Chicago Atlantic Real Estate Finance, Inc. 8-K

What Happened
Chicago Atlantic Real Estate Finance, Inc. (the Company or REFI) announced on June 17, 2026 that it entered into an Agreement and Plan of Merger to merge with and into Chicago Atlantic BDC, Inc. (Acquiror), with Acquiror surviving. Before the Merger, the Company — currently a REIT — will file Form N‑54A to elect to be regulated as a business development company (BDC). The parties intend the Merger to qualify as a tax “reorganization” under Section 368(a) and for the Surviving Company to be treated as a regulated investment company (RIC) after closing. The Company’s board (unanimously, on the recommendation of an independent special committee) approved the Merger Agreement and agreed to submit required BDC‑election and merger proposals to stockholders.

Key Details

• Merger Agreement signed June 17, 2026; closing is subject to required stockholder votes, SEC filings (Form N‑14 registration/proxy), effectiveness of the registration statement, Nasdaq listing approval, regulatory approvals, tax opinion and other customary conditions. Outside date: June 30, 2027 (agreement may be terminated if not closed by then).
• Consideration: each outstanding share of Company common stock will convert into Acquiror common stock per an Exchange Ratio equal to Company NAV per share divided by Acquiror NAV per share (NAVs to be calculated in good faith within ~48 hours before closing). Fractional shares payable in cash based on 5‑day VWAP.
• Support and governance: Support Agreements signed by certain insiders covering ~4.8% of Company shares and ~12.9% of Acquiror shares; Surviving Company board will include three independent directors from REFI and two from Acquiror.
• Fees, dividends and other mechanics: Company must declare/pay Tax Dividends as needed to eliminate accumulated earnings & profits and reduce final REIT taxable income/net capital gain to zero prior to the BDC election. Company Manager agreed to pay $2.0 million of the Company’s transaction fees. Acquiror’s board will consider a post‑closing share repurchase program of up to $25 million.

Why It Matters
This is a corporate combination that will change REFI’s regulatory status (REIT → BDC) before the merger and exchange REFI common shares for Acquiror shares based on relative net asset values. The transaction depends on multiple stockholder approvals, SEC and Nasdaq clearances, and tax‑qualification steps (including a tax opinion and FIRPTA certificate). For investors, key items to watch are (1) the final Exchange Ratio (based on NAV calculations shortly before closing), (2) the timing and tax effects of the required Tax Dividends and the REIT→BDC conversion, and (3) whether the required regulatory and stockholder approvals are obtained. Management provided a joint press release and investor presentation and hosted a conference call on June 18, 2026 to discuss the transaction.