SONIDA SENIOR LIVING INC

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help provide an understanding of our business and results of operations. This MD&A should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This report, including the following MD&A, contains forward-looking statements regarding future events or trends that should be read in conjunction with the risks, uncertainties and other factors described under “Cautionary Note Regarding Forward-Looking Statements” above in this Quarterly Report on Form 10-Q and “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 27, 2024, as well as “Item. 1A. Risk Factors” in this Quarterly Report on Form 10-Q. Actual results may differ materially from those projected in such statements as a result of such risks, uncertainties and other factors. Unless otherwise specified or where the context otherwise requires, references in this Report to “our,” “we,” “us,” “Sonida”, the “Company” and “our business” refer to Sonida Senior Living, Inc., together with its consolidated subsidiaries.

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help provide an understanding of our business and results of operations. This MD&A should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This report, including the following MD&A, contains forward-looking statements regarding future events or trends that should be read in conjunction with the risks, uncertainties and other factors described under “Cautionary Note Regarding Forward-Looking Statements” above in this Quarterly Report on Form 10-Q and “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 17, 2025, as well as “Item. 1A. Risk Factors” in this Quarterly Report on Form 10-Q. Actual results may differ materially from those projected in such statements as a result of such risks, uncertainties and other factors. Unless otherwise specified or where the context otherwise requires, references in this Quarterly Report on Form 10-Q to “our,” “we,” “us,” “Sonida”, the “Company” and “our business” refer to Sonida Senior Living, Inc., together with its consolidated subsidiaries.

Previous wording

The following discussion and analysis addresses (i) the Company’s results of operations for the three and nine months ended September 30, 2024 and 2023, and (ii) liquidity and capital resources of the Company.

Current wording

The following discussion and analysis addresses (i) the Company’s results of operations for the three months ended March 31, 2025 and 2024, and (ii) liquidity and capital resources of the Company.

Previous wording

The Company is a leading owner, operator and investor of senior housing communities in the United States. The Company’s operating strategy is to provide value to its senior living residents by providing quality senior living services at reasonable prices, while achieving and sustaining a strong, competitive position within its geographically concentrated regions, as well as continuing to enhance the performance of its operations. The Company generally provides senior living services to the 75+ population, including independent living, assisted living, and memory care services at reasonable prices. Many of the Company’s communities offer a continuum of care to meet each of their resident’s needs as they change over time. This continuum of care, which integrates independent living, assisted living, and memory care that may be bridged by home care through independent home care agencies, sustains our residents’ autonomy and independence based on their physical and mental abilities.

Current wording

The Company is a leading owner, operator and investor in independent living, assisted living and memory care communities and services for senior adults in the United States in terms of resident capacity. The Company’s operating strategy is to provide value to its senior living residents by providing quality senior living services at reasonable prices, while achieving and sustaining a strong, competitive position within its geographically concentrated regions, as well as continuing to enhance the performance of its operations. The Company primarily provides senior living services to the 75+ population, including independent living, assisted living, and memory care services at reasonable prices. Many of the Company’s communities offer a continuum of care to meet each of their resident’s needs as they change over time. This continuum of care, which integrates independent living, assisted living, and memory care that may be bridged by home care through independent home care agencies, sustains our residents’ autonomy and independence based on their physical and mental abilities.

Previous wording

As of September 30, 2024, the Company operated 83 senior housing communities in 20 states with an aggregate capacity of approximately 9,100 residents, including 70 owned senior housing communities (four through joint venture investments in a consolidated entity and four through a joint venture investment in an unconsolidated entity) and 13 communities that the Company third-party manages.

Current wording

As of March 31, 2025, the Company owned, managed, or invested in 94 senior housing communities in 20 states with an aggregate capacity of approximately 10,000 residents, including 81 owned senior housing communities (including four through joint venture investments in consolidated entities, four owned through a joint venture investment in an unconsolidated entity, and one unoccupied) and 13 communities that the Company manages on behalf of a third party.

Previous wording

The Company derives its revenue primarily by providing senior living and healthcare services to seniors. During the three months ended September 30, 2024, the Company generated resident revenue of $67.0 million compared to resident revenue of $59.1 million in the three months ended September 30, 2023, representing an increase of 13.4%. The increase in revenue was primarily due to increased occupancy, increased average rent rates, and four additional owned communities acquired in July 2024. During the nine months ended September 30, 2024, the Company generated resident revenue of $190.8 million compared to $172.7 million during the nine months ended September 30, 2023, representing an increase of 10.5%. The increase in revenue was primarily due to increased occupancy, increased average rent rates, and five additional communities that were acquired during 2024.

Current wording

During the three months ended March 31, 2025, the Company generated resident revenue of $79.3 million compared to resident revenue of $60.7 million in the three months ended March 31, 2024, representing an increase of 30.6%. The increase in revenue was primarily due to increased occupancy, increased average rent rates, and additional communities acquired in 2024.

Previous wording

Weighted average occupancy for the three months ended September 30, 2024 and 2023 for the 61 same-store communities owned by the Company was 87.0% and 84.9%, respectively, reflecting continued occupancy growth. The average monthly rental rate for these communities for the three months ended September 30, 2024 was 4.5% higher as compared to the three months ended September 30, 2023.

Current wording

Weighted average occupancy for the three months ended March 31, 2025 and 2024 for the communities owned by the Company, excluding 2024 acquisitions and repositioning projects, was 86.8% and 85.8%, respectively, reflecting continued occupancy growth. The average monthly rental rate for these owned communities for the three months ended March 31, 2025 increased 5.5% when compared to the three months ended March 31, 2024.

Previous wording

The Company has property management agreements with a third-party owner and its joint ventures pursuant to which the Company manages certain communities on their behalf for a management fee based on gross revenues of the applicable communities, as well as an incentive management fee, and other customary terms and conditions. The Company managed thirteen communities on behalf of the third-party owner during the nine months ended September 30, 2024 and as compared to ten communities during the nine months ended September 30, 2023. The Company managed four communities on behalf of an unconsolidated joint venture and four communities of a consolidated joint venture during the nine months ending September 30, 2024 and none during the prior period.

Current wording

The Company has property management agreements with third parties and its joint ventures pursuant to which the Company manages certain communities on their behalf for a management fee based on gross revenues of the applicable communities, as well as, in some cases, an incentive management fee and other customary terms and conditions. The Company managed 13 and ten communities on behalf of a third party for the three months ended March 31, 2025 and 2024, respectively. The Company also managed four communities on behalf of an unconsolidated joint venture and four communities in consolidated joint ventures for the three months ended March 31, 2025. No such joint ventures in the prior period.

Previous wording

On July 1, 2024, the Company entered into two joint ventures (collectively, the “Palatine JVs”) with affiliates of Palatine Capital Partners, which acquired four senior living communities located in Texas (3) and Georgia (1). The Palatine JVs acquired these communities for a purchase price of $32.8 million plus transaction costs of $0.1 million for net cash of $11.2 million and financing of $21.7 million of senior mortgage debt. The Company is a 51% owner in the joint ventures.

Current wording

In July 2024, the Company entered into two joint ventures (collectively, the “Palatine JVs”) with affiliates of Palatine Capital Partners, which acquired four senior living communities located in Texas (3) and Georgia (1). The Company is a 51% owner in the joint ventures. The noncontrolling interest of the Palatine JVs is reported on the noncontrolling interest line items in the Company's condensed consolidated financial statements.

Previous wording

In April 2024, the Company and KZ Stone Investor LLC (“KZ Investor”) formed a new joint venture, Stone JV LLC (“Stone”) for the purpose of acquiring, owning, and operating four senior housing communities located in the Midwest. In May 2024, Stone purchased the four communities for a purchase price of $64.0 million. KZ Investor is the controlling managing member of the newly formed venture and owns 66.67% of the entity as of September 30, 2024. Sonida owns a 33.33% noncontrolling interest in the new venture as of September 30, 2024, which was acquired through cash contributions in connection with the closing. Sonida operates the four communities for a management fee based on gross revenues of the applicable communities, as well as an incentive management fee based on earnings before interest, taxes, depreciation, amortization, rent, and management fees, and other customary terms and conditions.

Current wording

In May 2024, Stone JV LLC (“Stone JV”) purchased four communities in the Midwest. KZ Stone Investor LLC is the controlling managing member of the Stone JV and owned 67.29% of the entity as of March 31, 2025. Sonida owned a 32.71% noncontrolling interest in the Stone JV as of March 31, 2025. Sonida operates the four communities for a management fee based on the gross revenues of the applicable communities, as well as an incentive management fee based on earnings before interest, taxes, depreciation, amortization, rent, and management fees, and other customary terms and conditions.

Previous wording

The Company has evaluated its investment in the Stone joint venture under ASC 810. The Company has determined that it does not have the power to direct the activities of the VIE that most significantly impact its economic performance and is not the primary beneficiary of the VIE in accordance with ASC 810. The Company's interests in the VIE are, therefore, accounted for under the equity method of accounting. The carrying amount of the Company's investment in the unconsolidated venture and maximum exposure to loss as a result of the Company's ownership interest in the joint venture was $11.9 million, which is included in equity method investment on the accompanying condensed consolidated balance sheet as of September 30, 2024.

Current wording

The Company has evaluated its investment in the Stone JV under ASC 810 and determined that it does not have the power to direct the activities of the VIE that most significantly impact its economic performance and is not the primary beneficiary of the VIE. The Company's interests in the VIE are, therefore, accounted for under the equity method of accounting. The carrying amount of the Company's investment in the unconsolidated venture and maximum exposure to loss as a result of the Company's ownership interest in the Stone JV was $10.2 million as of March 31, 2025, which is included in investment in unconsolidated entity on the accompanying condensed consolidated balance sheet. For the three months ended March 31, 2025, the Company received a return of investment of $0.4 million in its unconsolidated entity.

Previous wording

The Company evaluates the realization of its investment in unconsolidated entities accounted for using the equity method if circumstances indicate the Company's investment is other than temporarily impaired. During the three and nine months ended September 30, 2024, there were no impairments.

Current wording

The Company evaluates the realization of its investment in unconsolidated entities accounted for using the equity method if circumstances indicate the Company's investment is other than temporarily impaired. For the three months ended March 31, 2025, there were no impairments.

Previous wording

In July 2024, the Company entered into a credit agreement with BMO Bank N.A to obtain a senior secured revolving credit facility (the “Credit Facility”). The Credit Facility had an initial borrowing capacity of $75.0 million, a term of three years, a leverage-based pricing matrix between SOFR plus 2.10% margin and SOFR plus 2.60% margin and is fully recourse to Sonida Senior Living, Inc. and its applicable subsidiaries. The borrowing base by which borrowing availability under the Credit Facility is determined is generally based upon the value of the senior living communities that secure the Company’s obligations under the Credit Facility. During the three months ended September 30, 2024, the Company borrowed $8.7 million under the Credit Facility, at a weighted average interest rate of 7.3%, which was secured by two of the Company’s previously unencumbered senior living communities. The borrowing of $8.7 million was repaid prior to September 30, 2024 and no borrowings were outstanding as of September 30, 2024. See “Note 15–Subsequent Events.” in the Notes to Condensed Consolidated Financial Statements.

Current wording

During 2024, the Company entered into a credit agreement with BMO Bank, N.A. and Royal Bank of Canada for a senior secured revolving credit facility (the “Credit Facility”). The Credit Facility has a borrowing capacity of up to $150.0 million, a term of three years, a leverage-based pricing matrix between SOFR plus 2.10% margin and SOFR plus 2.60% margin and is fully recourse to Sonida Senior Living, Inc. and its applicable subsidiaries. The borrowing base by which borrowing availability under the Credit Facility is determined is generally based upon the value of the senior living communities that secure the Company’s obligations under the Credit Facility. As of March 31, 2025, $60.0 million of borrowings were outstanding under the Credit Facility at a weighted average interest rate of 6.9%, which was secured by 13 of the Company’s senior living communities. As of March 31, 2025, we had an additional borrowing capacity of up to $43.2 million under our Credit Facility. See “Note 17–Subsequent Events” in the Notes to Condensed Consolidated Financial Statements.

Previous wording

We entered into an agreement with one of our previous lenders whereby the Company agreed to purchase the outstanding indebtedness it owed to such lender for a purchase price of $40.2 million (plus the reimbursement of certain amounts advanced to the Company by such lender). On February 2, 2024, the Company completed the purchase of the total outstanding principal balance of $74.4 million from the lender that was secured by seven of the Company’s senior living communities (such transaction, the “2024 Loan Purchase”). The 2024 Loan Purchase was funded by expanding the Company’s existing loan facility with Ally Bank (“Ally”) by $24.8 million and the remainder was funded by proceeds from the 2024 Private Placement, see “Note 7–Securities Financing” in the Notes to Condensed Consolidated Financial Statements. The 2024 Loan Purchase and Ally financing closed on February 2, 2024, reduced notes payable by $49.6 million, and resulted in a gain on debt extinguishment totaling $38.1 million. The Company incurred deferred loan costs of $0.5 million as part of the Ally financing that are amortized over the loan term. As part of the agreement with Ally, the Company expanded its current interest rate cap to include the additional borrowing at a cost of $0.6 million. The expanded Ally debt facility is secured by six of the Company’s senior living communities involved in the transaction.

Current wording

We entered into an agreement with one of our previous lenders whereby the Company agreed to purchase the outstanding indebtedness it owed to such lender for a purchase price of $40.2 million (plus the reimbursement of certain amounts advanced to the Company by such lender). On February 2, 2024, the Company completed the purchase of the total outstanding principal balance of $74.4 million from the lender that was secured by seven of the Company’s senior living communities (such transaction, the “2024 Loan Purchase”). The 2024 Loan Purchase was funded by expanding the Company’s existing loan facility with Ally Bank (“Ally”) by $24.8 million (“Ally Third Amendment”) and the remainder was funded by proceeds from the issuance of common stock. The 2024 Loan Purchase and Ally financing closed in February 2024, reduced notes payable by $49.6 million, and resulted in a gain on debt extinguishment, net totaling $38.1 million for the three months ended March 31, 2024. The Company incurred deferred loan costs of $0.5 million as part of the Ally financing that are amortized over the loan term. As part of the Ally Third Amendment, the Company expanded its current interest rate cap to include the additional borrowing at a cost of $0.6 million and increased the monthly interest rate cap reserve (“IRC Reserve”) held by Ally to match the notional amount required under the increased obligation. The expanded Ally debt facility is secured by six of the Company’s senior living communities involved in the transaction.

Previous wording

On May 22, 2024, the Company executed an amendment (“Ally Fourth Amendment”) to the Ally term loan agreement. Ally Bank successfully syndicated a portion of its total term loan commitment to Cross River Bank. Following the syndication, Ally Bank and Cross River Bank owned 67.5% and 32.5% of the outstanding principal balance, respectively. As each lender loans a specific amount to the debtor and has the right to repayment from the debtor this transaction is considered a loan syndication and the guidance in ASC 470-50 should be applied to the modified loans on a creditor-by-creditor basis. As Ally Bank was the sole lender prior to the syndication, there is no change in the allocation of deferred loan costs, and they will continue to be amortized over the loan term.

Current wording

On May 22, 2024, the Company executed an amendment (“Ally Fourth Amendment”) to the Ally term loan agreement. Ally Bank successfully syndicated a portion of its total term loan commitment to Cross River Bank. Following the syndication, Ally Bank and Cross River Bank owned 67.5% and 32.5%, respectively, of the outstanding principal balance. As each lender loans a specific amount to the debtor and has the right to repayment from the debtor this transaction is considered a loan syndication and the guidance in ASC 470-50 was applied to the modified loans on a creditor-by-creditor basis. As Ally Bank was the sole lender prior to the syndication, there is no change in the allocation of deferred loan costs, and they will continue to be amortized over the loan term. As part of the syndication, the IRC reserve spread moved from 2.3% to 3.0%, capping the total interest at 6.0% on the Ally term loan. The Ally Fourth Amendment allows the Company the option to extend the Ally debt maturity by 12 months from March 2026 to March 2027. The Company intends and has the ability to exercise this option.

Previous wording

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. For a discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no significant changes to our critical accounting policies since December 31, 2023.

Current wording

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and related notes. Actual results could differ from those estimates. For a discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes to our critical accounting policies since December 31, 2024.

Previous wording

Managed community reimbursement revenue for the three months ended September 30, 2024 was $6.6 million as compared to $5.0 million for the three months ended September 30, 2023, representing an increase of $1.6 million or 32.0%. The increase was primarily a result of managing three more communities in the three months ended September 30, 2024 compared to the prior period.

Current wording

Managed community reimbursement revenue for the three months ended March 31, 2025 was $11.6 million as compared to $6.1 million for the three months ended March 31, 2024, representing an increase of $5.5 million, or 90.2%. The increase was primarily a result of managing more communities.

Previous wording

Operating expenses for the three months ended September 30, 2024 were $50.5 million as compared to $44.5 million for the three months ended September 30, 2023, representingan increase of $6.0 million, or 13.5%. The increase was attributable to $3.6 million in operating expenses related to the additional communities acquired and managed during 2024 versus the prior year, and an increase of $2.4 million operating expenses related to our same-store portfolio, driven by $0.8 million increases in labor and $1.6 million increases in other operating expenses.

Current wording

Operating expenses for the three months ended March 31, 2025 were $60.4 million as compared to $46.3 million for the three months ended March 31, 2024, representingan increase of $14.1 million, or 30.5%. The increase was attributable to $11.5 million in operating expenses related to the 16 additional communities acquired during 2024 (including one unoccupied community acquired on December 31, 2024), and an increase of $2.6 million in operating expenses related to the remaining owned communities, driven by $1.4 million increases in labor and $1.2 million increases in other operating expenses.

Previous wording

General and administrative expenses for the three months ended September 30, 2024 were $11.8 million as compared to $8.6 million for the three months ended September 30, 2023, representing an increase of $3.2 million. The increase was primarily a result of an increase in labor and employee related expenses of $1.6 million due to the additional communities acquired and managed during 2024, a $0.8 million increase in stock-based compensation expense, a $0.5 million increase in transaction costs, and a net increase in other expenses of $0.3 million.

Current wording

General and administrative expenses for the three months ended March 31, 2025 were $8.5 million as compared to $6.8 million for the three months ended March 31, 2024, representing an increase of $1.7 million. The increase was primarily a result of an increase in labor and employee related expenses of $1.5 million to support the Company’s 2024 acquisitions and growth initiatives, and a $0.4 million increase in stock-based compensation expense, partially offset by a net decrease in other expenses of $0.2 million.

Previous wording

Managed community reimbursement expense for the three months ended September 30, 2024 was $6.6 million as compared to $5.0 million for the three months ended September 30, 2023, representing an increase of $1.6 million or 32.0%. The increase was primarily a result of managing more communities in the three months ended September 30, 2024 compared to the prior period.

Current wording

Managed community reimbursement expense for the three months ended March 31, 2025 was $11.6 million as compared to $6.1 million for the three months ended March 31, 2024, representing an increase of $5.5 million or 90.2%. The increase was primarily a result of managing more communities for the three months ended March 31, 2025 as compared to the prior period.

Previous wording

Gain on extinguishment of debtfor the nine months ended September 30, 2024 was $38.1 million. The gain related to the derecognition of notes payable and liabilities as a result of the 2024 Loan Purchase from one of our lenders. Gain onextinguishment of debtfor the nine months ended September 30, 2023 was$36.3 million and related to the derecognition of notes payable and liabilities as a result of the transition of legal ownership of two communities to Fannie Mae, the holder of the related non-recourse debt.

Current wording

Gain on extinguishment of debt, net for the three months ended March 31, 2024 was $38.1 million related to the derecognition of notes payable and liabilities as a result of the 2024 Loan Purchase.

Previous wording

In addition to $24.9 million of unrestricted cash as of September 30, 2024, our future liquidity will depend in part upon our operating performance, which will be affected by prevailing economic conditions, and financial, business and other factors, some of which are beyond our control. Principal sources of liquidity are expected to be cash flows from operations, proceeds from equity offerings, proceeds from our debt and credit facility, proceeds from debt refinancings or loan modifications, and proceeds from the sale of owned assets. During 2023, we entered into loan modifications with Fannie Mae, an amendment with Ally Bank, including a revised Limited Payment Guaranty, and an Equity Commitment with Conversant. During 2024, we completed the 2024 Private Placement pursuant to which we issued and sold an aggregate of 5.0 million shares of our common stock to several of our shareholders for gross cash proceeds of $47.8 million, which enabled us to purchase all of the Company’s debt then outstanding with a certain lender at a substantial discount, as well as fund future working capital and growth initiatives. Additional financing of $24.8 million for the debt purchase was provided by Ally Bank through an expansion of the Company’s existing Ally Bank term loan. On April 1, 2024, the Company entered into the At-the-Market Issuance Sales Agreement (the “ATM Sales Agreement”), whereby the Company may sell, at its option, shares of its common stock up to an aggregate offering price of $75,000,000. As of September 30, 2024, the Company has received $18.7 million net proceeds from the ATM sales. During August 2024, the Company completed a public offering and issued 4,830,317 shares of common stock for net proceeds of $124.1 million. During August 2024, the Company entered into a Credit Facility in which borrowing availability is determined based upon the value of the senior living communities. These transactions are expected to provide additional financial flexibility to us and increase our liquidity position. See “Note 6–Debt,” “Note 7–Securities Financing,” and “Note 15–Subsequent Events” in the Notes to Condensed Consolidated Financial Statements.

Current wording

In addition to $14.0 million of unrestricted cash as of March 31, 2025, our future liquidity will depend in part upon our operating performance, which will be affected by prevailing economic conditions, and financial, business and other factors, some of which are beyond our control. Principal sources of liquidity are expected to be cash flows from operations, proceeds from our secured Credit Facility, proceeds from equity offerings, including sales of common stock under our ATM sales agreement, proceeds from debt, proceeds from debt refinancings or loan modifications, and proceeds from the sale of owned assets. On April 1, 2024, the Company entered into the At-the-Market Issuance Sales Agreement (the “ATM Sales Agreement”), whereby the Company may sell, at its option, shares of its common stock up to an aggregate offering price of $75,000,000. During August 2024, the Company entered into its Credit Facility in which borrowing availability is determined based upon the value of the senior living communities securing the Credit Facility. As of March 31, 2025, the Company had outstanding borrowings under its Credit Facility of $60.0 million and availability of $43.2 million. These transactions are expected to provide additional financial flexibility for the Company and increase our liquidity position. See “Note 7–Debt” in the Notes to Condensed Consolidated Financial Statements.

Previous wording

In February 2024, in order to comply with Ally term loan requirements, the Company expanded its SOFR-based interest rate cap for an aggregate notional amount of $24.8 million at a cost of $0.6 million. The interest rate cap agreement has a 12-month term and caps the floating interest rate portion of our indebtedness with Ally Bank at 2.25%. As of September 30, 2024, the entire balance of our outstanding variable-rate debt obligations were covered by our interest rate caps to better manage our exposure to market risks associated with the fluctuations in interest rates.

Current wording

As of March 31, 2025, the majority of our outstanding variable-rate debt obligations were covered by our interest rate caps to better manage our exposure to market risks associated with the fluctuations in variable interest rates associated with our debt.

Previous wording

Net cash provided by operating activities for the nine months ended September 30, 2024 was $1.4 million as compared to $10.6 million for the nine months ended September 30, 2023. The change of $9.2 million is primarily due to the settlement of accounts payable and accrued expenses during the nine months ended September 30, 2024 compared to the prior year period. Additionally, we received grants of $2.9 million in the nine months ended September 30, 2023 from state departments due to financial distress impacts of COVID-19. No such grants were received during 2024.

Current wording

Net cash provided by operating activities for the three months ended March 31, 2025 was $3.8 million as compared to net cash used inoperating activities of $4.1 million for the three months ended March 31, 2024. The change of $7.9 million is primarily due to the change in accounts receivable and the improvement in net income inclusive of the non-cash adjustments to earnings during the three months ended March 31, 2025 compared to the prior year period.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2024 was $154.1 million primarily due a payment of $102.5 million for an acquisition deposit used to fund the purchase of the Palm Communities on October 1, 2024. Other net cash used in investing activities was for the acquisition of four new communities for $22.3 million, the acquisition of four unconsolidated entities for $22.4 million, and ongoing capital improvements combined with refurbishments at the Company’s senior housing communities of $17.9 million, which was partially offset by a return on investment of $10.4 million in our unconsolidated entities. Net cash used in investing activities of $12.8 million for the nine months ended September 30, 2023 wasprimarily the result ofongoing capital improvements and refurbishments at the Company’s senior housing communities of $14.2 million, partially offset by $1.4 million from the proceeds from the sale of fixed assets.

Current wording

Net cash used in investing activities for the three months ended March 31, 2025 was $7.9 million primarily due to $8.3 million in ongoing capital improvements combined with select refurbishment projects, as well as refurbishment projects associated with the 2024 acquired communities, partially offset by a return of investment of $0.4 million in our unconsolidated entity. Net cash used in investing activities of $5.1 million for the three months ended March 31, 2024 was primarily resulted from ongoing capital improvements and refurbishments at the Company’s senior housing communities of $5.8 million, partially offset by $0.6 million from the proceeds from the sale of an unencumbered land parcel in January 2024.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2024 was $178.8 million primarily due to net proceeds from the issuance of common stock of $190.5 million, proceeds of $36.9 million from notes payable, and proceeds from noncontrolling investors of $7.7 million, partially offset by repayments of notes payable of $50.0 million and dividends paid of $1.4 million. The net cash used in financing activities for the nine months ended September 30, 2023 was $7.4 million primarily due to repayments of notes payable of $12.5 million and deferred financing costs paid of $0.8 million, partially offset by proceeds of $6.0 million from equity draws under the Equity Commitment.

Current wording

Net cash used by financing activities for the three months ended March 31, 2025 was $2.5 million primarily due to dividends paid of $1.4 million and repayments of notes payable of $0.9 million. The net cash provided by financing activities for the three months ended March 31, 2024 was $29.1 million primarily due to net proceeds received from the issuance of common stock of $47.6 million and proceeds of $24.8 million from the Ally financing, partially offset by repayments of notes payable of $42.0 million.