Advanced Flower Capital Inc SEC Filings

Advanced Flower Capital Inc. furnished an update on operations and financial condition by announcing it issued a press release for the quarter ended September 30, 2025. The press release is included as Exhibit 99.1. The information under Item 2.02, including the exhibit, is being furnished and is not deemed filed or incorporated by reference except as expressly set forth.

Advanced Flower Capital Inc. (AFCG) reported Q3 2025 results marked by higher credit costs and a swing to losses. Interest income was $8.16 million for the quarter, with a net loss of $12.49 million (vs. income a year ago). Year‑to‑date, the company recorded a net loss of $21.59 million.

The CECL reserve rose to $51.17 million as of September 30, 2025 (from $30.42 million at December 31, 2024), reflecting credit deterioration, including three nonaccrual loans with amortized cost of about $104.2 million. A loan held at fair value tied to Private Company A remained on nonaccrual with $50.98 million outstanding principal and $16.92 million fair value, driving $11.45 million of unrealized losses year‑to‑date.

Liquidity declined as cash was $45.12 million (vs. $103.61 million at year‑end). Debt included $22.0 million outstanding on the revolver and $89.06 million net in 2027 senior notes. The revolver maturity was extended to April 29, 2028 with an increased rate floor. AFCG expanded its investment mandate beyond cannabis to ancillary and other industries, and on November 6, 2025 shareholders approved a new investment advisory agreement necessary for the planned REIT‑to‑BDC conversion.

Advanced Flower Capital Inc. (AFCG) reported shareholder approvals tied to its planned conversion from a REIT to a business development company (BDC). Shareholders approved a new 1940 Act–compliant investment advisory agreement with AFC Management, LLC, and authorized applying the BDC reduced asset coverage standard.

The investment advisory agreement was approved with 13,174,530 votes for, 541,875 against, and 124,887 abstentions. The reduced asset coverage requirement—permitting leverage at a 150% asset coverage ratio instead of 200%—was approved with 12,903,849 votes for, 790,942 against, and 146,501 abstentions. As of the September 15, 2025 record date, 22,594,541 common shares were outstanding and entitled to vote.

Advanced Flower Capital Inc. proposes to convert from a REIT to a BDC regulated under the Investment Company Act, subject to shareholder approval at a virtual Special Meeting on November 6, 2025. The Board unanimously approved the Conversion and recommends voting in favor of two primary proposals required to effect the Conversion: (1) approval of a new 1940 Act-compliant investment advisory agreement with AFC Management, LLC and (2) approval of reduced asset coverage from 200% to 150%, which would permit materially greater leverage.

The Company would cease REIT treatment and operate as an externally managed, closed-end, non-diversified BDC, and intends to elect RIC tax treatment under Subchapter M after conversion, expected as early as the first quarter of 2026. The Proxy discloses benefits the Board expects—broader investment mandate, access to private and middle-market opportunities, and potential for approximately $201 million of additional borrowing capacity under the 150% asset coverage scenario—but also details risks including different regulatory limits on leverage, increased compliance and reporting obligations, changed fee and incentive structures, and an active legal complaint filed September 9, 2025 naming the Company and affiliates.

Leonard M. Tannenbaum, a director and listed 10% owner of Advanced Flower Capital Inc. (AFCG), purchased 79,665 shares on 09/05/2025 at a weighted average price of $4.56 per share (trades ranged $4.51–$4.61). After the transaction his direct beneficial ownership is reported as 4,962,171 shares. The filing also discloses 127,667 shares held by his spouse (disclaimed) and 180,400 shares held by the Tannenbaum Family Foundation, for which he serves as President (disclaimed except for pecuniary interest). The report was signed by an attorney-in-fact on 09/08/2025. No derivative transactions or additional material terms are reported in this Form 4.

Advanced Flower Capital Inc. (AFCG) reported an insider purchase by Chief Executive Officer and Director Daniel Neville. On 09/08/2025 Mr. Neville acquired 12,388 shares of the issuer's common stock at a weighted average price of $4.44 per share, bringing his total beneficial ownership to 209,649 shares. The Form 4 indicates the transaction code P and notes the trade executed in multiple fills priced between $4.40 and $4.45, with the filer offering to provide detailed trade-level information upon request. The filing was submitted by Gabriel A. Katz as attorney-in-fact and lists Neville's business address in West Palm Beach, FL.

Advanced Flower Capital director and 10% owner Leonard M. Tannenbaum reported purchases of company common stock on September 2 and 3, 2025. He acquired 36,096 shares on 09/02/2025 at a weighted average price of $4.49, bringing his direct beneficial ownership to 4,845,645 shares. He acquired 36,861 shares on 09/03/2025 at a weighted average price of $4.57, bringing his direct beneficial ownership to 4,882,506 shares. The filing discloses additional indirect holdings of 127,667 shares held by a spouse and 180,400 shares held by the Tannenbaum Family Foundation; the reporting person disclaims beneficial ownership of the spouse-held shares and limits beneficial ownership of the foundation shares to his pecuniary interest.

Leonard M. Tannenbaum amended his Schedule 13D for Advanced Flower Capital Inc. to report changes in his holdings of the issuer's common stock. The filing reports an aggregate beneficial ownership of 4,989,949 shares, representing 22.1% of the 22,594,541 shares outstanding as of August 13, 2025. The amendment states the Reporting Person purchased additional shares in open market transactions and also included 180,400 shares held by the Tannenbaum Family Foundation, which he disclaims beneficial ownership of except to the extent of any pecuniary interest. Previously reported options to acquire an aggregate of 1,906,958 shares were voluntarily forfeited for no value and are no longer exercisable. The filing notes the net effect of these changes is a decrease of approximately 5.5 percentage points in the Reporting Person's aggregate beneficial ownership since the prior amendment. Exhibits list Schedule A (transactions) and Schedule B (forfeited options).

Leonard M. Tannenbaum, a director and listed 10% owner of Advanced Flower Capital Inc. (AFCG), reported purchases of the company's common stock on August 27-28, 2025. He acquired 330,127 shares on 08/27/2025 at a weighted-average price of $4.81 and 144,399 shares on 08/28/2025 at a weighted-average price of $4.57, for a total of 474,526 shares reported in the filing. Following those transactions the report shows 4,665,150 shares beneficially owned after the 08/27 trades and 4,809,549 shares after the 08/28 trades. The filing also discloses 127,667 shares held by his spouse and 180,400 shares held by the Tannenbaum Family Foundation; Mr. Tannenbaum serves as President of the foundation and disclaims beneficial ownership of those holdings except to the extent of any pecuniary interest. The Form 4 was signed by an attorney-in-fact on behalf of the reporting person on 08/29/2025.