Advanced Flower Capital (AFCG) Proxy Filing summary

Executive summary

• Board unanimously approved a plan to convert from a REIT to a BDC, aiming for greater investment flexibility and alignment with long-term strategy.

• Conversion will involve revoking REIT status, electing BDC regulation, and seeking RIC tax treatment as soon as practicable.

• Special Meeting scheduled for November 6, 2025, for shareholders to vote on key proposals required for the conversion.

• Conversion expected to occur in the first quarter of 2026, pending shareholder approval.

• Board believes BDC structure will enhance portfolio diversification, investment flexibility, and transparency.

Voting matters and shareholder proposals

• Shareholders are asked to approve a new 1940 Act-compliant investment advisory agreement with AFC Management, LLC.

• Approval sought for reduced asset coverage requirements, lowering from 200% to 150%, allowing increased leverage.

• Board recommends voting FOR both proposals; approval of Proposal 1 is required for the conversion to proceed.

• Shareholders of record as of September 15, 2025, are eligible to vote; quorum is a majority of shares present or by proxy.

• Voting can be done online, by phone, mail, or during the virtual meeting.

Board of directors and corporate governance

• Board and independent directors reviewed and approved the new advisory agreement after considering service quality, fees, profitability, and alignment with shareholder interests.

• Key executives include Leonard M. Tannenbaum (Chairman), Robyn Tannenbaum (President & CIO), and Daniel Neville (CEO).

• Directors and executive officers collectively own approximately 25.1% of outstanding shares.

• Board considered peer BDC fee structures and determined proposed fees are fair and not unreasonable.