Strawberry Fields REIT, Inc.

Previous wording

● risks and uncertainties related to the national, state and local economies, particularly the economies of Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas, and the real estate and healthcare industries in general;

Current wording

● risks and uncertainties related to the national, state and local economies, particularly the economies of Arkansas, Illinois, Indiana, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas, and the real estate and healthcare industries in general;

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 133 healthcare properties with an aggregate of 15,602 licensed beds. We hold fee title to 132 of these properties and hold one property under long-term leases. These properties are located in Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri, 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 133 healthcare properties with an aggregate of 15,496 licensed beds. We hold fee title to 132 of these properties and hold one property under a long-term lease. These properties are located in Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri, 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 March 31, 2026, the aggregate annualized average base rent under the leases for our properties was approximately $142.7 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 June 30, 2026, the aggregate annualized average base rent under the leases for our properties was approximately $142.4 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 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 24.2% of the 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 25.3% of outstanding OP units.

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 64 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 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.

Previous wording

As of March 31, 2026, we had cash and cash equivalents and restricted cash and equivalents of $69.7 million. We also had the ability to offer an additional Series A Bonds from the current outstanding of $95.5 million up to $173.8 million. Series C Bonds from the current outstanding of $78.3 million up to $199.1 million and the ability to offer additional Series D Bonds from the current outstanding of $55.5 million up to $142.2 million. Bond B does not have a ceiling for additional issuances; however, the series is subject to compliance with covenants and market conditions.

Current wording

As of June 30, 2026, we had cash and cash equivalents and restricted cash and equivalents of $77.6 million. We also had the ability to offer an additional $83.2 million in Series A Bonds, $130.0 million in series C-Bonds (Inc); $177.5 million in Series C Bonds (BVI) and an additional $92.1 million in Series D Bonds subject to compliance with covenants and market conditions. The Series B Bonds do not have a ceiling for additional issuances; however, the series is 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 March 31, 2026, on a condensed consolidated basis, we had total indebtedness of approximately $791.4 million, consisting of $252.0 million in HUD guaranteed debt, $337.4 million in net Series A, Series B, Series C Bonds and Series D bonds outstanding, $161.6 million in commercial mortgages loans and $40.4 million note payable. Under our Bonds and our commercial mortgages loans, we are subject to continuing covenants. Future indebtedness that the Company 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 June 30, 2026, on a condensed consolidated basis, we had total indebtedness of approximately $810.2 million, consisting of $250 million in HUD guaranteed debt, $359.5 million in Series A, Series B, Series C Bonds (Inc), Series C Bonds (BVI) and Series D Bonds outstanding, and $162.6 million in commercial mortgages loans. Under our bonds and our commercial mortgages loans, we are subject to continuing covenants, and future indebtedness that the Company 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 2029 there are balloon payment obligations consisting of three payments of $95.5 million, $78.3 million, and $55.5 million, due under the Series A Bonds, Series C Bonds, and Series D bonds in 2026, and $95.1 million due under Bond B in 2029, respectively, and payments of $56.1 million, $36.6 million and $52.3 million due under our three commercial bank term loans due in 2027, 2028, and 2029, respectively. 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 2029 there are six balloon payment obligations consisting of a payment of $34.1 million due under the Series C Bonds (BVI) in 2026, a payment of $101.5 million due under the Series A Bonds in 2026, a payment of $59.0 million due under the Series D Bonds in 2026, a payment of $94.2 million due under our commercial bank term mortgage loan facility due in 2029, a payment of $60.0 million due under our line of credit commercial bank mortgage loan facility due in 2029, a payment of $101.1 million due under the Series B Bonds in 2029 and a payment of $48.1 million due under the Series C Bonds (Inc) in 2030. We may also obtain additional financing that contains balloon payment obligations. These types of obligations may adversely affect us, including our cash flows, financial condition and ability to make distributions.

Previous wording

The Company believes that its overall level of indebtedness is appropriate for the Company’s business in light of its cash flow from operations and value of its properties and is generally typical for owners of multiple healthcare properties. The Company expects to generate sufficient positive cash flow from operations to meet its current debt service obligations and the distribution requirements for maintaining REIT status, and to be able to refinance its debt to the extent necessary to meet its balloon payment obligations.

Current wording

The Company believes that its overall level of indebtedness is appropriate for the Company’s business in light of its cash flow from operations and value of its properties and is generally typical for owners of multiple healthcare properties. The Company expects to generate sufficient positive cash flow from operations to meet its ongoing debt service obligations and the distribution requirements for maintaining REIT status, and to be able to refinance it debt to the extent necessary to meet it balloon payment obligations.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2026, was $17.4 million. This is a $1.6 million change from March 31, 2025, that is comprised of net earnings of $9.4 million, a $2.5 million change. Offset by a decrease in accounts payable, accrued liabilities and other liabilities of $4.1 million. Net cash provided by operating activities for the three months ended March 31, 2025, was $19 million. It was comprised of net earnings of $7.0 million and depreciation and amortization of $11.3 million and an increase in accounts payable and accrued liabilities and other liabilities of $1.9 million. These amounts were offset by an increase in straight-line rent of $1.5 million.

Current wording

Net cash provided by operating activities was $41.7 million for the six months ended June 30, 2026 and primarily consisted of net earnings of $18.4 million adjusted by depreciation and amortization of $22.6 million and foreign currency translation adjustments of $3.1 million. This was offset by an increase in straight-line rent receivables of $4.1 million. Net cash provided by operating activities was $48.8 million for the six months ended June 30, 2025 and primarily consisted of net earnings of $15.7 million adjusted by depreciation and amortization of $22.6 million offset by an increase in other assets of $0.7 million and a decrease in other accrued liabilities of $8.3 million.

Previous wording

As of March 31, 2026, we had non-recourse mortgage loans of $252.0 million from third party lenders that were guaranteed by HUD.

Current wording

As of June 30, 2026, we had non-recourse mortgage loans of $250.0 million from third party lenders that were guaranteed by HUD.

Previous wording

The two credit facilities closed in March 21, 2022 and August 25, 2023 are subject to financial covenants which are consist of (i) a covenant that the ratio of the Company’s indebtedness to its EBITDA cannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividend distribution is at least 1.20 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the ratio of the Company’s net operating income to its debt service after dividend distribution is at least 1.05 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement, and (iii) a covenant that the Company’s GAAP equity is at least $20,000,000. As of March 31, 2026, the Company was in compliance with the loan covenants.

Current wording

The two credit facilities that closed in June 18, 2026 are subject to financial covenants which consist of (i) a covenant that the ratio of the Company’s indebtedness to its EBITDA cannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividend distribution is at least 1.25 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the Company’s GAAP equity is at least $30 million. As of June 30, 2026, the Company was in compliance with the loan covenants.

Previous wording

As of March 31, 2026, the Company had outstanding Series A, Series B, Series C Bonds and Series D Bonds.

Current wording

As of June 30, 2026, the Company had outstanding Series A, Series B, Series C (Inc), Series C (BVI) Bonds and Series D Bonds.

Previous wording

As of March 31, 2026, the outstanding balance of Series A Bonds was NIS 302.2 million ($95.5 million)

Current wording

As of June 30, 2026, the outstanding balance of Series A Bonds was NIS 302.2 million ($101.5 million)

Previous wording

In June 2025, Strawberry Fields, Inc completed, directly, an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series B Bonds with a par value of NIS 312 million ($89.5 million). The series B Bonds were issued at par. Offering and issuance costs of approximately $2.5 million were incurred at closing. In December 2025, the Company issued an additional NIS 30.0 million ($9.4 million) in Series B Bonds. At March 31, 2026, the outstanding balance of Series B Bonds was $108.1 million.

Current wording

In June 2025, Strawberry Fields, Inc completed, directly, an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series B Bonds with a par value of NIS 312 million ($89.5 million). The series B Bonds were issued at par. Offering and issuance costs of approximately $2.5 million were incurred at closing. In December 2025, the Company issued an additional NIS 30.0 million ($9.4 million) in Series B Bonds. At June 30, 2026, the outstanding balance of Series B Bonds was NIS 328.2 million ($110.2 million).

Previous 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 ($11.3 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%. In October 2024, the BVI company issued an additional NIS 62.0 million ($16.6 million) in Series C Bonds. The bonds were issued at 99.3%.

Current wording

In July 2021, the BVI Company completed an initial offering of Series C Bonds (BVI) with a par value of NIS 208.0 million ($64.7 million). The Series C Bonds (BVI) were issued at par. During February 2023, the BVI Company issued additional Series C Bonds (BVI) in the face amount of NIS 40.0 million ($11.3 million) and raised a net amount of NIS 38.1 million ($10.7 million). These Series C Bonds (BVI) were issued at a price of 95.25%. In October 2024, the BVI company issued an additional NIS 62.0 million ($16.6 million) in Series C Bonds (BVI). The bonds were issued at 99.3%. On June 1, 2026 the Company completed an early redemption of NIS 146.4 million ($49.2 million)as of June 30, 2026, the outstanding principal amount of the Series C (BVI) Bonds was NIS 101.4 million ($34.1 million).

Previous wording

As of March 31, 2026, the Series D Bonds had an outstanding principal balance of approximately NIS 175.8 ($55.5 million).

Current wording

As of June 30, 2026, the Series D Bonds had an outstanding principal balance of approximately NIS 175.8 ($59.0 million).

Previous wording

The following table reconciles our calculations of FFO and AFFO for the three months ended March 31, 2026 and 2025, 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 six and three months ended June 30, 2026 and 2025, 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” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2025 Annual Report on 10-K filed on March 19, 2026, 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 three months ended March 31, 2026.

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” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2025 Annual Report on 10-K filed on March 19, 2026 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, 2026.