Advanced Flower Capital Inc.

Good morning. My name is Cree, and I will be your conference operator today. At this time, I'd like to welcome everyone to the AFC GAMER Q3 2021 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I would now like to turn the conference over to your speaker. You may now begin.

Thank you, Cree. Good morning, and thank you for joining the call. I'm joined this morning by Leonard Tannenbaum, Chief Executive Officer, Jonathan Calico, Head of Real Estate, Robin Tannenbaum, Head of Origination, and Brett Kaufman, our Chief Financial Officer. Before we begin, I would like to note that this call is being recorded. Replay information is included in our October 13, 2021 press release. and is posted on the Investor Relations section of AFC Gamma's website at afcgamma.com, along with our third quarter 2021 earnings release and investor presentation. Today's conference call includes forward-looking statements and projections that reflect the company's current views with respect to, among other things, anticipated market size and financial performance. These statements are subject to inherent uncertainties in predicting future results and conditions, and certain factors could cause results to differ materially from those projected in these forward-looking statements. New risks and uncertainties arise over time, and it is not possible for the company to predict those events or how they may affect these statements. Therefore, you should not place undue reliance on these forward-looking statements. We actually refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these forward-looking statements and projections. During this call, we will refer to distributable earnings, which is a non-GAAP financial measure. Reconciliations of net income, the most comparable gap measure to distributable earnings, can be found in our earnings release or in the investor presentation available on our website. The format for today's call is as follows. Len will provide introductory remarks, an overview of our third quarter results, and strategic commentary. John will then discuss the real estate lending environment. Robin will discuss the origination pipeline. And Brett will summarize our financials. We will then open the line for Q&A. With that, I now turn the call over to our Chief Executive Officer, Leonard Tannenbaum.

Thank you, Gabe, and good morning, and welcome to AFC Gamma's third quarter earnings call. For those who are joining us for the first time, AFC Gamma is a leading institutional lender to the cannabis industry. We issue loans that are typically secured by three pillars, cash flow, licenses, and real estate. These companies that we lend to are domestic, single, and multi-state cannabis operators, which include those that are privately held, as well as those listed on the Canadian exchanges. Before we dive into our quarterly results, I'd like to highlight what makes AFC Gamma unique. AFC Gamma is an institutional lender that combines my expertise in cash flow lending, having run a $5 billion credit-focused asset manager, John's real estate expertise, having run a real estate finance development company with billions of dollars in real estate transactions, and Robin's healthcare and investment banking background. The investment committee's expertise, combined with the experienced team that we are continuing to build, helps differentiate AFC Gamma from other lenders in this market. Over the last quarter, we have further built out our in-house capabilities to continue providing our borrowers with customized financing solutions. One key area that we continue to build out is our in-house construction expertise and led by Martin Bixler III. As John will describe in further detail, we believe our ability to consult on construction projects is unique and valuable, and we have financed our borrowers in building many construction projects. Additionally, as we announced last quarter, we are pleased that Brett Kaufman has joined us as AFC Gamma's Chief Financial Officer. Brett's expertise and leadership have strengthened the executive team, and we look forward to him continuing to meet with our investors and analysts. Turning now to our capital structure, a third important differentiator for AFC Gamma is our cost of capital as the first NASDAQ-listed lender in the industry. This allows us to access both public and private debt and equity markets. As discussed last quarter, we are striving to establish an industry-leading benchmark for our cost of capital. Subsequent to quarter end, we are pleased to have received an increase in our credit rating from Egan Jones, moving to a BBB Plus investment grade rating. Leveraging our investment grade rating, we closed on an offering of $100 million of unsecured notes due in 2027, led by Seaport Global Securities, which Brett will describe in further detail. We are further encouraged by the fact that the debt raise we completed with strong institutional support. Going forward, we expect to utilize a mix of debt and equity to fund our growth with a target of 0.5 times debt to equity. Typically, our lower yielding assets in our portfolio are comprised of larger, more diversified operators. Conceptually, we believe that using leverage against these types of assets in the portfolio is a good way to generate strong returns on equity for our shareholders. With this debt offering as our first step We continue to remain focused on developing the best cost of capital among the limited number of alternative lenders in the industry. I believe that we have all the necessary components in place to scale this business and serve this rapidly growing industry. As we continue to scale the business, we will continue to aim to improve our cost of capital. Separately, our actionable pipeline continues to remain strong. and nine months to close, which makes it difficult to predict the timing of closings. In structuring our investments, we lend at different rates to the top MSOs, the midsize operators, and the smaller single-state operators. Due to the size and scale of the top MSOs, we continue to see those operators borrowing at lower yields. Now turning to our quarterly results. During the third quarter, we continued to execute on our pipeline, which led to record originations. we closed on new commitments of 119.2 million and had net fundings of 79.3 million. As of November 1st, 2021, we have 14 borrowers that have operations in 14 states, which Robin will discuss later during the call. The closing of active deals in our pipeline resulted in distributable earnings of 44 cents per basic weighted average share. This increase in earnings drove a 13.2% increase in our quarterly dividend, moving from $0.38 a share in the second quarter to $0.43 a share in the third quarter. As a reminder, our dividend policy is to pay between 90% and 100% of distributable earnings over the year with a special dividend at the end of the year if necessary. Before turning the call over to John, I'd like to highlight a notable transaction that we recently closed. Subsequent to quarter end, AFC Gamma funded $50 million as part of a new $120 million tranche of Verano Holdings Corp.' 's credit facility. We are pleased to expand our relationship with Verano and believe the company is a top-tier credit given its strong brand reputation, real estate ownership, business execution, and experienced management team. With that, I will turn the call over to John.