UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On April 29, 2022, AFC Gamma, Inc. (the “Company”), entered into the Loan and Security Agreement (the “Revolving Credit Agreement”) by and among the Company, the other loan parties from time to time party thereto (the “Loan Parties”), the lenders party thereto (the “Lenders”), and East West Bank, as Lead Arranger, Bookrunner and Agent.
The Revolving Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) with $60 million in aggregate commitments, which may be borrowed, repaid and redrawn, subject to a borrowing base based on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided in the Revolving Credit Agreement. Interest is payable on the Revolving Credit Facility at the greater of (1) the applicable base rate plus 0.50% and (2) 4.50%, as provided in the Revolving Credit Agreement. Pursuant to the terms of the Revolving Credit Agreement, the amount of total commitments may be increased to up to $100 million in aggregate, subject to available borrowing base and lenders’ willingness to provide additional commitments.
The obligations of the Loan Parties under the Revolving Credit Agreement are secured by certain assets of the Loan Parties comprising of or relating to loan obligations designated for inclusion in the borrowing base. In addition, the Company is subject to various financial and other covenants, including: (1) liquidity of at least $5.0 million, (2) annual debt service coverage of at least 1.50 to 1.0 and (3) secured debt not to exceed 25% of total consolidated assets of the Company and its subsidiaries. The description above is only a summary of the material provisions of the Revolving Credit Agreement and is qualified in its entirety by reference to the Revolving Credit Agreement, a copy of which is filed as Exhibit 10.8 to this Current Report on Form 8-K and incorporated by reference herein.
Relationships
Certain of the lenders and their affiliates may in the future engage in investment banking, commercial banking and other financial advisory and commercial dealings with the Company and its affiliates.
| Item 1.02 | Termination of a Material Definitive Agreement. |
On April 29, 2022, the Company terminated its $75.0 million Revolving Credit Agreement by and among the Company and AFC Finance, LLC, an affiliate of the Company (the “AFCF Agreement”). The AFCF Agreement was replaced with the Revolving Credit Agreement described in Item 1.01 above.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: May 2, 2022 | AFC GAMMA, INC. | |
| By: | /s/ Brett Kaufman | |
| Brett Kaufman | ||
| Chief Financial Officer | ||
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