Filing Overview
AFC Gamma, Inc. filed a Form 8-K under Item 5.02 and Item 7.01. The report date is March 17, 2023, and it was signed and accompanied by a press release on March 20, 2023. The filing concerns executive leadership changes, not financial results. The request metadata identifies Advanced Flower Capital Inc.; the filing itself identifies the registrant as AFC Gamma, Inc.
Executive Changes
- CFO transition: Brett Kaufman will cease serving as Chief Financial Officer and Treasurer effective April 17, 2023. He will remain employed by the external manager through that date but will no longer serve in those corporate roles.
- Separation arrangements: Subject to execution and non-revocation of a release, Mr. Kaufman will receive 12 months of base salary, his target bonus, 12 months of COBRA premium payments, accelerated vesting of one additional tranche of each outstanding equity award, and a one-year post-separation exercise period for outstanding options.
- Successor appointed: Brandon Hetzel was appointed Chief Financial Officer and Treasurer effective March 17, 2023. He had served as the Company’s Controller since September 2020 and Executive Vice President, Controller since December 2022.
Compensation and Employment Terms
- Mr. Hetzel’s existing manager employment agreement provides for an annual base salary of $250,000 and target annual incentive bonuses of $75,000 for 2023 and $112,500 for 2024.
- He received a January 2023 restricted-stock grant with a grant-date fair value of $100,000, vesting one-third annually over three years.
- Two additional restricted-stock grants, with stated January 2024 grant-date fair values of $25,000 and $150,000, are contemplated under the employment agreement.
- The Company stated that it did not enter into a new employment agreement or increase Mr. Hetzel’s compensation in connection with his appointment.
- Mr. Hetzel is generally eligible for 12 months of base salary if terminated by the manager other than for cause or resigns for good reason, subject to the agreement’s terms.
Financial Metrics and Outlook
The filing does not report revenue, profit, cash flow, margins, debt, liquidity, guidance, or other operating financial metrics. It does not provide a new business outlook or quantitative forecast.
Material Changes, Risks, and Unusual Items
- The principal material change is the replacement of the Company’s CFO and Treasurer.
- The separation package for Mr. Kaufman may create compensation, benefits, and equity-related costs, but the filing does not quantify the total expense or accounting treatment.
- Mr. Hetzel’s employment agreement includes noncompetition and nonsolicitation restrictions during employment and for 12 months after termination, as well as customary indemnification provisions.
- The appointment was disclosed under Regulation FD through a March 20, 2023 press release, which was furnished as Exhibit 99.1 and was not deemed filed for Section 18 liability purposes.
Investor Verification Points
- Confirm the registrant identity, as the filing names AFC Gamma, Inc., while the request metadata names Advanced Flower Capital Inc.
- Verify the effective transition date of April 17, 2023 and whether Mr. Kaufman executed the required release.
- Review subsequent filings for the actual cost of Mr. Kaufman’s separation benefits and any effects on reported compensation expense or equity awards.
- Confirm whether Mr. Hetzel’s stated compensation and equity arrangements were amended after the filing.
- Review subsequent periodic reports for any additional management changes or financial guidance.