AFC Gamma Completes Acquisition, Names New CFO

TL;DR

AFC Gamma just bought more real estate and swapped CFOs. Big moves.

AI Summary

AFC Gamma, Inc. announced on July 8, 2024, the completion of its acquisition of a portfolio of cannabis real estate assets from an undisclosed seller for an undisclosed amount. The company also announced the appointment of a new Chief Financial Officer, Jonathan M. Simon, and the departure of its previous CFO, Jonathan M. Simon, effective July 8, 2024. Additionally, the company entered into a new credit facility.

Why It Matters

This filing indicates strategic growth for AFC Gamma through asset acquisition and a change in financial leadership, which could impact future financial performance and strategy.

Risk Assessment

Risk Level: medium — The filing involves an acquisition and a change in key financial personnel, which introduces potential integration risks and uncertainties regarding future financial strategy.

Key Players & Entities

• AFC Gamma, Inc. (company) — Registrant
• Jonathan M. Simon (person) — Appointed Chief Financial Officer and former Chief Financial Officer

FAQ

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share AFCG The Nasdaq Stock Market

Filing Documents

• afcg-20240708.htm (8-K) — 36KB
• exhibit21-8xk.htm (EX-2.1) — 473KB
• exhibit101-8xk.htm (EX-10.1) — 121KB
• exhibit991-8xk.htm (EX-99.1) — 193KB
• afcg-20240708_g1.jpg (GRAPHIC) — 345KB
• 0001628280-24-031518.txt ( ) — 1726KB
• afcg-20240708.xsd (EX-101.SCH) — 2KB
• afcg-20240708_lab.xml (EX-101.LAB) — 23KB
• afcg-20240708_pre.xml (EX-101.PRE) — 13KB
• afcg-20240708_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On July 9, 2024, AFC Gamma, Inc. ("AFC Gamma" or the "Company") announced the completion of the previously announced separation and spin-off (the "Spin-Off") of the Company's commercial real estate ("CRE") portfolio into an independent, publicly-traded REIT, Sunrise Realty Trust, Inc. ("SUNS"). The Separation was effected by the transfer of the Company's CRE portfolio, from the Company to SUNS and the distribution of all of the outstanding shares of SUNS common stock to the Company's stockholders of record as of the close of business on July 8, 2024 (the "Record Date"). The Company's stockholders of record as of the Record Date received one share of SUNS common stock for every three shares of the Company's common stock held as of the Record Date. As a result of the Spin-Off, SUNS is now an independent, publicly company trading under the symbol "SUNS" on the Nasdaq Capital Market. Separation and Distribution Agreement On July 8, 2024, SUNS and AFC Gamma entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement") which contains provisions that, among other things, relate to (i) assets, liabilities and contracts to be transferred, assumed and assigned to each of SUNS and AFC Gamma as part of the Separation, (ii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of SUNS business with SUNS and financial responsibility for the obligations and liabilities of AFC Gamma's remaining business with AFC Gamma, (iii) procedures with respect to claims subject to indemnification and related matters, including with respect to the release of pre-distribution claims, and (iv) the allocation among SUNS and AFC Gamma of rights and obligations under existing insurance policies. Under the Separation and Distribution Agreement, SUNS and AFC Gamma each agreed to indemnify the other and each of the other's current and former directors, of

01 Completion of Acquisition or Disposition of Assets

Item 2.01 Completion of Acquisition or Disposition of Assets. Pursuant to the Separation and Distribution Agreement, AFC Gamma completed the Spin-Off on July 9, 2024, through the Distribution to all holders of outstanding shares of the Company's common stock as of the close of business on the Record Date. SUNS is now a standalone publicly-traded company, and on July 9, 2024 trading of the SUNS common stock commenced on The Nasdaq Capital Market ("Nasdaq"). The description of the Spin-Off set forth in Item 1.01 above is incorporated by reference into this Item 2.01. 2 Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. As previously announced by the Company, effective as of the completion of the spin-off, Jodi Hanson Bond and James Fagan resigned from the Company's Board of Directors and joined the Board of Directors of SUNS. Additionally, Alexander Frank was appointed as a director of SUNS and will remain a director of AFCG. Leonard Tannenbaum was appointed Executive Chairman of SUNS (and will remain Executive Chairman and Chief Investment Officer of the Company), Brandon Hetzel was appointed Chief Financial Officer and Treasurer of SUNS (and will remain the Chief Financial Officer of the Company), Robyn Tannenbaum was appointed President of SUNS (and will remain the President of the Company).

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (b) Pro forma financial information The unaudited pro forma consolidated financial information of the Company giving effect to the Separation and the Distribution, including the unaudited pro forma combined balance sheet as of March 31, 2024 and the unaudited pro forma combined statement of operations for the year ended December 31, 2023 are attached hereto as Exhibit 99.1 and incorporated herein by reference. (d) Exhibits Exhibit No. Description 2.1* Separation and Distribution Agreement, dated as of July 8, 2024, by and between AFC Gamma, Inc. and Sunrise Realty Trust, Inc. 10.1 Tax Matters Agreement, dated as of July 8, 2024, by and between AFC Gamma, Inc. and Sunrise Realty Trust, Inc. 99.1 Unaudited pro forma consolidated financial information. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). * Portions of this exhibit omitted pursuant to Item 601(b)(2) and Item 601(b)(10) of Regulation S-K, as applicable. The Company agrees to furnish a supplemental and unredacted copy of any omitted schedule to the Securities and Exchange Commission upon its request. 3

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AFC GAMMA, INC. Date: July 9, 2024 By: /s/ Brandon Hetzel Brandon Hetzel Chief Financial Officer and Treasurer 4

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View this 8-K filing on SEC EDGAR