Advanced Flower Capital Inc. · NASDAQ:AFCG
Advanced Flower Capital — AFC Gamma — Q1 2021 Earnings Presentation
25 slides from Advanced Flower Capital's earnings presentation, May 11, 2021
Slide 1: AFC Gamma Q1 2021 Earnings Presentation
AFC Gamma Q1 2021 Earnings PresentationMay 11, 2021
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., a publicly traded company that will elect to be taxed as a REIT for federal income tax purposes and is being furnished in connection with AFCG’s First Quarter 2021 results. This presentation is provided for investors in AFC
Slide 4: Management Presenters
Management Presenters Leonard TannenbaumFounder & Chief Executive Officer Jonathan Kalikow Head of Real Estate Thomas Geoffroy Chief Financial Officer Robyn TannenbaumPartner, Head of Origination and Investor Relations Brandon Hetzel Controller Over 22 years of experience in credit investingFounder
Slide 5: Agenda
Agenda Why AFC Gamma? Q1 2021 Financial HighlightsMarket Opportunity Corporate OverviewConclusionWhy AFC Gamma?Appendix 5 1 2 3 4 5 6 7
Slide 6: Why AFC Gamma?
Why AFC Gamma? Backed by years of combined lending expertise and real estate experience, AFC Gamma is ideally positioned in the high-growth cannabis industry and poised to deliver enhanced value for shareholders Leading Institutional Loan Origination PlatformPremier financing source for cannabis ope
Slide 7: AFCG Company Overview
AFCG Company Overview Only NASDAQ-listed provider of institutional loans to the cannabis industryOriginates and funds loans to established cannabis best-in-class operators in states with attractive licensing and favorable supply/demand environmentsProvides compelling risk-adjusted returns with loans
Slide 8: Market Opportunity in the Current Environment
Market Opportunity in the Current Environment Source: “Cannabis Market - Growth, Trends, COVID-19 Impact, and Forecasts (2020 - 2025)” https://www.reportlinker.com/p06028477/?utm_source=GNWSources: Marijuana Business Daily, 2020 Gallup Poll, United Nations Report, Secure And Fair Enforcement (“SAFE”
Slide 9: AFCG's Market Opportunity
AFCG’s Market Opportunity 9 Limited Supply of CapitalInstitutional banks decline to provide full services to cannabis-related businesses Alternative sources of financing needed to complete commitments, allowing lenders to demand strong risk-adjusted returns with significant collateral Market Challen
Slide 10: Impact of COVID-19
Impact of COVID-19 Source: Marijuana Business Daily (4/2/20), “US Markets that have Allowed Marijuana Businesses to Remain Open During Coronavirus Pandemic”, Forbes, “Medical Cannabis Use For Mental Health Increased During Covid-19 Pandemic, Study Finds”*Massachusetts is the only state that deemed c
Slide 11: From Origination to Management
Other tools include, but are not limited to appraisals, quality of earnings, environmental reports, site visits, AML compliance, comparable analysis and background searches.Strength or weakness in any one of these areas can help indicate success or failure for a loan. From Origination to Management
Slide 12: Underwriting criteria: borrower, real estate and state analysis
Borrower & Operations Real Estate & Structure State-by-State Analysis Type of operations – cultivation, processing, manufacturing and distribution Mix analysis – wholesale vs. retail State regulatory approval Quality of management – cultivation experience and financial expertise, among other factors
Slide 13: AFC Gamma Maintains a Strong Deal Funnel and Pipeline
Represents deals sourced by AFCG’s manager from January 1, 2020 through April 30, 2021Includes potential co-investmentsTotal Loan Amount represents the collective funded and committed amountAs of April 30, 2021 AFC Gamma Maintains a Strong Deal Funnel and Pipeline Potential Funding of Active Deals $
Slide 14: Investment Portfolio Activity
Weighted average yield to maturity of ~21% as of April 30, 2021 Investment Portfolio Activity $97.2 (1) $165.6 Total commitments funded and unfunded measured at current face value of principal excluding PIK interest (and OID)The approximate weighted average YTM of the portfolio as of April 30, 2021
Slide 15: Diversified Portfolio Across Geography
As of April 30, 2021. Commitment size and collateral diversification available upon request Diversified Portfolio Across Geography Type States containing AFCG loans Cannabis is a rapidly expanding market with a limited supply of institutional capital 36 states + DC have legalized medicinal cannabis
Slide 16: Portfolio footnotes and yield to maturity notes
(1) All loans originated prior to 7/31/2020 were purchased from an affiliated entity at accreted and/or amortized cost plus accrued interest on 7/31/2020.(2) Approximate Yield to Maturity (“YTM”) calculation includes a variety of fees and features that affect the total yield, which may include Origi
Slide 17: AFC Gamma Q1 2021 Book Value Per Share
AFC Gamma Q1 2021 Book Value Per Share 97.2 (A) GAAP Net Income was $1.4 million or $0.20 per basic weighted average common share for the quarter ended 03/31/2021. Distributable Earnings of $3.2 million or $0.45 per basic weighted average common share outstanding is a Non-GAAP Financial Measure. Ple
Slide 18: Distributable Earnings & Dividends
Distributable Earnings & Dividends AFCG expects the Q2 2021 distribution to be between 75% and 90% of the Q2 2021 Distributable Earnings $0.45 $0.43 $0.49 On May 7, 2021, the AFCG Board of Directors declared a dividend of approximately $5.1 million or $0.38 per common shareto be paid on June 30, 202
Slide 19: Conclusion
Questions? Conclusion
Slide 20: Why AFC Gamma?
Why AFC Gamma? Backed by years of combined lending expertise and real estate experience, AFC Gamma is ideally positioned in the high-growth cannabis industry and poised to deliver enhanced value for shareholders Leading Institutional Loan Origination PlatformPremier financing source for cannabis ope
Slide 21: Appendix: Q1 2021 Financial Overview
Questions? APPENDIXQ1 2021 Financial Overview
Slide 22: First Quarter Balance Sheet
APPENDIX A First Quarter Balance Sheet As Of March 31, 2021 December 31, 2020 (unaudited) Assets Loans held for investment at fair value (cost of $48,833,111 and $46,994,711 at March 31, 2021 and December 31, 2020, respectively, net) $50,252,049 $48,558,051 Loans held for investment at carrying valu
Slide 23: First Quarter Income Statement
APPENDIX B First Quarter Income Statement For the three months ended March 31, 2021 (unaudited) Revenue Interest Income $ 4,685,005 Total revenue 4,685,005 Expenses Management and incentive fees, net (less rebate of $[237,743]) 876,662 General and administrative expense 2,061,633 Professional fees 1
Slide 24: Reconciliation of Distributable Earnings to GAAP Net Income
APPENDIX C Reconciliation of Distributable Earnings to GAAP Net Income For the three months ended March 31, 2021 Net Income $ 1,400,755 Adjustments to net income Non-Cash Equity compensation expense 1,599,115 Depreciation and amortization - Unrealized (gain), losses or other non-cash items 144,402 P
Slide 25: www.afcgamma.com
www.afcgamma.com