SONIDA SENIOR LIVING, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

Organization and Business

Sonida Senior Living, Inc., a Delaware corporation (together with its subsidiaries, the “Company,” “we,” “our,” “us,” or “Sonida”), is one of the largest, pure-play owner-operators and investors in U.S. senior living communities, with a focus on independent living, assisted living and memory care communities and services for senior adults. As of September 30, 2026, the Company owned, managed or was invested in 165 senior housing communities with over 16,700 total units 1 across 35 states, including 153 owned senior housing communities (inclusive of 40 managed by third-party property managers,15 leased pursuant to triple-net leases, three owned through a joint venture investment in a consolidated entity andfour owned through a joint venture investment in an unconsolidated entity) and 12 communities that the Company managed on behalf of a third-party. On March 11, 2026, the Company completed its previously announced merger with CNL Healthcare Properties, Inc. (“CHP”). See “Note 2–CHP Merger.”

Principles of Consolidation

The condensed consolidated financial statements include the financial statements of Sonida Senior Living, Inc., its wholly-owned subsidiaries, and other entities in which the Company has a controlling financial interest. All material intercompany balances and transactions have been eliminated in consolidation. The Company reports investments in unconsolidated entities whose operating and financial policies it has the ability to exercise significant influence under the equity method of accounting.

The Company evaluates its potential variable interest entity (“VIE”) relationships under certain criteria as provided for in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation(“ASC 810”). ASC 810 broadly defines a VIE as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity's activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The Company performs this evaluation on an ongoing basis and consolidates any VIEs for which the Company is determined to be the primary beneficiary, as determined by the Company's power to direct the VIE’s activities and the obligation to absorb its losses or the right to receive its benefits, which are potentially significant to the VIE.

As of September 30, 2026, the Company has a joint venture, Stone JV LLC (“Stone JV”) and owns a preferred equity investment in Parc Traditions, LP (“Parc LP”). Both investments are treated as unconsolidated entities. See “Note 4–Investments, Acquisitions and Assets Held for Sale.”

As of September 30, 2026, the Company was a 51% owner inone joint venture (the “Palatine JV”) with affiliates of Palatine Capital Partners (“Palatine”). The Company has evaluated its investment in the Palatine JV under ASC 810. The Company has determined that it has the power to direct the activities of the VIE that most significantly impact its economic performance and is the primary beneficiary of the VIE in accordance with ASC 810. Accordingly, the Company has consolidated the activity of the Palatine JV into its consolidated financial statements for the periods ended September 30, 2026 and December 31, 2025. Prior to March 31, 2026, the Company was a 51% owner intwo joint ventures with Palatine. See“Note 4–Investments, Acquisitions and Assets Held for Sale.”

Interim Unaudited Financial Information

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from this Quarterly Report on Form 10-Q pursuant to the rules and regulations of the SEC. The results for the interim periods shown in this report are not necessarily indicative of future financial results. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments, including normal recurring items, necessary to

1 Capacity disclosures in these footnotes to the condensed consolidated financial statements are outside the scope of our independent registered accounting firm’s review.

present fairly our condensed consolidated financial position as of September 30, 2026 and December 31, 2025, and our condensed consolidated results of operations and cash flows for the periods ended September 30, 2026 and 2025.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. These estimates include such items related to the accounting for: income taxes, including assessments of probabilities of realization of income tax benefits; other contingencies; allowances for uncollectible accounts receivable; impairment of long-lived assets and intangible assets, including applicable cash flow projections, holding periods and fair value evaluations; stock-based compensation; fair values of assets and liabilities acquired in asset acquisitions and business combinations; fair values of our equity method investments; and depreciation and amortization, including determination of estimated useful lives. Actual results could differ from those estimates.

2. CHP Merger

Strategic Merger with CNL Healthcare Properties, Inc.

On March 11, 2026, pursuant to a definitive agreement and plan of merger dated November 4, 2025 (the “Merger Agreement”), by and among the Company, SSL Sparti LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Holdco”), SSL Sparti Property Holdings Inc., a Maryland corporation and a wholly owned subsidiary of Holdco (f/k/a Sparti Merger Sub, Inc., “SNDA Merger Sub”), CNL Healthcare Properties, Inc., a Maryland corporation (“CHP”), and CHP Merger Corp., a Maryland corporation and a wholly owned subsidiary of CHP (“CHP Merger Sub”), the Company completed the acquisition of CHP through a series of steps ending with a forward merger of CHP with and into SNDA Merger Sub, with SNDA Merger Sub surviving the merger (the “CHP Merger”). As a result of the CHP Merger, the Company acquired 100% of the outstanding shares of CHP. The transactions contemplated by the Merger Agreement are collectively referred to herein as the “Merger Transactions”.

Pursuant to the Merger Agreement, each share of common stock of CHP, par value $0.01, was cancelled and converted into the right to receive (i) $2.32 in cash and 0.1318 shares of common stock of the Company, par value $0.01 (“Sonida Common Stock”), which was determined by dividing (a) $4.58 by (b) the volume weighted average trading price (“VWAP”), of Sonida Common Stock during a measurement period prior to the closing date, subject to a collar of 15% below the transaction reference price for the Sonida Common Stock of $26.74 (the “Transaction Reference Price”) and 30% above the Transaction Reference Price. Since the VWAP during the measurement period was $35.93, the 0.1318 exchange ratio was calculated by dividing $4.58 by $34.76, being the high end of the asymmetrical collar.

In connection with the issuance of Sonida Common Stock to the former CHP shareholders and certain equity financing transactions, on February 26, 2026, the Company amended its Amended and Restated Certificate of Incorporation, pursuant to that certain Eighth Certificate of Amendment to the Amended and Restated Certificate of Incorporation, to increase the authorized number of shares of Sonida Common Stock to 100.0 million.

Financing of the Merger Transactions

On December 29, 2025, the Company amended and restated its revolving credit facility (as further amended on March 5, 2026, the “A&R Credit Agreement”) to, among other things, provide for permanent debt financing (“Permanent Financing”) to fund a portion of the cash consideration necessary for the CHP Merger, which amendments were subject to and conditioned upon the consummation of the CHP Merger. The A&R Credit Agreement increased the available commitments under the revolving credit facility to $405.0 million, extended the maturity thereof to March 10, 2030, reduced the leverage-based pricing matrix to between Secured Overnight Financing Rate (“SOFR”) plus 1.35% margin and SOFR plus 2.00% margin, increased the number of participating lenders under the credit facility, and effected certain other changes (the “Revolving Credit Facility”). As of September 30, 2026, the available commitments under the Revolving Credit Facility had increased to $455.0 million. In addition, under the A&R Credit Agreement, the Company incurred $525.0 million in new term loans intwo equal tranches (the “Term Loan Facility”). The Term Loan Facility is comprised of athree-year tranche that matures on March 10, 2029 and afive-year tranche that matures March 10, 2031. The Term Loan Facility is subject to a leverage-based pricing matrix between SOFR plus 1.30% margin and SOFR plus 1.95% margin. As of September 30, 2026, the Company has a SOFR-based interest rate collar to reduce exposure to the variable interest rate fluctuations associated with thethree-year tranche Term Loan Facility. The interest rate collar has a notional amount of $287.5 million, a 33-month term with a SOFR-based collar of 4.05% and floor of 3.30%. Monthly cash settlements are received from or paid to the counterparties when interest rates rise above or fall below the contractual collar ceiling or floor rates. In June 2026, the Company entered into a SOFR-based interest rate swap (“IR Swap”) to reduce the exposure to the variable interest rate fluctuations associated with thefive-year tranche Term Loan

Facility. The IR Swap has a notional amount of $287.5 million, a 57-month term, and is structured as a floating to fixed swap with a fixed rate of 4.11%.

On March 10, 2026, in order to fund the remaining portion of the cash consideration required for the CHP Merger, the Company obtained $270.0 million in loans under a 364-day senior secured bridge facility (the “Bridge Facility”). The Bridge Facility would have matured on March 9, 2027 and was subject to a leverage-based pricing matrix between SOFR plus 1.35% margin and SOFR plus 2.00% margin. The Permanent Financing is and the Bridge Facility was subject to customary guarantees and security provisions, events of default, corporate covenants and borrowing base availability requirements. See “Note 8–Debt.”

On March 30, 2026, the Company obtained an additional $25.0 million in permanent term loans under the Term Loan Facility, and on March 31, 2026, obtained an additional $25.0 million of commitments under the Revolving Credit Facility, which were fully drawn, in order to repay $50.0 million of loans outstanding under the Bridge Facility.

On May 7, 2026, the Company obtained an additional $25.0 million in permanent term loans under the Term Loan Facility, and an additional $25.0 million of commitments on the Revolving Credit Facility, which were fully drawn, in order to repay $50.0 million of loans outstanding under the Bridge Facility.

On August 7, 2026 the Company entered into the Second Amended and Restated Term Loan Agreement with Ally Bank (“Ally Term Loan”). The Company repaid in full the $170.0 million outstanding under the Bridge Facility with proceeds from the Ally Term Loan. See “Note 8–Debt.”

As of September 30, 2026, the Term Loan Facility had $575.0 million outstanding split equally into athree-year tranche and afive-year tranche, and the Revolving Credit Facility had $251.0 million drawn and outstanding.

Equity Financing

On November 4, 2025, the Company entered into (i) an investment agreement (the “Conversant Investment Agreement”) with certain affiliates of Conversant Capital LLC (the “Conversant Investors”), pursuant to which the Conversant Investors agreed to fund an aggregate amount of $100.0 million in exchange for the issuance of 3,739,716 shares of Sonida Common Stock in a private placement pursuant to Section 4(a)(2) of the Securities Act at $26.74 per share, immediately prior to the CHP Merger, and (ii) an investment agreement (the “Silk Investment Agreement” and, together with the Conversant Investment Agreement, collectively, the “Investment Agreements”) with Silk Partners, LP (“Silk” and the Conversant Investors and Silk, together, the “Equity Investors”) pursuant to which Silk agreed to fund an aggregate amount of $10.0 million in exchange for the issuance of 373,972 shares of Sonida Common Stock in a private placement at $26.74 per share on substantially the same terms as in the Conversant Investment Agreement (collectively, the “Equity Financing”). On March 11, 2026, the Company issued 4,113,688 shares of Sonida Common Stock to the Equity Investors. Sonida used the proceeds from the Equity Financing pursuant to the Investment Agreements to fund a portion of the cash consideration required for the consummation of the transactions under the Merger Agreement. Under the Investment Agreements, Sonida provided to the Equity Investors representations and warranties substantially similar to those under the Merger Agreement, and the Equity Investors provided to Sonida customary representations and warranties for a private financing of this type. The Equity Investors and Sonida are subject to compliance with customary covenants under the Investment Agreements, subject to the Equity Investors’ consent (not to be unreasonably withheld, conditioned or delayed). The parties have provided mutual indemnities for breach of certain representation and warranties and post-closing covenants capped at the applicable purchase price paid by each of the Equity Investors. Under the Investment Agreements, Sonida was responsible for the Equity Investors’ reasonable and documented legal and other out-of-pocket expenses in connection with the Equity Financing which totaled $1.2 million.

In connection with the closing of the Equity Financing, (i) Conversant and certain other entities affiliated with Conversant that are current Company shareholders, Silk and the Company entered into an amended and restated investor rights agreement, and (ii) the Conversant Parties, Silk, PF Investors, LLC and the Company entered into an amended and restated registration rights agreement.

Preliminary Purchase Price

The consideration for the CHP Merger, which was transferred on March 11, 2026, the closing date of the CHP Merger (“Closing Date”), is as follows (in thousands, except per share data):

Preliminary Purchase Price Allocation

For the Company’s real estate acquisitions that are accounted for as business combinations, such as the CHP Merger, the Company allocates the acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, and noncontrolling interests at fair value as of the acquisition date. Any excess of the consideration transferred relative to the fair value of the net assets acquired is accounted for as goodwill. Acquisition costs related to business combinations are expensed as incurred. The preliminary estimated fair values of the assets acquired and liabilities assumed in the CHP Merger were based on information that was available as of March 11, 2026, the Closing Date. The fair values were determined using standard valuation methodologies, such as the cost, market, and income approach. These methodologies require various assumptions, including those of a market participant.

The following table provides a summary of the preliminary purchase price allocation by major categories of assets acquired and liabilities assumed based on their respective estimated fair values as of March 11, 2026 (in thousands):

During the nine months ended September 30, 2026, the Company recorded a measurement period adjustment to its initial preliminary purchase price allocation as a result of further refining its estimates and assumptions related to the valuation. The adjustment resulted in an increase to amounts allocated to property and equipment and intangible assets of $6.1 million and $2.4 million, respectively, with a corresponding decrease to goodwill of $8.5 million. The effect of the adjustment is reflected in the table above and in the unaudited pro forma financial information below. The impact of the adjustment to previously reported earnings was immaterial.

As of September 30, 2026, the Company had not finalized the determination of fair value of certain tangible and intangible assets acquired and liabilities assumed including, but not limited to, real estate assets, intangible assets and liabilities, and goodwill. As such, the assessment of fair value of assets acquired and liabilities assumed is preliminary and was based on information that was available at the time the condensed consolidated financial statements were prepared. The finalization of the purchase accounting assessment could result in material changes in the Company’s determination of the fair value of assets acquired and liabilities assumed, which will be recorded as measurement period adjustments in the period in which they are identified, up to one year from the Closing Date.

All of the goodwill totaling $55.4 million has been allocated to the Company’s single reportable segment. The recognized goodwill is attributable to expected synergies, cost savings, acquired workforce, and potential economies of scale benefits from senior living property management and community and vendor relationships following the closing of the CHP Merger. None of the goodwill recognized is expected to be deductible for tax purposes.

The intangible assets represent in-place leases that will be amortized over a weighted average period of 36 months.

Merger-Related Costs

During the three and nine months ended September 30, 2026, the Company incurred $0.7 million and $31.6 million, respectively, of merger-related costs, which primarily related to advisory, legal, accounting, tax, and transition service arrangement costs. These merger-related costs are included in Transaction, transition and restructuring costs on the condensed consolidated statements of operations.

Unaudited Pro Forma Financial Information

The condensed consolidated statements of operations for the three months ended September 30, 2026 include $105.7 million of revenues and $3.9 million of net loss associated with the results of operations of CHP. The condensed consolidated statements of operations for the nine months ended September 30, 2026 include $232.8 million of revenues and $16.2 million of net loss associated with the results of operations of CHP from March 11, 2026 to September 30, 2026.

The following unaudited pro forma information presents a summary of the results of operations for the combined Company, as if the CHP Merger had been consummated on January 1, 2025 (in thousands). The following unaudited pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma financial information, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses.

The unaudited pro forma financial information above includes nonrecurring significant adjustments made to account for certain costs incurred as if the CHP Merger had been completed on January 1, 2025, including transaction costs and other merger-related costs of $24.9 million which were excluded from the unaudited pro forma financial information for the nine months ended September 30, 2026, but included for the nine months ended September 30, 2025. The nine months ended September 30, 2025 also includes $8.9 million of transaction costs that were recognized during the year ended December 31, 2025.

3. Summary of Significant Accounting Policies

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of reserve accounts for property insurance, real estate taxes, capital expenditures, escrow deposits, derivatives, and debt service required by certain loan agreements. In addition, restricted cash includes deposits required by certain counterparties as collateral pursuant to letters of credit which must remain so long as the letters of credit are outstanding, which are subject to renewal annually.

The following table sets forth our cash, cash equivalents, and restricted cash (in thousands):

Long-Lived Assets

Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information to determine whether impairment indicators exist.

If an indicator of impairment is identified, recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation or disposition, calculated utilizing the lowest level of identifiable cash flows. If this comparison indicates that the carrying amount of an asset group is not recoverable, the Company estimates fair value of the asset group and records an impairment loss when the carrying amount exceeds fair value. There wereno impairments of long-lived assets for the three and nine months ended September 30, 2026. The Company recognized a non-cash impairment charge of $4.7 million to its “Property and equipment, net” during the three and nine months ended September 30, 2025, which related toone community.

In evaluating our long-lived assets for impairment, we undergo continuous evaluations of property-level performance and real estate trends, and management makes several estimates and assumptions, including, but not limited to, the projected date of disposition, estimated sales price, and future cash flows of each property during our estimated holding period. If our analysis or assumptions regarding the projected cash flows expected to result from the use and eventual disposition of our properties change, we incur additional costs and expenses during the holding period, or our expected hold periods change, we may incur future impairment losses. See “Note 5–Property and Equipment, net.”

Long-lived assets or disposal groups are classified as held for sale when management commits to a plan to sell the asset, the asset is available for immediate sale in its present condition, and a sale is probable within one year after the end of the applicable reporting period. Upon classification, the related assets and liabilities are presented separately in the condensed consolidated balance sheets.

Disposal groups are measured at the lower of their carrying amount or estimated fair value less costs to sell, and depreciation and amortization cease. The Company reassesses assets classified as held for sale each reporting period to ensure they continue to meet the held-for-sale criteria and are recorded at the lower of carrying amount or estimated fair value less estimated disposal costs. Fair values are typically estimated using market analysis, industry trends, and recent comparable sales.

Leases

We determine if a contract contains a lease at its inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances. We are the lessee in a lease contract when we obtain the right to control the asset. Operating lease right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and are included in other assets, netinour condensed consolidated balance sheets. Operating lease liabilities represent our obligation to make lease payments arising from the lease and are included in other current liabilities and other long-term liabilities in our condensed consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. When determining the lease term, we include renewal or termination options that we are reasonably certain to exercise. Leases with a lease term of 12 months or less at inception are not recorded in our condensed consolidated balance sheets. Operating lease expense is recognized on a straight-line basis over the lease term in our condensed consolidated statements of operations. As the rates implicit in our leases are not readily determinable, we use our local incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. When our contracts contain lease and non-lease components, we account for both components as a single lease component.

Acquisitions

We make certain judgments to determine whether a transaction should be accounted for as a business combination or an asset acquisition. These judgments include the assessment of the inputs, processes, and outputs associated with an acquired set of activities and whether the fair value of total assets acquired is concentrated to a single identifiable asset or group of similar assets. We account for a transaction as a business combination when the assets acquired include inputs and one or more substantive processes that, together, significantly contribute to the ability to create outputs and the total fair value of the assets acquired are not concentrated to a single identifiable asset or group of similar assets. Otherwise, we account for the transaction as an asset acquisition.

Upon the acquisition of new communities accounted for as an acquisition of assets, we recognize the assets acquired and the liabilities assumed as of the acquisition date, measured at their relative fair values using Level 3 inputs at the date of acquisition including replacement costs and market data, as well as Level 3 inputs including estimates of appropriate discount rates and capitalization rate once we have determined the fair value of each of these assets and liabilities. Relative fair values may be based on appraisals, internal analyses of recently acquired and existing comparable properties in the Company’s portfolio, other market data, and internal marketing and leasing activities. The acquisition date is the date on which we obtain control of the real estate property. The assets acquired and liabilities assumed consist of land, inclusive of associated rights, buildings, assumed debt, and identified intangible assets and liabilities. Above-market and below-market in-place lease values are recorded based on the net present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) Sonida’s estimate of the fair market lease rates for the corresponding in-place lease measured over a period equal to the remaining non-cancelable terms of the leases (including the below-market fixed-rate renewal period, if applicable). Favorable above-market in-place leases represent the value of the contractual monthly rental payments that are more than the current market rent at communities as acquired in recent acquisitions. Unfavorable below-market in-place leases represent the value of the contractual monthly rental payments that are less than the current market rent at communities as acquired in recent acquisitions. Above-market and below-market in-place leases are amortized to resident revenue on a straight-line basis over their estimated remaining lease terms, and are included in other long-term liabilities on the consolidated balance sheets. Additionally, acquired in-place lease intangibles represent market estimates to lease up the property based on leases in place at the time of acquisitions. These in-place lease intangibles are amortized to depreciation and amortization expense on a straight-line basis over their estimated remaining lease terms and are included in intangible assets, net on the condensed consolidated balance sheets.

For the Company’s real estate acquisitions that are accounted for as business combinations, the Company allocates the acquisition consideration (excluding acquisition costs) to the assets acquired and liabilities assumed at fair value as of the acquisition date. Any excess of the consideration transferred relative to the fair value of the net assets acquired is accounted for as goodwill. Acquisition costs related to business combinations are expensed as incurred. The fair values are determined using standard valuation methodologies, such as the cost, market, and income approach. These methodologies require various assumptions, including those of a market participant.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired and identifiable intangibles in a business combination. The Company accounts for goodwill in accordance with ASC 350, Intangibles—Goodwill and Other, which requires the Company to test goodwill for impairment at least annually.

The Company has the option (i) to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount or (ii) to perform the quantitative impairment test. The quantitative impairment test involves comparing the estimated fair value of a reporting unit with its respective book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit is less than book value, an impairment loss is recognized in an amount equal to the excess.

The determination of fair value(s) requires the Company to make significant estimates and assumptions. These estimates include, but are not limited to, future expected cash flows from a market participant perspective, discount rates, industry data and management’s prior experience. Unanticipated events or circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results.

Goodwill is tested annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount including goodwill exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill. The Company has not had any goodwill impairments for the nine months ended September 30, 2026.

Investment in Unconsolidated Entities

The Company reports investments in unconsolidated entities that it has the ability to exercise significant influence under the equity method of accounting. The initial carrying amount of investments in unconsolidated entities is based on the amount paid to purchase the investment. The Company's reported share of earnings from an unconsolidated entity is adjusted for the impact, if any, of basis differences between its carrying amount of the equity investment and its share of the investment’s underlying assets. Distributions received from an investee are recognized as a reduction in the carrying amount of the investment.

The Company evaluates the realization of its investments in ventures accounted for using the equity method if circumstances indicate that the Company's investments are other than temporarily impaired. A current fair value of an investment that is less than its carrying amount may indicate a loss in value of the investment. If the Company determines that an equity method investment is other than temporarily impaired, it is recorded at its fair value with an impairment charge recognized for the difference between its carrying amount and fair value.

Revenue Recognition

Resident revenue consists of fees for basic housing and certain support services and fees associated with additional housing and expanded support requirements such as assisted living care, memory care, and ancillary services. Basic housing and certain support services revenue is recorded when services are rendered, and amounts billed are due from residents in the period in which the rental and other services are provided. Residency agreements are generally short term in nature with durations of one year or less and are typically terminable by either party, under certain circumstances, upon 30 days’ notice, unless state law provides otherwise, with resident fees billed monthly in advance. Revenue for certain ancillary services is recognized as services are provided, and includes fees for services such as medication management, daily living activities, beautician/barber, laundry, television, guest meals, pets, and parking, which are generally billed monthly in arrears.

The Company’s senior housing communities have residency agreements that generally require the resident to pay a community fee and other amounts prior to moving into the community, which are initially recorded by the Company as deferred income. Community fees are recognized evenly over the term of the residency agreements, which are generally 12 months. The Company had contract liabilities for deferred fees paid by its residents prior to the month housing and support services were to be provided totaling $10.9 million and $7.3 million, respectively, which is reported as deferred income within current liabilities of the Company’s condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025. As of September 30, 2026, $6.4 million of deferred revenue has been recognized from the year ended December 31, 2025. As of September 30, 2025, $5.3 million of deferred revenue was recognized from the year ended December 31, 2024.

Revenues from Medicaid programs accounted for 5.2% and 7.4% of the Company’s revenue for the three months ended September 30, 2026 and 2025, respectively. Revenues from the Medicaid program accounted for approximately 5.5% and 7.9% of the Company’s revenue for the nine months ended September 30, 2026 and 2025, respectively. Resident revenues for Medicaid residents were recorded at the reimbursement rates as the rates were set prospectively by the applicable state upon the filing of an annual cost report. Revenues from private pay sources accounted for 94.8% and 92.6% of the Company’s revenue for the three months ended September 30, 2026 and 2025, respectively. Revenues from private pay sources accounted for approximately 94.5% and 92.1% of the Company’s revenue for the nine months ended September 30, 2026 and 2025, respectively.

Laws and regulations governing the Medicaid program are complex and subject to interpretation. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing that would have a material effect on its condensed consolidated financial statements. While no such regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from the Medicaid program.

The Company has management agreements whereby it manages certain communities on behalf of third-party owners and certain community investments under contracts that provide for periodic management fee payments to the Company. The Company has determined that all community management activities are a single performance obligation, which is satisfied over time as the services are rendered. Such revenue is included in “management fee income” on the Company’s condensed consolidated statements of operations. The Company is also reimbursed by the owners of the communities for costs incurred. Such revenue is included in “managed community reimbursement revenue” on the Company’s condensed consolidated statements of operations. The related costs are included in “managed community reimbursement expense” on the Company’s condensed consolidated statements of operations. See “Note 10–Revenue.”

The Company has triple-net operating leases whereby it earns rental income. Rental income and related revenues for operating leases are recognized based on the assessment of collectability of lease payments. When collectability is probable at commencement of the lease, lease income is recognized on an accrual basis and includes rental income that is recorded on the straight-line basis over the term of the lease. Collectability is reassessed during the lease term. When collectability of lease payments is no longer probable, lease income is recorded on a cash basis and limited to the amount of lease payments collected. In addition, lease related costs (the deferred rent from prior GAAP straight-line adjustments, unamortized lease costs and other lease related intangibles) are written-off when the Company determines that these assets are no longer realizable.

Rental income is recorded on an accrual basis and includes rental income that is recorded on the straight-line basis over the terms of the leases. The straight-line method records the periodic average amount of base rent earned over the term of a lease, taking into account contractual rent increases over the lease term. The Company records the difference between base rent revenues earned and amounts due per the respective lease agreements, as applicable, as an increase or decrease to deferred rent located in Other assets in the condensed consolidated balance sheets. Resident revenue also includes amounts for which tenants are required to reimburse the Company related to expenses incurred on behalf of the tenants, in accordance with the terms of the leases. Tenant reimbursements are recognized in the period in which the related reimbursable expenses are incurred, such as real estate taxes, common area maintenance, and similar items.

Some of the Company’s leases require the tenants to pay certain additional contractual amounts that are set aside by the Company for replacements of fixed assets and other improvements to the properties. These amounts are and will remain the property of the Company during and after the term of the lease. The amounts are recorded as capital improvement reserve income at the time such amounts are earned and are included in resident revenue in the consolidated statements of operations. Additional percentage rent that is due contingent upon tenant performance thresholds, such as gross revenues, is deferred until the underlying performance thresholds have been achieved.

Operating Leases

As of September 30, 2026, the Company owned 15 senior housing properties that were leased to third-party tenants under triple-net operating leases. Under the terms of the Company’s triple-net lease agreements, each tenant is responsible for the payment of property taxes, general liability insurance, utilities, repairs and maintenance, including structural and roof maintenance expenses.

Under the terms of the triple-net lease agreements, each tenant is required to pay real estate taxes directly to the taxing authorities and, therefore, such amounts are not included in the Company’s consolidated financial statements.

As of September 30, 2026, the Company’s triple-net operating leases had a weighted average remaining lease term of 4.3 years based on annualized base rents expiring between 2030 and 2032. The Company’s tenants hold options to extend the lease terms forfive-year periods, which are generally subject to terms and conditions similar to those provided under the initial lease term, including rent increases. The reported lease term is determined based on the non-cancellable periods of the Company’s leases unless economic incentives make it reasonably certain that an extension option will be exercised, in which case the Company includes the extended lease term.

The following are future minimum lease payments for the Company’s 15 senior housing properties to be received under non-cancellable operating leases for the remainder of 2026, each of the next four years and thereafter as of September 30, 2026 (in thousands):

Credit Risk and Allowance for Credit Losses

The Company’s resident accounts receivable are generally due within 30 days after the date billed. Resident accounts receivable are reported net of an allowance for credit losses of $7.4 million and $2.6 million as of September 30, 2026 and December 31, 2025, respectively, and represent the Company’s estimate of the amount that will ultimately be collected. The adequacy of the Company’s allowance for credit losses is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance, as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for credit losses adequately provides for expected losses.

Concentration of Credit Risk and Business Risk

Substantially all of our revenues are derived from senior living communities we own and senior living communities that we manage. Senior living operations are particularly sensitive to adverse economic, social and competitive conditions and trends, including the effects of pandemics, which have previously adversely affected our business, financial condition, and results of operations.

We have a concentration of owned properties operating in Texas (30), Ohio (17), Indiana (12), and Florida (12) which represented approximately 22%,9%,5%, and 8% respectively, of our resident revenues for the three months ended September 30, 2026 and approximately 22%,10%,6%, and 8% respectively, of our resident revenues for the nine months ended September 30, 2026.

We had a concentration of owned properties operating in Texas (20), Ohio (12), Indiana (12), and Florida (8) which represented approximately 22%,18%,13%, and 10% respectively, of our resident revenues for the three months ended September 30, 2025 and approximately 22%,18%,13%, and 10% respectively, of our resident revenues for the nine months ended September 30, 2025.

Income Taxes

Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. The effective tax rates for the three and nine months ended September 30, 2026 and 2025 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance.

Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. The valuation allowance reduces the Company’s net deferred tax assets to the amount that is “more likely than not” (i.e., a greater than 50% likelihood) to be realized. The Company has a full valuation allowance on deferred tax assets. However, in the event the Company were to ultimately determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded amounts, adjustments to deferred tax assets would increase net income in the period such determination was made. The benefits of the net deferred tax assets might not be realized if actual results differ from expectations.

The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that its position is “more likely than not” (i.e., a greater than 50% likelihood) to be upheld on audit based only on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense.

Employee Retention Credits

The Company filed for employee retention credits (“ERC”) with the Internal Revenue Service in November 2023. The ERC is a tax credit for businesses that had certain employee costs and were affected by the coronavirus pandemic under the Coronavirus Aid, Relief, and Economic Security (“CARES”)Act. During the year ended December 31, 2025, the Department of Treasury notified the Company of ERCs awarded under the CARES Act. The Company elected to account for the ERC as a gain analogizing to ASC 450-30, Gain Contingencies. The Company recognized gross ERC received of $0.6 million and $9.1 million of other income (expense), net on the condensed consolidated statements of operations for the nine months ended September 30, 2026 and 2025, respectively. The Company recognized gross ERC received of$0.3 million of other income (expense), net on the condensed consolidated statement of operations for the three months ended September 30, 2025 andnone during the three months ended September 30, 2026.

Redeemable Preferred Stock

The Company had Series A Convertible Preferred Stock (“Series A Preferred Stock”) outstanding through March 11, 2026. The Company’s Series A Preferred Stock was convertible outside of its control and was classified as mezzanine equity. The Series A Preferred Stock was initially recorded at fair value upon issuance, net of issuance costs and discounts. When the Series A Preferred Stock was outstanding, the holders of our Series A Preferred Stock were affiliates of Conversant Capital LLC, (together, the “Conversant Preferred Investors”) and were entitled to vote with the holders of common stock on all matters submitted to a vote of shareholders of the Company. As such, the Conversant Preferred Investors, in combination with the common stock owned by them and their affiliates as of December 31, 2025, had voting rights in excess of 50% of the Company’s total voting stock. It was deemed probable that the Series A Preferred Stock could be redeemed for cash by the Conversant Preferred Investors, and as such, the Series A Preferred Stock was required to be remeasured and adjusted to its maximum redemption value at the end of each reporting period. However, to the extent that the maximum redemption value of the Series A Preferred Stock did not exceed the fair value of the shares at the date of issuance, the shares were not adjusted below the fair value at the date of issuance. As of December 31, 2025, the Series A Preferred Stock was carried at the maximum redemption value. The Series A Preferred Stock did not have a maturity date and, therefore, was considered perpetual.

Dividends on redeemable Series A Preferred Stock were recorded to retained earnings or additional paid-in capital if retained earnings was an accumulated deficit. Dividends were cumulative, and any declaration of dividends was at the discretion of the Company’s Board of Directors (the “Board”). If the Board did not declare a dividend in respect of any dividend payment date, the amount of such accrued and unpaid dividend was added to the liquidation preference of the Series A Preferred Stock and compounded quarterly thereafter.

On March 11, 2026, all of the outstanding shares of Series A Preferred Stock were converted into 1,601,505 shares of common stock. See “Note 9–Securities Financing.”

Derivative Instruments

We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with the fluctuations in variable interest rates associated with our debt. We are also required to enter into interest rate derivative instruments in compliance with certain debt agreements. We regularly monitor the financial stability and credit standing of the counterparties to our derivative instruments. We do not enter into derivative financial instruments for trading or speculative purposes. We record all derivatives at fair value. As of September 30, 2026, our derivative instruments consisted of interest rate caps, interest rate collars, and interest rate swaps that were not designated as hedge instruments. As of December 31, 2025, our derivative instruments consisted of interest rate caps that were not designated as hedge instruments. Changes in fair value of undesignated hedge instruments are recorded in current period earnings as interest expense. See “Note 16–Derivatives and Hedging.”

Net Income (Loss) Per Common Share

The Company uses the two-class method to compute net income per common share because, until March 11, 2026, the Company had issued securities (Series A Preferred Stock) that entitled the holders to participate in dividends and earnings of the Company. Under this method, net income is reduced by the amount of any dividends earned during the period. The remaining earnings (undistributed earnings) are allocated based on the weighted-average shares outstanding of common stock and participating securities, including Series A Preferred Stock (on an if-converted basis) to the extent that each participating security may share in earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the participating securities, including Series A Preferred Stock, have no obligation to fund losses.

Diluted net income per common share is computed under the two-class method by using the weighted-average number of shares of common stock outstanding, plus, for periods with net income attributable to common shareholders, the potential dilutive effects of stock options, stock-based compensation awards, and warrants. In addition, the Company analyzes the potential dilutive effect of the outstanding Series A Preferred Stock under the“if-converted” method when calculating diluted earnings per share, in which it is assumed that the outstanding Series A Preferred Stock converts into common stock at the beginning of the period or when issued, if later. The Company reports the more dilutive of the approaches (two class or “if-converted”) as its diluted net income per share during the period. See “Note 11–Net Income (Loss) Per Share.”

Segment Reporting

The Company evaluates the performance of its senior living communities and allocates resources based on current operations and market assessments on a property-by-property basis. The Company does not have a concentration of operations geographically or by product or service as its management functions are integrated at the property level. The Company has determined that its operating units meet the criteria in ASCTopic 280, Segment Reporting, to be aggregated intoone reporting segment. As such, the Company operates inone segment.

Recently Issued Accounting Pronouncements Not Yet Adopted

Improvements to Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, and should be applied on a prospective or retrospective basis, with early adoption permitted. ASU 2024-03 will likely result in the required additional disclosures where applicable being included in our consolidated financial statements once adopted. We continue to evaluate the effect that adoption of ASU 2024-03 will have on our disclosures.

Recently Adopted Accounting Pronouncements

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. ASU 2025-03 revises current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. The amendments require that an entity consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. We adopted ASU 2025-03 on January 1, 2026. The adoption of the ASU did not have a material impact on our condensed consolidated financial statements and disclosures.

4. Investments, Acquisitions and Assets Held for Sale

Sarasota Acquisition

During September 2026, the Company acquiredone senior living community located in Sarasota, Florida for a purchase price of $14.7 million and transaction costs of $0.1 million. The asset acquisition was recorded at relative fair value. The Company recorded $13.5 million in “Property and equipment, net” for tangible assets purchased; $1.4 million in “Intangible assets, net” for in-place leases; and $0.1 million in “Other long-term liabilities” for below market leases in the Company’s condensed consolidated balance sheets.

Investment in Parc LP Unconsolidated Entity and Community Purchase Call Option

In April 2026, the Company purchased a preferred equity investment in Parc LP totaling $1.8 million with a community purchase call option totaling $1.0 million. The preferred equity investment carries a 15% annual non-compounding coupon. The preferred equity investment is included in investment in unconsolidated entities and the purchase call option is included in other assets, net in the condensed consolidated balance sheets.

The Company has evaluated its investment in Parc LP 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 Parc LP 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 Parc LP was $2.0 million as of September 30, 2026.

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 and nine months ended September 30, 2026, there were no impairments with respect to the Company’s investment in Parc LP.

Investment in Consolidated VIE

The Company has a joint venture with affiliates of Palatine. Prior to March 31, 2026, it included four communities owned by subsidiaries of Palatine undertwo joint ventures.

On March 31, 2026, the Company purchased the noncontrolling interest from Palatine of one of its joint ventures for a purchase price of $2.1 million and assumed the mortgage of $1.7 million on the community. As of September 30, 2026, the mortgage on this community has been repaid.

As of September 30, 2026, the Company is a 51% owner in the remaining Palatine joint venture. The noncontrolling interest of the Palatine JV is included in the Company’s condensed consolidated balance sheets.

Investment in Stone Unconsolidated Entity

The Company has a joint venture with KZ Stone Investor LLC (the “Stone JV”) which owns 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 September 30, 2026. Sonida owned the remaining 32.71% noncontrolling interest in the Stone JV as of September 30, 2026. Sonida operates thefour 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.

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 Stone JV are, therefore, accounted for under the equity method of accounting. The Company's maximum exposure to loss as a result of the Company’s ownership interest in the Stone JV was $21.7 million as of September 30, 2026. The carrying amount of the Company's investment in the unconsolidated venture was $8.8 million as of December 31, 2025. For the nine months ended September 30, 2026, the Company received a return of its investment of $11.6 million in its unconsolidated entity. For the nine months ended September 30, 2025, the Company received $0.6 million as a return on the Company’s investment in the Stone JV. See “Note 14–Related Party Transactions” for refinancing of the Stone JV debt.

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 and nine months ended September 30, 2026 and 2025, there wereno impairments with respect to the Company’s investment in the Stone JV.

As of September 30, 2026, the Company classifiedone community as held for sale in its condensed consolidated balance sheets in accordance with ASC 360. The community was sold in October 2026 for $13.5 million.

The reclassification of the property’s assets and liabilities held-for-sale status represents a presentation change within the balance sheet, rather than a new investing or financing transaction. The community did not meet the criteria for classification as a discontinued operation under ASC 205-20, as the sale does not represent a strategic shift that has or will have a major effect on the Company’s operations and financial results.

Additionally, the Company completed the sale ofone of its communities in June 2026 that was previously classified as held for sale as of December 31, 2025. See “Note 8–Debt”.

The below summarizes the carrying amounts of the major classes of assets and liabilities classified as held for sale in the condensed consolidated balance sheets (in thousands):

5. Property and Equipment, net

As of September 30, 2026 and December 31, 2025, property and equipment, net, which include assets under finance leases, consist of the following (in thousands):

The Company recognized depreciation expense on its property and equipment of $25.1 million and $11.9 million for the three months ended September 30, 2026 and 2025, respectively, and $63.9 million and $34.6 million for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026 and 2025, property and equipment, net included $1.7 million and $0.9 million, respectively, of capital expenditures which had been incurred but not yet paid.

There were no impairments of long-lived assets for the three and nine months ended September 30, 2026. The Company recognized a non-cash impairment charge of $4.7 million to its “Property and equipment, net” during the three and nine months ended September 30, 2025, which related toone community.

6. Intangible Assets, Net and Goodwill

Intangible assets, net represents in-place leases purchased with acquired communities and businesses.

A portion of the purchase price for the Company’s acquisitions has been allocated to in-place leases. The intangible assets are amortized on a straight-line basis over their estimated useful lives from the date of acquisition. The intangible assets, net balance is as follows (in thousands):

Amortization expense for intangible assets was $18.1 million and $2.6 million for the three months ended September 30, 2026 and 2025, respectively, and $42.4 million and $7.3 million for the nine months ended September 30, 2026 and 2025, respectively. Expected future amortization expense of intangible assets as of September 30, 2026 is as follows (in thousands):

Goodwill represents acquired goodwill from the CHP Merger. See “Note 2–CHP Merger.”

The change in the carrying amount of goodwill is as follows (in thousands):

7. Accrued Expenses

The following is a summary of accrued expenses as of September 30, 2026 and December 31, 2025 (in thousands):

(1) Includes $3.0 million and $3.9 million of deferred interest as of September 30, 2026 and December 31, 2025, respectively, in connection with the Federal National Mortgage Association loan modification.

(2) Includes loss contingencies of $7.7 million and $6.5 million as of September 30, 2026 and December 31, 2025, respectively, and accrued professional fees in connection with the CHP Merger of $0.3 million and $23.4 million as of September 30, 2026 and December 31, 2025, respectively.

8. Debt

Long-term debt balances, including associated interest rates and maturities consists of the following (in thousands):

(1) See “Note 16–Derivatives and Hedging” for information regarding our use of derivative instruments to manage exposure to interest rate risk.

The following schedule summarizes our debt payable as of September 30, 2026 (in thousands):

As of September 30, 2026, our fixed rate mortgage notes bore interest rates ranging from 3.0% to 6.3%. Our variable rate mortgage notes and borrowings under our Revolving Credit Facility are based on SOFR plus an applicable margin. As of September 30, 2026, the one-month SOFR was 3.9% and the applicable margins ranged from 1.0% to 2.1%.

As of September 30, 2026, we had property and equipment with a net carrying value of $363.8 million that was secured by outstanding notes payable. In addition, as of September 30, 2026, we had property and equipment with a net carrying value of $1,809.0 million secured by the Revolving credit facility, Term loan facilities and Ally term loan.

Ally Financing

On August 7, 2026 the Company entered into the Second Amended and Restated Term Loan Agreement with Ally which provides up to $380.0 million in borrowings. At closing, the Company drew $372.5 million on the Ally Term Loan which has delayed draw commitments for an additional $7.5 million available subject to achieving certain debt yields and debt service coverage ratios. The loan proceeds were used to fully refinance the previous $122.0 million term loan with Ally and to repay in full the $170.0 million outstanding under the Bridge Facility, with the remaining net proceeds used to pay down $70.0 million on the Revolving Credit Facility. The Ally Term Loan has afive-year maturity withtwo one-year extension options and an interest rate of SOFR plus 185 basis points. The Ally Term Loan is secured by 28 of the Company’s communities.

Debt Financing of the CHP Merger

In order to fund a portion of the cash consideration required for the CHP Merger, the Company obtained permanent debt financing of $930.0 million, with an accordion feature that would allow Sonida to increase the facilities up to $1.25 billion. On December 29, 2025, the Company amended and restated its revolving credit facility and on March 5, 2026 increased the borrowing amount (collectively, the “A&R Credit Agreement”), which amendments were subject to and conditioned upon the consummation of the CHP Merger. The A&R Credit Agreement increased the available commitments under the revolving credit facility to $405.0 million, extended the maturity thereof to March 10, 2030, reduced the leverage-based pricing matrix to between SOFR plus 1.35% margin and SOFR plus 2.00% margin, expanded the participating lenders, and effected certain other changes (the “Revolving Credit Facility”). In addition, the Company incurred $525.0 million in permanent term loans under the A&R Credit Agreement intwo equal tranches (the “Term Loan Facility”) to fund a portion of the cash consideration necessary for the CHP Merger. The Term Loan Facility is comprised of athree-year tranche that matures on March 10, 2029 and afive-year tranche that matures on March 10, 2031. The Term Loan Facility is subject to a leverage-based pricing matrix between SOFR plus 1.30% margin and SOFR plus 1.95% margin, and is otherwise subject to the same guarantees and security provisions, events of default, corporate covenants and borrowing base availability requirements of the Revolving Credit Facility. In July 2026, the Company purchased an interest rate collar agreement for a cost of $1.3 million to reduce the exposure to the variable interest rate fluctuations associated with thefive-year tranche Term Loan Facility. The interest rate collar has a notional amount of $287.5 million, a 33-month term and a SOFR-based cap of 4.05% and floor of 3.30%. Monthly cash settlements are received from or paid to the counterparties when interest rates rise above or fall below the contractual cap or floor rates. In June 2026, the Company entered into a SOFR-based interest rate swap (“IR Swap”) to reduce the exposure to the variable interest rate fluctuations associated with thefive-year tranche Term Loan Facility. The IR Swap has a notional amount of $287.5 million, a 57-month term and is structured as a floating to fixed swap with a fixed rate of 4.11%. Upon consummation of the CHP Merger, the $150.0 million revolving credit facility was replaced with a new $405.0 million revolving credit facility under the A&R Credit Agreement, which was subsequently increased to a $455.0 million commitment.

On March 10, 2026, in order to fund the remaining portion of the cash consideration required for the CHP Merger, the Company incurred $270.0 million in loans under a 364-day senior secured bridge facility (the “Bridge Facility”), which has been fully repaid as of September 30, 2026. The Bridge Facility would have matured on March 9, 2027 and was subject to a leverage-based pricing matrix between SOFR plus 1.35% margin and SOFR plus 2.00% margin. No principal payments for the Bridge Facility were due until maturity. The Bridge Facility was subject to the same guarantees and security provisions, events of default, corporate covenants and borrowing base availability requirements as the A&R Credit Agreement.

On March 30, 2026, the Company obtained an additional $25.0 million in permanent term loans under the Term Loan Facility, and on March 31, 2026, obtained an additional $25.0 million of commitments under the Revolving Credit Facility, which were fully drawn. The proceeds were used to repay $50.0 million of loans outstanding under the Bridge Facility.

On May 7, 2026, the Company obtained an additional $25.0 million in permanent term loans under the Term Loan Facility, and an additional $25.0 million of commitments under the Revolving Credit Facility, which were fully drawn. The proceeds were used to repay the $50.0 million of loans outstanding under the Bridge Facility.

The Company repaid in full the $170.0 million outstanding under the Bridge Facility with proceeds from the Ally Term Loan and recognized a loss on debt extinguishment of $4.4 million for the unamortized deferred loan costs on the Bridge Facility for the three and nine months ended September 30, 2026.

As of September 30, 2026, the Term Loan Facility had $575.0 million in term loans intwo equal tranches, and the Revolving Credit Facility had a commitment of $455.0 million.

Senior Secured Revolving Credit Facility

As of September 30, 2026, $251.0 million of borrowings were outstanding under the Revolving Credit Facility at a weighted average interest rate of 5.7%, which was secured by 76 of the Company’s senior living communities. During the nine months ended September 30, 2026, the Company borrowed $419.5 million under the Revolving Credit Facility and repaid $263.6 million of borrowings. As the borrowing capacity increased in connection with the refinancing, fees on the refinancing and remaining unamortized fees on the Revolving Credit Facility were deferred and amortized over the remaining term with no gain or loss on debt modification or extinguishment recognized. The Company incurred $5.9 million of deferred loan costs related to its Revolving Credit Facility during the nine months ended September 30, 2026. As of September 30, 2026, the Company had an additional committed capacity of up to $204.0 million under the Revolving Credit Facility. See “Note 2–CHP Merger” for a discussion on the change in finance structure.

2025 Ally Term Loan

On August 7, 2025, the Company entered into a senior secured term loan of $137.0 million (“2025 Ally Term Loan”) with Ally with a closing fee of 0.75%, or $1.0 million. The 2025 Ally Term Loan amended and restated the Company’s then-existing term loan with Ally, dated as of March 10, 2022, as amended. The 2025 Ally Term Loan allowed for an initial term loan advance on the closing date of $122.0 million secured by 19 communities. Two additional draws of $7.5 million each would have become available subject to achieving certain debt yields and debt service coverage ratios. The 2025 Ally Term Loan had a 36-month maturity date and a variable interest rate of one-month SOFR plus a 2.65% margin (subject to a performance-based stepdown to a 2.45% margin).

On August 7, 2026, the Company entered into the Ally Term Loan and fully refinanced the $122.0 million balance under the 2025 Ally Term Loan.

Mortgage Loan Extinguishment

On June 30, 2026, we completed the sale of one of our communities for a purchase price of $9.4 million. At the time of the sale, the community had an outstanding loan principal balance of $13.0 million. As part of the sale, the mortgage lender agreed to accept payment from the buyer and forgave the remaining balance due on the loan and $0.4 million of accrued interest. The transaction resulted in a gain on extinguishment of debt of $3.9 million for the nine months ended September 30, 2026.

Notes Payable - Consolidated VIE

As of September 30, 2026, the Company had $19.9 million of mortgage debt outstanding related to the Palatine JV. The mortgages have a weighted average interest rate of 6.4% and terms ranging from 2026 through 2027. The Company has guaranteed $3.1 million of the Palatine JV mortgages. In addition, one of the affiliates in the Palatine JV entered into a SOFR-based interest rate cap to reduce exposure to the variable interest rate fluctuations associated with one of the mortgages at a cost of $0.1 million.

Fannie Mae Loan Modification

In December 2024, the Company and certain of its subsidiaries entered into an amendment to its multifamily loan and security agreements with Federal National Mortgage Association (“Fannie Mae”). The amendment amended the terms of each of the loan agreements with Fannie Mae relating to 18 of the Company’s senior living communities and extended the maturity dates of each loan from December 1, 2026 to January 1, 2029 in exchange for $10.0 million of scheduled principal paydowns. The Company has made $4.0 million in principal payments as of September 30, 2026 and is scheduled to pay $3.0 million in November 2026 and November 2027.

Deferred Loan Costs

As of September 30, 2026 and December 31, 2025, the Company had gross deferred loan costs of $17.0 million and $12.5 million, respectively, related to notes payable. During the nine months ended September 30, 2026, the Company incurred an additional $15.0 million in gross deferred loan costs. Accumulated amortization was $7.5 million and $9.1 million as of September 30, 2026 and December 31, 2025, respectively.

Financial Covenants

Certain of the Company's debt agreements contain restrictions and financial covenants, which require the Company to maintain prescribed minimum liquidity, net worth, and shareholders' equity levels and debt service ratios, and require the Company not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis. In addition, the Company's debt agreements generally contain non-financial covenants, such as those requiring the Company to comply with Medicaid provider requirements and maintain insurance coverage.

The Company's failure to comply with applicable covenants could constitute an event of default under the applicable debt agreements. Many of the Company's debt agreements contain cross-default provisions so that a default under one of these instruments could cause a default under other debt agreements (including with other lenders). Furthermore, the Company's mortgage debt is secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of September 30, 2026, the Company was in compliance with the financial covenants of its debt agreements.

9. Securities Financing

Increase in Authorized Shares of Common Stock

On February 26, 2026, following receipt of shareholder approval at the special meeting of the Company’s shareholders held on February 26, 2026, the Company filed an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, with the Delaware Secretary of State to increase the number of authorized shares of the Company’s common stock from 30,000,000 shares to 100,000,000 shares. The charter amendment became effective upon filing.

Merger Equity Financing

On March 11, 2026, the Company issued 4.1 million shares of common stock for $110.0 million, less $1.2 million in issuance costs, in a private placement transaction to entities affiliated with Conversant and Silk.

See “Note 2–CHP Merger” for a discussion on the financing of the Merger Transactions which was completed on March 11, 2026.

On May 18, 2026, the Company entered into an equity distribution agreement (the “Distribution Agreement”) with several investment banks, each as a sales agent and/or principal and/or forward seller, and the forward purchasers party thereto relating to (a) the issuance and sale by the Company to or through the sales agents from time to time of shares of the Company’s common stock, and (b) the sale by the forward sellers, acting as agents for the forward purchasers, of shares of the Company’s common stock (collectively, the “Shares”), with the Shares to be sold under the Distribution Agreement having an aggregate gross offering price of up to $250.0 million (the “ATM Program”).

Pursuant to the terms of the Distribution Agreement, sales of the Shares under the ATM Program may be made in any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including, without limitation, sales made directly on the New York Stock Exchange, on any other existing trading market for the Company’s common stock or to or through a market maker (which may include ordinary brokers’ transactions) or as otherwise agreed by us and the sales agents, at market prices at the time of sale. With the Company’s prior consent, the sales agents may also sell Shares in negotiated transactions, including block transactions. The Company will pay a 2% or lower commission on the sales based on the volume-weighted average price.

The offering of Shares under the ATM Program pursuant to the Distribution Agreement will terminate upon the earlier of (i) the sale of the maximum aggregate amount of the Shares subject to the Distribution Agreement, or (ii) termination of the Distribution Agreement as provided for therein.

During the three months ended September 30, 2026, the Company sold 971,732 shares of common stock pursuant to its ATM Program at a weighted average price of $40.74 per share for $39.2 million in net proceeds. See “Note 18–Subsequent Events.”

Series A Preferred Stock

On March 11, 2026, the Company completed an induced conversion of all the outstanding shares of Series A Preferred Stock with the Conversant Preferred Investors, the holders of all of the outstanding shares of the Company’s Series A Preferred Stock into shares of the Company’s common stock. The Series A Preferred Stock was convertible outside of the Company's control and, in accordance with GAAP, was classified as mezzanine equity, outside the equity section, on our condensed consolidated balance sheets.

Under the terms of the induced conversion, the Conversant Preferred Investors received 1,601,505 shares of common stock based on a modified conversion price of $32.00 per share, a cash payment of $4.7 million, and a$1.1 million cash dividend for the period of January 1, 2026 through March 11, 2026. In addition, the expiration date for the 1,031,250 warrants held by the Conversant Preferred Investors was extended from November 3, 2026 to November 3, 2027. All other warrant terms remain unchanged.

During the quarter ended March 31, 2026, the Company derecognized the carrying amount of the Series A Preferred Stock from temporary equity totaling $51.2 million, recorded the issuance of 1,601,505 shares of the Company’s common stock and additional paid-in capital, and recognized a deemed dividend equal to the excess of the fair value of all securities and other consideration transferred over the fair value of the common stock issuable pursuant to the original contractual conversion terms, in accordance with ASC 260-10-S99-2, totaling $19.1 million.

The extension of the warrant expiration date represents a modification of equity-classified warrants. The incremental fair value resulting from the extension was included in the deemed dividend.

As of September 30, 2026, the Company hadno shares of Series A Preferred Stock outstanding.

On August 10, 2026, the Company entered into an Exchange Agreement (the “Exchange Agreement”) with the Conversant Preferred Investors, pursuant to which, among other things, the Company: (i) designated 41,250 shares of a new series of preferred stock, par value $0.01 per share, of the Company as Series B Convertible Preferred Stock (the “Series B Preferred Stock”), with terms substantially identical to the Company’s Series A Preferred Stock previously held and converted by the Conversant Investors into shares of common stock but with a lower conversion price of $32.00 per share, (ii) issued an aggregate of 41,250 shares of Series B Preferred Stock to the Conversant Preferred Investors in exchange for the surrender by the Conversant Preferred Investors of the shares of common stock previously issued upon conversion of the Series A Preferred Stock and any shares of Series A Preferred Stock held by the Conversant Preferred and (iii) issued an aggregate of 1,601,505 shares of common stock to the Conversant Preferred Investors upon the conversion of the Series B Preferred Stock (the “Exchange Shares”). Pursuant to the Exchange Agreement, the Company amended the registration statement in a post-effective amendment to register the resale from time to time by the Conversant Preferred Investors of all of the Exchange Shares. The Exchange Agreement had no impact on the Company’s condensed consolidated statements of operations, financial position, or cash flows, as the transaction did not result in any additional amounts recognized or adjustments to amounts previously recorded in connection with the conversion of the Series A Preferred Stock.

The Series A Preferred Stock had an 11% annual dividend calculated on the original investment of $41.3 million, accrued quarterly in arrears and compounded. Dividends were cumulative, and any declaration of dividends was at the discretion of the Company’s Board. If the Board did not declare a dividend in respect of any dividend payment date, the amount of such accrued and unpaid dividend was added to the liquidation preference of the Series A Preferred Stock and compounded quarterly thereafter. For the three and nine months ended September 30, 2025, the Board declared and paid $1.4 million and $4.2 million in dividends on the Series A Preferred Stock, respectively. As of December 31, 2025, a total of $10.0 million had been added to the liquidation preference of the Series A Preferred Stock.

The following schedule summarizes our Series A Preferred Stock as of September 30, 2026 and December 31, 2025 (in thousands):

Outstanding Warrants

On November 3, 2021, the Company issued 1,031,250 warrants to the Conversant Preferred Investors, each evidencing the right to purchaseone share of common stock at a price per share of $40.00 and with an exercise expiration date of November 3, 2026. On March 11, 2026, the expiration date for the warrants held by Conversant was extended from November 3, 2026 to November 3, 2027. The Company had 1,031,250 outstanding warrants as of September 30, 2026 and December 31, 2025.

10. Revenue

Revenue for thethree and nine months ended September 30, 2026 and 2025 is comprised of the following components (in thousands):

Community fees, ancillary services, management fees, and managed community reimbursement revenue represent revenue from contracts with customers in accordance with GAAP. Rental income represents lease income from the Company’s triple-net communities.

11. Net Income (Loss) Per Share

Basic net income (loss) per share (“EPS”) is calculated by dividing net earnings (loss) by the weighted average number of common shares outstanding during the period. Potentially dilutive securities include warrants, shares of the Series A Preferred Stock, shares of restricted stock, restricted stock units, and former employee stock options.

Diluted EPS reflects the assumed exercise or conversion of all dilutive securities. The Series A Preferred Stock was considered participating securities for the purposes of the Company's EPS calculation.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts):

The following weighted-average shares of securities were not included in the computation of diluted net income (loss) per common share as their effect would have been antidilutive:

12. Stock-Based Compensation

The Company uses equity awards as a long-term retention program that is intended to attract, retain and provide incentives for employees, officers, and directors and to more closely align shareholder and employee interests. The Company recognizes compensation expense for all of its share-based stock awards based on their fair values.

On March 11, 2026 and July 1, 2026, the Company granted a total of 1,212,500 performance stock unit awards (“PSUs”) to certain key employees, pursuant to the Company’s 2019 Omnibus Stock and Incentive Plan, as amended (the “Plan”) in connection with the closing of the CHP Merger. The PSUs are subject to a performance period that begins on March 11, 2027 and ends on March 11, 2030 (the “Performance Period”). During the Performance Period, PSUs will be earned and become vested upon the achievement of stock price hurdles measured by reference to the VWAP per share of the Company’s common stock for thirty (30) consecutive trading days (the “Vesting Stock Price”). The PSUs are allocated equally across three tranches, which can be earned during the Performance Period if the Vesting Stock Price meets or exceeds $40.11, $53.48 and $66.85 per share hurdles. The PSU grants had a fair value of$35.5 million.

The Company recognized$11.8 million and$1.4 million in stock-based compensation expense for the three months ended September 30, 2026 and 2025, respectively. The Company recognized $16.4 million and $3.6 million in stock-based compensation expense for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, the Company had $38.4 million in unrecognized stock compensation expense which will be recognized over approximately 1.23 years.

13. Commitments and Contingencies

As of September 30, 2026, the Company hadcontractual commitments of $8.8 million related to future renovations and technology enhancements to its communities.

The Company is subject to claims in the normal course of its business. Most of these claims are believed by management to be covered by insurance, subject to deductibles, normal reservations of rights by the insurance companies and possibly subject to certain exclusions in the applicable insurance policies. Where appropriate, these matters have been submitted to the Company’s insurance carrier. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. It is not possible to quantify the ultimate liability, if any, in these matters. Loss contingencies are reviewed quarterly, and estimates are adjusted to reflect the impact of all known information. As more information becomes available, including from potential claimants as litigation or resolution efforts progress, management estimates and assumptions regarding the potential financial impacts may change.

As of September 30, 2026, the Company was the prospective defendant in a pre-suit claim of negligence and wrongful death relating to a former resident at one of the Company’s senior living communities. While, to the Company’s knowledge, no complaint has been filed with respect to such claim as of the date of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, the Company has deemed it to be probable that such claim will result in a loss. The Company maintains insurance coverage for this claim, subject to meeting certain deductibles, applicable policy limits, customary reservations of rights by the insurance company, and the other terms and conditions thereof. Estimating an amount or range of possible losses from claims of this nature is inherently difficult, particularly where litigation has not commenced, and the final timing and outcome of such claim is dependent on many factors that are difficult to predict. Accordingly, the Company’s ultimate cost related to this matter may be materially different than the amount of the Company’s current estimate and accruals.

During the nine months ended September 30, 2026, in connection with the CHP Merger, several lawsuits were filed by purported shareholders of the Company and purported shareholders of CHP against the Company, members of the Company’s Board, CHP, and/or members of the CHP’s board of directors challenging the disclosures made in the Company’s Registration Statement on Form S-4 filed with the SEC (as amended) on January 2, 2026. No loss contingency was recorded for these matters as of September 30, 2026 as the Company believed that losses related to the lawsuits were remote.

The Company has accrued a totalof $7.7 million as of September 30, 2026 for all loss contingencies that are probable to result in a loss and reasonably estimated which is included in accrued expenses on the condensed consolidated balance sheet. In addition, insurance receivables for these claims have been recorded totaling $5.5 million as of September 30, 2026, which is included in accounts receivable on the condensed consolidated balance sheet.

14. Related Party Transactions

Conversant

On March 11, 2026, the Conversant Investors purchased an additional 3,739,716 shares of common stock of the Company for $100.0 million in a private placement. See “Note 2–CHP Merger.”

During the nine months ended September 30, 2026, the Company entered into certain agreements with Conversant Investors in connection with the CHP Merger. See “Note 2–CHP Merger.”

On March 11, 2026, the Company entered into an agreement with the Conversant Preferred Investors in order to induce the immediate full conversion of the Series A Preferred Stock into shares of the Company’s common stock. Pursuant to the agreement, the conversion price of the Series A Preferred Stock was decreased from $40.00 per share of common stock to $32.00 per share of common stock, the expiration date of all of the outstanding warrants issued on November 3, 2021 was extended from November 3, 2026 to November 3, 2027, and the Company made a one-time payment to the Conversant Preferred Investors totaling $4.7 million. In addition, the Company paid the Conversant Preferred Investors $1.1 million, for accrued but unpaid dividends for the period of January 1, 2026 through March 11, 2026. On March 11, 2026, all of the outstanding shares of Series A Preferred Stock were converted into 1,601,505 shares of common stock. On August 10, 2026, the Company entered into the Exchange Agreement with the Conversant Preferred Investors. See “Note 9–Securities Financing.”

Stone Joint Venture

As of September 30, 2026, the Company manages thefour communities owned by the Stone JV under a management agreement and also provides reporting services for the joint venture. See “Note 4–Investments, Acquisitions and Assets Held for Sale.” During the nine months ended September 30, 2026, the Company received a return of its investment of $11.6 million in the Stone JV.

In May 2026, the Stone JV refinanced its then-existing note payable totaling $34.0 million, secured by thefour owned communities. The new financing consists of $70.0 million of variable rate demand multifamily housing revenue bonds, backed by an irrevocable $70.9 million letter of credit covering principal and accrued interest. On the date of issuance, origination and underwriting fees of $0.6 million were paid in consideration of the issuance of the letter of credit. The Company received excess net proceeds from the financing based on its respective membership percentage interests, which is listed above. The new financing has a 20-year term, a variable interest rate of 3.7% on the bonds, and a 2.85% maintenance fee on the letter of credit. As of September 30, 2026 and December 31, 2025, the outstanding balance of the Stone JV debt was $70.0 million and $35.0 million, respectively. The Company has guaranteed $17.7 million of the outstanding balance of the Stone JV debt as of September 30, 2026.

Palatine Joint Venture

For the nine months ended September 30, 2026, the Company managed three communities owned by subsidiaries of Palatine in a joint venture under a management agreement and also provided reporting services for the joint venture. On March 31, 2026, the Company purchased the noncontrolling interest of one of thetwo joint ventures and the community is wholly owned by Sonida as of that date. See “Note 4–Investments, Acquisitions and Assets Held for Sale.”

Parc Communities LLC

In April 2026, the Company purchased a preferred equity investment in Parc LP totaling $1.8 million with a purchase call option in a community owned by the entity totaling $1.0 million. The preferred equity investment carries a 15% annual non-compounding coupon on the $2.8 million purchase price. For the three and nine months ended September 30, 2026, the Company recognized $0.2 million of earnings on the Parc LP investment. The general partner of Parc Tradition, LP is Parc Communities LLC, which is a third-party manager of two of our communities.

15. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company uses derivatives with financial institutions to manage exposure to interest rate changes for loans with variable interest rates. As of September 30, 2026 and December 31, 2025, we had interest rate cap, interest rate collar, and interest rate swap agreements, as applicable, with an aggregate notional value of $1,019.7 million and $194.2 million, respectively. The fair value of these derivative assets as of September 30, 2026 and December 31, 2025 was$19.7 million and $0.1 million, respectively, which was determined using significant observable inputs (Level 2), including quantitative models that utilize multiple market inputs to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions, and third-party pricing services. See “Note 16– Derivatives and Hedging.”

Financial Instruments Not Reported at Fair Value

For those financial instruments not carried at fair value, the carrying amount and estimated fair values of our financial assets and liabilities, were as follows as of September 30, 2026 and December 31, 2025 (in thousands):

1 Notes payable on separate communities that were classified as held for sale as of September 30, 2026 and December 31, 2025. The community classified as held for sale on December 31, 2025 was sold in June 2026.

We believe the carrying amount of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable, and accrued liabilities approximate fair value due to their short-term nature.

The fair value of debt, excluding deferred loan costs, is estimated using discounted cash flow analysis, based on current incremental borrowing rates for similar types of borrowing arrangements, which represent Level 2 inputs as defined in ASC 820, Fair Value Measurement.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The Company adjusts the carrying amount of certain non-financial assets to fair value on a non-recurring basis when they are impaired. There wereno impairment losses for the three and nine months ended September 30, 2026. The Company recognized a non-cash impairment charge of $4.7 million to its “Property and equipment, net” during the three and nine months ended September 30, 2025, which related toone community.

As of September 30, 2026, the Company’s assets measured at fair value on a non-recurring basis were as follows (in thousands):

16. Derivatives and Hedging

The Company uses derivatives as part of its overall strategy to manage our exposure to market risks associated with the fluctuations in variable interest rates associated with our debt. We are also required to enter into interest rate derivative instruments under certain debt agreements. We do not enter into derivative financial instruments for trading or speculative purposes. Our derivatives are not designated as cash flow hedges under ASC 815-20, Derivatives–Hedging, and therefore, all changes in the fair value of the instruments are included as a component of interest expense in our condensed consolidated statements of operations.

During August 2025, the Company entered into an interest rate cap transaction for an aggregate notional amount of $122.0 million for $0.1 million to reduce exposure to interest rate fluctuations in connection with the 2025 Ally Term Loan. The interest rate cap had a 36-month term and effectively capped SOFR at 5.50%. In August 2026, the Company terminated the interest rate cap associated with the 2025 Ally Term Loan, and entered into an interest rate collar transaction for an aggregate notional amount of $372.5 million for $1.5 million to reduce exposure to interest rate fluctuations in connection with the Ally Term Loan - see “Note 8– Debt.” The interest rate collar has a 36-month term, an interest rate floor of 3.63%, and an interest rate ceiling of 4.25%.

During March 2026, the Company entered into an interest rate cap transaction for an aggregate notional amount of $49.2 million for $0.5 million to reduce exposure to interest rate fluctuations associated with a portion of our variable mortgage notes payable. The interest rate cap has a 34-month term and effectively caps SOFR at 4.00%.

During March 2026, the Company entered into an interest rate cap transaction for an aggregate notional amount of $262.5 million for a cost of $0.6 million, to reduce exposure to interest rate fluctuations associated with the term-loan tranche maturing inthree years. The interest rate cap had a 36-month term and capped SOFR at 4.50%. In July 2026, the Company sold the interest rate cap with a notional value of $262.5 million for $1.3 million and used the proceeds of the sale to purchase an interest rate collar with a notional value of $287.5 million for $1.3 million to reduce exposure to interest rate fluctuations in connection with thethree-year term loan tranche. The interest rate collar has a 33-month term, an interest rate floor of 3.30%, and an interest rate ceiling of 4.05%. Monthly cash settlements are received from or paid to the counterparties when interest rates rise above or fall below the contractual cap or floor rates.

During May 2026, the Company entered into an interest rate cap transaction for an aggregate notional amount of $9.4 million for $0.1 million in connection with a loan related to a 2024 acquisition of a community located in Macedonia, Ohio. The interest rate cap has a 36-month term and effectively caps SOFR at 4.50%.

During June 2026, the Company entered into a SOFR-based IR Swap transaction for an aggregate notional amount of $287.5 million to reduce exposure to interest rate fluctuations associated with the term loan tranche maturing infive years at no cost to the Company. The IR Swap is structured as floating to fixed with a fixed interest rate of 4.11% and a 57-month term. The Company has the option to early terminate the IR Swap beginning in June 2027 for up to 4.50% of the notional amount outstanding.

The following table presents the fair values of derivative assets and liabilities in the condensed consolidated balance sheets (in thousands):

1 Of this amount, $3.0 million is presented on the condensed consolidated balance sheets as Current assets - derivative assets and $16.7 million is presented as Derivative assets, non-current.

The following table presents the effect of the derivative instruments on the condensed consolidated statements of operations (in thousands):

17. Segment Information

Each of our communities is identified as an individual operating segment and we combine them into a single reportable segment for reporting purposes under ASC 280. We measure the segment based on resident revenue less community operating expense (adjusted for various non-recurring non-operating community expenses), which we define as community net operating income (“NOI”), as well as some key performance indicators such as weighted average occupancy and a measurement of average rent per available unit. All other operating segments represent the managed communities, which consist of management fee income and the related managed community reimbursement revenues and expenses, as well as our triple-net leased communities.

Our Chief Executive Officer is our chief operating decision maker (“CODM”), who organizes our company, manages resource allocations and measures performance among ourone reportable segment. The CODM uses community NOI by property to allocate operating and capital resources and assesses performance of the segment by comparing actual NOI results to historical results and previously forecasted financial information. Our CODM manages our business by reviewing annual forecasts and segment results on a monthly basis. The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets. The total investment in equity method investments and capital expenditures are presented on the consolidated financial statements.

The following table presents resident revenue, community operating expense and community net operating income by reportable segment (in thousands):

(1) Includes community maintenance, software expense, supplies, insurance, real estate taxes, marketing expense, and other overhead expense.

A reconciliation of segment revenue to consolidated total revenues is as follows (in thousands):

A reconciliation of segment net operating income to the Company’s condensed consolidated statements of operations is as follows (in thousands):

18. Subsequent Events

Subsequent to the quarter ended September 30, 2026, the Company sold 780,000 shares under its ATM Program at a weighted average price of $37.25 per share for $28.8 million in net proceeds.

Acquisitions

In October 2026, the Company purchasedsix communities inthree separate acquisitions with an aggregate purchase price totaling $135.5 million.