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WEST PALM BEACH, FL— AFC Gamma, Inc., operating in the real estate sector, has announced the completion of a strategic spin-off, resulting in the creation of Sunrise Realty Trust, Inc. (SUNS), a new independent publicly-traded Real Estate Investment Trust (REIT).
According to the company's recent 8-K filing with the Securities and Exchange Commission, SUNS common stock is expected to commence trading on the Nasdaq Capital Market today on a "when-issued" basis under the ticker symbol "SUNSV".
Investors will have the opportunity to trade SUNS common stock on the distribution date, but the transactions will only settle on July 11, 2024. Regular way trading for SUNS shares is set to begin on Wednesday, under the symbol "SUNS". This marks a significant milestone for AFC Gamma, which is headquartered in West Palm Beach, Florida, and operates under the SIC code for the real estate industry.
The company has not provided any predictions regarding the potential trading prices for the common stock of either AFC Gamma or SUNS following the distribution. The filing emphasized that the information disclosed under Item 7.01 is not to be considered "filed" for regulatory purposes or incorporated by reference into any other filings unless explicitly stated by the company.
This strategic move separates AFC Gamma's commercial real estate portfolio into a distinct entity, potentially allowing each organization to focus on its core business strategies and growth opportunities. The spin-off reflects AFC Gamma's efforts to streamline its operations and provide shareholders with targeted investment opportunities within the real estate sector.
The announcement was made official by Brandon Hetzel, Chief Financial Officer and Treasurer of AFC Gamma, on Tuesday, as per the SEC filing.
The information regarding this corporate action is based on the latest SEC filing by AFC Gamma.
In other recent news, AFC Gamma reported a stable first quarter in 2024, generating distributable earnings of $0.49 per share and declaring a $0.48 dividend per share for the fourth consecutive quarter.
Post-spin-off, Jodi Hanson Bond and Jim Fagan will step down from the AFC Gamma Board of Directors and join the SUNS Board, while Alexander Frank will retain his position on the AFC Gamma Board and also be appointed to the SUNS Board.
In addition to these developments, AFC Gamma expressed optimism about the growth prospects of the cannabis industry, citing state-by-state legalization and increasing consumer acceptance as key drivers. The company is well-positioned in early-stage and near-term adult-use transition states, with a third of its portfolio exposed to Ohio, Florida, and Pennsylvania.
These updates provide a snapshot of the company's recent developments and strategic moves.
InvestingPro Insights
As AFC Gamma embarks on its strategic spin-off to create Sunrise Realty Trust, it's worth noting some key financial metrics and InvestingPro Tips that highlight the company's current financial health and future prospects. With a market capitalization of $250.49 million, AFC Gamma has demonstrated a solid track record, being profitable over the last twelve months as of Q1 2024. This is reflected in a P/E ratio of 20.23, adjusted for the same period, indicating investor confidence in its earnings potential.
Investors may also find comfort in the company's liquidity position, as its liquid assets exceed short-term obligations. This is a critical factor for a real estate investment trust, ensuring that it can meet its immediate financial needs without strain. Additionally, AFC Gamma's significant dividend yield of 15.84% as of mid-2024 is a testament to its commitment to returning value to shareholders.
For those seeking further insights and analysis, there are additional InvestingPro Tips available that delve deeper into AFC Gamma's financials and projections. With the use of the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking access to these valuable tips that can guide investment decisions.
In conclusion, as AFC Gamma navigates the real estate market and its corporate restructuring, these financial metrics and InvestingPro Tips offer a glimpse into the company's robust financial standing and its potential for profitability in the current fiscal year.
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