AFC Gamma Reconfirms Completion Date of Spin-Off of Commercial Real Estate Portfolio
AFC Gamma confirms the spin-off of its commercial real estate portfolio into a new publicly-traded entity, Sunrise Realty Trust (SUNS), scheduled for July 9, 2024. Shareholders holding AFC Gamma common stock as of July 8, 2024, will receive one SUNS share for every three AFC Gamma shares held. The SUNS stock will trade on Nasdaq under the symbol 'SUNS,' with regular trading commencing on July 10, 2024. Fractional shares will not be issued; instead, shareholders will receive cash for any fractional shares. No action is required from shareholders to receive their SUNS shares.
- Spin-off of commercial real estate portfolio into Sunrise Realty Trust, an independent REIT, might unlock shareholder value.
- Shareholders will receive one SUNS share for every three AFCG shares held, potentially enhancing their investment portfolio.
- AFC Gamma and SUNS cannot predict trading prices for their respective stocks, introducing potential volatility and uncertainty for investors.
Insights
The completion of the spin-off of AFC Gamma’s commercial real estate portfolio into an independent REIT, Sunrise Realty Trust, Inc. (SUNS), has significant implications for investors. This type of corporate restructuring can enable a company to focus more on its core operations—in this case, AFC Gamma's lending and financing solutions while allowing SUNS to concentrate on managing and growing the real estate portfolio.
From a financial perspective, the spin-off is expected to create distinct investment profiles for the two entities. AFC Gamma will continue to be a target for investors interested in the cannabis lending market, whereas SUNS would appeal to those focused on traditional commercial real estate investment.
One important detail is the distribution ratio: shareholders will receive one SUNS share for every three AFC Gamma shares held. This can potentially create more value for shareholders by unlocking the hidden value in the real estate assets under more specialized management, potentially leading to better market performance for both entities in their respective domains.
It's also worth noting that fractional shares will be settled in cash. This is a minor but noteworthy operational detail that simplifies the transaction for shareholders and avoids the complexities associated with holding fractional shares. Another point of interest is the trading timeline. Regular trading of SUNS shares will begin on July 10, 2024. However, transactions on the Distribution Date will not settle until July 11, 2024, suggesting potential liquidity considerations for investors aiming to trade immediately after the distribution.
Spinning off Sunrise Realty Trust, Inc. from AFC Gamma introduces a new player in the commercial real estate market, which is currently seeing diverse trends. REITs (Real Estate Investment Trusts) like SUNS can offer investors a way to diversify their portfolios, particularly appealing in times when real estate is viewed as a hedge against inflation.
The distribution of shares without requiring action from current shareholders and the assignment of a new ticker symbol ('SUNS') also adds to the ease of transition. However, the inability to predict trading prices adds a layer of uncertainty, which is not uncommon in spin-offs, yet noteworthy for investors considering immediate buying or selling actions.
Moreover, the emphasis on the fact that no fractional shares will be issued and instead cash will be given, shows an effort to maintain simplicity and shareholder satisfaction, which can sometimes be a nuisance in such transactions.
This spin-off happens in a market that is increasingly leaning towards specialized investment vehicles. AFC Gamma, focusing more on cannabis financing—a niche but rapidly growing sector—while SUNS will cater to traditional real estate investors, can tap into separate investor bases without conflicts of interest between the two distinct operational focuses.
Record Date for Distribution of Sunrise Realty Trust to be July 8, 2024
Distribution Date to be July 9, 2024
WEST PALM BEACH, Fla., July 08, 2024 (GLOBE NEWSWIRE) -- AFC Gamma, Inc. (NASDAQ:AFCG) (“AFC Gamma”) today reconfirms that the spin-off of its commercial real estate portfolio into an independent, publicly-traded REIT, Sunrise Realty Trust, Inc. (“SUNS”), will be completed on July 9, 2024.
Shareholders of AFC Gamma common stock as of the close of business on July 8, 2024 (the “Record Date”) will receive one share of new SUNS common stock for every three shares of AFC Gamma common stock held on the Record Date. The distribution is expected to occur before trading begins on July 9, 2024 (the “Distribution Date”), and SUNS common stock will trade on the Nasdaq Capital Market under the symbol “SUNS”. AFC Gamma will not issue fractional shares of its common stock in the distribution. Instead, holders of AFC Gamma common stock will receive cash in lieu of any fractional shares that they would otherwise be entitled to. No action is required from AFC Gamma stockholders to receive the distributed SUNS common shares.
You may purchase or sell SUNS common stock on the Distribution Date, but your transaction will not settle until July 11, 2024. Regular trading of SUNS shares on the Nasdaq Capital Market will commence on July 10, 2024. AFC Gamma and SUNS cannot predict the trading prices for their respective common stock before, on or after the Distribution Date.
About AFC Gamma, Inc.
AFC Gamma, Inc. (NASDAQ: AFCG) is a publicly-traded, institutional lender that originates, structures and underwrites loans secured by commercial real estate and other types of financing solutions. AFC Gamma targets direct lending and bridge loan opportunities typically ranging from
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the company’s current views and projections with respect to, among other things, the company’s plans to spin-off its commercial real estate portfolio into an independent company and the timing and structure of such spin-off. All statements other than historical facts, are forward-looking statements. 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 are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results. Certain factors, risks and uncertainties discussed under the caption “Risk Factors” and elsewhere in AFC Gamma’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings, could cause actual results and performance to differ materially from those projected in these forward-looking statements.
Investor Relations Contact:
Robyn Tannenbaum
(561) 510-2293
ir@afcgamma.com
www.afcgamma.com
Media Contact:
Collected Strategies
Jim Golden / Jack Kelleher / Taylor Koedding
afcg-cs@collectedstrategies.com
FAQ
When is AFC Gamma spinning off its commercial real estate portfolio into Sunrise Realty Trust?
What is the distribution ratio for AFC Gamma shareholders in the Sunrise Realty Trust spin-off?
What is the record date for AFC Gamma shareholders to receive shares of Sunrise Realty Trust?
When will Sunrise Realty Trust shares start trading on Nasdaq?
Will fractional shares of Sunrise Realty Trust be issued in the spin-off?
What is the symbol for Sunrise Realty Trust on Nasdaq?
