Advanced Flower Capital Inc. · NASDAQ:AFCG
Advanced Flower Capital — Q4 2023 Earnings Presentation
23 slides from Advanced Flower Capital's earnings presentation, Mar 7, 2024
Slide 1: Fourth Quarter & Full Year 2023 Investor Presentation
Fourth Quarter & Full Year 2023 Investor Presentation March 7, 2024
Slide 2: Forward-Looking Statements
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 Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend su
Slide 3: Legal Disclaimers
Legal Disclaimers Important Notices This presentation is by AFC Gamma, Inc. (“AFCG” or the “Company”), a publicly traded company that has elected to be taxed as a REIT for federal income tax purposes and is being furnished in connection with AFCG’s financial results. This presentation is provided fo
Slide 4: Sections
Sections 1. Corporate Overview 2. Why AFC Gamma 3. Market Opportunity 4. Q4 & FY 2023 Financial Highlights 5. Appendix
Slide 5: AFC Gamma Company Overview
AFC Gamma Company Overview Institutional Commercial Mortgage REIT Company Highlights(2) (NASDAQ: AFCG) • AFC Gamma is an institutional lender to the commercial real estate sector, with a specialization in loans backed by real estate collateral, cash flows and licenses to state law compliant cannabis
Slide 6: Why AFC Gamma
Why AFC Gamma Experienced, Significant lending, investment management and operator experience Management team aligned through significant investment; beneficially own or Cycle-Tested control over 20% of Company Leadership Team Experience navigating rapidly evolving markets and underwriting com
Slide 7: Experienced, Cycle-Tested Leadership Team
Experienced, Cycle-Tested Leadership Team Leonard Dan Robyn Brandon Tannenbaum, CFA Neville Tannenbaum Hetzel Founder, Chief Chief Executive Partner, President Chief Financial Officer Investment Officer Officer and Treasurer • 25+ years of experience in • 15+ years of experience in • 15+ years of ex
Slide 8: Attractive Market Opportunity in CRE
Attractive Market Opportunity in CRE Macroeconomic Environment + State of the CRE Sector…(1) • Real GDP has increased 2.5% in 2023, compared to Net New CRE Loans by Large US Banks(4) an increase of 2.1% YoY in 2022, and a bigger ($ in billions) increase of 5.9% in 2021(2) • The Federal Reserve began
Slide 9: Market Opportunity in the Current Environment
Market Opportunity in the Current Environment Legalization Fuels Expanding Market Size(1)(2)(3) 70% ~11% $32.4Bn >$46.0Bn Americans Support Projected Adult-Use Expected US Legal Expected US Legal Legalization Retail Cannabis Market Cannabis Market Size in Cannabis Market Size by CAGR 2023-2028 2024
Slide 10: Diversified Cannabis Portfolio Across the United States
Diversified Cannabis Portfolio Across the United States 41 states and DC have legalized AFCG's loan portfolio includes Cannabis is a rapidly expanding medical cannabis; of those, 24 12 cannabis loans to borrowers market in the United States with states and DC have legalized with significant operatio
Slide 11: CEO's Initial Observations
CEO’s Initial Observations Spent the first four months meeting all the borrowers in portfolio, touring facilities and conducting deep dives into key markets Over 40,000 28 dispensaries 11 cultivations 6 market deep 12 borrowers miles flown visited toured dives conducted met Key Observations 2024 Pri
Slide 12: Disciplined and Selective Investment Process
Disciplined and Selective Investment Process AFC Gamma is involved in all key phases of the lending process, with an aim to source loans with high return potential and downside risk protection AFCG maintains a direct origination platform, which works to create enhanced yields 1 Origination and allow
Slide 13: AFCG Maintains a Strong Deal Funnel and Pipeline
AFCG Maintains a Strong Deal Funnel and Pipeline(1) Through its direct origination platform, AFC Gamma sources deals via various leads in select jurisdictions, maintaining a robust pipeline of active opportunities $20.5B $19.4B $39.9B Total Deals Sourced(2) $799MM Deals Sourced $9.4B (1) Total Commi
Slide 14: Poised to Capitalize on Target Market Opportunity
Poised to Capitalize on Target Market Opportunity AFCG’s Competitive Advantages Leadership team’s extensive credit and operating knowledge resulting in disciplined capital deployment Timely execution to meet borrower needs r Proactive asset management with experienced professionals in-house, incl
Slide 15: Investment Portfolio Activity
Investment Portfolio Activity Current Commitments(1) (In MM) $502 $488 $483 $56 $447 $433 $431 $17 $419 $420 $421 $409 $62 $10 $46 $10 $32 $12 $56 $49 $446 $471 $421 $401 $397 $423 $421 $364 $371 $389 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Mar 1, 2024 Funded Unfunded
Slide 16: AFC Gamma Portfolio Summary
AFC Gamma Portfolio Summary AFCG’s manager has reviewed 1,240 deals, representing over $39 billion in aggregate value* 1,148 Deals Rejected* 10 Current Cannabis Deals in Review 14 CurrentDeals Cannabis & CRE Funded Principal Original Loan AFCG Loan, net TOTAL Cash Interest Paid In Kind Fixed/ Amorti
Slide 17: Q4 2023 Book Value
Q4 2023 Book Value(1) (In $ per share) $2.04 $16.65 ($2.00) $15.64 ($1.05) Book Value FY 2023 FY 2023 Regular FY 2023 CECL, Book Value December 31, 2022 Distributable Dividend FV Adjustments and December 31, 2023 Earnings(2) Stock Compensation (1) December 31, 2023 values per share based on 20,457,6
Slide 18: Distributable Earnings & Dividends
Distributable Earnings & Dividends(1) (In $ per share) $0.69 $0.62 $0.59 $0.56 $0.62 $0.55 $0.56 $0.56 $0.57 $0.56 $0.52 $0.50 $0.49 $0.48 $0.49 $0.48 $0.49 $0.48 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Distributable Earnings Dividends For Q4 2023, AFC Gamma declared
Slide 19: Appendix
QvAFC GAMMA Appendix
Slide 20: Appendix A: Balance Sheet
Appendix A Balance Sheet A s o f D e c e m be r 3 1, 2023 2022 A ssets Lo ans held fo r investment at fair value (co st o f $ 71,644,003 and $ 100,635,985 at December 31, 2023 and 2022, respectively, net) $ 61,720,705 $ 99,226,051 Lo ans held fo r investment at carrying value, net 301,265,398 285,17
Slide 21: Appendix B: Income Statement
Appendix B Income Statement Years ended December 31, 2023 2022 Revenue Interest income $ 70,535,087 $ 81,498,717 Interest expense (6,357,457) (6,814,075) Net interest income 64,177,630 74,684,642 Expenses Management and incentive fees, net (less rebate of $1,693,133 and $1,785,916, respectively) 14,
Slide 22: Appendix C: Reconciliation of GAAP Net Income to Distributable Earnings
Appendix C Reconciliation of GAAP Net Income to Distributable Earnings Three months ended Year ended December 31, 2023 December 31, 2023 Net Income $ (9,188,483) $ 20,951,999 Adjustments to net income Stock-based compensation expense 302,787 1,008,148 Depreciation and amortization - - Unrealized (ga
Slide 23: www.afcgamma.com
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