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].

Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclaimers and disclosures related to investment advice and positions held by contributors [1][2][3]. Group 1 - No stock, option, or similar derivative positions are held by the contributors in any mentioned companies [1]. - The article emphasizes that it is not financial or investment advice and encourages readers to conduct their own due diligence [2]. - Contributors may have personal positions in equities mentioned, but this is not disclosed in detail [3].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for AFC Gamma Inc. due to lower revenues, with the actual results being crucial for near-term stock price movements [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on March 13, 2025, with a consensus estimate of $0.39 per share, reflecting a year-over-year decrease of 20.4% [3]. - Revenues are projected to be $11.74 million, down 26.5% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 4.76% lower in the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -7.69%, complicating predictions for an earnings beat [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation of actual earnings from the consensus estimate, with positive readings being more predictive of earnings beats [6][7]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically produced positive surprises nearly 70% of the time [8]. Historical Performance - In the last reported quarter, AFC Gamma was expected to post earnings of $0.34 per share but delivered $0.35, resulting in a surprise of +2.94% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [13]. Conclusion - While AFC Gamma does not appear to be a compelling earnings-beat candidate, investors should consider other factors when making decisions regarding the stock ahead of the earnings release [16].

Core Viewpoint - Advanced Flower Capital Inc. has committed and funded a $15 million senior secured credit facility to Story of Ohio LLC to support its expansion in the Ohio adult-use cannabis market [1][2]. Company Overview - Advanced Flower Capital Inc. (AFC) is a leading commercial mortgage REIT that provides institutional loans to state-law compliant cannabis operators in the U.S. It specializes in loans ranging from $10 million to over $100 million, secured by quality real estate assets, license value, and cash flows [3]. - Story Companies is an emerging multi-state operator (MSO) in the cannabis industry, focusing on developing and acquiring vertically integrated cannabis assets in states with high profit margins and growth potential [4]. Financial Commitment - AFC has provided a $15 million credit facility to Story, which will be used to acquire and build out dispensaries in Ohio [1][2]. - The credit facility is a first-lien term loan secured by all of Story of Ohio LLC's assets, including cannabis licenses and owned real estate in Ohio and Georgia [2]. Strategic Partnership - The partnership between AFC and Story is characterized by a shared understanding of the complexities of the cannabis industry, enabling Story to capitalize on market opportunities [2]. - Story's leadership team consists of serial entrepreneurs with a track record of success in the volatile cannabis market, which aligns with AFC's strategic approach [2].

Company Overview - 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. [3] - The company originates, structures, and underwrites loans ranging from $10 million to over $100 million, typically secured by quality real estate assets, license value, and cash flows [3]. Financial Results Announcement - The company will release its financial results for the fourth quarter and full year ended December 31, 2024, on Thursday, March 13, 2025, before market open [1]. - Management will review the financial results at 10:00 am ET via webcast available on the Investor Relations website [1]. - A replay of the event will be available one hour after the live presentation [1]. Investor Relations - AFC distributes its earnings releases via its website and email lists, allowing interested parties to sign up for updates [2]. - The Investor Relations contact for the company is Robyn Tannenbaum, reachable at 561-510-2293 or via email [4].

Company Overview - Advanced Flower Capital Inc. (formerly AFC Gamma, Inc.) is a leading commercial mortgage REIT that provides institutional loans to state law compliant cannabis operators in the U.S. [4] - The company is based in West Palm Beach, Florida, and leverages a deep network and significant credit and cannabis expertise to originate, structure, underwrite, and manage loans ranging from $10 million to over $100 million, typically secured by quality real estate assets, license value, and cash flows [4]. Dividend Announcement - The Board of Directors of AFC declared a quarterly dividend of $0.33 per outstanding share of common stock for the quarter ending December 31, 2024 [2]. - This dividend is payable on January 15, 2025, to common stockholders of record on December 31, 2024, and is consistent with the September quarterly dividend [2]. Financial Performance - The announcement of the dividend reflects the company's ongoing commitment to returning value to shareholders and indicates stable financial performance [2].

Group 1 - Investors in Advanced Flower Capital Inc. (AFCG) should monitor the stock closely due to significant movements in the options market, particularly the Dec 20, 2024 $2.50 Put which has high implied volatility [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant price change or an upcoming event that could lead to a rally or sell-off [2] - AFC Gamma currently holds a Zacks Rank 3 (Hold) in the REIT and Equity Trust industry, which is in the top 33% of the Zacks Industry Rank, with the Zacks Consensus Estimate for the current quarter increasing from earnings of 33 cents per share to 36 cents [3] Group 2 - The high implied volatility for AFC Gamma may indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility to capture decay [4]

Financial Data and Key Metrics Changes - For Q3 2024, the company generated distributable earnings of $0.35 per basic weighted average share of common stock, with a GAAP net income of $1.4 million or $0.06 per share [14][26]. - The Board declared a post-spin dividend of $0.33 per share, marking the first dividend since the spin-off [15][32]. - Total assets as of September 30, 2024, were $366.6 million, with cash and cash equivalents of $122.2 million [29]. Business Line Data and Key Metrics Changes - The company originated approximately $59 million in new loans during Q3 2024, exceeding the annual target of $100 million, with total new originations reaching $116 million [8][24]. - The portfolio had a weighted average yield to maturity of approximately 18% as of both September 30 and November 1, 2024 [28][20]. Market Data and Key Metrics Changes - The company reported a modest exposure of 10% to the Florida market, focusing on current market conditions rather than future projections [44]. - The demand for debt capital in the cannabis sector is increasing, driven by refinancing activity and expansions, while traditional lenders remain cautious [19]. Company Strategy and Development Direction - The company aims to move up the quality curve while targeting a portfolio yielding mid- to high-teens internal rates of return (IRRs) [21]. - The strategy includes deploying capital into strong operators in limited license states and diversifying the portfolio [18][20]. Management's Comments on Operating Environment and Future Outlook - Management noted that the cannabis industry is facing challenges with revenue growth, particularly in mature markets like Illinois and New Jersey [40]. - The company remains optimistic about its ability to capitalize on opportunities in cannabis lending, despite a cautious lending environment [19][48]. Other Important Information - The company raised capital through its ATM stock offering program, generating net proceeds of approximately $12.2 million [30]. - The CECL reserve increased to $25.3 million, representing about 10.7% of loans at carrying value [31]. Q&A Session Summary Question: Guidance for 2025 loan origination targets - Management indicated that while they aim to be fully invested, they will cautiously deploy capital into good credits and new vintage loans, with a similar target for 2025 likely to be discussed in the fourth quarter call [35][36]. Question: Current risks in the cannabis industry compared to six months ago - Management acknowledged that revenue growth has been challenging, with competitive pressures in mature markets affecting profitability, but noted that as a debt lender, the current environment is manageable [40][41]. Question: Insights on Florida market exposure - Management stated that their Florida exposure is modest and they underwrite based on current market conditions, emphasizing the importance of being a challenger in the market [44][45]. Question: Trends in regional banks and lending activity - Management observed that more lenders are becoming cautious rather than entering the market, indicating that recent favorable rates are exceptions rather than the norm [47][48].

A D V A N C E D F L O W E R C A P I T A L | I N V E S TO R P R E S E N T AT IO N Advancing The Industry A Thoughtful Lending Partner Flexible Capital Solutions Deep Industry Experience Investor Presentation NASDAQ: AFCG Q3 2024 N A S D A Q : A F C G | I N V E S T O R P R E S E N T A T I O N D I S C L A I M E R Forward-Looking Statements Some of the statements contained in this presentation constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, and ...