REFI 10-K & 10-Q changes, risk factors and insider trading

We have limited operating history,history and may not be able to successfully operate our business, integrate new assets and/or manage our growth or to generate sufficient revenue to make or sustain distributions to our stockholders.

We have limited operating history,history and may not be able to operate our business successfully or to generate sufficient revenue to make or sustain distributions to our stockholders.

We were formed on March 30, 20212021, and are subject to all of the business risks and uncertainties associated with businesses with limited operating history, including the risk that we will not achieve our investment objective and that the value of your investment could decline substantially. We cannot assure you that we will be able to operate our business successfullyprofitably or profitably, orsuccessfully implement our operating policies. Our ability to provide attractive returns to our stockholders is dependent on our ability both to generate sufficient cash flow to pay our investors attractive distributions and to achieve capital appreciation, and we cannot assure you that we will be able to do either. There can be no assurance that we will be able to generate sufficient revenue from operations to pay our operating expenses and make or sustain distributions to stockholders. Our limited resources may also materially and adversely impact our ability to successfully implement our business plan. The results of our operations and the implementation of our business plan depend on several factors, including the availability of opportunities to make loans, the availability of adequate equity and debt financing, the federal and state regulatory environment relating to the cannabis industry (which are described below under “— Risks Related to the Cannabis Industry and Related Regulations”), conditions in the financial markets and economic conditions.

Our real estate investments are subject to risks particular to real property. These risks may result in a reduction or elimination of or return from an investment secured by a particular property.

All of our assets, including any investments made by us and any funds held by us,assets may be available to satisfy all of our liabilities and other obligations. If we become subject to a liability, parties seeking to have the liability satisfied may have recourse to our assets generally and not be limited to any particular asset, such as the asset representing the investment giving rise to the liability.

Our existing portfolio contains loans to companies with operations that are geographically concentrated in Arizona,a California,number Connecticut,of states with particular concentration Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New York, Ohio, Oregon, Pennsylvania, TexasOhio and West Virginia,Pennsylvania, and we will be subject to social, political and economic risks of doing business in those states and any other state in which we in the future have lending exposure.

Our existing portfolio contains loans to companies with operations that are geographically concentrated in Arizona,a California,number Connecticut,of states with particular concentration in Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New York, Ohio, Oregon, Pennsylvania, TexasOhio and West Virginia.Pennsylvania. While our investment strategy includes a focus on providing loans to companies with operations in states that limit the number of cannabis license issuances in order to protect the value of our collateral, circumstances and developments related to operations in these markets that could negatively affect our business, financial condition, liquidity and results of operations include, but are not limited to, the following factors:

While onewe have historically experienced a limited number of the loans in our portfolio is in payment default as of the date of this annual report on Form 10-K,defaults, there can be no assurance that we will not experience other defaults in the future.

As of December 31, 2024,2025, we had no investments in mezzanine loans, B-Notes or other investments that are subordinated or otherwise junior to other material indebtedness in an issuer’s capital structure.

We may invest in loans for which the proceeds are used for construction, primarily in the form of cultivation and dispensary build-outs of pre-existing buildings that collateralize our loans. If we fail to fund our entire commitment on a construction loan or if a borrower otherwise fails to complete the construction of a project, there could be adverse consequences associated with the loan, including, but not limited to, a loss of the value of the property securing the loan, especially if the borrower is unable to raise funds to complete it from other sources; a borrower’s claim against us for failure to perform under the loan documents; increased costs to the borrower that the borrower is unable to pay; a bankruptcy filing by the borrower; and abandonment by the borrower of the collateral for the loan. As of December 31, 2025, we had no investments in construction loans.

Investments in construction loans require us to make estimates about the fair value of land improvements that may be challenged by the Internal Revenue Service.IRS.

We may invest in construction loans, the interest from which would be qualifying income for purposes of the gross income tests applicable to REITs, provided that the loan value of the real property securing the construction loan was equal to or greater than the highest outstanding principal amount of the construction loan during any taxable year. For purposes of construction loans, the loan value of the real property is generally the fair value of the land plus the reasonably estimated cost of the improvements or developments (other than personal property) that secure the loan and that are to be constructed from the proceeds of the loan. There can be no assurance that the Internal Revenue Service (“IRS”) would not challenge our estimates of the loan values of the real property.

Our credit agreements generally limit our borrowers from incurring any debt that ranks equally with, or senior to, our loans. AsIn ofcases Decemberwhere 31,our 2024,borrowers wemay have investedexisting in three portfolio companies, with an aggregate loan principal balance of approximately $54.5 million or 12.5% of our total assets, for which all or a portion of oursenior debt, is subordinated to othersuch indebtedness of the borrower. In such cases, the debt senior to us generally represents traditional bank financing entered into prior to our relationship with the portfolio company. Although our intended investment strategy is to construct a portfolio of loans secured with first priority liens on certain assets of our borrowers, we may in the future enter into additional credit agreements that rank equally with, or are subordinated to, other debt of our borrowers or that otherwise permit our borrowers to incur other debt that ranks equally with, or senior to, our loans under such credit agreements. In such case, such instruments may, by their terms, provide that the holders of such other debt are entitled to receive payment of interest or principal on or before the dates on which we are entitled to receive payments in respect of our loans. These instruments may prohibit borrowers from paying interest on or repaying our loans in the event and during the continuance of a default under such instrument or upon the occurrence of other specified events. In certain cases, we may, and may continue to, obtain unsecured guarantees from the parent entities or subsidiaries of our borrowers in addition to the collateral provided by such borrowers and such guarantees may be effectively subordinated to any secured debt of any such entities and/or structurally subordinated to any debt of such subsidiaries. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a borrower, holders of securities ranking senior to our loan to that borrower, if any, typically are entitled to receive payment in full before we can receive any distribution in respect of our loan. After repaying such holders, the borrower may not have any remaining assets to use for repaying its obligation to us. In the case of securities or other debt ranking equally with our loans, we would have to share on an equal basis any distributions with other security holders in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant borrower.

We and our portfolio companies are subject to laws and regulations at the local, state and federal levels, including laws and regulations governing cannabis and REITs by state and federal governments. These laws and regulations, as well as their interpretation, may change from time to time, and new laws and regulations may be enacted, and enforcement priorities may shift, such as the possibility of more rigorous regulatory enforcement and reinterpretation of existing cannabis regulations. We cannot predict the nature and timing of future laws, regulations, interpretations or applications, or their potential effect. However, any change in these laws or regulations, changes in their interpretation, or newly enacted laws or regulations and any failure by us to comply with current or new laws or regulations or such changes thereto, could require changes to certain of our business practices, negatively impact our operations, cash flow or financial condition, impose additional costs on us or otherwise adversely affect our business.

For several years, the U.S. government generally has not enforced those laws against cannabis companies complying with state law and their vendors. We would likely be unable to execute our business plan if the federal government were to reverse its long-standing hands-off approach to the state legal cannabis markets, described below, and start strictly enforcing federal law regarding cannabis.

Former Attorney General William Barr testified in his confirmation hearing on January 15, 2019, that he would not upset “settled expectations,” “investments,” or other “reliance interest[s]” arising as a result of the Cole Memo, and that he did not intend to use federal resources to enforce federal cannabis laws in states that have legalized cannabis “to the extent people are complying with the state laws.” He stated: “My approach to this would be not to upset settled expectations and the reliance interest that have arisen as a result of the Cole Memorandum and investments have been made and so there has been reliance on it, so I don’t think it’s appropriate to upset those interests.” He also implied that the CSA’s prohibitions of cannabis may be null in states that have legalized cannabis: “[T]he current situation … is almost like a back door nullification of federal law.” Industry observers generally havedid not interpretedinterpret Attorney General Barr’s comments to suggest that the DOJ would proceed with cases against participants who entered the state-legal industry after the Cole Memo had been rescinded.

President Biden, at the time he won the Democratic Party nomination for President, affirmed that his administration would seek to “[d]ecriminalize marijuana use and legalize marijuana for medical purposes at the federal level”; “allow states to make their own decisions about legalizing recreational use”; and “automatically expunge all past marijuana convictions for use and possession.” This did not occur during his term. Although the U.S. Attorney General could order federal prosecutors not to interfere with cannabis businesses operating in compliance with states’ laws, the President alone cannot legalize medical cannabis, and as states have demonstrated, legalizing medical cannabis can take many different forms. Although President Biden issued a proclamationdirective in October 2022 asking the Secretary of Health and Human Services and the Attorney General to review “expeditiously . . . how marijuana is scheduled under federal law,law.” In August 2023, the processU.S. hasDepartment beenof stalled.Health and Human Services (“HHS”) recommended to the DEA that cannabis be reclassified from a Schedule I drug to a Schedule III drug under the CSA. HHS based this recommendation on a Food and Drug Administration (“FDA”) review of cannabis’ classification pursuant to President Biden’s directive in October 2022. On May 16, 2024, the Justice Department announced that the Attorney General had submitted a notice of proposed rulemaking that proposed moving marijuana from Schedule I to Schedule III, in accordance with the HHS recommendation.

A hearing on the proposed rulemaking took place in December 2024 before an administrative law judge (ALJ). The ALJ originally scheduled testimony on the proposed rescheduling through March 2025, but on January 13, the scheduled testimony was cancelled to allow an interlocutory appeal by a pro-rescheduling group. While this was still pending, on December 18, 2025, President Trump announced that he was “signing an executive order to reschedule marijuana from a Schedule I to a Schedule III Controlled substance with legitimate medical uses.” While the Executive Order requires the Attorney General to expedite the rescheduling process, an exact timeline remains unclear The current Trump administration has not taken ana singular official stance on cannabis, and it is therefore unclear whether the process of rescheduling will continue and, if so, what the timing of such reschedulingtimeline would be. Even in an expedited format, the re- or descheduling process could take months, or even years. A total de-scheduling of cannabis is unlikely, but entirely removing it from the schedule under the Controlled Substances Act would eliminate the money laundering and aiding-and-abetting risks currently posed by providing financial services to cannabis businesses. Rescheduling cannabis to CSA Schedule III would ease certain research restrictions, but it would not make the state medical or adult use programs federally legal unless they were compliant with the FDA regulation of cannabis as a Schedule III drug.

Federal prosecutors have significant discretion, and no assurance can be given that the federal prosecutor in each judicial district where we make a loan will not choose to strictly enforce the federal laws governing cannabis manufacturing or distribution. Any change in the federal government’s enforcement posture with respect to state-licensed cultivationcultivation, distribution, sale or use of cannabis, including the enforcement postures of individual federal prosecutors in judicial districts where we make our loans, would result in our inability to execute our business plan, and we would likely suffer significant losses with respect to our loans to cannabis industry participants in the United States, which would adversely affect our operations, cash flow and financial condition.

The legality of hemp is in flux on a federal and a state-by-state basis, and therefore, changesChanges to state or federal laws regarding hemp might result in limitations inor our inability to execute our business plan.

While theThe FDA has not yet enforced against the cannabis industry, it has sent numerous warning letters to sellers of CBD, Delta-8, and intoxicating hemp products. The FDA could turn its attention to the cannabis industry in the future, and will do so if cannabis is rescheduled, effectively moving it from primary DEA oversight (as a Schedule I drug) to primary FDA oversight (as a Schedule III drug). In the event that it is rescheduled, it is expected that the FDA may have to develop new policies and procedures to address cannabis’s unique challenges as a botanical product. In addition to requiring FDA approval of cannabis products marketed as drugs, the FDA could issue rules and regulations including certified good manufacturing practices related to the growth, cultivation, harvesting and processing of cannabis. It is also possible that the FDA would require that facilities where cannabis is grown register with the FDA and comply with certain federally prescribed regulations. Cannabis facilities are currently regulated by state and local governments. In the event that some or all of these federal enforcement and regulations are imposed, we do not know what the impact would be on the cannabis industry, including what costs, requirements and possible prohibitions may be enforced.enforced or how state legal markets may be impacted. If we or our borrowers are unable to comply with the regulations or registration as prescribed by the FDA, we and/or our borrowers may be unable to continue to operate our and their business in its current form or at all.

Certain financial transactions involving proceeds from the trafficking of cannabis can form a basis for prosecution under the federal money laundering statutes, unlicensed money transmitter statute and the Bank Secrecy Act. Previous guidance issued by the Financial Crimes Enforcement Network, a division of the U.S. Department of the Treasury, clarified how financial institutions can provide services to cannabis-related businesses consistent with their obligations under the Bank Secrecy Act. While the federal government has not initiated financial crimes prosecutions against state-law compliant cannabis companies or their vendors, the government theoretically could,could atdo least against companies in the adult-use markets.so. The continued uncertainty surrounding financial transactions related to cannabis activities may result in financial institutions discontinuing services to the cannabis industry or limit our ability to provide loans to the cannabis industry.

Because cannabis is illegal under federal law, federal bankruptcy protection is currently not available to parties who engage in the cannabis industry or cannabis-related businesses. RecentPast bankruptcy rulings have denied bankruptcies for dispensaries upon the justification that businesses cannot violate federal law and then claim the benefits of federal bankruptcy for the same activity and upon the justification that courts cannot ask a bankruptcy trustee to take possession of, and distribute cannabis assets as such action would violate the CSA. Therefore, we may not be able to seek the protection of the bankruptcy courts, and this could materially affect our business or our ability to obtain credit.

Various social and political circumstances in the U.S. and around the world (including wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics or outbreaks of infectious diseases), may also contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide. Such events, including trade tensions and tariffs between the United States and other countries, such as Canada, Mexico, and China, other uncertainties regarding actual and potential shifts in U.S. and foreign trade, economic and other policies with other countries, the Russia-Ukraineconflicts warin Europe, Ukraine and the Israel-HamasMiddle warEast and health epidemics and pandemics, could adversely affect our business, financial condition, cash flows and results of operations. These market and economic disruptions could also negatively impact the operating results of our borrowers.

In order to combat inflation, the Federal Reserve raised the Federal Funds Rate multiple times from March 2022 through July 2023. From September 2024 through December 2024, the Federal Reserve reduced the Federal Funds Rate three times as the inflation began to stabilize. MoreDuring recently,fiscal indicationsyear early2025, the Federal Reserve continued to cut the Federal Funds rate, resulting in 2025additional suggestdecreases thatof while75 abasis temporarypoints pauseto inthe Prime rate hikesduring maythe occur,year. persistentIn February 2026, the Federal Reserve held interest rates steady, but policymakers continue to emphasize their commitment to monitoring and addressing inflationary pressures. Persistent inflationary pressures and ongoing fiscal deficits may pose risk of volatility, thusand therefore any long-term plans by the Federal Reserve are uncertain, though further rate declines remain uncertain.probable. These developments, along with the United States government’s credit and deficit concerns, global economic uncertainties and market volatility and the impacts of any current or future global health pandemics, could cause interest rates to be volatile,fluctuate, which may negatively impact our ability to access the capital markets on favorable terms.

Co-investments. With the exception of CA BDC, which is an investment company subject to limitations on the ability to engage in transactions with affiliates, other investmentInvestment vehicles managed by our Manager or affiliates of our Manager may co-invest with us or hold positions in a loan where we have also invested, including by means of splitting commitments, participating in loans or other means of syndicating loans. Such loans may raise potential conflicts of interest between us and such other investment vehicles. To the extent such investment vehicles seek to acquire the same target assets as us, subject to the internal policies of our Manager and its affiliates described above, the scope of opportunities otherwise available to us may be adversely affected and/or reduced. In such circumstances, the size of the investment opportunity in loans otherwise available to us may be less than it would otherwise have been, and we may participate in such opportunities on different and potentially less favorable economic terms than such other parties if our Manager deems such participation as being otherwise in our best interests. Furthermore, when such other investment vehicles have interests or requirements that do not align with our interests, including differing liquidity needs or desired investment horizons, conflicts may arise in the manner in which any voting or control rights are exercised with respect to the relevant borrower, potentially resulting in an adverse impact on us. If we participate in a co-investment with an investment vehicle managed by our Manager or an affiliate of our Manager and such vehicle fails to fund a future advance on a loan, we may be required to, or we may elect to, cover such advance and invest additional funds. In addition, if we and such other investment vehicles invest in different classes or types of debt, equity or other investments relating to the same borrower, actions may be taken by such other investment vehicles that are adverse to our interests, including, but not limited to, during a work-out, restructuring or insolvency proceeding or similar matter occurring with respect to such loan. To the extent CA BDC co-invests with us, the transaction must comply with the terms of an exemptive order obtained by CA BDC and affiliated entities. As of December 31, 2024,2025, our affiliates and affiliates of our Manager hold co-investments in 1917 of the 3026 portfolio companies in which we hold an investment.

Certain of our officers and directors and the officers and other personnel of our Manager also serve or may serve as officers, directors or partners of certain affiliates of our Manager, as well as investment vehicles sponsored by such affiliates, including investment vehicles or managed accounts not yet established, whether managed or sponsored by affiliates or our Manager. For example, Mr. Mazarakis, who serves as our Executive Chairman of the Board, was appointed in December 2024 to serve as Chief Executive Officer and Co-Executive Chairman of the Board of Vireo Growth Inc. (“Vireo”), which iswas previously one of our portfolio companies and a related party.party during 2025. Certain affiliated investment funds that are managed by entities under common control with our Manager, and for which Mr. Mazarakis can exercise significant influence, also hold material equity interests in Vireo. Vireo has further entered into binding agreements with certain target portfolio companies, which are or may become borrowers under loans held by us and/or our affiliates. As a result of these transactions, which are ongoing, there are conflicts of interest related to Mr. Mazarakis’ time and attention devoted to our affairs as well as his executive positions for both entities. Mr. Mazarakis has agreed to recuse himself from all matters that involve us, Vireo, and other target portfolio companies ancillary thereto; including as it relates to any actions that would arise, including exercise of rights and remedies under our credit agreements, if Vireo were to default on itsany potential obligations to us or if a similar material event occurred that presented a direct conflict between us and Vireo.

We intend to operate in a manner so as to continue to qualify as a REIT for U.S. federal income tax purposes. We believe that our organization and method of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT. However, we cannot assure you that we will qualify as such. This is because qualification as a REIT involves the application of highly technical and complex provisions of the Code, and regulations promulgated by the U.S. Treasury Department thereunder (“Treasury Regulations”) as to which there are only limited judicial and administrative interpretations and involves the determination of facts and circumstances not entirely within our control. In addition, while we intend to take the position that we and certain of our affiliates are treated as separate entities for purposes of determining whether we qualify as a REIT, there can be no guarantee that the IRS will agree with our position. If we and certain of our affiliates are treated as the same entity for this purpose, we may not qualify as a REIT. Furthermore, future legislation, new regulations, administrative interpretations or court decisions may significantly change the U.S. tax laws or the application of the U.S. tax laws with respect to qualification as a REIT for federal income tax purposes or the federal income tax consequences of such qualification.

The maximum U.S. federal income tax rate for certain qualified dividends payable to individual U.S. stockholders is 20%. Dividends payable by REITs, however, are generally not qualified dividends and therefore are not eligible for taxation at the reduced rates. However, to the extent such dividends are attributable to certain dividends that we receive from a taxable REIT subsidiary or to income from a prior year that was retained by us and subject to corporate tax, such dividends generally will be eligible for the reduced rates that apply to qualified dividend income. The more favorable rates applicable to regular corporate dividends could cause investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the stock of REITs, including our equity. However, through the 2025 tax year, individual U.S. stockholders may be entitled to claim a deduction in determining their taxable income of 20% of ordinary REIT dividends (dividends other than capital gain dividends and dividends attributable to qualified dividend income received by us, if any). If we fail to qualify as a REIT, such stockholders may not claim this deduction with respect to dividends paid by us. Stockholders are urged to consult tax advisers regarding the effect of thisthese changerules on the effective tax rate with respect to REIT dividends.

As significant beneficial owners of our Manager, ourthe founders of Chicago Atlantic can exert significant influence over our corporate actions and important corporate matters.

OurThe founders,founders of Chicago Atlantic, Mr. Mazarakis, our Executive Chairman, Mr. Cappell, our Co-Chief Executive Officer, and Dr. Bodmeier, our President,former President and former Chief Investment Officer, beneficially own approximately 4.0%5.7% of our outstandingcommon equitystock on a fully-diluted basis as of December 31, 2024.2025. OurThe founders of Chicago Atlantic also own 100% of the outstanding equity of our Manager. OurThe founders of Chicago Atlantic could therefore exert substantial influence over our corporate matters, such as electing directors and approving material mergers, acquisitions, strategic partnerships or other business combination transactions, as applicable. This concentration of ownership may discourage, delay or prevent a change in control which could have the dual effect of depriving our stockholders from an opportunity to receive a premium for their equity as part of a sale of our Company and otherwise reducing the price of such equity.

Moreover, the evolving threat landscape—including the rise of sophisticated ransomware attacks, AI-driven phishing schemes, and increased risks stemming from supply chain vulnerabilities—has further heightened the challenges of safeguarding our information systems. Additionally, the rapid evolution and increased availability of artificial intelligence and machine learning technologies may also intensify cybersecurity risks by making such attacks and other cybersecurity incidents more difficult to detect, contain, and mitigate. New regulatory developments will likely continue to rise in priority and could impose more stringent disclosure requirements regarding cyber incidents, potentially amplifying the financial and operational impact of any breach.

Legal or governmental proceedings brought by or on behalf of third parties may adversely affect our financial results. Our investment activities may include activities that are hostile in nature and will subject it to the risks of becoming involved in such proceedings. The expense of defending claims against us and paying any amounts pursuant to settlements or judgments would be borne by us and would reduce net assets. Our Manager will be indemnified by us in connection with such proceedings, subject to certain conditions. Similarly, we may from time to timetime-to-time institute legal proceedings on behalf of ourselves or others, the ultimate outcome of which could cause us to incur substantial damages and expenses, which could have a material adverse effect on our business.

We were formed in March 2021 as a Maryland corporation and are astructured commercialas an externally managed mortgage real estate investment trust.trust (“REIT”). We completed our initial public offering ("IPO") in December 2021 and have elected to be taxed as a REIT for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2021. Our primary investment objective is to provide attractive, risk-adjusted returns for stockholders over time primarily through consistent current income dividends and other distributions and secondarily through capital appreciation. We intend to achieve this objective by originating, structuring and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Our current portfolio is comprised primarily of senior loans to state-licensed operators in the cannabis industry, secured by real estate, equipment, receivables, licenses or other assets of the borrowers to the extent permitted by applicable laws and regulations governing such borrowers. We may also invest in companies or properties that are not relatedaim to themaintain cannabisa industry that provide return characteristics consistent with our investment objective. We intend to grow the size of ourdiversified portfolio byacross continuing the track record of our businessjurisdictions and theverticals, businessincluding conductedcultivators, byprocessors, our Managerdispensaries, and itsother affiliatesbusinesses byancillary making loans to leading operators and property owners in the cannabis industry. There is no assurance that we will achieve our investment objective.thereto.

The Primefollowing Ratetable duringsets forth the components of interest and fee income for the years ended December 31, 20242025 and 2023 was as follows2024:

Our primary operating expenseexpenses isare the payment of Base Management Fees and Incentive Compensation under our Management Agreement with our Manager and the allocable portion of overhead and other expenses paid or incurred on our behalf, including reimbursing our Manager for a certain portion of the compensation of certain personnel of our Manager who assist in the management of our affairs, excepting only those expenses that are specifically the responsibility of our Manager pursuant to our Management Agreement. We bear all other costs and expenses of our operations and transactions, including (without limitation) fees and expenses relating to:

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition and/or results of operations. Except to the extent updated below or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors, there have been no material changes to the risk factors described in the “Risk Factors” sections in our Annual Report on Form 10-K for the year ended December 31, 2025. The risksfollowing material risk factors update or supplement the risk factors described in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q are notfor the onlyyear risksended facingDecember our31, Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or results of operations.2025.

Some of the statements contained in this quarterly report constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend such statements to be covered by the safe harbor provisions contained therein. Forward-looking statements relate to future events or the future performance or financial condition of Chicago Atlantic Real Estate Finance, Inc. (the “Company,” “we,” “us,” and “our”). The information contained in this section should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this quarterly report on Form 10-Q. This description contains forward-looking statements that involve risks and uncertainties. Actual results could differ significantly from the results discussed in the forward-looking statements due to the factors set forth in this quarterly report and in “Risk Factors” in our annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) and in Part II, Item 1A of this quarterly report on Form 10-Q, as such risks may bybe updated, amended, or superseded from time to time by subsequent reports we file with the SEC. The forward-looking statements contained in this report involve a number of risks and uncertainties, including statements concerning:

The following table sets forth the components of interest and fee income for the three months and six months ended MarchJune 31,30, 2026 and 2025:

1Other fee income includes prepayment fees, make-whole fees, and exit/success fees, and/or other upfront fees on loans for which the fair value option was elected, which are included in interest income on the Consolidated Statements of Operations.Income.

Rate obtained from the Federal Reserve Bank of New York's "Secured Overnight Financing Rate Data" table The below table summarizes the gross interest income derived from fixed and floating-rate loans during the three months and six months ended MarchJune 31,30, 2026 and 2025 based on portfolio composition as of the quarter end date.

To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute annually to our stockholders at least 90% of our REIT taxable income prior to the deduction for dividends paid. To the extent that we distribute less than 100% of our REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), we will pay tax at regular corporate rates on that undistributed portion. Furthermore, if we distribute less than the sum of 1) 85% of our ordinary income for the calendar year, 2) 95% of our capital gain net income for the calendar year, and 3) any undistributed shortfall from our prior calendar year (the “Required Distribution”) to our stockholders during any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year), then we are required to pay a non-deductible excise tax equal to 4% of any shortfall between the Required Distribution and the amount that was actually distributed. The 90% distribution requirement does not require the distribution of net capital gains. However, if we elect to retain any of our net capital gain for any tax year, we must notify our stockholders and pay tax at regular corporate rates on the retained net capital gain. Our stockholders must include their proportionate share of the retained net capital gain in their taxable income for the tax year, and they are deemed to have paid the REIT’s tax on their proportionate share of the retained capital gain. Furthermore, such retained capital gain may be subject to the nondeductible 4% excise tax. If it is determined that our estimated current year taxable income will be in excess of estimated dividend distributions (including capital gain dividend) for the current year from such income, we will accrue excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense, if any, is included in the line item, income tax expense. For the threesix months ended MarchJune 31,30, 2026,2026 and 2025, we did not incur excise tax expense.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740 - Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the consolidated financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have analyzed our various federal and state filing positions and believe that our income tax filing positions and deductions are documented and supported as of MarchJune 31,30, 2026 and 2025. Based on our evaluation, there is no reserve for any uncertain income tax positions. Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets.

As of MarchJune 31,30, 2026 our loan portfolio included 29 loans held for investment, with $413.6an aggregate of $412.1 million in principal outstanding, and approximately $4.5$2.4 million in unfunded commitments under delayed draw term loan facilities. Our loans are generally classified as held for investment and carried at amortized cost on the consolidated balance sheets. Such loans are generally secured by real estate, equipment, licenses, intellectual property and other assets of the borrowers to the extent permitted by the applicable laws and the regulations governing such borrowers. The below table summarizes the total outstanding principal and carrying value, net of current expected credit loss reserves as of MarchJune 31,30, 2026 and December 31, 2025:

Weighted average remaining life is calculated based on the carrying value of the loans as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

As of MarchJune 31,30, 2026 and December 31, 2025, our loan portfolio had a weighted-average yield-to-maturity internal rate of return (“YTM IRR”) of 15.8%15.6% and 16.3%, respectively, and was substantially secured by real estate and, with respect to certain of our loans, substantially all assets of the borrowers and certain of their subsidiaries, including equipment, receivables, and licenses. YTM IRR is calculated using various inputs, including (i) cash and paid-in-kind (“PIK”) interest, which is capitalized and added to the outstanding principal balance of the applicable loan, (ii) original issue discount (“OID”), (iii) amortization, (iv) unused fees, and (v) exit fees. Certain of our loans have extension or amendment fees, which are not included in our YTM IRR calculations, but may increase YTM IRR if such extension options are exercised by borrowers.

Our loans bear interest rates that are either fixed or determined periodically on the basis of Prime or SOFR plus a premium. Loans which bear interest on either Prime or SOFR are collectively referred to as "Floating-rate loans". The below table summarizes our portfolio of loans held for investment by rate type as of MarchJune 31,30, 2026 and December 31, 2025:

Our floating-rate loans typically include a Prime or SOFR interest rate floor that is generally set at the prevailing Prime or SOFR rate, as applicable, on the date of origination. As of MarchJune 31,30, 2026 and December 31, 2025 none of our loans were subject to an interest rate ceiling. We typically include an interest rate floor with our floating rate loans in order to provide us with protection against decreases in interest rates. As of MarchJune 31,30, 2026 and December 31, 2025, 64.8%58.8% and 58.2% of our loans were subject to an interest rate floor. As of MarchJune 31,30, 2026 and December 31, 2025, our portfolio had the following interest rate floors:

The following tables present changes in loans held for investment at carrying value as of and for the threesix months ended MarchJune 31,30, 2026 and 2025:

The risk ratings are primarily determined based on current and historical performance metrics specific to each portfolio company, as well as consideration of future economic conditions and each borrower’s estimated ability to meet debt service requirements. The risk ratings shown in the following table as of MarchJune 31,30, 2026 and December 31, 2025 consider borrower specific credit history and performance and reflect a quarterly re-evaluation of overall current macroeconomic conditions affecting the Company’s borrowers, specifically those designated as held for investment. The below table presents the categorization of our loan portfolio on the above rating scale, at carrying value as of MarchJune 31,30, 2026 and December 31, 2025:

Recent Developments During the FirstSecond Quarter of 2026

Updates to Our Loan Portfolio during the FirstSecond Quarter of 2026

During the period from JanuaryApril 1, 2026 through MarchJune 31,30, 2026, we advanced approximately $52.8$56.9 million of principalprincipal, excluding capitalized PIK interest and fees, to new and existing borrowers under delayed draw and revolving loan facilities. Additionally, we received approximately $51.6$19.7 million of repayments, comprised of $3.4$3.3 million in schedulescheduled amortization payments, $4.4$1.0 million in partial prepayments and $43.8$15.4 million from full repayments. A brief description of certain investment activities are described below:

During the three months ended MarchJune 31,30, 2026, we declared an ordinary cash dividend of $0.47 per share of our common stock, relating to the firstsecond quarter of 2026, which was paid on AprilJuly 15, 2026 to stockholders of record as of the close of business on MarchJune 31,30, 2026. The total amount of the cash dividend payment was approximately $9.9$10.0 million.

While we believe the principal amounts of our loans are generally adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of certain loans, particularly those not fully collateralized by real estate. In order to mitigate that risk, our loans are generally collateralized by other assets, such as equipment, receivables, licenses or other assets of the borrowers to the extent permitted by applicable laws and regulations. In addition, we seek to impose strict loan covenants and seek personal or corporate guarantees for additional protection. As of MarchJune 31,30, 2026, 61.0%55.7% of our portfolio is fully secured by real estate, and 2.4%2.6% has no real estate collateral. Our portfolio on average had real estate collateral coverage of 1.2x as of MarchJune 31,30, 2026. Our loans are generally secured by equity pledges of the borrower and all asset liens and our portfolio had a weighted average loan to enterprise value ratio of 43.7%.46.0%. As of MarchJune 31,30, 2025, 50.0%47.6% of our portfolio was fully secured by real estate and 1.6%2.3% had no real estate collateral. Our portfolio on average had real estate collateral coverage of 1.1x1.2x as of MarchJune 31,30, 2025, and a weighted average loan to enterprise value ratio of 47.5%.43.2%..

The April 2026 order represents a significant shift in federal policy and is expected to be followed by additional administrative proceedings. The DEA hascommenced scheduledadditional ahearings hearing forin June 29, 2026 to consider related regulatory considerations for adult-use cannabis, and further rulemaking, interpretive guidance, or enforcement policy statements may be issued thereafter. Closing briefs and in-person hearings, if any, are expected to occur in August 2026. As a result, the scope, implementation, and practical effects of the rescheduling action remain subject to ongoing administrative review and uncertainty.

As of the date of this Quarterly Report, no final regulatory framework has been established with respect to cannabis rescheduling beyond the April 2026 order,order and June 2026 administrative hearings, and no formal action has been taken to reclassify or de-schedule adult-use cannabis. While federal authorities have initiated additional administrative proceedings, including the June 2026 DEA hearing, the outcome, timing, and scope of any further actions remain uncertain.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

Interest income increaseddecreased by approximately $0.1$1.3 million during the quarter ended MarchJune 31,30, 2026, compared to the quarter ended MarchJune 31,30, 2025. The increasedecrease was driven primarily by ana increasedecrease of $0.8$1.0 million in exit/success fees associated with the fullrepayments repaymentsand amendments of threecertain loans during the respective periods. During the second quarter of 2026, the Company recognized $0.9 million associated with amendments of its existing loans during the period. In the second quarter of 2025, the Company recognized $1.0 million related to an amendment of one of its existing loans, $0.5 million of success fees on one of its loans, and $0.4 million related to OID accelerations. Interest income from acceleration of original issue discounts and other upfront fees generated approximately $0.7$0.4 million and $0.4$0.3 million of gross interest income during the three months ended MarchJune 31,30, 2026 and 2025, respectively. Additionally, the weighted average YTM IRR on our portfolio decreased from 16.9%16.8% at MarchJune 31,30, 2025 to 15.8%15.6% at MarchJune 31,30, 2026, as a result of certain re-pricing amendments relating to de-risking of our portfolio and the impact of the 75 basis point prime rate decline on our floating rate portfolio during the comparative periods.periods, resulting in a $1.3 million decrease in cash interest income, offset by an additional $0.9 million in PIK interest income.

Interest expense remained relatively consistent over the comparative period. ThisThe decreaseincrease is driven primarily by a decrease in unused fees and the amortization of debt issuance costs in the amount of $43 thousand, which was partially offset by an increase in the weighted average outstanding balance on the Revolving Loan, which was approximately $48.0$67.5 million and $41.6$42.3 million, as of MarchJune 31,30, 2026 and 2025, respectively.

Management and incentive fees payable to our Manager remainedslightly consistentdecreased over the comparative period. Management fees were approximately $1.2 million for the three months ended MarchJune 31,30, 2026 and 2025. The origination fee offsets in the three months ended MarchJune 31,30, 2026 was $0,$108 thousand, compared to approximately $4$133 thousand for the three months ended MarchJune 31,30, 2025. Incentive fees were approximately $0.5 million for the three months ended MarchJune 31,30, 20262026, andcompared to $0.8 million for the three months ended June 30, 2025.

General and administrative expenses and professional fees decreasedincreased by approximately $60$258 thousand for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily due to aan decreaseincrease in overhead reimbursements for costs incurred by the Manager on behalf of the Company, which were approximately $1.0$1.4 million for the three months ended MarchJune 31,30, 2026, compared to approximately $1.1 million for the three months ended MarchJune 31,30, 2025.

Stock based compensation expense increased slightly by approximately $0.2$0.1 million for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The increase over the comparative period is driven by the incremental expense recognized on the 187,157229,764 of restricted stock awards granted during 2025,2026, which had not been granted as of MarchJune 31,30, 2025.