Collected Strategies Jim Golden / Jack Kelleher AFCG-CS@collectedstrategies.com Advanced Flower Capital Inc. (NASDAQ:AFCG) is a leading commercial mortgage REIT that provides institutional loans to state-law compliant cannabis operators in the U.S. Through the management team's deep network and significant credit and cannabis expertise, AFC originates, structures, underwrites and manages loans ranging from $10 million to over $100 million, typically secured by quality real estate assets, license value and c ...

CLEVELAND, April 3, 2025 /PRNewswire/ -- Standard Wellness Holdings, LLC ("Standard Wellness"), a leading vertically integrated cannabis company, today announced the successful closing of a $14 million senior secured credit facility with Advanced Flower Capital Inc. (NASDAQ: AFCG) ("AFC"). This strategic financing will be utilized to refinance existing debt, including the full repayment of the company's debt facility with Focus Growth Capital Partners and early repayment of the seller note with Columbia Car ...

Supports Standard Wellness’s Continued Growth in Missouri, Utah and OhioWEST PALM BEACH, Fla., April 02, 2025 (GLOBE NEWSWIRE) -- Advanced Flower Capital Inc. (Nasdaq:AFCG) (“AFC”) today announced that it has committed to a $14 million senior secured credit facility to various subsidiaries of Standard Wellness Holdings (“Standard Wellness”), a privately held multi-state operator of cannabis cultivation, processing, and retail facilities. $10.5 million of the senior secured credit facility was funded at clos ...

Advanced Flower Capital (NASDAQ: AFCG ), a cannabis mortgage REIT, disappointed investors with its last earnings report on March 13, sending the stock down over 20% in a single session. What happened? The dividend was cut from a quarterlyI objectively search for undervalued stocks of any size across a wide variety of industries using quantitative methods that I've thoroughly backtested for success. I believe the numbers are more important than the story (most of the time), as they tend to paint a more reali ...

Analyst’s Disclosure: I/we have a beneficial long position in the shares of RIET, HOMZ, IRET, ALL HOLDINGS IN THE IREIT+HOYA PORTFOLIOS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Hoya Capital Research & Index Innovations (“Hoya Capital”) is an affiliate of Hoya Capi ...

Financial Data and Key Metrics Changes - For Q4 2024, the company generated distributable earnings of $0.29 per basic weighted average share, with a GAAP net loss of $1 million or $0.05 per share [14][31] - For the fiscal year 2024, net interest income was $45.7 million, with distributable earnings of $34.9 million or $1.68 per share, and a GAAP net income of $16.8 million or $0.78 per share [31] - As of December 31, 2024, total assets were $402.1 million, with total shareholder equity of $201.4 million and a book value per share of $9.02 [33] Business Line Data and Key Metrics Changes - The company originated $135 million in new commitments for the fiscal year 2024, exceeding the goal of $100 million [9] - The weighted average portfolio yield to maturity was approximately 18% as of December 31, 2024 [33] - The company received $119 million in paydowns from five underperforming credits during 2024 [28] Market Data and Key Metrics Changes - The active deal pipeline as of March 1, 2025, was over $380 million, indicating strong demand for capital in the cannabis sector [10][17] - The company noted a growing supply-demand imbalance for debt capital in the cannabis industry, driven by refinancing activity and market expansions [18] Company Strategy and Development Direction - The company refocused efforts solely on the cannabis sector after spinning off its commercial real estate portfolio [9] - The management aims to diversify the portfolio while enhancing underwriting and reducing exposure to underperforming credits [9] - The company is targeting loan sizes between $10 million and $40 million for future investments [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities in the cannabis space, citing a demand for capital that exceeds supply [10] - The company is focused on supporting strong operators in attractive limited license states, despite challenges in the market [18] - Management acknowledged the impact of underperforming legacy loans on earnings but emphasized ongoing efforts to manage the portfolio effectively [15][28] Other Important Information - The company declared a first-quarter dividend of $0.23 per share, reflecting a sustainable payout based on current performing assets [15] - The CECL reserve was $30.6 million, approximately 10.4% of loans at carrying value, indicating a cautious approach to credit risk [33] Q&A Session Summary Question: Update on Justice Grown and next steps - Management indicated they would not negotiate in public but emphasized setting dividends at sustainable levels based on performing assets [38][39] Question: Commentary on the pipeline and opportunities - Management noted a robust pipeline of opportunities across refinancing, CapEx, and M&A, with a focus on good operators and strong credits [41][46] Question: Outlook for new fundings in 2025 - Management stated they would likely wait until the next quarter to set a new target for fundings, citing a better opportunity set than the previous year [50][53] Question: Clarification on liquidity and credit lines - Management confirmed approximately $89 million available under revolving credit facilities as of March 1, 2025 [55] Question: Sustainability of the dividend - Management clarified that the recent dividend adjustments were based on new developments and the need to set a sustainable payout level [56][59] Question: Demand for assets in New Jersey and Pennsylvania - Management refrained from commenting on specific market conditions but acknowledged the competitive landscape in those states [66] Question: Perspective on 280E tax implications - Management recognized the complexities of 280E and its impact on companies, expressing a desire for reform but noting it is not a priority for the current administration [72][73]

AFC Gamma Inc. (AFCG) came out with quarterly earnings of $0.29 per share, missing the Zacks Consensus Estimate of $0.39 per share. This compares to earnings of $0.49 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -25.64%. A quarter ago, it was expected that this company would post earnings of $0.34 per share when it actually produced earnings of $0.35, delivering a surprise of 2.94%.Over the last four quarters, the company h ...

Financial Performance - Fourth quarter 2024 GAAP net loss of $(1.0) million or $(0.05) per basic weighted average common share, with Distributable Earnings of $6.3 million or $0.29 per basic weighted average common share[1][3] - Full year 2024 GAAP net income of $16.8 million or $0.78 per basic weighted average common share, with Distributable Earnings of $34.9 million or $1.68 per basic weighted average common share[1][3] - Interest income for the fourth quarter 2024 was $9.2 million, while total expenses were $3.5 million[17] - The company reported a provision for current expected credit losses of $(5.3) million for the fourth quarter 2024[17] - The weighted average number of common shares outstanding for the full year 2024 was 20,821,239[17] Dividends - Dividend declared of $0.23 per common share for the first quarter 2025, payable on April 15, 2025[5] Strategic Focus - The CEO indicated a focus on capital preservation and disciplined investment strategies in the cannabis sector due to ongoing market challenges[4] - The company plans to diversify its portfolio and provide debt capital to successful operators in the cannabis industry[4] Corporate Events - The company issued a presentation of its fourth quarter and full year 2024 results, available on its Investor Relations website[7] - The 2025 Annual Shareholders Meeting is scheduled for May 19, 2025, with a record date of March 24, 2025[6]

Fourth quarter 2024 GAAP net loss of $(1.0) million or $(0.05) per basic weighted average common share and Distributable Earnings¹ of $6.3 million or $0.29 per basic weighted average common share Full year 2024 GAAP net income of $16.8 million or $0.78 per basic weighted average common share and Distributable Earnings of $34.9 million or $1.68 per basic weighted average common share Dividend declared of $0.23 per common share for the first quarter 2025 WEST PALM BEACH, Fla., March 13, 2025 (GLOBE NEWSWIRE) ...

Loan Origination and Management - As of March 1, 2025, the loan origination pipeline consists of potential new loans to cannabis operators with prospective total loan commitments of approximately $383 million[39]. - From January 1, 2020, to March 1, 2025, the management team sourced over $20.6 billion of loans across the cannabis industry[39]. - The management team has underwritten over 400 loans with a principal value exceeding $10.0 billion during their careers[41]. - The company intends to fund potential loans using unused borrowing capacity under its senior secured revolving credit facility and other sources[40]. - The investment strategy focuses on first and second lien loans secured by real estate collateral, specifically targeting loans greater than $10 million[102][106]. - Since January 1, 2020, the company had 9 active loans in its pipeline and passed on 828 of 871 sourced loan opportunities due to various risk factors[107]. - The investment process emphasizes a disciplined underwriting approach, with loans screened based on company profile, state dynamics, and regulatory matters[105][107]. - The company employs a comprehensive review and selection process to mitigate credit risk associated with its loans[549]. Management Agreement and Fees - The Management Agreement automatically renews every year on July 31 for a one-year period unless either party elects not to renew[56]. - The company has entered into multiple amendments to its Management Agreement to update investment guidelines and payment processes[49][50][51][52]. - The Management Agreement allows for termination by the company with 30 days' notice for breaches by the Manager, including fraud or bankruptcy[57]. - The company may terminate the Management Agreement with 60 days' notice if it defaults on material terms, incurring a termination fee[58]. - The Termination Fee upon Management Agreement termination equals three times the sum of the annual Base Management Fee and annual Incentive Compensation earned in the prior 12 months[98]. - For the year ended December 31, 2024, the Manager earned a Base Management Fee of approximately $3.6 million, net of a Base Management Fee Rebate of approximately $0.9 million[78]. - The Incentive Compensation fee payable to the Manager for the year ended December 31, 2024 was approximately $6.8 million, compared to $10.4 million for 2023[78]. - Total management fees for the year ended December 31, 2024 amounted to $13.3 million, down from $17.7 million in 2023[79]. - The Base Management Fees were revised to 0.375% of Equity as of the last day of each quarter[81]. - The Hurdle Amount for Incentive Compensation is now set at 2% of Adjusted Capital as of the last day of the preceding fiscal quarter[84]. - The Annual Hurdle Amount for Clawback Obligation is now equal to 8% of Adjusted Capital as of the last day of the preceding fiscal year[87]. - The Manager did not seek reimbursement for Mr. Tannenbaum's compensation for the year ended December 31, 2024[78]. - The total Base Management Fees for 2023 were approximately $3.7 million, net of a rebate of $1.7 million[78]. - The total management fees for 2023 included approximately $5.4 million before deductions[79]. Investment Guidelines and Compliance - The investment guidelines have been amended to focus on investments in first and second lien loans secured by mortgages to cannabis operators[53]. - The company has established Investment Guidelines to ensure compliance with REIT regulations and investment strategies[63]. - The Investment Committee is responsible for reviewing loan opportunities and ensuring compliance with Investment Guidelines[65]. - Co-investments with other investment vehicles managed by the Manager are permitted, with limited risk to the company[68]. - The company actively monitors the legal landscape affecting the cannabis industry to mitigate risks associated with its loan portfolio[556]. Market and Regulatory Environment - The cannabis industry remains illegal at the federal level, but state legalization efforts are expanding, with 41 states allowing commercial sales for medical purposes[123]. - The company’s borrowers face significant regulatory compliance burdens, which may limit their ability to expand and could impact the company's investments[124]. - The company is subject to various regulations, including the Equal Credit Opportunity Act and the USA Patriot Act, impacting its lending operations[112]. - The Dodd-Frank Act has introduced significant regulatory changes that may affect the company's operations, with ongoing developments in applicable regulations[113]. - The company has not been required to register under the Investment Company Act, maintaining its operations under the Section 3(c)(5) Exemption[115]. Financial Performance and Risk Management - Core Earnings for the quarter were $5,225,000, representing a 5.2% quarterly return on Adjusted Capital of $100 million[93]. - The Hurdle Amount was set at $2,000,000, which is a 2.0% quarterly return on the same Adjusted Capital[93]. - The total Incentive Compensation calculated was $1,045,000, derived from a Catch-Up Amount of approximately $666,667 and an Excess Earnings Amount of approximately $378,333[93]. - The company aims to provide attractive risk-adjusted returns through cash distributions and capital appreciation by funding loans to cannabis companies[100]. - The company operates in a highly competitive market for lending opportunities, facing competition from various institutional investors, including REITs, banks, and private equity funds[110]. - The company has a flexible funding structure that allows for quicker redeployment of capital compared to traditional REIT models, enhancing its competitive advantage[111]. - The company’s operating results depend on the difference between income earned on assets and the cost of borrowing, which is sensitive to market interest rates[544]. - Interest rate risk is managed through a mix of floating- and fixed-rate loans to mitigate the impact of rising interest rates[545]. - A hypothetical 100 basis points increase in the floating benchmark rate would result in an increase in annual interest income of approximately $8.3 million[545]. - The fair value of loans may fluctuate significantly due to market conditions, with a decrease of 50 bps or increase of 50 bps resulting in an unrealized gain (loss) of approximately $0.3 million[545]. - The largest credit facility accounted for approximately 22.2% of the aggregate outstanding principal balances and approximately 20.3% of total loan commitments, with a principal amount of $79.2 million outstanding[553]. - As of December 31, 2024, the company had eight floating-rate loans, representing approximately 44% of the portfolio based on aggregate outstanding principal balances[545]. - The top three borrowers represented approximately 48.2% of the aggregate outstanding principal balances as of December 31, 2024[553].