AFCG — what changed in the latest 10-Q

Text added vs the prior filing · source: 10-Q · 2026-05-07

• Unless the context otherwise requires, the terms “AFC,” “we,” “us” or “our” refers to Advanced Flower Capital Inc.

• Effective January 1, 2026, we are an externally managed, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as

• amended (the “1940 Act”). Advanced Flower Capital Inc. is an institutional lender that was founded in July 2020 by a veteran team of investment professionals. We are a Maryland corporation and externally managed by AFC Management, LLC (in its capacity as investment adviser, the “Adviser”) pursuant t…

• The Advisory Agreement reflects an expanded investment mandate approved by our Board, including the ability to invest in a broader range of debt and other investments than was permitted under our prior REIT structure. While we continue to pursue lending opportunities within the cannabis industry, su…

• We primarily originate, structure, underwrite, invest in and manage senior secured mortgage loans and other types of loans and debt securities to companies ancillary to the cannabis industry as well as companies outside of the cannabis industry. Businesses ancillary to the cannabis industry may incl…

Text removed vs the prior filing · source: 10-Q · 2025-11-12

• Advanced Flower Capital Inc. is an institutional lender that was founded in July 2020 by a veteran team of investment professionals. We primarily originate, structure, underwrite, invest in and manage senior secured loans and other types of mortgage loans and debt securities, with a specialization i…

• Our objective is to provide attractive risk-adjusted returns over time through cash distributions and capital appreciation primarily by providing loans to state law compliant cannabis companies. The loans we originate are primarily structured as senior loans typically secured by real estate, equipme…

• As states continue to legalize cannabis for medical and adult-use, an increasing number of companies operating in the cannabis industry need financing. Due to the current capital constrained cannabis market, which does not typically have access to traditional bank financing, we believe we continue t…

• We are a Maryland corporation and externally managed by AFC Management, LLC, a Delaware limited liability company (our “Manager”), pursuant to the terms of the Amended and Restated Management Agreement, dated January 14, 2021, by and between the Company and AFC Management, LLC (as amended from time …

• We have elected to be taxed as a REIT under Section 856 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2020. We believe that we have qualified as a REIT and that our current and proposed method of operation will enable us to continu…

Text added vs the prior filing · source: 10-Q · 2026-05-07

• We evaluate our loans on a quarterly basis and fair value was determined, prior to January 1, 2026, by our Board through its independent Audit and Valuation Committee, and, beginning on January 1, 2026, by the Adviser, in its capacity as “valuation designee” under, and in accordance with, Rule 2a-5 …

• We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private and public middle-market companies. Most of our investments will not have a readily available market price, and the fair value of such investments are valued at fair value, as determined in …

• Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. We intend to fund portions of our investments with borrowings, and at such time, our net investment income will be affected by the difference between the rate at which we invest an…

• As of March 31, 2026, on a fair value basis, 59.3% of performing debt investments bore interest at a floating rate and 40.7% of performing debt investments bore interest at a fixed rate, respectively. Our borrowings under our Revolving Credit Facility bear interest at a floating rate and our TCGSL C…

• As of March 31, 2026, the weighted average floor of the investments in our portfolio based on outstanding principal was 3.8%.

Text removed vs the prior filing · source: 10-Q · 2025-11-12

• We generally hold our target investments as long-term loans; however, we may occasionally classify some of our loans as held for sale. We may carry our loans at fair value or carrying value in our consolidated balance sheet. As of September 30, 2025 and December 31, 2024, one loan held for investmen…

• We evaluate our loans on a quarterly basis and fair value is determined by our Board through its independent Audit and Valuation Committee. We use an independent third-party valuation firm to provide input in the valuation of all of our

• unquoted investments, which we consider along with other various subjective and objective factors in making our evaluations.

• Due to the inherent uncertainty of determining the fair value of loans that do not have a readily available market value, the fair value of our loans may fluctuate from period to period. Additionally, the fair value of our loans may differ significantly from the values that would have been used had …

• Changes in Market Interest Rates and Effect on Net Interest Income

Text added vs the prior filing · source: 10-Q · 2026-05-07

• In February 2025, AFC Agent, on behalf of the Company and the other lenders, initiated a mortgage foreclosure proceeding in connection with the forbearance agreement entered into by the Company and affiliates of the Justice Cannabis Company in March 2024 (the “2024 Justice Cannabis Company Forbearan…

• In April 2025, we and AFC Agent (collectively, the “AFC Parties”) commenced legal actions against two shareholders (the “Guarantors”) of the parent of Justice Cannabis Company in the United States District Court for the Southern District of New York asserting claims for violations of the Racketeer I…

• In June 2025, the AFC Parties filed an amended complaint against the Guarantors, asserting claims for breach of contract, tortious interference with contract, fraud, aiding and abetting fraud, and conversion, and dismissing without prejudice the RICO cause of action. In July 2025, the Parent moved t…

• On March 17, 2026, the New York state court denied Parent’s motion to dismiss the action. On April 3, 2026, AFC Agent and Parent each moved for a stay of the action. The Court has now temporarily stayed the New York state action until the Court can resolve certain issues raised by the parties’ stay …

• On March 31, 2026, the Southern District of New York denied the Guarantors’ motion to transfer and denied their motion to dismiss the cause of action for fraud, and dismissed the remaining causes of action. That action is in discovery.

Text removed vs the prior filing · source: 10-Q · 2025-11-12

• On September 9, 2025, a complaint was filed in the Superior Court of the State of California in Los Angeles County naming, among others, the Company, the Manager, and certain of their officers and/or directors as defendants. On September 19, 2025, an amended complaint was filed in the same action th…

• guarantors of the loan the Company made to the two subsidiaries (among other borrowers), and those two subsidiaries have filed an action against the Company (and others) in New Jersey. The complaint alleges that the Company conspired with a restructuring advisory firm to mismanage the borrowers’ ope…