Chicago Atlantic Real Estate Finance, Inc. 8-K

What Happened
Chicago Atlantic Real Estate Finance, Inc. (REFI) announced on July 9, 2026 that it entered a Loan Agreement with Koach Capital Fund I LLC, Koach Capital Fund II LP, Koach Capital Fund III LP and related entities (“Koach”). REFI issued 4,306,754 shares of common stock at $14.53 per share (≈ $62.5M value) in a private placement in exchange for second‑lien promissory notes from Koach (the “Koach Notes”). The new shares represent about 16.8% of REFI’s common stock outstanding after the issuance. The Koach Notes are secured by mortgages on 32 retail properties leased to cannabis operators, are subordinated to senior first‑lien debt (≈ $39M as of closing), and bear an aggregate 12.0% annual interest (10.0% cash + 2.0% PIK) with monthly cash interest and a weighted average maturity of ~12 years.

Key Details

• Shares issued: 4,306,754 at $14.53 per share (aggregate ≈ $62.5M).
• Koach Notes: second‑lien secured on 32 properties, subordinated to ~ $39M of senior debt.
• Interest & fees: 12.0% annual interest (10% cash / 2% PIK), monthly cash payments; exit fee equal to 2.5x each Note’s commitment.
• Lock-up: Koach investors agree not to transfer shares (20% locked 3 months; 80% locked 6 months). No placement agents or commissions were paid.

Why It Matters
This transaction materially increases REFI’s outstanding shares (Koach will hold ~16.8%), which dilutes existing shareholders and will be included in the inputs that determine the exchange ratio in the pending merger with Chicago Atlantic BDC, Inc. (LIEN). It also places a sizable, long‑term, higher‑cost financing obligation on assets leased to cannabis operators; the notes are secured but subordinate to existing senior debt. Investors should note the interest structure (cash + PIK), the substantial exit fee, and the filings (press release filed July 13, 2026); the Loan Agreement exhibit contains redactions but is available to the SEC on request.