AFCG

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 10:00 a.m. ET Chief Legal Officer - Gabriel A. Katz President and Chief Investment Officer - Robyn Tannenbaum Chief Executive Officer - Daniel Neville Chief Financial Officer - Brandon Hetzel Operator: Good day, and thank you for standing by. Welcome to the AFC Second Quarter 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, please press 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Gabriel A. Katz, Chief Legal Officer. Sir, please go ahead. Gabriel A. Katz: Good morning, and thank you all for joining AFC's earnings call for the quarter ended 06/30/2026. I am joined this morning by Robyn Tannenbaum, our president and chief investment officer Daniel Neville, our chief executive officer 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 07/17/2026 press release and is posted on the investor relations portion of AFC's website at afcbdc.com, along with our second quarter 2020 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, market developments, anticipated portfolio yield, and financial performance, and projections in 2026 and beyond. These statements are subject to inherent uncertainties in predicting future results. Please refer to AFC's most recent periodic filings with the SEC including our quarterly report on Form 10 Q filed earlier this morning for certain conditions and significant factors that could cause actual results to differ materially from these forward-looking statements and projections. Today's call will begin with Robyn providing an overview of the lending environment and our results, Daniel will then provide an update on our portfolio and pipeline. Finally, Brandon will conclude with a summary of our financial results before we open the line for Q&A. With that, I will now turn the call over to our President and Chief Investment Officer, Robyn. Robyn Tannenbaum: Thanks, Gabe, and good morning, everyone. We appreciate you joining us to discuss AFC's second quarter 2026 earnings. Before turning to our results, I want to provide some context on the broader lending environment. As many of you know, the private credit ecosystem is experiencing stress. Default rates across private credit have risen notably. With Fitch reporting a 6% default rate as of July 2026. And Proskauer's private credit default index tracking a similar upward trend. Banks, while not direct lenders to much of the middle market, hold indirect exposure through leveraged facilities, extended to private credit funds, and that exposure is now drawing increased scrutiny. In response to broader market stress, we are seeing a pullback in available capital particularly in the lower middle market where many lenders have either exited or shifted up market to support their existing portfolios. As a result, we continue to believe the lower middle market offers 1 of the most compelling risk adjusted return investment opportunities in private credit today. Competition remains rational in our segment. Unlike the upper middle market where larger direct lending funds continue to compete aggressively on pricing, leverage, and documentation, the lower middle market continues to reward lenders with sponsor relationships internal sourcing capabilities, and the ability to execute quickly. For AFC, this environment is exciting and what we are prepared for. We believe that this location is creating a compelling vintage for new originations. The loans we originate are generally supported by both enterprise value and asset coverage. We continue to negotiate comprehensive maintenance covenant including leverage and fixed charge coverage tests. Our pipeline continues to reflect that opportunity, and we are being thoughtful in how we deploy capital. In contrast, much of the upper middle market remains characterized by covenant light structures with fewer lender protections and more aggressive EBITDA adjustments. Now turning to our results. For the second quarter of 2026, AFC generated net investment income of $0.15 per weighted average share of common stock. Additionally, the board of directors declared the second quarter distribution of $0.05 per share. Which was paid on 07/15/2026 to shareholders of record on 06/30/2026. Last quarter, we announced a share repurchase program. During the quarter, we repurchased about $2.8 million which was $0.17 accretive to net asset value. We have approximately $2.2 million remaining in our $5 million share buyback program. Year to date, we have deployed approximately $102 million in new lower middle market commitments, Our pipeline remains well diversified across industries, and we tend to avoid sectors where we believe cyclicality or disruption creates an unfavorable risk profile. I will now turn it over to Daniel to discuss our portfolio. Daniel Neville: Thanks, Robyn, and good morning, everyone. I will start with the portfolio and our investment activity for the quarter then provide an update on our legacy positions and our pipeline. As of 06/30/2026, the fair value across our investment portfolio was $290 million across 17 portfolio companies, compared to $279 million across 15 portfolio companies at 30. 100% of the portfolio is in senior secured first lien debt investments and the weighted average yield, excluding nonaccrual loans, was 13.2%. During the quarter, we funded $17 million including $5 million to 2 new portfolio companies, and $12 million to 2 existing portfolio companies. Fundings were $8 million against $9 million of amortization and repayments. Subsequent to quarter end, we committed $7 million to a $25 million senior secured credit facility for a leading outpatient behavioral health platform with $3 million funded at close. The use of proceeds were to refinance existing debt and support future growth through acquisitions. And is consistent with our expanded lower middle market mandate. Turning to non-accrual loans, which remain concentrated in the legacy cannabis book. Regarding Devi, the receiver has continued the liquidation process. During the quarter, Devi entered into a binding term sheet to sell 2 additional assets. of Devi for $12.5 million in cash proceeds. Subsequent to quarter end, Devi earned a $2 million nonrefundable deposit on the purchase, we expect the transaction to close this year. Inception to date, we have received $58 million of principal repayment on the Devi loan. Regarding DMA, the receiver has continued the liquidation process. And closed the sale of 2 of the 3 dispensaries. Subsequent to quarter end. Moving on to Justice Grown. The Justice Grown loan matured on 05/01/2026 is in maturity default. We have commenced Article 9 foreclosures and are pursuing our rights and remedies under both the credit agreement including the parent guarantee and the shareholder guarantee. Our collateral includes vertically integrated assets in New Jersey, and 3 operating dispensaries in Pennsylvania. And a nonoperating cultivation facility in Pennsylvania. AFC has engaged SSG Advisors to conduct a robust marketing process for these assets and we encourage any interested buyers to see the notices available on our website and reach out to SSG for additional information. Given the active legal proceedings, we will not comment further on the specifics outside of what is disclosed in our SEC filings. Taking a step back, the portfolio continues to evolve as we make progress towards resolving the legacy cannabis loans on non-accrual, and the performing cannabis book amortizes and repays over time. Multiple trends signal that capital demand in the lower middle market is only accelerating as legacy lenders push off market. We will look to redeploy that capital into strong risk adjusted opportunities in the lower middle market. Our pipeline remains active, with $1.3 billion across a diverse range of industries. We remain focused on cash flowing borrowers with $5 million to $50 million of EBITDA, primarily in sponsored transactions. Where we believe we can achieve risk adjusted returns with strong structural protections. We are maintaining a disciplined approach to underwriting while actively advancing several opportunities through our pipeline. I will now turn it over to Brandon to discuss our financial results in more detail. Brandon Hetzel: Thank you, Daniel. For the quarter ended 06/30/2026, we generated total investment income of $8.7 million and net investment income of $3.5 million or $0.15 per weighted average share of common stock. This provided 3x coverage of our $0.05 second quarter 2026 distribution. Total investment income was $8.7 million compared with $9.8 million in the prior quarter. The decline primarily reflects $1.8 million of other income recognized in the first quarter that did not recur in the second quarter mainly relating to a $1.5 million exit fee from the Bloom repayment. Excluding these exit fees that are episodic, investment income increased modestly quarter over quarter driven by higher interest income. Total operating and income tax expenses were $5.2 million, compared to $5 million in the first quarter. And represented net of a management fee rebate of approximately $176 thousand for the quarter. We ended the second quarter with $364.5 million of principal outstanding spread across 17 loans. As of 06/30/2026, we had total assets of $399.7 million, total net assets of $187.3 million, and our net asset value per share was $8.25. This is an increase of $0.35 per share over the prior quarter. The increase in net asset value per share was driven by net investment income of $0.15 per share, $0.17 per share of accretion from repurchasing shares below net asset value, and an increase in unrealized appreciation on investments of approximately $0.08 per share. And offset by the second quarter distribution of $0.05 per share. Regarding the share repurchase program, during the quarter, we repurchased and extinguished approximately 839 thousand shares at a weighted average price of $3.29 per share. for approximately $2.8 million in the aggregate. Approximately $2.2 million remains available under the $5 million share repurchase program. Turning to the balance sheet. As of 06/30/2026, we had $207 million of debt outstanding consisting of $110 million drawn under our secured revolving credit facility. $20 million drawn under our unsecured revolving credit facility, and $77 million of senior unsecured notes outstanding. Subsequent to quarter end, the company repaid $84 million and $20 million, respectively, on the company's outstanding debt obligations under the secured revolving credit facility and the unsecured revolving credit facility. The weighted average interest rate on our debt outstanding was 6.3% for the quarter. Debt to equity was 1.1x as of June 30 compared to 1.09x at March 31. And net debt to equity was 0.53x compared to 0.48x respectively. Our asset coverage ratio was 190% which provides meaningful cushion against the 150% requirement applicable to us. We ended the quarter with $106.5 million of cash and cash equivalents. This provides substantial liquidity for new investments and other capital allocation opportunities. On distributions, we paid the second quarter distribution of $0.05 per common share on 07/15/2026 to shareholders of record as of 06/30/2026. With that, I will now turn it back over to the operator to start the Q&A. Operator: Thank you. First question is going to come from the line of Aaron Thomas Grey with Alliance Global Partners. Your line is open. Please go ahead. Aaron Thomas Grey: Hi. Thank you very much, for the questions here. I guess, first 1 for me, just in terms of, you know, activity. I could certainly appreciate, right, incremental funding for existing borrowers. But as we think about new borrowers, you know, today, you had this participation in July. But how is it best to think about the pipeline relative to you know, your ability to execute on opportunities in the near term. It does seem like there is been a little bit maybe of a slowdown considering the fast start you got off to in January, February. So just curious in terms of if that is partially the environment, maybe a bit longer of a process. Some timing, any color there would be appreciated. Thank you. Robyn Tannenbaum: Thanks. Do you want to take that 1? Daniel Neville: Yeah. Sure. Thanks, Aaron. So we have very active pipeline, $1.3 billion in the pipeline. And I think we are happy with the quality of the opportunities that we are seeing in the pipeline the pricing that we are seeing, etcetera. But originations are going to be lumpy. You saw it in Q1, we did about $80 million. We did less in Q2. And, so I think that we are advancing a bunch of opportunities through the pipeline. And are seeing good looks, and we will look to continue the momentum over the course of the year. But it will be lumpy and episodic just given the deals that we are hunting. Aaron Thomas Grey: I appreciate that. that is helpful. And then just in that line, given the potential lumpiness of this, and you could have some potential, you know, larger opportunities, how comfortable do you feel regarding your liquidity position today to ensure that you are able to capitalize on potential large opportunities that could come in the pipeline? Thanks. Robyn Tannenbaum: Daniel, do you want to do that 1? Or Brandon? Brandon Hetzel: Yeah. Sure. Yes. As stated in my remarks, at the end of the quarter, in our investment presentation, we have over $70 million in liquidity available to deploy. So we are very comfortable with our liquidity position. Daniel Neville: Yeah. And I would say in terms of some of the larger opportunities too as well outside of AFC, We do operate under a, co investment relief order with the SEC, which allows us to potentially participate with other affiliates under the TCG platform. And so 1 of the opportunities that you saw in July, we participated alongside an affiliate. And if there are larger opportunities out there that we are chasing, that is also an option to deploy into larger opportunities. And there is also the opportunity to syndicate deals that are above kind of our target hold threshold as well. Aaron Thomas Grey: Okay. Great. Thanks. Last question. From me. I know you said in prepared remarks, right, nothing further, you know, from some of the SEC filings regarding justice. But just maybe to clarify things, now that you have the process in place, you talked about prepared remarks. there is nothing outstanding or maybe that is the legacy operators are doing, you know, that could keep you from, going through with the sale process and for you to be able to, you know, retrieve as much as possible from those assets? Just any clarification on that, you know, would be helpful. Thanks. Robyn Tannenbaum: Gabe or Daniel? Gabriel A. Katz: Yeah. Aaron, we have pretty extensive disclosures in the SEC filings. I would encourage you and the investors to read through that. We, outside of that, we just are not gonna be able to comment given the active stages of litigation there. Aaron Thomas Grey: Fair enough. Thank you very much. I will jump back in the queue. Thank you. Operator: And 1 moment for our next question. Our next question comes from the line of Pablo Zuanic with Zuanic & Associates. Your line is open. Please go ahead. Pablo Zuanic: Thank you, and good morning, everyone. Robyn, can you maybe go back to your comments in prior quarters about your views about lending in the cannabis industry? I mean, pretty much you have implied that you remain very cautious there. And that pretty much all the new activity will be outside of cannabis. But we do have a more favorable regulatory backdrop. Right? So do you want to expand on that, please? Thanks. Robyn Tannenbaum: Sure. Thanks for the question, Pablo. I think what we have said in prior quarters and in prior years is that access to equity capital in the cannabis industry was challenged. And I think, unfortunately, it still continues to be challenged. There have been a lot of milestones that people have been hoping for a while that have been long overdue, like the rescheduling of medical cannabis, which happened, I think, you know, quicker relative to where people thought it was going to be a few months ago. And, the pending potential rescheduling of adult use cannabis. You know, we have also had I think, 2 companies now, uplift to the NYSE. And, unfortunately, you have you seen a lot of, activity on the equity capital side of things associated with it, and I think it is still a difficult environment to raise equity capital. And as a result, I think we have concerns about, the industry continuing to be funded kind of on the debt side of things without having access to equity capital. And that also impacts the refi-ability of these borrowers These are not straightforward businesses. There can be some volatility in the industry in the regulatory environment. And a lack of refi-ability on the equity side of things deal with those problems is problematic to debt investors. And so we applaud the progress. I think there has been good progress, but the lack of equity is very problematic for us. Pablo Zuanic: Thank you. that is a good color. Maybe just going back to Devi and DMA. In the case of Devi, you said that you are expecting the assets to be sold for $12.5 million in the second half. And that a deposit was already taken on the transaction for $2 million. So it pretty much confirms that the transaction is in place. I just want to make sure I heard that right. I know I can go back to the transcript. And whether you have access to the full amount, or are there other parties that have access to those proceeds also. Thanks. Daniel Neville: Yeah. So that you heard correct. So it was a it was a binding term sheet that was signed up, subject to, $2 million cash hard deposit. So our expectation is that closes, sometime this year. And that would be for $12.5 million of total cash proceeds on we are a participant in-- we are the lead participant in the Devi loan, but I believe we have 70%, 78% or somewhere around 80% is our participation in Devi. So 80% of the proceeds would be you know, would be distributed to us on a on a pro rata basis. Pablo Zuanic: Thank you. that is good color. And the same question on DMA, and I am sorry if I misheard You said that 2 of the 3 dispensaries closed the transaction, or they closed operations? I am just trying I do not know if you can give a number. as to what you are expecting. Daniel Neville: No. That luckily, the transaction closed. The dispensaries did not close. So we had 2 of the 3 dispensaries under APA previously. That sale received regulatory both of those sales received regulatory approval in June, and both of those transactions closed in July. And I think in terms of, the rest of the transaction and the wind down of DMA, we have 1 more to go. And we you can look at our new BDC filings to see, where our mark is on that. Pablo Zuanic: Right. And, again, apologies if there is more people on the Q&A line here, Hugh. In terms of the new loan you made in the third quarter, can you give more color on the amount? I think you said $17 million or maybe I misheard. And more color on the company itself, you know, if you can. Thank you. Daniel Neville: In the second quarter, Pablo, you were asking? The 1 in the second quarter? Pablo Zuanic: Unless I misheard, I thought that you said subsequent to the report that you also fund funded a new loan. Maybe I misheard that? Daniel Neville: Sure. Yep. Yeah. that is correct. So it is a-- we talked a little bit in the script. it is a behavioral health roll up focused in the Northeast. They have 10 locations throughout the Northeast. And do a mix of, do a mix of talk therapy, medication management, as well as some additional add ons both in an outpatient setting as well as a, as well as a partial hospitalization setting. So it is an industry, you know, we had talked about previously focusing on industries that are more predictable recession resistant recession resistant, have good cash flow characteristics and highlighted health is 1 of the areas we would be focused on. And so we have done a couple transactions and around that space, 1 in the insurance space in Q1, and This deal in Q3. Brandon Hetzel: And, Pablo, the size of that deal was we committed $7 million and funded $3.1 million on closing. Pablo Zuanic: Thank you. that is good color there. And then, look, I have not gone through the 10-Q in full, only partially. I think a while ago, you said that, Sunburn was non-accrual. Can you give a reminder where you are with the Sunburn loan. Which I think was renamed under another borrower's name. But just some color there. Daniel Neville: Oh, sure. So we had disclosure last quarter. There was we entered into a forbearance agreement with Sunburn that was conditioned on the company raising additional equity capital as well as some other conditions. The company fulfilled those obligations. In Q2, and we received a pay down associated with the loan and there was additional equity capital that went into the business for some expansion that they are looking to do. And the company fulfilled the forbearance obligations, and the loan is in good standing. Pablo Zuanic: Thank you. And the very last 1, I mean, obviously, we know how much credit you have available credit lines you have available. But right now, you are at net debt to net debt-to-equity at 0.53. What are you comfortable with? I understand the average on BDCs is like 1.3x, but what are you comfortable with? Daniel Neville: Sure. I think on our side of things, we have always said that somewhere around 1.0x or potentially above that, but I think 1.0x is a good intermediate target for us. Pablo Zuanic: that is good. Thank you. that is all for me. Operator: And I am showing thank you. And I am showing no further questions, and I would like to hand the conference back over to Daniel Neville for closing remarks. Daniel Neville: Thanks, everyone, for joining us today, and we look forward to keeping you updated on future progress. Operator: This concludes today's conference call. Thank you for participating and you may now disconnect. Everyone, have a great day. Before you buy stock in AFC Gamma, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AFC Gamma wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Advanced Flower Capital (AFCG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management identifies a compelling 'vintage' for new originations in the lower middle market as traditional banks and larger private credit funds retreat or move up-market. The company is intentionally shifting its focus toward recession-resistant sectors like healthcare and insurance, moving away from the cyclicality and regulatory volatility of the cannabis industry. Performance attribution for the quarter was driven by modest increases in interest income, though total investment income declined due to the non-recurrence of a large $1.5 million exit fee from the prior period. Management emphasizes a disciplined underwriting approach that prioritizes senior secured first-lien positions with comprehensive maintenance covenants, contrasting this with 'covenant-light' trends in the upper middle market. The legacy cannabis portfolio remains the primary source of non-accruals, with management actively pursuing a liquidation strategy through receiverships and asset sales to recover capital. Strategic capital allocation included a $2.8 million share repurchase program, which management noted was $0.17 accretive to net asset value per share. Management expects origination activity to remain 'lumpy and episodic' despite a robust $1.3 billion pipeline, as they prioritize deal quality over deployment speed. The company intends to leverage its SEC co-investment relief order to participate in larger transactions alongside affiliates, providing flexibility beyond its own balance sheet constraints. Liquidation of legacy assets, specifically the Devi and DMA positions, is expected to conclude within the 2026 calendar year, providing further capital for redeployment. Management is targeting an intermediate net debt-to-equity ratio of approximately 1.0x, indicating significant room for leverage expansion from the current 0.53x level. Future deployments will focus on cash-flowing borrowers with EBITDA between $5 million and $50 million, primarily within sponsored transactions. The Justice Grown loan is in maturity default as of May 1, 2026; management has commenced Article 9 foreclosures and engaged advisors to market the underlying assets. Management expressed continued caution regarding the cannabis sector, citing a critical lack of available equity capital which hinders the 'refi-ability' of borrowers despite federal rescheduling progress. A $1.1 million decline in total investment income quarter-over-quarter was attributed to the absence of one-time fees, highlighting the impact of episodic income on headline metrics. The Devi liquidation involves a binding term sheet for $12.5 million in cash proceeds, with a $2 million non-refundable deposit already secured subsequent to quarter-end. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that while Q1 saw $80 million in activity, Q2 was slower because originations are naturally 'lumpy' based on deal hunting cycles. They remain satisfied with current pipeline pricing and quality, expecting momentum to continue throughout the year. The company confirmed over $70 million in available liquidity and the ability to syndicate deals that exceed target hold thresholds. The use of co-investment vehicles with TCG platform affiliates was highlighted as a key tool for capturing larger market opportunities. Robyn Tannenbaum noted that while regulatory milestones like rescheduling are positive, the industry still lacks sufficient equity capital to support debt structures. Management views the lack of equity as a major risk to borrower stability and the ability to refinance debt, justifying their cautious stance. Management confirmed the Sunburn loan is now in good standing after the borrower fulfilled forbearance requirements, including raising additional equity capital. The company received a paydown on the loan during Q2 as part of this resolution.

Interested in AFC Gamma Inc.? Here are five stocks we like better. AFC Gamma reported $3.5 million in second-quarter net investment income, or $0.15 per share, and declared a $0.05 quarterly distribution covered three times by earnings. Net asset value rose to $8.25 per share, aided by stock repurchases below NAV and unrealized appreciation. The company is targeting opportunities in the lower middle-market private credit sector as lenders retreat, with a $1.3 billion pipeline focused on sponsor-backed borrowers generating $5 million to $15 million of EBITDA. Its portfolio grew to $290 million across 17 companies, entirely in senior secured first-lien loans, with a 13.2% weighted average yield. Legacy cannabis loans remain the main source of credit stress. AFC is pursuing asset sales and foreclosure actions on troubled exposures, while maintaining caution about new cannabis lending because borrowers have limited access to equity capital. AFC Gamma (NASDAQ:AFCG) reported second-quarter net investment income of $3.5 million, or $0.15 per weighted average common share, while emphasizing opportunities to deploy capital in the lower middle-market private credit sector as lenders retreat amid broader market stress. The company’s board declared a quarterly distribution of $0.05 per share, paid July 15 to shareholders of record June 30. The distribution was covered three times by quarterly net investment income, according to Chief Financial Officer Brandon Hetzel. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be President and Chief Investment Officer Robyn Tannenbaum said default rates have risen across private credit, citing a 6% default rate reported by Fitch as of July 2026. She said lenders have pulled back from the lower middle market or shifted their focus to larger borrowers, reducing available capital for smaller companies. Tannenbaum said AFC views the environment as a potentially attractive origination vintage, particularly for lenders that can source transactions, maintain sponsor relationships and negotiate protective loan terms. The company generally targets investments supported by enterprise value and asset coverage, with maintenance covenants including leverage and fixed-charge coverage tests, she said. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand Chief Executive Officer Dan Neville said AFC’s pipeline stood at $1.3 billion across a range of industries. The company is focused on cash-flowing borrowers with EBITDA of $5 million to $15 million, primarily in sponsor-backed transactions. “Originations are going to be lumpy,” Neville said in response to an analyst question, noting the company made roughly $80 million of originations in the first quarter and less in the second quarter. He said AFC was advancing several opportunities and was satisfied with the quality and pricing of transactions in its pipeline. → On Holding's Price Stumble May Be an Opening for a Company Built to Run As of June 30, AFC’s investment portfolio had a fair value of $290 million across 17 portfolio companies, compared with $279 million across 15 companies at March 31. The portfolio was entirely invested in senior secured first-lien debt, and its weighted average yield, excluding non-accrual loans, was 13.2%. During the quarter, AFC funded $17 million, consisting of $5 million to two new portfolio companies and $12 million to two existing companies. The company recorded $8 million in fundings against $9 million of amortization and repayments. After the quarter ended, AFC committed $7 million to a $25 million senior secured credit facility for an outpatient behavioral health platform, funding $3.1 million at closing. Neville said the platform operates 10 locations in the Northeast and provides services including talk therapy, medication management and partial hospitalization programs. The proceeds are intended to refinance debt and support acquisitions. Hetzel said the company had more than $70 million of available liquidity to deploy at quarter-end. Neville added that AFC can participate alongside affiliates under its SEC co-investment relief order and may syndicate loans that exceed its target hold threshold. Non-accrual loans remain concentrated in AFC’s legacy cannabis portfolio. Neville said the receiver overseeing DEBI’s liquidation entered into a binding term sheet during the quarter to sell two additional DEBI assets for $12.5 million in cash proceeds. DEBI received a $2 million non-refundable deposit after quarter-end, and AFC expects the transaction to close this year. AFC has received $58 million of principal repayments on the DEBI loan since inception. Neville said AFC is the lead participant in the loan and holds roughly 78% to 80% of the position, meaning proceeds would be distributed on a pro rata basis. For DMA, the receiver sold two of three dispensaries after regulatory approvals were received in June and the transactions closed in July. One asset remains to be resolved, Neville said. The Justice Grown loan matured May 1 and is in maturity default. AFC has commenced Article 9 foreclosure actions and is pursuing remedies under the credit agreement, including parent and shareholder guarantees. The collateral includes vertically integrated assets in New Jersey, three operating dispensaries in Pennsylvania and a non-operating Pennsylvania cultivation facility. AFC retained SSC Advisors to market the assets. Neville also said a Sunburn loan returned to good standing after the borrower met conditions under a forbearance agreement, including raising additional equity capital. AFC received a paydown on that loan during the second quarter. Despite regulatory developments in cannabis, Neville said AFC remains cautious about new lending in the sector because of limited access to equity capital. He said the lack of equity financing can make it more difficult for borrowers to address operational, regulatory or market volatility. Total investment income was $8.7 million in the second quarter, down from $9.8 million in the first quarter. Hetzel said the decline primarily reflected $1.8 million of other income recognized in the first quarter that did not recur, including a $1.5 million exit fee associated with the Bloom repayment. Excluding episodic exit fees, investment income rose modestly on higher interest income. At June 30, AFC had $364.5 million of principal outstanding across 17 loans, total assets of $399.7 million and net assets of $187.3 million. Net asset value per share increased $0.35 sequentially to $8.25. The increase reflected $0.15 per share of net investment income, $0.17 per share of accretion from repurchasing stock below net asset value and approximately $0.08 per share of unrealized appreciation, partly offset by the $0.05 per-share distribution. During the quarter, AFC repurchased and retired approximately 839,000 shares at an average price of $3.29 per share, for about $2.8 million. About $2.2 million remained under the company’s $5 million repurchase authorization. AFC ended the quarter with $207 million of debt outstanding and $106.5 million of cash and cash equivalents. After quarter-end, the company repaid $84 million on its secured revolving credit facility and $20 million on its unsecured revolving credit facility. Net debt-to-equity was 0.53 times at June 30, while the asset coverage ratio was 190%, above the 150% requirement applicable to the company. AFC Gamma, Inc is a specialty finance real estate investment trust that focuses on providing structured financing solutions to companies operating and developing digital infrastructure and life science real estate assets. As a REIT, AFC Gamma seeks to generate attractive risk-adjusted returns through a diversified portfolio of loans, preferred equity and other financing structures that are secured by tangible property collateral or contractual revenue streams. The company's primary business activities include originating, acquiring and managing secured loans and equity investments that support wireless and broadband network deployment, data center expansion, and life sciences facility development. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "AFC Gamma Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Total Investment Income: $8.7 million for the second quarter of 2026, compared with $9.8 million in the first quarter. Net Investment Income: $3.5 million, or $0.15 per weighted average share of common stock. Distribution: $0.05 per share for the second quarter, paid on July 15, 2026. Net Asset Value (NAV) per Share: $8.25 as of June 30, 2026, an increase of $0.35 per share over the prior quarter. Portfolio Fair Value: $290 million across 17 portfolio companies, compared to $279 million across 15 portfolio companies on March 31. Weighted Average Yield: 13.2% excluding non-accrual loans. Fundings: $17 million during the quarter, including $5 million to two new portfolio companies and $12 million to two existing portfolio companies. Total Operating and Income Tax Expenses: $5.2 million, compared to $5 million in the first quarter. Debt Outstanding: $207 million as of June 30, 2026, consisting of $110 million drawn under the secured revolving credit facility, $20 million under the unsecured revolving credit facility, and $77 million of senior unsecured notes. Weighted Average Interest Rate on Debt: 6.3% for the quarter. Debt to Equity: 1.1 times as of June 30, compared to 1.09 times on March 31. Net Debt to Equity: 0.53 times, compared to 0.48 times in the prior quarter. Asset Coverage Ratio: 190%. Cash and Cash Equivalents: $106.5 million at quarter end. Share Repurchases: Approximately 839,000 shares repurchased at a weighted average price of $3.29 per share for approximately $2.8 million, with approximately $2.2 million remaining under the $5 million program. Warning! GuruFocus has detected 3 Warning Signs with AFCG. Is AFCG fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Advanced Flower Capital Inc (NASDAQ:AFCG) generated net investment income of $0.15 per share, providing three times coverage of its $0.05 quarterly distribution. The company repurchased approximately $2.8 million of its shares at a discount, which was $0.17 accretive to net asset value (NAV) per share. NAV per share increased by $0.35 quarter-over-quarter to $8.25, driven by net investment income, share repurchase accretion, and unrealized appreciation. The company maintains a strong liquidity position with $106.5 million in cash and over $70 million available to deploy, providing flexibility for new investments. Advanced Flower Capital Inc (NASDAQ:AFCG) continues to see a robust pipeline of $1.3 billion in the lower middle market, where it believes it can achieve compelling risk-adjusted returns with strong structural protections. The company successfully resolved the Sunburn loan situation, as the borrower fulfilled its forbearance obligations and the loan is now in good standing. Advanced Flower Capital Inc (NASDAQ:AFCG) faces ongoing challenges with its legacy cannabis portfolio, including non-accrual loans at Debbie, DMA, and Justice Grown, which is in maturity default and subject to foreclosure proceedings. The company's total investment income declined to $8.7 million in Q2 2026 from $9.8 million in Q1 2026, partly due to the non-recurrence of a $1.5 million exit fee. New investment originations were slower in Q2 2026 compared to Q1, with only $17 million funded, highlighting the lumpy and episodic nature of deal flow. The broader private credit market is experiencing stress, with rising default rates and a pullback in available capital, which could impact the operating environment for borrowers. The company's debt-to-equity ratio increased slightly to 1.1 times, and net debt to equity rose to 0.53 times, indicating a modest increase in leverage. The Justice Grown loan is in maturity default, and the company has commenced foreclosure proceedings, with the outcome and recovery amount uncertain due to active litigation. Q: Can you provide more color on the new loan funded subsequent to quarter end, including the amount and the company itself? A: Daniel Neville (CEO) confirmed it's a behavioral health roll-up focused on the Northeast with 10 locations, offering talk therapy, medication management, and outpatient/partial hospitalization services. This aligns with the focus on predictable, recession-resistant industries with good cash flow. Brandon Hetzel (CFO) added that AFC committed $7 million and funded $3.1 million at closing. Q: Given the potential lumpiness of originations and possible large opportunities, how comfortable are you with your liquidity position to capitalize on them? A: Brandon Hetzel (CFO) stated that AFC has over $70 million in liquidity available to deploy, expressing high comfort with the position. Daniel Neville (CEO) added that AFC operates under a co-investment relief order with the SEC, allowing participation with TCG platform affiliates on larger deals, and also has the option to syndicate deals above its target hold threshold. Q: Can you expand on your views about lending in the cannabis industry, given the more favorable regulatory backdrop? A: Daniel Neville (CEO) reiterated caution, noting that access to equity capital in the cannabis industry remains challenged despite milestones like the rescheduling of medical cannabis and uplistings to NYSE. He expressed concern about funding the industry solely with debt without equity capital, which impacts borrower refinancing ability and makes the volatile regulatory environment problematic for debt investors. Q: Regarding the Debbie loan, can you confirm the asset sale details and whether AFC has access to the full proceeds? A: Daniel Neville (CEO) confirmed that a binding term sheet was signed for the sale of two additional assets for $12.5 million in cash proceeds, with a $2 million nonrefundable deposit received. He clarified that AFC is the lead participant with approximately 78-80% of the loan, so proceeds would be distributed on a pro rata basis. Q: Can you clarify the status of the DMA dispensary sales? A: Daniel Neville (CEO) clarified that the transactions closed successfully, not the dispensaries themselves. Two of the three dispensaries under the Asset Purchase Agreement received regulatory approval in June and closed in July. One more dispensary remains to be sold, with details on the mark available in SEC filings. Q: How should we think about the pipeline relative to your ability to execute on new opportunities, given the apparent slowdown in activity? A: Daniel Neville (CEO) acknowledged that originations are lumpy, with Q1 seeing about $80 million and Q2 less, but emphasized a very active $1.3 billion pipeline with good quality and pricing. He expects to continue advancing opportunities through the pipeline over the course of the year, though activity will remain episodic. Q: Can you provide an update on the Justice Grown loan and the sale process? A: Daniel Neville (CEO) declined to comment beyond SEC filings due to active litigation, but noted that AFC has commenced Article 9 foreclosures and is pursuing rights under the credit agreement, parent guarantee, and shareholder guarantee. SFC advisors have been engaged for a marketing process of the collateral, including vertically integrated assets in New Jersey and dispensaries in Pennsylvania. Q: What is your comfort level with the current net debt to equity ratio of 0.53 times? A: Daniel Neville (CEO) stated that AFC has always targeted around one times leverage or potentially above, indicating that one times is a good intermediate target for the company. Q: Can you provide an update on the Sunburn loan, which was previously in non-accrual? A: Daniel Neville (CEO) reported that AFC entered into a forbearance agreement with Sunburn, conditioned on raising additional equity capital. The company fulfilled its obligations in Q2, received a paydown, and the loan is now in good standing. Q: Are there any outstanding issues from legacy operators that could prevent you from proceeding with the Justice Grown sale process? A: Daniel Neville (CEO) directed attention to extensive disclosures in SEC filings and declined to comment further given the active status of litigation, indicating the process is proceeding as disclosed. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Second quarter 2026 GAAP net investment income (“NII”) of $3.5 million, or $0.15 per weighted average share WEST PALM BEACH, Fla., Aug. 13, 2026 (GLOBE NEWSWIRE) -- Advanced Flower Capital Inc. (Nasdaq: AFCG) (“AFC,” or the “Company”) today announced its financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Highlights Total investment income of $8.7 million and GAAP NII of $3.5 million, or $0.15 per weighted average share Net asset value (“NAV”) per share of $8.25 as of June 30, 2026, compared with $7.90 as of March 31, 2026 GAAP net increase in net assets resulting from operations of $5.4 million, or $0.23 per weighted average share Gross and net investment fundings of $17.2 million and $8.0 million, respectively Investment portfolio of $289.8 million at fair value across 17 portfolio companies, compared with $279.2 million as of March 31, 2026 Weighted average yield on income producing debt investments of 13.2% as of June 30, 2026 Debt-to-equity of 1.10x and net debt-to-equity of 0.53x; total available liquidity of over $70 million Repurchased 839,406 shares at a weighted average price of $3.29, generating $0.17 per share of NAV accretion in connection with our recently adopted Share Repurchase Program (as defined below) “AFC generated net investment income of $0.15 per weighted average share in the second quarter. NAV per share increased to $8.25, including $0.17 of accretion from repurchasing shares at a substantial discount to NAV. We remained selective in the attractive lower middle-market and will continue to prioritize credit quality and risk-adjusted returns,” said Dan Neville, Chief Executive Officer. Common Stock Distribution On July 15, 2026, the Company paid a regular cash distribution of $0.05 per common share for the second quarter of 2026 to shareholders of record as of June 30, 2026. Share Repurchase Program On May 4, 2026, the Company’s Board of Directors (the “Board”) authorized a program for the purpose of repurchasing up to $5.0 million of the Company's common stock (the “Repurchase Program”). Under the Repurchase Program, the Company may, but is not obligated to, repurchase its outstanding common stock in the open market from time to time, subject to certain limitations and applicable law. Unless amended or extended by the Company's Board, the Company expects the Repurchase Program to be in place until the earlier of such time that $5.0 million of the Company's outstanding shares of common stock have been repurchased, or May 4, 2027. During the quarter, AFC repurchased and extinguished 839,406 shares at a weighted average price of $3.29, or approximately $2.8 million in the aggregate, generating $0.17 per share of NAV accretion. Operating Results (1) Total operating expenses and income tax expense is presented net of the management fee rebate of $176,420 and $233,988 for the three months ended June 30, 2026 and March 31, 2026, respectively. Amounts may not sum due to rounding. Portfolio and Investment Activity As of June 30, 2026, AFC’s investment portfolio had a fair value of $289.8 million across 17 portfolio companies in 4 industries, compared with $279.2 million across 15 portfolio companies as of March 31, 2026. Senior secured first lien debt investments represented 100% of the portfolio at fair value. During the second quarter, AFC funded $17.2 million, including $5.1 million to two new portfolio companies and $12.1 million to two existing portfolio companies. Net fundings were $8.0 million after $9.2 million of repayments, amortization, and sale proceeds. Liquidity and Capital Resources As of June 30, 2026, AFC had $207.0 million of debt outstanding, including $110.0 million under its secured revolving credit facility, $20.0 million under its unsecured revolving credit facility with an affiliate, and $77.0 million of senior unsecured notes. The weighted average interest rate on debt outstanding was 6.3% for the quarter. Debt-to-equity was 1.10x as of June 30, 2026, compared with 1.09x as of March 31, 2026. Net debt-to-equity was 0.53x, compared with 0.48x. Asset coverage was 190%, compared with 191%. Additional Information AFC issued a presentation of its second quarter 2026 results, titled “Second Quarter 2026 Earnings Presentation,” which can be viewed on the Investor Relations section of AFC’s website found here AFC -- Investor Relations. The Company also filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, with the Securities and Exchange Commission (the “SEC”) on August 13, 2026. AFC routinely posts important information for investors on its website here. The Company intends to use this webpage as a means of disclosing material information, for complying with our disclosure obligations under Regulation FD and to post and update investor presentations and similar materials on a regular basis. AFC encourages investors, analysts, the media and others interested in AFC to monitor the Investor Relations section of its website, in addition to following its press releases, SEC filings, public conference calls, presentations, webcasts and other information posted from time to time on the website. To sign-up for email-notifications, please visit the “Email Alerts” section of the website under the “IR Resources” section. Conference Call & Discussion of Financial Results AFC will host a conference call at 10:00 a.m. (Eastern Time) on Thursday, August 13, 2026, to discuss its quarterly financial results. All interested parties are welcome to participate. The call will be available through a live audio webcast at the Investor Relations section of AFC’s website found here AFC -- Investor Relations. To participate via telephone, please register in advance at this link. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. The complete webcast will be archived for 90 days on the Investor Relations section of AFC’s website. AFC distributes its earnings releases via its website and email lists. Those interested in receiving firm updates by email can sign up for them here. About AFC AFC (Nasdaq: AFCG) is a publicly traded business development company that provides flexible credit solutions to lower middle-market companies. The company primarily originates, structures, invests and manages direct senior debt investments, targeting companies generating annual EBITDA of $5 to $50 million. The company seeks to maximize risk-adjusted returns for its stockholders with an opportunistic approach across all industries. AFC is headquartered in West Palm Beach, Florida. For additional information regarding the company, please visit www.afcbdc.com. Forward-Looking Statements This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views and projections with respect to, among other things, future events and financial performance. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “guidance,” “estimates,” “projects,” “anticipates,” and “future” or similar expressions are intended to identify forward-looking statements. These forward-looking statements, including statements about our future growth and strategies for such growth, are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results. Certain factors, including our ability to maintain our status as a BDC; our ability to maintain our status under Subchapter M of the Internal Revenue Code of 1986, as amended, as a regulated investment company (“RIC”) and our qualification for tax treatment as a RIC; the ability of our adviser to locate suitable loan opportunities for us, monitor and actively manage our loan portfolio and implement our investment strategy; actual and potential conflicts of interest with our adviser and its affiliates; our being subject to regulations and SEC oversight as a BDC, including limits on affiliated transactions, co-investments, asset diversification requirements, and limits on issuance of debt; changes in interest rates and impacts of such changes on our results of operations, cash flows and the market value of our loans; and other factors could cause actual results and performance to differ materially from those projected in these forward-looking statements. More information on these risks and other potential factors that could affect our business and financial results is included in AFC’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of AFC’s most recently filed periodic reports on Form 10-K, Form 10-Q and subsequent filings. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect AFC. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Investor Relations ContactRobyn [email protected] Media ContactDoug AllenDukas Linden Public [email protected]

Gladstone Investment (GAIN) came out with quarterly earnings of $0.26 per share, beating the Zacks Consensus Estimate of $0.24 per share. This compares to earnings of $0.24 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +8.33%. A quarter ago, it was expected that this business development company would post earnings of $0.22 per share when it actually produced earnings of $0.2, delivering a surprise of -9.09%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Gladstone Investment, which belongs to the Zacks Financial - SBIC & Commercial Industry industry, posted revenues of $28.36 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 10.46%. This compares to year-ago revenues of $23.54 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Gladstone Investment shares have added about 17.8% since the beginning of the year versus the S&P 500's gain of 12.8%. While Gladstone Investment has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Gladstone Investment was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.23 on $26.26 million in revenues for the coming quarter and $0.91 on $105.16 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - SBIC & Commercial Industry is currently in the bottom 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Advanced Flower Capital Inc. (AFCG), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 13. This company is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Advanced Flower Capital Inc.'s revenues are expected to be $8.24 million, up 32.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Gladstone Investment Corporation (GAIN) : Free Stock Analysis Report Advanced Flower Capital Inc. (AFCG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Completed the first quarter operating as a Business Development Company (BDC), expanding investment flexibility beyond real estate-backed cannabis loans. Shifted focus toward the lower middle market to capture an 'exceptional vintage' created by larger lenders moving upmarket to support existing portfolios. Targeting cash-flowing operating businesses with $5 million to $50 million in EBITDA, a segment management believes offers superior risk-adjusted returns. Achieved net fundings of $39.1 million in Q1, driven by $90 million in new non-cannabis commitments offset by $41.2 million in cannabis loan repayments. Emphasizing strong credit quality through the use of financial covenants, such as cash flow measures and fixed charge coverage ratios, rather than the covenant-light structures common in larger deals. Maintaining a robust active pipeline of over $1.5 billion in potential deals across healthcare, consumer, manufacturing, and services sectors. Expects overall portfolio yields to shift toward the low double-digit range as the company prioritizes higher-quality borrowers and sponsors over higher-yielding cannabis assets. Intends to redeploy capital from cannabis loan paydowns and non-accrual liquidations into performing lower middle market credits to support current income. Anticipates that federal rescheduling of cannabis could improve asset values and recovery prospects for non-accrual loans, though the primary growth focus remains non-cannabis lending. Plans to utilize available dry powder and an expanded $80 million credit facility for deployment throughout 2026, though specific timing remains subject to market conditions. Authorized a $5 million share buyback program as a flexible tool for capital allocation and enhancing long-term shareholder value. Reported three loans currently on non-accrual status, with a focus on maximizing recovery through liquidations and legal remedies. Expressed the intention to exercise rights and remedies against Justice Grown following a maturity default on 05/01/2026., targeting collateral including cultivation facilities and dispensaries in New Jersey and Pennsylvania. Received a $6.2 million paydown from the Debbie Holdings receivership during Q1, bringing total recoveries from that credit to $20.8 million. Expanded the senior secured revolving credit facility to $80 million, with a potential accordion feature to reach $100 million. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is pursuing all rights and remedies under the credit agreement, including shareholder and parent guarantees, to obtain maximum value from the collateral. The company declined to predict specific outcomes due to the early stage of the litigation process. Yields are expected to trend toward the low double digits, representing a decrease from historical cannabis-related yields. Management believes the lower yields are offset by significantly improved borrower quality and the presence of experienced private equity sponsors. Rescheduling is viewed as a positive for the industry by eliminating 280E tax liabilities and potentially increasing the value of medical cannabis assets. Despite these tailwinds, the company remains committed to diversifying into the less competitive and more economically attractive general lower middle market. New investments include a revenue recovery business for retail suppliers (STAT) and a healthcare benefits platform for hourly employees. These deals exemplify the strategy of backing cash-flowing businesses in niches with high growth potential or unfilled market needs. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Advanced Flower Capital Inc. (AFCG) came out with quarterly earnings of $0.21 per share, beating the Zacks Consensus Estimate of $0.16 per share. This compares to earnings of $0.21 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +35.48%. A quarter ago, it was expected that this company would post a loss of $0.04 per share when it actually produced a loss of $0.12, delivering a surprise of -200%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Advanced Flower Capital Inc., which belongs to the Zacks Financial - SBIC & Commercial Industry industry, posted revenues of $9.81 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 36.39%. This compares to year-ago revenues of $6.64 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Advanced Flower Capital Inc. shares have lost about 2.8% since the beginning of the year versus the S&P 500's gain of 7.6%. While Advanced Flower Capital Inc. has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Advanced Flower Capital Inc. was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.15 on $7.3 million in revenues for the coming quarter and $0.58 on $29.21 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - SBIC & Commercial Industry is currently in the bottom 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Crescent Capital BDC (CCAP), is yet to report results for the quarter ended March 2026. The results are expected to be released on May 13. This company is expected to post quarterly earnings of $0.41 per share in its upcoming report, which represents a year-over-year change of -8.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Crescent Capital BDC's revenues are expected to be $38.82 million, down 7.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Flower Capital Inc. (AFCG) : Free Stock Analysis Report Crescent Capital BDC, Inc. (CCAP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in AFC Gamma Inc.? Here are five stocks we like better. First quarter operating as a BDC: AFC Gamma shifted into lower middle market private credit, closing two non‑cannabis loans totaling about $90M (plus $5M post‑quarter), reporting net fundings of $39.1M and a deal pipeline of over $1.5B; management expects yields to normalize into the low double‑digit range. Portfolio stress and recovery actions: The firm has three loans on non‑accrual and its Justice Grown loan entered maturity default on May 1, 2026, with AFC pursuing guarantees and asset remedies; it also received $6.2M in Debbie Holt’s paydowns this quarter ( $20.8M total to date). NAV and capital allocation: NAV rose to $7.90 (+$0.44) driven by $0.21 per‑share net investment income and unrealized appreciation; the board declared a $0.05 quarterly dividend, authorized a $5M share buyback, and expanded the revolver to $80M (expandable to $100M). AFC Gamma (NASDAQ:AFCG) reported first-quarter 2026 results and discussed its expanding focus on lower middle market private credit during an earnings call covering the period ended March 31, 2026. Management highlighted the company’s first full quarter operating as a business development company (BDC), new non-cannabis originations, repayments in its cannabis loan book, and updates on certain challenged credits. President and Chief Investment Officer Robyn Tannenbaum said the company completed its “first quarter operating as a BDC,” which she said expanded AFC’s investment flexibility beyond real estate-backed lending. Tannenbaum said the change “better positions AFC to diversify its exposure across industries and credit risk profiles.” → Berkshire Hathaway’s Record Cash Hoard: Why and What's Next? During the quarter, the company closed two non-cannabis lower middle market deals totaling approximately $90 million in new commitments. Tannenbaum also noted that AFC received $41.2 million in cannabis loan repayments during the quarter and posted net fundings of $39.1 million for the period. Daniel Neville, Chief Executive Officer, provided more detail on the quarter’s new investments and additional post-quarter funding. He said AFC closed two loans totaling $90 million during the first quarter and, subsequent to quarter end, “closed an additional $5 million of loans.” → A Prada Payday: Is AMC Back in Style? Neville described a $60 million senior secured credit facility closed in January to support the combination of STAT and The Moresby Group, backed by Cambridge Capital. He also said the company committed $30 million in February to a $60 million senior secured term loan supporting the acquisition and growth of a healthcare benefits platform tailored to hourly and lower-wage employees. AFC funded $20 million at closing, with the remaining $10 million funded after quarter end. Chairman Leonard Tannenbaum outlined the firm’s view of current lending conditions. He said that as private credit experienced “meaningful reductions in net inflows,” many lenders have shifted away from the lower middle market and moved upmarket, creating what he described as “a sizable opportunity for a small, nimble lender like us.” → Insider Sales: Top AST SpaceMobile Insider Cuts Postion Over 30% Leonard Tannenbaum said AFC is seeing “better risk-adjusted returns” with “absolute yields running at approximately 100-300 basis points higher than they were just 6 months ago.” He identified the firm’s target segment as borrowers with $5 million to $50 million of EBITDA, describing that range as “largely below the threshold where the larger private credit platforms operate.” He also contrasted deal structures in the lower middle market with those in larger transactions, saying AFC’s deals typically include “a cash flow measure and a fixed charge coverage ratio covenant,” and that the firm is “not allowing the aggressive EBITDA add backs endemic to larger deals.” Neville said AFC’s pipeline remained sizable “with over $1.5 billion of deals as of today,” spanning industries including healthcare, consumer, manufacturing, and services. He added that the company is primarily participating in sponsored transactions, while selectively engaging in non-sponsored deals, and that financings are often used for “expansion capital, acquisitions, refinancings, or recapitalizations.” Neville said the company continued to have “three loans on non-accrual” and remains focused on receiving paydowns to redeploy capital “into performing credits that should contribute to current income.” He said the receiver continued the liquidation process for the company’s investment in Debbie Holt’s, and AFC received a $6.2 million paydown in the first quarter, bringing total paydowns since the receivership began to $20.8 million. Management also addressed Justice Grown. Neville said the loan matured on May 1, 2026 and is now “in maturity default.” He said AFC intends to exercise its rights and remedies under the credit agreement, including rights under a shareholder guarantee and parent guarantee. Neville said the Justice Grown loan is secured by vertical assets in New Jersey, including a cultivation facility and three dispensaries (two owned), and in Pennsylvania by three dispensaries and a cultivation facility that is “currently not operational.” He said the company remains “laser-focused” on pursuing remedies and “realizing maximum value from this loan.” On a question regarding potential outcomes given pending litigation, Chief Legal Officer Gabriel Katz said AFC is “pursuing all rights and remedies to obtain maximum value from the credit facility,” but added it is “too early to make any predictions on outcomes in this litigation.” Chief Financial Officer Brandon Hetzel said AFC generated total investment income of $9.8 million and net investment income of $4.8 million, or $0.21 per basic weighted average share of common stock, for the quarter ended March 31, 2026. Hetzel said the company ended the quarter with $356.6 million of principal outstanding across 15 loans. As of May 1, 2026, he said the portfolio consisted of $370 million of principal outstanding across 17 loans. As of March 31, 2026, Hetzel reported total assets of $394.9 million, total shareholder equity of $185.8 million, and net asset value (NAV) per share of $7.90. He said NAV per share increased $0.44 from the prior quarter, driven primarily by net investment income of $0.21 per share and increased unrealized appreciation on investments of approximately $0.28 per share, offset by the $0.05 per share dividend. Robyn Tannenbaum said the board declared a first-quarter distribution of $0.05 per share, paid April 15, 2026 to shareholders of record as of March 31, 2026. She also said the board approved a $5 million share buyback program, describing it as “a flexible component of our capital allocation strategy designed to enhance long-term shareholder value.” Hetzel said that during the quarter, AFC expanded its senior secured revolving credit facility to $80 million, including an additional $30 million commitment from the lead arranger, “an FDIC-insured bank with over $75 billion of assets.” He added the facility remains expandable to $100 million, subject to lender participation in the borrowing base. The company averaged approximately $22 million drawn on the facility during the quarter. When asked about yield expectations in the pipeline, Neville said recent deal disclosures provide “a guidepost,” but added that with the transition to lower middle market lending, management would expect yields to “move down a touch into kinda the low double-digit kinda range on an overall basis.” He said the company expects borrower and sponsor quality to improve relative to what is available in the cannabis landscape. On federal cannabis rescheduling, Neville said it was “great to see progress at the federal level,” citing potential benefits including elimination of 280E liabilities for medical operators and decreased future uncertainty. He noted, however, that “none of the operators were really paying taxes today” outside of one operator, and said industry competition has increased over the last five years. He said rescheduling could support asset values and potentially improve recoveries on non-accrual loans, but added that AFC is seeing “better opportunities in the lower middle market today” and remains focused on expanding in that direction. In closing remarks, Neville said the company looks forward to updating investors on its “continued transition to lower middle market lending on future calls.” AFC Gamma, Inc is a specialty finance real estate investment trust that focuses on providing structured financing solutions to companies operating and developing digital infrastructure and life science real estate assets. As a REIT, AFC Gamma seeks to generate attractive risk-adjusted returns through a diversified portfolio of loans, preferred equity and other financing structures that are secured by tangible property collateral or contractual revenue streams. The company's primary business activities include originating, acquiring and managing secured loans and equity investments that support wireless and broadband network deployment, data center expansion, and life sciences facility development. The article "AFC Gamma Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.