Facilitating Cambridge Capital’s Strategy to Create a Leading Revenue and Cost Optimization PlatformWEST PALM BEACH, Fla., Feb. 05, 2026 (GLOBE NEWSWIRE) -- AFC today announced that its wholly owned subsidiary TCGDL LLC has closed a $60 million senior secured credit facility to STAT Buyer, LLC, a holding company controlled by Cambridge Capital (“Cambridge”), formed to facilitate the combination of its existing portfolio company STAT with The Moresby Group (“Moresby”). The proceeds from the credit facility w ...

WEST PALM BEACH, Fla., Jan. 05, 2026 (GLOBE NEWSWIRE) -- Advanced Flower Capital Inc. (Nasdaq: AFCG) (“AFC” or the “Company”) announced today that it has completed its previously announced conversion from a real estate investment trust (“REIT”) to a business development company (“BDC”) regulated under the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Conversion”), effective as of January 1, 2026. “We thank our shareholders for their continued support in AFC as we complete this important ...

Core Insights - The article discusses the investment landscape in the real estate sector, particularly focusing on the performance and outlook of real estate investment trusts (REITs) and related securities [2][3]. Group 1: Company Insights - Hoya Capital Research & Index Innovations is affiliated with Hoya Capital Real Estate, providing investment advisory services and market commentary focused on publicly traded securities in the real estate industry [2]. - The commentary emphasizes that it is for informational and educational purposes only, and does not constitute investment, tax, or legal advice [2]. Group 2: Industry Insights - The real estate industry is highlighted as having unique risks associated with investments in real estate companies and housing industry companies, as well as ETFs [2]. - The article notes that past performance of market data does not guarantee future results, indicating the inherent volatility and unpredictability of the real estate market [3].

Financial Data and Key Metrics Changes - For Q3 2025, the company generated distributable earnings of $0.16 per basic weighted average share of common stock and declared a dividend of $0.15 per common share [8][16] - The company reported a GAAP net loss of $12.5 million, or a loss of $0.57 per basic weighted average share [16] - As of September 30, 2025, total assets were $288.7 million, total shareholder equity was $169.3 million, and book value per share was $7.49 [17] Business Line Data and Key Metrics Changes - The company has made progress in reducing exposure to underperforming credits, with $43 million of principal repayment received since the end of Q2 2025 [9] - The CECL reserve was $51.3 million, approximately 18.7% of loans at carrying value, including a $4 million reserve on a specific loan [17] - The company anticipates a taxable loss of approximately $4 million related to a loan settlement, which will impact Q4 earnings [11][12] Market Data and Key Metrics Changes - The company is expanding its investment mandate to include direct lending opportunities outside the cannabis industry, targeting a pipeline of approximately $350 million [15] - The active cannabis pipeline is currently valued at $60 million, with a broader focus on non-cannabis opportunities [20][30] Company Strategy and Development Direction - The company plans to convert from a mortgage REIT to a business development company (BDC), which will allow it to invest in a wider array of opportunities [4][5] - The conversion is expected to occur in Q1 2026, with the company continuing to operate as a REIT until then [6] - The expanded investment focus aims to diversify exposure across industries and credit risk profiles, enhancing long-term growth potential [7][15] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the cannabis industry, noting limited opportunities due to the lack of federal progress and equity capital [21][44] - The company remains committed to capital preservation and is focused on stable, recession-resistant industries for future investments [23][36] - Management indicated that the selectivity in deal-making will increase with the broader investment mandate [25] Other Important Information - The company has received strong shareholder support for its conversion plans, with over 94% voting in favor of the proposals [5] - The company is actively managing underperforming loans and has initiated liquidation processes for certain assets [10][14] Q&A Session Summary Question: Clarification on the $350 million pipeline - The $350 million pipeline includes approximately $415 million, with $60 million allocated to cannabis and the remainder to non-cannabis opportunities [19][20] Question: Timing for redeploying cash - The conversion to a BDC is expected in Q1 2026, but no specific date has been provided for cash redeployment [30][31] Question: Skill set replication in new industries - The company has a strong underwriting background and is casting a wide net to explore various industries while leveraging past experiences [32][35] Question: Changes in fee structure with the external investment advisor - Details regarding the fee structure changes were referenced to the proxy materials, indicating no significant changes [37][40] Question: Future outlook for the cannabis industry - Management remains cautious about the cannabis sector, emphasizing the need for federal progress and equity capital before increasing investments [44] Question: Dividend guidance for Q1 2026 - No specific guidance was provided for dividends in Q1 2026, but the board has decided on no dividend for Q4 2025 [46]

Company Overview - Advanced Flower Capital (AFCG) is a Nasdaq-listed commercial mortgage REIT providing institutional loans to state law-compliant cannabis operators in the United States[12] - The company aims for attractive risk-adjusted returns with a target average portfolio gross yield of 12%-20%[12][13] - Shareholders approved the plan to convert from a REIT to a BDC, with over 61% of outstanding shares voted and approximately 94% of those votes cast in favor[12] Market Opportunity - The U S legal cannabis market is expected to reach $63 billion by 2030, with a total economic impact surpassing $200 billion[25] - Cannabis market is projected to grow at a CAGR of approximately 12% from 2025 to 2030, outpacing growth projections for wine, spirits, tobacco, and beer[28][31] - 42 states and DC have legalized medical cannabis, with 24 states and DC legalizing adult-use cannabis[32] Portfolio and Deal Flow - AFC's loan portfolio includes 14 loans to borrowers across 16 states[19] - The company has a deal selectivity of 34% since inception[42] - Total closed deals since inception amount to $930 million[42] - The company has sourced $261 billion in total deals since inception[42] - Current commitments stand at $340 million, with a principal balance of $328 million[42] Financial Performance - For the three months ended September 30, 2025, the company reported a net loss of $1249 million[54] - Distributable earnings for the three months ended September 30, 2025, were $354 million, or $016 per basic weighted average share[55] - For the nine months ended September 30, 2025, the company reported a net loss of $2159 million[54] - Distributable earnings for the nine months ended September 30, 2025, were $1147 million, or $052 per basic weighted average share[55]

Financial Performance - Advanced Flower Capital reported a GAAP net loss of $(12.5) million or $(0.57) per basic weighted average common share for Q3 2025[1][2]. - Distributable Earnings for the third quarter were $3.5 million or $0.16 per basic weighted average common share[1][2]. - Distributable Earnings for the nine months ended September 30, 2025, totaled $11.5 million, compared to $28.6 million for the same period in 2024[18]. - The provision for current expected credit losses for Q3 2025 was $7.4 million, compared to $0.2 million in Q3 2024[18][20]. - The company emphasizes that Distributable Earnings is a non-GAAP financial measure, providing insights into its operational performance[12][16]. Business Transition - The company is transitioning from a mortgage REIT to a business development company (BDC), which is expected to broaden its investment opportunities beyond real estate[4][5]. - Shareholders approved the conversion to BDC, with completion expected in Q1 2026[4][5]. - AFC's management believes the conversion to BDC will enhance its ability to generate consistent, risk-adjusted returns for shareholders[5]. Dividend Information - The company paid a regular cash dividend of $0.15 per common share for Q3 2025[6]. Portfolio Management - AFC is actively resolving nonaccrual positions and driving loan repayments across its portfolio, with a focus on the lower-middle market[3].

Core Insights - Advanced Flower Capital Inc. reported a GAAP net loss of $(12.5) million or $(0.57) per basic weighted average common share for Q3 2025, alongside Distributable Earnings of $3.5 million or $0.16 per share [1][2]. Financial Performance - The company experienced a net loss of $(12.5) million for the third quarter of 2025, translating to $(0.57) per basic weighted average common share [2]. - Distributable Earnings for the same period were reported at $3.5 million, equating to $0.16 per basic weighted average common share [2][17]. Strategic Developments - Shareholders approved the conversion of AFC from a mortgage REIT to a business development company (BDC), which is expected to broaden the investment scope beyond real estate-backed loans [4][5]. - The conversion is anticipated to be completed in the first quarter of 2026, pending customary conditions and regulatory requirements [5]. Market Opportunities - The CEO highlighted ongoing efforts to resolve nonaccrual positions and drive loan repayments, noting limited new capital entering the cannabis market [3]. - The company is actively exploring lending opportunities in the lower-middle market, aiming for attractive risk-adjusted returns [3]. Dividend Information - AFC paid a regular cash dividend of $0.15 per common share for Q3 2025 to shareholders of record as of September 30, 2025 [6].

Financial Performance - The company declared cash dividends totaling $11,975,530 for the nine months ended September 30, 2025, with a per-share amount of $0.53[190]. - Distributable earnings for the three months ended September 30, 2025, were $3.54 million, compared to $7.25 million for the same period in 2024, reflecting a decrease of approximately 51%[201]. - The net loss from continuing operations for the three months ended September 30, 2025, was approximately $(12.5) million, compared to a net income of approximately $1.2 million for the same period in 2024[204]. - The book value per share decreased from approximately $9.02 as of December 31, 2024, to approximately $7.49 as of September 30, 2025[196]. - The company expects to realize a taxable loss of approximately $4.1 million upon closing the settlement, significantly impacting distributable earnings for Q4 2025, leading to no anticipated dividend for that quarter[194]. Loan and Investment Activities - The company expanded its investment strategy to include senior secured mortgage loans to ancillary cannabis companies and other industries, aiming for attractive risk-adjusted returns[172]. - The company completed a spin-off of its commercial real estate portfolio into an independent publicly traded REIT, Sunrise Realty Trust, Inc., on July 9, 2024[180]. - The company reported a loan repayment of approximately $23.2 million from Private Company J, along with exit fees of approximately $0.9 million[184]. - The company placed a loan with Private Company P on nonaccrual status effective June 1, 2025, due to payment defaults[182]. - The company increased its loan commitment to Private Company O by an additional $3.0 million, extending the draw period and amortization start date[185]. - The loan portfolio as of September 30, 2025, comprised 14 loans with an aggregate originated commitment of approximately $344.6 million and outstanding principal of approximately $332.8 million[220]. - The company funded approximately $40.7 million in new loans during the nine months ended September 30, 2025, while principal repayments amounted to approximately $61.0 million[230]. Credit and Risk Management - The company is subject to credit risk on its commercial real estate loans and other targeted types of loans, which may adversely impact operating results[292]. - The company primarily provides loans to companies in the cannabis industry, which involves significant risks including federal illegality and lack of liquidity[298]. - Management plans to monitor the legal landscape to mitigate risks associated with the cannabis industry[300]. - The provision for current expected credit losses increased by approximately $7.2 million for the three months ended September 30, 2025, compared to the same period in 2024[218]. - As of September 30, 2025, the CECL Reserve was approximately $51.3 million, or 18.69%, of total loans held at carrying value of approximately $274.7 million[218]. Cash Flow and Liquidity - The company reported net cash provided by operating activities of approximately $11.8 million for the nine months ended September 30, 2025, which was less than the $12.0 million in dividends declared during the same period[243]. - As of September 30, 2025, the company had unrestricted cash totaling approximately $45.1 million, down from $103.6 million as of December 31, 2024[244]. - Net cash provided by investing activities was approximately $23.8 million for the nine months ended September 30, 2025, down from approximately $99.3 million in 2024, primarily due to a decrease in proceeds from the sale of loans[263]. - Net cash used in financing activities was approximately $(94.1) million for the nine months ended September 30, 2025, compared to $(70.9) million in 2024, largely due to a decrease in borrowings on the Revolving Credit Facility[264]. - The Company is required to maintain liquidity of at least $5.0 million and an annual debt service coverage of at least 1.50 to 1.0 under the Revolving Credit Facility[251]. Debt and Financing - The company entered into a new shelf registration statement on Form S-3, allowing for the offer and sale of up to $1.0 billion in securities[187]. - The Company issued $100.0 million in aggregate principal amount of the 2027 Senior Notes, accruing interest at a rate of 5.75% per annum, with net proceeds of approximately $97.0 million[254]. - The Revolving Credit Facility's initial maturity date was extended to April 29, 2028, with aggregate commitments of $60.0 million, potentially increasing to $100.0 million[248]. - As of September 30, 2025, the Company had total unfunded commitments of $11.4 million, with $6.2 million due in less than one year[269]. - As of September 30, 2025, the Company was in compliance with all covenants contained in the Revolving Credit Agreement[251]. Asset Management - The total loan held at fair value decreased from approximately $30.5 million as of December 31, 2024, to approximately $16.9 million as of September 30, 2025[226]. - The company wrote off a loan receivable of $1.8 million during the second quarter of 2025, which was equal to the carrying value of the loan[235]. - As of September 30, 2025, the portfolio of assets held outside of TRS1 had a weighted average real estate collateral coverage of approximately 1.0 times the aggregate committed principal amount of loans[239]. - The Company entered into Amendment Number Four to the Revolving Credit Agreement, extending the maturity date to April 29, 2028, and increasing the interest rate floor from 4.00% to 7.00%[249]. - As of September 30, 2025, the top three borrowers represented approximately 49.5% of the aggregate outstanding principal balances and 45.4% of total loan commitments[295].

Core Viewpoint - Advanced Flower Capital Inc. has received shareholder approval to convert from a real estate investment trust (REIT) to a business development company (BDC), which is expected to enhance its growth potential and shareholder value [1][2]. Group 1: Conversion Details - The conversion plan includes a new investment advisory agreement compliant with the Investment Company Act of 1940 and reduced asset coverage requirements for BDCs, aligning the company's leverage with industry standards [1]. - The conversion is anticipated to be completed in the first quarter of 2026, with the company continuing to trade under its existing Nasdaq ticker symbol, AFCG [3]. Group 2: Strategic Implications - The conversion to a BDC will enable the company to broaden its investment scope beyond real estate-backed loans, allowing it to pursue a wider range of market opportunities, which is expected to improve its ability to generate consistent, risk-adjusted returns [2]. Group 3: Company Background - Advanced Flower Capital Inc. specializes in originating, structuring, underwriting, and managing senior secured mortgage loans, particularly in the cannabis industry, with loans typically ranging from $10 million to over $100 million [4].

Core Viewpoint - Advanced Flower Capital Inc. (AFC) is set to release its financial results for Q3 2025 on November 12, 2025, before market open, with a management review scheduled for 10:00 am ET [1]. Company Overview - Advanced Flower Capital Inc. (AFC) is a commercial mortgage real estate investment trust (REIT) that specializes in originating, structuring, underwriting, investing in, and managing senior secured mortgage loans, particularly for the cannabis industry in legalized states [3]. - The company manages loans ranging from $10 million to over $100 million, typically secured by quality real estate assets, license value, and cash flows [3]. - AFC is headquartered in West Palm Beach, Florida, and leverages a deep network and significant expertise in credit and cannabis to operate effectively in its niche market [3]. Investor Relations - AFC distributes its earnings releases through its website and email lists, allowing interested parties to sign up for updates [2]. - For further inquiries, AFC has provided contact information for investor relations and media [4].