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].

Core Viewpoint - Advanced Flower Capital Inc. (AFC) is seeking shareholder approval for its conversion from a real estate investment trust (REIT) to a business development company (BDC), with a special meeting scheduled for November 6, 2025 [2][5][10]. Group 1: Shareholder Meeting Details - The special meeting will be conducted virtually on November 6, 2025, at 10:00 a.m. Eastern Time, and shareholders of record as of September 15, 2025, are entitled to vote [3][5]. - Shareholders will receive proxy cards or instructions on how to vote in the coming days [3][7]. Group 2: Proposals for Approval - Two key proposals are being presented for shareholder approval: 1. A new investment advisory agreement compliant with the Investment Company Act of 1940 [6]. 2. The application of a reduced asset coverage ratio as permitted under Section 61(a)(2) of the 1940 Act [6][8]. Group 3: Strategic Rationale - The conversion aims to expand AFC's investment scope beyond real-estate-backed loans, enhancing portfolio diversification and reducing concentration risk [8]. - This strategic shift is expected to better position AFC for long-term sustainable value creation for shareholders [8]. Group 4: Company Background - AFC is a leading commercial mortgage REIT that specializes in originating, structuring, underwriting, and managing senior secured mortgage loans, particularly in the cannabis industry [11]. - The company typically manages loans ranging from $10 million to over $100 million, secured by quality real estate assets and cash flows [11].

Core Points - Advanced Flower Capital Inc. (AFC) declared a quarterly dividend of $0.15 per share for the quarter ending September 30, 2025, payable on October 15, 2025, to stockholders of record on September 30, 2025 [1] - The third quarter dividend remains consistent with the second quarter dividend, with the Board evaluating Distributable Earnings each quarter due to uncertainties regarding loan repayments [2] Company Overview - Advanced Flower Capital Inc. is a commercial mortgage real estate investment trust (REIT) that specializes in originating, structuring, underwriting, 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, secured by quality real estate assets and cash flows [3] Distributable Earnings - Distributable Earnings is a non-GAAP financial measure used by the company to evaluate performance, excluding certain transactions and GAAP adjustments [4][6] - The calculation of Distributable Earnings is similar to Core Earnings but includes Incentive Compensation earned during the period [5] - Distributable Earnings is defined as net income excluding stock-based compensation, depreciation, unrealized gains/losses, expected credit losses, and one-time events [6][7] - The company aims to distribute at least 90% of its annual REIT taxable income, with Distributable Earnings serving as a factor in determining dividend levels [7][8]

Financial Data and Key Metrics Changes - For Q2 2025, the company generated distributable earnings of $0.15 per basic weighted average share of common stock and declared a second quarter dividend of $0.15 per share [5][6][18] - The company reported a GAAP net loss of $13.2 million, or a loss of $0.60 per basic weighted average common share [18] - As of June 30, 2025, total assets were $290.6 million, total shareholder equity was $184.7 million, and book value per share was $8.18 [19] Business Line Data and Key Metrics Changes - The company exited an equipment loan to a Nevada cultivator, impacting earnings but not book value as the loan was fully reserved [6][7] - The weighted average portfolio yield to maturity was approximately 17% as of August 1, 2025 [19] - The CECL reserve was $44 million, approximately 14.6% of loans at carrying value, with total unrealized losses of $21.5 million for loans held at fair value [19] Market Data and Key Metrics Changes - The cannabis industry remains challenging with limited capital entering the market, impacting the company's ability to invest in size [12] - The company noted that about two-thirds of cannabis opportunities do not have real estate coverage, limiting the current investment pipeline [28] Company Strategy and Development Direction - The company announced its intention to convert from a REIT to a BDC, which would allow it to invest in a broader array of opportunities, including non-real estate covered assets [13][14] - The conversion is seen as a positive step to capitalize on the cannabis sector's growth potential, especially if federal rescheduling occurs [14][16] Management's Comments on Operating Environment and Future Outlook - Management highlighted the ongoing uncertainty and volatility in the cannabis industry, which has tightened underwriting standards and reduced the investment pipeline [29] - The potential rescheduling of cannabis is expected to attract more capital into the industry, improving asset valuations and supporting the company's troubled loans [31][32] Other Important Information - The company expanded its senior secured revolving credit facility from $30 million to $50 million [19] - The proposed conversion to a BDC is subject to shareholder approval and is anticipated to occur in 2026 [16][17] Q&A Session Summary Question: Why convert to BDC versus mortgage REIT? - Management explained that many thriving cannabis operators do not own real estate, limiting investment opportunities as a REIT. The conversion to a BDC is seen as the best path for long-term value [22][24] Question: How much will the BDC conversion broaden the pipeline? - Management indicated that approximately two-thirds of cannabis opportunities do not have real estate coverage, suggesting significant potential for pipeline expansion post-conversion [28] Question: Update on problem loans with Private Company A and K? - Management provided updates on asset sales under receivership for Private Company A and clarified the accounting treatment for loans held at fair value versus carrying value [37][39] Question: What is the target debt leverage ratio? - The company targets a leverage ratio between 1.0 and 1.2 times and does not foresee issuing equity given current stock trading levels [41][42] Question: Market sentiment on mortgage REIT sector? - Management noted that mortgage REITs have traded better recently, with interest rates impacting trading and investment opportunities [45] Question: Impact of rescheduling on borrower interest? - Management stated that the rescheduling conversation is still new, and many are in a holding pattern awaiting concrete developments [49][50] Question: CECL reserves increase due to portfolio fundamentals or macro aspects? - Management indicated that while macro factors play a role, the increase in CECL reserves is primarily driven by individual loan evaluations [51][52] Question: Will BDC conversion open new credit facilities? - Management noted that while the current credit line is similar to BDC financing, it is uncertain if the structure will attract more banks to participate in cannabis lending [54][55]

Company Overview - Advanced Flower Capital (AFCG) aims to provide attractive risk-adjusted returns through investments with significant collateral, targeting an average portfolio gross yield of 12%-20%[14,15] - The company's management and investment team have collectively structured over $15 billion in loan transactions and taken four companies public[14,54] - AFC's loan portfolio includes 15 loans to borrowers with operations and/or collateral across 16 states[22] Market Opportunity - The U S legal cannabis market is expected to reach $63 billion by 2030, with a total economic impact surpassing $200 billion[28] - Cannabis growth is expected to continue, potentially cutting into alcohol purchases, with alcohol sales in legal cannabis states underperforming by 1-1 5% over the past 5 years[33] - Cannabis is a $35 billion legal market projected to grow to $63 billion by 2030[37] Financial Performance & Portfolio - The company's total commitments since inception are $917 million[58] - The outstanding principal balance is $358 million, with current commitments of $370 million[25,58] - Deal selectivity is 3 9%, representing the ratio of closed deals to deals sourced/reviewed since January 1, 2020[58] - The weighted average yield-to-maturity (YTM) of the portfolio loans is approximately 17% as of August 1, 2025[49,64]

Company Performance - AFC Gamma Inc. reported quarterly earnings of $0.15 per share, missing the Zacks Consensus Estimate of $0.24 per share, and down from $0.56 per share a year ago, representing an earnings surprise of -37.50% [1] - The company posted revenues of $6.2 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 18.17%, and down from $19.96 million year-over-year [2] - Over the last four quarters, AFC Gamma has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates [2] Stock Performance - AFC Gamma shares have declined approximately 45.3% since the beginning of the year, contrasting with the S&P 500's gain of 10% [3] - The current Zacks Rank for AFC Gamma is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.24 on revenues of $8.18 million, and for the current fiscal year, it is $0.93 on revenues of $31.62 million [7] - The trend of estimate revisions for AFC Gamma was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The REIT and Equity Trust industry, to which AFC Gamma belongs, is currently in the bottom 19% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

[Second Quarter 2025 Financial Highlights and Strategic Announcements](index=1&type=section&id=Q2_2025_Financial_Highlights_Strategic_Announcements) AFC reported a GAAP net loss of $(13.2) million and Distributable Earnings of $3.4 million, also announcing an expanded investment mandate and proposed BDC conversion [Summary of Q2 2025 Results](index=1&type=section&id=Summary_Q2_2025_Results) AFC reported a GAAP net loss of $(13.2) million and Distributable Earnings of $3.4 million for Q2 2025, with per-share figures of $(0.60) and $0.15 respectively Q2 2025 Key Financial Highlights | Metric | Amount | | :------------------------------------ | :------------- | | GAAP Net Loss | $(13.2) million | | GAAP Net Loss per Share | $(0.60) | | Distributable Earnings | $3.4 million | | Distributable Earnings per Share | $0.15 | [Key Strategic Initiatives](index=1&type=section&id=Key_Strategic_Initiatives) AFC plans to expand its investment mandate to include secured loans for ancillary cannabis and middle-market companies, and proposes converting to a BDC, pending shareholder approval - **Expansion of Investment Mandate**: Approved an amendment to include secured loans to ancillary cannabis businesses and public/private middle-market companies operating outside the cannabis industry[4](index=4&type=chunk) - **Proposed Conversion to BDC**: Intention to convert from a commercial mortgage REIT to a BDC, subject to shareholder approval, to pursue a broader array of investment opportunities[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management_Commentary) CEO Dan Neville emphasized resolving non-accrual credits and evaluating cannabis opportunities, highlighting the BDC conversion as a milestone to expand the investable universe beyond mortgage REIT limitations [CEO Statement](index=1&type=section&id=CEO_Statement) CEO Dan Neville highlighted the company's focus on resolving non-accrual credits and selectively evaluating opportunities with established cannabis operators, emphasizing that the proposed BDC conversion is a significant milestone, enabling the company to overcome limitations of its mortgage REIT structure in the capital-intensive cannabis industry and expand its investable universe to include non-real estate covered and ancillary businesses - **Operational Focus**: Focused on working through non-accrual credits and selectively evaluating opportunities with established operators of scale in attractive cannabis markets[3](index=3&type=chunk) - **Rationale for BDC Conversion**: The conversion would significantly expand the investable universe, allowing lending to ancillary cannabis businesses and non-real estate covered, vertically integrated operators, addressing limitations of the mortgage REIT structure in the capital-intensive cannabis industry[6](index=6&type=chunk) [Company Profile](index=2&type=section&id=Company_Profile) Advanced Flower Capital Inc. (AFCG) is a commercial mortgage REIT specializing in senior secured mortgage loans and other debt securities for cannabis industry operators in legalized states [About Advanced Flower Capital](index=2&type=section&id=About_Advanced_Flower_Capital) Advanced Flower Capital Inc. (AFCG) is a commercial mortgage real estate investment trust (REIT) primarily originating, structuring, underwriting, investing in, and managing senior secured mortgage loans and other debt securities, with a specialization in loans to cannabis industry operators in states that have legalized medical and/or adult-use cannabis - **Business Model**: Operates as a commercial mortgage REIT, primarily originating, structuring, underwriting, investing in, and managing senior secured mortgage loans and other debt securities[13](index=13&type=chunk) - **Investment Focus**: Specializes in loans to cannabis industry operators in legalized states, with loans typically secured by quality real estate assets, license value, and cash flows, ranging from **$10 million to over $100 million**[13](index=13&type=chunk) [Detailed Second Quarter 2025 Financial Performance](index=1&type=section&id=Detailed_Q2_2025_Financial_Performance) AFC reported a GAAP net loss of $(13.2) million and Distributable Earnings of $3.4 million for Q2 2025, with a detailed reconciliation of these figures and a declared common stock dividend [GAAP Net Loss and Distributable Earnings](index=1&type=section&id=GAAP_Net_Loss_Distributable_Earnings) AFC reported a GAAP net loss of $(13.2) million and Distributable Earnings of $3.4 million for Q2 2025, with per-share figures of $(0.60) and $0.15 respectively Q2 2025 Financial Results (Three Months Ended June 30, 2025) | Metric | Amount | | :------------------------------------ | :------------- | | Net (loss) income | $(13,164,651) | | Distributable earnings | $3,384,328 | | Basic weighted average shares outstanding | 22,114,341 | | Distributable earnings per basic weighted average share | $0.15 | [Reconciliation of GAAP Net Income (Loss) to Distributable Earnings](index=4&type=section&id=Reconciliation_GAAP_Net_Income_to_Distributable_Earnings) The reconciliation table details adjustments made to GAAP Net income (loss) to arrive at Distributable Earnings, showing a $14.1 million provision for current expected credit losses for Q2 2025 Reconciliation of GAAP Net Income (Loss) to Distributable Earnings (Three Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------------ | :------------- | :------------- | | Net (loss) income | $(13,164,651) | $16,446,121 | | Stock-based compensation expense | $484,502 | $369,343 | | Unrealized losses (gains) or other non-cash items | $1,055,970 | $1,420,001 | | Provision for (reversal of) current expected credit losses | $14,074,320 | $(6,190,240) | | TRS loss (income), net of dividends | $934,187 | $(624,235) | | **Distributable earnings** | **$3,384,328** | **$11,420,990** | | Basic weighted average shares outstanding | 22,114,341 | 20,400,004 | | Distributable earnings per basic weighted average share | $0.15 | $0.56 | [Common Stock Dividend](index=2&type=section&id=Common_Stock_Dividend) On July 15, 2025, Advanced Flower Capital paid a regular cash dividend of $0.15 per common share for the second quarter of 2025 to shareholders of record as of June 30, 2025 Q2 2025 Common Stock Dividend | Metric | Value | | :-------------------- | :---- | | Dividend per share | $0.15 | | Payment Date | July 15, 2025 | | Record Date | June 30, 2025 | [Strategic Business Developments](index=1&type=section&id=Strategic_Business_Developments) AFC is expanding its investment mandate to include secured loans to ancillary cannabis and middle-market companies, alongside a proposed conversion to a BDC to broaden investment opportunities [Expansion of Investment Mandate](index=1&type=section&id=Expansion_Investment_Mandate) AFC's Board approved expanding its investment mandate to include secured loans for ancillary cannabis businesses and public/private middle-market companies outside the cannabis industry, adhering to REIT obligations - **New Investment Areas**: Expanded mandate to include secured loans to ancillary cannabis businesses and public/private middle-market companies operating outside the cannabis industry[4](index=4&type=chunk) [Proposed Conversion to Business Development Company (BDC)](index=1&type=section&id=Proposed_Conversion_to_BDC) AFC announced its intention to convert from a commercial mortgage REIT to a BDC, pending shareholder approval, to significantly expand the investable universe, allowing lending to ancillary cannabis businesses and non-real estate covered operators - **Conversion Rationale**: The current mortgage REIT structure limits lending opportunities in the capital-intensive cannabis industry due to many operators not owning real estate[6](index=6&type=chunk) - **Expanded Investable Universe**: Conversion to a BDC would allow lending to ancillary cannabis businesses with high growth potential and non-real estate covered, vertically integrated operators, as well as direct lending opportunities in other private and public middle-market companies[6](index=6&type=chunk)[7](index=7&type=chunk) - **Approval Requirement**: The proposed conversion is subject to shareholder approval of a new investment advisory agreement with its Manager that complies with the Investment Company Act of 1940[8](index=8&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non_GAAP_Financial_Measures) Distributable Earnings is a non-GAAP financial measure used by AFC to evaluate performance by excluding certain non-cash and GAAP adjustments not indicative of current loan activity, serving as a factor in dividend authorization [Definition and Rationale for Distributable Earnings](index=3&type=section&id=Definition_Rationale_Distributable_Earnings) Distributable Earnings is a non-GAAP financial measure used by AFC to evaluate performance by excluding certain non-cash and GAAP adjustments not indicative of current loan activity, defined as GAAP net income (loss) adjusted for specific items, and serves as a factor in dividend authorization - **Definition**: Distributable Earnings is GAAP net income (loss) excluding stock-based compensation, depreciation/amortization, unrealized gains/losses, provision for current expected credit losses, TRS (income) loss, and certain one-time non-cash charges[16](index=16&type=chunk) - **Purpose**: Used to evaluate performance by excluding effects of certain transactions and GAAP adjustments not necessarily indicative of current loan activity and operations, and is a factor considered by the Board of Directors in authorizing dividends[14](index=14&type=chunk)[17](index=17&type=chunk) - **Limitations**: It is a non-GAAP measure and should not be considered a substitute for GAAP net income; methodology may differ from other REITs, impacting comparability[18](index=18&type=chunk) [Investor Information](index=2&type=section&id=Investor_Information) Advanced Flower Capital provides investors with access to its Q2 2025 earnings presentation and Form 10-Q filing, and will host a conference call on August 14, 2025, to discuss quarterly financial results [Investor Resources and Conference Call](index=2&type=section&id=Investor_Resources_Conference_Call) Advanced Flower Capital provides investors with access to its 'Second Quarter 2025 Earnings Presentation' and its Form 10-Q filing via its website, and will host a conference call on August 14, 2025, at 10:00 am ET to discuss quarterly financial results, with options for live audio webcast and telephone participation - **Available Resources**: Q2 2025 Earnings Presentation and Quarterly Report on Form 10-Q are available on advancedflowercapital.com under the Investor Relations section[10](index=10&type=chunk)[11](index=11&type=chunk) - **Conference Call**: Scheduled for August 14, 2025, at 10:00 am ET, with live audio webcast and telephone registration available; the complete webcast will be archived for 90 days[12](index=12&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward_Looking_Statements) This section contains a standard disclaimer regarding forward-looking statements, indicating they reflect current views and projections but are subject to inherent uncertainties and risks, with no obligation to publicly update or revise them unless required by law [Disclaimer Regarding Forward-Looking Statements](index=4&type=section&id=Disclaimer_Forward_Looking_Statements) This section contains a standard disclaimer regarding forward-looking statements, indicating they reflect current views and projections but are subject to inherent uncertainties and risks, advising that actual results may differ materially due to factors such as the Manager's ability to locate loan opportunities, market demand, and credit losses, and disclaiming any obligation to publicly update or revise these statements unless required by law - **Nature of Statements**: Reflects current views and projections regarding future events and financial performance, identified by words such as 'believes,' 'expects,' 'will,' 'intends,' etc[20](index=20&type=chunk) - **Risk Factors**: Subject to inherent uncertainties, including the Manager's ability to locate suitable loan opportunities, demand for cannabis cultivation and processing facilities, and management's current estimate of expected credit losses, which could cause actual results to differ materially[20](index=20&type=chunk) - **No Obligation to Update**: The company does not undertake any obligation to publicly update or revise any forward-looking statements, except as required by law[20](index=20&type=chunk) [Contact Information](index=5&type=section&id=Contact_Information) Contact details for investor relations and media inquiries are provided for Advanced Flower Capital Inc [Investor and Media Contacts](index=5&type=section&id=Investor_Media_Contacts) Contact details for investor relations and media inquiries are provided for Advanced Flower Capital Inc - **Investor Relations Contact**: Robyn Tannenbaum, **(561) 510-2293**, ir@advancedflowercapital.com[22](index=22&type=chunk) - **Media Contact**: Collected Strategies, Jim Golden / Jack Kelleher, AFCG-CS@collectedstrategies.com[22](index=22&type=chunk)

Core Insights - Advanced Flower Capital Inc. reported a GAAP net loss of $(13.2) million or $(0.60) per basic weighted average common share for Q2 2025, alongside Distributable Earnings of $3.4 million or $0.15 per basic weighted average common share [1][2] Financial Performance - The company experienced a net loss of $(13.2) million for the quarter ended June 30, 2025, compared to a net income of $16.4 million for the same period in 2024 [19] - Distributable Earnings for the quarter were $3.4 million, down from $11.4 million in the same quarter of the previous year [19] Strategic Developments - The company announced its intention to convert from a Mortgage REIT to a Business Development Company (BDC), which would allow it to pursue a wider range of investment opportunities beyond real estate [5][6] - The Board of Directors approved an amendment to the management agreement, expanding the investment mandate to include secured loans to ancillary cannabis companies and middle-market companies outside the cannabis sector [4][6] Market Context - The CEO highlighted a lack of capital entering the cannabis market and the need to selectively evaluate opportunities with established operators in attractive markets [3] - The conversion to a BDC is seen as a significant milestone, enabling the company to lend to ancillary cannabis businesses and diversify its investment portfolio [6][7] Dividend Information - The company paid a regular cash dividend of $0.15 per common share for Q2 2025 to shareholders of record as of June 30, 2025 [8]