Compound Real Estate Bonds Review (2026): The 8.5% Bond With a Going-Concern Warning

The one-sentence version

A product marketed as a savings-account alternative you can leave at any time is issued by two companies that have each told the SEC there is substantial doubt they can continue operating, and whose combined cash is a fraction of what they owe their bondholders.

What the June 2026 semiannual report adds

Compound Real Estate Bonds, Inc. filed its Form 1-SA for the six months ended June 30, 2026 on September 28, 2026 (accession 0001829126-26-010470). It is unaudited. Four things in it matter to someone holding these bonds.

1. Bondholders are leaving, and the liquid assets went out with them. Bond principal outstanding fell from $19,007,784 at December 31, 2025 to $14,325,182 at June 30, 2026, a 24.6% drop in six months; the cash flow statement shows net receipts from issuing bonds of −$4,682,603. To pay for that, the $4,980,679 of Treasury bills on the December balance sheet went to zero and $2,670,000 of mortgage investments came back in (the book fell from $12,396,287 to $9,726,287).

2. The cushion for the next redemption is much thinner. With the Treasuries spent, cash at June 30 was $1,673,563 against $14,396,506 owed to bondholders (principal plus $71,324 of accrued interest): 11.6% cover, down from 35.3% in December and 46.3% in March. Counting the $1,702,568 of accounts receivable as well, it is 23.5%. The company's own management discussion puts it this way, as of August 31, 2026: $15,839,877 of bonds outstanding and "only $1,714,889 in cash and cash equivalents with which to satisfy potential redemptions." It adds that if redemption demand exceeds reserves, it "may need to seek additional financing or liquidate assets."

3. It still pays out more in interest than it earns in total. Income for the half was $740,269 (mortgage interest $682,269, Treasury interest $56,925, fees $1,074). Interest on the bonds was $746,448. Advertising fell to zero because the offering closed on September 19, 2025, and professional costs fell 60%, and the half still lost $219,622. Total liabilities of $16,396,437 exceeded total assets of $13,128,921, a shareholder's deficit of $3,267,516, wider than the $3,047,894 in December.

4. The related-party balance collapsed, and the note says why. The amount owed to affiliates fell from $6,897,095 at March 31, 2026 (per the annual report) to $1,970,893 at June 30. The note breaks the June figure into $1,547,663 owed to an affiliate the note calls "CASL" "for CREB I bond redemptions paid on the Company's behalf", $415,250 owed to CGB "for investor funds transferred from CREB I to a CGB portfolio" and $7,980 of other items. In plain terms: an affiliate has been paying some of this entity's redemptions, and some bondholders' money has been moved into another group product. The filing does not say what CGB is, and does not say whether the parent will keep paying.

Three things in the report that do not add up. We note them because a bondholder should know the document is not clean, not because they change the picture:

• The August figure is higher than the June one. Bonds outstanding were $14,396,506 at June 30 (principal plus accrued interest) and $15,839,877 at August 31 — $1,443,371 more, with the offering closed. Two months of 8.5% interest on $14.4 million is roughly $0.2 million. The filing does not explain the rest.
• The liquidity section labels the June 30, 2026 cash and bond figures as "As of June 30, 2025"; they match the 2026 balance sheet, not the 2025 one.
• The accumulated deficit is $3,363,766 on the balance sheet and $3,359,539 in the statement of changes in equity for the same date, a $4,227 gap; total equity agrees at −$3,267,516.

The report does not update the loan-by-loan detail, so we cannot tell you whether the $7,466,612 Ontario loan described below is still outstanding or was the one that repaid.

What Compound sells

Compound Real Estate Bonds — you may have met it as Compound Banc, the name on its App Store and Google Play listings — offers a "digital bond." You put in money from a $500 minimum (per the marketing site; the offering circular of the entity now selling bonds sets a $1,000 minimum initial investment), it accrues 8.50% APY with interest paid daily, and the marketing site states "Withdraw Anytime" and "No Lock-Ins" with "Daily Liquidity". The offering circular's contractual terms are repayment within 5 business days of a demand, or within 30 business days if more than $50,000 of repayments has been requested over the last 30 days.

To the company's credit, the site is explicit that this is not a bank product: "CREB investments are not FDIC insured bank deposits" and "Investing involves risk, including possible loss of principal." That disclosure is real and it is more than some competitors manage.

The bonds are described as backed by senior secured real estate loans and U.S. Treasuries. The original Form 1-K explains the pitch plainly: its parent, Compound Real Estate Holdings, "targeted millennials with a basic distrust of traditional financial institutions who had difficulty saving money" and offers "an alternative to the low interest saving accounts at traditional institutions."

That is a savings-substitute framing, aimed at savers, sold on liquidity. Hold that thought against the next section.

What the audited annual report says

Compound Real Estate Bonds, Inc. filed its Form 1-K for the year ended December 31, 2025 on April 30, 2026. Regulation A Tier 2 annual reports contain audited financial statements, which makes this the most reliable document about the company in existence.

It contains a going concern section. Here is the operative sentence, verbatim:

The Company has not yet generated sufficient revenues to fully cover all principal and interest obligations on its outstanding bonds from operating cash flow alone, and there can be no assurance that it will do so in future periods... These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the date these consolidated financial statements are issued.

And, on redemptions:

there is substantial uncertainty as to whether we will have sufficient capital to meet periodic bondholder redemptions.

And, on repayment:

The Company cannot provide assurance that its existing assets will generate sufficient cash flow to repay all bonds in full.

This is the first and loudest item in our real estate platform red-flags guide, and the same language is what we flagged at Groundfloor across two consecutive audits. A "going concern" qualification is a specific accounting term, not a figure of speech. It means the auditors concluded there is substantial doubt the business can meet its obligations over the next twelve months. It is disclosed in the annual report of a product sold on the promise that you can take your money out whenever you like.

Why it loses money, in one line

Look at the second row against the first. In 2025 the interest Compound owed its bondholders ($1,766,965) was larger than everything the company earned ($1,625,212) — before a single dollar of salary, advertising, legal fee or servicing cost.

The company says this itself, and the sentence is worth quoting because it forecloses the obvious optimistic reading:

While the Company's advertising... legal and professional fees... and other administrative fees are expected to decrease in 2026, the Company would still have net losses in 2025 even if these expenses had been reduced to zero.

That is not a cost-control problem. It is a spread problem. The company pays 8.5% on all the money it raises, and earns ~11.8% on only the ~62% it has managed to lend out, with the rest parked in Treasuries and bank accounts yielding far less. Run that arithmetic and the gross margin is thin before costs and negative after them.

Raising the bond rate from 7% to 8.5% in April 2024 — which the filing confirms — made the product more attractive to savers and the spread harder to earn.

The concentration nobody mentions

This is the finding that changed how we read the whole offering.

As of March 31, 2026, Compound held roughly $11,630,246 in real-estate-backed loans. The Form 1-K states:

Approximately 64.2% of the Company's outstanding loan portfolio was concentrated in a single loan of $7,466,612 secured by an industrial property with a LTV of 50% in the Canadian Province of Ontario, with no other single loan representing more than 15%.

A saver putting $500 into an 8.5% "digital bond" marketed as an alternative to a savings account is, in economic substance, taking a roughly two-thirds concentrated position in one commercial mortgage on one industrial building in Ontario, Canada.

Three details make that worse rather than better:

1. All loans are one-year term with no principal due until the end of the term. So the loan book throws off interest but returns no principal until maturity. It cannot be a source of redemption liquidity in the meantime.
2. The collateral is in a foreign jurisdiction. Enforcing on an Ontario industrial property is not the same exercise as enforcing in Florida, and it introduces currency and legal-process exposure that the marketing does not mention.
3. The LTV is 50%, which is genuinely conservative and is the strongest fact in Compound's favour here. If that valuation is right, the loan has real cushion. But a single 50%-LTV loan is still a single loan.

The liquidity arithmetic

The product's core promise is that you can withdraw at any time. Here is what stood behind that promise on the two dates the filings report.

At the end of 2025, cash and Treasuries covered about 35% of what bondholders were owed. By March 2026 that had improved to about 46%. By June 30, 2026 it was 11.6%: the Treasuries had been spent on redemptions (see what the June report adds). By our arithmetic, roughly half of that change came from a smaller bond liability as holders redeemed and half from more cash, in a quarter when the amount owed to related parties rose by $2,832,023.

That redemption figure is the one to sit with. Of 4,134,718 bonds ever sold, raising $41,347,180, a total of 2,494,567 — just over 60% — had already been redeemed by March 31, 2026. The book has more than halved.

And the money to meet the next wave is not contractually guaranteed by anyone. The filing:

In the event that bondholder redemption requests exceed the Company's available liquidity reserves, the Company would be dependent on its parent, Compound Real Estate Holdings, Inc. ('CH'), to provide capital... CH is under no contractual obligation to advance any such funds.

Meanwhile the amount Compound owes related parties went $65,955 at the end of 2024 → $4,065,072 at the end of 2025 → $6,897,095 by March 2026. The parent has been funding the operation, and it has been doing so as a creditor.

There are two Compounds, and the newer one is worse on its face

This is the part most likely to catch out someone comparing what they read to what they bought.

The Regulation A offering of Compound Real Estate Bonds, Inc. — the entity with the audited annual report described above — terminated on September 19, 2025. The company states it "is not currently raising capital under that offering."

Compound Real Estate Bonds II, Inc. was incorporated in Florida on June 18, 2025 and its offering was qualified by the SEC on September 18, 2025 — the day before the first one terminated. It is a separate legal entity, also wholly owned by Compound Real Estate Holdings, with a June 30 fiscal year end.

Its Form 1-SA for July 1 to December 31, 2025, filed March 31, 2026, reports:

• Revenues: $807. Not thousand. Eight hundred and seven dollars.
• Total expenses: $320,642, of which advertising and marketing $161,028 and interest on bonds $108,525
• Loss for the period: $319,835
• As of December 31, 2025: $7,939,037 of Compound Bonds outstanding against $7,619,202 of total assets — it owes more than it holds
• Its own going-concern language: "These conditions raise substantial doubt about the Company's ability to continue as a going concern."

And the disclosure we have not seen anyone else note. Of that $7,619,202 in assets:

$1,078,025 in cash and cash equivalents held in our own name, $5,367,878 in cash and cash equivalents held in a bank account in the name of an affiliate, and $1,509,807 invested in U.S. Treasury Bonds

About two-thirds of the assets standing behind CREB II's bondholders were sitting in a bank account belonging to a different company (67% by our arithmetic; the filing's three components add to $7,955,710, not the $7,619,202 total it states). The filing does not describe an escrow arrangement, a trust, or a security interest over that account. It says the cash is held in an affiliate's name. That was the interim picture; CREB II has since filed its first audited annual report, and the cash is now on its own balance sheet — along with bonds outstanding, principal plus interest, that have grown from $7,939,037 to $21,137,844 and still exceed total assets of $19,761,427.

We are not asserting the money is gone or misused — there is no evidence of that, and intra-group cash management is common. We are pointing out what a bondholder's claim actually reaches, which is a question that only matters on the day it matters.

The honest case for Compound

A review that only stacks up the bad facts is not a review.

• The disclosure is real and it is good. Everything on this page came from documents Compound wrote and filed. The going-concern language is prominent, the concentration is quantified, the affiliate cash is described. Plenty of issuers bury less than this.
• The 50% average LTV is conservative for private real estate credit, and the range tops out at 55%. If those valuations hold, the loans have meaningful cushion.
• The asset yield is real. Loans at 10–12% against an 8.5% coupon is a workable spread if deployment reaches a high enough share of assets and the cost base is spread over a bigger book. The model is not incoherent; it is subscale.
• Redemptions have been getting paid. Over 2.49 million bonds were redeemed — that is a functioning redemption process, not a gate. This is the single most important counterweight to everything above.
• They tell you it is not FDIC insured, in plain language, on the marketing page.

For comparison against products that publish the same disclosures and are not in this position, see our real estate debt comparison, the Groundfloor Notes review and the Arrived Private Credit Fund review. The bear case is not that Compound is a scam. It is that the risk being taken is not the risk being advertised. "8.50% APY, withdraw anytime" describes a savings product. The filings describe an early-stage, loss-making, subscale specialty lender with a concentrated book, dependent on a parent that has no obligation to help it.

Who this is for

It is not a savings account substitute, and it should not be held as one. Anything you would be distressed to lose, or need on a specific date, does not belong here. The "withdraw anytime" promise is a policy, not a contractual guarantee backed by liquid assets, and the issuer has said so in writing.

It could suit a risk-tolerant investor allocating a small, genuinely losable slice to private credit, who has read both entities' filings, who understands they are underwriting an Ontario industrial loan more than a diversified book, and who treats 8.5% as compensation for real default and liquidity risk rather than as a yield upgrade on cash.

If you are looking for the thing Compound is marketed as — somewhere safe to park savings at a good rate — the honest answer is that a Treasury fund or an insured account pays less and is a different asset class entirely, and that comparison is the one to make. Our passive real estate income guide sets out the realistic menu, and is real estate crowdfunding safe covers what is and is not protected when an issuer fails.

How to verify every number on this page

1. EDGAR, CIK 0001919204 (Compound Real Estate Bonds, Inc.). Open the Form 1-K filed April 30, 2026. Read Item 2, "Management's Discussion and Analysis" — the results, liquidity and going-concern paragraphs are consecutive and take about five minutes.
2. In the same document, Item 1 "Business," section "Recent Operations" — this is where the 64.2% single-loan concentration is stated.
3. EDGAR, CIK 0002078250 (Compound Real Estate Bonds II, Inc.). Open the Form 1-K filed September 3, 2026 (fiscal year ended June 30, 2026) and read "Liquidity and Capital Resources" and the going-concern note. The earlier Form 1-SA filed March 31, 2026 is where the affiliate-held cash figure appears, in the first sentence of its "Liquidity and Capital Resources."
4. Our read of that September 2026 Form 1-K is here. If a newer Form 1-K or 1-SA has been filed since, it supersedes both pages.

FAQ

Methodology

Every financial figure on this page was read directly from primary SEC filings on August 20, 2026:

• Form 1-K for the fiscal year ended December 31, 2025, Compound Real Estate Bonds, Inc., CIK 0001919204, Commission File No. 024-11848, filed April 30, 2026 (accession 0001829126-26-004272). This is an audited annual report under Regulation A Tier 2.
• Form 1-SA for the period July 1 to December 31, 2025, Compound Real Estate Bonds II, Inc., CIK 0002078250, filed March 31, 2026 (accession 0001829126-26-002910). Semi-annual reports are unaudited.
• Form 1-SA for the six months ended June 30, 2026, Compound Real Estate Bonds, Inc., CIK 0001919204, filed September 28, 2026 (accession 0001829126-26-010470), read on September 29, 2026. Unaudited. The June 2026 cover is our arithmetic: $1,673,563 ÷ ($14,325,182 + $71,324) = 11.6%.

Marketing claims were read from compoundrealestatebonds.com on the same date. Where the filings and the marketing describe the same thing differently, both are quoted rather than reconciled.

Two internal inconsistencies in the source documents are noted rather than smoothed over: the Form 1-K states total 2025 expenses as $3,047,794 in one sentence and total operating expenses as $3,047,784 in the next, a $10 difference; and the same filing gives the bond minimum as "$10" in its Business section, the marketing site states a $500 minimum, and the offering circular of Compound Real Estate Bonds II, the entity now selling bonds, sets a $1,000 minimum initial investment. We report all three rather than reconcile them.

Percentages of the bond liability covered by liquid assets are our own arithmetic on the filed figures: $6,828,064 ÷ $19,345,217 = 35.3% at December 31, 2025, and $7,770,502 ÷ $16,766,718 = 46.3% at March 31, 2026.

We hold no position in any Compound entity, have no affiliate relationship with Compound, and earn nothing whether you invest or not. Nothing here is investment advice. If Compound files a newer report, or disputes any figure above, we will update this page and say what changed.

Last updated: September 29, 2026 (Form 1-SA for the six months ended June 30, 2026). First published August 20, 2026.