Forward-Looking Statements Certain statements in this quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of the U.S. federal securities laws. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. This Form 10-Q also contains forward-looking statements by third parties relating to market and industry data and forecasts; forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements contained in this Form 10-Q. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations, Funds From Operations (“FFO”), our strategic plans and objectives, cost management, potential property acquisitions, anticipated capital expenditures (and access to capital), amounts of anticipated cash distributions to our stockholders in the future and other matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and variations of these words and other similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and/or could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. Readers are cautioned to not place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to: ● risks and uncertainties related to the national, state and local economies, particularly the economies of Arkansas, Illinois, Indiana, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas, and the real estate and healthcare industries in general; ● availability and terms of capital and financing; ● the impact of existing and future healthcare reform legislation on our tenants, borrowers and guarantors; ● adverse trends in the healthcare industry, including, but not limited to, changes relating to reimbursements available to our tenants by government or private payors; ● competition in the long-term healthcare industry and shifts in the perception of various types of long-term care facilities, including skilled nursing facilities; 38 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Forward-Looking Statements (continued) ● our tenants’ ability to make rent payments; ● our dependence upon key personnel whose continued service is not guaranteed; ● availability of appropriate acquisition opportunities and the failure to integrate successfully; ● ability to source target-marketed deal flow; ● ability to dispose of assets held for sale for the anticipated proceeds or on a timely basis, or to deploy the proceeds therefrom on favorable terms; ● fluctuations in mortgage and interest rates; ● changes in the ratings of our debt securities; ● risks and uncertainties associated with property ownership and development; ● the potential need to fund improvements or other capital expenditures out of operating cash flow; ● potential liability for uninsured losses and environmental liabilities; ● the outcome of pending or future legal proceedings; ● changes in tax laws and regulations affecting REITs; ● our ability to maintain our qualification as a REIT; and ● the effect of other factors affecting our business or the businesses of our operators that are beyond our or their control, including natural disasters, other health crises or pandemics and governmental action, particularly in the healthcare industry. This list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. New risks and uncertainties may also emerge from time to time that could materially and adversely affect us. Overview Strawberry Fields REIT, Inc. (the “Company”) is engaged in the ownership, acquisition, financing and triple-net leasing of skilled nursing facilities and other post-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. 39 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Overview (continued) We employ a disciplined approach in our investment strategy by investing in healthcare real estate assets. We seek to invest in assets that will provide attractive opportunities for dividend growth and appreciation in asset value, while maintaining balance sheet strength and liquidity, thereby creating long-term stockholder value. We expect to grow our portfolio by diversifying our investments by tenant, facility type and geography. We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operations of such facilities. As of June 30, 2026, the aggregate annualized average base rent under the leases for our properties was approximately $142.4 million. 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. Related Party Tenants As a landlord, the Company does not control the operations of its tenants, including related party tenants, and is not able to cause its tenants to take any specific actions 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. 40 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Results of Operations Operating Results Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025: Three Months Ended June 30, Increase / Percentage (dollars in thousands except per share data) 2026 2025 (Decrease) Difference Revenues: Rental revenues $ 40,049 $ 37,861 $ 2,188 6 % Expenses: Depreciation 9,183 8,695 488 6 % Amortization 1,987 2,629 (642 ) (24 )% General and administrative expenses 3,247 1,999 1,248 62 % Property and other taxes 3,962 3,775 187 5 % Facility rent expenses 175 147 28 19 % Total Expenses 18,554 17,245 1,309 8 % Interest expense, net 11,820 11,365 455 4 % Amortization of interest expense 209 201 8 4 % Mortgage insurance premium 377 388 (11 ) (3 )% Total Interest Expenses 12,406 11,954 452 4 % Other loss Other loss (151 ) - (151 ) (100 )% Net income 8,938 8,662 276 3 % Net income attributable to non-controlling interest (6,780 ) (6,706 ) (74 ) (1 )% Net income attributable to common stockholders 2,158 1,956 202 10 % Basic and diluted income per common share $ 0.16 $ 0.16 $ 0.0 0 % Rental revenues: The increase in rental revenues of $2.2 million or 6% is due to higher income from the purchase of additional properties and lease renewals. Depreciation and amortization: The decrease in depreciation and amortization of $0.1 million or (9)% is primarily due lower depreciation from fully depreciated assets and the sale of 2 properties, offset by the purchases of additional properties since the second quarter 2025. General and administrative expenses: The increase in general and administrative expenses of $1.3 million or 62% reflects higher closing costs related to the new line of credit and term loan, as well as higher compensation expense. 41 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Results of Operations (continued) Interest expense, net: The increase in interest expense of $0.5 million or 4% is primarily due to additional interest expense from the Bond Series B issuance that closed in June of 2025, as well as Bond Series C issuance in May of 2026. This increase was offset by lower interest expense resulting from a paydown of a commercial loan. Net income: The increase in net income from $8.6 million during the second quarter of 2025, to $8.9 million income during the second quarter of 2026 is primarily a result of higher rental income since the second quarter of 2025 offset by higher general and administrative expenses and an increase in interest expense. Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025: Six Months Ended June 30, Increase / Percentage (dollars in thousands) 2026 2025 (Decrease) Difference Revenues: Rental revenues $ 80,033 $ 75,193 $ 4,840 6 % Expenses: Depreciation 18,423 17,377 1,046 6 % Amortization 4,200 5,217 (1,017 ) (19 )% General and administrative expenses 5,769 4,056 1,713 42 % Property and other taxes 7,699 7,425 274 4 % Facility rent expenses 304 294 10 3 % Total Expenses 36,395 34,369 2,026 6 % Interest expense, net 23,906 24,001 (95 ) (.4 )% Amortization of interest expense 410 402 8 2 % Mortgage insurance premium 759 776 (17 ) (2 )% Total Interest Expenses 25,075 25,179 (104 ) (.4 )% Other (loss) income Other (loss) income (151 ) 8 (159 ) (1,988 )% Net income 18,412 15,653 2,759 18 % Net income attributable to non-controlling interest 13,974 12,113 1,861 15 % Net income attributable to common stockholders 4,438 3,540 898 25 % Basic and diluted income per common share $ 0.33 $ 0.28 $ 0.05 18 % Rental revenues: The increase in rental revenue of $4.8 million or 6% is due to the acquisition of properties made since second quarter of 2025. Depreciation and amortization: The increase in depreciation and amortization of $0.03 million or 0.13% is primarily due to properties purchased in 2025, offset by full amortized assets. General and administrative: The increase in general and administrative of $1.7 million or 42% is primarily a result of higher costs associated with the new line of credit and term loan, higher professional fees, and higher compensation expenses. 42 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Results of Operations (continued) Net income: The increase in net income to $18.4 million in 2026 is primarily a result of higher rental income and lower amortization expense since second quarter 2025 offset by higher general and administrative expenses. Liquidity and Capital Resources To qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, to our stockholders on an annual basis. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly dividends to common stockholders from cash flow from operating activities. All such dividends are at the discretion of our board of directors. 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. Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make distributions to our stockholders and other general business needs. Our primary sources of cash include operating cash flows, stock sales and borrowings. Our primary uses of cash include funding acquisitions and investments consistent with our investment strategy, repaying principal and interest on any outstanding borrowings, making distributions to our equity holders, funding our operations and paying accrued expenses. Our long-term liquidity needs consist primarily of funds necessary to pay for the costs of acquiring additional healthcare properties and principal and interest payments on our debt. We expect to meet our long-term liquidity requirements through various sources of capital, including future equity issuances or debt offerings, net cash provided by operations, long-term mortgage indebtedness and other secured and unsecured borrowings. 43 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Liquidity and Capital Resources (continued) 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. 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. 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. Cash Flows The following table presents selected data from our condensed consolidated statements of cash flows for the periods presented: Six Months Ended June 30, 2026 2025 (dollars in thousands) Net cash provided by operating activities $ 41,730 $ 48,781 Net cash provided by (used in) investing activities 900 (40,423 ) Net cash (used in) provided by financing activities (31,777 ) 29,430 Net increase in cash and cash equivalents and restricted cash and cash equivalents $ 10,853 $ 37,788 Cash and cash equivalents, and restricted cash and cash equivalents beginning of period 66,758 93,656 Cash and cash equivalents and restricted cash and cash equivalents, end of period $ 77,611 $ 131,444 44 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Cash Flows (continued) 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. Cash received from investing activities was $0.9 million for the six months ended June 30, 2026 and comprised of the sale of a property in Oklahoma for $4.2 million. This was offset by an increase in notes receivable of $3.4 million. Cash used in investing activities for the six months ended June 30, 2025 was comprised of $40.5 million for the acquisition of properties for Kansas Master Lease, a property in Oklahoma as well as a property in Texas. This was offset by $0.1 million in principal payments on notes receivable. Cash used by financing activities for the six months ended June 30, 2026 was comprised of ATM sales of $1.7 million and proceeds from the issuance of Series C Bonds (Inc) of $52.2 million offset by bond repayments of $56.7 million, repayments of senior debt $4.7 million, dividend payments of $4.4 million, $4.4 million in repayments of the note payable and non-controlling interest distributions of $14 million. Cash provided by financing activities for the six months ended June 30, 2025 was comprised of proceeds from the issuance of Series B Bonds $86 million offset by Non-controlling interest distributions of $12.0 million, repayments of senior debt $36.6 million, dividend payments of $3.5 million and $4.0 million in repayments of the note payable. Indebtedness Mortgage Loans Guaranteed by HUD As of June 30, 2026, we had non-recourse mortgage loans of $250.0 million from third party lenders that were guaranteed by HUD. Each loan is secured by first mortgages on certain specified properties, interests in the leases for these properties and second liens on the operator’s assets. In the event of default on any single loan, the loan agreement provides that the applicable lender may require the tenants for the property securing the loan to make all rental payments directly to the lender. In exchange for the HUD guarantee, we pay HUD, on an annual basis, 0.65% of the principal balance of each loan as mortgage insurance premium, in addition to the interest rate denominated in each loan agreement. As a result, the overall average interest rate paid with respect to the HUD guaranteed loans as of June 30, 2026, was 3.91% per annum (including the mortgage insurance payments). The loans have an average maturity of 21 years. Commercial Bank Term Loans On June 18, 2026, the Company closed two mortgage loan facilities with a commercial bank consisting of a $100.0 million term loan facility and a Revolving Line of Credit (“RLOC”) facility with commitments of up to $200.0 million. At closing, the Company refinanced approximately $160.0 million of existing bank indebtedness, consisting of $100.0 million under the term loan facility and $60.0 million under the RLOC facility. The term loan facility provides for monthly payments of principal and interest based on a 20-year amortization schedule with a balloon payment due in June 2029. The RLOC facility provides for monthly interest-only payments with all outstanding principal due in June 2029. The rate on both facilities is based on the one-month Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.75% and is subject to a floor of 5.50% (as of June 30, 2026, the rate was 6.40%). As of June 30, 2026, the outstanding balances under the term loan facility and revolving line of credit facility were $100.0 million and $60.0 million, respectively. The term loan facility is collateralized by 14 properties owned by the Company, while the RLOC facility is collateralized by 36 properties owned by the Company. 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. On September 25, 2024, the Company acquired a property, located in Tennessee. As part of the acquisition of the property the Company assumed a $2.8 million loan that previously existed on the property. The loan had an interest rate of 6.25% and matured in April 2026. On April 6, 2026, the company refinanced the loan with the same bank. The loan balance at refinancing was $2.7 million and the company received an interest rate of 6.0%. The loan term ends on March 2031. The loan balance as of June 30, 2026 is $2.6 million 45 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Indebtedness (continued) Outstanding Bond Debt As of June 30, 2026, the Company had outstanding Series A, Series B, Series C (Inc), Series C (BVI) Bonds and Series D Bonds. Series A Bonds In August 2024, Strawberry Fields, Inc completed, directly, an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series A Bonds with a par value of NIS 145.6 million ($37.1 million). The series A Bonds were issued at par. Offering and issuance costs of approximately $1.0 million were incurred at closing. In December 2024, the Company issued an additional NIS 145.6 million ($38.1 million) in Series A Bonds. Exchange of Series D Bonds for Series A Bonds In September 2024 the Company made an exchange tender offer of outstanding Series D Bonds for Series A Bonds. The interest rate on Series D Bonds is 9.1% per annum. The exchange offer rate was 1.069964 Series A Bonds per Series D Bonds. As a result of this offer, NIS 47.3 million Series D Bonds ($12.7 million) were exchanged for NIS 50.6 million Series A Bonds ($13.6 million). As of June 30, 2026, the outstanding balance of Series A Bonds was NIS 302.2 million ($101.5 million) The Series A Bonds are traded on the TASE Series B Bonds In June 2025, Strawberry Fields, Inc completed, directly, an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series B Bonds with a par value of NIS 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). Series C Bonds (Inc) In June 2026, Strawberry Fields, Inc completed, directly, an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series C (Inc) Bonds with a par value of NIS 162.7 million ($55.8 million). The series C Bonds (Inc) were issued at 101% of par. Offering and issuance costs of approximately $3.6 million were incurred at closing. At June 30, 2026, the outstanding balance of the Series C Bonds (Inc) was NIS 162.7 million ($54.7 million). Series C Bonds (BVI) 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). 46 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Series D Bonds In June 2023, the BVI Company completed an initial offering of Series D Bonds with a par value of NIS 82.9 million ($22.9 million). The Series D Bonds were issued at par. During August 2023, the BVI Company issued additional Series D Bonds in the face amount of NIS 70.0 million ($19.2 million). These Series D Bonds were issued at a price of 99.7%. On February 8, 2024, the BVI Company issued additional NIS 98.2 million ($25.7 million) Series D Bonds. These Series D Bonds were issued at a price of 106.3%. Exchange of Series D Bonds for Series A Bonds In September 2024 the Company made an exchange tender offer of outstanding Series D Bonds for Series A Bonds. The interest rate on Series D Bonds is 9.1% per annum. The exchange offer rate was 1.069964 Series A Bonds per Series D Bonds. As a result of this offer, 47.3 million NIS Series D Bonds ($12.7 million) were exchanged for 50.6 million NIS Series A Bonds ($13.6 million). As of June 30, 2026, the Series D Bonds had an outstanding principal balance of approximately NIS 175.8 ($59.0 million). Summary of fixed and variable loans June 30, December 31, 2026 2025 (Amounts in $000s) Fixed rate loans $ 647,606 $ 634,168 Variable rate loans 162,637 160,484 Gross Note payable and senior debt $ 810,243 $ 794,652 47 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Funds From Operations (“FFO”) The Company believes that funds from operations (“FFO”), as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts (“NAREIT”), and adjusted funds from operations (“AFFO”) are important non-GAAP supplemental measures of our operating performance. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization. AFFO is defined as FFO excluding the impact of straight-line rent, above-/below-market leases, non-cash compensation and certain non-recurring items. We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating results among investors and makes comparisons of operating results among REITs more meaningful. We consider FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare our operating performance between periods or as compared to other companies. While FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity or operating performance. FFO and AFFO also do not consider the costs associated with capital expenditures related to our real estate assets nor do they purport to be indicative of cash available to fund our future cash requirements. Further, our computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define AFFO differently than we do. 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: FFO and AFFO Six Months Ended June 30, Three Months Ended June 30, 2026 2025 2026 2025 (dollars in $1,000s) Net income $ 18,412 $ 15,653 $ 8,938 $ 8,662 Depreciation and amortization 22,623 22,594 11,170 11,324 Funds from Operations 41,035 38,247 20,108 19,986 FFO per weighted average common share and OP Units 0.74 0.69 0.36 0.36 Adjustments to FFO: Straight-line rent (4,090 ) (3,022 ) (2,001 ) (1,087 ) Funds from Operations, as Adjusted $ 36,945 $ 35,225 $ 18,107 $ 18,899 AFFO per weighted average common share and OP Units 0.66 0.64 0.32 0.34 48 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued) Subsequent Events On July 31, 2026, the Company redeemed in full the Series C Bonds (BVI) issued by the BVI company. The final redemption payment was for NIS 109.8 million ($34.1 million) and was funded from cash from the condensed consolidated balance sheet. The redemption of Series C Bonds (BVI) released liens on 9 properties previously pledged as collateral for the bond. Critical Accounting Policies and Estimates 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