Sunrise Realty Trust Completes Acquisition, Triggers Change of Control

Ticker: SUNS · Form: 8-K · Filed: Jul 9, 2024 · CIK: 2012706

Sunrise Realty Trust, Inc. 8-K Filing Summary
FieldDetail
CompanySunrise Realty Trust, Inc. (SUNS)
Form Type8-K
Filed DateJul 9, 2024
Risk Levelmedium
Pages7
Reading Time8 min
Key Dollar Amounts$0.01
Sentimentneutral

Sentiment: neutral

Topics: acquisition, change-of-control, officer-changes

TL;DR

Sunrise Realty Trust just bought stuff, changing hands. Big moves ahead.

AI Summary

On July 8, 2024, Sunrise Realty Trust, Inc. announced the completion of its acquisition of certain assets from an unnamed seller for an undisclosed amount. This event also triggered a change in control of the registrant. The filing also disclosed changes in officers and compensatory arrangements.

Why It Matters

This acquisition and change of control could significantly alter Sunrise Realty Trust's operational strategy and financial structure, impacting its future performance and shareholder value.

Risk Assessment

Risk Level: medium — The acquisition and change of control introduce uncertainty regarding future strategy and integration, which could pose risks.

Key Players & Entities

  • Sunrise Realty Trust, Inc. (company) — Registrant
  • July 8, 2024 (date) — Date of earliest event reported

FAQ

What specific assets were acquired by Sunrise Realty Trust, Inc.?

The filing states that "certain assets" were acquired, but does not provide specific details about the nature or type of these assets.

Who was the seller in the acquisition transaction?

The filing does not disclose the identity of the seller from whom Sunrise Realty Trust, Inc. acquired the assets.

What was the total purchase price for the acquired assets?

The filing does not disclose the dollar amount of the transaction for the acquired assets.

What is the effective date of the change in control of Sunrise Realty Trust, Inc.?

The change in control of the registrant became effective on July 8, 2024, as reported in the filing.

Are there any details provided regarding changes in officers or compensatory arrangements?

Yes, the filing indicates "Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers" as an item of disclosure, suggesting such changes have occurred.

Filing Stats: 1,974 words · 8 min read · ~7 pages · Grade level 12.7 · Accepted 2024-07-09 16:55:11

Key Financial Figures

  • $0.01 — ch registered Common Stock, par value $0.01 per share SUNS The Nasdaq Stock Marke

Filing Documents

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") announced the completion of the previously announced separation and spin-off (the "Spin-Off") of the AFC Gamma's commercial real estate ("CRE") portfolio into an independent, publicly-traded REIT, Sunrise Realty Trust, Inc. ("SUNS" or the "Company"). The Separation was effected by the transfer of AFC Gamma's CRE portfolio, from AFC Gamma to SUNS and the distribution of all of the outstanding shares of SUNS common stock to all of AFC Gamma's stockholders of record as of the close of business on July 8, 2024 (the "Record Date"). AFC Gamma's stockholders of record as of the Record Date received one share of SUNS common stock for every three shares of AFC Gamma 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, offi

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 AFC Gamma common stock as of the close of business on the Record Date. For every three shares of AFC Gamma common stock held, such holder received one share of SUNS common stock, and holders will receive cash in lieu of any fractional share of SUNS common stock they otherwise would have been entitled to receive in connection with the Distribution. SUNS is now a standalone publicly-traded company, and on July 9, 2024 trading of the Company's common stock commenced on The Nasdaq Capital Market ("Nasdaq").

01. Change in Control of Registrant

Item 5.01. Change in Control of Registrant. The information relating to the Spin-Off provided in Item 1.01 of this Current Report is incorporated herein by reference. On July 9, 2024, AFC Gamma completed the Spin-Off of the Company to the stockholders of AFC Gamma. The Company is now an independent publicly-traded REIT and its common stock trades on Nasdaq under the symbol "SUNS". Item 5.02. Departure of Directors or Certain Officers Election of Directors Appointment of Certain Officers Compensatory Arrangements of Certain Officers. SUNS 2024 Stock Incentive Plan SUNS has adopted the 2024 Stock Incentive Plan (the "Plan"). A summary of the Plan can be found in the Information Statement in the section entitled "Management—2024 Stock Incentive Plan." Such description is incorporated herein by reference. The description of the foregoing Plan is intended to provide a general description only, is subject to the detailed terms and conditions of, and is qualified in its entirety by reference to the full text of, the Plan, which is attached hereto as Exhibit 10.3, which is incorporated herein by reference.

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On July 9 2024, SUNS posted an investor presentation to the Company's website. The information in Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be, or be deemed, incorporated by reference in any filings under the Securities Act of 1933, as amended (the "Securities Act"), unless the Company specifically states that the information is to be considered "filed" under the Exchange Act or incorporates it by reference into a filing under the Securities Act or the Exchange Act. 3

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (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. 10.2 Management Agreement (filed as Exhibit 10.2 to Amendment No. 2 to the Company's Registration Statement on Form 10-12B on May 20, 2024 and incorporated herein by reference). 10.3+ Sunrise Realty Trust, Inc. 2024 Stock Incentive Plan (filed as Exhibit 10.4 to Amendment No. 3 to the Company's Registration Statement on Form 10-12B on June 10, 2024 and incorporated herein by reference). 99.1 Investor Presentation, dated July 9, 2024. 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. + Management contract or compensatory plan or arrangement 4

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SUNRISE REALTY TRUST, INC. Date: July 9, 2024 By: /s/ Brandon Hetzel Brandon Hetzel Chief Financial Officer and Treasurer 5

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