Aerial_Views/E+ via Getty Images Real Estate Weekly Outlook U.S. equity markets were little changed this week while long-term benchmark interest rates surged as investors assessed the potential political and economic fallout from a disastrous debate performance by President Biden, setting the stage for a potentially volatile and unpredictable second half of 2024. Beneath the political drama, investors parsed corporate commentary and economic data that pointed towards a further slowdown in U.S. consumer spen ...

Core Viewpoint - AFC Gamma, Inc. is set to complete the spin-off of its commercial real estate portfolio into a new publicly-traded REIT, Sunrise Realty Trust, Inc., on July 9, 2024, with a special dividend declared for shareholders [1][2]. Group 1: Spin-Off Details - The spin-off will allow holders of AFC Gamma common stock as of July 8, 2024, to receive one share of SUNS common stock for every three shares of AFCG common stock held [2]. - The distribution of SUNS shares is expected to occur before the market opens on July 9, 2024, with SUNS trading on Nasdaq under the symbol "SUNS" [2]. - Fractional shares will not be issued; instead, cash will be provided for any fractional shares [2]. Group 2: Special Dividend - The Board of Directors declared a special dividend of $0.15 per share of AFC Gamma common stock, payable on July 15, 2024, to shareholders of record as of July 8, 2024 [2]. Group 3: Company Overview - AFC Gamma, Inc. is an institutional lender that focuses on loans secured by commercial real estate, targeting direct lending and bridge loan opportunities typically ranging from $10 million to $100 million [3]. - The company specializes in lending to state-law compliant cannabis operators and is based in West Palm Beach, Florida [3].

Record Date for Distribution of Sunrise Realty Trust to be July 8, 2024Distribution Date Expected to be July 9, 2024Board of Directors Declares $0.15 per Share Spin-Off Special Dividend WEST PALM BEACH, Fla., June 27, 2024 (GLOBE NEWSWIRE) -- AFC Gamma, Inc. (NASDAQ:AFCG) (“AFC Gamma”) today announced that the previously announced spin-off of its commercial real estate portfolio is expected to be completed on July 9, 2024. The commercial real estate portfolio will spin-off into a new independent, publicly-t ...

Core Viewpoint - AFC Gamma, Inc. successfully exited its largest loan of $84.0 million, generating a 19.9% internal rate of return (IRR) over the loan's life [1][2]. Group 1: Loan Management - The loan was sold to a third party at par plus accrued, following the borrower's failure to make an interest payment [1]. - The exit from this loan reflects the company's proactive portfolio management strategy aimed at reducing exposure to underperforming credits [2]. Group 2: Company Strategy - The CEO emphasized the commitment to delivering value for shareholders and the intention to redeploy capital into deals with strong risk-adjusted returns [2]. - The company specializes in direct lending and bridge loan opportunities, particularly targeting state-law compliant cannabis operators [3].

WEST PALM BEACH, Fla., June 04, 2024 (GLOBE NEWSWIRE) -- AFC Gamma, Inc. (NASDAQ:AFCG) (“AFC Gamma”) today announced that it has successfully exited its $84.0 million loan to Subsidiary of Public Company H. This was AFC Gamma’s largest loan in its portfolio and during our last earnings call, we noted that the borrower failed to make its April interest payment in May. Through active portfolio management, AFC Gamma is pleased to announce that it has sold the loan to a third-party at par plus accrued, which ge ...

Core Viewpoint - AFC Gamma, Inc. is preparing for the spin-off of its commercial real estate portfolio, which will result in the establishment of Sunrise Realty Trust, Inc. as a separate entity that will seek REIT status and trade on Nasdaq [1][2]. Group 1: Spin-Off Details - The spin-off is expected to be completed in mid-2024, at which point SUNS will operate independently [1]. - Jodi Hanson Bond and Jim Fagan will resign from the AFC Gamma Board and are anticipated to join the SUNS Board post-spin-off [1]. - Alexander Frank will remain on the AFC Gamma Board while also being appointed to the SUNS Board [1]. Group 2: Board Composition - Post spin-off, the AFC Gamma Board will include Leonard Tannenbaum as Executive Chairman and Chief Investment Officer, Thomas Harrison as Lead Independent Director, and Alexander Frank as Independent Chair of Audit & Valuation Committee [2]. - The SUNS Board will consist of Leonard Tannenbaum as Executive Chairman, Brian Sedrish as CEO, and Alexander Frank as Lead Independent Director [2]. Group 3: Company Profile - AFC Gamma, Inc. is a publicly-traded institutional lender focused on originating, structuring, and underwriting loans secured by commercial real estate, with loan sizes typically ranging from $10 million to $100 million [3]. - The company specializes in lending to state-law compliant cannabis operators and is based in West Palm Beach, Florida [3].

AFC Gamma, Inc. (NASDAQ:AFCG) Q1 2024 Results Conference Call May 9, 2024 10:00 AM ET Company Participants Gabriel Katz - Chief Legal Officer Daniel Neville - Chief Executive Officer Robyn Tannenbaum - President Brandon Hetzel - Chief Financial Officer Operator Good morning, and welcome to AFC Gamma's First Quarter 2024 Earnings Call [Operator Instructions]. As a reminder, this call is being recorded. I would now like to turn the call over to Gabriel Katz, Chief Legal Officer. Please go ahead. Gabriel Katz ...

First quarter 2024 GAAP net loss of $(0.1) million or $(0.01) per basic weighted average common share and Distributable Earnings(1) of $10.0 million or $0.49 per basic weighted average common share Paid dividend of $0.48 per common share for first quarter 2024 WEST PALM BEACH, Fla., May 09, 2024 (GLOBE NEWSWIRE) -- AFC Gamma, Inc. (NASDAQ:AFCG) ("AFC Gamma" or the "Company") today announced its results for the first quarter ended March 31, 2024. AFC Gamma reported generally accepted accounting principles (" ...

[First Quarter 2024 Financial Results](index=1&type=section&id=First%20Quarter%202024%20Financial%20Results) AFC Gamma reported a GAAP net loss but strong Distributable Earnings in Q1 2024, driven by new loan originations and a consistent dividend payout [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the first quarter of 2024, AFC Gamma reported a GAAP net loss of $(0.1) million, or $(0.01) per share, alongside non-GAAP Distributable Earnings of $10.0 million, or $0.49 per share Q1 2024 Key Financial Metrics | Metric | Value | Per Share (Basic) | | :--- | :--- | :--- | | GAAP Net Loss | $(0.1) million | $(0.01) | | Distributable Earnings (Non-GAAP) | $10.0 million | $0.49 | [Operational and Strategic Highlights](index=1&type=section&id=Operational%20and%20Strategic%20Highlights) The company originated $90.4 million in new loans during the first quarter, diversified between cannabis operators and commercial real estate developers, while anticipating legislative reforms - Total loan originations in Q1 2024 amounted to **$90.4 million**, comprising **$34.0 million** to cannabis operators and **$56.4 million** to commercial real estate developers[2](index=2&type=chunk) - Completed a **$34.0 million** debt investment in Sunburn Cannabis, a private, vertically integrated operator in Florida[2](index=2&type=chunk) - The company is encouraged by promising legislative developments, including anticipated federal rescheduling of cannabis and potential adult-use legalization in states like Ohio and Florida[2](index=2&type=chunk) [Common Stock Dividend](index=1&type=section&id=Common%20Stock%20Dividend) AFC Gamma declared and paid a cash dividend of $0.48 per common share for Q1 2024, with the total distribution of $9.9 million covered by Distributable Earnings Q1 2024 Dividend Information | Metric | Value | | :--- | :--- | | Dividend per Common Share | $0.48 | | Total Dividends Distributed | $9.9 million | | Payment Date | April 15, 2024 | - The dividend of **$0.48 per share** is covered by the Distributable Earnings of **$0.49 per basic weighted average common share** for the same period[3](index=3&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes "Distributable Earnings," a non-GAAP metric, to assess performance by excluding certain non-cash items and GAAP adjustments, providing a useful indicator for dividend capacity [Definition and Rationale](index=2&type=section&id=Definition%20and%20Rationale) Distributable Earnings adjusts GAAP net income by excluding items such as stock-based compensation, unrealized gains/losses, and CECL changes, offering a clearer view of core loan activity and operational performance - Distributable Earnings is used internally and by management to evaluate performance, excluding certain GAAP adjustments not considered indicative of current loan operations[9](index=9&type=chunk) - Key adjustments to GAAP net income include excluding: stock-based compensation, unrealized gains/losses, increase in provision for CECL, and TRS (taxable REIT subsidiary) income/loss[10](index=10&type=chunk) - As a REIT, the company aims to pay dividends at least equal to its taxable income, and Distributable Earnings is considered a useful indicator for its dividend policy[11](index=11&type=chunk) [Reconciliation of GAAP Net (loss) income to Distributable Earnings](index=3&type=section&id=Reconciliation%20of%20GAAP%20Net%20(loss)%20income%20to%20Distributable%20Earnings) For Q1 2024, AFC Gamma reconciled a GAAP net loss of $(54,116) to Distributable Earnings of $9,965,706, or $0.49 per share, a decrease from Q1 2023 Reconciliation of GAAP Net (Loss) Income to Distributable Earnings (in USD) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net (loss) income (GAAP)** | **$(54,116)** | **$10,025,274** | | Stock-based compensation expense | $543,222 | $280,578 | | Unrealized (gains) losses | $3,613,693 | $1,477,691 | | Increase in provision for CECL | $4,931,674 | $702,426 | | TRS (income) loss, net of dividends | $931,233 | $(866,204) | | **Distributable earnings (Non-GAAP)** | **$9,965,706** | **$11,619,765** | | **Distributable earnings per share** | **$0.49** | **$0.57** | [Company and Investor Information](index=1&type=section&id=Company%20and%20Investor%20Information) This section provides an overview of AFC Gamma's business, details for investor communications, and standard forward-looking statement disclaimers [About AFC Gamma](index=2&type=section&id=About%20AFC%20Gamma) AFC Gamma is a publicly-traded institutional lender specializing in direct and bridge loans secured by commercial real estate, with a focus on state-compliant cannabis operators - AFC Gamma is an institutional lender (NASDAQ:AFCG) that originates, structures, and underwrites loans secured by commercial real estate[8](index=8&type=chunk) - The company focuses on direct lending and bridge loans, typically from **$10 million to $100 million**, specializing in the state-compliant cannabis sector[8](index=8&type=chunk) [Conference Call & Discussion of Financial Results](index=1&type=section&id=Conference%20Call%20%26%20Discussion%20of%20Financial%20Results) AFC Gamma scheduled a conference call for May 9, 2024, to discuss its first-quarter financial results, with a live audio webcast and archive available online - A conference call to discuss Q1 2024 financial results was scheduled for **10:00 am (Eastern Time) on Thursday, May 9, 2024**[6](index=6&type=chunk) - Details for participation via webcast or telephone were provided, with the webcast to be archived for **90 days** on the company's website[6](index=6&type=chunk)[7](index=7&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains a standard safe harbor statement, cautioning that the press release includes forward-looking statements subject to inherent uncertainties and risks, with no obligation to update - The release contains forward-looking statements that are not guarantees of future performance and are subject to inherent risks and uncertainties[16](index=16&type=chunk) - Investors are directed to the company's SEC filings, including Forms 10-K and 10-Q, for more information on potential risks that could affect financial results[16](index=16&type=chunk) [Investor Relations](index=4&type=section&id=Investor%20Relations) The document provides specific contact information for both investor and media inquiries directed at AFC Gamma - Contact information is provided for both AFC Gamma Investor Relations and Media Relations[18](index=18&type=chunk)

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for Q1 2024 report a net loss of **$54,116**, a significant decline from **$10.0 million** net income in Q1 2023, with total assets increasing to **$476.4 million** and liabilities rising to **$165.8 million** [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202024%20(unaudited)%20and%20December%2031%2C%202023) Total assets increased to **$476.4 million** as of March 31, 2024, driven by growth in loans, while total liabilities rose to **$165.8 million** due to increased borrowings, leading to a decrease in shareholders' equity to **$310.6 million** Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$476,406** | **$466,585** | | Cash and cash equivalents | $82,298 | $121,626 | | Loans held for investment, net | $383,522 | $338,717 | | **Total Liabilities** | **$165,785** | **$146,533** | | Line of credit payable, net | $60,000 | $42,000 | | Senior notes payable, net | $88,163 | $88,015 | | **Total Shareholders' Equity** | **$310,621** | **$320,052** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%202023%20(unaudited)) The company reported a net loss of **$54,116** for Q1 2024, a significant decline from **$10.0 million** net income in Q1 2023, primarily due to decreased net interest income, increased credit loss provisions, and unrealized losses on loans Statements of Operations Highlights (in thousands) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Net Interest Income | $14,758 | $16,832 | | Total Expenses | $6,015 | $6,412 | | Provision for current expected credit losses | $(4,932) | $(702) | | Change in unrealized (losses) on loans at fair value, net | $(3,614) | $(1,478) | | **Net (Loss) Income** | **$(54)** | **$10,025** | | **Diluted (Loss) Earnings Per Share** | **$(0.01)** | **$0.49** | [Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%202023%20(unaudited)) Shareholders' equity decreased to **$310.6 million** as of March 31, 2024, primarily due to **$9.9 million** in common stock dividends and a net loss of **$54,116**, partially offset by stock-based compensation - Dividends declared on common shares were **$0.48 per share** in Q1 2024, totaling **$9.9 million**, compared to **$0.56 per share** in Q1 2023, which totaled **$11.5 million**[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%202023%20(unaudited)) Cash and cash equivalents decreased by **$39.3 million** in Q1 2024, with **$6.4 million** provided by operating activities, **$53.9 million** used in investing activities, and **$8.2 million** provided by financing activities Cash Flow Summary (in thousands) | Activity | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,373 | $4,383 | | Net cash (used in) provided by investing activities | $(53,881) | $14,992 | | Net cash provided by (used in) financing activities | $8,180 | $(79,141) | | **Net (decrease) in cash** | **$(39,328)** | **$(59,767)** | [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(unaudited)) The notes detail accounting policies, loan portfolio composition, credit loss provisions, and debt structure, highlighting the company's specialization in cannabis industry loans and expansion into commercial real estate, with several loans on non-accrual status - The company primarily originates, structures, and manages senior secured loans, with a specialization in loans to cannabis industry operators and, more recently, to the broader commercial real estate sector[26](index=26&type=chunk)[28](index=28&type=chunk) - The Current Expected Credit Loss (CECL) Reserve increased to **$31.4 million** as of March 31, 2024, from **$26.4 million** at year-end 2023, representing **8.71%** of total loans held at carrying value[56](index=56&type=chunk)[58](index=58&type=chunk) - As of March 31, 2024, the company had **$60.0 million** outstanding on its Revolving Credit Facility and **$90.0 million** in principal outstanding on its **5.75% 2027 Senior Notes**[63](index=63&type=chunk)[69](index=69&type=chunk) - Subsequent to the quarter's end, in April 2024, a borrower (Subsidiary of Public Company H) defaulted on its interest payment, and the lenders are evaluating their rights and remedies[119](index=119&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's business, recent developments including the planned spin-off of its CRE portfolio, and financial performance, noting a decrease in net income due to lower interest income and higher credit loss provisions, with Distributable Earnings at **$0.49 per share** for Q1 2024 [Overview and Spin-Off](index=29&type=section&id=Overview%20and%20Spin-Off) The company, a lender specializing in cannabis industry loans, has expanded into commercial real estate lending and announced a plan to spin off its CRE portfolio into Sunrise Realty Trust, Inc. (SUNS) to refocus on its core cannabis business - The company has expanded its investment guidelines from solely cannabis-related loans to include a broader range of commercial real estate (CRE) lending opportunities[126](index=126&type=chunk)[128](index=128&type=chunk) - Announced a plan to spin-off its CRE portfolio into a new, independent, publicly-traded REIT, Sunrise Realty Trust, Inc. (SUNS), to allow AFCG to focus on its core cannabis lending strategy[135](index=135&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk) [First Quarter Developments and Loan Portfolio](index=31&type=section&id=First%20Quarter%20Developments%20and%20Loan%20Portfolio) In Q1 2024, the company funded **$85.8 million** in new loans, primarily in CRE, managed several non-accrual loans, and received a full repayment from Private Company I, with the total loan portfolio outstanding principal at **$439.2 million** - Funded two new CRE mezzanine loans (CRE Private Co. A and B) with a combined principal of **$46.7 million**[140](index=140&type=chunk)[141](index=141&type=chunk) - Private Company I, previously on non-accrual, was fully repaid, with the company receiving **$3.8 million** in principal and recognizing **$0.7 million** in past-due cash interest[149](index=149&type=chunk) - Placed Private Company A on non-accrual status effective March 1, 2024, and continued to manage non-accrual loans with Private Company G and Private Company K through forbearance agreements[143](index=143&type=chunk)[145](index=145&type=chunk)[147](index=147&type=chunk) [Results of Operations and Key Metrics](index=32&type=section&id=Results%20of%20Operations%20and%20Key%20Metrics) Q1 2024 saw a net loss of **$(0.1) million**, a significant decline from **$10.0 million** net income in Q1 2023, primarily due to decreased interest income and increased credit loss provisions, with Distributable Earnings at **$0.49 per share** GAAP Net (Loss) Income to Distributable Earnings Reconciliation (in millions) | Metric (in millions) | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Net (loss) income | $(0.1) | $10.0 | | Stock-based compensation | $0.5 | $0.3 | | Unrealized losses | $3.6 | $1.5 | | Provision for credit losses | $4.9 | $0.7 | | TRS (income) loss, net | $0.9 | $(0.9) | | **Distributable earnings** | **$10.0** | **$11.6** | | **Distributable earnings per share** | **$0.49** | **$0.57** | - Interest income decreased by **$2.1 million** (**11.6%**) YoY, primarily due to a loan to Subsidiary of Private Company G being on non-accrual status[166](index=166&type=chunk) - The provision for current expected credit losses increased by **$4.2 million** YoY, driven by changes in macroeconomic factors and borrower-specific conditions[176](index=176&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company held **$82.3 million** in cash and cash equivalents, with its **$60.0 million** revolving credit facility fully drawn and **$90.0 million** in senior notes outstanding, while no shares were sold or repurchased during the quarter - Cash and cash equivalents stood at **$82.3 million** as of March 31, 2024, down from **$121.6 million** at the end of 2023[199](index=199&type=chunk) - The company had **$60.0 million** of borrowings outstanding under its Revolving Credit Facility, with zero remaining availability as of March 31, 2024[203](index=203&type=chunk) - No shares were sold under the At-the-Market (ATM) program or repurchased under the Share Repurchase Program during Q1 2024[200](index=200&type=chunk)[201](index=201&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk disclosures highlight exposure to interest rate, credit, and real estate risks, with **51%** of the loan portfolio being floating-rate and the top four borrowers representing **58.3%** of outstanding principal - The company is exposed to interest rate risk, with **51%** of its loan portfolio (by principal) having floating interest rates as of March 31, 2024[227](index=227&type=chunk) - A hypothetical **100 basis point** increase in floating benchmark rates would increase annual interest income by approximately **$2.3 million**, while a **100 basis point** decrease would lower it by approximately **$1.9 million**[234](index=234&type=chunk) - The loan portfolio has significant credit risk concentration, with the top four borrowers representing approximately **58.3%** of the aggregate outstanding principal balance as of March 31, 2024[242](index=242&type=chunk) - The company faces unique risks related to its cannabis industry loans, including the federal illegality of cannabis and potential inability to take possession of collateral, which management mitigates by monitoring the legal landscape and planning to sell defaulted loans rather than foreclose[244](index=244&type=chunk)[246](index=246&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[249](index=249&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control[251](index=251&type=chunk) [Part II. Other Information](index=52&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company was not subject to any material legal proceedings as of March 31, 2024 - As of March 31, 2024, the company was not subject to any material legal proceedings[253](index=253&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the Risk Factors disclosed in the Annual Report for the fiscal year ended December 31, 2023 - There were no material changes to the Risk Factors disclosed in the company's Annual Report for the fiscal year ended December 31, 2023[254](index=254&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and no share repurchases during the quarter, with **$20.0 million** remaining in its repurchase program - The company did not have any unregistered sales of equity securities during the period[255](index=255&type=chunk) - No shares of common stock were repurchased during the three months ended March 31, 2024, under the company's **$20.0 million** share repurchase program[256](index=256&type=chunk)[257](index=257&type=chunk) [Defaults Upon Senior Securities](index=52&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None reported[258](index=258&type=chunk) [Mine Safety Disclosures](index=52&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[259](index=259&type=chunk) [Other Information](index=52&type=section&id=Item%205.%20Other%20Information) None reported - None reported[260](index=260&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the 10-Q report, including amendments to agreements and CEO/CFO certifications - The report includes a list of all exhibits filed, such as the Indenture for the 2027 Senior Notes and CEO/CFO certifications[261](index=261&type=chunk)