REFI originates and holds primarily senior secured loans. It earns interest income and loan-related fees from borrowers, then pays operating expenses, financing costs, and other obligations. The remaining cash-oriented earnings are measured through distributable earnings, the company-specific measure most relevant to assessing its distribution. Its lending focus can offer comparatively high contractual loan yields, but it also creates concentrated exposure to borrower credit quality, property values, cannabis-industry conditions, and the legal and banking framework affecting that industry.
Business
REIT
Listing
REFI · NASDAQ
Reporting period
2026-06-30
Dividend schedule
Quarterly
How the business works
REFI’s distribution capacity begins with cash interest and fee income from its secured lending portfolio. Net interest income is affected by the size and yield of the loan book, borrower repayments and originations, credit performance, non-accruals, funding costs, operating expenses, and realized credit losses. Portfolio growth can add income, while repayments, loan resolutions, lower loan yields, higher borrowing costs, or credit impairments can reduce distributable earnings available for distributions.
Financial snapshot: 2026-06-30. Research reviewed 2026-10-17. The annual earnings comparison is from 2026-10-17. The business and balance-sheet figures below relate to the reporting period shown.
The assets it owns
$461.699 million total assetsReported by Chicago Atlantic Real Estate Finance, Inc.
The June quarter included a $41.0 million related-party loan secured behind a senior lender. It was meeting scheduled payments, which is encouraging, but a second lien gives REFI a weaker claim on collateral than a first lien. This loan is measured at fair value, so its carrying value should not be confused with its original principal.
Share of consolidated total assets at 2026-06-30; other assets are the arithmetic residual. This is not a loan-seniority or sector allocation.
Annual earnings of $1.79 per share compare with $1.88 in annual dividends. Coverage is 95.21%. Earnings fall short of the payment in this update. We want to see the gap close.
Borrowers provide most of REFI's revenue through loan interest, while lending fees add another source of income. Some interest is paid in cash, but some is added to the borrower's debt and collected later. Discounts agreed when loans are made also contribute income over the loan term.
That mix matters because a healthy-looking interest figure can include money that has not arrived yet. Cash collections provide firmer support for the dividend, while deferred interest leaves REFI dependent on the borrower's eventual repayment.
REFI held approximately $13.4 million of unrestricted cash at June 30, 2026. Management expected that cash, available revolver capacity and operating cash flows would cover the following year's operating needs.
That provides useful context, but cash already held and unused borrowing capacity are not the same thing. Management's outlook also depends on operating cash flows arriving as expected, so it should not be read as proof that every future cash requirement is already funded.
Annual earnings of $1.79 per share compare with $1.88 in annual dividends. Coverage is 95.21%. Earnings fall short of the payment in this update. We want to see the gap close.
The payment needs stronger earnings support. Look for a smaller shortfall in the next update.
There has been some progress with troubled borrowers. Loan 6 was repaid in April, and Loan 9 returned to accrual in March after demonstrating sustained debt service. Loans 4 and 34 still were not accruing interest at June-end.
Those recoveries are meaningful evidence that individual credits can improve, but they do not clear the remaining problem loans. Continued principal repayments and resumed cash interest would offer stronger reassurance than a change in accounting status alone.
Cannabis operators' limited financing choices create a lending niche for REFI, but the legal environment also makes recoveries more complicated. The company may be unable to take possession of cannabis collateral after a default and could instead need to sell the loan at a loss.
The opportunity and the risk come from the same industry constraints. Borrowers keeping their licences and meeting their obligations matter to income, while the value REFI can actually recover matters more than the mere existence of collateral.
At June 30, expected-loss reserves represented 2.27% of loan principal, compared with 1.23% at the previous year-end. Loan 36 remained on accrual despite paying no cash interest, and its loan-to-value ratio reached 107.2%.
The larger reserve and reliance on interest due later keep credit quality under pressure. Cash recoveries, rather than continued accrual alone, are needed to show that these loans can sustain income.
The filing reports that shelf-based offerings were unavailable and ATM share sales were suspended after the old registration's extension expired. The merger agreement also restricts new equity issuance, subject to exceptions or consent.
This narrows REFI's access to equity capital, although it does not by itself establish a cash shortfall. Restored offering access and updated liquidity would show whether the constraint has eased.
The July 9 share issue increased REFI's share count without materially increasing reported equity. The Koach notes carry contractual payments, but their receipts run through equity rather than interest income. The proposed merger treats the notes differently when calculating the share exchange.
More shares without a matching increase in reported equity put pressure on book value per share. The notes have economic value, but their contribution to earnings per share and the final merger consideration still need to be established.
The next earnings report needs to show how the Koach transaction affects income available to each common share. Its receipts are recorded through equity rather than interest income, so contractual payments should not automatically be treated as an uplift to reported earnings. The proposed merger uses a different treatment of the notes, making the final share-exchange calculation important too.
Net asset value
Latest recorded asset value per share$14.15Share price compared with recorded asset value34.20% discount
Financial data through October 17, 2026.
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U.S. federal · Tax year 2025
Dividend tax treatment
Chicago Atlantic Real Estate Finance classified its 2025 common dividends as ordinary, nonqualified dividends, entirely designated as Section 199A.
Ordinary, nonqualified
100%
Qualified dividends
0%
Capital-gain distributions
0%
Return of capital
0%
Tax year: 2025. Total distributions: $1.88 per share.
Tax details and source
Total ordinary dividends (includes qualified)
100%
Section 199A portion (within ordinary dividends)
100%
Exempt-interest distributions
0%
Reporting form
Form 1099-DIV
Source date
2026-01-29
Qualified dividends are included in total ordinary dividends. Section 199A is a separate designation within ordinary dividends, not extra income or qualified dividend income.
Your account type, holding period and circumstances affect treatment. Use your broker’s tax statement for filing. Return of capital generally reduces cost basis; amounts beyond basis can be taxable. IRS dividend guidance.
