Annual report
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File No. 001-41628 STRAWBERRY FIELDS REIT, INC. (Exact name of registrant as specified in its charter) Maryland 84-2336054(State or other jurisdictionof incorporation or organization) (I.R.S. EmployerIdentification No.) 6101 Nimtz Parkway, South Bend, IN 46628(Address of principal executive offices, including Zip Code) Registrant’s telephone number, including area code: (574) 807-0800 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registeredCommon stock Par value $0.0001 per share STRW NYSE American LLC Securities registered pursuant to Section 12(g) of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growthcompany. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the ExchangeAct. Large accelerated filer ☐ Accelerated filer ☐Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financialreporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect thecorrection of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of theregistrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act.) Yes ☐ No ☒ The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was lastsold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed fourth fiscal quarter: $139,676,706 As of March 19, 2026, there were 13,378,307 shares of the registrant’s common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE
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Portions of the registrant’s Definitive Proxy Statement for the Meeting of Shareholders (to be filed with the Securities and Exchange Commission no later than 120 days afterthe end of the registrant’s fiscal year end) are incorporated by reference in this Annual Report on Form 10-K in response to Part II, Item 5 and Part III, Items 10, 11, 12, 13 and14.
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TABLE OF CONTENTS PART I Item 1. Business 7Item 1A. Risk Factors 34Item 1B. Unresolved Staff Comments 34Item 1C. Cybersecurity 34Item 2. Properties 34Item 3. Legal Proceedings 35Item 4. Mine Safety Disclosures 35 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 36Item 6. [Reserved] 36Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 37Item 7A. Quantitative and Qualitative Disclosures About Market Risk 49Item 8. Financial Statements and Supplementary Data 49Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 50Item 9A. Controls and Procedures 50Item 9B. Other Information 50Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 50 PART III Item 10. Directors, Executive Officers and Corporate Governance 51Item 11. Executive Compensation 51Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 51Item 13. Certain Relationships and Related Transactions, and Director Independence 51Item 14. Principal Accountant Fees and Services 51 PART IV Item 15. Exhibit and Financial Statement Schedules 52Item 16. Form 10-K Summary 53 2
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements in this Annual Report on Form 10-K are “forward-looking statements” within the meaning of the U.S. federal securities laws. Forward-lookingstatements provide our current expectations or forecasts of future events and are not statements of historical fact. This Form 10-K also contains forward-looking statements bythird parties relating to market and industry data and forecasts; forecasts and other forward-looking information obtained from these sources are subject to the samequalifications and uncertainties as the other forward-looking statements contained in this Form 10-K. These forward-looking statements include information about possible orassumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations, Funds From Operations (“FFO”), ourstrategic plans and objectives, cost management, potential property acquisitions, anticipated capital expenditures (and access to capital), amounts of anticipated cashdistributions to our stockholders in the future and other matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and variations ofthese words and other similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject torisks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and/or could cause actual results to differ materially from those expressedor forecasted in the forward-looking statements. Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. Readers are cautioned to not place undue reliance onforward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changedassumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-lookingstatements as a result of various factors, including, but not limited to: ● risks and uncertainties related to the national, state and local economies, particularly the economies of Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri,Ohio, Oklahoma, Tennessee and Texas, and the real estate and healthcare industries in general; ● availability and terms of capital and financing; ● the impact of existing and future healthcare reform legislation on our tenants, borrowers and guarantors; ● adverse trends in the healthcare industry, including, but not limited to, changes relating to reimbursements available to our tenants by government or private payors; ● competition in long-term healthcare industry and shifts in the perception of various types of long-term care facilities, including skilled nursing facilities; ● our tenants’ ability to make rent payments; ● our dependence upon key personnel whose continued service is not guaranteed; ● availability of appropriate acquisition opportunities and the failure to integrate successfully; ● ability to source target-marketed deal flow; ● ability to dispose of assets held for sale for the anticipated proceeds or on a timely basis, or to deploy the proceeds therefrom on favorable terms; ● fluctuations in mortgage and interest rates; ● changes in the ratings of our debt securities; 3
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● risks and uncertainties associated with property ownership and development; ● the potential need to fund improvements or other capital expenditures out of operating cash flow; ● potential liability for uninsured losses and environmental liabilities; ● the outcome of pending or future legal proceedings; ● changes in tax laws and regulations affecting REITs; ● our ability to maintain our qualification as a REIT; and ● the effect of other factors affecting our business or the businesses of our operators that are beyond our or their control, including natural disasters, other healthcrises or pandemics and governmental action; particularly in the healthcare industry. This list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. New risks anduncertainties may also emerge from time to time that could materially and adversely affect us. GLOSSARY OF CERTAIN TERMS The following is a glossary of certain terms used in this Form 10-K: “ADA” means the Americans with Disabilities Act of 1990, as amended. “ALF” means assisted living facility. “AFFO” means adjusted funds from operations “Affordable Care Act” means the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010. “BVI Company” means Strawberry Fields REIT, Ltd., a company organized under the laws of the British Virgin Islands. Upon the consummation of the formationtransactions, the BVI Company became a wholly-owned subsidiary of the Operating Partnership. “CAGR” means compound annual growth rate. “Capitalization rate” means the ratio of a property’s operating income to its purchase price. “CMS” means the Centers for Medicare and Medicaid Services, which administers Medicare, Medicaid and the State Children’s Health Insurance Program. “Company” means Strawberry Fields REIT, Inc., a Maryland corporation. “Dollars” or “$” means United States dollars. “EBITDA” means earnings before interest, taxes, depreciation and amortization. “EBITDAR” means earnings before interest, taxes, depreciation, amortization and rent. “EBITDARM” means earnings before interest, taxes, depreciation, amortization, rent and management fees. “FFO” means funds from operations “GLA” or “gross leasable area” or means the area in any building that may be leased to tenants. 4
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“HHS” means the U.S. Department of Health and Human Services. “HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended. “HITECH Act” means the Health Information Technology for Economic and Clinical Health Act. “HUD” means the U.S. Department of Housing and Urban Development, the federal government agency for housing and urban development. “long-term acute care hospital” or “LTACH” means medical institutions in which patients requiring prolonged hospitalization (but who are stable) are given medicalcare and rehabilitation for several weeks. The operation of these institutions is subject to receipt of a suitable license. “MIP” means mortgage insurance premiums “NIS” means New Israeli Shekels. “Operating Partnership” means Strawberry Fields Realty LP, a Delaware limited partnership. “OP units” means the units of limited partnership interests in the Operating Partnership. “Predecessor Company” means Strawberry Fields REIT, LLC, an Indiana limited liability company. Prior to the consummation of the formation transactions, thePredecessor Company was the indirect owner of 73 of our properties. “SNF” means a skilled nursing facility. “Series C Bonds” means the Series C Bonds issued by the BVI Company, which were first offered to the public in Israel on July 28, 2021. As of December 31, 2025,the Series C Bonds had an outstanding principal balance of approximately $77.7 million. “Series D Bonds” means the Series D Bonds issued by the BVI Company, which were first offered to the public in Israel on June 19, 2023. As of December 31, 2025,the Series D Bonds had an outstanding principal balance of approximately $55.1 million. “Series A Bonds-Inc” means the Series A Bonds issued by Strawberry Fields, Inc, which were first offered to the public in Israel on August 5, 2024. As of December31, 2025, the Series A Bonds had an outstanding principal balance of approximately $94.7 million. “Series B Bonds-Inc” means the Series B Bonds issued by Strawberry Fields, Inc, which were first offered to the public in Israel on June 22, 2025. As of December31, 2025, the Series A Bonds had an outstanding principal balance of approximately $107.2 million. “TASE” means the Tel Aviv Stock Exchange Ltd. “TRS” means taxable REIT subsidiary. 5
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TENANT INFORMATION This Annual Report on Form 10-K includes information regarding certain of our tenants that lease properties from us and are not subject to SEC reporting requirements. The information related to our tenants contained or referred to in this Annual Report on Form 10-K was provided to us by such tenants. We have not verified thisinformation through an independent investigation or otherwise. We have no reason to believe that this information is inaccurate in any material respect, but we cannot provideany assurance of its accuracy. We are providing this data for informational purposes only. 6
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PART I References in this Annual Report on Form 10-K to “we,” “our,” “us” and “the Company” refer to Strawberry Fields REIT, Inc., a Maryland corporation, together with itsconsolidated subsidiaries, Strawberry Fields Realty LP, a Delaware limited partnership, which we refer to in this Form 10-K as our Operating Partnership. We are the solegeneral partner of our Operating Partnership. ITEM 1. Business We are a self-managed and self-administered real estate company that specializes in the acquisition, ownership and triple-net leasing of skilled nursing facilities andother post-acute healthcare properties. As of December 31, 2025, our portfolio consisted of 133 healthcare properties with an aggregate of 15,602 licensed beds. We hold feetitle to 132 of these properties and hold one property under a long-term lease. These properties are located across Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri,Ohio, Oklahoma, Tennessee and Texas. Our 133 properties comprise 143 healthcare facilities, consisting of 131 skilled nursing facilities, 10 assisted living facilities and 2long-term acute care hospitals. We generate substantially all of our revenues by leasing our properties to tenants under long-term leases primarily on a triple-net basis, under which the tenant paysthe cost of real estate taxes, insurance and other operating costs of the facility and capital expenditures. Our properties are currently leased to 143 tenants under 32 leaseagreements. Approximately 89.4% of our properties are held under a master lease which provides for cross default provisions, cross collateralization and diversification of risk.As of December 31, 2025, our average remaining initial lease term is 7.2 years with average annual rent escalators of 2.8%. Most of our leases include two 5-year renewaloptions to extend the term. We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operation of such facilities. As of December 31,2025, the aggregate annualized average base rent for the expected life of the leases for our properties was approximately $142.7 million. Each healthcare facility located at our properties is managed by a qualified operator with an experienced management team. As of December 31, 2025, 66 facilitiesrepresenting 48.5% of our annualized base rent are leased to and operated by related parties that are affiliates of Moishe Gubin, who is our Chairman and Chief ExecutiveOfficer and Michael Blisko, who is one of our directors. These properties are operated by affiliates of Infinity Healthcare Management (“Infinity Healthcare”), a healthcareconsulting business, beneficially owned by Mr. Gubin and Mr. Blisko/. Infinity Healthcare and its affiliates are one of the largest groups of operators of skilled nursingfacilities in the Midwest with over 8,500 beds. Our relationship with Infinity Healthcare provides us with unmatched insight into operating trends and industry developments.Additionally, our relationship with Infinity Healthcare provides us with operating flexibility with regard to evaluating potential new acquisitions or better understanding ofoperational issues pertaining to underperforming tenants. Since January 2020 we have grown significantly through acquisitions, having purchased 72 facilities, with an aggregate purchase price of approximately $439.8million and weighted average lease yield of 13.9%. The weighted average lease yield is calculated as the annualized average annual base rent for the expected life of the leasesdivided by total purchase price. Since 2020, our aggregate annualized average base rent for the expected life of the leases for our properties has grown at an approximate13.4% CAGR from $75.3 million in fiscal year 2019 to $142.7 million as of December 31, 2025. In addition, our Adjusted EBITDA and FFO from 2020 to 2025 grew at anapproximate 13.5% and 13.3% CAGR, respectively. During that period, we expanded our geographic footprint from nine states to ten states. From January 1, 2025, through December 31, 2025, we acquired 19 skilled nursing and 1 assisted living facilities for a total cost of $112.1 million (includingleasehold improvements), which includes capitalized acquisition costs. These acquisitions are expected to generate initial annual cash revenues of approximately $12.1million. 7
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Our management team has extensive experience in acquiring, owning, financing, operating and leasing skilled nursing facilities and other types of healthcareproperties. The team is led by Moishe Gubin, our Chief Executive Officer and Chairman of our Board of Directors, Greg Flamion, our Chief Financial Officer, and JeffreyBajtner who serves as our Chief Investment Officer. Combined, this team has over 50 years of experience investing in real estate and particularly in healthcare related realestate and operating companies. Mr. Gubin began his career working as a skilled nursing operator in 1998 and developed in-depth knowledge of the business beforepurchasing his first skilled nursing facility in 2003. Mr. Gubin has successfully raised equity and debt capital to facilitate over 160 real estate related/healthcare relatedacquisitions totaling over $1.6 billion in gross investment. In addition, our management team has extensive experience as operators of, and healthcare consultants to, skillednursing facilities, having managed and operated over 90 skilled nursing facilities, including 66 of our current tenants. We believe our management team’s unique experienceacross both skilled nursing operations and real estate and its extensive knowledge of the skilled nursing industry position us favorably to take advantage of healthcareinvestment opportunities. Additionally, our deep and broad relationships with industry operators have allowed us to identify and acquire skilled nursing facilities to whichmany of our competitors do not have access. We have assembled a high quality and diversified portfolio of skilled nursing and other healthcare related facilities and we plan to continue to invest primarily inskilled nursing facilities and other healthcare facilities that primarily provide services to the elderly. We believe these asset classes provide potential for higher risk-adjustedreturns compared to other forms of net-leased real estate assets due to the specialized expertise necessary to acquire, own, finance and operate these properties, which arefactors that tend to limit competition among investors, owners, operators and finance companies. Additionally, our management team’s strong relationships in the industryhave allowed us to acquire healthcare-related properties at valuations that achieve attractive lease yields, with the goal of generating strong returns for our stockholders overthe long-term. As we continue to acquire additional properties and expand our portfolio, we expect to continue diversifying our portfolio by geography and by tenant, whilealso maintaining balance sheet strength and liquidity. We elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2022. We believe that we have beenorganized and have operated, and we intend to continue to operate, in a manner to qualify for taxation as a REIT. We operate through an umbrella partnership, commonlyreferred to as an UPREIT structure, in which substantially all of our properties and assets are held through Strawberry Fields Realty, L.P. (the “Operating Partnership”). We arethe general partner of the Operating Partnership and as of December 31, 2025 we own approximately 24.0% of the outstanding OP units. To maintain REIT status, we mustmeet certain organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income,determined without regard to the dividends paid deduction and excluding any net capital gains. We generate revenues primarily by leasing healthcare-related properties to healthcare operators in triple-net lease arrangements, under which the tenant is solelyresponsible for the costs related to the property (including property taxes, insurance, maintenance and repair costs and capital expenditures). From time to time, we also extendloans to healthcare operators, generally secured by their receivables. We conduct and manage our business as one operating segment for internal reporting and internaldecision-making purposes. We expect to grow our portfolio by pursuing opportunities to acquire additional properties that will be leased to a diverse group of local, regionaland national healthcare providers, which may include new or existing skilled nursing operators. We also anticipate diversifying our portfolio over time, including by acquiringproperties in different geographic markets, and in different asset classes. In addition, we actively monitor the clinical, regulatory, and financial operating results of our tenants,and work to identify opportunities within their operations and markets that could improve their operating results at our facilities. We communicate such observations to ourtenants; however, we have no contractual obligation to do so. Moreover, our tenants have sole discretion with respect to the day-to-day operation of the facilities they leasefrom us, and how and whether to implement any observation we may share with them. We also actively monitor the overall occupancy, skilled mix, and other operatingmetrics of our tenants monthly. 8
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We have replaced tenants in the past, and may elect to replace tenants in the future, if they fail to meet the terms and conditions of their leases with us. Thereplacement tenants may include tenants with whom we have had no prior landlord-tenant relationship as well as current tenants with whom we are comfortable expanding ourrelationships. In addition, we periodically reassess the investments we have made and the tenant relationships we have entered, and have selectively disposed of facilities orinvestments, or terminated such relationships, and we expect to continue making such reassessments and, where appropriate, taking such actions. Our Industry The skilled nursing industry has evolved to meet the growing demand for post-acute and custodial healthcare services generated by an aging population, increasinglife expectancies and the trend toward shifting patient care to lower cost settings. We believe this evolution has led to a number of favorable improvements in the industry, asdescribed below: ● Shift of Patient Care to Lower Cost Alternatives. The growth of the senior population in the United States continues to increase healthcare costs. In response, federaland state governments have adopted cost-containment measures that encourage the treatment of patients in more cost-effective settings such as SNFs, for which thestaffing requirements and associated costs are often significantly lower than acute care hospitals, inpatient rehabilitation facilities and other post-acute care settings.As a result, SNFs are generally serving a larger population of higher-acuity patients than in the past. The same trend is impacting ALFs, which are now generallyserving some patients who previously would have received services at SNFs. ● Significant Acquisition and Consolidation Opportunities. The skilled nursing industry is large and highly fragmented, characterized predominantly by numerous localand regional providers. We believe this fragmentation provides significant acquisition and consolidation opportunities. ● Widening Supply and Demand Imbalance. The number of SNFs has declined modestly over the past several years. According to the Valuation & Information Group,which provides appraisal and market reports for the industry, the nursing home industry is currently comprised of approximately 14,800 facilities, as compared withover 16,700 facilities as of December 2000. Supply of new facilities is limited due to certificate of need restrictions. 71% of states have certificate of needrestrictions., We expect that the supply/demand imbalance in the skilled nursing industry will increasingly favor skilled nursing providers due to the shift of patientcare to lower cost settings and an aging population to meet the growing need for post-acute healthcare. ● Increased Demand Driven by Aging Populations. As seniors account for a higher percentage of the total U.S. population, we believe the overall demand for skillednursing services will increase. At present, the primary market demographic for skilled nursing services is individuals aged 75 and older. The 2020 U.S. Censusreported that there were over 56 million people in the United States in 2020 over the age of 65. The U.S. Census estimates this group to be one of the fastest growingsegments of the United States population, projecting that it will almost double between 2020 and 2060. According to the Centers for Medicare & Medicaid Services,nursing home care facilities and continuing care retirement expenditures are projected to grow from approximately $196.8 billion in 2020, which includes federalexpenditures in response to the COVID-19 pandemic, to approximately $266 billion in 2028. 9
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Tenants and Operators Our properties are currently leased to 143 tenants under 32 lease agreements. Our leases include 16 master lease agreements that cover 127 facilities leased to 126tenants, with the remaining 16 leases each covering a single facility leased to one tenant. 66 of our tenants are related parties. Each property is operated as a healthcare facility by a licensed operator, which may be the tenant or a separate operator. Each operator holds a license granted by stateregulators to operate a specific type of facility. All the operators have experienced management teams and senior healthcare staff with substantial knowledge of their respectivelocal markets. We target healthcare operators that are owned by principals with a history of quality care, and the demonstrated ability to successfully navigate in a changinghealthcare operating environment. Certain operators are related parties. We believe that each of the operators of our properties is primarily focused on serving the needs of the local community. Unlike operators that are part of a largenational healthcare conglomerate, we believe the operators at our properties can manage their facilities more efficiently because they are not burdened by costly infrastructureand have the flexibility to rapidly adjust their cost structure to respond to changes in the reimbursement environment. In order to operate efficiently and improve profitability, most of the operators at our facilities have engaged large consulting firms that specialize in healthcare andskilled nursing operations. These consulting firms provide advice and assistance on marketing, operating policies and procedures, billing, collections and regulatorycompliance. The operators and consultants work together to develop and standardize best practices in the facilities, while operating in a cost-efficient manner. The operators atour properties primarily use one of 15 principal consulting firms, including three firms that are part of Infinity Healthcare, a healthcare consulting business that is owned bythe Moishe Gubin, who is our Chairman and Chief Executive Officer and Michael Blisko, who is one of our directors. The tenants and operators of our properties have demonstrated the ability to generate consistent profitability despite the challenging markets in which they operate. Inmany cases, these tenants and operators have successfully optimized and stabilized underperforming skilled nursing facilities. While these tenants and operators have beensuccessful, we expect to seek opportunities to diversify our tenant/operator mix through future acquisitions that will be leased to new operators. 10
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The following table contains information regarding our healthcare facility portfolio by tenant, as of December 31, 2025. Lessor/CompanySubsidiary Manager/Tenant/Operator(1) City State Propertytype Number oflicensed beds Tenant LeaseExpiration Year(2) Rentablesquare feet Percentleased AnnualizedLease Income % of totalAnnualizedLease Income Annualized leaseincome per SQF Master LeaseIndiana 1 1020 West VineSt, LLC The Watersof PrincetonII, LLC Princeton IN SNF 95 2034 32,571 100% 1,224,215 0.9% 37.59 12803 LenoverStreet Realty,LLC The Watersof Dillsboro- Ross II,LLC Dillsboro IN SNF 123 2034 67,851 100% 1,585,037 1.1% 23.36 1350 North ToddSt, LLC The WatersofScottsburgII, LLC Scottsburg IN SNF 99 2034 28,050 100% 1,275,761 0.9% 45.48 1600 East LibertyStreet Realty,LLC The WatersofCovingtonII, LLC Covington IN SNF 119 2034 40,821 100% 1,533,491 1.1% 37.57 1601 Hospital DrRealty, LLC The WatersofGreencastleII, LLC Greencastle IN SNF 100 2034 31,245 100% 1,288,648 0.9% 41.24 1712 LelandDrive Realty,LLC The WatersofHuntingburgII, LLC Huntingburg IN SNF 95 2034 45,156 100% 1,224,215 0.9% 27.11 2055 Heritage DrRealty, LLC The WatersofMartinsvilleII, LLC Martinsville IN SNF 103 2034 30,060 100% 1,327,307 0.9% 44.16 3895 KeystoneAve Realty, LLC The WatersofIndianapolisII, LLC Indianapolis IN SNF 81 2034 25,469 100% 1,043,805 0.7% 40.98 405 Rio VistaLane Realty, LLC The Watersof RisingSun II, LLC Rising Sun IN SNF 58 2034 16,140 100% 747,416 0.5% 46.31 950 Cross AveRealty, LLC The Watersof CliftyFalls II,LLC Madison IN SNF 138 2034 39,438 100% 1,778,334 1.2% 45.09 958 EastHighway 46Realty, LLC The Waterof BatesvilleII, LLC Batesville IN SNF 86 2034 59,582 100% 1,108,237 0.8% 18.60 2400 ChateauDrive Realty LLC The Watersof MuncieII, LLC Muncie IN SNF 72 2034 22,350 100% 927,826 0.7% 41.51 Big H2O The WatersofNewcastleII, LLC (2) New Castle IN SNF 66 2034 24,860 100% 850,507 0.6% 34.21 1316 North TibbsAvenue RealtyLLC West Park awatercommunity Indianapolis IN SNF 89 2034 26,572 100% 1,146,896 0.8% 43.16 1002 SISTERBARBARAWAY, LLC Waters ofGeorgetown Georgetown IN SNF 78 2034 50,948 100% 1,005,145 0.7% 19.73 2640 Cold SpringRoad Realty,LLC Alpha AWatersCommunity,LLC Indianapolis IN SNF 86 2034 37,054 100% 1,108,237 0.8% 29.91 Master LeaseIllinois 1 253 BradingtonDrive, LLC Bria ofColumbia Columbia IL SNF 119 2032 43,189 100% 410,821 0.3% 9.51 3523Wickenhauser,LLC Bria ofAlton Alton IL SNF 181 2032 44,840 100% 624,862 0.4% 13.94 727 North 17thSt, LLC Bria ofBelleville Belleville IL SNF 180 2032 50,650 100% 621,410 0.4% 12.27 Master LeaseIllinois 2 1623 WestDelmar Ave, LLC Bria ofGodfrey Godfrey IL SNF 68 2032 15,740 100% 234,755 0.2% 14.91 393 EdwardsvilleRoad LLC Bria ofWood River Wood River IL SNF 106 2032 29,491 100% 365,941 0.3% 12.41
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Lessor/CompanySubsidiary Manager/Tenant/Operator (1) City State Propertytype Number oflicensed beds Tenant LeaseExpiration Year(2) Rentablesquare feet Percentleased AnnualizedLease Income % of totalAnnualizedLease Income Annualized leaseincome per SQF Master LeaseLandmark 8200 NationalAve Realty, LLC Landmark ofMidwest CityHospital MidwestCity OK LTACH 31 2032 49,319 100% 149,088 0.1% 3.02 Oak LawnNursing Realty,LLC Oak LawnRespiratoryand Rehabcenter, LLC Oak Lawn IL SNF 143 2028 37,854 100% 687,731 0.5% 18.17 Forest ViewNursing Realty,LLC Forest ViewRehab andNursingcenter, LLC Itasca IL SNF 144 2024 34,152 100% 692,540 0.5% 20.28 Parkshore EstatesNursing Realty,LLC ParkshoreEstatesNursing &RehabCenter, LLC Chicago IL SNF 318 2024 94,018 100% 1,529,359 1.1% 16.27 Hill ValleyMaster Lease 1015 MagazineStreet, LLC Landmark ofRiver CityRehabilitationand NursingCenter Louisville KY SNF 92 2032 36,050 100% 2,060,536 1.4% 57.16 900 GagelAvenue, LLC Landmark ofIroquois ParkRehabilitationand NursingCenter Louisville KY SNF 120 2032 36,374 100% 2,687,656 1.9% 73.89 308 West MapleAvenue, LLC Landmark ofLancasterRehabilitationand NursingCenter Lancaster KY SNF 96 2032 42,438 100% 2,150,125 1.5% 50.67 1155 EasternParkway, LLC Landmark ofLouisvilleRehabilitationand NursingCenter Louisville KY SNF 252 2032 106,250 100% 5,644,077 4.0% 53.12 203 Bruce Court,LLC Landmark ofDanvilleRehabilitationand NursingCenter Danville KY SNF 90 2032 26,000 100% 2,015,742 1.4% 77.53 203 Bruce Court,LLC GoldenrodVillageAssistedLiving Center Danville KY ALF 16 2032 19,500 100% 358,354 0.3% 18.38 203 Bruce Court,LLC HillsideSuitesIndependentLiving Center Danville KY IndependentLiving 0 2032 1,000 - 0.0% 120 Life CareWay, LLC Landmark ofBardstownRehabilitationand NursingCenter Bardstown KY SNF 100 2032 36,295 100% 2,239,713 1.6% 61.71 1033 NorthHighway 11, LLC Landmark ofLaurel CreekRehabilitationand NursingCenter Manchester KY SNF 106 2032 32,793 100% 2,374,096 1.7% 72.40 945 West RussellStreet, LLC Landmark ofElkhorn CityRehabilitationand NursingCenter ElkhornCity KY SNF 106 2032 31,637 100% 2,374,096 1.7% 75.04 420 Jett Drive,LLC Landmark ofBreathittCountyRehabilitationand NursingCenter, LLC Jackson KY SNF 120 2032 32,581 100% 2,687,656 1.9% 82.49 1253 LakeBarkley Drive,LLC Landmark ofKuttawa, ARehabilitation& NursingCenter Kuttawa KY SNF 65 2032 37,892 100% 1,455,813 1.0% 38.42
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Lessor/CompanySubsidiary Manager/Tenant/Operator (1) City State Propertytype Number oflicensed beds Tenant LeaseExpiration Year(2) Rentablesquare feet Percentleased AnnualizedLease Income % of totalAnnualizedLease Income Annualized leaseincome per SQF Master LeaseOhio - 3090 Five PointsHartford Realty,LLC ContinentHealthcareCo - Hartford Fowler OH SNF 54 2025 15,504 100% 196,012 0.1% 12.64 3121 GlanzmanRd Realty, LLC ContinentHealthcareCo - Toledo Toledo OH SNF 84 2025 24,087 100% 304,908 0.2% 12.66 620 West StrubRd Realty, LLC ContinentHealthcareCo -Sandusky Sandusky OH SNF 50 2025 18,984 100% 181,493 0.1% 9.56 4250 SodomHutchings RoadRealty, LLC ContinentHealthcareCo - Cortland Cortland OH SNF 50 2025 14,736 100% 181,493 0.1% 12.32 Master LeaseTennessee 1 115 WoodlawnDrive, LLC Lakebridge aWatersCommunity,LLC JohnsonCity TN SNF 109 2031 37,734 100% 1,026,061 0.7% 27.19 146 Buck CreekRoad, LLC Waters ofRoanHighlands,LLC RoanMountain TN SNF 80 2031 30,139 100% 753,072 0.5% 24.99 704 5th AvenueEast, LLC Waters ofSpringfield,LLC Springfield TN SNF 66 2031 19,900 100% 621,284 0.4% 31.22 2501 River Road,LLC Waters ofCheatham,LLC AshlandCity TN SNF 80 2031 37,953 100% 753,072 0.5% 19.84 202 Enon SpringsEast, LLC Waters ofSmyrna, LLC Smyrna TN SNF 91 2031 34,070 100% 856,619 0.6% 25.14 140 TechnologyLane, LLC Waters ofJohnson City,LLC JohnsonCity TN SNF 84 2031 34,814 100% 790,726 0.6% 22.71 835 Union Street,LLC Waters ofShelbyville,LLC Shelbyville TN SNF 96 2031 44,327 100% 903,686 0.6% 20.39 1340 NorthGrundy QuarlesHighway, LLC Waters ofGainesboro,LLC Gainesboro TN SNF 83 2031 20,866 100% 781,312 0.5% 37.44 1340 NorthGrundy QuarlesHighway, LLC Waters ofGainesboro,LLC Gainesboro TN ALF 25 2031 10,277 100% 235,335 0.2% 22.90 100 NetherlandLane, LLC Waters ofKingsport Kingsport TN SNF 67 2031 28,140 100% 630,698 0.4% 22.41 2648 SeviervilleRoad, LLC Waters ofMaryville Maryville TN SNF 181 2031 49,810 100% 1,703,825 1.2% 34.21 Master LeaseTennessee 2 505 North RoanStreet, LLC AgapeRehabilitation& NursingCenter, AWater’sCommunity JohnsonCity TN SNF 84 2031 27,100 100% 1,628,910 1.1% 60.11 14510 Highway79, LLC Waters ofMcKenzie, ARehabilitation& NursingCenter McKenzie TN SNF 66 2031 22,454 100% 1,279,858 0.9% 57.00 6500 Kirby GateBoulevard, LLC Waters ofMemphis, ARehabilitation& NursingCenter Memphis TN SNF 90 2031 51,565 100% 1,745,261 1.2% 33.85 978 Highway 11South, LLC Waters ofSweetwater,ARehabilitation& NursingCenter Sweetwater TN SNF 90 2031 30,312 100% 1,745,261 1.2% 57.58 13
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Lessor/CompanySubsidiary Manager/Tenant/Operator (1) City State Propertytype Number oflicensed beds Tenant LeaseExpiration Year(2) Rentablesquare feet Percentleased AnnualizedLease Income % of totalAnnualizedLease Income Annualized leaseincome per SQF 2830 Highway394, LLC Waters ofBristol, ARehabilitation& NursingCenter Bristol TN SNF 120 2031 53,913 100% 2,327,014 1.6% 43.16 Master LeaseArkansas 1 5301 WheelerAvenue, LLC TheBlossoms atFort Smith Fort Smith AR SNF 117 2028 41,490 100% 821,950 0.6% 19.81 414 MasseyAvenue, LLC TheBlossoms atMountainViewAssistedLiving MountainView AR ALF 32 2028 12,548 100% 224,807 0.2% 17.92 706 Oak GroveStreet, LLC TheBlossoms atMountainView MountainView AR SNF 97 2028 31,586 100% 681,445 0.5% 21.57 8701 Riley Drive,LLC TheBlossoms atWoodlandHills Little Rock AR SNF 140 2028 61,543 100% 983,530 0.7% 15.98 1516 CumberlandStreet, LLC TheBlossoms atCumberland Little Rock AR SNF 120 2028 82,328 100% 843,025 0.6% 10.24 5720 WestMarkham Street,LLC TheBlossoms atMidtown Little Rock AR SNF 154 2028 56,176 100% 1,081,883 0.8% 19.26 2501 John AshleyDrive, LLC TheBlossoms atNorth LittleRock Little Rock AR SNF 140 2028 65,149 100% 983,530 0.7% 15.10 1513 SouthDixieland Road,LLC TheBlossoms atRogers Rogers AR SNF 110 2028 32,962 100% 772,773 0.5% 23.44 826 North Street,LLC TheBlossoms atStamps Stamps AR SNF 94 2028 30,924 100% 660,370 0.5% 21.35 Master LeaseArkasnas 2 326 LindleyLane, LLC TheBlossoms atNewport Newport AR SNF 120 2029 49,675 100% 850,639 0.6% 17.12 2821 West DixonRoad, LLC TheBlossoms atWest Dixon Little Rock AR SNF 140 2029 42,825 100% 992,412 0.7% 23.17 2821 West DixonRoad, LLC TheBlossoms atWest DixonAssistedLiving Little Rock AR ALF 32 2029 7,557 100% 226,837 0.2% 30.02 552 Golf LinksRoad, LLC TheBlossoms atHot Springs Hot Springs AR SNF 152 2029 30,372 100% 1,077,476 0.8% 35.48 Master LeaseIndiana 2 8400 ClearvistaPlace LLC The Waters ofCastletonSNF, LLC Indianapolis IN SNF 114 2034 41,400 100% 1,023,207 0.7% 24.72 524 AndersonRoad LLC The Waters ofChesterfieldSNF, LLC Chesterfield IN SNF 60 2034 21,900 100% 538,530 0.4% 24.59 640 WestEllsworth StreetLLC The Waters ofColumbiaCity SNF,LLC ColumbiaCity IN SNF 84 2034 30,462 100% 753,942 0.5% 24.75 11563 West 300South LLC The Waters ofDunkirk SNF,LLC Dunkirk IN SNF 46 2034 19,800 100% 412,873 0.3% 20.85 5544 East StateBoulevard LLC The Waters ofFort WayneSNF, LLC Ft. Wayne IN SNF 77 2034 31,500 100% 691,113 0.5% 21.94 548 South 100West LLC The Waters ofHartford CitySNF, LLC HartfordCity IN SNF 65 2034 22,400 100% 583,407 0.4% 26.04 2901 West 37thAvenue LLC The Waters ofHobart SNF, Hobart IN SNF 110 2034 43,854 100% 987,305 0.7% 22.51
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LLC 1500 Grant StreetLLC The Waters ofHuntingtonSNF, LLC Huntington IN SNF 85 2034 44,957 100% 762,917 0.5% 16.97 787 North DetroitStreet LLC The Waters ofLaGrangeSNF, LLC Lagrange IN SNF 100 2034 31,133 100% 897,550 0.6% 28.83 981 BeechwoodAvenue LLC The Waters ofMiddletownSNF, LLC Middletown IN SNF 60 2034 18,500 100% 538,530 0.4% 29.11 14
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Lessor/CompanySubsidiary Manager/Tenant/Operator (1) City State Propertytype Number oflicensed beds Tenant LeaseExpiration Year(2) Rentablesquare feet Percentleased AnnualizedLease Income % of totalAnnualizedLease Income Annualized leaseincome per SQF 317 Blair PikeLLC The Waters ofPeru SNF,LLC Peru IN SNF 130 2034 60,230 100% 1,166,815 0.8% 19.37 815 WestWashingtonStreet LLC The Waters ofRockportSNF Rockport IN SNF 60 2034 25,000 100% 538,530 0.4% 21.54 612 East 11thStreet LLC The Waters ofRushvilleSNF Rushville IN SNF 98 2034 16,572 100% 879,599 0.6% 53.08 505 West WolfeStreet LLC The Waters ofSullivan SNF Sullivan IN SNF 93 2034 15,600 100% 834,721 0.6% 53.51 500 EastPickwick DriveLLC The Waters ofSyracuseSNF Syracuse IN SNF 66 2034 26,000 100% 592,383 0.4% 22.78 300 FairgroundsRoad LLC The Waters ofTipton SNF Tipton IN SNF 150 2034 30,970 100% 1,346,325 0.9% 43.47 1900 Alber StreetLLC The Waters ofWabash SNFEast Wabash IN SNF 84 2034 29,762 100% 753,942 0.5% 25.33 1720 Alber StreetLLC The Waters ofWabash SNFWest Wabash IN SNF 44 2034 12,956 100% 394,922 0.3% 30.48 300 NorthWashingtonStreet LLC The Waters ofWakarusaSNF Wakarusa IN SNF 133 2034 48,000 100% 1,193,741 0.8% 24.87 8400 ClearvistaPlace LLC The Waters ofCastletonALF, LLC Indianapolis IN ALF 54 2034 43,900 100% 484,677 0.3% 11.04 787 North DetroitStreet LLC The Waters ofLaGrangeALF, LLC Lagrange IN ALF 17 2034 20,756 100% 152,583 0.1% 7.35 612 East 11thStreet LLC The Waters ofRushvilleALF, LLC Rushville IN ALF 29 2034 11,048 100% 260,289 0.2% 23.56 505 West WolfeStreet LLC The Waters ofSullivan ALF,LLC Sullivan IN ALF 32 2034 10,400 100% 287,216 0.2% 27.62 300 NorthWashingtonStreet LLC The Waters ofWakarusaALF, LLC Wakarusa IN ALF 61 2034 48,630 100% 547,505 0.4% 11.26 Master LeaseTexas 1 1621 Coit RoadRealty, LLC Landmark ofPlanoNursing andRehab Plano TX SNF 160 2033 74,718 100% 723,520 0.5% 9.68 5601 Plum CreekDrive Realty,LLC Landmark ofAmarilloNursing andRehab Amarillo TX SNF 99 2033 90,046 100% 447,678 0.3% 4.97 2301 NorthOregon Realty,LLC Grace PointWellnessCenter El Paso TX SNF 182 2033 19,895 100% 823,004 0.6% 41.37 Master LeaseTide Group 2001 Avenue E,LLC CommunityCare Centerof Hondo Hondo TX SNF 75 2035 18,572 100% 719,642 0.5% 38.75 1213 WaterStreet, LLC WatersideNursing andRehabilitation Kerrville TX SNF 179 2035 37,012 100% 1,717,544 1.2% 46.41 2808 StoneyBrook Drive,LLC Oasis atGalleria Houston TX SNF 112 2035 29,550 100% 1,074,665 0.8% 36.37 202 East MillStreet, LLC Big SpringCare Centerfor Rehab andHealthcare Humansville MO SNF 60 2035 20,111 100% 575,713 0.4% 28.63 631 West MainStreet, LLC BuffaloPrairie Centerfor Rehab andHealthcare Buffalo MO SNF 60 2035 21,587 100% 575,713 0.4% 26.67 18540 StateHighway 16,LLC Country AireRetirementCenter Lewistown MO SNF 60 2035 24,222 100% 575,713 0.4% 23.77 1 GeorgianGardens Drive,LLC GeorgianGardensCenter for Potosi MO SNF 120 2035 38,973 100% 1,151,426 0.8% 29.54
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Rehab andHealthcare 2001 JeffersonParkway, LLC Golden YearsCenter forRehab andHealthcare Harrisonville MO SNF 132 2035 41,407 100% 1,266,569 0.9% 30.59 800 South WhiteOak, LLC MarshfieldCare Centerfor Rehab andHealthcare Marshfield MO SNF 74 2035 23,905 100% 710,046 0.5% 29.70 15
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Lessor/CompanySubsidiary Manager/Tenant/Operator (1) City State Propertytype Number oflicensed beds Tenant LeaseExpiration Year(2) Rentablesquare feet Percentleased AnnualizedLease Income % of totalAnnualizedLease Income Annualized leaseincome per SQF 501 S Monroe St,LLC Oregon CareCenter Oregon MO SNF 60 2035 19,966 100% 575,713 0.4% 28.83 1531 NebraskaSt, LLC TiffanyHeights MoundCity MO SNF 60 2035 19,947 100% 575,713 0.4% 28.86 Master LeaseMissouri 11515 TroostAvenue LLC BridgewoodHealth CareCenter KansasCity MO SNF 166 2040 75,045 100% 1,453,833 1.0% 19.37 902 Manor DriveLLC CharitonParkHealthcareCenter Salisbury MO SNF 120 2040 33,675 100% 1,050,963 0.7% 31.21 11400 MehlAvenue LLC CrestwoodHealth CareCenter Florissant MO SNF 150 2040 39,346 100% 1,313,704 0.9% 33.39 1622 East 28thStreet LLC EastviewManor CareCenter Trenton MO SNF 90 2040 24,667 100% 788,222 0.6% 31.95 2800 Hwy TTLLC Four SeasonsLivingCenter Sedalia MO SNF 239 2040 112,191 100% 2,093,169 1.5% 18.66 52435 InfirmaryRoad LLC MilanHealthcareCenter Milan MO SNF 100 2040 27,425 100% 875,803 0.6% 31.93 2041 Silva LaneLLC North VillagePark Moberly MO SNF 183 2040 22,500 100% 1,602,719 1.1% 71.23 649 South WalnutLLC St. ElizabethCare Center St.Elizabeth MO SNF 63 2040 20,927 100% 551,756 0.4% 26.37 1300 CountyFarm Road, LLC CassvilleHealthCenter forRehab andHealthcare Cassville MO SNF 60 2040 21,000 100% 525,482 0.4% 25.02 2350 KanellBouldevard, LLC CedargateHealthcare PoplarBluff MO SNF 124 2040 31,536 100% 1,085,995 0.8% 34.44 Master LeaseKansas 520 E MorseAvenue LLC AdvenaLiving ofBonnerSprings BonnerSprings KS SNF 45 2034 13,456 100% 349,745 0.2% 25.99 440 N 4th StreetLLC ClearwaterAssisted andIndependentLiving Clearwater KS SNF 46 2034 20,260 100% 357,518 0.3% 17.65 620 WoodAvenue LLC AdvenaLiving ofClearwater Clearwater KS ALF 55 2034 25,577 100% 427,467 0.3% 16.71 601 N Rose HillRoad LLC AdvenaLiving ofFountainview Rose Hill KS SNF 68 2034 33,360 100% 528,504 0.4% 15.84 2015 SE 10thAvenue LLC AdvenaLiving on10th Topeka KS SNF 60 2034 22,877 100% 466,327 0.3% 20.38 1600 SWoodlawnBoulevard LLC AdvenaLiving ofWoodlawn Wichita KS SNF 80 2034 29,164 100% 621,770 0.4% 21.32 Master LeaseOklahoma 103 Har-BerRoad LLC Grand LakeVilla Grove OK SNF 100 2035 31,691 100% 675,357 0.5% 21.31 2400 WhitesMeadow Drive,LLC HarrahNursingCenter Harrah OK SNF 100 2035 37,136 100% 675,357 0.5% 18.19 701 S. 8th St,LLC McLoudNursing McLoud OK SNF 80 2035 11,370 100% 540,286 0.4% 47.52 1400 South MainStreet, LLC Betty AnnNursing Grove OK SNF 60 2035 15,340 100% 405,214 0.3% 26.42 IndividualLeases AmbassadorNursing Realty,LLC AmbassadorNursing andRehab, LLC Chicago IL SNF 190 2031 37,100 100% 1,005,313 0.7% 27.10 MomenceMeadows Realty,LLC MomenceMeadowsNursing &RehabCenter, LLC Momence IL SNF 140 2025 37,139 100% 1,038,000 0.7% 27.95
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Lincoln ParkHoldings, LLC LakeviewRehab andNursingcenter, LLC Chicago IL SNF 178 2031 34,362 100% 1,260,000 0.9% 36.67 ContinentalRealty, LLC ContinentalNursing andRehab, LLC Chicago IL SNF 208 2031 53,653 100% 1,575,348 1.1% 29.36 16
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Lessor/CompanySubsidiary Manager/Tenant/Operator (1) City State Propertytype Number oflicensed beds Tenant LeaseExpiration Year(2) Rentablesquare feet Percentleased AnnualizedLease Income % of totalAnnualizedLease Income Annualized leaseincome per SQF Westshire Realty,LLC City ViewMulti careCenter LLC Cicero IL SNF 485 2025 124,020 100% 1,082,928 0.8% 8.73 Belhaven Realty,LLC BelhavenNursing andRehab, LLC Chicago IL SNF 221 2031 60,000 100% 2,134,570 1.5% 35.58 West SuburbanNursing Realty,LLC WestSuburbanNursing &RehabCenter, LLC Bloomingdale IL SNF 259 2027 70,314 100% 1,961,604 1.4% 27.90 Niles NursingRealty, LLC Niles Nursing& Rehab,LLC Niles IL SNF 304 2031 46,480 100% 2,409,998 1.7% 51.85 MidwayNeurological andRehab Realty,LLC MidwayNeurologicaland RehabCenter, LLC Bridgeview IL SNF 404 2031 120,000 100% 2,547,713 1.7% 21.23 516 West FrechSt, LLC ParkerNursing andRehab, LLC Streator IL SNF 102 2031 24,979 100% 498,351 0.3% 19.95 4343 KennedyDrive, LLC Hope CreekNursing andRehabilitationCenter, LLC East Moline IL SNF 245 2030 104,000 100% 478,959 0.3% 4.61 1585 Perry WorthRd, LLC Waters ofLebanon LLC Lebanon IN SNF 64 2027 32,650 100% 116,678 0.1% 3.57 2301 NorthOregon Realty,LLC SpecialtyHospitalManagement El Paso TX LTACH 32 2029 24,660 100% - 0.0% - 9209 DollarwayRoad, LLC TheBlossoms atWhite Hall White Hall AR SNF 120 2029 45,771 100% 843,022 0.6% 18.42 9300 Ballard RdRealty, LLC Zahav of DesPlaines Des Plaines IL SNF 231 2033 70,556 100% 1,302,479 0.9% 18.46 8200 National AveRealty, LLC Midwest CityPost Acuteand Rehab Midwest City OK SNF 106 2032 39,789 100% 510,000 0.3% 12.82 Total/Average 15,602 2032 5,327,707 100% 142,675,460 100.0% 29.11 (1) The tenant and the operator are the same for each facility other than the 40 SNF’s leased under the two Indiana master lease agreements and six SNF’s leased inTexas. In the case of these other facilities, the tenants are county hospitals which have entered into management agreements with the operators listed in the table. Thesearrangements permit the facilities to participate in a CMS program that pays higher Medicaid reimbursement rates for facilities associated with hospitals in underserved areas. (2) The expiration dates do not reflect the exercise of any renewable options. Related Party Tenants As of December 31, 2025, we leased 66 of our facilities to tenants that are affiliates of: (i) Moishe Gubin who serves as Chairman of the Board and our ChiefExecutive Officer and (ii) Michael Blisko, who serves as one of our directors. As of December 31, 2025, approximately 48.5% of our annualized base rent is received fromsuch related-party tenants. The failure of these tenants to fulfill their obligations under their leases or renew their leases upon expiration could have a material adverse effect onour business, financial condition and results of operations. Rental income from leases with these related party tenants represented 48.5% of all rental income for the year ended December 31, 2025. We believe these affiliatedrelationships provide a strong alignment of interests between us and our tenants and offers us increased operating flexibility with regards to potentially replacingunderperforming tenants or evaluating acquisitions in new states. As we continue to grow and expand our portfolio, we intend to develop new relationships with unrelatedparty tenants and operators in order to diversify our tenant base and reduce our dependence on related party and operators. 17
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The following table contains information regarding tenant/operators that are related parties of the Company as December 31, 2025: Manager/Tenant/Operators that are Related Parties Lessor/Company Subsidiary Manager/Tenant/Operator Beneficial Owner Percentage inTenant/Operator by Related Party MoisheGubin/GubinEnterprises LP MichaelBlisko/BliskoEnterprises LP Master Lease Indiana 1 1020 West Vine Street Realty, LLC The Waters of Princeton II LLC 49.49% 50.51%12803 Lenover Street Realty LLC The Waters of Dillsboro – Ross Manor II LLC 49.49% 50.51%1350 North Todd Drive Realty, LLC The Waters of Scottsburg II LLC 49.49% 50.1%1600 East Liberty Street Realty LLC The Waters of Covington II, LLC 49.49% 50.51%1601 Hospital Drive Realty LLC The Waters of Greencastle II LLC 49.49% 50.51%1712 Leland Drive Realty, LLC The Waters of Huntingburg II LLC 49.49% 50.51%2055 Heritage Drive Realty LLC The Waters of Martinsville II LLC 49.49% 50.51%3895 South Keystone Avenue Realty LLC The Waters of Indianapolis II LLC 49.49% 50.51%405 Rio Vista Lane Realty LLC The Waters of Rising Sun II LLC 49.49% 50.51%950 Cross Avenue Realty LLC The Waters of Clifty Falls II LLC 49.49% 50.51%958 East Highway 46 Realty LLC The Water of Batesville II LLC 49.24% 50.51%2400 Chateau Drive Realty, LLC The Waters of Muncie II LLC 49.49% 50.51%The Big H2O, LLC The Waters of New Castle II LLC 49.49% 50.51%1316 North Tibbs Avenue Realty LLC Westpark A Waters Community, LLC 50.00% 50.00%1002 Sister Barbara Way, LLC The Waters of Georgetown LLC 49.49% 50.51%2640 Cold Spring Road Realty, LLC Alpha, A Waters Community, LLC 49.49% 50.51%Master Lease Tennessee 1 115 Woodlawn Drive, LLC Lakebridge, a Waters Community, LLC 50.00% 50.00%146 Buck Creek Road, LLC The Waters of Roan Highlands, LLC 50.00% 50.00% 704 5TH Avenue East, LLC The Waters of Springfield, LLC 50.00% 50.00%2501 River Road, LLC The Waters of Cheatham, LLC 50.00% 50.00%202 Enon Springs Road East, LLC The Waters of Smyrna, LLC 50.00% 50.00%140 Technology Lane, LLC The Waters of Johnson City, LLC 50.00% 50.00%835 Union Street, LLC The Waters of Shelbyville, LLC 50.00% 50.00%1340 North Grundy Quarles Highway, LLC Waters of Gainesboro, LLC 50.00% 50.00%100 Netherland Lane, LLC Waters of Kingsport, LLC 50.00% 50.00%2648 Sevierville Road, LLC Waters of Maryville, LLC 50.00% 50.00% Master Lease Tennessee 2 505 North Roan Street, LLC Agape Rehabilitation & Nursing Center, AWater’s Community, LLC 50.00% 50.00% 14510 Highway 79, LLC Waters of McKenzie, A Rehabilitation & NursingCenter, LLC 50.00% 50.00% 6500 Kirby Gate Boulevard, LLC Waters of Memphis, A Rehabilitation & NursingCenter, LLC 50.00% 50.00% 978 Highway 11 South, LLC Waters of Sweetwater, A Rehabilitation & NursingCenter, LLC 50.00% 50.00% 2830 Highway 394, LLC Waters of Bristol, A Rehabilitation & NursingCenter, LLC 50.00% 50.00%Master Lease Indiana 2 8400 Clearvista Place LLC The Waters of Castleton SNF, LLC 50.00% 50.00%524 Anderson Road LLC The Waters of Chesterfield SNF, LLC 50.00% 50.00%640 West Ellsworth Street LLC The Waters of Columbia City SNF, LLC 50.00% 50.00%11563 West 300 South LLC The Waters of Dunkirk SNF, LLC 50.00% 50.00%5544 East State Boulevard LLC The Waters of Fort Wayne SNF, LLC 50.00% 50.00%548 South 100 West LLC The Waters of Hartford City SNF, LLC 50.00% 50.00%2901 West 37th Avenue LLC The Waters of Hobart SNF, LLC 50.00% 50.00%1500 Grant Street LLC The Waters of Huntington SNF, LLC 50.00% 50.00%787 North Detroit Street LLC The Waters of LaGrange SNF, LLC 50.00% 50.00%981 Beechwood Avenue LLC The Waters of Middletown SNF, LLC 50.00% 50.00%317 Blair Pike LLC The Waters of Peru SNF, LLC 50.00% 50.00%815 West Washington Street LLC The Waters of Rockport SNF 50.00% 50.00%612 East 11th Street LLC The Waters of Rushville SNF 50.00% 50.00%505 West Wolfe Street LLC The Waters of Sullivan SNF 50.00% 50.00%500 East Pickwick Drive LLC The Waters of Syracuse SNF 50.00% 50.00%300 Fairgrounds Road LLC The Waters of Tipton SNF 50.00% 50.00%1900 Alber Street LLC The Waters of Wabash SNF East 50.00% 50.00%1720 Alber Street LLC The Waters of Wabash SNF West 50.00% 50.00%300 North Washington Street LLC The Waters of Wakarusa SNF 50.00% 50.00%8400 Clearvista Place LLC The Waters of Castleton ALF, LLC 50.00% 50.00%787 North Detroit Street LLC The Waters of LaGrange ALF, LLC 50.00% 50.00%612 East 11th Street LLC The Waters of Rushville ALF, LLC 50.00% 50.00%505 West Wolfe Street LLC The Waters of Sullivan ALF, LLC 50.00% 50.00%300 North Washington Street LLC The Waters of Wakarusa ALF, LLC 50.00% 50.00%Individual Leases Ambassador Nursing Realty, LLC Ambassador Nursing and Rehabilitation Center II,LLC 40.00% 40.00% Momence Meadows Realty, LLC Momence Meadows Nursing and RehabilitationCenter, LLC 50.00% 50.00%Lincoln Park Holdings, LLC Lakeview Rehabilitation and Nursing Center, LLC 40.00% 40.00% Continental Nursing Realty, LLC Continental Nursing and Rehabilitation Center,LLC 40.00% 40.00%Westshire Nursing Realty, LLC City View Multicare Center LLC 50.00% 50.00%
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Belhaven Realty, LLC Belhaven Nursing and Rehabilitation Center, LLC 50.00% 50.00% West Suburban Nursing Realty, LLC West Suburban Nursing and Rehabilitation Center,LLC 40.00% 40.00%Niles Nursing Realty LLC Niles Nursing & Rehabilitation Center, LLC 50.00% 50.00% Midway Neurological and Rehabilitation Realty, LLC Midway Neurological and Rehabilitation Center,LLC 50.00% 50.00%516 West Frech Street, LLC Parker Rehab & Nursing Center, LLC 50.00% 50.00%1585 Perry Worth Road LLC The Waters of Lebanon LLC 50.00% 50.00% 18
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We monitor the creditworthiness of our tenants by evaluating the ability of the tenants to meet their lease obligations to us based on the tenants’ financialperformance, including the evaluation of any guarantees of tenant lease obligations. The primary basis for our evaluation of the credit quality of our tenants (and morespecifically the tenants’ ability to pay their rent obligations to us) is the tenants’ lease coverage ratios. These coverage ratios compare (i) earnings before interest, income taxes,depreciation, amortization and rent (“EBITDAR”) to rent coverage, and (ii) earnings before interest, income taxes, depreciation, amortization, rent and management fees(“EBITDARM”) to rent coverage. We utilize a standardized 5% management fee when we calculate lease coverage ratios. We obtain various financial and operationalinformation from our tenants each month. We regularly review this information to calculate the above-described coverage metrics, to identify operational trends, to assess theoperational and financial impact of the changes in the broader industry environment (including the potential impact of government reimbursement and regulatory changes),and to evaluate the management and performance of the tenants’ operations. These metrics help us identify potential areas of concern relative to our tenants’ credit quality andultimately the tenants’ ability to generate sufficient liquidity to meet their ongoing obligations, including their obligations to continue paying contractual rents due to us andsatisfying other financial obligations to third parties, as prescribed by our triple-net leases. Geographic Diversification As of December 31, 2025, our portfolio of 143 facilities is broadly diversified by geographic location across ten U.S. states, comprising Arkansas, Illinois, Indiana, Kansas,Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas. The following table contains information regarding our healthcare facility portfolio by geography, as of December 31, 2025: State NumberofProperties Facility Type Licensed BedCount AnnualizedAverage BaseRent (Amountsin $000s) % of TotalAnnualizedAverageBase Rent Indiana 36 36 SNFs 5 ALFs 3,404 $ 35,914 25.2%Kentucky 10 10 SNFs 1 ALF 1,163 26,048 18.3%Illinois 20 20 SNFs 4,226 22,463 15.7%Tennessee 15 15 SNFs 1 ALF 1,412 17,782 12.5%Missouri 18 18 SNFs 1,921 17,348 12.2%Arkansas 13 12 SNFs 2 ALFs 1,568 11,044 7.7%Texas 6 5 SNFs 1 LTACH 839 5,506 3.9%Oklahoma 5 5 SNFs 1 LTACH 477 2,955 2.1%Kansas 6 5 SNFs 1 ALF 354 2,751 1.9%Ohio 4 4 SNFs 238 864 0.6%Totals 133 131 SNFs 10 ALFs 2 LTACHs 15,602 $ 142,675 100.0% 19
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Competitive Strengths We believe that the following competitive strengths provide a solid foundation for the sustained growth of our business and successful execution of our businessstrategies: Diversified Portfolio. We have a portfolio that is diversified in terms of both geography and tenant composition. As of December 31, 2025, our portfolio is comprisedof 133 healthcare-related properties with a total of 15,602 licensed beds located throughout Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, Oklahoma,Tennessee and Texas. We believe that our geographic diversification limits the potential impact of any regulatory, reimbursement, competitive dynamic or other changes in anysingle market on the overall performance of our portfolio. We lease our properties to 143 tenants, with no single tenant accounting for more than 4.0% of our annualized baserent. This diversification limits our exposure for any single tenant that encounters financial or operational difficulties. Protected Markets. In nine of the ten states in which we operate, we benefit from CON laws that require state approval for the construction and expansion of certaintypes of healthcare facilities. These laws represent significant barriers to entry and limit competition in these markets. Demonstrated Ability to Identify and Structure Accretive Acquisition Opportunities. Our management team has long-standing relationships in the skilled nursingand post-acute industries. Through their experience in acquiring these types of facilities, we have the proven ability to identify and complete complex and accretivetransactions. Additionally, because many of our acquisitions are off-market opportunities sourced through our management team’s network of industry relationships, webelieve we do not typically compete with larger healthcare-focused real estate companies for acquisitions as they tend to focus on larger, platform acquisition opportunities. Asa result, we have consistently acquired assets at attractive valuations and believe we can continue to identify these types of opportunities to expand our portfolio. Significant Experience Acquiring Underperforming Assets. Although we primarily seek to acquire properties that have had consistent profitability, we may alsoacquire underperforming properties if we believe that the underlying facilities can become successful through better management. Our management team’s prior experience asoperators gives it the ability to evaluate these types of facilities and their potential for improved revenue enhancement and increased operating efficiencies. We will considerthe acquisition of underperforming properties if they are available at attractive valuations and provide us with significant upside potential once their new operators havesuccessfully stabilized and optimized their operations. If we acquire underperforming properties, we would expect to lease them to tenants and operators that have significantturnaround experience and support from experienced consultants. 20
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Experienced and Adept Operators. We have strong and long-standing relationships with operators and their principals who have significant experience in operatingsuccessful skilled nursing facilities. These operators and their principals have a strong track record of operating in challenging markets where operators are subject to increasedregulatory issues and significant competition. Additionally, these operators and their principals have learned to successfully operate facilities in which most of the revenue isearned from providing services to patients covered by Medicaid which are subject to lower reimbursement rates than other revenue sources. Consulting Firms Provide Additional Resources for the Operators of our Facilities. Most of the operators of our facilities utilize the services of experiencedhealthcare consulting firms to provide them with expert advice and assistance with their operations. We believe these consulting firms provide the operators with additionalexpertise and resources that materially enhance their ability to operate efficiently and to meet applicable regulatory requirements. Close Relationships with Tenants, Operators and Consultants Provide Enhanced Oversight, Market Intelligence and Strong Alignment of Interests. The nature ofour close relationships with the tenants and operators of our properties and their consulting firms allows us to maintain close communication and obtain early knowledge ofpotential issues faced by our tenants, enabling us to address those issues that affect us as the lessor. These relationships also provide us with intelligence on the markets inwhich we own properties and assistance in locating new and replacement tenants. Additionally, the consulting firms assist us without charge in evaluating potentialacquisitions and operators. This assistance provides us with insight into local market trends, which is particularly valuable for new markets. These relationships also provide astrong alignment of interests between our interests as a property owner and our tenants’ interests. Well-Structured, Long-Term, Triple-Net Leases Generate Predictable and Growing Rental Income Streams. Most of our owned properties are leased to tenantsunder long-term, non-cancellable, triple-net leases, pursuant to which the tenants are responsible for all maintenance and repairs, insurance and taxes associated with the leasedproperties and the business conducted at the properties. As of December 31, 2025, 100% of the gross leasable area of our facilities was leased with an average remaining leaseterm of 7.2 years. Our leases generally have an initial term of 10 years with two five-year extensions, and annual rent escalators of 1% to 3% per year, which provides us witha steady and growing cash rental stream. Additionally, our leases are structured to provide us with key credit support and have credit enhancement provisions that may includenon-refundable security deposits of up to 6 months, personal and corporate guarantees and cross-default provisions under our master leases. Approximately 89.4% of our totalannualized rental revenue is generated through our 16 master leases that have cross-default and cross-collateralization provisions. Seasoned Management Team with Significant Experience. Moishe Gubin, our Chairman and Chief Executive Officer, has over 25 years of operating and real estateexperience in the skilled nursing and long-term care industries. Prior to founding the Predecessor Company, Mr. Gubin worked as an operator of skilled nursing facilities andbuilt a strong operational knowledge base that has been incorporated into the day-to-day management of our current portfolio. Additionally, Mr. Gubin has significantacquisition experience having completed over 140 healthcare-related facilities with an aggregate investment amount of over $1.6 billion since 2003. Mr. Gubin also hassignificant experience accessing debt capital markets to fund growth, having raised over $500 million of publicly traded bonds that are listed on the Tel Aviv Stock Exchange.We believe that the diverse operational and financial background and expertise of our management team gives us the ability to successfully manage our portfolio and sustainour growth. 21
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Our Business and Growth Strategies Our objective is to generate attractive returns for our stockholders over the long term through dividends and capital appreciation. Key elements of our strategy includethe following: Acquire Additional Healthcare Properties in Concentrated Geographic Areas. We plan to invest primarily in real estate used as skilled nursing facilities and otherhealthcare facilities that provide services to the elderly, where our management team has substantial experience and relationships. We believe these facilities have the potentialto provide higher risk-adjusted returns compared to other forms of net-leased real estate assets due to the specialized expertise necessary to acquire, own, finance and managethese properties, which are factors that tend to limit competition among investors, owners, operators and finance companies. We will seek to acquire properties in states wherewe believe we can build regional density in order to create competitive advantages and drive operational and cost efficiencies. Negotiate Well-Structured Net Leases. Our primary ownership structure is a facility purchase with a long-term triple-net lease with the healthcare operator. We seekto structure our leases with initial lease terms of 10 years with tenant options to extend the lease for an additional period of 5 to 10 years and rent escalators that provide asteadily growing cash rental stream. Our lease structures are designed to provide us with credit support for our rents, including, in certain cases, lease deposits, covenantsregarding liquidity, and various provisions for cross-default. We believe these features help insulate us from variability in operator cash flows and enable us to minimize ourexpenses while we continue to build our portfolio. Leverage Existing and Develop New Operator Relationships. The Company has cultivated relationships in the healthcare industry through which we have sourcedour existing portfolio, and we intend to continue to expand our portfolio by leveraging these existing relationships. Sixty-seven of our properties are leased to related parties.One of our goals is to reduce our dependence on related party tenants in order to diversify our tenant base. Although we expect to continue to lease properties to related partytenants in markets in which the related party tenants have substantial experience and operations, we intend to lease properties in other markets to unrelated tenants if we areable to identify qualified operators. Additionally, we will consider leasing properties to unrelated parties in markets in which related parties operate if we are able to identifyqualified operators that are willing to lease properties on terms that are no less favorable than those available from related parties. Utilize Prudent Investment Underwriting Criteria. We have adopted what we believe to be a thorough investment underwriting process based on careful analysis anddue diligence with respect to both the healthcare real estate and the healthcare service operations. We seek to make investments in healthcare properties that have the followingattributes: well-located, visible to traffic, in good physical condition with predictable future capital improvement needs and with attractive prospects for future profitability. Monitor the Performance of our Facilities and Industry Trends. We carefully monitor the financial and operational performance of our tenants and of the specificfacilities in which we invest through a variety of methods, such as reviews of periodic financial statements, and regular meetings with the facility operators. Pursuant to theterms of our leases, our tenants are required to provide us with certain periodic financial statements and operating data. 22
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Utilize Targeted Leverage in Our Investing Activities. We seek to utilize a targeted level of leverage that is appropriate in light of market conditions, future cashflows, the creditworthiness of tenants and future rental rates. We will seek to achieve a ratio of debt to asset fair market value in the range of 45% to 55%. However, ourcharter and bylaws do not limit the amount of debt that we may incur and our board of directors has not adopted a policy limiting the total amount of our borrowings. Policy for the Acquisition and Sale of Properties In considering these performance targets, readers should bear in mind that targeted performance for each acquisition is not a guarantee, projection, forecast orprediction and is not necessarily indicative of future results. These performance targets are as of the date hereof and may change in the future. The performance targets arebased on an assumption that economic, market and other conditions will not deteriorate and, in some cases, will improve. These performance targets are also based onestimates and assumptions about performance believed to be reasonable under the circumstances, but actual realized returns of our investments will depend on, among otherfactors, the ability to consummate attractive investments, future operating results, the value of the assets and market conditions at the time of disposition, any relatedtransaction costs and the timing and manner of sale, all of which may differ from the assumptions and circumstances on which targeted returns are based. We believe theperformance targets are reasonable, but readers should keep in mind that this investment involves a high degree of risk and they should purchase these securities only if theycan afford a complete loss of their investment. We believe our management team’s depth of experience in healthcare real estate, operations and finance provides us with unique perspective in underwriting potentialinvestments. Our real estate underwriting process focuses on both real estate and healthcare operations. The process includes a detailed analysis of the facility and the financialstrength and experience of the tenant and its management. Key factors that we consider in the underwriting process include the following: ● the current, historical and projected cash flow and operating margins of each tenant and at each facility; ● the ratio of our tenants’ operating earnings both to facility rent and to facility rent plus other fixed costs, including debt costs; ● the quality and experience of the tenant and its management team; ● construction quality, condition, design and projected capital needs of the facility and property condition assessments; ● competitive landscape; ● drivers of healthcare-related needs; ● the location of the facility; ● local economic and demographic factors and the competitive landscape of the market; ● licensure and accreditation; ● the effect of evolving healthcare legislation and other existing and future regulations and compliance with such regulations on our tenants’ profitability andliquidity; and ● the payor mix of private, Medicare and Medicaid patients at the facility. 23
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We also require tenants to furnish property and operator-level financials, among other data, on a monthly basis; we evaluate individual and portfolio propertyperformance, liquidity metrics, lease and debt coverage, occupancy, planned capital expenditures, and other measures; and we conduct in- person visits to each facility in theportfolio at least two times per year. We believe our underwriting process enables us to acquire desirable properties with strong tenants that will support our ability to deliverattractive risk-adjusted returns to our stockholders. The policy does not limit the authority of our board of directors to change or deviate from the policy as it sees fit from time to time. Changes to the policy do notrequire stockholder approval. Our management does not have a fixed policy relating to the sale of properties. Accordingly, each potential sale opportunity will be examined on its merits in view ofthe business opportunity involved. Our Leases As of December 31, 2025, all of our healthcare properties were subject to lease agreements. Our leases have a weighted-average annualized lease income per leasedsquare foot of $26.78, and a weighted-average remaining lease term of approximately 7.2 years. To our knowledge, except as noted below, none of our current tenants are in default under any of the leases. Each of our properties is leased under a separate lease agreement, although 16 groups of properties, covering a total of 127 facilities, are subject to 16 master leaseagreements. Each master lease agreement provides that the tenants under the master lease are jointly and severally liable for the obligations of all of the other tenants undersuch master lease. We entered into these master lease agreements in order to facilitate financing the underlying properties. Rental income under these master leases representsa substantial portion of our rental income. The following table summarizes information concerning the master lease agreements as of December 31, 2025 (dollars in thousands): Master Lease Agreements Master Lease Name States FacilitiesCount GLA AnnualizedAverageBase Rent($000s) % of TotalAnnualizedAverageBase Rent Master Lease Indiana 1 (1) IN 16 578,167 $ 19,175 13.4% Master Lease Indiana 2 (1) IN 24 705,730 $ 16,623 11.7%Master Lease Central Illinois 1 IL 3 138,678 $ 1,657 1.2%Master Lease Central Illinois 2 IL 2 45,231 $ 601 0.4%Master Lease Landmark TX/OK/IL 4 215,343 $ 3,051 2.1%Master Lease Ohio OH 4 73,311 $ 864 0.6% Master Lease Tennessee 1 (1) TN 11 348,030 $ 9,056 6.3% Master Lease Tennessee 2 (1) TN 5 185,344 $ 8,726 6.1%Master Lease Arkansas 1 AR 9 414,706 $ 7,053 4.9%Master Lease Arkansas 2 AR 4 130,429 $ 3,147 2.2%Master Lease Kentucky KY 11 438,810 $ 26,048 18.3%Master Lease Missouri MO 10 408,312 $ 11,342 7.9%Master Lease Kansas KS 6 144,694 $ 2,752 1.9%Master Lease Texas TX 3 55,584 $ 1,994 1.4%Master Lease Tide Group MO/TX 11 408,312 $ 9,518 6.7%Master Lease Oklahoma OK 4 95,537 2,296 1.6% Total (16) 127 4,386,218 123,903 86.7% (1) The tenants under the two master leases in Indiana and the two Tennessee master leases are affiliated with Moishe Gubin, who is our Chairman and Chief Executive Officerand Michael Blisko, who is one of our directors. See “Item 1. Business—Our Leases.” 24
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The following table summarizes information concerning the lease agreements that are not subject to a master lease agreement as of December 31, 2025 (dollars in thousands): Individual Leases Lessor State FacilityType RentableSq. Ft. AnnualizedAverageBase Rent($000s) % of TotalAnnualizedAverageBase Rent Ambassador Nursing Realty, LLC Illinois SNF 37,100 $ 1,005 0.7%Momence Meadows Realty, LLC Illinois SNF 37,139 $ 1,038 0.7%Lincoln Park Holdings, LLC Illinois SNF 34,362 $ 1,260 0.9%Continental Nursing Realty, LLC Illinois SNF 53,653 $ 1,575 1.1%Westshire Nursing Realty, LLC Illinois SNF 124,020 $ 1,082 0.8%Belhaven Realty, LLC Illinois SNF 60,000 $ 2,135 1.5%West Suburban Nursing Realty, LLC Illinois SNF 70,314 $ 1,962 1.4%Niles Nursing Realty LLC Illinois SNF 46,480 $ 2,410 1.7%Midway Neurological and Rehabilitation Realty, LLC Illinois SNF 120,000 $ 2,548 1.8%516 West Frech Street, LLC Illinois SNF 24,979 $ 498 0.4%4343 Kennedy Drive, LLC Illinois SNF 104,000 $ 479 0.3%1585 Perry Worth Rd, LLC Indiana SNF 32,650 $ 117 0.1%9300 Ballard Rd Realty, LLC Illinois SNF 70,556 $ 1,302 0.9%2301 North Oregon Realty, LLC Texas LTACH 24,660 $ - -%9209 Dollarway Road, LLC Arkansas SNF 45,771 $ 843 0.6%8200 National Ave Realty, LLC Oklahoma SNF 39,789 $ 510 0.4% Total (16) 925,473 $ 18,764 13.3% Investment and Financing Policies Our properties are located in 10 states and we intend to continue to acquire properties in other states throughout the United States. Our investment objectives are toincrease cash flow, provide quarterly cash dividends, maximize the value of our properties and acquire properties with cash flow growth potential. We intend to investprimarily in SNFs and seniors housing, including ALFs and we may determine in the future to expand our investments to include medical office buildings, long-term acutecare hospitals and inpatient rehabilitation facilities. Although our portfolio currently consists primarily of owned real property, future investments may include first mortgages,mezzanine debt and other securities issued by, or joint ventures with, REITs or other entities that own real estate consistent with our investment objectives. Competition The market for making investments in healthcare properties is highly fragmented, and increased competition makes it more challenging for us to identify and successfullycapitalize on opportunities that meet our investment objectives. In acquiring and leasing healthcare properties, we compete with private equity funds, real estate developers,REITs, other public and private real estate companies and private real estate investors, many of whom have greater financial resources than we have. We also face competitionin leasing or subleasing available facilities to prospective tenants. 25
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Regulation Healthcare Regulatory Matters The following discussion describes certain material healthcare laws and regulations that may affect our operations and those of our tenants/operators. Although thereis presently no Federal regulation on the lessor itself from Federal government agencies that regulate and inspect the operators and no regulation of the lessor in the States inwhich we own real property, our tenants (the operators of skilled nursing facilities, long-term acute care hospitals and other healthcare providers) are subject to extensivefederal, state and local government healthcare laws and regulations. These laws and regulations include requirements related to licensure, conduct of operations, ownership ofthe facilities operation, addition or expansion of facilities and services, prices for services, billing for services and the confidentiality and security of health-related information.Different properties within our portfolio may be more or less subject to certain types of regulation, some of which are specific to the type of facility or provider. These lawsand regulations are wide-ranging and complex, may vary or overlap from jurisdiction to jurisdiction, and are subject frequently to change. Compliance with these regulatoryrequirements can increase operating costs and, thereby, adversely affect the financial viability of our tenants/operators’ businesses. Our tenants/operators’ failure to complywith these laws and regulations could adversely affect their ability to successfully operate our properties, or receive reimbursement for services rendered within them, whichcould negatively impact their ability to satisfy their contractual obligations to us. Our leases will require the tenants/operators to comply with all applicable laws, includinghealthcare laws. Our tenants are subject directly to healthcare laws and regulations, because of the broad nature of some of these restrictions, such as the Anti-Kickback Statutediscussed below. We intend for all of our business activities and operations to conform in all material respects with all applicable laws and regulations, including healthcarelaws and regulations. We expect that the healthcare industry will continue to face increased regulation and pressure in the areas of fraud, waste and abuse, cost control,healthcare management and provision of services. Healthcare Reform Measures. The Affordable Care Act changed how healthcare services are covered, delivered and reimbursed through expanded coverage ofuninsured individuals, reduced growth in Medicare program spending, reductions in Medicare and Medicaid reimbursement, including but not limited to, DisproportionateShare Hospital, or DSH payments, and expanding efforts by governmental and private third party payors to tie reimbursement to quality and efficiency. In addition, the lawreformed certain aspects of health insurance, contains provisions intended to strengthen fraud and abuse enforcement, and encourage the development of new payment models,including the creation of Accountable Care Organizations, or ACOs. The status of the Affordable Care Act is subject to substantial uncertainty due to proposals to terminate ormodify its provisions. We are not able to predict the effect of such changes on our business since the nature of any changes is undetermined. However, any changes that resultin a decrease in payments made on behalf of patients are likely to reduce the income that our tenants receive from the operation of facilities at our properties. Sources of Revenue and Reimbursement. Our tenants and operators receive payments for patient services from the federal government under the Medicare program,state governments under their respective Medicaid or similar programs, managed care plans, private insurers and directly from patients. Medicare is a federal program thatprovides certain hospital and medical insurance benefits to persons age 65 and over, some disabled persons, persons with end-stage renal disease and persons with LouGehrig’s Disease. Medicaid is a federal-state program, administered by the states pursuant to certain conditions imposed by the Federal government, which provides hospitaland medical benefits to qualifying individuals who are unable to afford healthcare. Generally, revenues for services rendered to Medicare patients are determined under aprospective payment system, or PPS. CMS annually establishes payment rates for the PPS for each applicable facility type and level of care provided. 26
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Amounts received under Medicare and Medicaid programs are generally significantly less than established facility gross charges for the services provided and maynot reflect the provider’s costs. Healthcare providers generally offer discounts from established charges to certain group purchasers of healthcare services, including privateinsurance companies, employers, health maintenance organizations, or HMOs, preferred provider organizations, or PPOs and other managed care plans. These discountprograms generally limit a provider’s ability to increase revenues in response to increasing costs. Patients are generally not responsible for the total difference betweenestablished provider gross charges and amounts reimbursed for such services under Medicare, Medicaid, HMOs, PPOs and other managed care plans, but are responsible tothe extent of any exclusions, deductibles or coinsurance features of their coverage. The amount of such exclusions, deductibles and coinsurance continues to increase.Collection of amounts due from individuals is typically more difficult than from governmental or third-party payers takes considerably longer and often requires theinvolvement of, and payment to, third parties to collect. Payments to providers are being increasingly tied to quality and efficiency. These initiatives include requirements to report clinical data and patient satisfactionscores, reduced Medicare payments to hospitals based on “excess” readmission rates as determined by CMS, denial of payments under Medicare, Medicaid and some privatepayors for services resulting from a hospital or facility-acquired condition, or HAC, and reduced Medicare payments to hospitals with high risk-adjusted HAC rates. Certainprovider types, including, but not limited to, inpatient rehabilitation facilities and long-term acute care hospitals, are subject to specific limits and restrictions on eligibility foradmissions which, in turn, affect reimbursement at these facilities. The amounts of program payments received by our tenants/operators can be changed from time to time by legislative or regulatory actions and by determinations byagents for the programs. Level of payment has also been impacted by the Federal budget sequestration which automatically reduces payments as a result of fundinglimitations. The Medicare and Medicaid statutory framework is subject to administrative rulings, interpretations and discretion that affect the amount and timing ofreimbursement made under Medicare and Medicaid. Federal healthcare program reimbursement changes may be applied retroactively under certain circumstances. In recentyears, the federal government has enacted various measures to reduce spending under federal healthcare programs. In April 2018, CMS announced as part of its patient drivenpayment model (“PDPM”) a skilled-nursing preferred payor system (“SNF-PPS”) intended to reduce administrative burden, and foster innovation to improve care and qualityfor patients. In addition, many states have enacted, or are considering enacting, measures designed to reduce their Medicaid expenditures and change private healthcare insurance,and states continue to face significant challenges in maintaining appropriate levels of Medicaid funding due to state budget shortfalls. Many States have also sought to controlcosts by implementing a variety of alternative care and payment models authorized under Federal Medicaid waivers and such models often impose new or enhancedadministrative requirements on health care providers as a condition of payment. Further, non-government payers may reduce their reimbursement rates in accordance withpayment reductions by government programs or for other reasons. Healthcare provider operating margins may continue to be under significant pressure due to the deteriorationin pricing flexibility and payor mix, as well as increases in operating expenses that exceed increases in payments under the Medicare and Medicaid programs. 27
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Anti-Kickback Statute. A section of the Social Security Act known as the “Anti-Kickback Statute” prohibits, among other things, the offer, payment, solicitation oracceptance of remuneration, directly or indirectly, in return for referring an individual to a provider of services for which payment may be made in whole or in part under afederal healthcare program, including the Medicare or Medicaid programs. Courts have interpreted this statute broadly and held that the Anti-Kickback Statute is violated ifjust one purpose of the remuneration is to generate referrals, even if there are other lawful purposes. The Affordable Care Act provides that knowledge of the Anti-KickbackStatute or specific intent to violate the statute is not required in order to violate the Anti-Kickback Statute. Violation of the Anti-Kickback Statute is a crime, punishable byfines of up to $25,000 per violation, five years imprisonment, or both. Violations may also result in civil and administrative liability and sanctions, including civil penalties ofup to $50,000 per violation, liability under the False Claims Act, exclusion from participation in federal and state healthcare programs, including Medicare and Medicaid, andadditional monetary penalties in amounts treble to the underlying remuneration. There are a limited number of statutory exceptions and regulatory safe harbors for categories of activities deemed protected from prosecution under the Anti-Kickback Statute. Currently, there are statutory exceptions and safe harbors for various activities, including the following: certain investment interests, space rental, equipmentrental, practitioner recruitment, personnel services and management contracts, sale of practice, referral services, warranties, discounts, employees, managed care arrangements,investments in group practices, freestanding surgery centers, ambulance replenishing and referral agreements for specialty services. The safe harbor for space rentalarrangements requires, among other things, that the aggregate rental payments be set in advance, be consistent with fair market value and not be determined in a manner thattakes into account the volume or value of any referrals. The fact that conduct or a business arrangement does not fall within a safe harbor does not necessarily render theconduct or business arrangement illegal under the Anti-Kickback Statute. However, such conduct and business arrangements may lead to increased scrutiny by governmentenforcement authorities. Many states have laws similar to the Anti-Kickback Statute that regulate the exchange of remuneration in connection with the provision of healthcare services,including prohibiting payments to physicians for patient referrals. The scope of these state laws is broad because they can often apply regardless of the source of payment forcare. These statutes typically provide for criminal and civil penalties, as well as potential loss of facility licensure and eligibility for reimbursement by government payors. We intend to use commercially reasonable efforts to structure our arrangements, including any lease/operating arrangements involving facilities in which localphysicians are investors, so as to satisfy, or meet as closely as possible, safe harbor requirements. The safe harbors are narrowly structured, and there are not safe harborsavailable for every type of financial arrangement that we or our tenants/operators may enter. Although it is our intention to fully comply with the Anti-Kickback Statue, as wellas all other applicable state and federal laws, we cannot assure you that all of our arrangements or the arrangements of our tenants/operators will meet all the conditions for asafe harbor. There can be no assurance regulatory authorities enforcing these laws will determine our financial arrangements or the financial relationships of ourtenants/operators comply with the Anti-Kickback Statute or other similar laws and such regulatory authorities or private qui tam relators bringing actions on behalf ofgovernment entities in exchange for a portion of any recovery may allege non-compliance and seek financial or other penalties. Stark Law. The Social Security Act also includes a provision commonly known as the “Stark Law.” The Stark Law is a strict liability statute that prohibits a physicianfrom making a referral to an entity furnishing “designated health services” paid by Medicare or Medicaid if the physician or a member of the physician’s immediate family hasa financial relationship with that entity unless an exception to the law is met. Designated health services include, among other services, inpatient and outpatient hospitalservices, clinical laboratory services, physical therapy services and radiology services. The Stark Law also prohibits entities that provide designated health services frombilling the Medicare and Medicaid programs for any items or services that result from a prohibited referral and requires the entities to refund amounts received for items orservices provided pursuant to the prohibited referral. Sanctions for violating the Stark Law are imposed without consideration to intent and include denial of payment, civilmonetary penalties of up to $15,000 per prohibited service provided for failure to return amounts received in a timely manner, and exclusion from the Medicare and Medicaidprograms. The statute also provides for a penalty of up to $100,000 for a circumvention scheme. Failure to refund amounts received pursuant to a prohibited referral may alsoconstitute a false claim and result in additional penalties under the False Claims Act, which is discussed in greater detail below. 28
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There are exceptions to the self-referral prohibition for many of the customary financial arrangements between physicians and providers, including employmentcontracts, leases and recruitment agreements. There is also an exception for a physician’s ownership interest in an entire hospital, as opposed to an ownership interest in ahospital department if such ownership interests and capacity were in place as of March 23, 2010. Unlike safe harbors under the Anti-Kickback Statute, an arrangement mustcomply with every requirement of a Stark Law exception, or the arrangement will be in violation of the Stark Law. Through a series of rulemakings, CMS has issued finalregulations implementing the Stark Law. While these regulations were intended to clarify the requirements of the exceptions to the Stark Law, it is unclear how the governmentwill interpret many of these exceptions for enforcement purposes and even an inadvertent failure to comply with the strict requirements, such as assuring a signature, can resultin imposition of penalties under certain circumstances. Although there is an exception for a physician’s ownership interest in an entire hospital, the Affordable Care Act prohibits newly created physician-owned hospitalsfrom billing for Medicare patients referred by their physician owners. As a result, the law effectively prevents the formation after December 31, 2010 of new physician-ownedhospitals that participate in Medicare and Medicaid. While the Affordable Care Act grandfathers existing physician-owned hospitals, it does not allow these hospitals toincrease the percentage of physician ownership and significantly restricts their ability to expand services. Many states also have laws similar to the Stark Law that prohibit certain self-referrals. The scope of these state laws is broad because they can often apply regardlessof the source of payment for care, and little precedent exists for their interpretation or enforcement. These statutes typically provide for criminal and civil penalties, as well asloss of facility licensure. Although our lease agreements will require tenants to comply with the Stark Law, we cannot offer assurance that the arrangements entered into by us or by ourtenants/operators will be found to be in compliance with the Stark Law or similar state laws. The False Claims Act. The federal False Claims Act prohibits knowingly making or presenting any false claim for payment to the federal government. Thegovernment may use the False Claims Act to prosecute Medicare and other government program fraud in areas such as coding errors, billing for services not provided,submitting false cost reports and failing to report and repay an overpayment within 60 days of identifying the overpayment or by the date a corresponding cost report is due,whichever is later. The False Claims Act defines the term “knowingly” broadly. Although simple negligence will not give rise to liability under the False Claims Act,submitting a claim with reckless disregard to its truth or falsity or failing to correct an error within specified period of time constitutes a “knowing” submission. The False Claims Act contains qui tam, or whistleblower, provisions that allow private individuals to bring actions on behalf of the government alleging that thedefendant has defrauded the federal government. Whistleblowers under the False Claims Act may collect a portion of the government’s recovery, which serves as an incentiveto bring claims which then must be defended whether or not they have merit. Every entity that receives at least $5 million annually in Medicaid payments must have writtenpolicies for all employees, contractors or agents, providing detailed information about false claims, false statements and whistleblower protections under certain federal laws,including the False Claims Act, and similar state laws. In some cases, whistleblowers and the federal government have taken the position, and some courts have held, that providers who allegedly have violated otherstatutes, such as the Anti-Kickback Statute and the Stark Law, have thereby submitted false claims under the False Claims Act. The Affordable Care Act clarifies this issuewith respect to the Anti-Kickback Statute by providing that submission of claims for services or items generated in violation of the Anti-Kickback Statute constitutes a false orfraudulent claim under the False Claims Act. If a defendant is found liable under the False Claims Act, the defendant may be required to pay three times the actual damagessustained by the government, additional civil penalties of up to $10,000 per false claim, plus reimbursement of the fees of counsel for the whistleblower. 29
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Many states have enacted similar statutes preventing the presentation of a false claim to a state government, and we expect more to do so because the Social SecurityAct provides a financial incentive for states to enact statutes establishing state level liability. Other Fraud & Abuse Laws. There are various other fraud and abuse laws at both the federal and state levels that cover false claims and false statements and thesemay impact our business. For example, the Civil Monetary Penalties law authorizes the imposition of monetary penalties against an entity that engages in a number ofprohibited activities. The penalties vary by the prohibited conduct, but include penalties of $10,000 for each item or service, $15,000 for each individual with respect to whomfalse or misleading information was given, and treble damages for the total amount of remuneration claimed. The prohibited actions include, but are not limited to, thefollowing: ● knowingly presenting or causing to be presented, a claim for services not provided as claimed or which is otherwise false or fraudulent in any way; ● knowingly giving or causing to be giving false or misleading information reasonably expected to influence the decision to discharge a patient; ● offering or giving remuneration to any beneficiary of a federal healthcare program likely to influence the receipt of reimbursable items or services; arranging forreimbursable services with an entity which is excluded from participation from a federal healthcare program; or knowingly or willfully soliciting or receiving remuneration fora referral of a federal healthcare program beneficiary. Any violations of the Civil Monetary Penalties Law by management or our tenants/operators could result in substantial fines and penalties and could have an adverseeffect on our business. HIPAA Administrative Simplification and Privacy and Security Requirements. HIPAA, as amended by the HITECH Act, and its implementing regulations create anational standard for protecting the privacy and security of individually identifiable health information (called “protected health information”). Compliance with HIPAA ismandatory for covered entities, which include healthcare providers such as tenants/operators of our facilities. Compliance is also required for entities that create, receive,maintain or transmit protected health information on behalf of healthcare providers or that perform services for healthcare providers that involve the disclosure of protectedhealth information, called “business associates.” Covered entities must report a breach of protected health information that has not been secured through encryption or destruction to all affected individuals withoutunreasonable delay, but in any case, no more than 60 days after the breach is discovered. Notification must also be made to HHS and, in the case of a breach involving morethan 500 individuals, to the media. In the final rule issued in January, 2013, HHS modified the standard for determining whether a breach has occurred by creating apresumption that any non-permitted acquisition, access, use or disclosure of protected health information is a breach unless the covered entity or business associate candemonstrate that there is a low probability that the information has been compromised, based on a risk assessment. 30
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Covered entities and business associates are subject to civil penalties for violations of HIPAA of up to $1.5 million per year for violations of the same requirement. Inaddition, criminal penalties can be imposed not only against covered entities and business associates, but also against individual employees who obtain or disclose protectedhealth information without authorization. The criminal penalties range up to $250,000 and up to 10 years imprisonment. In addition, state Attorneys General may bring civilactions for HIPAA violations, HHS must conduct periodic HIPAA compliance audits of covered entities and business associates. If any of our tenants/operators are subject toan investigation or audit and found to be in violation of HIPAA, such tenants/operators could incur substantial penalties, which could have a negative impact on their financialcondition. Our tenants/operators may also be subject to more stringent state law privacy, security and breach notification obligations. Enforcement of HIPAA and the HealthInformation Technology for Economic and Clinical Health (HITECH) Act, which substantially augmented the requirements under HIPAA have become increasingly stringentand the penalties for non-compliance have become increasingly harsh. Licensure, Certification and Accreditation. Healthcare property construction and operation are subject to numerous federal, state and local regulations relating to theadequacy of medical care, equipment, personnel, operating policies and procedures, maintenance of adequate records, fire prevention, rate-setting and compliance withbuilding codes and environmental protection laws. The requirements for licensure, certification and accreditation are subject to change and, in order to remain qualified, it maybecome necessary for our tenants/operators to make changes in their facilities, equipment, personnel and services. Facilities in our portfolio will be subject to periodic inspection by governmental and other authorities to assure continued compliance with the various standardsnecessary for licensing and accreditation. We will require our healthcare properties to be properly licensed under applicable state laws. Except for provider types not eligiblefor participation in Medicare and Medicaid, we expect our tenant/operators to participate in the Medicare and Medicaid programs and, where applicable, to be accredited by anapproved accrediting organization which is also often a requirement for Medicare certification. The loss of Medicare or Medicaid certification would result in ourtenants/operators that operate Medicare/Medicaid-eligible providers from receiving reimbursement from federal healthcare programs. The loss of accreditation, whereapplicable, would result in increased scrutiny by CMS and likely the loss of payment from non-government payers which often condition participation and payment onparticipation in the Medicare program. In some states, the construction or expansion of healthcare properties, the acquisition of existing facilities, the transfer or change of ownership and the addition of newbeds or services may be subject to review by and prior approval of, or notifications to, state regulatory agencies under a Certificate of Need, or CON program. Such lawsgenerally require the reviewing state agency to determine the public need for additional or expanded healthcare properties and services and have begun to expect some level ofrevenue from enforcement action in their budget planning. Some states in which we operate have also adopted limitations on the opening of new skilled nursing facilities. See“Item 1. Business – Skilled nursing facility industry Business in the United States.” The requirements for licensure, certification and accreditation also include notification orapproval in the event of the transfer or change of ownership or certain other changes. Further, federal programs, including Medicare, must be notified in the event of a changeof ownership or change of information at a participating provider. Failure by our tenants/operators to provide required federal and state notifications, obtain necessary statelicensure and CON approvals could result in significant penalties as well as prevent the completion of an acquisition or effort to expand services or facilities. We may berequired to provide ownership information or otherwise participate in certain of these approvals and notifications. Antitrust Laws. The federal government and most states have enacted antitrust laws that prohibit certain types of conduct deemed to be anti-skilled nursing facilities.These laws prohibit price fixing, concerted refusal to deal, market allocation, monopolization, attempts to monopolize, price discrimination, tying arrangements, exclusivedealing, acquisitions of competitors and other practices that have, or may have, an adverse effect on competition. Violations of federal or state antitrust laws can result invarious sanctions, including criminal and civil penalties. Antitrust enforcement in the healthcare industry is currently a priority of the Federal Trade Commission and theAntitrust Division of the Department of Justice. We intend to operate so that we and our tenants/operators are in compliance with such federal and state laws, but future reviewby courts or regulatory authorities could result in a determination that could adversely affect the operations of our tenants/operators and, consequently, our operations. Inaddition to enforcement by Federal and State agencies, in an effort to control health care costs, private payors such as employee welfare benefit plans administered by or foremployers or unions have become increasing aggressive in bringing actions against providers alleging violations of antitrust laws. 31
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Healthcare Industry Investigations. Significant media and public attention has focused in recent years on the healthcare industry. The federal government is dedicatedto funding additional federal enforcement activities related to healthcare providers and preventing fraud and abuse. Our tenants/operators will engage in many routinehealthcare operations and other activities that could be the subject of governmental investigations or inquiries. For example, our tenants/operators will likely have significantMedicare and Medicaid billings, numerous financial arrangements with physicians who are referral sources, and joint venture arrangements involving physician investors. Inrecent years, Congress and the States have increased the level of funding for fraud and abuse enforcement activities. It is possible that governmental entities could initiateinvestigations or litigation in the future and that such proceedings could result in significant costs and penalties, as well as adverse publicity. It is also possible that ourexecutives could be included in governmental investigations or litigation or named as defendants in private litigation. Governmental agencies and their agents, such as the Medicare Administrative Contractors, fiscal intermediaries and carriers, as well as the HHS-OIG, CMS and stateMedicaid programs, may conduct audits of our tenants/operator’s operations. Private payers may conduct similar post-payment audits, and our tenants/operators may alsoperform internal audits and monitoring. Many of these audits employ the use of statistical sampling and extrapolation whereby a small number of claims are reviewed butadverse results are applied against a provider’s claims for long periods of time. Depending on the nature of the conduct found in such audits and whether the underlyingconduct could be considered systemic such that results are extrapolated, the resolution of these audits which can often require substantial repayments could have a material,adverse effect on our portfolio’s financial position, results of operations and liquidity. Under the Recovery Audit Contractor, or RAC program, CMS contracts with RACs on a contingency basis to conduct post-payment reviews to detect and correctimproper payments in the fee-for-service Medicare program, to managed Medicare plans and in the Medicaid program. CMS has also initiated a RAC prepaymentdemonstration program in 11 states. CMS also employs Medicaid Integrity Contractors, or MICs to perform post-payment audits of Medicaid claims and identifyoverpayments. In addition to RACs and MICs, the state Medicaid agencies and other contractors have increased their review activities. Aside from the costs associated withresponding to a myriad of requests for substantiation of services, should any of our tenants/operators be found out of compliance with any of these laws, regulations orprograms, our business, our financial position and our results of operations could be negatively impacted. Environmental Matters A wide variety of federal, state and local environmental and occupational health and safety laws and regulations affect healthcare property operations. These complexfederal and state statutes, and their enforcement, involve a myriad of regulations, many of which involve strict liability on the part of the potential offender. Some of thesefederal and state statutes may directly impact us. Under various federal, state and local environmental laws, ordinances and regulations, an owner of real property or a securedlender, such as us, may be liable for the costs of removal or remediation of hazardous or toxic substances at, under or disposed of in connection with such property, as well asother potential costs relating to hazardous or toxic substances (including government fines and damages for injuries to persons and adjacent property). The cost of any requiredremediation, removal, fines or personal or property damages and the owner’s or secured lender’s liability therefore could exceed or impair the value of the property, and/or theassets of the owner or secured lender. In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect theowner’s ability to sell or rent such property or to borrow using such property as collateral which, in turn, could reduce our revenues. 32
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Prior to closing any property acquisition or loan, we ordinarily obtain Phase I environmental assessments in order to attempt to identify potential environmentalconcerns at the facilities. These assessments will be carried out in accordance with an appropriate level of due diligence and will generally include a physical site inspection, areview of relevant federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of theproperty’s chain of title and review of historic aerial photographs and other information on past uses of the property. We may also conduct limited subsurface investigationsand test for substances of concern where the results of the Phase I environmental assessments or other information indicates possible contamination or where our consultantsrecommend such procedures. Americans with Disabilities Act Our properties must comply with Title III of the ADA to the extent that such properties are “public accommodations” as defined by the ADA. The ADA may requireremoval of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. Many States andlocalities have similar requirements that are in addition to, and sometime more stringent than, Federal requirements. We believe the existing properties are in substantialcompliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. However, noncompliance with theADA or a comparable State or local requirement could result in imposition of fines or an award of damages to private litigants. The obligation to make readily achievableaccommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect. Emerging Growth Company Status We are an “emerging growth company,” as defined in the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirementsthat are applicable to other public companies that are not “emerging growth companies,” including not being required to comply with the auditor attestation requirements ofSection 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions fromthe requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Wehave not yet made a decision as to whether we will take advantage of any or all of these exemptions. If we do take advantage of any of these exemptions, we do not know ifsome investors will find common stock less attractive as a result. The result may be a less active trading market for common stock and our stock price may be more volatile. In addition, the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in the Securities Act forcomplying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until thosestandards would otherwise apply to private companies. We have elected to avail ourselves of the extended transition period for adopting new or revised accounting standardsavailable to emerging growth companies. We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds$1.07 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of the first sale of shares pursuant to a registration statementfiled under the Securities Act, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt or (iv) the date onwhich we are deemed to be a “large accelerated filer” under the Exchange Act. Human Capital Resource Management As of December 31, 2025, we had 9 full-time employees. Our employees are primarily located at our corporate offices in Chicago and Florida. Our employees are notmembers of any labor union, and we consider our relations with our employees to be satisfactory. We endeavor to maintain workplaces that are free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability,sexual orientation, gender identification or expression or any other status protected by applicable law. The basis for recruitment, hiring, development, training, compensationand advancement at the Company is qualifications, performance, skills and experience. We believe our employees are fairly compensated, and compensation and promotiondecisions are made without regard to gender, race and ethnicity. Employees are routinely recognized for outstanding performance. Insurance We require our tenants to maintain general liability, professional liability, all risks and other insurance coverages and to name us as an additional insured under thesepolicies. We believe that the policy specifications and insured limits are appropriate given the relative risk of loss, the cost of the coverage and industry practice. Available Information We file annual, quarterly and current reports, proxy statements and other information with SEC. The SEC maintains an internet site that contains these reports, andother information about issuers, like us, which file electronically with the SEC. The address of that site is http://www.sec.gov. We make available our reports on Form 10-K,10-Q, and 8-K (as well as all amendments to these reports), and other information, free of charge, on the Investor Relations section of our website atwww.strawberryfieldsreit.com. The information found on, or otherwise accessible through, our website is not incorporated by reference into, nor does it form a part of, thisreport or any other document that we file with the SEC. 33
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ITEM 1A. Risk Factors Not applicable. ITEM 1B. Unresolved Staff Comments Not applicable. ITEM 1C. Cybersecurity Our management recognizes the critical importance of addressing cybersecurity threats and risks to our business and operations. Therefore, we have established acomprehensive framework to assess and manage material risks arising from cybersecurity threats. Our Information Security Officer (“ISO”) and the Cybersecurity Incident Response Team (“IRT”) are responsible for assessing and managing cybersecurity risks. The IRT iscomprised of individuals with expertise in information security, technology, legal and risk management. The IRT monitors cybersecurity incidents and potential threats. Itliaises with external cybersecurity experts and industry partners to stay current on emerging threats and best practices. The diverse expertise of the IRT members enablescomprehensive risk assessment and swift responses to mitigate the potential impact of breaches or other cybersecurity incidents. We actively engage consultants, outside counsel and other technology experts to enhance our cybersecurity risk management processes. We perform regular assessments andevaluations of the effectiveness of our cybersecurity measures. In addition to third party engagements, we maintain rigorous oversight of cybersecurity risks associated withour use of third party service providers. Vendor management processes are employed to evaluate vendors’ cybersecurity practices, assess risk position and implement measuresto mitigate potential threats arising from these external relationships. The Board of Directors has been designated to oversee cybersecurity risk management. Its members possess diverse expertise, which enables them to effectively evaluate theadequacy of our cybersecurity measures and challenge management’s approach when necessary. The Information Security Officer provides regular updates to our chiefexecutive officer and Board of Directors on cybersecurity risks, ongoing initiatives, incidents, response activities and strategies. The Board of Directors acknowledgescybersecurity as a strategic risk and a priority for the Company. The Board of Directors is actively involved in the oversight of our cybersecurity risk management efforts,ensuring alignment with our overall business objectives. We continuously strive to strengthen our cybersecurity measures to protect our systems and data from evolving threats. To date, cybersecurity incidents and risks have notmaterially affected us, including our business strategy, results of operations, or financial condition. ITEM 2. Properties As of the date of this Report, we hold fee title to 132 of these properties and hold one property under a long-term lease. These properties are located across Arkansas,Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas. Our 133 properties comprise 143 healthcare facilities, consisting of the following: ● 131 stand-alone skilled nursing facilities; ● two dual-purpose facilities used as both skilled nursing facilities and long-term acute care hospitals; and ● 10 assisted living facilities. Information regarding our properties as of December 31, 2025, are included in Item 15. “Exhibits and Financial Statement Schedules—Schedule III. Real Estate andAccumulated Depreciation” of this Annual Report on Form 10-K. As of December 31, 2025, almost all of our properties are leased under long-term, triple-net leases. The following table displays the expiration of the annualizedcontractual cash rental income under our lease agreements as of December 31, 2025: Lease Expirations Year of Lease Expiration (1) Number ofLeasesFacilities GLA ofLeasesExpiring Percent ofPortfolioGLA AnnualizedBase Rent Percentage ofTotal AnnualizedBase Rent AnnualizedBase RentPer Sq. Ft. 2026 1 37,139 0.7% 1,038,000 0.7% $ 27.94 2027 2 102,964 1.9% 2,078,281 1.5% $ 20.18 2028 9 414,706 7.8% 7,053,312 4.9% $ 17.01 2029 6 200,860 3.8% 3,990,387 2.8% $ 19.87 2030 9 440,891 8.3% 9,440,457 6.6% $ 21.41 Thereafter 116 4,131,147 77.5% 119,075,022 83.5% $ 28.82 Total 143 5,327,707 100.0% $ 142,675,459 100.0% $ 26.80 (1) The year of each lease expiration is based on current contract terms. 34
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ITEM 3. Legal Proceedings We are not currently a party to any material legal proceedings, that are not covered by insurance and expected to be resolved within policy limits, other than the following: In March 2020, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a complaint in the U.S. District Court for the Northern District of Illinoisagainst Moishe Gubin, Michael Blisko, the Predecessor Company and 21 of its subsidiaries, as well as the operators of 17 of the facilities operated at our properties. Thecomplaint was related to the Predecessor Company’s acquisition of 16 properties located in Arkansas and Kentucky that were completed between May 2018 and April 2019and the attempt to purchase an additional five properties located in Massachusetts. The complaint was dismissed by the Court in 2020 on jurisdictional grounds. The plaintiffsdid not file an appeal with respect to this action, and the time for an appeal has expired. In August 2020, Joseph Schwartz, Rosie Schwartz and several companies controlled by them filed a second complaint in the Circuit Court in Pulaski County, Arkansas.The second complaint had nearly identical claims as the federal case, but was limited to matters related to the Predecessor Company’s acquisition of properties located inArkansas. The sellers, which were affiliates of Skyline Health Care, had encountered financial difficulties and requested the Predecessor Company to acquire these properties.The defendants have filed an answer denying the plaintiffs’ claims and asserting counterclaims based on breach of contract. This case has been dismissed without prejudice. InApril 2024, they filed yet another complaint in Arkansas, and this time dealing with the properties located in Arkansas, Kentucky and Massachusetts. There has been somemotion practice where the Court dismissed some of the Plaintiff’s remedies and claims. In January 2021, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a third complaint in Illinois state court in Cook County, Illinois, which hasnearly identical claims to the initial federal case, but was limited to claims related to the Kentucky and Massachusetts properties. The complaint has not been properly servedon any of the defendants, and, accordingly, the defendants did not responded to the complaint. Instead, the defendants filed a motion to quash service of process. On January11, 2023, the Cook County Circuit Court entered an order granting such motion, quashing service of process on all defendants. In March 2023, the plaintiffs filed a newcomplaint and again attempted to serve it on the defendants. It is the defendants’ position that service was (once again, potentially) defective and sought a dismissal of thematter for want of prosecution by Joseph Schwartz, Rosie Schwartz and certain companies owned by them. The dismissal was granted, but has been appealed to the IllinoisAppellate Court, with no substantive movement on the matter to date. In April of 2024, Joseph Schwartz, Rosie Schwartz and several companies controlled by them filed afourth complaint in the Circuit Court in Pulaski County, Arkansas. This fourth complaint had nearly identical claims as the federal case and the Illinois state court matter. InNovember 2024, the court dismissed all rescission claims, finding plaintiffs had an adequate remedy at law in the form of monetary damages, ordered dissolution of a lispendens plaintiffs had filed against certain properties, and identified additional pleading deficiencies in the complaint. The court granted plaintiffs leave to amend, andplaintiffs filed a second amended complaint. On March 10, 2026, the court dismissed the second amended complaint with prejudice as to all defendants, finding that plaintiffsfailed to cure the previously identified deficiencies. The court also denied plaintiffs' motion for a temporary and permanent restraining order, finding no irreparable harm, anadequate remedy at law, and no likelihood of success on the merits. The dismissal with prejudice bars plaintiffs from refiling these claims, subject to any appeal. As of the dateof this filing, no appeal has been filed. In each of these complaints, the plaintiffs asserted claims for fraud, breach of contract and rescission arising out of the defendants' alleged failure to perform certain post-closing obligations under the purchase contracts. We had potential direct exposure for these claims because the subsidiaries of the Predecessor Company that were named asdefendants are now subsidiaries of the Operating Partnership. Additionally, the Operating Partnership was potentially liable for the claims made against Moishe Gubin,Michael Blisko and the Predecessor Company pursuant to the provisions of the contribution agreement, under which the Operating Partnership assumed all the liabilities of thePredecessor Company and agreed to indemnify the Predecessor Company and its affiliates for such liabilities. As described above, the federal action was dismissed for lack ofsubject matter jurisdiction, the first Arkansas action was dismissed without prejudice, the Illinois state court action has been dismissed, and the second Arkansas action (filedApril 2024) was dismissed with prejudice on March 10, 2026. The plaintiffs have 30 days from March 10, 2026 (the date the court entered the dismissal order) to file a noticeof appeal. As of the date of this filing, no notice of appeal has been filed. As noted above, the March 2020 and January 2021 complaints also related to the Predecessor Company’s planned acquisition of five properties located in Massachusetts.A subsidiary of the Predecessor Company purchased loans related to these properties in 2018 for a price of $7.74 million with the expectation that the subsidiaries wouldacquire title to the properties and the loans would be retired. The subsidiary subsequently advanced $3.1 million under the loans to satisfy other liabilities related to theproperties. The planned acquisition/settlement with the sellers/owners and/borrowers was not consummated because the underlying tenants of the properties surrendered theirlicenses to operate healthcare facilities on these properties. The Predecessor Company intends to institute legal proceedings to collect the outstanding amount of these loans and to assert related claims against the sellers and theirprincipals for the unpaid principal balances as well as protective advances and collection costs. In connection with enforcing their rights, in July 2022, the Companyforeclosed, and (as lender) sold four of the five properties at auction for the total amount of $4.4 million. In December 2022, the Company took title on the fifth property withan estimated fair value of $1.2 million. ITEM 4. Mine Safety Disclosures Not applicable. 35
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PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Common Equity On September 23, 2022, our common stock commenced trading on the OTCQX market operated by the OTC Markets Group, Inc., under the symbol “STRW”. OnFebruary 22, 2023, our common stock commenced trading on the NYSE American market, also under the symbol “STRW”. As of March 19th, 2026, approximately 5,462 stockholders of record owned 13,257,425 issued and outstanding shares of common stock. This number of stockholdersof record does not represent the actual number of beneficial owners of our common stock because shares of our common stock are also held in “street name” by securitiesbrokers and others for the benefit of beneficial owners who may vote the shares. In addition, as of March 19, 2026, the Operating Partnership had 42,462,059 outstanding OP Units held by seven limited partners other than the Company. No publictrading market exists for the OP Units. To maintain REIT status, we are required each year to distribute to stockholders at least 90% of our annual REIT taxable income after certain adjustments. Alldistributions will be made by us at the discretion of our board of directors and will depend on our financial position, results of operations, cash flows, capital requirements,debt covenants (which include limits on distributions by us), applicable law, and other factors as our board of directors deems relevant. Distributions with respect to our common stock can be characterized for federal income tax purposes as taxable ordinary dividends, non-dividend distributions or acombination thereof. Following is the characterization of our annual cash dividends on common stock for 2025: (dollars in thousands) Ordinary dividend $ 6,386 Non-dividend distributions $ 1,206 Capital Gain Distribution $ 42 Total taxable distribution $ 7,634 Purchases and Sale of Equity Securities by the Issuer and Affiliated Purchasers (ATM Program) On July 12, 2024, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (“SEC”). On August 1, 2024, the SECdeclared the Registration Statement effective. In connection with the Registration Statement the Company established an at-the-market equity program (the “ATM Program”).The ATM Program will allow the Company to issue and sell to the public from time to time, at the Company’s discretion, newly issued shares of common stock. The Companyexpected the ATM to provide the Company with additional financing flexibility and intends to use the net proceeds from the ATM Program to increase stock liquidity andfacilitate growth. During 2024 the company issued 278,152 shares in the ATM program at an average price of $11.33 per share netting the company $3.2 million dollars. During 2025the company issued 197,102 shares in the ATM program at an average price of $11.79 per share netting the company $2.3 million dollars. During 2024, the Company converted 1,947,078 OP Units into shares of common stock. During 2025, the Company converted 1,056,200 OP Units into shares ofcommon stock. The company during this time also converted 176,899 OP Units for cash. The average cost was $11.45 per share. On November 9, 2023 the Board of Directors authorized the repurchase of up to $5 million of the Company’s common stock. As of December 31, 2025, the Companyhad purchased 319,584 shares in aggregate of common stock at an average price per share of $9.93 and an aggregate repurchase price of $3.2 million dollars. All commonshares repurchased in the program have been retired and are now held as unissued shares available for use and reissuance for purpose as and when determined by the Board. During 2025, the Company purchased and retired 64,636 shares of our common stock in the open market at an average price per share of $10.09 and an aggregaterepurchase cost of $0.7 million The following table sets forth information regarding the Company’s quarterly repurchase of shares of its outstanding common stock during as of December 31, 2025. Period Number ofShares Average PricePaid PerShare CumulativeNumber ofSharesPurchased asPart ofPubliclyAnnouncedPlans orPrograms ApproximateDollar Valueof Shares ThatMay Yet bePurchasedUnder thePlans orPrograms Beginning Balance Jan 1, 2025 254,948 $ 9.93 254,948 $ 2,481,000 Q1 2025 - - 254,948 2,481,000 Q2 2025 64,636 10.09 319,584 1,827,000 Q3 2025 - - 319,584 1,827,000 Q4 2025 - - 319,584 1,827,000 Total 319,584 $ 9.93 319,584 $ 1,827,000 Securities Authorized for Issuance under Equity Compensation Plans The information required by Item 5 is incorporated by reference to our Definitive Proxy Statement for our 2025 annual stockholders’ meeting. ITEM 6. [Reserved] 36
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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The discussion below contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated inthese forward-looking statements as a result of various factors, including those which are discussed in the section titled “Risk Factors.” Also see “Statement RegardingForward-Looking Statements” preceding Part I. The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and the notes thereto. Overview Strawberry Fields REIT, Inc. (the “Company”) is engaged in the ownership, acquisition, financing and triple-net leasing of skilled nursing facilities and other post-acutehealthcare properties. As of December 31, 2025, our portfolio consists of 143 healthcare facilities with an aggregate of 15,602 licensed beds. We hold fee title to 132 of theseproperties and hold one property under a long-term lease. These properties are located in Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, Oklahoma, Tennesseeand Texas. We generate substantially all our revenues by leasing our properties to tenants under long-term leases primarily on a triple-net basis, under which the tenant paysthe cost of real estate taxes, insurance and other operating costs of the facility and capital expenditures. Each healthcare facility located at our properties is managed by aqualified operator with an experienced management team. We employ a disciplined approach in our investment strategy by investing in healthcare real estate assets. We seek to invest in assets that will provide attractiveopportunities for dividend growth and appreciation in asset value, while maintaining balance sheet strength and liquidity, thereby creating long-term stockholder value. Weexpect to grow our portfolio by diversifying our investments by tenant, facility type and geography. We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operations of such facilities. As of the date of thisreport, the aggregate annualized average base rent under the leases for our properties was approximately $142.7 million. We elect to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2022. We are organized in an UPREITstructure in which we own substantially all of our assets and conduct substantially all of our business through the Operating Partnership. We are the general partner of theOperating Partnership and as of the date of the report own approximately 24.0% of the outstanding OP units. 37
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Significant Events in 2025 On January 1, 2025, the Company entered into a new master lease for 10 Kentucky properties formally part of the Landmark Master Lease. Base rent is $23.3 million a yearand is subject to an increase based on CPI with a minimum increase of 2.50%. The initial lease term is 10 years with four 5-year extension options. Also, as part of thenegotiation of the new Kentucky Master Lease, the Company entered into a 5 year note payable with the parent of the Landmark tenant for $50.9 million dollars, included inNote Payable in the accompanying consolidated balance sheets. On January 2, 2025, the Company acquired 6 facilities consisting of 354 beds in Kansas. The acquisition was $24.0 million and the Company funded the acquisition utilizingcash from the consolidated balance sheets. The Company formed a new master lease for an initial 10-year period that included two 5-year extension options on a triple-netbasis. Additionally, the lease will increase the Company’s annual rents by $2.4 million and is subject to 3% annual increases. On March 31, 2025, the Company acquired a skilled nursing facility with 100 licensed beds near Oklahoma City, Oklahoma. The acquisition was $5.0 million and was fundedutilizing cash from the consolidated balance sheets. The initial term of the lease is 10 years and includes two 5-year extension options. Base rent for the property is $0.5million dollars annually and is subject to 3% annual increases. On April 4, 2025, the Company completed the acquisition for a skilled nursing facility with 112 licensed beds near Houston, Texas. The acquisition was for $11.5 million andwas funded utilizing cash from the consolidated balance sheets. The Company funded the acquisition utilizing cash from the consolidated balance sheets. The facility wasleased to an existing third party operator and added to their Master Lease (Texas Master Lease 2). The initial annual base rents are $1.3 million dollars and subject to 3%annual rent increases. On June 24, 2025, the Company issued 312.0 million NIS in Series B Bonds on the TASE, which is approximately $89.5 million. The bonds are unsecured, were issued at parand have a fixed interest rate of 6.70%. Repayment of the bond principal, at 4% of the principal, will be paid in the years 2026 through 2028, with the remaining 88% due inJune 2029. Interest payments will be due semi-annually on June 30th and December 30th of the years 2025 through maturity in 2029. On July 1, 2025, the Company completed the acquisition of nine skilled nursing facilities, comprised of 686 beds, located in Missouri. The acquisition was for $59 million andthe Company funded the acquisition utilizing cash from the consolidated balance sheets. Eight of the facilities were leased to the Tide Group and were added to the masterlease the Company entered into in August 2024. This acquisition increased Tide Group’s annual rents by $5.5 million. These properties are subject to an annual rent increase of3% and the initial term is 10 years. The ninth facility was leased to an affiliate of Reliant Care Group L.L.C. The facility was added to the master lease the Company assumedin December 2024 and increased Reliant Care Group’s annual rents by $0.6 million. On July 1, 2025, the Company sold Chalet of Niles, a property in Michigan that was formally part of the Landmark Master Lease, to a third-party purchaser. The property soldfor $2.7 million dollars. A loss of $0.01 million dollars resulted from this sale. The buyer received financing from the Company for the acquisition. The financing was $2.4million for three years and is interest only, with an annual interest rate of 10%. The financing has a balloon payment at the end of year three. On August 5, 2025, the Company completed the acquisition for a skilled nursing facility with 80 licensed beds near McLoud, Oklahoma. The acquisition was for $4.25million. The Company funded the acquisition utilizing cash from the consolidated balance sheets. The initial annual base rents are $0.4 million dollars and subject to 3%annual rent increases. The initial term is 10 years and includes two 5-year extension options. On August 29, 2025, the Company completed the acquisition for a healthcare facility comprised of 108 skilled nursing beds and 16 assisted living beds near Poplar Bluff,Missouri. The acquisition was for $5.3 million. The Company funded the acquisition utilizing cash from the consolidated balance sheets. The initial annual base rents are $0.5million dollars and subject to 3% annual rent increases. The property was assumed by the Reliant Care master lease and is subject to the terms of the master lease. 38
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On November 4, 2025, the Company completed the acquisition for a skilled nursing facility with 60 licensed beds near Grove, Oklahoma. The acquisition was for $3.0million. The Company funded the acquisition utilizing cash from the consolidated balance sheet. The initial annual base rents are $0.3 million dollars and subject to 3% annualrent increases. Related Party Tenants As a landlord, the Company does not control the operations of its tenants, including related party tenants, and is not able to cause its tenants to take any specific actions toaddress trends in occupancy at the facilities operated by its tenants, other than to monitor occupancy and income of its tenants, discuss trends in occupancy with tenants andpossible responses, and, in the event of a default, to exercise its rights as a landlord. However, Moishe Gubin, our Chairman and Chief Executive Officer, and Michael Blisko,one of our directors, as the controlling members of 66 of our tenants and related operators, have the ability to obtain information regarding these tenants and related operatorsand cause the tenants and operators to take actions, including with respect to occupancy. Results of Operations Operating Results Year Ended December 31, 2025 Compared to Year Ended December 31, 2024: Year EndedDecember 31, Increase / Percentage (dollars in thousands) 2025 2024 (Decrease) Difference Rental revenues $ 154,999 $ 117,058 $ 37,941 32% Expenses: Depreciation 35,774 29,031 6,743 23%Amortization 10,475 4,657 5,818 125%General and administrative expenses 8,608 6,851 1,757 26%Property and other taxes 15,247 14,489 758 5%Facility rent expenses 609 727 (118) (16)%Total Expenses 70,713 55,755 14,958 27%Interest expense, net 48,612 32,603 16,009 49%Amortization of interest expense 804 657 147 22%Mortgage Insurance Premium 1,536 1,548 (12) (1)%Total Interest Expenses 50,952 34,808 16,144 46%Other (loss) income Other (loss) income (28) 10 (38) (380)%Net Income 33,306 26,505 6,801 26%Net income attributable to non-controlling interest (25,731) (22,410) (3,321) (15)%Net Income attributable to common stockholders 7,575 4,095 3,480 85%Basic and diluted income per common share $ 0.60 $ 0.57 0.03 5% 39
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Rental revenues: Rental revenues increased $37.9 million, or 32.4%, compared to fiscal year 2024. The year-over-year growth was primarily driven by $13.1 million inadditional revenue associated with the re-tenanting of the Landmark and Kentucky Master Lease, as well as contributions from recent property acquisitions completed in 2024and 2025. These acquisitions included the Missouri lease ($10.3 million), the Tide Group Master Lease ($5.5 million), and the Kansas Master Lease ($2.4 million). Theincrease also reflects additional reimbursed property taxes from tenants. Depreciation and Amortization: Depreciation expense increased $6.7 million, or 23.2%, compared to fiscal year 2024. The results were driven by year-over-year depreciationfrom new real estate investments placed into service during the 2024 and 2025. These increases were partially offset by assets that became fully depreciated in 2025.Amortization expense increased $5.8 million, or 124.9%, primarily due to the amortization of an asset associated with the note payable related to the re-tenanting of theproperties under the Kentucky Master Lease. General and Administrative Expense: General and administrative expenses increased $1.8 million compared to fiscal year 2024, or 25.6%, primarily due to $1.7 million ofhigher payroll expenses driven by increased executive compensation and employee bonus costs. Property and Other Taxes: Property expenses increased $0.8 million year over year. This increase was driven primarily by higher property tax obligations, which rose as aresult of approximately $0.8 million in new property taxes associated with assets acquired during 2024 and 2025. Interest expense, net: Interest expense increased $16.0 million, or 49.1%, from fiscal year 2024 to fiscal year 2025. The increase was primarily driven by $9.3 million of higherbond interest expense associated with the issuance of a new bond series, $4.5 million of additional interest expense related to a new note payable entered into during 2025, and$1.5 million of increased mortgage interest expense from a third commercial bank loan facility used to finance the acquisition of the Missouri facilities. Net Income: The increase in net income from $26.5 million during the year ended December 31, 2024 to $33.3 million in the year ended December 31, 2025 is primarily dueto increases in rental revenue (net of increase in real estate taxes), and is offset by higher depreciation, amortization, property taxes, general and administrative and interestexpenses. Liquidity and Capital Resources To qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividendspaid deduction and excluding any net capital gains, to our stockholders on an annual basis. Accordingly, we intend to make, but are not contractually bound to make, regularquarterly dividends to common stockholders from cash flow from operating activities. All such dividends are at the discretion of our board of directors. As of December 31, 2025, we had cash and cash equivalents and restricted cash and equivalents of $66.8 million. We also had the ability to offer additional Series ABonds from the current outstanding of $94.7 million up to $172.4 million. Series C Bonds from the current outstanding of $77.7 million up to $197.5 million and the ability tooffer additional Series D Bonds from the current outstanding of $55.1 million up to $141.1 million. is subject to compliance with covenants and market conditions. Bond Bdoes not have a ceiling for additional issuances; however, the series is subject to compliance with covenants and market conditions. 40
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Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets andoperations, make distributions to our stockholders and other general business needs. Our primary sources of cash include operating cash flows and borrowings. Our primaryuses of cash include funding acquisitions and investments consistent with our investment strategy, repaying principal and interest on any outstanding borrowings, makingdistributions to our equity holders, funding our operations and paying accrued expenses. Our long-term liquidity needs consist primarily of funds necessary to pay for the costs of acquiring additional healthcare properties and principal and interest payments onour debt. We expect to meet our long-term liquidity requirements through various sources of capital, including future equity issuances or debt offerings, net cash provided byoperations, long-term mortgage indebtedness and other secured and unsecured borrowings. We may utilize various types of debt to finance a portion of our acquisition activities, including long-term, fixed-rate mortgage loans, variable-rate term loans and securedrevolving lines of credit. As of December 31, 2025, on a consolidated basis, we had total indebtedness of approximately $794.5 million, consisting of $254.1 million in HUDguaranteed debt, $334.7 million in gross Series A, B, C, and D bonds outstanding and $163.1 million in commercial mortgages. We also have a Note Payable with anoutstanding balance of $42.6 million. Under our Bonds and our commercial mortgages, we are subject to continuing covenants, and future indebtedness that we may incur,may contain similar provisions. In the event of a default, the lenders could accelerate the timing of payments under the debt obligations, and we may be required to repay suchdebt with capital from other sources, which may not be available on attractive terms, or at all, which would have a material adverse effect on our liquidity, financial condition,results of operations and ability to make distributions to our stockholders. Our debt arrangements may require us to make a lump-sum or “balloon” payment at maturity. Our ability to make the balloon payments due under our existing and futureindebtedness will depend on our working capital at the time of repayment, our ability to obtain additional financing or our ability to sell any property securing suchindebtedness. At the time the balloon payment is due, we may or may not be able to refinance the existing financing on terms as favorable as the original bond or loan or sellany related property at a price sufficient to make the balloon payment. In addition, balloon payments and payments of principal and interest on our indebtedness may leave uswith insufficient cash to pay the distributions that we are required to pay to qualify and maintain our qualification as a REIT. Through 2029 there are balloon payment obligations consisting of three payments of $94.7 million, $77.7 million, and $55.1 million, due under the Series A Bonds, SeriesC Bonds, and Series D bonds in 2026, and $94.3 million due under Bond B in 2029, respectively, and payments of $56.1 million, $36.6 million and $52.3 million due underour three commercial bank term loans due in 2027, 2028, and 2029, respectively. We may also obtain additional financing that contains balloon payment obligations. Thesetypes of obligations may materially adversely affect us, including our cash flows, financial condition and ability to make distributions. The Company believes that its overall level of indebtedness is appropriate for the Company’s business in light of its cash flow from operations and value of its propertiesand is generally typical for owners of multiple healthcare properties. The Company expects to generate sufficient positive cash flow from operations to meet its ongoing debtservice obligations and the distribution requirements for maintaining REIT status. 41
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Cash Flows The following table presents selected data from our consolidated statements of cash flows: Years Ended December 31, 2025 2024 (dollars in thousands) Net cash provided by operating activities $ 90,037 $ 59,330 Net cash used in investing activities (111,872) (136,776)Net cash (used in) provided by financing activities (5,063) 133,344 Net (decrease) increase in cash and cash equivalents and restricted cash andequivalents (26,898) 55,898 Cash and cash equivalents, and restricted cash and equivalents beginning of year 93,656 37,758 Cash and cash equivalents and restricted cash and equivalents, end of year $ 66,758 $ 93,656 Net cash provided by operating activities increased $30.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due toan increase of $12.6 million increase in depreciation and amortization, a $8.7 million increase in accounts payable and accrued liabilities and other liabilities and a $6.8 millionincrease in net income. The increases in Depreciation, Amortization is driven by acquisitions made in 2024 and 2025 as well as the re-tenanting of the Landmark and Kentuckymaster leases. The increase in accounts payable and other liabilities is due to increased deposits related to the recent property acquisitions, as well as an increase in prepaidrent. Cash used in investing activities decreased by $24.9 million for the year ended December 31, 2025 compared December 31, 2024, primarily due to a $27.9 milliondecrease in cash used for property acquisitions in real estate and lease rights. This difference was offset by a net $3.0 million increase in notes receivable balances. Cash flows generated from financing activities decreased by $138.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Thedecline was driven by a lower amount of cash received from debt and equity issuances, specifically, from $59.0 in lower proceeds from senior debt, $33.0 million in lowerproceeds from equity raises and $21.5 million in lower proceeds from bond issuances. The company also increased debt principal repayments by $18.8 million in 2025 andincreased common stock and OP unit distributions by $5.7 million in 2025. Indebtedness Mortgage Loans Guaranteed by HUD As of December 31, 2025, we had non-recourse mortgage loans of $254.1 million from third party lenders that were guaranteed by HUD. Each loan is secured by first mortgages on certain specified properties, interests in the leases for these properties and second liens on the operator’s assets. In the event ofdefault on any single loan, the loan agreement provides that the applicable lender may require the tenants for the property securing the loan to make all rental paymentsdirectly to the lender. In exchange for the HUD guarantee, we pay HUD, on an annual basis, 0.65% of the principal balance of each loan as mortgage insurance premium, inaddition to the interest rate denominated in each loan agreement. As a result, the overall average interest rate paid with respect to the HUD guaranteed loans as of December31, 2025, was 3.91% per annum (including the mortgage insurance payments). The loans have an average maturity of 21 years. 42
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Commercial Bank Term Loans On March 21, 2022, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $105 million. Thefacility provides for monthly payments of principal and interest based on a 20-year amortization with a balloon payment due in March 2027. The rate is based on the one-month Secured Overnight Financing Rate (“SOFR”) plus a margin of 3.5% and a floor 4% (as of the December 31, 2025 the rate was 7.37%). As of December 31, 2025, totaloutstanding principal amount was $61.2 million. This loan is collateralized by 21 properties owned by the Company. The loan proceeds were used to repay the Series B Bondsand prepay commercial loans not secured by HUD guarantees. The Company recognized a foreign currency transaction loss of approximately $10.1 million in connection withthe repayment of the Series B Bonds during the year ended December 31, 2022. On August 25, 2023, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $66 million. Thefacility provides for monthly payments of interest and payment of principal and interest thereafter, will start on August 2024 based on a 20-year amortization with a balloonpayment due in August 2028. The rate is based on the one-month SOFR plus a margin of 3.5% and a floor of 4% (as of the December 31, 2024, the rate was 7.37%). As ofDecember 31, 2025, total outstanding principal amount was $40.3 million. This loan is collateralized by 19 properties owned by the Company. The loan proceeds were used toacquire the Indiana facilities. On December 19, 2024, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $59 million. Thefacility provides for monthly payments of interest and payment of principal will start on January 2026 based on a 20-year amortization with a balloon payment due inDecember 2029. The rate and interest is based on the one-month Secured Overnight Financing Rate SOFR plus a margin of 3.0% and a floor of 4% (as of the December 31,2025, the rate was 6.87%). As of December 31, 2025, total outstanding principal amount was $59 million. This loan is collateralized by 8 properties owned by the Company.The loan proceeds were used to acquire the Missouri facilities. The two credit facilities closed in March 21, 2022 and August 25, 2023 are subject to financial covenants which are consist of (i) a covenant that the ratio of theCompany’s indebtedness to its EBITDA cannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividenddistribution is at least 1.20 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the ratio of the Company’s net operatingincome to its debt service after dividend distribution is at least 1.05 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement, and (iii) a covenantthat the Company’s GAAP equity is at least $20,000,000. As of December 31, 2025, the Company was in compliance with the loan covenants. The credit facility closed on December 19, 2024 is subject to financial covenants which consist of (i) a covenant that the ratio of the Company’s indebtedness to itsEBITDA cannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividend distribution is at least 1.25 to 1.00 foreach fiscal quarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the ratio of the Company’s net operating income to its debt service afterdividend distribution is at least 1.05 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement, and (iii) a covenant that the Company’s GAAPequity is at least $30,000,000. As of December 31, 2025, the Company was in compliance with the loan covenants. Outstanding Bond Debt As of December 31, 2025, the Company had outstanding Series A, Series B, Series C Bonds and Series D Bonds. Series A Bonds In August 2024, Strawberry Fields, Inc completed, directly, an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series A Bonds with a par value of NIS 145.6million ($37.1 million). The series A Bonds were issued at par. Offering and issuance costs of approximately $1.0 million were incurred at closing. In December 2024, theCompany issued an additional NIS 145.6 million ($38.1 million) in Series A Bonds. Exchange of Series D Bonds for Series A Bonds In September 2024 the Company made an exchange tender offer of outstanding Series D Bonds for Series A Bonds. The interest rate on Series D Bonds is 9.1% perannum. The exchange offer rate was 1.069964 Series A Bonds per Series D Bonds. As a result of this offer, NIS 47.3 million Series D Bonds ($12.7 million) were exchangedfor NIS 50.6 million Series A Bonds ($13.6 million). As of December 31, 2025, the outstanding balance of Series A Bonds was NIS 302.2 million ($94.7 million) The Series A Bonds are traded on the TASE. Series B Bonds In June 2025, Strawberry Fields, Inc completed, directly, an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series B Bonds with a par value of NIS 312million ($89.5 million). The series B Bonds were issued at par. Offering and issuance costs of approximately $2.5 million were incurred at closing. In December 2025, theCompany issued an additional NIS 30.0 million ($9.4 million) in Series B Bonds. At December 31, 2025, the outstanding balance of Series B Bonds was $107.2 million. Series C Bonds In July 2021, the BVI Company completed an initial offering of Series C Bonds with a par value of NIS 208.0 million ($64.4 million). The Series C Bonds were issued atpar. During February 2023, the BVI Company issued additional Series C Bonds in the face amount of NIS 40.0 million ($11.3 million) and raised a net amount of NIS 38.1million ($10.7 million). These Series C Bonds were issued at a price of 95.25%. In October 2024, the BVI company issued an additional NIS 62.0 million ($16.6 million) inSeries C Bonds. The bonds were issued at 99.3%. 43
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As of December 31, 2025, the outstanding principal amount of the Series C Bonds was NIS 247.9 million ($77.7 million). The Series C Bonds are traded on the TASE. Series D Bonds In June 2023, the BVI Company completed an initial offering of Series D Bonds with a par value of NIS 82.9 million ($22.9 million). The Series D Bonds were issued atpar. During August 2023, the BVI Company issued additional Series D Bonds in the face amount of NIS 70.0 million ($19.2 million). These Series D Bonds were issued at aprice of 99.7%. On February 8, 2024, the BVI Company issued additional NIS 98.2 million ($25.7 million) Series D Bonds. These Series D Bonds were issued at a price of106.3%. Exchange of Series D Bonds for Series A Bonds In September 2024 the Company made an exchange tender offer of outstanding Series D Bonds for Series A Bonds. The interest rate on Series D Bonds is 9.1% perannum. The exchange offer rate was 1.069964 Series A Bonds per Series D Bonds. As a result of this offer, 47.3 million NIS Series D Bonds ($12.7 million) were exchangedfor 50.6 million NIS Series A Bonds ($13.6 million). As of December 31, 2025, the Series D Bonds had an outstanding principal balance of approximately NIS 175.8 ($55.1 million). Summary of fixed and variable loans: December 31, 2025 2024 (Amounts in $000s) Fixed rate loans $ 634,168 $ 475,494 Variable rate loans 160,484 198,441 Gross Note Payable and other Debt $ 794,652 $ 673,935 Funds From Operations (“FFO”) The Company believes that net income as defined by GAAP is the most appropriate earnings measure. We also believe that funds from operations (“FFO”), as defined inaccordance with the definition used by the National Association of Real Estate Investment Trusts (“NAREIT”), and adjusted funds from operations (“AFFO”) are importantnon-GAAP supplemental measures of our operating performance. Because the historical cost accounting convention used for real estate assets requires straight-linedepreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values havehistorically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be lessinformative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, amongother items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions,plus real estate depreciation and amortization. AFFO is defined as FFO excluding the impact of straight-line rent, above-/below-market leases, non-cash compensation andcertain non-recurring items. We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating results amonginvestors and makes comparisons of operating results among REITs more meaningful. We consider FFO and AFFO to be useful measures for reviewing comparative operatingand financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare our operating performance between periods oras compared to other companies. While FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent cash flows from operations or net income asdefined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity or operating performance. FFO and AFFO also do not consider thecosts associated with capital expenditures related to our real estate assets nor do they purport to be indicative of cash available to fund our future cash requirements. Further,our computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other REITs that do not define FFO in accordance with the current NAREITdefinition or that interpret the current NAREIT definition or define AFFO differently than we do. 44
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The following table reconciles our calculations of FFO and AFFO for the years ended December 31, 2025 and 2024, to net income, the most directly comparable GAAPfinancial measure (in thousands): FFO and AFFO: Year EndedDecember 31, 2025 2024 Net income $ 33,306 $ 26,505 Loss from real estate disposition 12 Depreciation and amortization 46,249 33,688 Funds from Operations 79,567 60,193 Adjustments to FFO: Straight-line rent (7,102) (4,368)Funds from Operations, as Adjusted $ 72,465 $ 55,825 Dividend Plans We are required to pay dividends in order to maintain our REIT status and we expect to make quarterly dividend payments in cash with the annual dividend amount noless than 90% of our annual REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. Critical Accounting Policies The preparation of consolidated financial statements in conformity with generally accepted accounting principles, or GAAP, in the United States requires management tomake estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period. Management considers accounting estimates or assumptions critical in either of thefollowing cases: ● the nature of the estimates or assumptions is material because of the levels of subjectivity and judgment needed to account for matters that are highly uncertain andsusceptible to change; and ● the effect of the estimates and assumptions is material to the consolidated financial statements. Management believes the current assumptions used to make estimates in the preparation of the consolidated financial statements are appropriate and not likely to changein the future. However, actual experience could differ from the assumptions used to make estimates, resulting in changes that could have a material adverse effect on ourconsolidated results of operations, financial position and/or liquidity. These estimates will be made and evaluated on an on-going basis using information that is available aswell as various other assumptions believed to be reasonable under the circumstances. The following presents information about our critical accounting policies including the material assumptions used to develop significant estimates. Since the Companywas recently formed and just completed the formation transactions, certain of these critical accounting policies contain discussion of judgments and estimates that have not yetbeen required by management but that it believes may be reasonably required of it to make in the future. 45
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Principles of Consolidation The consolidated financial statements include the accounts of our Operating Partnership and its wholly owned subsidiaries, and all material intercompany transactions andbalances are eliminated in consolidation. From inception, we continually evaluate all of our transactions and investments to determine if they represent variable interests subject to the variable interest entity, orVIE, consolidation model and then determine which business enterprise is the primary beneficiary of its operations. We make judgments about which entities are VIEs basedon an assessment of whether (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to financethat entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary. Thisevaluation is based on our ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance. For investments not subject to the variable interest entity consolidation model, we will evaluate the type of rights held by the limited partner(s) or other member(s), whichmay preclude consolidation in circumstances in which the sole general partner or managing member would otherwise consolidate the limited partnership. The assessment oflimited partners’ or members’ rights and their impact on the presumption of control over a limited partnership or limited liability corporation by the sole general partner ormanaging member should be made when an investor becomes the sole general partner or managing member and should be reassessed if (i) there is a change to the terms or inthe exercisability of the rights of the limited partners or members, (ii) the sole general partner or member increases or decreases its ownership in the limited partnership orcorporation, or (iii) there is an increase or decrease in the number of outstanding limited partnership or membership interests. Our ability to assess correctly our influence or control over an entity at inception of our involvement or on a continuous basis when determining the primary beneficiary ofa VIE affects the presentation of these entities in our consolidated financial statements. Subsequent evaluations of the primary beneficiary of a VIE may require the use ofdifferent assumptions that could lead to identification of a different primary beneficiary, resulting in a different consolidation conclusion than what was determined at inceptionof the arrangement. Revenue Recognition We recognize rental revenue for operating leases on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possessionor controls the physical use of a leased asset. For assets acquired subject to leases, we recognize revenue upon acquisition of the asset provided the tenant has taken possessionor control of the physical use of the leased asset. If the lease provides for tenant improvements, we determine whether the tenant improvements, for accounting purposes, areowned by the tenant or us. When we are the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physicalleased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance funded is treated as a lease incentive and amortized as a reduction ofrevenue over the lease term. The determination of ownership of the tenant improvements is subject to significant judgment. If our assessment of the owner of the tenantimprovements for accounting purposes were different, the timing and amount of our revenue recognized would be impacted. We monitor the liquidity and creditworthiness of our tenants and operators on a continuous basis to determine the need for an allowance for credit loss, including anallowance for operating lease straight-line rent receivables, for estimated losses resulting from tenant defaults or the inability of tenants to make contractual rent and tenantrecovery payments. This evaluation considers industry and economic conditions, property performance, credit enhancements and other factors. For straight-line rent amounts,our assessment is based on income recoverable over the term of the lease. We exercise judgment in establishing allowances and consider payment history and current creditstatus in developing these estimates. These estimates may differ from actual results, which could be material to our consolidated financial statements. As of December 31,2025 and 2024 we determined that no allowance was necessary to cover the potential loss of rent from our tenants. 46
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Real Estate Investments We make estimates as part of our allocation of the purchase price of acquisitions (whether an asset acquisition acquired via purchase/leaseback or a business combinationvia an asset acquired from the current lessor) to the various components of the acquisition based upon the relative fair value of each component for asset acquisitions and atfair value of each component for business combinations. In making estimates of fair values for purposes of allocating purchase prices of acquired real estate, we utilize anumber of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. Wealso consider information obtained about each property as a result of our pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of thetangible and intangible assets acquired. The most significant components of our allocations are typically the allocation of fair value to land and buildings and, for certain of ouracquisitions, in-place leases and other intangible assets. In the case of the fair value of buildings and the allocation of value to land and other intangibles, the estimates of thevalues of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining leaseterm. In the case of the value of in-place leases, including the assessment as to the existence of any above-or below-market in-place leases, our management makes its bestestimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expectedlease-up periods, market conditions and costs to execute similar leases. These assumptions affect the amount of future revenue that we will recognize over the remaining leaseterm for the acquired in-place leases. The values of any identified above-or below-market in-place leases are based on the present value of the difference between (i) thecontractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over aperiod equal to the remaining non-cancelable term of the lease, or for below-market in-place leases including any bargain renewal option terms. Above-market lease values arerecorded as a reduction of rental income over the lease term while below-market lease values are recorded as an increase to rental income over the lease term. The recordedvalues of in-place lease intangibles are recognized in amortization expense over the initial term of the respective leases. We evaluate each purchase transaction to determine whether the acquired assets meet the definition of a business. Transaction costs related to acquisitions that are notdeemed to be businesses are included in the cost basis of the acquired assets, while transaction costs related to acquisitions that are deemed to be businesses are expensed asincurred. Asset Impairment Real estate asset impairment losses are recorded when events or changes in circumstances indicate the asset is impaired and the estimated undiscounted cash flows to begenerated by the asset are less than its carrying amount. Management assesses the impairment of properties individually and impairment losses are calculated as the excess ofthe carrying amount over the fair value of assets to be held and used, and carrying amount over the fair value less cost to sell in instances where management has determinedthat we will dispose of the property. In determining fair value, we use current appraisals or other third-party opinions of value and other estimates of fair value such asestimated discounted future cash flows. Factors That May Influence Future Results of Operations Our revenues are primarily derived from rents we earn pursuant to the lease agreements we enter into with our tenants. Our tenants operate in the healthcare industry,generally providing nursing and medical care to patients. The capacity of our tenants to pay our rents is dependent upon their ability to conduct their operations at profitablelevels. We believe that the business environment of the industry segments in which our tenants operate is generally positive for efficient operators. However, our tenants’operations are subject to economic, regulatory and market conditions that may affect their profitability, which could impact our results of operations. Accordingly, we activelymonitor certain key factors, including changes in those factors that we believe may provide early indications of conditions that may affect the level of risk in our leaseportfolio. 47
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Key factors that we consider in underwriting prospective tenants and borrowers and in monitoring the performance of existing tenants include, but are not limited to, thefollowing: ● the current, historical and projected cash flow and operating margins of each tenant and at each facility; ● the ratio of our tenants’ operating earnings both to facility rent and to facility rent plus other fixed costs, including debt costs; ● the quality and experience of the tenant and its management team; ● construction quality, condition, design and projected capital needs of the facility; ● the location of the facility; ● local economic and demographic factors and the competitive landscape of the market; ● the effect of evolving healthcare legislation and other regulations on our tenants’ profitability and liquidity; ● the payor mix of private, Medicare and Medicaid patients at the facility; and ● whether such tenants are related parties. One of our goals is to reduce our dependence on related party tenants in order to diversify our tenant base. Although we expect to continue to lease properties to relatedparty tenants in markets in which the related party tenants have substantial experience and operations, we intend to lease properties in other markets to unrelated tenants if weare able to identify qualified operators. Additionally, we will consider leasing properties to unrelated parties in markets in which related parties operate if we are able toidentify qualified operators that are willing to lease properties on terms that are no less favorable than those available from related parties. We also actively monitor the credit risk of our tenants. The methods we use to evaluate a tenant’s liquidity and creditworthiness include reviewing certain periodicfinancial statements, operating data and clinical outcomes data of the tenant. Over the course of a lease, we also have regular meetings with the facility management teams.Through these means we are able to monitor a tenant’s credit quality. Certain business factors, in addition to those described above that directly affect our tenants, which in turn will likely materially influence our future results of operations: ● the financial and operational performance of our tenants; ● trends in the cost and availability of capital, including market interest rates, which our prospective tenants may use for their working capital financing; ● reductions in reimbursements from Medicare, state healthcare programs and commercial insurance providers that may reduce our tenants’ profitability and our leaserates; and ● competition from other financing sources. 48
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Inflation We are exposed to inflation risk as income from long-term leases are a main source of our cash flows from operations. For our leased properties, we expect there to beprovisions in the majority of our leases that will protect us from the impact of inflation. These provisions may include rent escalators, and leases that are triple-net. However,due to the long-term nature of the anticipated leases, among other factors, the leases may not re-set frequently enough to cover inflation. ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affectmarket sensitive instruments. In pursuing our business and investment objectives, we expect that the primary market risk to which we will be exposed is interest rate risk. We may be exposed to the effects of interest rate changes primarily as a result of long-term debt used to acquire properties. As of December 31, 2025, we had $94.7million in Series A Bonds which bear interest at a fixed rate of 6.97%, $107.2 million in Series B Bonds which bear interest at a fixed rate of 6.70%, $77.7 million outstandingunder our Series C Bonds, which bear interest at a fixed rate of 5.7% per annum, $55.1 million outstanding under our Series D Bonds, which bear interest at a fixed rate of9.1% per annum, and $417.3 million in senior debt notes, of which $160.5 million (20.20% of total debt) bear interest at variable rate equal to one month SOFR plus a margin.At December 31, 2025, one month SOFR was 3.87%. Assuming no increase in the amount of our variable interest rate debt, if one-month SOFR increased 100 basis points,our annual cash flow would decrease by approximately $1.6 million. Our interest rate risk management objectives are to limit the impact of interest rate changes on earningsand cash flows and to lower overall borrowing costs. To achieve our objectives, we may borrow at fixed rates or variable rates. We also may enter into derivative financialinstruments such as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument. In addition to changes in interest rates, the value of our future investments is subject to fluctuations based on changes in local and regional economic conditions, change incurrency rates between the Israeli Shekel and the U.S. Dollar and changes in the creditworthiness of tenants/operators, which may affect our ability to refinance our debt ifnecessary. ITEM 8. Financial Statements and Supplementary Data See the Index to Consolidated Financial Statements on page F-1 of this report. 49
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ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None. ITEM 9A. Controls and Procedures Our management, under the supervision and with the participation of our principal executive and financial officer, is responsible for and has evaluated theeffectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in our filings under the Exchange Act is recorded, processed,summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such information is accumulated and communicated to ourcompany’s management, as appropriate, to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive and financial officer haveconcluded that such disclosure controls and procedures were effective as of December 31, 2025 (the end of the period covered by this Annual Report). Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. In May 2013, the Internal Control – IntegratedFramework (the “2013 Framework”) was released by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The 2013 Framework updates andformalizes the principles embedded in the original Internal Control-Integrated Framework issued in 1992 (the “1992 Framework”), incorporates business and operatingenvironment changes and improves the original 1992 Framework’s ease of use and application. Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. In conducting this assessment, itused the criteria set forth by COSO in the 2013 Framework. Based on management’s assessment and those criteria, management believes that the Company has maintainedeffective internal control over financial reporting as of December 31, 2025. Limitations on Controls Our system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of publishedfinancial statements in accordance with accounting principles generally accepted in the United States. All internal control systems, no matter how well designed, have inherentlimitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections ofany evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonablylikely to materially affect, our internal control over financial reporting. ITEM 9B. Other Information During the fourth quarter of 2025, no director or officer adopted any insider trading arrangement contemplated by 17 CFR Section 229.408. The Company has adopted a Code of Business Conduct & Ethics, which contains insider trading policies and procedures governing the purchase, sale, and/or otherdispositions of the Company’s securities by directors, officers and employees, or the registrant itself, that have been designed to promote compliance with insider trading laws,rules and regulations, and the NYSE American’s listing standards. ITEM 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Not applicable. 50
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PART III ITEM 10. Directors, Executive Officers and Corporate Governance The information required under Item 10 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end ofour fiscal year ended December 31, 2025 in connection with our 2026 Annual Meeting of Stockholders. ITEM 11. Executive Compensation The information required under Item 11 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end ofour fiscal year ended December 31, 2025 in connection with our 2026 Annual Meeting of Stockholders. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required under Item 12 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end ofour fiscal year ended December 31, 2025 in connection with our 2026 Annual Meeting of Stockholders. The following table discloses the number of outstanding options, warrants and rights granted to participants by the Company under the equity compensation plans, aswell as the number of securities remaining available for future issuance under these plans as of December 31, 2025. Number ofsecurities to beissued uponexercise ofoutstandingoptions, warrantsand rights (a) Weightedaverage exerciseprice ofoutstandingoptions,warrants andrights (b) Number ofsecuritiesremainingavailable forfuture issuanceunder equitycompensationplans (excludingsecuritiesreflected incolumn (a)) (c) Equity compensation plans approved by security holders - - 968,650 Equity compensation plans not approved by security holders - - - Total - - 968,650 ITEM 13. Certain Relationships and Related Transactions, and Director Independence Additional information required under Item 13 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after theend of our fiscal year ended December 31, 2025 in connection with our 2026 Annual Meeting of Stockholders. ITEM 14. Principal Accountant Fees and Services The information required under Item 14 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end ofour fiscal year ended December 31, 2025 in connection with our 2026 Annual Meeting of Stockholders. 51
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PART IV ITEM 15. Exhibit and Financial Statement Schedules Financial Statements (1) Consolidated Financial Statements: See Index to Consolidated Financial Statements at page F-1. (2) Financial Statement Schedules Schedule III: Real Estate and Accumulated Depreciation Note: All other schedules have been omitted because the required information is presented in the consolidated financial statements and the related notes or because theschedules are not applicable. (3) Exhibits: The exhibits listed in the accompanying index to exhibits are filed as part of, or incorporated by reference into, this Annual Report. EXHIBIT INDEX Exhibit Description 1.1 At Market Issuance Sales Agreement by and among Strawberry Fields REIT, Inc., B. Riley Securities, Inc. and A.G.P. Alliance Global Partners, dated July 11,2024, filed with the Securities and Exchange Commission on July 12, 2024. 1.2 Amendment No. 1 to At Market Issuance Sales Agreement with B. Riley Securities, Inc., A.G.P./Alliance Global Partners, and Wedbush Securities Inc., datedJune 4, 2025 (Exhibit 2 has been redacted) 3.1 Articles of Amendment and Restatement of Strawberry Fields REIT, Inc., incorporated herein by reference to Exhibit 3.1 to the Registration Statement onForm 10 filed with the Securities and Exchange Commission as of July 12, 2022. 3.2 Amended and Restated Bylaws of Strawberry Fields REIT, Inc., incorporated herein by reference to Exhibit to the Registration Statement on Form 10 filedwith the Securities and Exchange Commission as of July 12, 2022. 4.1* Description of Capital Stock incorporated herein by reference to Exhibit 4.1 to the Form 10-K filed with the Securities and Exchange Commission as of March19, 2024 10.1 Deed of Trust dated April 23, 2018, between Strawberry Fields REIT, LTD and Mishmeret Trust Services Company Ltd. .incorporated herein by reference toExhibit 10.1 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022. 10.2 Deed of Trust dated November 24, 2015, between Strawberry Fields REIT, LTD and Mishmeret Trust Services Company Ltd., incorporated herein byreference to Exhibit 10.2 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022. 10.3 Deed of Trust dated July 27, 2021 between Strawberry Fields REIT, LTD and Mishmeret Trust Services Company Ltd., incorporated herein by reference toExhibit 10.3 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022. 10.4 First Amended and Restated Agreement of Limited Partnership dated June 1, 2021 of Strawberry Fields Realty LP, incorporated herein by reference to Exhibit10.4 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022. 52
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10.5 Contribution Agreement dated June 8, 2021 between Strawberry Fields REIT, Inc., Strawberry Fields REIT, LLC and of Strawberry Fields Realty LP.,incorporated herein by reference to Exhibit 10.5 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12,2022. 10.6 Tax Protection Agreement effective as of June 8, 2021 among Strawberry Fields Realty LP, Strawberry Fields REIT, Inc. and Strawberry Fields REIT, LLC.,incorporated herein by reference to Exhibit 10.6 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12,2022. 10.7 Strawberry Fields REIT, Inc. 2021 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.7 to the Registration Statement on Form 10 filed withthe Securities and Exchange Commission as of July 12, 2022. 10.8 Term Loan and Security Agreement dated March 18, 2022, by and among Strawberry Fields Realty LP and certain subsidiaries thereof named as Borrowers,and Popular Bank, as Agent and Lender., incorporated herein by reference to Exhibit 10.8 to the Registration Statement on Form 10 filed with the Securitiesand Exchange Commission as of July 12, 2022. 10.9 Indemnification Agreement effective January 13, 2020 between the Company and Jack Levine Bailey incorporated herein by reference to Exhibit 10.2 to theForm 10-Q filed with the Securities and Exchange Commission as of September 8, 2022. 10.10 Indemnification Agreement effective January 13, 2020 between the Company and Michael Blisko incorporated herein by reference to Exhibit 10.3 to the Form10-Q filed with the Securities and Exchange Commission as of September 8, 2022. 10.11 Indemnification Agreement effective January 13, 2020 between the Company and Moishe Gubin incorporated herein by reference to Exhibit 10.4 to the Form10-Q filed with the Securities and Exchange Commission as of September 8, 2022. 10.12 Indemnification Agreement effective January 13, 2020 between the Company and [BOD MEMBER] incorporated herein by reference to Exhibit 10.4 to theForm 10-Q filed with the Securities and Exchange Commission as of September 8, 2022. 10.13 Deed of Trust dated June 19, 2023, between Strawberry Fields REIT, LTD and Mishmeret Trust Services Company Ltd. .incorporated herein by reference toExhibit 10.9 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022. 10.14 Deed of Trust dated August 4, 2024, between the Company and Mishmeret Trust Services Company Ltd., incorporated herein by reference to Exhibit 10.1 tothe Form 8-K filed with the Securities and Exchange Commission as of August 6, 2024. *21.1 List of Subsidiaries of the Registrant *31.1 Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *31.2 Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. **32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS Inline XBRL Instance Document101.SCH Inline XBRL Taxonomy Schema101.CAL Inline XBRL Taxonomy Calculation Linkbase101.DEF Inline XBRL Taxonomy Definition Linkbase101.LAB Inline XBRL Taxonomy Label Linkbase101.PRE Inline XBRL Taxonomy Presentation Linkbase104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. ** Furnished herewith. + Management contract or compensatory plan or arrangement. ITEM 16. Form 10-K Summary None. 53
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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized. STRAWBERRY FIELDS REIT, INC. By: /s/ Moishe Gubin Moishe Gubin Chairman and Chief Executive Officer Dated: March 19, 2026 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in thecapacities and on the dates indicated. Name Title Date /s/ Moishe Gubin Chairman and Chief Executive Officer(Principal Executive Officer) March 19, 2026Moishe Gubin /s/ Greg Flamion Chief Financial Officer (Principal Financial Officer and PrincipalAccounting Officer) March 19, 2026 Greg Flamion /s/ Michael Blisko Director March 19, 2026 Michael Blisko /s/ Jack Levine Director March 19, 2026 Jack Levine /s/ Stanford Gertz Director March 19, 2026Stanford Gertz /s/ Mark Meyers Director March 19, 2026Mark Meyers /s/ Ted Lerman Director March 19, 2026Ted Lerman 54
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PageReport of Independent Registered Public Accounting Firm (PCAOB ID No. 400) with respect to Strawberry Fields REIT, Inc. F-2 Consolidated Balance Sheets as of December 31, 2025 and 2024 F-3 Consolidated Statements of Income and Comprehensive (Loss) Income for the years ended December 31, 2025 and 2024 F-4 Consolidated Statements of Equity for the years ended December 31, 2025 and 2024 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 F-6 Notes to Consolidated Financial Statements F-8 Schedule III: Real Estate and Accumulated Depreciation as of December 31, 2025 F-41 F-1
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Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Strawberry Fields REIT, INC. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Strawberry Fields REIT, Inc., (the “Company”) as of December 31, 2025 and 2024 and the relatedconsolidated statements of income and comprehensive (loss) income, equity and cash flows, for the years then ended, and the related notes to the consolidated financialstatements and financial statement schedule III (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statementsreferred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results ofits operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Supplemental Information Financial statement schedule III (“Schedule III”) has been subjected to audit procedures performed in conjunction with the audit of the Company’s consolidated financialstatements. Schedule III is the responsibility of the Company’s management. Our audit procedures included determining whether Schedule III reconciles to the consolidatedfinancial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the informationpresented in Schedule III. In forming our opinion on Schedule III, we evaluated whether Schedule III, including its form and content, is presented in conformity with the rulesand regulations of the Securities and Exchange Commission (“SEC”). In our opinion, Schedule III is fairly stated, in all material respects, in relation to the consolidatedfinancial statements as a whole. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) andare required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and thePCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged toperform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting butnot for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation ofthe consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. (PCAOB ID: 400)HACKER, JOHNSON & SMITH PAWe have served as the Company’s auditor since 2019. Fort Lauderdale, Florida March 19, 2026 F-2
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STRAWBERRY FIELDS REIT, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS(Amounts in $000’s, except share data) December 31, 2025 2024 Assets Real estate investments, net $ 687,151 $ 609,058 Cash and cash equivalents 31,812 48,373 Restricted cash and equivalents 34,946 45,283 Straight-line rent receivable, net 34,804 27,702 Right of use lease asset 851 1,204 Goodwill, other intangible assets and lease rights 68,352 27,947 Deferred financing expenses 5,358 6,162 Notes receivable, net 20,821 16,585 Other assets 1,130 5,275 Total Assets $ 885,225 $ 787,589 Liabilities Accounts payable and accrued liabilities $ 22,369 $ 18,718 Bonds, net 330,612 209,944 Note payable 42,624 - Senior debt 417,262 460,591 Operating lease liability 851 1,204 Other liabilities 20,983 13,561 Total Liabilities $ 834,701 $ 704,018 Commitments and Contingencies (Notes 8 and 14) Equity Preferred stock, $.0001 par value, 100,000,000 shares authorized, no shares issued and outstanding $ - $ - Common stock, $.0001 par value, 500,000,000 shares authorized, 13,257,425 and 12,062,309 shares issuedand outstanding in 2025 and 2024 1 1 Additional paid in capital 18,554 16,535 Accumulated other comprehensive (loss) income (7,682) 340 Retained earnings 1,233 1,292 Total Stockholders’ Equity $ 12,106 $ 18,168 Non-controlling interest $ 38,418 $ 65,403 Total Equity $ 50,524 $ 83,571 Total Liabilities and Equity $ 885,225 $ 787,589 See accompanying notes to consolidated financial statements. F-3
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STRAWBERRY FIELDS REIT, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE (LOSS) INCOME(Amounts in $000’s, except share data) Year Ended December 31, 2025 2024 Revenues Rental revenues $ 154,999 $ 117,058 Expenses: Depreciation $ 35,774 29,031 Amortization 10,475 4,657 General and administrative expenses 8,608 6,851 Property taxes 15,247 14,489 Facility rent expenses 609 727 Total expenses $ 70,713 $ 55,755 Income from operations 84,286 61,303 Interest expense, net $ (48,612) $ (32,603)Amortization of deferred financing costs (804) (657)Mortgage insurance premium (1,536) (1,548)Total interest expense $ (50,952) $ (34,808) Other (loss) income: Other (loss) income (28) 10 Total other (loss) income (28) 10 Net income $ 33,306 $ 26,505 Less: Net income attributable to non-controlling interest (25,731) (22,410) Net income attributable to common shareholders 7,575 4,095 Other comprehensive (loss) income: (Loss) gain due to foreign currency translation (34,837) 431 Comprehensive income attributable to non-controlling interest 26,815 (620) Comprehensive (loss) income $ (447) $ 3,906 Net income attributable to common stockholders $ 7,575 $ 4,095 Basic and diluted income per common share $ 0.60 $ 0.57 Weighted average number of common stock outstanding 12,696,831 7,124,158 See accompanying notes to consolidated financial statements. F-4
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STRAWBERRY FIELDS REIT, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF EQUITY(Amounts in $000’s, except share data) Number ofCommonShares CommonStock atPar AdditionalPaid-inCapital Accumulatedothercomprehensiveincome RetainedEarnings Non-controllinginterest Total Balance, December 31, 2023 6,487,856 $ - $ 5,746 $ 529 $ 1,232 $ 39,766 $ 47,273 Issuance of common stock in exchange for OP units 1,947,078 - - - - - - Proceeds from equity raise net of offering costs of $2.0million 3,333,334 1 33,009 - - - 33,010 ATM common stock sales 278,152 - 3,239 - - - 3,239 Common stock issued for property acquisition 264,884 - 3,078 - - - 3,078 Common stock retirement (248,995) - (2,470) - - - (2,470)Dividends - - - - (4,035) - (4,035)Non-controlling interest distributions - - - - - (23,460) (23,460)Net change in foreign currency translation - - - (189) - 620 431 Reallocation of non-controlling interest (26,067) 26,067 - Net Income - - - - 4,095 22,410 26,505 Balance, December 31, 2024 12,062,309 $ 1 $ 16,535 $ 340 $ 1,292 $ 65,403 $ 83,571 Issuance of common stock in exchange for OP units 1,056,200 - - - - - - Common Stock Bonus 6,450 - 72 - - - 72 ATM common stock sales 197,102 - 2,324 - - - 2,324 Common Stock Retirement (64,636) - (652) - - - (652)Dividends - - - - (7,634) - (7,634)Non-controlling interest distributions - - - - - (25,600) (25,600)OP Units retirement - - - - - (2,026) (2,026)OP Units issued for property acquisition - - - - - 2,000 2,000 Net change in foreign currency translation andadjustments - - - (8,022) - (26,815) (34,837)Net Income - - - 7,575 25,731 33,306 Reallocation of non-controlling interest - - 275 - - (275) - Balance, December 31, 2025 13,257,425 $ 1 $ 18,554 $ (7,682) $ 1,233 $ 38,418 $ 50,524 See accompanying notes to consolidated financial statements. F-5
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STRAWBERRY FIELDS REIT, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in $000’s) Year Ended December 31, 2025 2024 Cash flows from operating activities: Net income $ 33,306 $ 26,505 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 46,249 33,688 Stock based compensation 1,688 - Amortization of bond issuance costs 2,549 629 Amortization of deferred financing costs 804 657 Loss from sale of real estate investments 12 - Increase in other assets (98) (1,773)Amortization of right of use asset 353 505 Foreign currency translation adjustments 3,172 3,207 Increase in straight-line rent receivables (7,102) (4,368)Increase in accounts payable and accrued liabilities and other liabilities 9,457 785 Repayment of operating lease liability (353) (505)Net cash provided by operating activities $ 90,037 $ 59,330 Cash flow from investing activities: Purchase of real estate investments $ (110,036) $ (113,897)Purchase of lease rights - (24,000)(Increase) decrease in notes receivable (1,836) 1,121 Net cash used in investing activities $ (111,872) $ (136,776) Cash flows from financing activities: Proceeds from issuance of bonds, net of issuance costs $ 95,156 $ 116,704 Proceeds from ATM Stock Sales, net 2,324 3,239 Proceeds from senior debt, net of discount - 59,000 Proceeds from equity raise, net - 33,010 Deferred financing costs - (784)Repayment of bonds (15,046) (10,459)Repayment of senior debt (43,329) (37,401)Repayment of note payable (8,256) - Non-controlling interest distributions (25,600) (23,460)Payment of dividends (7,634) (4,035)OP Unit Retirement (2,026) - Common stock retirement (652) (2,470)Net cash (used in) provided by financing activities $ (5,063) $ 133,344 (Decrease) increase in cash and cash equivalent and restricted cash and equivalents $ (26,898) $ 55,898 Cash and cash equivalents and restricted cash and equivalents at the beginning of the year $ 93,656 $ 37,758 Cash and cash equivalents and restricted cash and equivalents at the end of the year $ 66,758 $ 93,656 F-6
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STRAWBERRY FIELDS REIT, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in $000’s) Year Ended December 31, 2025 2024 Supplemental Disclosure of Cash Flow Information: Cash paid during the year for interest $ 47,719 $ 33,672 Supplemental schedule of noncash activities: Accumulated other comprehensive income: Foreign currency translation adjustments $ (34,837) $ 431 Note payable assumed in exchange for acquisition of intangible asset $ 50,880 $ - Transfer of other assets to real estate investments, net $ 4,243 $ - OP units issued for property acquisition $ 2,000 $ - Note receivable from sale of real estate investments $ 2,400 $ - Right of use lease asset obtained in exchange for operating lease liabilities $ - $ 3,017 Assumption of note payable and other debt for property acquisition $ - $ 2,800 Common shares issued for property acquisition $ - $ 3,078 Right of use lease asset and lease liability terminated $ - $ 2,850 See accompanying notes to consolidated financial statements. F-7
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. Business Overview The Company STRAWBERRY FIELDS REIT Inc. (the “Company”) is a Maryland corporation formed in July 2019. The Company commenced operations on June 8, 2021, following thecompletion of the formation transactions described below. The Company conducts its business through a traditional UPREIT structure in which substantially all of its assetsare owned by subsidiaries of Strawberry Fields Realty, LP, a Delaware limited partnership formed in July 2019 (the “Operating Partnership”). The Company is the generalpartner of the Operating Partnership. The Company owns approximately 24.0% and 22.1% of the outstanding Operating Partnership units (“OP units”) as of December 31,2025 and December 31, 2024, respectively. As the sole general partner of the Operating Partnership, the Company has the exclusive power under the partnership agreement to manage and conduct the business affairs ofthe Operating Partnership, subject to certain limited approval and voting rights of the limited partners. The Company may cause the Operating Partnership to issue additionalOP units in connection with property acquisitions, compensation or otherwise. The Company became a publicly traded entity on September 21, 2022. The Company is engaged in the ownership, acquisition, financing and triple-net leasing of skilled nursing facilities and other post-acute healthcare properties. As of December31, 2025, the Company’s portfolio consists of 132 healthcare properties and one leased property that is in turn leased to a tenant that operates the facilities. As of December 31,2024, the Company owned 113 properties and leased one property that it in turn subleased to a tenant that operates the facility. As of December 31, 2025, the portfolioproperties are located in Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas. The Company generates substantially all of itsrevenues by leasing its properties to tenants under long-term leases primarily on a triple-net basis, under which the tenant pays the cost of real estate taxes, insurance and otheroperating costs of the facility and capital expenditures. Each healthcare facility located at its properties is managed by a qualified operator with an experienced managementteam. Variable Interest Entity The Company consolidates the Operating Partnership, a variable interest entity (“VIE”) in which the Company is considered the primary beneficiary. The primary beneficiaryis the entity that has (i) the power to direct the activities that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the VIE orthe right to receive benefits from the VIE that could be significant to the VIE. Non-Controlling Interest A non-controlling interest is defined as the portion of the equity in an entity not attributable, directly or indirectly, to the primary beneficiary. Non-controlling interests arerequired to be presented as a separate component of equity on a consolidated balance sheets. Accordingly, the presentation of net income is modified to present the incomeattributed to controlling and non-controlling interests. The non-controlling interest on the Company’s consolidated balance sheets represents OP units not held by the Companyand represents approximately 76.0% and 77.9% of the outstanding OP Units issued by the Operating Partnership as of December 31, 2025 and 2024, respectively. The holdersof these OP units are entitled to share in cash distributions from the Operating Partnership in proportion to their percentage ownership of OP units. Net income is allocated tothe non-controlling interest based on the weighted-average of OP units outstanding during the year. Basis of Presentation The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Fiscal Year End The Company has adopted a fiscal year end of December 31. F-8
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2. Summary of Significant Accounting Policies Use of Estimates Management is required to make estimates and assumptions in the preparation of the consolidated financial statements in conformity with GAAP. These estimates andassumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements andthe reported amounts of revenue and expenses during the reporting period. Actual results may differ from management’s estimates. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, the Operating Partnership and its wholly-owned subsidiaries. Intercompanytransactions and balances have been eliminated upon consolidation. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and short-term investments with original maturities of three months or less when purchased. The Company’s cash, cash equivalents and restricted cash and equivalents periodically exceed federally insurable limits. The Company monitors the cash balances in itsoperating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject toother adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to the cash in its operating accounts. At December 31, 2025and 2024, the Company had $53.1 million and $80.0 million, respectively, on deposit in excess of federally insured limits. Restricted Cash and Equivalents Restricted cash and equivalents primarily consists of amounts held by mortgage lenders to provide for real estate tax expenditures, tenant improvements, capital expendituresand security deposits, as well as escrow accounts related to principal and interest payments on bonds. Real Estate Depreciation Real estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected life of the asset on a straight-line basis. TheCompany considers the period of future benefit of an asset to determine its appropriate useful life. The Company does not incur expenditures for tenant improvements as theyare the responsibility of the tenant per their respective leases. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Building and improvements 7-45 yearsEquipment and personal property 2-18 years F-9
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2. Summary of Significant Accounting Policies (cont.) Real Estate Valuation In determining fair value and the allocation of the purchase price of acquisitions, the Company uses current appraisals or third-party valuations services. The most significantcomponents of these allocations are typically the allocation of fair value to land and buildings and, for certain of its acquisitions, in place leases and other intangible assets. Inthe case of the fair value of buildings and the allocation of value to land and other intangibles, the estimates of the values of these components will affect the amount ofdepreciation and amortization the Company records over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in placeleases, the Company makes best estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costsduring hypothetical expected lease up periods, market conditions and costs to execute similar leases. These assumptions affect the amount of future revenue that the Companywill recognize over the remaining lease term for the acquired in place leases. The Company evaluates each purchase transaction to determine whether the acquired assets meet the definition of a business. Transaction costs related to acquisitions that arenot deemed to be businesses are included in the cost basis of the acquired assets, while transaction costs related to acquisitions that are deemed to be businesses are expensedas incurred. All of the Company’s acquisitions of investment properties qualified as asset acquisitions during the periods. Revenue Recognition Rental income from operating leases is generally recognized on a straight-line basis over the terms of the leases. Substantially all of the Company’s leases contain provisionsfor specified annual increases over the rents of the prior year and are generally computed in one of three methods depending on specific provisions of each lease as follows: (i) a specified annual increase over the prior year’s rent, generally between 1.0% and 3.0%; (ii) a calculation based on the Consumer Price Index; or (iii) specific dollar increases. Contingent revenue is not recognized until all possible contingencies have been eliminated. The Company considers the operating history of the lessee and the generalcondition of the industry when evaluating whether all possible contingencies have been eliminated and have historically, and expect in the future, to not include contingentrents as income until received. The Company follows a policy related to rental income whereby the Company considers a lease to be non-performing after 60 days of non-payment of past due amounts and does not recognize unpaid rental income from that lease until the amounts have been received. Rental revenues relating to non-contingent leases that contain specified rental increases over the life of the lease are recognized on the straight-line basis. Recognizing incomeon a straight-line basis requires us to calculate the total non-contingent rent containing specified rental increases over the life of the lease and to recognize the revenue evenlyover that life. This method results in rental income in the early years of a lease being higher than actual cash received, creating a straight-line rent receivable asset included inour accompanying consolidated balance sheets. At some point during the lease, depending on its terms, the cash rent payments eventually exceed the straight-line rent whichresults in the straight-line rent receivable asset decreasing to zero over the remainder of the lease term. The Company assesses the collectability of straight-line rent inaccordance with the applicable accounting standards and reserve policy. If the lessee becomes delinquent in rent owed under the terms of the lease, the Company may providea reserve against the recognized straight-line rent receivable asset for a portion, up to its full value, that the Company estimates may not be recoverable. F-10
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2. Summary of Significant Accounting Policies (Cont.) Revenue Recognition (cont.) Capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. Capitalized below-market leases areaccreted to rental income over the remaining terms of the respective leases and expected below-market renewal option periods. The Company reports revenues and expenses within our triple-net leased properties for real estate taxes that are escrowed and obligations of the tenants in accordance withtheir respective lease with us. Gain from sale of real estate investments was recognized when control of the property is transferred, and it is probable that substantially all consideration will be collected. Allowance for Credit Loss The Company evaluates the liquidity and creditworthiness of its tenants, operators and borrowers on a monthly and quarterly basis. The Company’s evaluation considersindustry and economic conditions, individual and portfolio property performance, credit enhancements, liquidity and other factors. The Company’s tenants, borrowers andoperators furnish property, portfolio and guarantor/operator-level financial statements, among other information, on a monthly or quarterly basis; the Company utilizes thisfinancial information to calculate the lease or debt service coverages that it uses as a primary credit quality indicator. Lease and debt service coverage information is evaluatedtogether with other property, portfolio and operator performance information, including revenue, expense, net operating income, occupancy, rental rate, reimbursement trends,capital expenditures and EBITDA (defined as earnings before interest, tax, depreciation and amortization), along with other liquidity measures. The Company evaluates, on amonthly basis or immediately upon a significant change in circumstance, its tenants’, operators’ and borrowers’ ability to service their obligations with the Company. The Company maintains an allowance for credit loss for straight-line rent receivables resulting from tenants’ inability to make contractual rent and tenant recovery paymentsor lease defaults. For straight-line rent receivables, the Company’s assessment is based on amounts estimated to be recoverable over the lease term. Impairment of Long-Lived Assets and Goodwill The Company assesses the carrying value of real estate assets and related intangibles (“real estate assets”) when events or changes in circumstances indicate that the carryingvalue may not be recoverable. The Company tests its real estate assets for impairment by comparing the sum of the expected future undiscounted cash flows to the carryingvalue of the real estate assets. The expected future undiscounted cash flows are calculated utilizing the lowest level of identifiable cash flows that are largely independent ofthe cash flows of other assets and liabilities. If the carrying value exceeds the expected future undiscounted cash flows, an impairment loss will be recognized to the extent thatthe carrying value of the real estate assets is greater than their fair value. Goodwill is tested for impairment at least annually based on certain qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less thanits’ carrying value. Potential impairment indicators include a significant decline in real estate values, significant restructuring plans, current macroeconomic conditions, state ofthe equity and capital markets or a significant decline in the Company’s market capitalization. If the Company determines that it is more likely than not that the fair value of areporting unit is less than its’ carrying value, the Company applies the required two-step quantitative approach. The quantitative procedures of the two-step approach (i)compare the fair value of a reporting unit with its carrying value, including goodwill, and, if necessary, (ii) compare the implied fair value of reporting unit goodwill with thecarrying value as if it had been acquired in a business combination at the date of the impairment test. The excess fair value of the reporting unit over the fair value of assets andliabilities, excluding goodwill, is the implied value of goodwill and is used to determine the impairment amount, if any. The Company has selected the fourth quarter of eachfiscal year to perform its annual impairment test. F-11
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2. Summary of Significant Accounting Policies (Cont.) Concentrations of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash and equivalents,notes receivable and operating leases on owned properties. These financial instruments are subject to the possibility of loss of carrying value as a result of the failure of otherparties to perform according to their contractual obligations or changes in market prices which may make the instrument less valuable. Cash and cash equivalents, restrictedcash and equivalents are held with various financial institutions. From time to time, these balances exceed the federally insured limits. These balances are maintained with highquality financial institutions which management believes limits the risk. With respect to notes receivable, the Company obtains various collateral and other protective rights,and continually monitor these rights, in order to reduce such possibilities of loss. In addition, the Company provides reserves for potential losses based upon management’speriodic review of our portfolio. On of December 31, 2025 and 2024, the Company held six notes receivable with an outstanding balance of $20.8 million and $16.5 million, respectively. The notes havematurities ranging from 2026 through 2046, and interest rates ranging from 2% to 10.25%. One of the notes is collateralized by tenants accounts receivable. All other notesreceivable are uncollateralized as of December 31, 2025 and 2024. Market Concentration Risk As of December 31, 2025 and 2024, the Company owned 132 and 113 properties and leased 1 property, respectively. The facilities are located in 10 states, with 20 facilities ofits total facilities located in Illinois (which include 4,226 skilled nursing beds or 27.1% of the Company’s total beds) and 41 of its total facilities in Indiana (which include3,404 skilled nursing and assisted living beds or 21.8% of the Company’s total beds). Since tenant revenue is primarily generated from Medicare and Medicaid, the operationsof the Company are indirectly subject to the administrative directives, rules and regulations of federal and state regulatory agencies, including, but not limited to the Centersfor Medicare & Medicaid Services, and the Department of Health and Aging in all states in which the Company operates. Such administrative directives, rules and regulations,including budgetary reimbursement funding, are subject to change by an act of Congress, the passage of laws by the state regulators or an administrative change mandated byone of the executive branch agencies. Such changes may occur with little notice or inadequate funding to pay for the related costs, including the additional administrativeburden, to comply with a change. Debt and Capital Raising Issuance Costs Costs incurred in connection with the issuance of equity interests are recorded as a reduction of additional paid-in capital. Debt issuance costs related to debt instruments,excluding line of credit arrangements, are deferred, recorded as a reduction of the related debt liability, and amortized to interest expense over the remaining term of the relateddebt liability utilizing the interest method. Deferred financing costs related to line of credit arrangements are deferred, recorded as an asset and amortized to interest expenseover the remaining term of the related line of credit arrangement utilizing the interest method. Penalties incurred to extinguish debt and any remaining unamortized debt issuance costs, discounts and premiums are recognized as income or expense in the consolidatedstatements of income at the time of extinguishment. Segment Reporting Accounting guidance regarding disclosures about segments of an enterprise and related information establishes standards for the manner in which public business enterprisesreport information about operating segments. The Company’s investment decisions in health care properties, and resulting investments are managed as a single operatingsegment for internal reporting and for internal decision-making purposes. Therefore, the Company has concluded that it operates as a single segment. The Chief OperatingDecision Makers for the segment is/ are: Moishe Gubin, Chairman and Chief Executive Officer and Greg Flamion, Chief Financial Officer. Basic and Diluted Income Per Common Share The Company calculates basic income per common share by dividing net income attributable to common stockholders by the weighted average number of common sharesoutstanding during the year. At December 31, 2025 and 2024, there were 42,347,555 and 43,426,807 OP units, respectively, outstanding which were potentially dilutivesecurities. During the years ended December 31, 2025 and 2024 the assumed conversion of the OP units had no impact on basic and diluted income per share . F-12
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2. Summary of Significant Accounting Policies (Cont.) Foreign Currency Translation and Transactions Assets and liabilities denominated in foreign currencies that are translated into U.S. dollars use exchange rates in effect at the end of the period, and revenues and expensesdenominated in foreign currencies that are translated into U.S. dollars use average rates of exchange in effect during the related period. Gains or losses resulting fromtranslation are included in accumulated other comprehensive (loss) income, a component of equity on the consolidated balance sheets. Gains or losses resulting from foreign currency transactions are translated into U.S. dollars at the rates of exchange prevailing at the dates of the transactions. The effects oftransaction gains or losses, if any, are included in other (loss) income, in the consolidated statements of income. Fair Value Measurement The Company measures and discloses the fair value of nonfinancial and financial assets and liabilities utilizing a hierarchy of valuation techniques based on whether the inputsto a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, whileunobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created thefollowing fair value hierarchy: ● Level 1—quoted prices for identical instruments in active markets; ● Level 2—quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derivedvaluations in which significant inputs and significant value drivers are observable in active markets; and ● Level 3—fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The Company measures fair value using a set of standardized procedures that are outlined herein for all assets and liabilities which are required to be measured at fair value.When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and classifies such items in Level 1. In instanceswhere a market price is available, but the instrument is in an inactive or over-the-counter market, the Company consistently applies the dealer (market maker) pricing estimateand classifies the asset or liability in Level 2. If quoted market prices or inputs are not available, fair value measurements are based upon valuation models that utilize currentmarket or independently sourced market inputs, such as interest rates, option volatilities, credit spreads and/or market capitalization rates. Items valued using such internallygenerated valuation techniques are classified according to the lowest level input that is significant to the fair value measurement. As a result, the asset or liability could beclassified in either Level 2 or Level 3 even though there may be some significant inputs that are readily observable. Internal fair value models and techniques used by theCompany include discounted cash flow valuation models. F-13
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2. Summary of Significant Accounting Policies (Cont.) Real Estate Investments – Held for Sale At December 31, 2025 and 2024, the Company had one property included in real estate investments which was held for sale and carried at the lower of their net book value orfair value on a non-recurring basis on the consolidated balance sheets. The Company’s real estate investments held for sale were classified as Level 3 of the fair valuehierarchy. Stock-Based Compensation The Company accounts for share-based payment awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). ASC 718 requires that thecost resulting from all share-based payment transactions be recognized in the consolidated financial statements. ASC 718 requires all entities to apply a fair value-basedmeasurement method in accounting for share-based payment transactions. The Company recognizes share-based payments over the vesting period. Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Expense Disaggregation Disclosures.” ASU2024-03 requires disclosure to disaggregate prescribed expenses within relevant income statement captions. The standard is effective for fiscal years beginning after December15, 2026 and for interim periods after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes to its existing disclosures. In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and ContractAssets The ASU provides an optional practical expedient for estimating future credit losses based on current conditions as of the balance sheet date and assuming thoseconditions do not change over the remaining life of the accounts receivable. This standard is effective January 1, 2026. The adoption of this ASU did not have a materialimpact on the consolidated results of operations and financial condition. In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to theAccounting for Internal-Use Software. The ASU removes references to prescriptive software development stages and includes an updated framework for capitalizing internalsoftware costs. This standard is effective January 1, 2028. The Company is currently evaluating this ASU’s impact on the consolidated results of operations and financialcondition. F-14
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3. Restricted Cash and Equivalents The following table presents the Company’s cash and equivalents and escrow deposits: December 31, 2025 2024 (amounts in $000’s) Escrow with trustee $ 2,170 $ 16,609 MIP escrow accounts 790 688 Other escrow and debt deposits 270 270 Property tax and insurance escrow 6,815 7,228 Interest and expense reserve bonds escrow 12,696 8,225 HUD replacement reserves 12,205 12,263 Total restricted cash and equivalents $ 34,946 $ 45,283 Escrow with trustee - The Company transfers funds to the trustee for its Series A, B, C and D bonds to cover principal and interest payments prior to the payment date. MIP escrow accounts - The Company is required to make monthly escrow deposits for MIP on the HUD guaranteed mortgage loans. Other escrow and debt deposits – The Company funds various escrow accounts under certain of its loan agreements, primarily to cover debt service on underlying loans. Property tax and insurance escrow - The Company funds escrows for real estate taxes and insurance under certain of its loan agreements. Interest and expense reserve bonds escrow - The indentures for the Series A, B, C, and D Bonds require the funding of a six-month interest reserve as well as an expensereserve. See Note 7 – Bonds, Note Payable and Other Debt. HUD replacement reserves - The Company is required to make monthly payments into an escrow for replacement and improvement of the project assets covered by HUDguaranteed mortgage loans. A portion of the replacement reserves are required to be maintained until the applicable loan is fully paid. NOTE 4. Real Estate Investments, net Real estate investments consist of the following: Estimated December 31, Useful Lives 2025 2024 (Years) (Amounts in $000’s) Buildings and improvements 7-45 $ 773,555 $ 683,582 Equipment and personal property 2-18 123,072 104,869 Land - 72,586 69,036 969,213 857,487 Less: accumulated depreciation (282,062) (248,429)Real estate investments, net $ 687,151 $ 609,058 For the years ended December 31, 2025 and 2024, total depreciation expense was $35.8 million and $29.0 million, respectively. F-15
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4. Real Estate Investments, net (cont.) Acquisition of Properties On March 25, 2024, the Company entered into a purchase agreement for a property comprised of a 68-bed skilled nursing facility and 10 bed assisted living facilitynear Georgetown, Indiana. The acquisition was closed on May 31, 2024 for $5.85 million and the Company funded the acquisition by utilizing cash from the balance sheet. On August 30, 2024 the Company completed the acquisition of two skilled nursing facilities with 254 licensed beds near San Antonio, Texas. The acquisition was for$15.25 million. The Company funded the acquisition utilizing cash from the balance sheet. On September 25, 2024 the Company completed the acquisition for a property comprised of an 83-bed skilled nursing facility and 25-bed assisted living facility nearNashville, Tennessee. The acquisition was for $6.7 million and the Company funded the acquisition by assuming $2.8 million of existing debt on the facilities, $3.1 millioncommon stock to the seller, and transferring $0.8 million issuing of other assets to the seller. On October 11, 2024, the Company acquired an 86-bed skilled nursing facility in Indianapolis, Indiana. The acquisition was for $6.0 million and the Company fundedthe acquisition utilizing cash from its balance sheet. The facility was added to an existing master lease with Infinity of Indiana. On December 20, 2024, the Company completed a purchase with an unaffiliated seller with respect to eight healthcare facilities located in Missouri. The purchaseprice for the facilities was $87.5 million. The facilities were currently leased under a master lease agreement to a group of third-party tenants. Under the master lease, thetenants currently pay annual rent on a triple net basis. The eight facilities are comprised of 1,111 licensed beds. The Company purchase the facilities utilizing cash from thebalance sheet and funds provided by a third-party lender. On December 31, 2024 the Company completed the acquisition of a 100-bed skilled nursing facility in Oklahoma for $5.0 million. Under the lease, the tenants initialannual rents are $500,000 on a triple net basis. On January 1, 2025, the Company entered into a new master lease for 10 Kentucky properties formally part of the Landmark Master Lease. Base rent is $23.3 milliona year and is subject to an increase based on CPI with a minimum increase of 2.50%. The initial lease term is 10 years with four 5-year extension options. Also, as part of thenegotiation of the new Kentucky Master Lease, the Company entered into a 5 year note payable with the parent of the Landmark tenant for $50.9 million dollars, included inNote Payable in the accompanying consolidated balance sheets. On January 2, 2025, the Company acquired 6 facilities consisting of 354 beds in Kansas. The acquisition was $24.0 million and the Company funded the acquisitionutilizing cash from the consolidated balance sheets. The Company formed a new master lease for an initial 10-year period that included two 5-year extension options on atriple-net basis. Additionally, the lease will increase the Company’s annual rents by $2.4 million and is subject to 3% annual increases. On March 31, 2025, the Company acquired a skilled nursing facility with 100 licensed beds near Oklahoma City, Oklahoma. The acquisition was $5.0 million andwas funded utilizing cash from the consolidated balance sheets. The initial term of the lease is 10 years and includes two 5-year extension options. Base rent for the property is$0.5 million dollars annually and is subject to 3% annual increases. On April 4, 2025, the Company completed the acquisition for a skilled nursing facility with 112 licensed beds near Houston, Texas. The acquisition was for $11.5million and was funded utilizing cash from the consolidated balance sheets. Base rent for this property is $1.3 million dollars annually. The property was added to an existingmaster lease and is subject to an annual base rent increase of 3%. The initial term is approximately 10 years and includes two 5 year extension options. On July 1, 2025, the Company completed the acquisition of nine skilled nursing facilities, comprised of 686 beds, located in Missouri. The acquisition was for $59million and the Company funded the acquisition utilizing cash from the consolidated balance sheets. Eight of the facilities were leased to the Tide Group and were added to themaster lease the Company entered into in August 2024. These properties are subject to annual rent increase of 3% and the initial term is 10 years. This acquisition increasedTide Group’s annual rents by $5.5 million. The ninth facility was leased to an affiliate of Reliant Care Group L.L.C. The facility was added to the master lease the Companyassumed in December 2024 and increased Reliant Care Group’s annual rents by $0.6 million. On July 1, 2025, the Company sold Chalet of Niles, a property in Michigan that was formally part of the Landmark Master Lease, to a third-party purchaser. Theproperty sold for $2.7 million dollars. A loss of $0.01 million dollars resulted from this sale. The buyer received financing from the Company for the acquisition. The financingwas $2.4 million for three years and is interest only, with an annual interest rate of 10%. The financing has a balloon payment at the end of year three. On August 5, 2025, the Company completed the acquisition for a skilled nursing facility with 80 licensed beds near McLoud, Oklahoma. The acquisition was for$4.25 million. The Company funded the acquisition utilizing cash from the consolidated balance sheets. The initial annual base rents are $0.4 million dollars and subject to 3%annual rent increases. The initial term is 10 years and includes two 5 year extension options. On August 29, 2025, the Company completed the acquisition for a healthcare facility comprised of 108 skilled nursing beds and 16 assisted living beds near PoplarBluff, Missouri. The acquisition was for $5.3 million. The Company funded the acquisition utilizing cash from the consolidated balance sheets. The initial annual base rentsare $0.5 million dollars and subject to 3% annual rent increases. The property was assumed by the Reliant Care master lease and is subject to the terms of the master lease. On November 10, 2025, the Company purchased a skilled nursing facility with 60 licensed beds near Grove, Oklahoma. The acquisition was for $3.0 million. TheCompany will funded the acquisition utilizing cash from the consolidated balance sheet. The property was assumed by the Oklahoma master lease and is subject to terms ofthe lease. F-16
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4. Real Estate Investments, net (cont.) Other Properties In December 2022, the Company, through one of its subsidiaries, took title on a property in Massachusetts through a foreclosure. As of December 31, 2025 and 2024, theproperty is carried at estimated fair value of $1.2 million and is included in real estate investments in the accompanying consolidated balance sheets. NOTE 5. Intangible Assets and Goodwill Intangible assets consist of the following goodwill, Certificate of Need (“CON”) licenses and lease rights: GoodwillincludingCONLicenses Lease Rights Total (Amounts in $000’s) Balances, December 31, 2023 Gross $ 1,323 $ 54,577 $ 55,900 Accumulated amortization $ - $ (47,296) $ (47,296) Net carrying amount $ 1,323 $ 7,281 $ 8,604 Acquisition of lease rights $ - $ 24,000 $ 24,000 Amortization for the year ended December 31, 2024 $ - $ (4,657) $ (4,657)Balances, December 31, 2024 Gross $ 1,323 $ 78,577 $ 79,900 Accumulated amortization $ - $ (51,953) $ (51,953) Net carrying amount $ 1,323 $ 26,624 $ 27,947 Lease amendment $ - $ 50,880 $ 50,880 Amortization for the year ended December 31, 2025 $ - $ (10,475) $ (10,475)Balances, December 31, 2025 Gross $ 1,323 $ 129,457 $ 130,780 Accumulated amortization $ - $ (62,428) $ (62,428)Net carrying amount $ 1,323 $ 67,029 $ 68,352 Estimated amortization expense for all finite-lived intangible assets for each of the future years ending December 31, is as follows: Amortization of LeaseRights (Amounts in$000’s) 2026 $ 8,175 2027 7,949 2028 7,564 2029 7,488 2030 7,488 Thereafter 28,365 Total $ 67,029 F-17
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 6. Leases As of December 31, 2025 and 2024, the Company had leased 133 properties and 114 properties, respectively, to tenant/operators in the states of Arkansas, Illinois, Indiana,Kansas, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas. As of December 31, 2025 and 2024, all of the Company’s healthcare facilities were leased. Most of thesefacilities are leased on a triple-net basis, meaning that the lessee (i.e., operator of the facility) is obligated under the lease for all expenses of the property in respect toinsurance, taxes and property maintenance, as well as the lease payments. The following table provides additional information regarding the properties owned/leased for the periods indicated: December 31, 2025 2024 Cumulative number of properties 133 114 Cumulative number of operational beds 15,602 14,186 The following table provides additional information regarding the properties/facilities leased by the Company as of December 31, 2025: State Number ofOperationalBeds/Units Owned byCompany Leased byCompany Total Illinois 4,226 20 - 20 Indiana 3,404 35 1 36 Ohio 238 4 - 4 Tennessee 1,412 15 - 15 Kentucky 1,163 10 - 10 Arkansas 1,568 13 - 13 Kansas 354 6 - 6 Missouri 1,921 18 - 18 Oklahoma 477 5 - 5 Texas 839 6 - 6 Total properties 15,602 132 1 133 Facility Type Skilled Nursing Facilities 15,195 130 1 131 Long-Term Acute Care Hospitals 63 2 - 2 Assisted Living Facility 344 10 - 10 Total facilities 15,602 142 1 143 As of December 31, 2025, total future minimum rental revenues for the Company’s tenants are as follows: Year Amount (Amounts in $000’s) 2026 $ 134,750 2027 138,139 2028 136,368 2029 130,572 2030 131,587 Thereafter 388,668 Total $ 1,060,084 F-18
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 6. Leases (cont.) The following table provides summary information regarding the number of operational beds associated with a property leased by the Company and subleased to third-partyoperators: December 31, 2025 2024 Number of facilities leased and subleased to third-parties 1 1 Number of operational beds 68 68 Right of use assets and operating lease liabilities are disclosed as separate line items in the consolidated balance sheets and are valued based on the present value of the futureminimum lease payments at lease commencement. As the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on theinformation available at the adoption date in determining the present value of future payments. Lease expense is recognized on a straight-line basis over the lease term. TheCompany’s operating lease obligation is for one skilled nursing facility. The lease expires on March 1, 2028 and has two five-year renewal options. The lease is a triple netlease, which requires the Company to pay real and personal property taxes, insurance expenses and all capital improvements. The Company subleases the building as part ofthe Indiana master lease. Based on the sublease with the Company’s tenant, the tenant is required to pay real and personal property taxes, insurance expenses and all capitalimprovements. The components of lease expense and other lease information are as follows (dollars in thousands): Years ended December 31, 2025 2024 Operating lease cost $ 397 $ 637 As of December 31, 2025 2024 Operating lease right of use asset $ 851 $ 1,204 Operating lease liability $ 851 $ 1,204 Weighted average remaining lease term-operating leases (in years) 2.19 3.25 Weighted average discount rate 4.1% 4.1% Future minimum operating lease payments under non-cancellable leases as of December 31, 2025, reconciled to the Company’s operating lease liability presented on theconsolidated balance sheets: (Amounts in$000s) 2026 $ 397 2027 397 2028 100 Total $ 894 Less Interest (43)Total operating lease liability $ 851 Other Properties leased by the Company The Company, through one of its subsidiaries, leases its office spaces from a related party. Rental expense under the leases for the year ended December 31, 2025 and 2024,was $218,000 and $214,000 , respectively. F-19
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Other Debt Bonds, Note Payable and Other Debt consist of the following: WeightedAverageInterestRate atDecember 31, December 31, 2025 2025 2024 (Amounts in $000s) HUD guaranteed loans 3.26% $ 254,085 $ 262,150 Bank loans 7.17% 163,177 198,441 Series A, B, C, and D bonds 6.78% 334,766 213,344 Note payable 10.00% 42,624 - Gross bonds, note payable, and other debt $ 794,652 $ 673,935 Debt issuance costs (4,154) (3,400) Net bonds, note payable, and other debt $ 790,498 $ 670,535 Principal payments on the Bonds, Note Payable and Other Debt payable through maturity are as follows (amounts in $000s): Year Ending December 31 Amount 2026 $ 258,877 2027 83,288 2028 63,414 2029 169,993 2030 9,483 Thereafter 209,597 Total Principal Payments on Bonds, Note Payable and Other Debt $ 794,652 Debt Covenant Compliance As of December 31, 2025 and 2024, the Company was party to approximately 45 and 43 outstanding credit related instruments, respectively. These instruments included notepayable, credit facilities, mortgage notes, bonds and other credit obligations. Some of the instruments include financial covenants. Covenant provisions include, but are notlimited to, debt service coverage ratios, and minimum levels of EBITDA (defined as earnings before interest, tax, and depreciation and amortization) or EBITDAR (defined asearnings before interest, tax, depreciation and amortization and rental expense). Some covenants are based on annual financial metric measurements, and some are based onquarterly financial metric measurements. The Company routinely tracks and monitors its compliance with its covenant provisions. As of December 31, 2025, the Companywas in compliance with all financial and administrative covenants. F-20
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Other Debt (cont.) Senior Debt—Mortgage Loans Guaranteed by HUD As of December 31, 2025 and 2024, the Company had HUD guaranteed mortgage loans from financial institutions of $254 million and $262 million, respectively. These loanswere secured by first mortgage liens on the applicable properties, assignments of rent and second liens on the operator’s assets. The Company pays HUD annual mortgageinsurance premiums of 0.65% of the loan balances in addition to the interest rate. As a result, the overall interest rate paid by the Company with respect to the HUD guaranteedloans as of December 31, 2025 and 2024 was 3.91%, (including the mortgage insurance premium). Commercial Bank Mortgage Loan Facilities On March 21, 2022, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $105 million. The facilityprovides for monthly payments of principal and interest based on a 20-year amortization with a balloon payment due in March 2027. The rate is based on the one-monthSecured Overnight Financing Rate (“SOFR”) plus a margin of 3.5% and a floor of 4% (as of December 31, 2025 the rate was 7.37%). On June 30, 2025, the company paiddown $30.0 million dollars of the outstanding loan. As of December 31, 2025 and 2024, total outstanding balance was $61.2 million and $95.1 million, respectively. This loanis collateralized by 21 properties owned by the Company. The loan proceeds were used to repay the Series B Bonds and prepay certain bank loans not secured by HUDguaranteed mortgages. On August 25, 2023, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $66 million. The facilityprovides for monthly payments of interest only for the first 12 months and principal and interest thereafter based on a 20-year amortization with a balloon payment due inAugust 2028. The rate is based on the one-month SOFR plus a margin of 3.5% and a floor of 4% (as of December 31, 2025, the rate was 7.37%). On December 17, 2024 thecompany paid down $24 million dollars of the outstanding loan. As of December 31, 2025 and 2024, total outstanding balance was $40.3 million and $41.6 million,respectively. This loan is collateralized by 19 properties owned by the Company. On September 25, 2024, the Company acquired a property, located in Tennessee. As part of the acquisition of the property the Company assumed a $2.8 million loan thatpreviously existed on the property. The loan bears a fixed 6.25% annual interest rate. The loan term matures on April 23, 2026. As of December 31, 2025 and 2024 theoutstanding balance of the loan was $2.7 million and $2.8 million, respectively. On December 19, 2024, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $59 million. Thefacility provides for monthly payments of interest and payment of principal and interest that began on January 2026 based on a 20-year amortization with a balloon paymentdue in December 2029. The rate is based on the one-month SOFR plus a margin of 3.0% and a floor of 4% (as of the December 31, 2025, the rate was 6.87%). As of December31, 2025 and 2024, total outstanding principal amount was $59 million. This loan is collateralized by 8 properties owned by the Company. The loan proceeds were used toacquire the Missouri facilities. The two credit facilities that closed in March 21, 2022 and August 25, 2023 are subject to financial covenants which consist of (i) a covenant that the ratio of the Company’sindebtedness to its EBITDA cannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividend distribution is atleast 1.20 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the ratio of the Company’s net operating income to itsdebt service after dividend distribution is at least 1.05 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement, and (iii) a covenant that theCompany’s GAAP equity is at least $20 million. As of December 31, 2025, the Company was in compliance with the loan covenants. The credit facility closed on December 19, 2024 is subject to financial covenants which consist of (i) a covenant that the ratio of the Company’s indebtedness to its EBITDAcannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividend distribution is at least 1.25 to 1.00 for each fiscalquarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the ratio of the Company’s net operating income to its debt service after dividenddistribution is at least 1.05 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement, and (iii) a covenant that the Company’s GAAP equity is atleast $30 million. As of December 31, 2025, the Company was in compliance with the loan covenants. Series A Bonds In August 2024, Strawberry Fields, Inc completed, directly, an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series A Bonds with a par value of NIS 145.6million ($37.1 million). The series A Bonds were issued at par. Offering and issuance costs of approximately $1.0 million were incurred at closing. In December 2024, theCompany issued an additional NIS 145.6 million ($38.1 million) in Series A Bonds. Exchange of Series D Bonds for Series A Bonds In September 2024, the Company made an exchange tender offer of outstanding Series D Bonds for Series A Bonds. The interest rate on Series D Bonds is 9.1% per annum.The exchange offer rate was 1.069964 Series A Bonds per Series D Bonds. As a result of this offer, 47.3 million NIS Series D Bonds ($12.7 million) were exchanged for 50.6million NIS Series A Bonds ($13.6 million). As of December 31, 2025 and 2024, the outstanding balance of the Series A Bonds were $94.7 million and $88.5 million, respectively. Increases in the outstanding balance aredue to a change in the exchange rate. F-21
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Other Debt (cont.) Interest The Series A Bonds have an interest rate of 6.97% per annum. In July 2024, Standard & Poor’s provided an initial rating for the Series A Bonds of ilA+. Interest on the Series A Bonds is payable semi-annually in arrears on March 31 and September 30 of each year. The interest rate may increase if certain financial ratios are notachieved, as discussed below. Payment Terms The principal amount of the Series A Bonds is payable in three annual installments due on September 30 of each of the years 2024 through 2026. The first two principalpayments are equal to 6% of the original principal amount of the Series A Bonds, and the last principal payment is equal to the outstanding principal amount of the Series ABonds. Financial Covenants Until the date of full repayment of the Series A Bonds, the Company must comply with certain financial covenants described below. The application of the covenants is basedon the consolidated financial statements of the Company as prepared under the GAAP accounting method. The financial covenants are as follows: ● On the last day of each calendar quarter, the consolidated equity of the Company (excluding minority rights), as set forth in the Company’s consolidated financialstatements, will not be less than USD 20 million ● On the last day of each calendar quarter, the ratio between the Financial Debt and EBITDA shall not exceed 10 ● The DSCR shall not be less than 1.05 Dividend Restrictions As long as the Company does not breach any of the Financial Covenants, no distribution restriction shall hinder the Company. If the Company is in non-compliance with oneor more of the Financial Covenants, the Company can make a distribution in an amount that does not exceed the amount required to meet the U.S. legal requirementsapplicable to REITs. Increase in Interest Rate In the event that: ● The Company’s bond rating ilA+ or equivalent is lowered ● The EBITDA ratio exceeds 8 ● EBITDA to total debt service payments fall below 1.10 ● Consolidated Equity is less than USD $30 million An additional rate of 0.25% will take place per deviation from the financial covenants, with a maximum additions rate not to exceed 1.5% above the interest rate determinedon the tender. Security The Company has committed not to pledge its assets under general liens without obtaining the consent in advance of the Bond holders. Nevertheless, The Company is entitledto register specific liens on its properties and also to provide guarantees; and its subsidiaries are entitled to register liens, including general and specific, on their assets. Additional Bonds Inc Company can issue additional Series A Bonds at any time not to exceed a maximum outstanding of NIS 550 million (or $172.4 million). Redemption Provisions The Company may, at its discretion, call the Series A Bonds for early repayment. In the event of the redemption of all of the Series A Bonds, the Company would be requiredto pay the highest of the following amounts: ● the market value of the balance of the Series A Bonds in circulation which will be determined based on the average closing price of the Series A Bonds for thirty (30)trading days before the date on which the board of directors resolves to undertake the early redemption; or ● the par value of the Series A Bonds available for early redemption in circulation (i.e., the principal balance of the Series A Bonds plus accrued interest until the date ofthe actual early redemption); or ● the balance of the payments under the Series A Bonds (consisting of future payments of principal and interest), when discounted to their present value based on theannual yield of the Israeli government bonds plus an “additional rate” of 3.0% per annum. Change of Control The holders of a majority of the Series A Bonds may accelerate the repayment of outstanding balance of the Bonds if the control of the Company is transferred, directly orindirectly, unless the transfer of control is approved by the holders of a majority of the Series A Bonds. For the purpose of this provision, a transfer of control means a change of control of the Company such that the Company has a controlling stockholder that is not any of the“controlling stockholders” and/or is in the hands of any of their immediate family members (including through trusts that the controlling stockholders and/or any of theirimmediate family members are the beneficiaries under and/or are their managers). In this regard, “control” is defined in the Israeli Companies Law
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Other Debt (cont.) Series B Bonds In June 2025, Strawberry Fields REIT, Inc completed, directly, an initial offering on the TASE of Series B Bonds with a par value of NIS 312 million ($89.5 million). Theseries B Bonds were issued at par. Offering and issuance costs of approximately $2.5 million were incurred at closing. On December 16, 2025, Strawberry Fields REIT issuedadditional Series B Bonds with a par value of NIS 30.0 million (gross). The bonds were issued at 99.21 and raised a net amount of NIS 29.4 million ($9.2 million), offeringand issuance costs of approximately $.02 million incurred at closing. As of December 31, 2025, the outstanding balance of the Series B Bonds was $107.2 million. Increases inthe outstanding balance is due to a change in the exchange rate. Interest The Series B Bonds have an interest rate of 6.70% per annum. In June 2025, Standard & Poor’s provided an initial rating for the Series B Bonds of ilA+. Interest on the Series B Bonds is payable semi-annually in arrears on June 30 and December 31 of each year. The interest rate may increase if certain financial ratios are notachieved, as discussed below. Payment Terms The principal amount of the Series B Bonds is payable in four annual installments due on June 30 of each of the years 2026 through 2029. The first three principal paymentsare equal to 4% of the original principal amount of the Series B Bonds, and the last principal payment is equal to the outstanding principal amount of the Series B Bonds. Financial Covenants Until the date of full repayment of the Series B Bonds, the Company must comply with certain financial covenants described below. The application of the covenants is basedon the consolidated financial statements of the Company as prepared under the GAAP accounting method. The financial covenants are as follows: ● On the last day of each calendar quarter, the consolidated equity of the Company (excluding minority rights), as set forth in the Company’s consolidated financialstatements, will not be less than USD 20 million. ● On the last day of each calendar quarter, the ratio between the Financial Debt and EBITDA shall not exceed 10 ● The DSCR shall not be less than 1.05 Dividend Restrictions As long as the Company does not breach any of the Financial Covenants, no distribution restriction shall hinder the Company. If the Company is in non-compliance with oneor more of the Financial Covenants, the Company can make a distribution in an amount that does not exceed the amount required to meet the U.S. legal requirementsapplicable to REITs. F-23
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Senior Debt (Cont.) Increase in Interest Rate In the event that: ● The Company’s bond rating ilA+ or equivalent is lowered ● The financial debt to EBITDA ratio exceeds 8 ● EBITDA to total debt service payments fall below 1.10 ● Consolidated Equity is less than USD $30 million An additional rate of 0.25% will take place per deviation from the financial covenants, with a maximum additions rate not to exceed 1.5% above the interest rate determinedon the tender. Security The Company has committed not to pledge its assets under general liens without obtaining the consent in advance of the Bond holders. Nevertheless, The Company is entitledto register specific liens on its properties and also to provide guarantees; and its subsidiaries are entitled to register liens, including general and specific, on their assets. Additional Bonds Inc Company can issue additional Series B Bonds at any time and the series does not have a formal ceiling. However, the new issuances are subject to regulatory oversight. Redemption Provisions The Company may, at its discretion, call the Series B Bonds for early repayment. In the event of the redemption of all of the Series B Bonds, the Company would be requiredto pay the highest of the following amounts: ● the market value of the balance of the Series B Bonds in circulation which will be determined based on the average closing price of the Series B Bonds for thirty (30) tradingdays before the date on which the board of directors resolves to undertake the early redemption; or ● the par value of the Series B Bonds available for early redemption in circulation (i.e., the principal balance of the Series B Bonds plus accrued interest until the date of theactual early redemption); or ● the balance of the payments under the Series B Bonds (consisting of future payments of principal and interest), when discounted to their present value based on the annualyield of the Israeli government bonds plus an “additional rate” of 3.0% per annum. Change of Control The holders of a majority of the Series B Bonds may accelerate repayment of the outstanding balance of the Bonds if the control of the Company is transferred, directly orindirectly, unless the transfer of control is approved by the holders of a majority of the Series B Bonds. For the purpose of this provision, a transfer of control means a change of control of the Company such that the Company has a controlling stockholder that is not any of the“controlling stockholders” and/or is in the hands of any of their immediate family members (including through trusts that the controlling trusts that the controlling stockholdersand/or any of their immediate family members are the beneficiaries under and/or are their managers). In this regard, “control” is defined in the Israeli Companies Law. F-24
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Other Debt (cont.) Series C Bonds In July 2021, the BVI Company completed an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series C Bonds with a par value of NIS 208.0 million ($64.7million). These Series C Bonds were issued at par. Offering and issuance costs of approximately $1.7 million were incurred at closing. In February 2023, the BVI Companyissued an additional NIS 40.0 million ($11.3 million) in Series C Bonds, offering and issuance costs of approximately $0.9 million were incurred at closing. In October 2024,the BVI company issued an additional NIS 62.0 million ($16.6 million) in Series C Bonds, offering and issuance costs of approximately $0.8 million were incurred at closing. As of December 31, 2025 and 2024, the total Series C Bond outstanding was $77.7 million and $73.3 million, respectively. Increases in the outstanding balance is due to achange in the exchange rate. Interest The Series C Bonds initially bore interest at a rate of 5.7% per annum. In July 2021, Standard & Poor’s provided an initial rating for the Series C Bonds of ilA+. Interest on the Series C Bonds is payable semi-annually in arrears on July 31 and January 31 of each year. The interest rate may increase if certain financial ratios are notachieved, as discussed below. Payment Terms The principal amount of the Series C Bonds is payable in five annual installments due on July 31 of each of the years 2022 through 2026. The first four principal payments areequal to 6% of the original principal amount of the Series C Bonds, and the last principal payment is equal to the outstanding principal amount of the Series C Bonds. Financial Covenants Until the date of full repayment of the Series C Bonds, the BVI Company must comply with certain financial covenants described below. The application of the covenants isbased on the financial statements of the BVI Company as prepared under the IFRS accounting method. The financial covenants are as follows: ● The stockholders’ equity of the BVI Company may not be less than $230 million. ● The ratio of the consolidated stockholders’ equity of the BVI Company to its total consolidated balance sheet may not be less than 25%. ● The ratio of the adjusted net financial debt to adjusted EBITDA of the BVI Company (for the past four quarters) may not exceed 12. ● The ratio of the outstanding amount of the Series C Bonds to the fair market value of the collateral may not exceed 75%. Dividend Restrictions The indenture for the Series C Bonds limits the amount of dividends that may be paid by the BVI Company to its stockholders. The BVI Company may not make anydistribution unless all of the following conditions are fulfilled (with all amounts calculated under IFRS): ● The distribution amount may not exceed 80% of the net profit after tax that is recognized in the most recent consolidated financial statements of the BVI Company, lessprofits or losses arising from a change in accounting methods, net revaluation profits/losses (that have not yet been realized) arising from a change in the fair value of theassets with respect to the fair value in prior reporting period. ● The ratio of the consolidated stockholders’ equity of the BVI Company to its total consolidated balance sheet may not be less than 30%. F-25
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Other Debt (cont.) Series C Bonds (Cont.) Dividend Restrictions (Cont.) ● The distributable profits for which no distribution was performed in a specific year will be added to the following quarters. ● The BVI Company’s equity at the end of the last quarter, before the distribution of dividends, less the dividends distributed, may not be less than $250 million. ● The BVI Company meets the financial conditions described above, and the Company is not in violation of all and/or any of its material undertakings to the holders of theSeries C Bonds. Increase in Interest Rate In the event that: (i) the stockholders’ equity of BVI Company (excluding minority interests) is less than $250 million; (ii) the ratio of the adjusted net financial debt to adjusted EBITDA (for the latest four quarters) exceeds 11; (iii) the ratio of the consolidated equity of the BVI Company to total consolidated assets of the BVI Company is below 27%; or (iv) the ratio of outstanding amount of the Series C Bonds to the fair market value of the collateral for the Series B Bonds exceeds 75%, then, in each case, the interest on the Series C Bonds will increase by an additional 0.5% annually, but only once with respect to each failure to meet these requirements.Compliance with these financial covenants is measured quarterly. Additionally, if a decline in the rating of the Series C Bonds should take place, then for each single ratings decrease, the interest will be increased by 0.25% per year, up to amaximum increment of 1.25% annually. In any case, the total increase in the interest rate as a result of the above adjustments will not exceed 1.5% per year. The increases in the interest rate will also be reversed if theBVI Company regains compliance. Security The Series C Bonds are secured by first mortgage liens on eight properties. In addition, the Series C Bonds are also secured by interest and expenses reserves. The BVICompany has agreed not to pledge its assets pursuant to a general lien without obtaining the prior consent of the holders of the Series C Bonds, provided that the BVICompany is entitled to register specific liens on its properties and also to provide guarantees and its subsidiaries are entitled to register general and specific liens on theirassets. Under the terms of the indenture for the Series C Bonds, the BVI Company can take out properties from the collateral (in case of HUD refinancing) or to add properties andincrease the Series C Bonds as long as the ratio of outstanding amount of the Series C Bonds to fair market value of the collateral is not more than 65%. In addition, startingfrom July 1, 2023, if the fair market value of the collateral is below 55%, the BVI Company can request to release collateral so the fair market value will increase to 55%. F-26
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Other Debt (cont.) Series C Bonds (cont.) Additional Bonds The BVI Company can issue additional Series C Bonds at any time not to exceed a maximum of NIS 630 million (or $197.5 million). Redemption Provisions The BVI Company may, at its discretion, call the Series C Bonds for early repayment. In the event of the redemption of all of the Series C Bonds, the BVI Company would berequired to pay the highest of the following amounts: ● the market value of the balance of the Series C Bonds in circulation which will be determined based on the average closing price of the Series B Bonds for thirty (30)trading days before the date on which the board of directors resolves to undertake the early redemption; or ● the par value of the Series C Bonds available for early redemption in circulation (i.e., the principal balance of the Series C Bonds plus accrued interest until the date of theactual early redemption); or ● the balance of the payments under the Series C Bonds (consisting of future payments of principal and interest), when discounted to their present value based on the annualyield of the Israeli government bonds plus an “additional rate.” The additional rate will be 3.0% per annum for early repayment as of December 31, 2025. Change of Control The holders of a majority of the Series C Bonds may accelerate repayment of the outstanding balance of the Bonds if the control of the BVI Company is transferred, directly orindirectly, unless the transfer of control is approved by the holders of a majority of the Series C Bonds. For the purpose of this provision, a transfer of control means a change of control of the BVI Company such that the BVI Company has a controlling stockholder that is not anyof the “controlling stockholders” and/or is in the hands of any of their immediate family members (including through trusts that the controlling stockholders and/or any of theirimmediate family members are the beneficiaries under and/or are their managers). In this regard, “control” is defined in the Israeli Companies Law. For purposes of the Series C Bonds, the “controlling stockholders” of the BVI Company are deemed to be Moishe Gubin and Michael Blisko. F-27
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Other Debt (cont.) Series D Bonds In June 2023, the BVI Company completed an initial offering on the TASE of Series D Bonds with a par value of NIS 82.9 million ($22.9 million). These Series D Bonds wereissued at par. Offering and issuance costs of approximately $0.6 million were incurred at closing. In July 2023, the BVI Company issued an additional NIS 70 million ($19.2million) in Series D Bonds. On February 8, 2024, the BVI Company issued additional Series D Bonds with a par value of NIS 100.0 million (gross) and raised a net amount ofNIS 98.2 million ($25.7 million), offering and issuance costs of approximately $.05 million incurred at closing. Exchange of Series D Bonds for Series A Bonds In September 2024, the Company made an exchange tender offer of outstanding Series D Bonds for series A Bonds. The interest rate on Series A Bonds is 6.97% per annum.The exchange offer rate was 1.069964 Series A Bonds per Series D Bonds. As a result of this offer, 47.3 million NIS Series D Bonds ($12.7 million) were exchanged for NIS50.6 million Series A Bonds ($13.6 million). As of December 31, 2025 and 2024, the outstanding balance of the Series D Bonds were $55.1 million and $51.5 million, respectively. Increase in outstanding balance was dueto a change in exchange rate. Interest The Series D Bonds initially bore interest at a rate of 9.1% per annum. In June 2023, Standard & Poor’s provided an initial rating for the Series D Bonds of ilA. Interest on the Series D Bonds is payable semi-annually in arrears on March 31 and September 30 of each year. The interest rate may increase if certain financial ratios are notachieved, as discussed below. Payment Terms The principal amount of the Series D Bonds is payable in three annual installments due on September 30 of each of the years 2024 through 2026. The first two principalpayments are equal to 6% of the original principal amount of the Series D Bonds, and the last principal payment is equal to the outstanding principal amount of the Series DBonds. Financial Covenants Until the date of full repayment of the Series D Bonds, the BVI Company must comply with certain financial covenants described below. The application of the covenants isbased on the financial statements of the BVI Company as prepared under the IFRS accounting method. The financial covenants are as follows: ● The stockholders’ equity of the BVI Company may not be less than $230 million. ● The ratio of the Consolidated stockholders’ equity of the BVI Company to its total Consolidated balance sheet may not be less than 25%. ● The ratio of the adjusted net financial debt to adjusted EBITDA of the BVI Company (for the past four quarters) may not exceed 12. Dividend Restrictions The indenture for the Series D Bonds limits the amount of dividends that may be paid by the BVI Company to its stockholders. The BVI Company may not make anydistribution unless all of the following conditions are fulfilled (with all amounts calculated under IFRS): ● The distribution amount may not exceed 80% of the net profit after tax that is recognized in the most recent Consolidated financial statements of the BVI Company, lessprofits or losses arising from a change in accounting methods, net of revaluation profits/losses (that have not yet been realized) arising from a change in the fair value of theassets with respect to the fair value in the prior reporting period. ● The ratio of the consolidated stockholders’ equity of the BVI Company to its total consolidated balance sheet may not be less than 30%. ● The distributable profits for which no distribution was performed in a specific year will be added to the following quarters. ●The BVI Company’s equity at the end of the last quarter, before the distribution of dividends, less the dividends distributed, may not be less than $250 million. ● The BVI Company meets the financial conditions described above, and the BVI Company is not in violation of all and/or any of its material undertakings to the holders ofthe Series D Bonds as of December 31, 2025. F-28
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. Bonds, Note Payable and Other Debt (cont.) Series D Bonds (Cont.) Increase in Interest Rate In the event that: (i) the stockholders’ equity of the BVI Company (excluding minority interests) is less than $250 million; (ii) the ratio of the adjusted net financial debt to adjusted EBITDA (for the latest four quarters) exceeds 11; (iii) the ratio of the consolidated equity of the BVI Company to total consolidated assets of the BVI Company is below 27%; or then, in each case, the interest on the Series D Bonds will increase by an additional 0.5% annually, but only once with respect to each failure to meet these requirements.Compliance with these financial covenants is measured quarterly. Additionally, if a decline in the rating of the Series D Bonds should take place, then for each single ratings decrease, the interest will be increased by 0.25% per year, up to amaximum increment of 1.25% annually. In any case, the total increase in the interest rate as a result of the above adjustments will not exceed 1.5% per year. The increases in the interest rate will also be reversed if theBVI Company regains compliance. Security The BVI Company has committed not to pledge its assets under general liens without obtaining the consent in advance of the Bond holders. Nevertheless, the BVI Company isentitled to register specific liens on its properties and also to provide guarantees; and its subsidiaries are entitled to register liens, including general and specific, on their assets. Additional Bonds The BVI Company can issue additional Series D Bonds at any time not to exceed a maximum outstanding of NIS 450 million (or $141.1 million). Redemption Provisions The BVI Company may, at its discretion, call the Series D Bonds for early repayment. In the event of the redemption of all of the Series D Bonds, the BVI Company would berequired to pay the highest of the following amounts: ● the market value of the balance of the Series D Bonds in circulation which will be determined based on the average closing price of the Series D Bonds for thirty (30)trading days before the date on which the board of directors resolves to undertake the early redemption; or ● the par value of the Series D Bonds available for early redemption in circulation (i.e., the principal balance of the Series D Bonds plus accrued interest until the date of theactual early redemption); or ● the balance of the payments under the Series D Bonds (consisting of future payments of principal and interest), when discounted to their present value based on the annualyield of the Israeli government bonds plus an “additional rate.” The additional rate would have been 1.0% per annum for early repayment performed by September 30,2024, and 3.0% thereafter. Change of Control The holders of a majority of the Series D Bonds may accelerate repayment of the outstanding balance of the Bonds if the control of the BVI Company is transferred, directly orindirectly, unless the transfer of control is approved by the holders of a majority of the Series D Bonds. For purposes of the Series D Bonds, the “controlling stockholders” of the BVI Company are deemed to be Moishe Gubin and Michael Blisko. For the purpose of this provision, a transfer of control means a change of control of the BVI Company such that the BVI Company has a controlling stockholder that is not anyof the “controlling stockholders” and/or is in the hands of any of their immediate family members (including through trusts that the controlling stockholders and/or any of theirimmediate family members are the beneficiaries under and/or are their managers). In this regard, “control” is defined in the Israeli Companies Law. Note Payable On January 1, 2025, the Company created a new Kentucky Master Lease with a new third-party operator. This master lease was created from 10 properties that were formallyin the Landmark Master Lease. In order to release the properties from the Landmark Master Lease, the Company entered into a $50.9 million dollar note payable with theparent of the Landmark operator. The note is for equal monthly payments of $1.1 million dollars for 5 years and bears interest of 10.0%. As of December 31,2025, theoutstanding balance of the note payable was $42.6 million. F-29
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 8. Commitments and Contingencies Commitments The Company guarantees from time-to-time obligations of its wholly-owned subsidiaries. Contingencies We are not currently a party to any material legal proceedings, that are not covered by insurance and expected to be resolved within policy limits, other than the following: In March 2020, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a complaint in the U.S. District Court for the Northern District of Illinois againstMoishe Gubin, Michael Blisko, the Predecessor Company and 21 of its subsidiaries, as well as the operators of 17 of the facilities operated at our properties. The complaintwas related to the Predecessor Company’s acquisition of 16 properties located in Arkansas and Kentucky that were completed between May 2018 and April 2019 and theattempt to purchase an additional five properties located in Massachusetts. The complaint was dismissed by the Court in 2020 on jurisdictional grounds. The plaintiffs did notfile an appeal with respect to this action, and the time for an appeal has expired. In August 2020, Joseph Schwartz, Rosie Schwartz and several companies controlled by them filed a second complaint in the Circuit Court in Pulaski County, Arkansas. Thesecond complaint had nearly identical claims as the federal case, but was limited to matters related to the Predecessor Company’s acquisition of properties located in Arkansas.The sellers, which were affiliates of Skyline Health Care, had encountered financial difficulties and requested the Predecessor Company to acquire these properties. Thedefendants have filed an answer denying the plaintiffs’ claims and asserting counterclaims based on breach of contract. This case has been dismissed without prejudice. In January 2021, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a third complaint in Illinois state court in Cook County, Illinois, which hasnearly identical claims to the initial federal case, but was limited to claims related to the Kentucky and Massachusetts properties. The complaint has not been properly servedon any of the defendants, and, accordingly, the defendants did not respond to the complaint. Instead, the defendants filed a motion to quash service of process. On January 11,2023, the Cook County Circuit Court entered an order granting such motion, quashing service of process on all defendants. In March 2023, the plaintiffs filed a new complaintand again attempted to serve it on the defendants. It is the defendants’ position that service was (once again, potentially) defective and sought a dismissal of the matter for wantof prosecution by Joseph Schwartz, Rosie Schwartz and certain companies owned by them. The dismissal was granted, but has been appealed to the Illinois Appellate Court,with no substantive movement on the matter to date. In April of 2024, Joseph Schwartz, Rosie Schwartz and several companies controlled by them filed a fourth complaint in the Circuit Court in Pulaski County, Arkansas. Thisfourth complaint had nearly identical claims as the federal case and the Illinois state court matter. In November 2024, the court dismissed all rescission claims, findingplaintiffs had an adequate remedy at law in the form of monetary damages, ordered dissolution of a lis pendens plaintiffs had filed against certain properties, and identifiedadditional pleading deficiencies in the complaint. The court granted plaintiffs leave to amend, and plaintiffs filed a second amended complaint. On March 10, 2026, the courtdismissed the second amended complaint with prejudice as to all defendants, finding that plaintiffs failed to cure the previously identified deficiencies. The court also deniedplaintiffs' motion for a temporary and permanent restraining order, finding no irreparable harm, an adequate remedy at law, and no likelihood of success on the merits. Thedismissal with prejudice bars plaintiffs from refiling these claims, subject to any appeal. As of the date of this filing, no appeal has been filed. In each of these complaints, the plaintiffs asserted claims for fraud, breach of contract and rescission arising out of the defendants’ alleged failure to perform certain post-closing obligations under the purchase contracts. We have potential direct exposure for these claims because the subsidiaries of the Predecessor Company that were named asdefendants are now subsidiaries of the Operating Partnership. Additionally, the Operating Partnership is potentially liable for the claims made against Moishe Gubin, MichaelBlisko and the Predecessor Company pursuant to the provisions of the contribution agreement, under which the Operating Partnership assumed all of the liabilities of thePredecessor Company and agreed to indemnify the Predecessor Company and its affiliates for such liabilities. We and the named defendants believe that the claims set forth inthe complaints are without merit. The named defendants intend to vigorously defend the litigation and to assert counterclaims against the plaintiffs based on their failure tofulfill their obligations under the purchase contracts, interim management agreement, and operations transfer agreements. We believe this matter will be resolved without amaterial adverse effect to the Company. As described above, the federal action was dismissed for lack of subject matter jurisdiction, the first Arkansas action was dismissedwithout prejudice, the Illinois state court action has been dismissed, and the second Arkansas action (filed April 2024) was dismissed with prejudice on March 10, 2026. Theplaintiffs have 30 days from March 10, 2026 (the date the court entered the dismissal order) to file a notice of appeal. As of the date of this filing, no notice of appeal has beenfiled. As noted above, the March 2020, January 2021 and April 2024 complaints also related to the Predecessor Company’s planned acquisition of five properties located inMassachusetts. A subsidiary of the Predecessor Company purchased loans related to these properties in 2018 for a price of $7.74 million with the expectation that thesubsidiaries would acquire title to the properties and the loans would be retired. The subsidiary subsequently advanced $3.1 million under the loans to satisfy other liabilitiesrelated to the properties. The planned acquisition/settlement with the sellers/owners and/borrowers was not consummated because the underlying tenants of the propertiessurrendered their licenses to operate healthcare facilities on these properties. The Predecessor Company intends to institute legal proceedings to collect the outstanding amount of these loans and to assert related claims against the sellers and theirprincipals for the unpaid principal balances as well as protective advances and collection costs. In connection with enforcing their rights, in July 2022, the Companyforeclosed, and (as lender) sold four of the five properties at auction for the total amount of $4.4 million. In December 2022, the Company took title on the fifth property withan estimated fair value of $1.2 million. F-30
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 9. Equity Incentive Plan The Company has adopted the 2021 Equity Incentive Plan (the “Plan”). The Plan permits the grant of both options qualifying under Section 422 of the Internal Revenue Code(“incentive stock options”) and options not so qualifying, and the grant of stock appreciation rights, stock awards, incentive awards, performance units, and other equity-basedawards. A total of 250,000 shares have been authorized to be granted under the Plan. On May 30, 2024, shareholders approved an amendment to increase the number of sharesauthorized to be granted under the plan to 1,000,000 shares. As of December 31, 2025, 968,650 shares were available for grant. On January 31, 2025, 6,450 shares were usedfrom the incentive plan as an employee bonus. No other shares were issued during the twelve-month period December 31, 2025. NOTE 10. Stockholders’ Equity and Distributions The Company elected and qualified to be treated as a REIT commencing with the taxable year ending December 31, 2022. U.S. federal income tax law requires that a REITdistribute annually at least 90% of its net taxable income, excluding net capital gains, and that it pays tax at regular corporate rates to the extent that it annually distributes lessthan 100% of its net taxable income, including net capital gains. In addition, a REIT is required to pay a 4% nondeductible excise tax on the amount, if any, by which thedistributions that it makes in a calendar year are less than the sum of 85% of its ordinary income, 95% of its capital gain net income and 100% of its undistributed income fromprior years. On November 9, 2023, the Board of Directors authorized the repurchase of up to $5 million of the Company’s common stock. As of December 31, 2025 the Company hadpurchased 319,584 shares in aggregate of common stock at an average price per share of $9.93 and an aggregate repurchase priced of $3.2 million. As of December 31, 2025, there were a total of 13,257,425 shares of common stock issued and outstanding. The outstanding shares were held by a total of approximately4,041 stockholders of record, including certain affiliates of the Company who held 865,322 of these shares. At December 31, 2025 there were 42,347,555 OP units outstanding. Under the terms of the Operating Partnership agreement, such holders have the right to request theredemption of their OP units, in cash. If a holder requests redemption, the Company will have the option of issuing shares of common stock to the requesting holder instead ofcash. In addition, OP unit holders are required to obtain Company approval prior to the sale or transfer of any or all of such OP unit holders’ interest. In addition, the Company has reserved a total of 42,347,555 shares of common stock that may be issued, at the Company’s option, upon redemption of the OP unitsoutstanding as of December 31, 2025. F-31
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. Related Party Transactions and Economic Dependence The following entities and individuals are considered to be Related Parties: Moishe Gubin Chairman of the BoardMichael Blisko Director Operating entities See list below Lease Agreements with Related Parties As of December 31, 2025 and 2024, each of the Company’s facilities were leased and operated by separate tenants. Each tenant is an entity that leases the facility from one ofthe Company’s subsidiaries and operates the facility as a healthcare facility. The Company had 66 tenants out of 143 who were related parties as of December 31, 2025 and 66tenants out of 124 who were related parties as of December 31, 2024. Most of the lease agreements are triple net leases. On February 20, 2024, the Company entered into a new, replacement master lease for these properties. The tenant remains a group of tenants affiliated with two of theCompany’s directors, Moishe Gubin and Michael Blisko. The new master lease has an initial term of ten years and is subject to 2 five-year extensions. The initial annual baserent for the properties is $14.5 million dollars and is subject to annual increases of 3%. In connection with the new master lease, the existing purchase option held by thetenant, which was granted by the prior owner of the properties, of $127.0 million was terminated. Consideration for the termination of the purchase option and inducement forentering into the new, replacement master lease was $18.0 million paid to the tenants. The $18.0 million payment was funded by cash and the proceeds from the additionalSeries D Bond issuance in February 2024. On May 31, 2024, the Company acquired a property for $5.85 million comprised of a 68-bed skilled nursing facility and 10 bed assisted living facility near Georgetown,Indiana. The initial annual rent amount is $585 thousand and was leased to Infinity, a related party operator. The property was added to the Indiana Master Lease 1. TheCompany funded the acquisition utilizing cash from its consolidated balance sheets. On September 25, 2024, the Company completed the acquisition of a property comprised of an 83-bed skilled nursing facility and 25 bed assisted living facility nearNashville, Tennessee. The acquisition was for $6.7 million and the Company funded the acquisition by assuming $2.8 million of existing debt on the facilities, $3.1 million incommon stock to the seller, and transferring $0.8 million of other assets to the seller. The property was leased to Infinity, a related party operator. The property annual rent is$670 thousand and the property was added to the Tennessee Master Lease 1. On October 11, 2024, the Company acquired an 86-bed skilled nursing facility in Indianapolis, Indiana. The acquisition was for $6.0 million and the Company funded theacquisition utilizing cash from its consolidated balance sheets. The facility was leased to Infinity, a related party operator and was added to the Indiana Master Lease 1. F-32
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. Related Party Transactions and Economic Dependence (cont.) The following table sets forth details of the lease agreements in force between the Company and its subsidiaries and lessees that are related parties: Related Party Ownershipin Manager/Tenant/ Operator (1) (2) State Lessor/CompanySubsidiary Tenant/Operator MoisheGubin/GubinEnterprisesLP MichaelBlisko/BliskoEnterprisesLP Averageannual rentover life oflease AnnualEscalation % oftotalrent Leasematurity Extensionoptions Master LeaseIndiana 1 IN 1020 WestVine StreetRealty, LLC The Watersof PrincetonII, LLC 49.49% 50.51% $1,224,215 3.00% 0.9% 2034 2 five year IN 12803 LenoverStreet RealtyLLC The Watersof Dillsboro– RossManor IILLC 49.49% 50.51% 1,585,037 3.00% 1.1% 2034 2 five year IN 1350 NorthTodd DriveRealty, LLC The Watersof ScottsburgII LLC 49.49% 50.51% 1,275,761 3.00% 0.9% 2034 2 five year IN 1600 EastLiberty StreetRealty LLC The Watersof CovingtonII LLC 49.49% 50.51% 1,533,491 3.00% 1.1% 2034 2 five year IN 1601 HospitalDrive RealtyLLC The WatersofGreencastleII LLC 49.49% 50.51% 1,288,648 3.00% 0.9% 2034 2 five year IN 1712 LelandDrive Realty,LLC The WatersofHuntingburgII LLC 49.49% 50.51% 1,224,215 3.00% 0.9% 2034 2 five year IN 2055 HeritageDrive RealtyLLC The WatersofMartinsvilleII LLC 49.49% 50.51% 1,327,307 3.00% 0.9% 2034 2 five year IN 3895 SouthKeystoneAvenue RealtyLLC The WatersofIndianapolisII LLC 49.49% 50.51% 1,043,805 3.00% 0.7% 2034 2 five year IN 405 Rio VistaLane RealtyLLC The Watersof Rising SunII LLC 49.49% 50.51% 747,416 3.00% 0.5% 2034 2 five year IN 950 CrossAvenue RealtyLLC The Watersof CliftyFalls II LLC 49.49% 50.51% 1,778,334 3.00% 1.2% 2034 2 five year IN 958 EastHighway 46Realty LLC The Watersof BatesvilleII LLC 49.49% 50.51% 1,108,237 3.00% 0.8% 2034 2 five year IN 2400 ChateauDrive Realty,LLC The Watersof Muncie IILLC 49.49% 50.51% 927,826 3.00% 0.7% 2034 2 five year IN The Big H2OLLC The Watersof NewCastle II LLC 49.49% 50.51% 850,507 3.00% 0.6% 2034 2 five year IN 1316 NorthTibbs AvenueRealty, LLC Westpark AWatersCommunity,LLC 50.00% 50.00% 1,146,896 3.00% 0.8% 2034 2 five year IN 1002 SisterBarbara WayLLC The WatersofGeorgetownLLC 49.49% 50.51% 1,005,145 3.00% 0.7% 2034 2 five year IN 2640 ColdSpring Road,LLC Alpha HomeA WatersCommunityLLC 49.49% 50.51% 1,108,237 3.00% 0.8% 2034 2 five year F-33
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. Related Party Transactions and Economic Dependence (cont.) Lease Agreements with Related Parties (cont.) Related Party Ownershipin Manager/Tenant/ Operator (1) (2) State Lessor /CompanySubsidiary Tenant/Operator MoisheGubin/GubinEnterprisesLP MichaelBlisko/BliskoEnterprisesLP Averageannual rentover life oflease AnnualEscalation % oftotalrent Leasematurity Extensionoptions Master LeaseTennessee 1 TN 115 WoodlawnDrive, LLC Lakebridge, aWatersCommunity,LLC 50.00% 50.00% 1,026,061 3.00% 0.7% 2031 2 five year TN 146 BuckCreek Road,LLC The Waters ofRoanHighlands,LLC 50.00% 50.00% 753,072 3.00% 0.5% 2031 2 five year TN 704 5th AvenueEast, LLC The Waters ofSpringfield,LLC 50.00% 50.00% 621,284 3.00% 0.4% 2031 2 five year TN 2501 RiverRoad, LLC The Waters ofCheatham,LLC 50.00% 50.00% 753,072 3.00% 0.5% 2031 2 five year TN 202 EnonSprings RoadEast, LLC The Waters ofSmyrna, LLC 50.00% 50.00% 856,619 3.00% 0.6% 2031 2 five year TN 140TechnologyLane, LLC The Waters ofJohnson City,LLC 50.00% 50.00% 790,726 3.00% 0.6% 2031 2 five year TN 835 UnionStreet, LLC The Waters ofShelbyville,LLC 50.00% 50.00% 903,686 3.00% 0.6% 2031 2 five year TN 1340 NorthGrundyQuarlesHighway The Waters ofGainesboro,LLC 50.00% 50.00% 1,016,647 3.00% 0.7% 2031 2 five year TN 100 NetherlandLane, LLC The Waters ofKinsport,LLC 50.00% 50.00% 630,698 3.00% 0.4% 2031 2 five year TN 2648SeviervilleRoad, LLC The Waters ofMaryville,LLC 50.00% 50.00% 1,703,825 3.00% 1.2% 2031 2 five year Master LeaseTennessee 2 TN 505 NorthRoan, LLC AgapeRehabilitation& NursingCenter, AWater’sCommunityLLC 50.00% 50.00% 1,628,910 3.00% 1.1% 2031 2 five year TN 14510Highway 79,LLC Waters ofMcKenzie, ARehabilitation& NursingCenter, LLC 50.00% 50.00% 1,279,858 3.00% 0.9% 2031 2 five year TN 6500 KirbyGateBoulevard,LLC Waters ofMemphis, ARehabilitation& NursingCenter, LLC 50.00% 50.00% 1,745,261 3.00% 1.2% 2031 2 five year TN 978 Highway11 South, LLC Waters ofSweetwater,ARehabilitation& NursingCenter, LLC 50.00% 50.00% 1,745,261 3.00% 1.2% 2031 2 five year TN 2830 Highway394, LLC Waters ofBristol, ARehabilitation& NursingCenter, LLC 50.00% 50.00% 2,327,014 3.00% 1.6% 2031 2 five year F-34
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. Related Party Transactions and Economic Dependence (cont.) Lease Agreements with Related Parties (cont.) Related Party Ownershipin Manager/Tenant/ Operator (1) (2) State Lessor/CompanySubsidiary Tenant/Operator MoisheGubin/GubinEnterprisesLP MichaelBlisko/BliskoEnterprisesLP Averageannual rentover life oflease AnnualEscalation % of totalrent Leasematurity Extensionoptions Master LeaseIndiana 2 IN 8400ClearvistaPlace LLC The Watersof CastletonSNF, LLC 50.00% 50.00% 1,023,207 3.00% 0.7% 2034 2 five year IN 524 AndersonRoad LLC The WatersofChesterfieldSNF, LLC 50.00% 50.00% 538,530 3.00% 0.4% 2034 2 five year IN 640 WestEllsworthStreet LLC The Watersof ColumbiaCity SNF,LLC 50.00% 50.00% 753,942 3.00% 0.5% 2034 2 five year IN 11563 West300 South LLC The Watersof DunkirkSNF, LLC 50.00% 50.00% 412,873 3.00% 0.3% 2034 2 five year IN 5544 East StateBoulevardLLC The Watersof FortWayne SNF,LLC 50.00% 50.00% 691,113 3.00% 0.5% 2034 2 five year IN 548 South 100West LLC The Watersof HartfordCity SNF,LLC 50.00% 50.00% 583,407 3.00% 0.4% 2034 2 five year IN 2901 West37th AvenueLLC The Watersof HobartSNF, LLC 50.00% 50.00% 987,305 3.00% 0.7% 2034 2 five year IN 1500 GrantStreet LLC The WatersofHuntingtonSNF, LLC 50.00% 50.00% 762,917 3.00% 0.5% 2034 2 five year IN 787 NorthDetroit StreetLLC The Watersof LaGrangeSNF, LLC 50.00% 50.00% 897,550 3.00% 0.6% 2034 2 five year IN 981BeechwoodAvenue LLC The WatersofMiddletownSNF, LLC 50.00% 50.00% 538,530 3.00% 0.4% 2034 2 five year IN 317 Blair PikeLLC The Watersof Peru SNF,LLC 50.00% 50.00% 1,166,815 3.00% 0.8% 2034 2 five year IN 815 WestWashingtonStreet LLC The Watersof RockportSNF 50.00% 50.00% 538,530 3.00% 0.4% 2034 2 five year IN 612 East 11thStreet LLC The Watersof RushvilleSNF 50.00% 50.00% 879,599 3.00% 0.6% 2034 2 five year F-35
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. Related Party Transactions and Economic Dependence (cont.) Lease Agreements with Related Parties (cont.) Related Party Ownershipin Manager/Tenant/ Operator (1) (2) State Lessor/CompanySubsidiary Tenant/Operator MoisheGubin/GubinEnterprisesLP MichaelBlisko/BliskoEnterprisesLP Averageannual rentover life oflease AnnualEscalation % of totalrent Leasematurity Extensionoptions IN 505 WestWolfe StreetLLC The Watersof SullivanSNF 50.00% 50.00% 834,721 3.00% 0.6% 2034 2 five year IN 500 EastPickwickDrive LLC The Watersof SyracuseSNF 50.00% 50.00% 592,383 3.00% 0.4% 2034 2 five year IN 300FairgroundsRoad LLC The Watersof TiptonSNF 50.00% 50.00% 1,346,325 3.00% 0.9% 2034 2 five year IN 1900 AlberStreet LLC The Watersof WabashSNF East 50.00% 50.00% 753,942 3.00% 0.5% 2034 2 five year IN 1720 AlberStreet LLC The Watersof WabashSNF West 50.00% 50.00% 394,922 3.00% 0.3% 2034 2 five year IN 300 NorthWashingtonStreet LLC The Watersof WakarusaSNF 50.00% 50.00% 1,193,741 3.00% 0.8% 2034 2 five year IN 8400ClearvistaPlace LLC The Watersof CastletonALF, LLC 50.00% 50.00% 484,677 3.00% 0.3% 2034 2 five year IN 787 NorthDetroit StreetLLC The Watersof LaGrangeALF, LLC 50.00% 50.00% 152,583 3.00% 0.1% 2034 2 five year IN 612 East 11thStreet LLC The Watersof RushvilleALF, LLC 50.00% 50.00% 260,289 3.00% 0.2% 2034 2 five year IN 505 WestWolfe StreetLLC The Watersof SullivanALF, LLC 50.00% 50.00% 287,216 3.00% 0.2% 2034 2 five year IN 300 NorthWashingtonStreet LLC The Watersof WakarusaALF, LLC 50.00% 50.00% 547,505 3.00% 0.4% 2034 2 five year F-36
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. Related Party Transactions and Economic Dependence (cont.) Lease Agreements with Related Parties (cont.) Related Party Ownershipin Manager/Tenant/ Operator (1) (2) State Lessor/CompanySubsidiary Manager/Tenant/Operator MoisheGubin/GubinEnterprisesLP MichaelBlisko/BliskoEnterprisesLP AverageAnnualrentover lifeoflease AnnualEscalation % oftotalrent Leasematurity Extensionoptions IL AmbassadorNursingRealty, LLC AmbassadorNursing andRehabilitationCenter II, LLC 40.00% 40.00% 1,005,313 3.00% 0.7% 2031 2 five year IL MomenceMeadowsRealty, LLC MomenceMeadows Nursingand RehabilitationCenter, LLC 50.00% 50.00% 1,038,000 None 0.7% 2025 None IL Lincoln ParkHoldings,LLC LakeviewRehabilitation andNursing Center,LLC 40.00% 40.00% 1,260,000 None 0.9% 2031 None IL ContinentalNursingRealty, LLC ContinentalNursing andRehabilitationCenter, LLC 40.00% 40.00% 1,575,348 None 1.1% 2031 None IL WestshireNursingRealty, LLC City ViewMulticare Center,LLC 50.00% 50.00% 1,082,928 3.00% 0.8% 2026 2 five year IL BelhavenRealty, LLC Belhaven Nursingand RehabilitationCenter, LLC 50.00% 50.00% 2,134,570 3.00% 1.5% 2031 2 five year IL WestSuburbanNursingRealty, LLC West SuburbanNursing andRehabilitationCenter, LLC 40.00% 40.00% 1,961,604 None 1.4% 2027 None IN 1585 PerryWorth Road,LLC The Waters ofLebanon, LLC 50.00% 50.00% 116,678 3.00% 1.7% 2027 2 five year IL Niles NursingRealty LLC Niles Nursing &RehabilitationCenter LLC 50.00% 50.00% 2,409,998 3.00% 1.8% 2031 2 five year IL MidwayNeurologicalandRehabilitationRealty, LLC MidwayNeurological andRehabilitationCenter, LLC 50.00% 50.00% 2,547,713 3.00% 0.7% 2031 2 five year IL 516 WestFrech Street,LLC Parker Rehab &Nursing Center,LLC 50.00% 50.00% 498,351 Variesbetween$12,000 and$24,000annually 0.4% 2031 None F-37
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. Related Party Transactions and Economic Dependence (cont.) Lease Agreements with Related Parties (cont.) (1) The interests of the two listed related parties are not held through any commonly owned holding companies. Mr. Gubin’s interests are held directly/indirectly by GubinEnterprises LP. Mr. Blisko’s interests are held by Blisko Enterprises LP and New York Boys Management, LLC.(2) Each of the tenants is a limited liability company. The percentages listed reflect the owners’ percentage ownership of the outstanding membership interests in each tenant. Guarantees from Related Parties As of December 31, 2025 and 2024, Mr. Gubin and Mr. Blisko were not parties to any guarantees of any debt of the Company and its subsidiaries. Balances with Related Parties December 31, 2025 2024 (amounts in $000s) Straight-line rent receivable $ 16,324 $ 17,801 Tenant portion of replacement reserve $ 8,759 $ 9,664 Notes receivable $ 5,823 $ 6,295 Payments from Related Parties Years ended December 31, 2025 2024 (amounts in $000s) Rental income received from related parties $ 70,020 $ 71,390 F-38
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. Related Party Transactions and Economic Dependence (cont.) Other Related Party Relationships On December 31, 2025 and 2024, the Company had approximately $0.8 million and $5.9 million, respectively, on deposit with OptimumBank. Mr. Gubin is the Chairman ofthe Board of OptimumBank. On June 14, 2022, the Company purchased an $8 million note held by Infinity Healthcare Management, a company controlled by Mr. Blisko and Mr. Gubin. The note wasissued by certain unaffiliated tenants. It bears interest at 7% per annum, payable annually. The principal amount of the note becomes payable 120 days after the date on whichtenants are first able to exercise the purchase option for the properties contained in their lease. The purchase option becomes exercisable upon the Company’s ability to deliverfee simple title to the properties. If the tenants do not exercise the option within this period, then the outstanding balance of the note will thereafter be payable in thirty-six (36)equal monthly installments of principal and interest. NOTE 12. Income Taxes The Company elected and qualified to be taxed as a REIT for federal income tax purposes. As a REIT, the Company generally is not subject to federal income tax on its net taxable income that it distributes currently to its stockholders. Under the Code, REITs aresubject to numerous organizational and operational requirements, including a requirement that they distribute each year at least 90% of their REIT taxable income, determinedwithout regard to the deduction for dividends paid and excluding any net capital gains. If the Company fails to qualify for taxation as a REIT in any taxable year and does notqualify for certain statutory relief provisions, the Company’s income for that year will be taxed at regular corporate rates, and the Company would be disqualified fromtaxation as a REIT for the four taxable years following the year during which the Company ceased to qualify as a REIT. Even if the Company qualifies as a REIT for federalincome tax purposes, it may still be subject to state and local taxes on its income and assets and to federal income and excise taxes on its undistributed income. The Company follows accounting guidance relating to accounting for uncertainty in income taxes, which sets out a consistent framework to determine the appropriate level oftax reserves to maintain for uncertain tax positions. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than fiftypercent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a taxposition has met the more-than-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject tomanagement’s judgment. Management is not aware of any uncertain tax positions that would have material effect on the Company’s consolidated financial statements. F-39
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 13. Fair Value of Financial Instruments The Company is required to disclose the fair value of financials instruments for which it is practicable to estimate that value. The fair value of short-term financial instrumentssuch as cash and cash equivalents, restricted cash, accounts payable and accrued expenses approximate their carrying value on the consolidated balance sheets due to theirshort-term nature. The Company’s foreclosed real estate is recorded at fair value on a non-recurring basis and is included in real estate investments on the consolidated balancesheets. Estimates of fair value are determined based on a variety of information, including the use of available appraisals, estimates of market values by licensed appraisers orlocal real estate brokers and knowledge and experience of management. The fair values of the Company’s remaining financial instruments that are not reported at fair value onthe consolidated balance sheets are reported below: December 31, 2025 2024 (amounts in $000s) Level Carrying Amount Fair Value Carrying Amount Fair Value Bonds, Note payable, and other debt 3 $ 794,652 $ 802,800 $ 673,935 $ 675,941 Notes receivable 3 $ 20,821 $ 20,462 $ 16,585 $ 16,488 The fair value of the bonds, note payable, other debt, and notes receivable are estimated using a discounted cash flow analysis. NOTE 14. Subsequent Events In January 2026, the Company approved a compensation adjustment for its Chief Executive Officer retroactively to be recognized in 2025, delivered in the form of limitedpartnership units of the OP (“OP Units”). The Company recognized stock-based compensation expense of $1.5 million during the year ended December 31, 2025. TheCompany granted to Mr. Gubin 114,504 OP Units in January 2026. The OP Units were determined using a grant-date fair value of $13.10. NOTE 15. Financing Income (Expenses), Net Year ended December 31, 2025 2024 (Amounts in $000’s) Financing expenses Interest expenses with respect to bonds $ (22,255) $ (11,158)Interest expenses on loans from banks and others (27,851) (22,344)Interest expenses with respect to leases (44) (140)Total financing expenses $ (50,150) $ (33,642) Financing income $ 1,538 $ 1,039 Interest Expense, Net $ (48,612) $ (32,603) F-40
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STRAWBERRY FIELDS REIT, Inc. and SubsidiariesSchedule IIIReal Estate and Accumulated Depreciation Initial Cost to Company Gross Amount at Which Carried at Close ofPeriod Property Location Type ofproperty Land Buildingimprovementsandintangibleassets leaseassets Furniture,fixturesandequipment Land Buildingimprovementsandintangibleassets leaseassets Furniture,fixturesandequipment Total Accumulateddepreciation Date ofconstruction Dateacquired1020 WestVine St, LLC IN SNF 73,704 5,373,301 552,994 73,704 5,373,301 552,994 5,999,999 2,351,167 1968 5/1/201512803LenoverStreet Realty,LLC IN SNF 749,235 11,715,266 707,200 749,235 11,715,266 707,200 13,171,701 5,978,110 1898 12/28/20121600 EastLiberty StreetRealty, LLC IN SNF 226,684 8,613,047 684,202 226,684 8,613,047 684,202 9,523,933 4,174,855 1973 12/28/20121601Hospital DrRealty, LLC IN SNF 374,029 6,536,475 574,959 374,029 6,536,475 574,959 7,485,463 3,190,677 1981 12/28/20122055Heritage DrRealty, LLC IN SNF 397,029 6,567,012 592,208 397,029 6,567,012 592,208 7,556,249 3,349,061 1978 12/28/20123895Keystone AveRealty, LLC IN SNF 905,829 5,401,715 465,715 905,829 5,401,715 465,715 6,773,259 2,671,470 1985 12/28/2012405 Rio VistaLane Realty,LLC IN SNF 851,889 3,190,949 277,894 851,889 3,190,949 277,894 4,320,732 2,025,845 1965 12/28/2012950 CrossAve Realty,LLC IN SNF 1,055,229 8,223,435 793,445 1,055,229 8,223,435 793,445 10,072,109 4,217,996 1972 12/28/2012958 EastHighway 46Realty, LLC IN SNF 1,424,142 12,353,018 494,464 1,424,142 12,353,018 494,464 14,271,624 5,521,919 1975 12/28/20121350 NorthTodd St, LLC IN SNF 76,959 3,151,485 371,556 76,959 3,151,485 371,556 3,600,000 2,111,635 1976 12/28/20121712 LelandDrive Realty,LLC IN SNF 158,995 5,399,959 441,046 158,995 5,399,959 441,046 6,000,000 2,915,087 1977 5/1/2015253BradingtonDrive, LLC IL SNF 533,575 6,030,915 535,510 533,575 6,882,910 535,510 7,951,995 3,748,008 1993 4/1/20111621 CoitRoad Realty,LLC TX SNF 1,466,005 6,428,360 771,979 1,466,005 6,428,360 771,979 8,666,344 4,249,585 1977 7/1/20158200National AveRealty, LLC OK SNF/LTACH 1,941,555 8,519,002 781,484 1,941,555 8,519,002 781,484 11,242,041 3,762,034 1989 7/1/20152301 NorthOregonRealty, LLC TX SNF/LTACH 460,109 9,224,188 1,017,263 460,109 9,224,188 1,017,263 10,701,560 4,494,883 1970 7/1/20155601 PlumCreek DriveRealty, LLC TX SNF/LTACH 1,110,560 8,585,477 694,019 1,110,560 8,585,477 694,019 10,390,056 4,407,749 1985 7/1/20151623 WestDelmar Ave,LLC IL SNF 369,094 2,188,077 257,828 369,094 2,587,883 257,828 3,214,805 1,451,684 1962 11/26/2014393EdwardsvilleRoad LLC IL SNF 251,415 3,426,747 387,838 251,415 4,335,229 387,838 4,974,482 2,188,785 1971 11/26/2014911 South3rd St RealtyLLC MI SNF - - - - - - - 1969 5/22/2015516 WestFrech St,LLC IL SNF 85,518 1,697,527 266,955 85,518 1,697,527 266,955 2,050,000 1,938,063 1974 9/28/20111316 NorthTibbs AvenueRealty LLC IN SNF 323,226 2,940,959 335,816 323,226 2,940,959 335,816 3,600,001 1,822,872 1976 6/1/2014 F-41
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STRAWBERRY FIELDS REIT, Inc. and SubsidiariesSchedule IIIReal Estate and Accumulated Depreciation Initial Cost to Company Gross Amount at Which Carried at Close ofPeriod Property Location Type ofproperty Land Buildingimprovementsandintangibleassets leaseassets Furniture,fixturesandequipment Land Buildingimprovementsandintangibleassets leaseassets Furniture,fixturesandequipment Total Accumulateddepreciation Date ofconstruction Dateacquired3090 FivePoints HartfordRealty, LLC OH SNF 114,614 1,348,246 155,890 114,614 1,348,246 155,890 1,618,750 1,454,952 1950 8/1/20153121 GlanzmanRd Realty, LLC OH SNF 211,543 2,977,780 329,427 211,543 2,977,780 329,427 3,518,750 2,116,879 1959 8/1/2015620 West StrubRd Realty, LLC OH SNF 140,266 2,785,910 192,574 140,266 2,785,910 192,574 3,118,750 1,883,764 1978 8/1/20154250 SodomHutchings RoadRealty, LLC OH SNF 41,548 581,176 96,026 41,548 581,176 96,026 718,750 677,202 1975 8/1/2015AmbassadorNursing Realty,LLC IL SNF 2,344,176 5,891,870 991,190 2,344,176 5,891,870 991,190 9,227,236 4,404,621 1976 4/1/2008MomenceMeadowsRealty, LLC IL SNF 185,405 5,861,271 703,325 185,405 5,861,271 703,325 6,750,001 4,210,974 1974 8/2/2006Oak LawnNursing Realty,LLC IL SNF 808,226 3,388,277 403,497 808,226 3,388,277 403,497 4,600,000 2,857,196 1964 4/30/2012Forest ViewNursing Realty,LLC IL SNF 392,245 6,288,479 819,276 392,245 6,288,479 819,276 7,500,000 3,235,139 1975 11/25/2013Lincoln ParkHoldings, LLC IL SNF 4,322,851 6,815,753 861,396 4,322,851 6,815,753 861,396 12,000,000 3,451,343 1973 11/26/2014ContinentalRealty, LLC IL SNF 3,392,263 6,659,835 720,666 3,392,263 6,659,835 720,666 10,772,764 5,483,499 1976 4/2/2008WestshireRealty, LLC IL SNF 356,185 22,165,811 2,253,929 356,185 22,165,811 2,253,929 24,775,925 11,475,646 1974 7/26/2013BelhavenRealty, LLC IL SNF 2,298,858 7,026,385 924,756 2,298,858 7,026,385 924,756 10,249,999 6,707,567 1985 6/1/2006West SuburbanNursing Realty,LLC IL SNF 1,061,095 11,501,970 1,336,935 1,061,095 11,501,970 1,336,935 13,900,000 7,507,458 1975 11/2/2007Niles NursingRealty, LLC IL SNF 3,115,279 21,168,943 1,715,779 3,115,279 21,168,943 1,715,779 26,000,001 11,082,261 1974 8/25/2012ParkshoreEstates NursingRealty, LLC IL SNF 450,232 18,186,687 1,747,280 450,232 18,186,687 1,747,280 20,384,199 8,096,400 1975 2/5/2015MidwayNeurologicaland RehabRealty, LLC IL SNF 1,436,736 15,856,182 1,707,081 1,436,736 15,856,182 1,707,081 18,999,999 12,742,508 1972 4/1/2005115 WoodlawnDrive, LLC TN SNF 1,130,269 9,411,746 930,933 1,130,269 9,411,746 930,933 11,472,949 4,055,364 1995 8/1/2016146 Buck CreekRoad, LLC TN SNF 829,555 6,907,704 683,254 829,555 6,907,704 683,254 8,420,513 2,976,414 1997 8/1/2016704 5th AvenueEast, LLC TN SNF 684,383 5,698,856 563,684 684,383 5,698,856 563,684 6,946,923 2,455,541 1964 8/1/20162501 RiverRoad, LLC TN SNF 829,555 6,907,704 683,254 829,555 6,907,704 683,254 8,420,513 2,976,414 1964 8/1/2016202 EnonSprings East,LLC TN SNF 943,619 7,857,513 777,201 943,619 7,857,513 777,201 9,578,333 3,385,671 1974 8/1/2016140 TechnologyLane, LLC TN SNF 871,033 7,253,089 717,416 871,033 7,253,089 717,416 8,841,538 3,125,234 2007 8/1/2016835 UnionStreet, LLC TN SNF 995,467 8,289,244 819,904 995,467 8,289,244 819,904 10,104,615 3,571,696 1962 8/1/2016308 West MapleAvenue, LLC KY SNF 995,467 8,289,244 819,904 995,467 8,289,244 819,904 10,104,615 3,571,696 1970 8/1/2016Big H2O -Land RisingSun IN 772,847 - - 772,847 - - 772,847 - 12/1/20121585 PerryWorth, LLC IN SNF 98,516 820,342 81,142 98,516 820,342 81,142 1,000,000 331,354 1967 7/17/20171155 EasternParkway, LLC KY SNF 1,147,712 18,894,131 1,708,157 1,147,712 18,894,131 1,708,157 21,750,000 6,965,211 1973 9/1/20171015 MagazineStreet, LLC KY SNF 2,750,000 3,060,000 690,000 2,750,000 3,060,000 690,000 6,500,000 3,639,858 1981 5/1/20185301 WheelerAvenue, LLC AR SNF 400,000 3,147,874 877,500 400,000 3,147,874 877,500 4,425,374 2,564,199 1967 8/29/2018
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414 MasseyAvenue, LLC AR SNF 125,000 845,359 240,000 125,000 845,359 240,000 1,210,359 713,811 1994 8/29/2018706 Oak GroveStreet, LLC AR SNF 300,000 2,641,399 727,500 300,000 2,641,399 727,500 3,668,899 1,999,275 1965 8/29/20188701 Riley Dr.,LLC AR SNF 950,000 3,295,319 1,050,000 950,000 3,295,319 1,050,000 5,295,319 3,533,882 1979 8/29/20181516CumberlandStreet, LLC AR SNF 325,000 3,313,843 900,000 325,000 3,313,843 900,000 4,538,843 2,179,176 1971 8/29/20185720 WestMarkhamStreet, LLC AR SNF 600,000 4,069,851 1,155,000 600,000 4,069,851 1,155,000 5,824,851 2,602,434 1973 8/29/20182501 JohnAshley Dr.,LLC AR SNF 550,000 3,695,319 1,050,000 550,000 3,695,319 1,050,000 5,295,319 3,811,562 1969 8/29/20181513 S.DixielandRoad, LLC AR SNF 275,000 3,060,608 825,000 275,000 3,060,608 825,000 4,160,608 2,147,384 1968 8/29/2018826 NorthStreet, Stamps,LLC AR SNF 225,000 2,625,428 705,000 225,000 2,625,428 705,000 3,555,428 1,789,617 1971 8/29/2018900 GagelAvenue, LLC KY SNF 1,250,000 2,390,000 360,000 1,250,000 2,390,000 360,000 4,000,000 1,917,672 1970 8/30/2018120 Life CareWay, LLC KY SNF 200,000 5,863,133 750,000 200,000 5,863,133 750,000 6,813,133 2,625,872 1974 2/19/20191033 NorthHighway 11,LLC KY SNF 450,000 5,976,921 795,000 450,000 5,976,921 795,000 7,221,921 2,541,296 1978 2/19/2019945 WestRussell Street,LLC KY SNF 350,000 6,076,921 795,000 350,000 6,076,921 795,000 7,221,921 2,314,679 1979 2/19/20199209 DollarwayRoad, LLC AR SNF 500,000 5,450,000 900,000 500,000 5,450,000 900,000 6,850,000 3,457,378 2001 3/27/2019 F-42
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STRAWBERRY FIELDS REIT, Inc. and SubsidiariesSchedule IIIReal Estate and Accumulated Depreciation Initial Cost to Company Gross Amount at Which Carried at Close ofPeriod Property Location Type ofproperty Land Buildingimprovementsandintangibleassets leaseassets Furniture,fixturesandequipment Land Buildingimprovementsandintangibleassets leaseassets Furniture,fixturesandequipment Total Accumulateddepreciation Date ofconstruction Dateacquired727 North 17thSt, LLC 3523Wickenhauser,LLC IL SNF 613,116 3,856,645 663,640 613,116 5,939,315 663,640 7,216,071 2,164,385 1969,1971 1/1/2019326 LindleyLane, LLC AR SNF 250,000 2,917,353 720,000 250,000 2,917,353 720,000 3,887,353 1,676,669 2001 4/10/20192821 WestDixon Road,LLC AR SNF 400,000 4,817,873 354,000 400,000 4,817,873 354,000 5,571,873 3,033,813 1950 4/10/2019552 Golf LinksRoad, LLC AR SNF 500,000 3,511,981 912,000 500,000 3,511,981 912,000 4,923,981 2,095,599 1978 4/10/20199300 BallardRoad, LLC IL SNF 285,000 12,467,584 1,391,952 285,000 12,467,584 1,391,952 14,144,536 5,369,472 1974 6/28/2019Land inCovington KY N/A 94,922 - - 94,922 - - 94,922 - N/A 11/6/20152400 ChateauDrive Realty,LLC IN SNF 327,804 2,538,755 283,441 327,804 2,538,755 283,441 3,150,000 1,046,689 1972 11/13/2019203 BruceCourt, LLC KY SNF 150,000 3,755,896 477,000 150,000 3,755,896 477,000 4,382,896 1,846,277 1972 6/1/20204343 KennedyDrive LLC IL SNF 1,650,000 1,615,000 735,000 1,650,000 1,615,000 735,000 4,000,000 994,116 2009 10/1/2020505 North RoanStreet, LLC TN SNF 650,000 10,171,216 504,000 650,000 10,171,216 504,000 11,325,216 1,865,485 2005 8/25/202114510 Highway79, LLC TN SNF 525,000 5,117,868 396,000 525,000 5,117,868 396,000 6,038,868 1,418,717 1969 8/25/20216500 Kirby GateBoulevard, LLC TN SNF 1,250,000 17,345,000 405,000 1,250,000 17,345,000 405,000 19,000,000 2,366,669 2015 8/25/2021978 Highway 11South, LLC TN SNF 250,000 9,965,900 540,000 250,000 9,965,900 540,000 10,755,900 1,916,266 1966 8/25/20212830 Highway394, LLC TN SNF 475,000 27,625,000 900,000 475,000 27,625,000 900,000 29,000,000 3,908,663 2017 8/25/20211253 LakeBarkley Drive,LLC KY SNF 175,000 4,496,940 195,000 175,000 4,496,940 195,000 4,866,940 1,206,335 1968 8/25/2021 1123 Rockdale MA Vacant - 1,200,000 - - 1,200,000 - 1,200,000 420 Jett Drive,LLC KY SNF 100,000 4,700,000 1,200,000 100,000 4,700,000 1,200,000 6,000,000 1,157,409 1971 1/5/20238400 ClearvistaPlace, LLC IN ALF 199,550 4,939,068 1,140,000 199,550 4,939,068 1,140,000 6,278,618 866,621 1985 8/25/20238400 ClearvistaPlace, LLC IN SNF 199,550 2,504,532 270,000 199,550 2,504,532 270,000 2,974,082 294,788 1985 8/25/2023524 AndersonRoad, LLC IN SNF 182,300 2,522,236 600,000 182,300 2,522,236 600,000 3,304,536 518,610 1984 8/25/2023640 WestEllsworth Street,LLC IN SNF 36,300 3,750,050 840,000 36,300 3,750,050 840,000 4,626,350 746,613 1957 8/25/202311563 West 300South LLC IN SNF 47,200 2,026,277 460,000 47,200 2,026,277 460,000 2,533,477 374,578 1969 8/25/20235544 East StateBoulevard, LLC IN SNF 492,800 2,978,021 770,000 492,800 2,978,021 770,000 4,240,821 641,240 1964 8/25/2023548 South 100West, LLC IN SNF 86,000 2,843,914 650,000 86,000 2,843,914 650,000 3,579,914 527,785 1973 8/25/20232901 West 37thAvenue, LLC IN SNF 702,800 4,255,515 1,100,000 702,800 4,255,515 1,100,000 6,058,315 849,562 1974 8/25/20231500 GrantStreet, LLC IN SNF 118,700 3,712,725 850,000 118,700 3,712,725 850,000 4,681,425 747,804 1968 8/25/2023787 NorthDetroit Street,LLC IN ALF 50,400 4,457,159 1,000,000 50,400 4,457,159 1,000,000 5,507,559 818,386 1970 8/25/2023787 NorthDetroit Street,LLC IN SNF 50,400 800,885 85,000 50,400 800,885 85,000 936,285 133,930 1978 8/25/2023981 BeechwoodAvenue, LLC IN SNF 29,600 2,674,936 600,000 29,600 2,674,936 600,000 3,304,536 491,082 1974 8/25/2023317 Blair Pike,LLC IN SNF 72,800 5,787,027 1,300,000 72,800 5,787,027 1,300,000 7,159,827 1,153,912 1966 8/25/2023815 WestWashingtonStreet, LLC IN SNF 44,100 2,660,436 600,000 44,100 2,660,436 600,000 3,304,536 531,589 1966 8/25/2023
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612 East 11thStreet, LLC IN ALF 49,650 4,367,758 980,000 49,650 4,367,658 980,000 5,397,308 870,263 1967 8/25/2023612 East 11thStreet, LLC IN SNF 49,650 1,402,542 145,000 49,650 1,402,542 145,000 1,597,192 232,733 1967 8/25/2023505 West WolfeStreet, LLC IN ALF 86,100 4,105,930 930,000 86,100 4,105,530 930,000 5,121,630 650,518 1970 8/25/2023505 West WolfeStreet, LLC IN SNF 110,200 1,492,219 160,000 110,200 1,492,219 160,000 1,762,419 160,581 1970 8/25/2023 F-43
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STRAWBERRY FIELDS REIT, Inc. and SubsidiariesSchedule IIIReal Estate and Accumulated Depreciation Initial Cost to Company Gross Amount at Which Carried at Close of Period Property Location Type ofproperty Land Buildingimprovementsandintangibleassets leaseassets Furniture,fixturesandequipment Land Buildingimprovementsandintangibleassets leaseassets Furniture,fixturesandequipment Total Accumulateddepreciation Date ofconstruction Dateacquired500 EastPickwickDrive, LLC IN SNF 206,500 2,768,489 660,000 206,500 2,768,489 660,000 3,634,989 495,625 1986 8/25/2023300FairgroundsRoad, LLC IN SNF 94,500 6,666,839 1,500,000 94,500 6,666,839 1,500,000 8,261,339 1,330,451 1977 8/25/20231900 AlberStreet, LLC IN SNF 819,000 2,967,350 840,000 819,000 2,967,350 840,000 4,626,350 626,662 1969 8/25/20231720 AlberStreet, LLC IN SNF 360,000 1,623,326 440,000 360,000 1,623,326 440,000 2,423,326 333,652 1970 8/25/2023300 NorthWashingtonStreet, LLC IN SNF 90,050 5,905,004 1,330,000 90,050 5,905,004 1,330,000 7,325,054 932,609 1984 8/25/2023300 NorthWashingtonStreet, LLC IN ALF 90,050 2,964,561 305,000 90,050 2,964,561 305,000 3,359,611 421,628 2000 8/25/20231002 SisterBarbaraWay IN SNF 521,000 4,444,000 860,000 521,000 4,444,000 860,000 5,825,000 424,810 2010 5/31/2023100NetherlandLane TN SNF 391,160 270,840 670,000 391,160 270,840 670,000 1,332,000 155,365 2018 8/30/20242648SeviervilleRoad TN SNF 636,200 221,800 1,810,000 636,200 221,800 1,810,000 2,668,000 823,040 1956/2016 8/30/20242001Avenue E TX SNF 134,960 3,617,993 750,000 134,960 3,617,993 750,000 4,502,953 581,608 1968 8/30/20241213 WaterStreet TX SNF 620,136 8,336,911 1,790,000 620,136 8,336,911 1,790,000 10,747,047 1,685,525 1957/1975 8/30/20241340 NorthGrundyQuarlesHighway TN SNF 73,400 5,796,600 830,000 73,400 5,796,600 830,000 6,700,000 434,873 1979/2004 9/30/202411515TroostAvenue,LLC MO SNF 1,137,500 11,263,940 - 1,137,500 11,263,940 - 12,401,440 387,708 1974 12/19/202452435InfirmaryRoad, LLC MO SNF 23,500 7,447,247 - 23,500 7,447,247 - 7,470,747 219,717 1980 12/19/20242041 SilvaLane , LLC MO SNF 100,000 13,571,468 - 100,000 13,571,468 - 13,671,468 560,561 1963 12/19/2024902 ManorDrive, LLC MO SNF 73,684 8,891,212 - 73,684 8,891,212 - 8,964,896 306,038 1970 12/19/20242800HighwayTT, LLC MO SNF 55,460 17,799,625 - 55,460 17,799,625 - 17,855,085 612,668 1975 12/19/2024649 SouthWalnutStreet, LLC MO SNF 10,000 4,696,571 - 10,000 4,696,571 - 4,706,571 138,563 1980 12/19/20241622 East28th Street,LLC MO SNF 35,380 6,688,293 - 35,380 6,688,293 - 6,723,673 276,256 1967 12/19/202411400MehlAvenue,LLC MO SNF 750,000 10,456,120 - 750,000 10,456,120 - 11,206,120 308,488 1987 12/19/2024103 Har-Ber Road OK SNF 165,250 4,034,750 800,000.00 165,250 4,034,750.00 800,000.00 5,000,000 223,381 1973 12/31/2024520 EMorseAvenueLLC KS SNF 64,420 2,626,427 360,000 64,420 2,626,427 360,000 3,050,847 126,161 1973 1/2/2025440 N 4thStreet LLC KS ALF 219,600 2,643,044 256,000 219,600 2,643,044 256,000 3,118,644 93,493 1970 1/2/2025620 WoodAvenueLLC KS SNF 141,400 3,147,414 440,000 141,400 3,147,414 440,000 3,728,814 152,130 1969 1/2/2025601 N RoseHill RoadLLC KS SNF 170,500 3,895,669 544,000 170,500 3,895,669 544,000 4,610,169 169,882 1970 1/2/2025
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2015 SE10thAvenueLLC KS SNF 37,830 3,549,967 480,000 37,830 3,549,967 480,000 4,067,797 228,322 1959 1/2/20251600 SWoodlawnBoulevardLLC KS SNF 134,500 4,649,229 640,000 134,500 4,649,229 640,000 5,423,729 300,272 1974 1/2/20252400WhitesMeadowDrive, LLC OK SNF 411,734 3,588,266 1,000,000 411,734 3,588,266 1,000,000 5,000,000 224,963 1988 3/31/20252808StoneyBrookDrive, LLC TX SNF 1,392,516 8,987,484 1,120,000 1,392,516 8,987,484 1,120,000 11,500,000 242,323 1967 4/4/2025202 E MillStreet, LLC MO SNF 25,242 4,542,785 601,010 25,242 4,542,785 601,010 5,169,038 100,620 1984 7/1/2025631 WMainStreet, LLC MO SNF 32,555 4,535,473 601,010 32,555 4,535,473 601,010 5,169,038 100,527 1991 7/1/202518540 MO-16, LLC MO SNF 32,555 4,535,473 601,010 32,555 4,535,473 601,010 5,169,038 100,527 1991 7/1/20251 GeorgiangardensDrive, LLC MO SNF 68,515 9,067,540 1,202,020 68,515 9,067,540 1,202,020 10,338,076 201,010 1983 7/1/20252001JeffersonParkway,LLC MO SNF 113,711 9,935,950 1,322,222 113,711 9,935,950 1,322,222 11,371,883 220,622 1909 7/1/2025800 SouthWhite OakRoad, LLC MO SNF 19,533 5,614,366 741,246 19,533 5,614,366 741,246 6,375,145 124,246 1980 7/1/2025501 SMonroeStreet, LLC MO SNF 36,994 4,533,593 601,347 36,994 4,533,593 601,347 5,171,934 100,527 1980 7/1/20251531NebraskaStreet, LLC MO SNF 23,756 4,544,272 601,010 23,756 4,544,272 601,010 5,169,038 100,639 1976 7/1/20251300CountyFarm Road,LLC MO SNF 35,359 4,532,668 601,010 35,359 4,532,668 601,010 5,169,038 100,491 1983 7/1/2025701 S 8thSt, LLC OK SNF 333,714 2,925,830 1,002,937 333,714 2,925,830 1,002,937 4,262,480 87,793 1965 8/5/20252350KanellBoulevard,LLC MO SNF 161,392 3,908,491 1,243,019 161,392 3,908,492 1,243,019 5,312,903 93,603 1973 8/29/20251400 SouthMainStreet, LLC OK SNF 384,008 2,020,736 601,186 384,008 2,020,737 601,186 3,005,930 26,244 1961 11/10/2025Total $72,586,232 $ 797,514,896 $94,869,311 $72,586,234 $ 801,757,351 $94,869,311 $969,212,896 $282,062,366 (1) The cost of building and improvements is depreciated on a straight-line basis over the estimated useful lives of the buildings and improvements, ranging primarily from 3to 35 years. The cost of intangible lease assets is depreciated on a straight-line basis over the initial term of the related leases, ranging primarily from 3 to 20 years. The cost offurniture, fixtures and equipment are depreciated on a straight-line basis over the estimated useful lives of the furniture, fixtures and equipment, ranging primarily from 2 to 15years. See Note 4 to the consolidated financial statements for information on useful lives used for depreciation and amortization. (2) LTACH — long-term acute care hospital, SNF — skilled nursing facility, and ALF — assisted living facility. F-44
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STRAWBERRY FIELDS REIT, INC. and SubsidiariesSchedule IIIReal Estate and Accumulated Depreciation The changes in total real estate and accumulated depreciation are as follows (in thousands): For the year ended December 31, 2025 2024 Cost Balance at beginning of the year $ 857,487 $ 737,712 Acquisitions 112,183 119,775 Disposals/other (457) - Balance at end of the year $ 969,213 $ 857,487 Accumulated Depreciation Balance at beginning of the year $ 248,429 $ 219,398 Depreciation 35,774 29,031 Dispositions/other (2,141) - Balance at end of the year $ 282,062 $ 248,429 Net Real Estate $ 687,151 $ 609,058 The unaudited aggregate net tax value of real estate assets for federal income tax purposes as of December 31, 2025 is estimated to be $740,067,540 F-45
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Exhibit 21.1 STRAWBERRY FIELDS REIT INC List of Subsidiaries of Registrant Entity Name Country of Incorporation 1 1 Georgian gardens Drive, LLC United States 2 100 Netherland Lane, LLC United States 3 1002 Sister Barbara Way, LLC United States 4 1015 Magazine Street, LLC United States 5 1020 West Vine Street Realty, LLC United States 6 103 HAR-BER ROAD, LLC United States 7 1033 North Highway 11, LLC United States 8 1101 Glendale Boulevard, LLC United States 9 11400 Mehl Avenue, LLC United States 10 115 Woodlawn Drive, LLC United States 11 11515 Troost Avenue, LLC United States 12 1155 Eastern Parkway, LLC United States 13 11563 West 300 South, LLC United States 14 120 Life Care Way, LLC United States 15 120 North Tower Road, LLC United States 16 1213 Water Street, LLC United States 17 1253 Lake Barkley Drive, LLC United States 18 12803 Lenover Street Realty, LLC United States 19 1300 County Farm Road, LLC United States 20 1316 North Tibbs Avenue Realty, LLC United States 21 1340 North Grundy Quarles Highway, LLC United States 22 1350 North Todd Street Realty, LLC United States 23 140 Technology Lane, LLC United States 24 1400 South Main Street, LLC United States 25 14510 Highway 79, LLC United States 26 146 Buck Creek Road, LLC United States 27 1500 Grant Street, LLC United States 28 1513 South Dixieland Road, LLC United States 29 1516 Cumberland Street, LLC United States 30 1531 Nebraska Street, LLC United States 31 1585 Perry Worth Road, LLC United States 32 1600 East Liberty Street Realty, LLC United States 33 1600 S Woodlawn Boulevard LLC United States 34 1601 Hospital Drive Realty, LLC United States 35 1621 Coit Road Realty, LLC United States 36 1622 East 28th Street, LLC United States 37 1623 West Delmar Avenue, LLC United States 38 1712 Leland Drive Realty, LLC United States 39 1720 Alber Street, LLC United States 40 18540 MO-16, LLC United States 41 1900 Alber Street, LLC United States 42 2001 Avenue E, LLC United States 43 2001 Jefferson Parkway, LLC United States 44 2015 SE 10th Avenue LLC United States 45 202 E Mill Street, LLC United States 46 202 Enon Springs Road East, LLC United States 47 203 Bruce Court, LLC United States 48 2041 Silva Lane, LLC United States 49 2055 Heritage Drive Realty, LLC United States 50 2301 North Oregon Street Realty, LLC United States
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51 2350 Kanell Boulevard, LLC United States 52 2400 Chateau Drive Realty, LLC United States 53 2400 Whites Meadow Drive, LLC United States 54 2501 John Ashley Drive, LLC United States 55 2501 River Road, LLC United States 56 253 Bradington Drive, LLC United States 57 2640 Cold Spring Road Realty, LLC United States 58 2648 Sevierville Road, LLC United States 59 2800 Hwy TT, LLC United States 60 2808 Stoney Brook Drive, LLC United States 61 2821 West Dixon Road, LLC United States 62 2830 Highway 394, LLC United States 63 2901 West 37th Avenue, LLC United States 64 300 Fairgrounds Road, LLC United States 65 300 North Washington Street, LLC United States 66 308 West Maple Avenue, LLC United States 67 3090 Five Points Hartford Road Realty, LLC United States 68 3121 Glanzman Road Realty, LLC United States 69 317 Blair Pike, LLC United States 70 326 Lindley Lane, LLC United States 71 3523 Wickenhauser, LLC United States 72 3895 Keystone Avenue Realty, LLC United States 73 393 Edwardsville Road, LLC United States 74 405 Rio Vista Lane Realty, LLC United States 75 414 Massey Avenue, LLC United States 76 420 Jett Drive, LLC United States 77 4250 Sodom Hutchings Road Realty, LLC United States 78 4343 Kennedy Drive, LLC United States 79 500 East Pickwick Drive, LLC United States 80 501 S Monroe Street, LLC United States 81 505 North Roan Street, LLC United States 82 505 West Wolfe Street, LLC United States 83 516 West Frech Street, LLC United States 84 520 E Morse Avenue LLC United States 85 524 Anderson Road, LLC United States 86 52435 Infirmary Road, LLC United States 87 5301 Wheeler Avenue, LLC United States 88 548 South 100 West, LLC United States 89 552 Golf Links Road, LLC United States 90 5544 East State Boulevard, LLC United States
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91 5601 Plum Creek Drive Realty, LLC United States 92 5720 West Markham Street, LLC United States 93 601 N Rose Hill Road LLC United States 94 612 East 11th Street, LLC United States 95 620 West Strub Road Realty, LLC United States 96 620 Wood Avenue LLC United States 97 631 W Main Street, LLC United States 98 640 West Ellsworth Street, LLC United States 99 649 South Walnut, LLC United States 100 6500 Kirby Gate Boulevard, LLC United States 101 701 S 8th St, LLC United States 102 704 5th Avenue East, LLC United States 103 706 Oak Grove Street, LLC United States 104 727 North 17th Street, LLC United States 105 787 North Detroit Street, LLC United States 106 800 South White Oak Road, LLC United States 107 815 West Washington Street, LLC United States 108 8200 National Avenue Realty, LLC United States 109 826 North Street, LLC United States 110 835 Union Street, LLC United States 111 8400 Clearvista Place, LLC United States 112 8701 Riley Drive, LLC United States 113 900 Gagel Avenue, LLC United States 114 902 Manor Drive, LLC United States 115 9209 Dollarway Road, LLC United States 116 9300 Ballard Road, LLC United States 117 945 West Russell Street, LLC United States 118 950 Cross Avenue Realty, LLC United States 119 958 East Highway 46 Realty, LLC United States 120 978 Highway 11 South, LLC United States 121 981 Beechwood Avenue, LLC United States 122 Ambassador Nursing Realty, LLC United States 123 Arkansas Loan Acquisition, LLC United States 124 Belhaven Realty, LLC United States 125 Continental Nursing Realty, LLC United States 126 Forest View Nursing Realty, LLC United States 127 Lincoln Park Holdings, LLC United States 128 Midway Neurological and Rehabilitation Realty, LLC United States 129 Momence Meadows Realty, LLC United States 130 Niles Nursing Realty, LLC United States 131 Oak Lawn Nursing Realty, LLC United States 132 Parkshore Estates Nursing Realty, LLC United States 133 Strawberry Fields REIT, Inc. United States 134 Strawberry Fields Management Services, LLC United States 135 Strawberry Fields Realty, LP United States 136 Strawberry Fields REIT, LTD British Virgin Islands 137 The Big H2O, LLC United States 138 TX/OK Funding, LLC United States 139 West Suburban Nursing Realty, LLC United States 140 Westshire Nursing Realty, LLC United States
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Exhibit 31.1 CERTIFICATION I, Moishe Gubin, certify that: 1. I have reviewed this Annual Report on Form 10-K of Strawberry Fields REIT, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. By: /s/ Moishe Gubin Moishe Gubin Chairman and Chief Executive Officer Date: March 19, 2026
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Exhibit 31.2 CERTIFICATION I, Greg Flamion, certify that: 1. I have reviewed this Annual Report on Form 10-K of Strawberry Fields REIT, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. By: /s/ Greg Flamion Greg Flamion, Chief Financial Officer Date: March 19, 2026
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Exhibit 32.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the Annual Report on Form 10-K of Strawberry Fields REIT, Inc. (the “Company”) for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Moishe Gubin, Chairman and Chief Executive Officer of the Company, and Greg Flamion, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Moishe Gubin Name:Moishe Gubin Title: Chairman and Chief Executive Officer Date: March 19, 2026 /s/ Greg Flamion Name:Greg Flamion Title: Chief Financial Officer Date: March 19, 2026 The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.