Advanced Flower Capital Inc.

Good morning, and welcome to AFC Gamma's earnings conference call for the fourth quarter and fiscal year ended December 31st, 2023. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. 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.

Good morning, and thank you all for joining AFC Gamma's earnings call for the fourth quarter and fiscal year ended December 31st, 2023. I'm joined this morning by Leonard Tannenbaum, our executive chairman, Daniel Neville, our chief executive officer, Robin Tannenbaum, our president, and Brandon Hetzel, our chief financial officer. Before we begin, I would like to note that this call is being recorded. Replay information is included in our January 31, 2024 press release, and is posted on the investor relations portion of AFC Gamma's website at afcgamma.com, along with our fourth quarter and fiscal year 2023 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, future market developments, anticipated portfolio yield, and financial performance and projections in 2024 and beyond. These statements are subject to inherent uncertainties in predicting future results. Please refer to AFC-Gamma's most recent periodic filings with the SEC for certain conditions and significant 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 AFC Gamma's earnings release and investor presentation available on AFC Gamma's website. The format for today's call is as follows. Len and Dan will provide introductory remarks, an overview of our fourth quarter and full year performance, as well as some strategic commentary. Brandon will summarize our financial results. and we will then open the lines for Q&A. With that, I will now turn the call over to our Executive Chairman, Leonard Tannenbaum.

Thank you. Good morning and welcome to AFC Earnings Call for the quarter and fiscal year ended December 31st, 2023. I would like to thank everyone for joining us today to discuss our results. For the quarter ended December 31st, 2023, AFC generated distributable earnings of 49 cents per basic weighted average share of common stock. As a reminder, distributable earnings is the primary metric the Board considers when declaring AFC's quarterly dividend. The Board of Directors declared a 48 cent dividend per share for the December quarter, which was in line with the previous two quarters. Since going public, we have generated distributable earnings that have met or exceeded our dividend each quarter and paid out $5.54 per share in dividends, including paying out $2 per share during fiscal 2023. For the full year 2023, AFC paid out approximately 99% of its distributable earnings in the form of dividends. For the first quarter of 2024, the Board of Directors has declared a fourth consecutive 48-cent dividend, which will be paid on April 15th to shareholders as of record March 31st, 2024. Since Dan's appointment as CEO in mid-November, the team has been very busy as we continue to evaluate our portfolio with Dan's operating lens and bottoms-up investment approach. I am pleased with the progress the team has made on some of our underperforming assets. As we have discussed two weeks ago, AFC will return to its exclusive focus on lending to the cannabis industry after the spinoff of our commercial real estate portfolio is complete. As a reminder, the commercial real estate portfolio will spinoff into an independent, publicly traded REIT, Sunrise Realty Trust, which is expected to trade on the NASDAQ exchange under the ticker symbol SUNS upon completion of the separation. We have decided to pursue this transaction because we believe that both AFC and sons will be better positioned to grow and realize their full potential as independent, pure play capital providers in the cannabis and commercial real estate space, respectively. The separation will allow each company to focus on its respective portfolio, articulate their own clear investment thesis, and have the flexibility to tailor their business strategies to best capture market opportunities within their specialization. We expect the spinoff to be completed by mid-2024, subject to SEC review, as well as final approval by our Board of Directors. As Executive Chairman and the largest shareholder of both entities post-spinoff, I am very excited about the future for AFC and Sons. CRE debt markets today represent a significant opportunity to capitalize on market dislocations precipitated by the rise in interest rates, declining liquidity, and a pullback of regional banks from CRE lending. We are also seeing a large increase in CRE deal flow in the past few weeks. With that, I will pass it to Dan to discuss our AFC cannabis portfolio.