Strawberry Fields REIT Inc

Previous wording

Strawberry Fields REIT, Inc. (the “Company”) is engaged in the ownership, acquisition, financing and triple-net leasing of skilled nursing facilities and other post-acute healthcare properties. Currently, our portfolio consists of 101 healthcare properties with an aggregate of 12,527 licensed beds. We hold fee title to 98 of these properties and hold three properties under a long-term lease. These properties are located in Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas. We generate substantially all our revenues by leasing our properties to tenants under long-term leases primarily on a triple-net basis, under which the tenant pays the cost of real estate taxes, insurance and other operating costs of the facility and capital expenditures. Each healthcare facility located at our properties is managed by a qualified operator with an experienced management team.

Current wording

Strawberry Fields REIT, Inc. (the “Company”) is engaged in the ownership, acquisition, financing and triple-net leasing of skilled nursing facilities and other post-acute healthcare properties. Currently, our portfolio consists of 104 healthcare properties with an aggregate of 12,889 licensed beds. We hold fee title to 103 of these properties and hold one property under a long-term lease. These properties are located in Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas. We generate substantially all our revenues by leasing our properties to tenants under long-term leases primarily on a triple-net basis, under which the tenant pays the cost of real estate taxes, insurance and other operating costs of the facility and capital expenditures. Each healthcare facility located at our properties is managed by a qualified operator with an experienced management team.

Previous wording

We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operations of such facilities. As of June 30, 2024, the aggregate annualized average base rent under the leases for our properties was approximately $106.7 million.

Current wording

We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operations of such facilities. As of September 30, 2024, the aggregate annualized average base rent under the leases for our properties was approximately $109.2 million.

Previous wording

We elected a REIT status for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2022. We are organized in an UPREIT structure in which we own substantially all of our assets and conduct substantially all of our business through the Operating Partnership. We are the general partner of the Operating Partnership and as of the date of the report own approximately 13.3% of outstanding OP units.

Current wording

We elected a REIT status for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2022. We are organized in an UPREIT structure in which we own substantially all of our assets and conduct substantially all of our business through the Operating Partnership. We are the general partner of the Operating Partnership and as of the date of the report own approximately 14.2% of outstanding OP units.

Previous wording

On January 1, 2024 the Company commenced its lease for two skilled nursing facilities with 226 licensed beds near Johnson City, Tennessee. The lease includes a purchase option which the Company intends to exercise once certain conditions precedent are met.

Current wording

On January 1, 2024, the Company commenced its lease for two skilled nursing facilities with 248 licensed beds near Johnson City, Tennessee. The lease includes a purchase option which the Company intends to exercise once certain conditions precedent are met. On August 30, 2024, the Company exercised its purchase option. The acquisition was for $4.0 million, and the Company funded the acquisition utilizing cash from the balance sheet. The properties were leased to Infinity, a related party operator. The rent for the properties did not change ($400 thousand per year) and the properties will be added to the Tennessee Master Lease 1.

Previous wording

On March 25, 2024 the Company entered into a purchase agreement for a property comprised of an 68-bed skilled nursing facility and 10 bed assisted living facility near Georgetown, Indiana. The Company closed on the property May 31, 2024 for $5.83 million in an all cash transaction.

Current wording

On March 25, 2024, the Company entered into a purchase agreement for a property comprised of a 68-bed skilled nursing facility and 10 bed assisted living facility near Georgetown, Indiana. The Company closed on the property May 31, 2024, for $5.83 million in an all cash transaction. The facility was leased to Infinity, a related party operator. On June 1 st, 2024, the facility was added to the IN Master Lease in the second amendment to the master lease.

Previous wording

On July 12, 2024 the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (“SEC”).On August 1, 2024 the SEC declared the Registration Statement effective. In connection the Registration Statement the Company established an at-the-market equity program (the “ATM Program”). The ATM Program will allow the Company to issue and sell to the public from time to time, at the Company’s discretion, newly issued shares of common stock. The ATM Program is expected to provide the Company with additional financing flexibility and intends to use the net proceeds from the ATM Program to increase stock liquidity and facilitate growth.

Current wording

On July 12, 2024, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (“SEC”). On August 1, 2024, the SEC declared the Registration Statement effective. In connection with the Registration Statement the Company established an at-the-market equity program (the “ATM Program”). The ATM Program will allow the Company to issue and sell to the public from time to time, at the Company’s discretion, newly issued shares of common stock. The ATM Program is expected to provide the Company with additional financing flexibility and intends to use the net proceeds from the ATM Program to increase stock liquidity and facilitate growth.

Previous wording

On August 5, 2024, the Company issued 150 million NIS in Series A Bonds on the Tel Aviv stock exchange (“TASE”), which is approximately $38.0 million. The bonds are unsecured, were issued at par and have a fixed interest rate of 6.97%. Repayment of the bond principal will occur in three annual payments on September 30th of the years 2024, 2025 and 2026. 6% of the principal will be paid in the years 2024 and 2025, with the remaining 88% due in 2026. Interest payments will be due concurrent with the principal payments on September 30th of the years 2024, 2025 and 2026. In addition, the investors in Series D bond were offered to exchange their holdings with certificates of Series A bonds at a conversion rate of 1.06884 bond A for each certificate of bond D. The conversion window has not yet been closed and the conversion has not yet been completed.

Current wording

On August 5, 2024, the Company issued 145.6 million NIS in Series A Bonds on the Tel Aviv stock exchange (“TASE”), which is approximately $38.1 million. The bonds are unsecured, were issued at par and have a fixed interest rate of 6.97%. Repayment of the bond principal, at 6% of the principal, will be paid in the years 2024 and 2025, with the remaining 88% due in 2026. Interest payments will be due concurrent with the principal payments on September 30th of the years 2024, 2025 and 2026. In addition, the investors in Series D bond were offered to exchange their holdings with certificates of Series A bonds at a conversion rate of 1.069964 bond A for each certificate of bond D. As of September 30, 2024, 47.2 million NIS ($12.7 million USD) Series D bonds have been exchanged for 50.6 million NIS ($13.6 million) Series A bonds.

Previous wording

On August 5, 2024 the Company entered into a purchase agreement for two skilled nursing facilities with 254 licensed beds near San Antonio, TX. The acquisition is for $15.25 million. The Company expects to fund the acquisition utilizing cash from the balance sheet. The closing date of the transaction is expected before the end of third quarter in 2024.

Current wording

On August 30, 2024, the Company completed the acquisition for two skilled nursing facilities with 254 licensed beds near San Antonio, TX. The acquisition was for $15.25 million. The Company funded the acquisition utilizing cash from the balance sheet. The facilities are leased to the Tide Health Group, a 3 rd party operator. The properties are leased in the Texas Master Lease 2, which includes an annual base rent of $1.5 million dollars with 3% annual rent increases and an initial term of 10 years with two options of 5 year extensions.

Previous wording

On July 18, 2024 the Company entered into a purchase agreement for a property comprised of an 83-bed skilled nursing facility and 23 bed assisted living facility near Nashville, Tennessee. The acquisition is for $6.7 million. The Company expects to fund the acquisition by assuming existing debt on the facilities of $3.0 million and the balance of $3.7 million will be paid by the Company issuing common stock to the seller. The closing date of the transaction is expected before the end of third quarter in 2024.

Current wording

On September 25, 2024, the Company completed the acquisition of a property comprised of an 83-bed skilled nursing facility and 23 bed assisted living facility near Nashville, Tennessee. The acquisition was for $6.7 million and the Company funded the acquisition by assuming $2.8 million of existing debt on the facilities, $3.1 million was paid by the Company issuing common stock to the seller, and another $0.8 million by transferring other assets to the seller. The property was leased to Infinity, a related party operator. The property annual rent is $670 thousand dollars and the property will be added to the Tennessee Master Lease 1.

Previous wording

As a landlord, the Company does not control the operations of its tenants, including related party tenants, and is not able to cause its tenants to take any specific actions to address trends in occupancy at the facilities operated by its tenants, other than to monitor occupancy and income of its tenants, discuss trends in occupancy with tenants and possible responses, and, in the event of a default, exercise its rights as a landlord. However, Moishe Gubin, our Chairman and Chief Executive Officer, and Michael Blisko, one of our directors, as the controlling members of 66 of our tenants and related operators, have the ability to obtain information regarding these tenants and related operators and cause the tenants and operators to take actions, including with respect to occupancy.

Current wording

As a landlord, the Company does not control the operations of its tenants, including related party tenants, and is not able to cause its tenants to take any specific actions to address trends in occupancy at the facilities operated by its tenants, other than to monitor occupancy and income of its tenants, discuss trends in occupancy with tenants and possible responses, and, in the event of a default, exercise its rights as a landlord. However, Moishe Gubin, our Chairman and Chief Executive Officer, and Michael Blisko, one of our directors, as the controlling members of 68 of our tenants and related operators, have the ability to obtain information regarding these tenants and related operators and cause the tenants and operators to take actions, including with respect to occupancy.

Previous wording

Rental revenues: The increase in Rental Revenues of $5.0 million or 20.4% is due to higher income from the purchase of additional properties, annual lease escalations, and lease renewals.

Current wording

Rental revenues: The increase in rental revenues of $3.7 million or 14.3% is due to higher income from the purchase of additional properties and lease renewals.

Previous wording

Depreciation and Amortization: The increase in depreciation and amortization of $1.2 million or 17.7% is primarily due to new properties and lease rights purchased since June 30, 2023 offset by lower depreciation from fully depreciated assets.

Current wording

Depreciation and Amortization: The increase in depreciation and amortization of $1.1 million or 14.4% is primarily due to new properties and lease rights purchased since September 30, 2023 offset by lower depreciation from fully depreciated assets.

Previous wording

Interest expense, net: The increase in interest expense of $2.4 million or 45.1% is primarily due to an increase in the additional interest on a new loan from Popular Bank and a Series D Bonds issuance that occurred since 2Q 2023.

Current wording

Interest expense, net: The increase in interest expense of $725 thousand or 9.2% is primarily due to an increase in the additional interest on a new loan from Popular Bank, the Series A Bond issuance and a Series D Bonds issuance that occurred since 3Q 2023.

Previous wording

Net Income: The increase in net income from $5.7 million during the second quarter of 2023, to $7.0 million income during the second quarter of 2024 is primarily a result of higher rental income in the second quarter of 2024 offset by higher depreciation and amortization expenses, higher general and administrative expenses, higher property taxes, and an increase in interest expense.

Current wording

Net Income: The increase in net income from $4.7 million during the third quarter of 2023, to $6.9 million income during the third quarter of 2024 is primarily a result of higher rental income in the third quarter of 2024 offset by higher depreciation and amortization expenses, higher interest expense, lower general and administrative expenses, and lower property taxes.

Previous wording

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023:

Current wording

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023:

Previous wording

Rental revenues: The increase in Rental revenue of $8.6 million or 17.6% is due to renegotiation of certain leases, acquisition of new properties, annual rent increases and renewal of leases.

Current wording

Rental revenues: The increase in rental revenue of $12.2 million or 16.5% is due to renegotiation of certain leases, acquisition of new properties and renewal of leases.

Previous wording

Depreciation and Amortization: The increase in depreciation of $2.3 million or 16.8% is primarily purchases of new properties and lease rights offset by lower depreciation from fully depreciated assets.

Current wording

Depreciation and Amortization: The increase in depreciation and amortization of $3.4 million or 16.0% is primarily purchases of new properties and lease rights offset by lower depreciation from fully depreciated assets.

Previous wording

General and administrative: The increase in general and administrative of $1.2 million or 51.0% is primarily a result of higher insurance, higher corporate salaries and other expenses.

Current wording

General and administrative: The increase in general and administrative of $1.1 million or 27.4% is primarily a result of higher insurance, higher corporate salaries and other expenses.

Previous wording

Interest expense, net: The increase in interest expense of $5.3 million or 47.7% is primarily related to an increase in the additional interest on a new loan from Popular Bank and a Series D Bonds issuance that occurred since 2Q 2023

Current wording

Interest expense, net: The increase in interest expense of $6.0 million or 33.6% is primarily related to additional interest on a new loan from Popular Bank, a Series A bond issuance and a Series D bond issuance that occurred since the third quarter of 2023

Previous wording

Net Income: The increase in net income to $13.0 million in 2024 is primarily a result of higher rental income in 2024 offset by higher interest expenses, higher depreciation and amortization expenses, higher general and administrative expenses and the absence of a real estate impairment loss.

Current wording

Net Income: The increase in net income to $19.9 million in 2024 from $14.5 million in same period last year (37.2% increase) is primarily a result of higher rental income in 2024 offset by higher interest expenses, higher depreciation and amortization expenses, higher general and administrative expenses, lower property taxes and the absence of a real estate impairment loss.

Previous wording

As of June 30, 2024, we had cash and cash equivalents and restricted cash and equivalents of $42.1 million. We also had the ability to offer an additional $168 million in Series C Bonds and an additional $120 million in Series D Bonds subject to compliance with covenants and market conditions.

Current wording

As of September 30, 2024, we had cash and cash equivalents and restricted cash and equivalents of $53.2 million. We also had the ability to offer an additional $98 million in Series A, $144 million in Series C Bonds and an additional $108 million in Series D Bonds subject to compliance with covenants and market conditions.

Previous wording

We may utilize various types of debt to finance a portion of our acquisition activities, including long-term, fixed-rate mortgage loans, variable-rate term loans and secured revolving lines of credit. As of June 30, 2024, on a condensed consolidated basis, we had total indebtedness of approximately $555.0 million, consisting of $266.1 million in HUD guaranteed debt, $125.9 million in Series C Bonds and Series D Bonds outstanding and $163.0 million in commercial mortgages loans. Under our bonds and our commercial mortgages loans, we are subject to continuing covenants, and future indebtedness that we may incur may contain similar provisions. In the event of a default, the lenders could accelerate the timing of payments under the debt obligations, and we may be required to repay such debt with capital from other sources, which may not be available on attractive terms, or at all, which would have a material adverse effect on our liquidity, financial condition, results of operations and ability to make distributions to our stockholders.

Current wording

We may utilize various types of debt to finance a portion of our acquisition activities, including long-term, fixed-rate mortgage loans, variable-rate term loans and secured revolving lines of credit. As of September 30, 2024, on a condensed consolidated basis, we had total indebtedness of approximately $584.5 million, consisting of $264.1 million in HUD guaranteed debt, $155.7 million in Series A Bonds, Series C Bonds, and Series D gross bonds outstanding and $164.7 million in commercial mortgages loans. Under our bonds and our commercial mortgages loans, we are subject to continuing covenants, and future indebtedness that we may incur may contain similar provisions. In the event of a default, the lenders could accelerate the timing of payments under the debt obligations, and we may be required to repay such debt with capital from other sources, which may not be available on attractive terms, or at all, which would have a material adverse effect on our liquidity, financial condition, results of operations and ability to make distributions to our stockholders.

Previous wording

Through 2028 there are four balloon payment obligations consisting of a payment of $50.8 million due under the Series C Bonds in 2026, a payment of $57.8 million due under the Series D Bonds in 2026, a payment of $86.1 million due under our commercial bank mortgage loan facility due in 2027, and a payment of $60.7 million due under our commercial bank mortgage loan facility due in 2028. We may also obtain additional financing that contains balloon payment obligations. These types of obligations may materially adversely affect us, including our cash flows, financial condition and ability to make distributions.

Current wording

Through 2028 there are five balloon payment obligations consisting of a payment of $46.5 million due under Series A Bonds in 2026, $51.4 million due under the Series C Bonds in 2026, a payment of $47.2 million due under the Series D Bonds in 2026, a payment of $86.1 million due under our commercial bank mortgage loan facility due in 2027, and a payment of $60.7 million due under our commercial bank mortgage loan facility due in 2028. We may also obtain additional financing that contains balloon payment obligations. These types of obligations may materially adversely affect us, including our cash flows, financial condition and ability to make distributions.

Previous wording

Net cash provided by operating activities was $22.7 million for the six months ended June 30, 2024 and primarily consisted of net earnings of $13.0 million adjusted by depreciation and amortization of $16.3 million offset by an increase in assets of $3.4 million and a decrease in other accrued liabilities of $2.4 million. Net cash provided by operating activities was $25.6 million for the six months ended June 30, 2023 and primarily consisted of net earnings of $9.8 million adjusted by depreciation and amortization of $14.0 million and a loss on real estate impairment of $2.5 million.

Current wording

Net cash provided by operating activities was $34.5 million for the nine months ended September 30, 2024 and primarily consisted of net earnings of $19.9 million adjusted by depreciation and amortization of $24.7 million offset by an increase in Accounts Receivable of $2.8 million, an increase in straight-line receivables of $3.0 million and a decrease in other accrued liabilities of $6.1 million. Net cash provided by operating activities was $42.0 million for the nine months ended September 30, 2023 and primarily consisted of net earnings of $14.5 million adjusted by depreciation and amortization of $21.3 million, a loss on real estate impairment of $2.5 million, and an increase in accounts payable and other accrued liabilities of $6.5 million.

Previous wording

Cash used in investing activities for the six months ended June 30, 2024 was comprised of $23.3 million for the acquisition of the rights to the Indiana Master Lease 2 as well as the new facility in Georgetown, Indiana. This was offset by $0.6 million in principal payments on notes receivable. Cash used in investing activities for the six months ended June 30, 2023 was comprised of the acquisition of a new facility in Kentucky for $6.0 million offset by $1.6 million of principal payments on notes receivable.

Current wording

Cash used in investing activities for the nine months ended September 30, 2024 was comprised of $43.0 million for the acquisition of the rights to the Indiana Master Lease 2 as well as 6 new properties in Indiana, Tennessee and Texas. This was offset by $0.8 million in principal payments on notes receivable. Cash used in investing activities for the nine months ended September 30, 2023 was comprised of the acquisition of 25 new facilities in Indiana and Kentucky for $108.1 million. There was also an increase of $6.5 million in note receivables, which was offset by $1.0 million of principal payments on notes receivable.

Previous wording

Cash provide by financing activities for the six months ended June 30, 2024 was comprised of proceeds from the issuance of Series D Bonds $25.7 million offset by Non-controlling interest distributions of $11.4 million, repayments of senior debt $7.1 million, dividend payments of $1.6 million and stock buybacks of $0.7 million. Cash provided by financing activities for the six months ended June 30, 2023 were primarily comprised of a private placement of Series C Bonds which netted $10.4 million, issuance of Series D Bonds which netted $22.3 million and a new HUD loan of $3.1 million. These amounts were offset by $8.4 million in principal debt payments, dividends paid to common shareholders of $1.4 million, a $10.0 million distribution to the non-controlling interest holders and repayment of non-controlling interest redemption liability of $15.8 million.

Current wording

Cash provided by financing activities for the nine months ended September 30, 2024 was comprised of proceeds from the issuance of Series A Bonds $37.1 million, Series D Bonds $25.7 million and proceeds of the ATM sales of $2.4 million. These increases were offset by non-controlling interest distributions of $17.2 million, bond principal repayments of $10.5 million, repayments of mortgage debt $10.1 million, dividend payments of $2.5 million and stock buybacks of $0.9 million. Cash provided by financing activities for the nine months ended September 30, 2023 were primarily comprised of a private placement of Series C Bonds which netted $10.9 million, issuance of Series D Bonds which netted $22.4 million, a private placement of Series D Bonds $19.1 million, a new HUD loan of $3.2 million and a commercial bank facility of $66 million. These amounts were offset by $15.3 million in principal debt payments, dividends paid to common shareholders of $2.1 million, a $15.2 million distribution to the non-controlling interest holders and repayment of non-controlling interest redemption liability of $15.8 million.

Previous wording

As of June 30, 2024, we had non-recourse mortgage loans of $266.1 million from third party lenders that were guaranteed by HUD.

Current wording

As of September 30, 2024, we had non-recourse mortgage loans of $264.1 million from third party lenders that were guaranteed by HUD.

Previous wording

On March 21, 2022, the Company closed a mortgage loan with a commercial bank pursuant to which the Company borrowed approximately $105 million. The loan agreement provides for monthly payments of principal and interest based on a 20-year amortization with a balloon payment due in March 2027. The rate is based on the one-month Secured Overnight Financing Rate (“SOFR”) plus a margin of 3.5% and a floor of 4% (as of the June 30, 2024 the rate was 8.83%). As of June 30, 2024 and December 31, 2023, total outstanding principal amount was $97.0 million and $98.8 million, respectively. This loan is collateralized by 21 properties owned by the Company.

Current wording

On March 21, 2022, the Company obtained a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $105 million. The facility provides for monthly payments of principal and interest based on a 20-year amortization with a balloon payment due in March 2027. The interest rate is based on the one-month SOFR plus a margin of 3.5% and a floor of 4% (as of September 30, 2024 the interest rate was 8.42%). As of September 30, 2024 and December 31, 2023, total amounts outstanding were $95.1 million and $98.8 million, respectively. This facility loan is collateralized by 21 properties owned by the Company. The loan proceeds were used to repay the Series B Bonds and prepay commercial loans not secured by HUD guaranteed mortgages.

Previous wording

On August 25, 2023, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $66 million. The facility is an interest only facility for the first 12 months and beginning in the second year monthly payments of principal and interest based on a 20-year amortization schedule with a balloon payment due in August 2028. The rate is based on the one-month Secured Overnight Financing Rate (“SOFR”) plus a margin of 3.5% and a floor of 4% (as of June 30, 2024, the rate was 8.83%). As of June 30, 2024, and December 31, 2023, total amounts outstanding were $66.0 million. This facility loan is collateralized by and was used for the acquisition of 19 properties (24 facilities). See note 4 of the financial statements included in Part I to this Form 10-Q.

Current wording

On August 25, 2023, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $66 million. The facility is an interest only facility for the first 12 months and provides for monthly payments of principal based on a 20-year amortization starting in the second year with a balloon payment due in August 2028. The rate is based on the one-month Secured Overnight Financing Rate (“SOFR”) plus a margin of 3.5% and a floor of 4% (as of September 30, 2024, the rate was 8.42%). As of September 30, 2024 and December 31, 2023, total amounts outstanding were $65.3 million and $66.0 million, respectively. This facility loan is collateralized by and used for the acquisition of 19 properties (24 facilities).

Previous wording

The Company has issued Series C Bonds and Series D Bonds.

Current wording

The Company has issued Series A Bonds directly and Series C Bonds and Series D Bonds through the BVI company, a wholly owned subsidiary.

Previous wording

In July 2021, the Company completed an initial offering of Series C Bonds with a par value of NIS 208.0 million ($64.7 million). The Series C Bonds were issued at par. During February 2023, the BVI Company issued additional Series C Bonds in the face amount of NIS 40.0 million ($11.2 million) and raised a net amount of NIS 38.1 million ($10.7 million). These Series C Bonds were issued at a price of 95.25%. The Series C Bonds interest rate is 5.7% at June 30, 2024.

Current wording

In July 2021, the BVI Company completed an initial offering of Series C Bonds with a par value of NIS 208.0 million ($64.7 million). The Series C Bonds were issued at par. During February 2023, the BVI Company issued additional Series C Bonds in the face amount of NIS 40.0 million ($11.2 million) and raised a net amount of NIS 38.1 million ($10.7 million). These Series C Bonds were issued at a price of 95.25%. The Series C Bonds interest rate is 5.7% at September 30, 2024.

Previous wording

On June 19, 2023, the Company completed an initial offering of Series D Bonds with a par value of NIS 82.9 million ($22.9 million). The Series D Bonds were issued at par and the interest rate is 9.1%. During July 2023, the BVI Company issued additional Series D Bonds with a par value of NIS 70.0 million and raised a gross amount of $19.2 million (NIS 69.8 million). The Bonds were issued at a price of 99.7%. See Note 7 to the condensed consolidated Financial Statements included under Item 1 to this Form 10-Q .

Current wording

On June 19, 2023, the BVI Company completed an initial offering of Series D Bonds with a par value of NIS 82.9 million ($22.9 million). The Series D Bonds were issued at par and the interest rate is 9.1%. During July 2023, the BVI Company issued additional Series D Bonds with a par value of NIS 70.0 million and raised a gross amount of $19.2 million (NIS 69.8 million). The Bonds were issued at a price of 99.7%. On February 8, 2024, the BVI Company issued additional Series D Bonds with a par value of NIS 100.0 million and raised a net amount of $25.7 million (NIS 98.2 million). The Bonds were issued at a price of 106.3%.

Previous wording

The following table reconciles our calculations of FFO and AFFO for the six and three months ended June 30, 2024 and 2023, to net income the most directly comparable GAAP financial measure, for the same periods:

Current wording

The following table reconciles our calculations of FFO and AFFO for the nine and three months ended September 30, 2024 and 2023, to net income the most directly comparable GAAP financial measure, for the same periods:

Previous wording

Our condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q have been prepared in accordance with GAAP for interim financial information set forth in the Accounting Standards Codification, as published by the Financial Accounting Standards Board. GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements. We periodically reevaluate our estimates and assumptions, and in the event they prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Please refer to “Critical Accounting Policies and Estimates” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2023 Annual Report on 10-K filed on March 19, 2024 for further information regarding the critical accounting policies that affect our more significant estimates and judgments used in the preparation of our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. There have been no material changes in such critical accounting policies during the six months ended June 30, 2024.

Current wording

Our condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q have been prepared in accordance with GAAP for interim financial information set forth in the Accounting Standards Codification, as published by the Financial Accounting Standards Board. GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements. We periodically reevaluate our estimates and assumptions, and in the event they prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Please refer to “Critical Accounting Policies and Estimates” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2023 Annual Report on 10-K filed on March 19, 2024 for further information regarding the critical accounting policies that affect our more significant estimates and judgments used in the preparation of our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. There have been no material changes in such critical accounting policies during the nine months ended September 30, 2024.