Good morning, and welcome to AFC Gamma's First Quarter 2024 Earnings Call [Operator Instructions]. As a reminder, this call is being recorded. I would now like to turn the call over to Gabriel Katz, Chief Legal Officer. Please go ahead.

Good morning, and thank you all for joining AFC Gamma's earnings call for the quarter ended March 31, 2024, I'm joined this morning by Daniel Neville, our Chief Executive Officer; Robyn Tannenbaum, our President; 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 April 10, 2024 press release and is posted on the Investor Relations portion of AFC Gamma's website at afcgamma.com, along with our first quarter 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 2024 and beyond. These statements are subject to inherent uncertainties in predicting future results. Please refer to AFC Gamma's most recent periodic filings 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 can be found in AFC Gamma's earnings release and investor presentation available on AFC Gamma's Web site. The format for today's call is as follows. Dan will provide an overview of our first quarter 2024 performance as well as an update on our portfolio. Robyn will then provide an update on the anticipated spinoff of our commercial real estate portfolio and Brandon will conclude with a summary of our financial results. We will then open the lines for Q&A. With that, I will now turn the call over to our CEO, Dan Neville.

Thank you, Gabe. Good morning, and welcome to AFC's earnings call for the quarter ended March 31, 2024. I would like to thank everyone for joining us today to discuss our results. For the first quarter, AFC generated distributable earnings of $0.49 per basic weighted average share of common stock. As a reminder, distributable earnings is the primary metric the Board considers when declaring quarterly dividends. The Board of Directors declared a fourth consecutive $0.48 dividend which was paid on April 15, 2024, to shareholders of record as of March 31, 2024. Since going public, we have generated distributable earnings that met or exceeded our dividend each quarter and paid out $6.02 in dividends per share. We are increasingly optimistic about the outlook for the cannabis industry. The industry has seen expansion fueled by increasing state-by-state legalization and growing consumer acceptance. According to BDSA, the US cannabis industry is projected to continue its upward trajectory with sales hitting $32 billion in 2024 and growing to $46 billion by 2028. We continue to see exciting developments at both the state and federal level. Just last week, the Attorney General put forth a proposal to reclassify cannabis from Schedule I to Schedule III. Once enacted, this change would bring significant benefits to the US cannabis industry, including the elimination of a punitive tax regime for cannabis and increased investment in this space. From a lender's perspective, we expect that the elimination of 280E will enhance the cash flow and credit profile for our existing borrowers and expand our pipeline of potential borrowers. Beyond the financial impact, the rescheduling process is a long overdue validation of the medical benefits of cannabis and yet another concrete step in the slow but steady march toward legalization. While there is still uncertainty related to the time…

Thanks, Dan. The spin-off of our commercial real estate portfolio into an independent NASDAQ-listed company, Sunrise Realty Trust remains on track. We continue to expect that the spin-off will be completed by mid-2024, subject to SEC review as well as final approval by our Board of Directors. We remain excited about the opportunity set that we are seeing in commercial real estate lending, which is largely driven by a significant reduction in available capital from many of the traditional commercial real estate lending sources as regional banks have pulled back. Additionally, many of our peers are working through their existing portfolios, which has slowed new capital deployment. This trend, coupled with significant upcoming debt maturities presents us with the opportunity to construct a portfolio with new vintage assets. As of May 1, 2024, our CRE pipeline remains robust with over $815 million of potential loans, which should allow us to create a portfolio with attractive risk-adjusted returns. We plan to provide another update on the spinoff when appropriate. Now I'll turn it over to Brandon to discuss our financials.

Thank you, Robyn. For the quarter ended March 31, 2024, we generated net interest income of $14.8 million and distributable earnings of $10 million or $0.49 per basic weighted average common share and had a GAAP net loss of $0.1 million or $0.01 per basic weighted average common share. The difference between our distributable earnings of $10 million and our GAAP net loss of $0.1 million is mainly driven by an increase in our unrealized losses on loans held at fair value of $3.6 million and an increase in our CECL reserve of $4.9 million for the first quarter. 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 noncash 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 noncash items recorded in net income or loss for the period. We ended the first quarter of 2024 with $441.2 million of principal outstanding spread across 15 loans. As of May 1, 2024, our portfolio consisted of $432.5 million of principal outstanding across 15 loans. The weighted average portfolio yield to maturity, which is measured for each loan over the life of such loan was approximately 20% as of March 31, 2024, and May 1, 2024. As of March 31, 2024, we had total assets of $476.4 million including cash and cash equivalents of $82.3 million and had $60 million drawn on our line of credit, which was subsequently repaid in full on April 1, 2024. Our line of credit provides us with up to $60 million in available funds that can be drawn as needed. Currently, the majority of our cash is earning interest of approximately 4.5% to 5.3%. As of March 31, 2024, the CECL reserve was $31.4 million or approximately 8.7% of our loans at carrying value. which increased $4.9 million from the December 31, 2023, reserve of $26.4 million. In addition to the increased CECL reserve, during the first quarter, we had an increase in our unrealized losses on loans at fair value of $3.6 million. As of March 31, 2024, our total shareholder equity was $310.6 million and our book value per share was $15.03. On April 15, 2024, AFC paid a dividend of $0.48 per common share the first quarter to shareholders of record as of March 31, 2024. Year-to-date, we paid out dividends of approximately 99% of our distributable earnings. As a reminder, on an annual basis, our dividend policy is to pay between 85% and 100% of distributable earnings over the year. With that, I will now turn it back over to the operator to start the Q&A.

[Operator Instructions] I'm not showing any questions in queue.

Thank you all for joining us today to discuss our Q1 results.

Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.