NOTE 14 — PROPOSED MERGER WITH CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.

On June 17, 2026, the Company entered into the Merger Agreement with REFI and, for the limited purposes discussed therein, the Adviser and REFI Manager. Pursuant to the Merger Agreement and assuming that all conditions contained in the Merger Agreement are satisfied, REFI will merge with and into the Company, with the Company continuing as the surviving company. Prior to the Merger, REFI, which has elected to be taxed as a real estate investment trust (“REIT”), will elect to be regulated as a BDC under the 1940 Act by filing a Form N-54A with the SEC. (the “BDC Election”). The BDC Election requires the approval of REFI’s stockholders, together with their approval of a new investment advisory agreement between REFI and the Adviser, and becomes effective when the Form N-54A is accepted for filing by the SEC. The Company intends to continue to qualify as a RIC, and the parties intend the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

At the effective time of the Merger (the “Merger Effective Time”), each outstanding share of REFI common stock (other than shares owned by the Company or its consolidated subsidiaries) will be converted into the right to receive a number of shares of the Company’s common stock equal to the Exchange Ratio (as defined below), plus any cash (without interest) in lieu of fractional shares in connection with the closing of the Merger.

Under the terms of the Merger Agreement, the “Exchange Ratio” equals the ratio (rounded to the fourth decimal place) of REFI’s adjusted book value per share (the “Closing REFI NAV”) to the the net asset value per share of the Company’s common stock (the “Closing LIEN NAV”) subject to adjustment as set forth in the Merger Agreement. Each of the Closing REFI NAV and the Closing LIEN NAV is calculated in good faith as of a single date mutually agreed by the parties that is no earlier than 48 hours (excluding Sundays and holidays) prior to the Merger Effective Time, based on the valuation principles, assumptions and methodologies, and giving effect to the categories of adjustments, set forth in Exhibit A to the Merger Agreement. Each calculation is required to be approved by the applicable board of directors, including its special committee, and certified in writing by the applicable adviser or manager,

Based on the respective net asset values of the Company and REFI as of March 31, 2026, as disclosed in the joint press release issued by the Company and REFI on June 18, 2026, former REFI stockholders would be expected to own approximately 50.5% of the Company’s outstanding common stock immediately following the Merger. The actual ownership percentage will depend on the Exchange Ratio calculated shortly prior to the closing of the Merger and is expected to differ from this estimate.

The Merger Agreement was approved by the Board upon the unanimous recommendation of a special committee of the Board comprised solely of independent directors (the “LIEN Special Committee”), which received a fairness opinion from Keefe, Bruyette & Woods, Inc., which served as financial advisor to the LIEN Special Committee.

Consummation of the Merger is subject to customary closing conditions, including, among others, (i) requisite approvals by the Company’s and REFI’s stockholders, , including in each case the separate approval of the Merger Agreement by a majority of the shares voted by stockholders unaffiliated with the Company, the Adviser, REFI and REFI Manager, and including REFI stockholder approval of the BDC Election and of a new investment advisory agreement between REFI and the Adviser, (ii) approvals by the board of directors of REFI required under Rule 17a-8 of the 1940 Act, (iii) effectiveness of the Company’s registration statement on Form N-14 (which contains a joint proxy statement/prospectus) for the Company’s common stock to be issued as consideration in the Merger, (iv) Nasdaq listing authorization for the shares of the Company’s common stock to be issued as consideration in the Merger, (v) subject to certain exceptions, the accuracy of the representations and warranties and compliance with the covenants of each party to the Merger Agreement, (vi) the absence of a material adverse effect in respect of the parties, (vii) receipt of required regulatory approvals, (viii) receipt of customary legal opinions to the effect that the Merger will be treated as a “reorganization” within the meaning of Section 368(a) of the Code by the parties and (ix) completion of the closing net asset value determinations.

Concurrently with the execution of the Merger Agreement, certain stockholders of the Company and REFI entered into Voting and Support Agreements covering approximately 12.9% of the Company’s outstanding common stock and approximately 4.8% of REFI’s outstanding common stock. Pursuant to these agreements, each such stockholder agreed to vote its/his shares of the Company’s common stock or REFI’s common stock, as applicable, in favor of the Merger-related proposals at the respective special meetings of the Company’s and REFI’s stockholders held for the purpose of approving the Merger and related transactions.

The Merger Agreement may be terminated under specified circumstances, including if the Merger has not been consummated by June 30, 2027, and does not provide for a termination fee.

Except for specified SEC and printing and mailing costs, fees and expenses incurred in connection with the Merger generally will be shared equally between the Company and REFI, with REFI Manager paying $2.0 million of REFI’s Merger-related expenses.

The Merger Agreement also provides that, prior to the Merger Effective Time, the Board will consider in good faith the adoption of a share repurchase program of up to $25.0 million to be implemented following the closing of the Merger.

The Merger had not closed as of June 30, 2026 and, accordingly, no amounts related to the Merger are reflected in the accompanying financial statements. However, pre-close transaction costs of $1.3 million incurred in connection with the Merger are included in prepaid expenses and other assets, of which $0.8 million are unpaid and included in other payables on the Statements of Assets and Liabilities (see NOTE 6 — RELATED PARTY TRANSACTIONS). The Company expects to account for the Merger as an asset acquisition under ASC 805-50 , with the Company treated as the accounting acquirer. Direct transaction costs incurred by the Company are expected to be included as a component of the total accumulated cost of the transaction. The final accounting, including allocation of the consideration transferred, will be determined as of the closing date of the Merger. The Merger is expected to close in the fourth quarter of 2026, subject to satisfaction or waiver of the closing conditions. On July 31, 2026, the Company filed a registration statement on Form N-14 with the SEC containing a preliminary joint proxy statement/prospectus relating to the Merger. As of the date of this Quarterly Report, that registration statement had not been declared effective, and the record dates and the dates of the special meetings of the Company’s and REFI’s stockholders had not been established. There can be no assurance that the Merger will be completed on the contemplated terms or at all.

The foregoing summary description of the Merger Agreement and the transactions contemplated thereby is subject to and qualified in its entirety by reference to the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 18, 2026 and is incorporated herein by reference. Schedules and exhibits to the Merger Agreement, including the exhibit setting out the valuation principles and categories of adjustments used to determine the Closing REFI NAV and the Closing LIEN NAV, were omitted from that filing pursuant to Item 601(a)(5) of Regulation S-K.