Earnings call transcript: Advanced Flower Capital Q4 2024 misses EPS forecast

Advanced Flower Capital Inc. (AFCG) reported its fourth-quarter 2024 earnings, revealing a notable shortfall against Wall Street expectations. The company posted earnings per share (EPS) of $0.29, falling short of the forecasted $0.3683. Revenue also missed the mark, coming in at $7.64 million compared to the anticipated $11.59 million. The disappointing results led to a significant pre-market decline in stock price, with shares dropping 21.2% to $6.69, nearing its 52-week low. According to InvestingPro data, the stock appears fairly valued at current levels, with 2 analysts recently revising their earnings expectations downward for the upcoming period.

Key Takeaways

• Advanced Flower Capital missed both EPS and revenue forecasts for Q4 2024.
• The stock price fell by 21.2% in pre-market trading following the earnings announcement.
• The company has a robust pipeline of over $380 million in potential deals.
• Focus remains on lending to established cannabis operators amid a challenging market environment.

Company Performance

Advanced Flower Capital’s performance in the fourth quarter of 2024 highlights the ongoing challenges in the cannabis finance sector. Despite a strategic focus on lending to proven cannabis operators, the company struggled to meet earnings expectations. The full-year 2024 distributable earnings per share stood at $1.68, demonstrating resilience over the year despite quarterly setbacks.

Financial Highlights

• Revenue: $7.64 million (missed forecast of $11.59 million)
• Earnings per share: $0.29 (missed forecast of $0.3683)
• Total assets as of December 31, 2024: $402.1 million
• Cash and cash equivalents: $103.6 million
• Book value per share: $9.02

Earnings vs. Forecast

Advanced Flower Capital’s Q4 EPS of $0.29 was below the forecasted $0.3683, representing a miss of approximately 21.3%. Revenue also fell short by 34.1%, with actuals at $7.64 million compared to the expected $11.59 million. This marks a notable deviation from prior quarters where the company generally met or exceeded expectations.

Market Reaction

The market reacted negatively to the earnings miss, with Advanced Flower Capital’s stock price plummeting by 21.2% in pre-market trading. This decline positions the stock close to its 52-week low of $6.51, reflecting investor concerns over the company’s ability to navigate a complex market landscape. Despite the recent decline, InvestingPro data shows analyst price targets ranging from $10 to $14, suggesting potential upside. The stock currently trades at 0.9x book value, indicating possible value opportunity for investors willing to weather near-term volatility.

Outlook & Guidance

Looking ahead, Advanced Flower Capital has set its first-quarter 2025 dividend at $0.23 per share, maintaining a focus on sustainable returns. The company continues to target strategic capital deployment, with a strong pipeline of quality credits and opportunities in emerging markets like Kentucky and Ohio. InvestingPro research indicates the company maintains a FAIR overall Financial Health score, with particularly strong marks in cash flow management. Discover detailed analysis and over 30 key financial metrics in the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Executive Commentary

CEO Daniel Neville emphasized the company’s strategic positioning, stating, "We are seeing a robust pipeline of good operators with strong credits." He reiterated the company’s commitment to achieving attractive risk-adjusted returns in the cannabis lending space.

Risks and Challenges

• Market volatility: Significant stock price fluctuations highlight investor uncertainty.
• Regulatory environment: Ongoing challenges with cannabis-specific regulations, such as 280E tax implications.
• Competitive landscape: Limited new capital providers, yet increased competition for quality operators.
• Economic pressures: Broader macroeconomic factors affecting the cannabis sector.

Q&A

During the earnings call, analysts probed into the company’s strategy for managing underperforming credits and its approach to loan pricing flexibility. The management addressed these concerns, emphasizing a cautious yet opportunistic stance in navigating the evolving cannabis market.

Full transcript - Advanced Flower Capital Inc (AFCG) Q4 2024:

Conference Operator: Good day, and thank you for standing by. Welcome to AFC’s Fourth Quarter and Fiscal Year twenty twenty four Earnings Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. You.

Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Gabriel Katz, Chief Legal Officer. Please go ahead.

Gabriel Katz, Chief Legal Officer, Advanced Flower Capital (AFC): Good morning, and thank you all for joining AFC’s earnings call for the quarter and fiscal year ended 12/31/2024. I’m joined this morning by Robin 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 02/12/2025 press release and is posted on the Investor Relations portion of AFC’s website at advancedflowercapital.com along with our fourth quarter and fiscal year 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, anticipated market developments, portfolio yield and financial performance in 2025 and beyond.

These statements are subject to inherent uncertainties in predicting future results. Please refer to AFC’s most recent periodic filings, including our annual report on Form 10 K filed earlier this morning with the SEC for certain conditions and significant factors that could cause actual results to differ materially from these forward looking statements and projections. During this call, we will refer to distributable earnings, which is a non GAAP financial measure. Reconciliations to net income, the most comparable GAAP measure to distributable earnings, can be found in AFC’s earnings release and investor presentation available on AFC’s website. Today’s call will begin with Robin providing a high level recap of our 2024 fiscal year.

Dan will then provide an update, an overview of our portfolio and an update on the cannabis industry. Finally, Brandon will conclude with a summary of our financial results before we open the lines for Q and A. With that, I will now turn the call over to Robin, our President and Chief Investment Officer.

Robin Tannenbaum, President and Chief Investment Officer, Advanced Flower Capital (AFC): Thanks, Gabe, and good morning to all our investors and analysts that have joined us today. Looking back on 2024, AFC was extremely active in our first full year with Dan Neville as our CEO. We laid out three main goals for AFC in the beginning of twenty twenty four. One, restart the origination engine and close at least $100,000,000 of originations. Two, increase portfolio diversification while enhancing underwriting and three, reduce our exposure to underperforming credits through active portfolio management.

I am pleased to announce that over the course of the year, we made progress on all three initiatives and refocused our efforts solely on cannabis with the spin off of our commercial real estate portfolio on July 9. Starting with originations, we set a goal of $100,000,000 of originations for the fiscal year 2024 and ended the year originating $135,000,000 of new commitments. Since the end of 2024, we have closed $15,000,000 of new commitments and have two signed term sheets, which we expect to close over the coming months. We continue to see interesting opportunities in the cannabis space as the demand for capital far exceeds the supply. As of 03/01/2025, we had an active deal pipeline of over $380,000,000 Turning to our underwriting process and increasing portfolio diversification.

The addition of Dan with his operational background has enabled us to use both a top down and bottoms up underwriting approach on new investments. We are focused on lending to operators with a track record of executing in the cannabis industry and we have decreased the amount of construction lending in the portfolio. Looking ahead to 2025, we look forward to continuing to diversify the portfolio in loans similar to our recent deals with accomplished operators. Based on the deals we’re seeing today, we currently see a sweet spot in loan sizes between $10,000,000 and $40,000,000 Lastly, we have focused our portfolio management efforts on underperforming credits in order to preserve capital. We believe that as we begin to get repaid on some of these underperforming assets and reinvest that capital into performing credits, we may unlock future earnings potential.

Dan will dive deeper into the portfolio shortly, but I am pleased that through our portfolio management efforts in 2024, we received $119,000,000 of pay downs from five underperforming credits and redeployed that capital across nine new loans to date. With that, I’ll turn it over to Dan, who will discuss our fourth quarter performance, the cannabis industry and provide an update on our portfolio.

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): Thanks, Robin, and good morning, everyone. I’ll begin with an overview of our results, followed by some commentary on the industry and an update on our portfolio. For the fourth quarter of twenty twenty four, AFC generated distributable earnings of $0.29 per basic weighted average share of common stock. While we have made significant progress over the last year reducing our exposure to underperforming credits, there is still work to be done and our earnings in the fourth quarter and through the start of this year were impacted by the underperformance of some of our legacy loans. As a result, the Board of Directors has declared a first quarter dividend of $0.23 per share, which will be paid on 04/15/2025 to shareholders of record on 03/31/2025.

We are focused on paying a dividend that is sustainable based on the current performing asset base and believe that the $0.23 dividend should be in line or close to our first and second quarter distributable earnings. Before turning to the existing portfolio, I would like to highlight a recent transaction that we closed. In mid February, we committed and funded a $15,000,000 senior secured credit facility to Storey of Ohio. Storey intends to use the proceeds of this loan to acquire and build out dispensaries in Ohio. Our first lien term loan is secured by all of Storey’s assets in Ohio with its Georgia assets initially included as additional collateral.

This transaction reflects our continued focus on supporting strong operators in attractive limited license dates and further diversifying our portfolio. As Robin described earlier, our active pipeline remains strong with over $380,000,000 in deals as of 03/01/2025. We are focused on sourcing and backing operators with a prior track record of success and selectively providing construction financing to operators with existing operations in other states. We see a growing supplydemand imbalance for debt capital across the sector with rising demand outpacing an already limited supply. This demand is driven by refinancing activity, adult use and medical expansions and increased M and A in the cannabis space.

Given the Republican sweep installed progress on federal reform, we don’t see many new capital providers entering the market providing AFC with an opportunity to continue lending to strong operators at attractive risk adjusted returns. Turning to our current portfolio management efforts. We have continued the liquidation process for Private Company A, which recently completed the sale of its Georgia assets for $15,000,000 of net proceeds. We are awaiting approval from the receivership to direct the distribution of these proceeds which should go to pay down the loan. As the borrower monetizes additional assets and we receive pay downs from private company A, we expect to earn additional revenue redeploying that capital as Private Company A is on non accrual and any capital received currently goes to principal pay down.

Turning to subsidiary of private company G. On a positive note, since we entered the forbearance agreement in March 2024, the borrower has infused additional equity capital and put experienced operators in place of its Pennsylvania and New Jersey operations. The subsidiary of private company G is also known and operates as Justice Grown. However, we have recently uncovered and notified the company of additional defaults under the forbearance agreement and additional defaults under its credit facility. In response, the company sued the CRO of the New Jersey operations.

With respect to this loan, we are secured by the vertical assets in New Jersey, which include an owned cultivation facility and three dispensaries, two of which are owned. In Pennsylvania, we are secured by three dispensaries and an owned cultivation facility, which is currently not operational. Additionally, we have a parent guarantee and a shareholder guarantee as an added protective measure. We intend to aggressively pursue all rights and remedies we have under the credit facility and the guarantees to protect and preserve our shareholders’ capital. In the complaint against the CRO, Justice Groan also accused AFC of attempting to take the keys.

While we would not normally comment on baseless accusations, I feel the need to address this issue head on given the potential for it to cause significant harm to AFC’s business. Our business is simple. We lend money out seeking to earn an attractive risk adjusted return and we expect to be paid back. In the history of AFC, we have never sought to enforce a foreclosure outside of a payment event of default. When borrowers run into issues, which is not uncommon given the emerging nature of the cannabis industry, We always seek to work with them to find a solution that puts the borrower on more stable footing while also protecting our shareholders’ capital.

We entered into the credit facility with Justice Groan in April 2021 and subsequently entered into multiple amendments and two forbearance agreements, each of which they material defaulted on. We are lenders and have no intention of taking the keys and indeed are prohibited from doing so under our legal standing. Additionally, the multiple amendments and forbearance agreements show we bent over backwards to avoid auctioning the borrower’s assets to the highest third party through a foreclosure. In short, these accusations are baseless and our only focus is being a trusted lending partner to strong operators with a history of success in the cannabis industry. While I am disappointed that Just as Grown is still not on more stable footing, we achieved a number of positive outcomes related to other loans on the portfolio management front in 2024.

We saw $119,000,000 of capital returns across five underperforming loans last year, including a $4,000,000 exit of our loan to private company I, a $22,000,000 pay down from private company L, a $5,000,000 pay down from private company A, a $4,000,000 net pay down from private company B and an 84,000,000 exit of our loan to subsidiary of Public Company H. As a reminder, this loan to subsidiary of Public Company H went into payment default in May 2024 and we received a full pay down of the loan at par including back interest and default interest only a month later. While past performance is not indicative of future results, we are no stranger to portfolio management and will act aggressively to protect our shareholders’ capital. As of 12/31/2024, we had $2.24 per share in unrealized losses and CECL reserves. During 2024, positions we exited had CECL reserves and unrealized losses of $0.31 per share associated with them.

By selling or being repaid on these positions at par, the $0.31 per share of reserves and unrealized losses were added back to book value. We are laser focused on unlocking value from underperforming loans and are excited about the new lending opportunities that we are seeing. Now, I’ll turn it over to Brandon to discuss our financial results in more detail.

Brandon Hetzel, Chief Financial Officer, Advanced Flower Capital (AFC): Thank you, Dan. For the quarter ended 12/31/2024, we generated net interest income of $7,600,000 and distributable earnings of $6,300,000 or $0.29 per basic weighted average common share and had a GAAP net loss of $1,000,000 or $0.05 per basic weighted average common share. For the fiscal year ended 12/31/2024, we generated net interest income of $45,700,000 and distributable earnings of $34,900,000 or $1.68 per basic weighted average common share and had a GAAP net income of $16,800,000 or $0.78 per basic weighted average common share. As previously mentioned, we believe providing distributable earnings is helpful to shareholders in assessing the overall performance of AFC’s business. Distributable earnings represents the net income computed in accordance with GAAP, excluding non cash items such as stock compensation expense, any unrealized gains or losses, provision for current expected credit losses also known as CECL, taxable REIT subsidiary income or loss net of dividends and other non cash items recorded in net income or loss for the period.

We ended the fourth quarter of twenty twenty four with $356,800,000 of principal outstanding spread across 16 loans. As of 03/01/2025, our portfolio consisted of $368,800,000 of principal outstanding across 17 loans. The weighted average portfolio yield to maturity, which is measured for each loan over the life of such loan was approximately 18% as of 12/31/2024 and 03/01/2025. As of 12/31/2024, we had total assets of $402,100,000 including cash and cash equivalents of $103,600,000 which included $100,000,000 drawn on our lines of credit which were both subsequently repaid in full on 01/02/2025. As of 12/31/2024, the CECL reserve was $30,600,000 or approximately 10.4% of our loans at carrying value.

And we had a total unrealized loss included on the balance sheet of $19,700,000 for our loans held at fair value. As of 12/31/2024, our total shareholder equity was $201,400,000 and our book value per share was $9.02 With that, I will now turn it back over to the operator to start the Q and A.

Conference Operator: Our first question comes from the line of Aaron Grey with AGP.

Aaron Grey, Analyst, AGP: Hi, good morning and thank you for the questions here. First question for me. So just on Justice Groh, private company G, obviously you guys had done a lot of work to restore that to accrual and had worked out some forbearance agreement. So I imagine a lot of this is still new, but just how best to think about some of these next steps? Looks like you guys talked about in the prepared remarks, everything’s kind of still on the table.

Are you guys still looking to come to a potential new agreement? Or what are the potential next steps we should be thinking about in the timeline? Because obviously this is one of the bigger borrowers in the portfolio today. So any incremental color that would be helpful. Thanks.

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): Yes. Thanks for the question, Aaron. Look, we’re not going to negotiate in public here. And so I think what we as the management team and the Board of Directors have done is look to set our dividend at a sustainable level based on the current performing assets within the portfolio. And we add some commentary to that effect based on where we stand today.

And should we receive pay downs and redeploy that capital into productive assets in the future, it’s pretty simple arithmetic and you guys can do your own math on what the income statement would look like if we redeploy that capital into productive assets.

Aaron Grey, Analyst, AGP: Okay, great. Thanks for that color there. And then just commentary in terms of the pipeline, right? How should we think about the mix of opportunities that you see most appealing? You talked about refinancing, CapEx as well as M and A in terms of for potential new capital deployment for the year.

So what are you seeing in terms of near term opportunities and how much of that pipeline might be able to come to fruition for the year? Thanks.

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): Yes. So the we’re seeing a lot of interesting opportunities kind of across those broad swaths. Some is opportunities in new medical markets like Kentucky, which review as an attractive and limited license state that obviously is going to require significant capital for build out. Some of those opportunities are in recently adult use flip states that are and the Story of Ohio loan that we did would be a great example of that. And there’s certainly more capital as additional dispensaries and capacity is built to service the Ohio market.

Other opportunities are refinancing opportunities. We’re seeing certainly some exits from the space, from other funds that have operated in the space historically that are not raising new funds or redeploying capital. And that is creating a need for good borrowers with good assets that could use that capital. And then on the flip side, we have seen not as much on the public side of things, but more on the private side some significant M and A. And oftentimes consideration for any of those M and A transactions is typically a third debt, a third cash, a third stock.

And we’re happy to be a provider of M and A and expansion capital to folks that are good operators that are looking to take advantage of some of the distress in the space and scale up their portfolios. So it’s a mix of all of the above. On the redeployment side of things, I think at least for the time being given

Pablo Zwaneck, Analyst, Zwaneck and Associates: some of

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): the uncertainty related to the underperforming assets in the portfolio. A target for that is going to be partially dependent on how much capital we receive back over the course of the year. But I would say that we are seeing a robust pipeline of good operators with strong credits that fit our profile and we’ll be able to deploy any of the capital that we receive back plus the capital that we have available under our current liquidity into good credits in the space this year.

Aaron Grey, Analyst, AGP: Okay, great. Thanks for color there. And I’ll jump back into the queue.

Conference Operator: Our next question comes from Pablo Zwaneck with Zwaneck and Associates.

Pablo Zwaneck, Analyst, Zwaneck and Associates: Maybe Dan, just to follow-up in terms of the outlook for the book for 2025. I think last year you had set a target of $100,000,000 in new fundings. I don’t know if you want to if you’re setting a new target. You talked about of the $54,000,000 in commitment so far in $2,025,000,000 dollars how much has been drawn in the first quarter, if you can talk about that. I think you have about $35,000,000 in maturities this year.

Just trying to understand the year end look of the book in terms of total. Thank you.

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): Yes, sure. So we did with the deployment of our loan to Storey of Ohio, we did get slightly into leverage at the start of this year. Obviously, we have availability under some of the various credit facilities that we have to continue to deploy capital into the space. On the target, I think that we’ll look to probably wait to give that target likely next quarter given that some of the recent events are a little bit newer here. And so how much we redeploy this year is one, a function of obviously availability under liquidity, but two, a function of how much capital we get back and the timing of getting that capital back.

I would say that last year, we set a target of 100,000,000 We deployed $125,000,000 of capital. I think the opportunity set today is even better than it was six to nine months ago. And so we’re seeing a good pipeline of borrowers that we’re able to move up the quality curve on the credit profiles, the quality of the operators, the states that they’re exposed to, while still earning still targeting IRRs that are within our historical norms and our targets.

Pablo Zwaneck, Analyst, Zwaneck and Associates: Right. And just can you remind us of the liquidity? I mean, obviously, we have your balance sheet cash flow available and then in terms of the credit lines, what’s left? Just a reminder on that.

Brandon Hetzel, Chief Financial Officer, Advanced Flower Capital (AFC): Sure. And you can see it in our investor presentation as well. So we currently have two revolving lines of credit that allow us to borrow up to $100,000,000 As of March 1, we had approximately $89,000,000 available under those facilities.

Pablo Zwaneck, Analyst, Zwaneck and Associates: All right, understood. And then just going back to the dividend, I mean, obviously, it has to be a number that’s sustainable. You’ve issued $0.33 after the spin. So should we have thought of that as more or less of an extraordinary one time dividend? Or was it that things really change between that announcement and the $0.23 that you’re doing now?

Is it all Justice Grown related, I guess what I’m asking? Because I suppose you already knew about Justice Grown when you announced the $0.33 last quarter? Thank you.

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): No. These issues are more recent. So it’s the way the forbearance agreement was structured, there were excess cash flow sweeps associated with the cash flow generation of this business. And there’s been significant developments as we’ve entered into the new year here. So there was nothing extraordinary about the $0.33 And we’re looking to set given the uncertainty around this situation as well as some of the pay downs related to private company A, which are larger loans, we wanted to set the dividend at a level that is based on the performing book, ex any of the underperforming legacy loans.

Pablo Zwaneck, Analyst, Zwaneck and Associates: Understood. That’s good color. Thank you. And look, I understand the need to exit those underperforming loans and replace them with stronger operators and better credits. And obviously, you’re doing that with STORY, for example, right, a very strong operator over there.

But does that mean that you’re being put in a position to offer maybe even more competitive rates that you have had you have taken in the past? That maybe in this need to swap the quality of portfolio, you’re having to bid more aggressively in all in rates than you would have had in the past?

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): I think it’s situational based on the credit, right? There are some loans that we’re entering that are very low leverage that amortize quickly that have a great collateral package and great security. And for a loan like that, it’s going to be priced at a little lower cost of capital than a regular way cannabis loan would be priced. And there are also loans that are a little bit more development assets, I would say, in states that we really like. We have exposure to a small construction loan in Georgia.

It’s one of six licenses in the entirety of Georgia. And you have to structure a loan like that with appropriate protections in terms of construction reserves, interest reserves, etcetera,

Pablo Zwaneck, Analyst, Zwaneck and Associates: to

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): make sure you have adequate security and protection in the structuring of the loan. And a loan like that is going to earn a little bit higher rate than your average cannabis loan. So we are not just picking one number and going out with term sheets with that. We are this is bespoke credit investing and each one of these companies’ credits and structures is its own unique snowflake.

Pablo Zwaneck, Analyst, Zwaneck and Associates: Right. And one more, I realize that being asset listed, you cannot own plant touching assets. So that’s something we have to keep in mind when there’s receivers being appointed and those type of things. But how would you describe the demand for assets in New Jersey and Pennsylvania right now? On the one hand, Pennsylvania would go wrecked, so it should be strong demand, but there seems to be a lot of distressed assets in that market.

And I guess New Jersey, supposedly an exciting market, but a lot of competition with a lot of new stores, right? So how would you describe the environment in terms of demand for assets in those two states?

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): Yes. Unfortunately, Pablo, we’re not going to be in a position to comment there. I think you all can make your own observations about those markets and the attractiveness of those markets. And I’d leave it at that.

Pablo Zwaneck, Analyst, Zwaneck and Associates: Okay. And if I may want to add just one more last one. Regarding to ADE, in my opinion, what a lot of the companies are doing makes a lot of sense, right? Most companies are filing as normal corporations and just accruing the tax liability as uncertain tax benefits and we’ll see what happens in four, six years’ time, right? These are not debt with a maturity date and there’s a lot of so this could take a while, right?

So you could make the argument that these companies are going to be in much better financial shape, generating positive cash flow because of the way they are dealing with 280E. I’m just thinking from your perspective, do you agree with that view that these companies as a result of not paying 280E are in better shape, although it will have a big tax liability piling up on their balance sheet, right? Thanks.

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): Yes. There’s puts and takes. We obviously not paying your taxes is a choice. I wish I had that choice. But the old saying, there are two certainties in life, death and taxes, I think still does apply.

And And some of these companies I think are not paying taxes because they can’t afford to pay those taxes. I also think that not paying taxes also potentially presents some issues for companies because in certain states, you can only due to the regulatory regime and the regulatory overlay, you can only do equity transfers as opposed to asset sales. And so in an equity transfer scenario, the taxes attached to that individual asset and somebody eventually has to pay the tax man. And so I think there’s puts and takes. We don’t really have a strong view one way or another.

We would love for both the industry and for our borrowers to get 280E reform over the line. I think it’s a crime that it’s still out there and these companies are paying exorbitant rates. But unfortunately, I’m not sure that that’s really a high priority item or a focus for the Republican administration.

Pablo Zwaneck, Analyst, Zwaneck and Associates: All right. Thank you very much.

Conference Operator: That concludes today’s question and answer session. I’d like to turn the call back to Dan Neville for closing remarks.

Daniel Neville, Chief Executive Officer, Advanced Flower Capital (AFC): Thank you so much for joining us today and for the questions.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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