# Strawberry Fields (STRW) 10-Q SEC filing - Q2 FY2026

- Filed: Aug 6, 2026, 5:15 PM EDT
- Fiscal quarter: Q2 FY2026
- Calendar quarter: Q2 2026
- Accession: 0001493152-26-036400
- OpenCapital page: https://www.opencapital.sh/filings/0001493152-26-036400
- Markdown URL: https://www.opencapital.sh/filings/0001493152-26-036400.md
- Official SEC filing index: https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/0001493152-26-036400-index.htm

## Filing documents

- [10-Q (form10-q.htm)](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/form10-q.htm)
- [EX-31.1 (ex31-1.htm)](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/ex31-1.htm)
- [EX-31.2 (ex31-2.htm)](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/ex31-2.htm)
- [EX-32.1 (ex32-1.htm)](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/ex32-1.htm)
- [EX-32.2 (ex32-2.htm)](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/ex32-2.htm)

---

## 10-Q

SEC source: [form10-q.htm](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/form10-q.htm)

**UNITED
STATES**

**SECURITIES
AND EXCHANGE COMMISSION**

**Washington,
D.C. 20549**

**FORM10-Q**

(Mark
One)

**☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For
the quarterly period ended June 30, 2026

or

**☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For
the transition period from _______________________ to __________

Commission
File Number: **001-41628**

**Strawberry
Fields REIT, Inc.**

(Exact
name of registrant as specified in its charter)

**Maryland** **84-2336054**

(State  or other jurisdiction of (IRS  Employer

incorporation  or organization) Identification  No.)

**6101
Nimtz Parkway, South Bend, IN, 46628**

(Address
of principal executive offices)

**(574) 807-0800**

(Registrant’s
telephone number, including area code)

**N/A**

(Former
name, former address and former fiscal year, if changed since last report)

Securities
registered pursuant to Section 12 (b) of the Act:

Title  of each class Trading  Symbol(s) Name  of each exchange on which registered

Common  stock, par value $0.0001 per share STRW NYSE  American LLC

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large  accelerated filer ☐ Accelerated  filer ☐

Non-accelerated  filer ☒ Smaller  reporting company ☒

Emerging  growth company ☒

If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 14,157,336 shares of common stock, $0.0001 par value, issued and outstanding as of August 6, 2026.

**STRAWBERRY
FIELDS REIT, INC.**

**FORM
10-Q**

**June
30, 2026**

**TABLE
OF CONTENTS**

|  |  | **Page**<br>**No.** |
| --- | --- | --- |
| **PART  I** | [**Financial Information**](#sa_001) | 3 |
| Item  1. | [Condensed Financial Statements of Strawberry Fields REIT, Inc.:](#sa_002) | 3 |
|  | [Condensed Consolidated Balance Sheets June 30, 2026 (unaudited) and December 31, 2025](#sa_003) | 3 |
|  | [Condensed Consolidated Statements of Income and Comprehensive Loss (unaudited) three and six months ended June 30, 2026 and 2025](#sa_004) | 4 |
|  | [Condensed Consolidated Statements of Equity (unaudited) three and six months ended June 30, 2026 and 2025](#sa_005) | 5 |
|  | [Condensed Consolidated Statements of Cash Flows (unaudited) six months ended June 30, 2026 and 2025](#sa_006) | 7 |
|  | [Notes to Condensed Consolidated Financial Statements June 30, 2026 (unaudited)](#sa_007) | 9 |
| Item  2. | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ak_001) | 38 |
| Item  3. | [Quantitative and Qualitative Disclosures About Market Risk](#ak_002) | 49 |
| Item  4. | [Controls and Procedures](#ak_003) | 50 |
| **PART  II** | [Other Information](#ak_004) | 51 |
| Item  1. | [Legal Proceedings](#ak_005) | 51 |
| Item 1A | [Risk factors](#qw_001) | 52 |
| Item  2. | [Unregistered Sales of Equity Securities](#ak_006) | 52 |
| Item 3 | [Defaults Upon Senior Securities](#qw_002) | 52 |
| Item 4 | [Mine Safety Disclosures](#mm_001) | 52 |
| Item  5. | [Other Information](#ak_007) | 52 |
| Item  6. | [Exhibits](#ak_008) | 52 |
|  | [Signatures](#ak_009) | 53 |

**PART
I – FINANCIAL INFORMATION**

## Item 1. Condensed Financial Statements of Strawberry Fields REIT, Inc.: Item
1 - Financial Statements**

**STRAWBERRY FIELDS REIT, INC. and Subsidiaries**

### CONDENSED CONSOLIDATED BALANCE SHEETS

_(Amounts in $000’s, except share data)_

| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
|  | (unaudited) |  |
| Assets |  |  |
| Real estate investments, net | $664,327 | $687,151 |
| Cash and cash equivalents | 42,153 | 31,812 |
| Restricted cash and equivalents | 35,458 | 34,946 |
| Straight-line rent receivable, net | 38,894 | 34,804 |
| Right of use lease asset | 669 | 851 |
| Goodwill, other intangible assets and lease rights | 64,152 | 68,352 |
| Deferred financing expenses | 6,462 | 5,358 |
| Note receivable, net | 24,171 | 20,821 |
| Other assets | 2,169 | 1,130 |
| Total Assets | $878,455 | $885,225 |
| Liabilities |  |  |
| Accounts payable and accrued liabilities | $20,708 | $22,369 |
| Bonds, net | 351,870 | 330,612 |
| Note payable | 38,177 | 42,624 |
| Senior debt | 412,589 | 417,262 |
| Operating lease liability | 669 | 851 |
| Other liabilities | 21,809 | 20,983 |
| Total Liabilities | $845,822 | $834,701 |
| Commitments and Contingencies (Note 8) | - | - |
| Equity |  |  |
| Preferred stock, $.0001 par value, 100,000,000 shares authorized, no shares issued and outstanding | - | - |
| Common stock, $.0001 par value, 500,000,000 shares authorized, 14,069,238 shares and 13,257,425 issued and outstanding | 1 | 1 |
| Additional paid in capital | 20,841 | 18,554 |
| Accumulated other comprehensive loss | (13,824) | (7,682) |
| Retained earnings | 1,238 | 1,233 |
| Total Stockholders’ Equity | $8,256 | $12,106 |
| Non-controlling interest | $24,377 | $38,418 |
| Total Equity | $32,633 | $50,524 |
| Total Liabilities and Equity | $878,455 | $885,225 |

See
accompanying notes to condensed consolidated financial statements.

**STRAWBERRY FIELDS REIT, INC. and Subsidiaries**

### CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS

_(unaudited) · (Amounts in $000’s, except share and per share data)_

| Line item | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Revenues |  |  |  |  |
| Rental revenues | $80,033 | $75,193 | $40,049 | $37,861 |
| Expenses: |  |  |  |  |
| Depreciation | $18,423 | $17,377 | $9,183 | $8,695 |
| Amortization | 4,200 | 5,217 | 1,987 | 2,629 |
| General and administrative expenses | 5,769 | 4,056 | 3,247 | 1,999 |
| Property taxes | 7,699 | 7,425 | 3,962 | 3,775 |
| Facility rent expenses | 304 | 294 | 175 | 147 |
| Total expenses | $36,395 | $34,369 | $18,554 | $17,245 |
| Income from operations | 43,638 | 40,824 | 21,495 | 20,616 |
| Interest expense, net | $(23,906) | $(24,001) | $(11,820) | $(11,365) |
| Amortization of deferred financing costs | (410) | (402) | (209) | (201) |
| Mortgage insurance premium | (759) | (776) | (377) | (388) |
| Total interest expense | $(25,075) | $(25,179) | $(12,406) | $(11,954) |
| Other (loss) income: |  |  |  |  |
| Other (loss) income | (151) | 8 | (151) | - |
| Net income | $18,412 | $15,653 | $8,938 | $8,662 |
| Less - |  |  |  |  |
| Net income attributable to non-controlling interest | (13,974) | (12,113) | (6,780) | (6,706) |
| Net income attributable to common stockholders | 4,438 | 3,540 | 2,158 | 1,956 |
| Other comprehensive loss: |  |  |  |  |
| Loss due to foreign currency translation | (25,001) | (16,746) | (22,526) | (20,820) |
| Comprehensive loss attributable to non-controlling interest | 18,859 | 12,967 | 16,980 | 16,118 |
| Comprehensive loss | $(1,704) | $(239) | $(3,388) | $(2,746) |
| Net income attributable to common stockholders | $4,438 | $3,540 | 2,158 | 1,956 |
| Basic and diluted income per common share | $.33 | $.29 | $.16 | $.16 |
| Weighted average number of common shares outstanding | 13,400,894 | 12,327,563 | 13,454,882 | 12,457,560 |

See
accompanying notes to condensed consolidated financial statements

**STRAWBERRY FIELDS REIT, INC. and Subsidiaries**

### CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

_(Amounts in $000’s**)_

| Line item | Number of common shares | Common Stock at Par | Additional Paid-in Capital | Accumulated other comprehensive income | Retained Earnings | Non- controlling interest | Total |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Balance, December 31, 2024 | 12,062,309 | $1 | $16,535 | $340 | $1,292 | $65,403 | $83,571 |
| Issuance of common stock in exchange for OP units (unaudited) | 250,000 | - | - | - | - | - | - |
| ATM common stock sales (unaudited) | 190,972 | - | 2,244 | - | - | - | 2,244 |
| Employee common stock bonus (unaudited) | 6,450 | - | 72 | - | - | - | 72 |
| OP Units Retirement (unaudited) | - | - | - | - | - | (2,026) | (2,026) |
| Dividends (unaudited) | - | - | - | - | (1,714) | - | (1,714) |
| Non-controlling interest distributions (unaudited) | - | - | - | - | - | (6,020) | (6,020) |
| Net change in foreign currency translation (unaudited) | - | - | - | 923 | - | 3,151 | 4,074 |
| Reallocation of non- controlling interest (unaudited) | - | - | (1,659) | - | - | 1,659 | - |
| Net income (unaudited) | - | - | - | - | 1,584 | 5,407 | 6,991 |
| Balance, March 31, 2025 (unaudited) | 12,509,731 | $1 | $17,192 | $1,263 | $1,162 | $67,574 | $87,192 |
| Common Stock Retirement (unaudited) | (64,636) | - | (652) | - | - | - | (652) |
| OP Units Converted to Common Stock (unaudited) | 547,500 | - | - | - | - | - | - |
| Dividends (unaudited) | - | - | - | - | (1,742) | - | (1,742) |
| Non-controlling interest distributions (unaudited) | - | - | - | - | - | (6,020) | (6,020) |
| Net change in foreign currency translation (unaudited) | - | - | - | (4,702) | - | (16,118) | (20,820) |
| Reallocation of non-controlling interest (unaudited) | - | - | 1,014 | - | - | (1,014) | - |
| Net income (unaudited) | - | - | - | - | 1,956 | 6,706 | 8,662 |
| Balance, June 30, 2025 (unaudited) | 12,992,595 | $1 | $17,554 | $(3,439) | $1,376 | $51,128 | $66,620 |

See
accompanying notes to condensed consolidated financial statements

**S**TRAWBERRY FIELDS REIT, INC. and Subsidiaries**

### CONDENSED CONSOLIDATED STATEMENTS OF EQUITY, continued

_(Amounts in $000’s)_

| Line item | Number of common shares | Common Stock at Par | Additional Paid-in Capital | Accumulated other comprehensive income | Retained Earnings | Non- controlling interest | Total |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Balance, December 31, 2025 | 13,257,425 | $1 | $18,554 | $(7,682) | $1,233 | $38,418 | $50,524 |
| Issuance of common stock in exchange for OP units (unaudited) | 100,000 | - | - | - | - | - | - |
| ATM common stock sales (unaudited) | 34,207 | - | 441 | - | - | - | 441 |
| Employee common stock bonus (unaudited) | 6,675 | - | 88 | - | - | - | 88 |
| Stock Based Compensation | - | - | - | - | - | 1,500 | 1,500 |
| Dividends (unaudited) | - | - | - | - | (2,140) | - | (2,140) |
| Non-controlling interest distributions (unaudited) | - | - | - | - | - | (6,778) | (6,778) |
| Net change in foreign currency translation (unaudited) | - | - | - | (596) | - | (1,879) | (2,475) |
| Reallocation of non- controlling interest (unaudited) | - | - | 48 | - | - | (48) | - |
| Net income (unaudited) | - | - | - | - | 2,280 | 7,194 | 9,474 |
| Balance, March 31, 2026 (unaudited) | 13,398,307 | $1 | $19,131 | $(8,278) | $1,373 | $38,407 | $50,634 |
| OP Units Converted to Common Stock (unaudited) | 573,262 | - | - | - | - | - | - |
| ATM common stock sales (unaudited) | 97,669 | - | 1,294 | - | - | - | 1,294 |
| Warrants | - | - | 3,608 | - | - | - | 3,608 |
| Stock Based Compensation | - | - | - | - | - | 175 | 175 |
| Dividends (unaudited) | - | - | - | - | (2,293) | - | (2,293) |
| Non-controlling interest distributions (unaudited) | - | - | - | - | - | (7,197) | (7,197) |
| Net change in foreign currency translation (unaudited) | - | - | - | (5,546) | - | (16,980) | (22,526) |
| Reallocation of non-controlling interest (unaudited) | - | - | (3,192) | - | - | 3,192 | - |
| Net income (unaudited) | - | - | - | - | 2,158 | 6,780 | 8,938 |
| Balance, June 30, 2026 (unaudited) | 14,069,238 | $1 | $20,841 | $(13,824) | $1,238 | $24,377 | $32,633 |

See
accompanying notes to condensed consolidated financial statements

**STRAWBERRY FIELDS REIT, INC. and Subsidiaries**

### CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

_(Amounts in $000’s)_

| Line item | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
| --- | --- | --- |
| Cash flows from operating activities: |  |  |
| Net income | $18,412 | $15,653 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| Depreciation and amortization | 22,623 | 22,594 |
| Amortization of bond issuance costs | 1,246 | 1,380 |
| Stock based compensation | 1,763 | 72 |
| Amortization of deferred financing costs | 410 | 402 |
| Loss on sale of real estate investments | 151 | - |
| Increase in other assets | (1,039) | (723) |
| Amortization of right of use lease asset | 182 | 175 |
| Foreign currency translation adjustments | 3,089 | 4,086 |
| Increase in straight-line rent receivables, net | (4,090) | (3,022) |
| (Decrease) Increase in accounts payable and accrued liabilities and other liabilities | (835) | 8,339 |
| Repayment of operating lease liability | (182) | (175) |
| Net cash provided by operating activities | $41,730 | $48,781 |
| Cash flow from investing activities: |  |  |
| Sale (purchase) of real estate investments | $4,250 | $(40,500) |
| (Increases) decreases in notes receivable | (3,350) | 77 |
| Net cash provided by (used in) investing activities | $900 | $(40,423) |
| Cash flows from financing activities: |  |  |
| Proceeds from issuance of bonds, net | $52,221 | $85,979 |
| Deferred financing cost | (1,514) | - |
| Proceeds from issuance of ATM sales, net | 1,735 | 2,244 |
| Repayment of bonds | (56,691) | - |
| Repayment of senior debt | (4,673) | (36,593) |
| Repayment of note payable | (4,447) | (4,026) |
| Payment of dividends | (4,433) | (3,456) |
| Non-controlling interest distributions | (13,975) | (12,040) |
| OP unit retirement | - | (2,026) |
| Common stock retirement | - | (652) |
| Net cash (used in) provided by financing activities | $(31,777) | $29,430 |
| Increase in cash and cash equivalents and restricted cash and equivalents | $10,853 | $37,788 |
| Cash and cash equivalents and restricted cash and equivalents at the beginning of the period | $66,758 | $93,656 |
| Cash and cash equivalents and restricted cash and equivalents at the end of the period | $77,611 | $131,444 |

**STRAWBERRY FIELDS REIT, INC. and Subsidiaries**

### CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

_(Amounts in $000’s)_

| Line item | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
| --- | --- | --- |
| Supplemental Disclosure of Cash Flow Information: |  |  |
| Cash paid during the period for interest | $37,778 | $22,925 |
| Supplemental schedule of noncash activities: |  |  |
| Stock Warrants associated with bond offering | $3,608 | - |
| Foreign currency translation adjustments | $(25,001) | $(16,746) |
| Note Payable in exchange for acquisition of intangible asset | - | $50,880 |
| Transfer of other assets to real estate Investments, net | - | 4,243 |
| Transfer of accrued stock based compensation to equity | $1,500 | - |

See
accompanying notes to condensed consolidated financial statements

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

### **NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 1. Business**

***Overview***

***The
Company***

STRAWBERRY
FIELDS REIT, Inc. (the “Company”) is a Maryland corporation formed in July 2019. The Company commenced operations on June
8, 2021. The Company conducts its business through a traditional UPREIT structure in which substantially all its assets are owned by
subsidiaries of Strawberry Fields Realty, LP, a Delaware limited partnership formed in July 2019 (the “Operating Partnership”).
The Company is the general partner of the Operating Partnership. The Company owns approximately 25.3% and 24.0% of the outstanding Operating
Partnership units (“OP units”) as of June 30, 2026 and December 31, 2025, respectively.

As
the sole general partner of the Operating Partnership, the Company has the exclusive power under the partnership agreement to manage
and conduct the business affairs of the Operating Partnership, subject to certain limited approval and voting rights of the limited partners.
The Company may cause the Operating Partnership to issue additional OP units in connection with property acquisitions, compensation or
otherwise. The Company became a publicly traded entity on September 21, 2022.

The
Company is engaged in the ownership, acquisition, financing and triple-net leasing of skilled nursing facilities and other post-acute
healthcare properties. As of June 30, 2026, the Company’s portfolio consists of 132 healthcare properties and one leased property
that is in turn leased to a tenant that operates the facilities. As of December 31, 2025, the Company owned 132 properties and leased
one property that it in turn subleased to a tenant that operates the facility. As of June 30, 2026, the portfolio properties are located
in Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas. The Company generates substantially
all of its revenues by leasing its 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 its properties is managed by a qualified operator with an experienced management team.

***Interim
Condensed Consolidated Financial Statements***

The
accompanying unaudited, condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted
accounting principles in the United States of America (“GAAP”) for interim financial information, and the Securities and
Exchange Commission (“SEC”) rules for interim financial reporting. Certain information and footnote disclosures normally
included in the condensed consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to such rules
and regulations. However, in the opinion of management, the accompanying interim condensed consolidated financial statements reflect
all normal recurring adjustments necessary to present fairly the Company’s condensed consolidated financial position as of June
30, 2026, and the condensed consolidated results of operations and cash flows for the periods presented. The condensed consolidated results
of operations for interim periods are not necessarily indicative of the results of operations to be expected for any subsequent interim
period or for the fiscal year ending December 31, 2026.

***Variable
Interest Entity***

The
Company consolidates the Operating Partnership, a variable interest entity (“VIE”) in which the Company is considered the
primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact
the entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the
VIE that could be significant to the VIE.

***Non-Controlling
Interest***

A
non-controlling interest is defined as the portion of the equity in an entity not attributable, directly or indirectly, to the primary
beneficiary. Non-controlling interests are required to be presented as a separate component of equity on condensed consolidated balance
sheets. Accordingly, the presentation of net income is modified to present the income attributed to controlling and non-controlling interests.
The non-controlling interest on the Company’s condensed consolidated balance sheets represents OP units not held by the Company
and represents approximately 74.7% and 76.0% of the outstanding OP Units issued by the Operating Partnership as of June 30, 2026 and
December 31, 2025, respectively. The holders of these OP units are entitled to share in cash distributions from the Operating Partnership
in proportion to their percentage ownership of OP units. Net income is allocated to the non-controlling interest based on the weighted
average of OP units outstanding during the period.

***Basis
of Presentation***

The
Company maintains its accounting records on an accrual basis in accordance with GAAP.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 2. Summary of Significant Accounting Policies**

***Fiscal
Year End***

The
Company has adopted a fiscal year end of December 31.

***Use
of Estimates***

Management
is required to make estimates and assumptions in the preparation of the condensed consolidated financial statements in conformity with
GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results may differ from management’s estimates.

***Principles
of Consolidation***

The
accompanying condensed consolidated financial statements include the accounts of the Company and the Operating Partnership and its wholly-owned
subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.

***Cash
and Cash Equivalents***

Cash
and cash equivalents consist of cash on hand and short-term investments with original maturities of three months or less when purchased.

The
Company’s cash, cash equivalents and restricted cash and cash equivalents periodically exceed federally insurable limits. The Company
monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could
be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date,
the Company has experienced no loss or lack of access to the cash in its operating accounts. On June 30, 2026 and December 31, 2025,
the Company had $61.2 million and $53.1 million, respectively, on deposit in excess of federally insured limits.

***Restricted
Cash and Cash Equivalents***

Restricted
cash primarily consists of amounts held by mortgage lenders to provide for real estate tax expenditures, tenant improvements, capital
expenditures and security deposits, as well as escrow accounts related to principal and interest payments on Bonds.

***Real
Estate Depreciation***

Real
estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected life of the asset
on a straight-line basis. The Company considers the period of future benefit of an asset to determine its appropriate useful life. The
Company does not incur expenditures for tenant improvements as they are the responsibility of the tenant per their respective leases.
The Company anticipates the estimated useful lives of its assets by class to be generally as follows:

 Schedule
of Assets Useful Lives

Building  and improvements 7-45  years

Equipment  and personal property 2-18  years

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 2. Summary of Significant Accounting Policies (Cont.)**

***Real
Estate Valuation***

In
determining fair value and the allocation of the purchase price of acquisitions, the Company uses current appraisals or third-party valuations
services. The most significant components of these allocations are typically the allocation of fair value to land and buildings and,
for certain of its acquisitions, in place leases and other intangible assets. In the case of the fair value of buildings and the allocation
of value to land and other intangibles, the estimates of the values of these components will affect the amount of depreciation and amortization
the Company records over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of
in place leases, the Company makes best estimates based on the evaluation of the specific characteristics of each tenant’s lease.
Factors considered include estimates of carrying costs during hypothetical expected lease up periods, market conditions and costs to
execute similar leases. These assumptions affect the amount of future revenue that the Company will recognize over the remaining lease
term for the acquired in place leases.

The
Company evaluates each purchase transaction to determine whether the acquired assets meet the definition of a business. Transaction costs
related to acquisitions that are not deemed to be businesses are included in the cost basis of the acquired assets, while transaction
costs related to acquisitions that are deemed to be businesses are expensed as incurred. All of the Company’s acquisitions of investment
properties qualified as asset acquisitions during the periods.

***Revenue
Recognition***

Rental
income from operating leases is generally recognized on a straight-line basis over the terms of the leases. Substantially all of the
Company’s leases contain provisions for specified annual increases over the rents of the prior year and are generally computed
in one of three methods depending on specific provisions of each lease as follows:

(i) a  specified annual increase over the prior year’s rent, generally between 1.0% and 3.0%;

(ii) a  calculation based on the Consumer Price Index; or

(iii) specific  dollar increases.

Contingent
revenue is not recognized until all possible contingencies have been eliminated. The Company considers the operating history of the lessee
and the general condition of the industry when evaluating whether all possible contingencies have been eliminated and have historically,
and expect in the future, to not include contingent rents as income until received. The Company follows a policy related to rental income
whereby the Company considers a lease to be non-performing after 60 days of non-payment of past due amounts and does not recognize unpaid
rental income from that lease until the amounts have been received.

Rental
revenues relating to non-contingent leases that contain specified rental increases over the life of the lease are recognized on the straight-line
basis. Recognizing income on a straight-line basis requires us to calculate the total non-contingent rent containing specified rental
increases over the life of the lease and to recognize the revenue evenly over that life. This method results in rental income in the
early years of a lease being higher than actual cash received, creating a straight-line rent receivable asset included in our accompanying
condensed consolidated balance sheets. At some point during the lease, depending on its terms, the cash rent payments eventually exceed
the straight-line rent which results in the straight-line rent receivable asset decreasing to zero over the remainder of the lease term.
The Company assesses the collectability of straight-line rent in accordance with the applicable accounting standards and reserve policy.
If the lessee becomes delinquent in rent owed under the terms of the lease, the Company may provide a reserve against the recognized
straight-line rent receivable asset for a portion, up to its full value, that the Company estimates may not be recoverable.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 2. Summary of Significant Accounting Policies (Cont.)**

***Revenue
Recognition (Cont.)***

Capitalized
above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. Capitalized
below-market leases are accreted to rental income over the remaining terms of the respective leases and expected below-market renewal
option periods.

The
Company reports revenues and expenses within our triple-net leased properties for real estate taxes that are escrowed and obligations
of the tenants in accordance with their respective lease with us.

Gain
from sale of real estate investments is recognized when control of the property is transferred and it is probable that substantially
all consideration will be collected.

***Allowance
for Credit losses***

The
Company evaluates the liquidity and creditworthiness of its tenants, operators and borrowers on a monthly and quarterly basis. The Company’s
evaluation considers industry and economic conditions, individual and portfolio property performance, credit enhancements, liquidity
and other factors. The Company’s tenants, borrowers and operators furnish property, portfolio and guarantor/operator-level financial
statements, among other information, on a monthly or quarterly basis; the Company utilizes this financial information to calculate the
lease or debt service coverages that it uses as a primary credit quality indicator. Lease and debt service coverage information is evaluated
together with other property, portfolio and operator performance information, including revenue, expense, net operating income, occupancy,
rental rate, reimbursement trends, capital expenditures and EBITDA (defined as earnings before interest, tax, depreciation and amortization),
along with other liquidity measures. The Company evaluates, on a monthly basis or immediately upon a significant change in circumstance,
its tenants’, operators’ and borrowers’ ability to service their obligations with the Company.

The
Company maintains an allowance for credit losses for straight-line rent receivables resulting from tenants’ inability to make
contractual rent and tenant recovery payments or lease defaults. For straight-line rent receivables, the Company’s assessment is
based on amounts estimated to be recoverable over the lease term.

***Impairment
of Long-Lived Assets and Goodwill***

The
Company assesses the carrying value of real estate assets and related intangibles (“real estate assets”) when events or changes
in circumstances indicate that the carrying value may not be recoverable. The Company tests its real estate assets for impairment by
comparing the sum of the expected future undiscounted cash flows to the carrying value of the real estate assets. The expected future
undiscounted cash flows are calculated utilizing the lowest level of identifiable cash flows that are largely independent of the cash
flows of other assets and liabilities. If the carrying value exceeds the expected future undiscounted cash flows, an impairment loss
will be recognized to the extent that the carrying value of the real estate assets is greater than their fair value.

Goodwill
is tested for impairment at least annually based on certain qualitative factors to determine if it is more likely than not that the fair
value of a reporting unit is less than its carrying value. Potential impairment indicators include a significant decline in real estate
values, significant restructuring plans, current macroeconomic conditions, state of the equity and capital markets or a significant decline
in the Company’s market capitalization. If the Company determines that it is more likely than not that the fair value of a reporting
unit is less than its carrying value, the Company applies the required two-step quantitative approach. The quantitative procedures of
the two-step approach (i) compare the fair value of a reporting unit with its carrying value, including goodwill, and, if necessary,
(ii) compare the implied fair value of reporting unit goodwill with the carrying value as if it had been acquired in a business combination
at the date of the impairment test. The excess fair value of the reporting unit over the fair value of assets and liabilities, excluding
goodwill, is the implied value of goodwill and is used to determine the impairment amount, if any. The Company has selected the fourth
quarter of each fiscal year to perform its annual impairment test.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 2. Summary of Significant Accounting Policies (Cont.)**

***Concentrations
of Credit Risk***

Financial
instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted
cash and cash equivalents, notes receivable and operating leases on owned properties. These financial instruments are subject to the
possibility of loss of carrying value as a result of the failure of other parties to perform according to their contractual obligations
or changes in market prices which may make the instrument less valuable. Cash and cash equivalents, restricted cash and equivalents are
held with various financial institutions. From time to time, these balances exceed the federally insured limits. These balances are maintained
with high quality financial institutions which management believes limits the risk.

With
respect to notes receivable, the Company obtains various collateral and other protective rights, and continually monitors these rights,
to reduce such possibilities of loss. In addition, the Company provides reserves for potential losses based upon management’s periodic
review of our portfolio.

On
June 30, 2026 and December 31, 2025, the Company held five and six notes receivable with an outstanding balance of $24.2 and $20.8 million,
respectively. The notes have maturities ranging from 2026 through 2046, and interest rates ranging from 5% to 10.25%. One of the notes
is collateralized by tenants’ accounts receivable. All other notes receivable are uncollateralized as of June 30, 2026.

***Market
Concentration Risk***

As
of June 30, 2026 and December 31, 2025, the Company owned 132 and leased 1 property. The facilities are located in 10 states, with 20
facilities of its total facilities located in Illinois (which include 4,226 skilled nursing and assisted living beds or 27.3% of the
Company’s total beds) and 41 of its total facilities in Indiana (which include 3,404 skilled nursing and assisted living beds or
22.0% of the Company’s total beds). Since tenant revenue is primarily generated from Medicare and Medicaid, the operations of the
Company are indirectly subject to the administrative directives, rules and regulations of federal and state regulatory agencies, including,
but not limited to the Centers for Medicare & Medicaid Services, and the Department of Health and Aging in all states in which the
Company operates. Such administrative directives, rules and regulations, including budgetary reimbursement funding, are subject to change
by an act of Congress, the passage of laws by the state regulators or an administrative change mandated by one of the executive branch
agencies. Such changes may occur with little notice or inadequate funding to pay for the related costs, including the additional administrative
burden, to comply with a change.

***Debt
and Capital Raising Issuance Costs***

Costs
incurred in connection with the issuance of equity interests are recorded as a reduction of additional paid-in capital. Debt issuance
costs related to debt instruments, excluding line of credit arrangements, are deferred, recorded as a reduction of the related debt liability,
and amortized to interest expense over the remaining term of the related debt liability utilizing the interest method. Deferred financing
costs related to line of credit arrangements are deferred, recorded as an asset and amortized to interest expense over the remaining
term of the related line of credit arrangement utilizing the interest method.

Penalties
incurred to extinguish debt and any remaining unamortized debt issuance costs, discounts and premiums are recognized as income or expense
in the condensed consolidated statements of income at the time of extinguishment.

***Segment
Reporting***

Accounting
guidance regarding disclosures about segments of an enterprise and related information establishes standards for the manner in which
public business enterprises report information about operating segments. The Company’s investment decisions in health care properties,
and resulting investments are managed as a single operating segment for internal reporting and for internal decision-making purposes.
Therefore, the Company has concluded that it operates as a single segment. The Chief Operating Decision Makers for the segment is/are:
Moishe Gubin, Chairman and Chief Executive Officer and Greg Flamion, Chief Financial Officer.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 2. Summary of Significant Accounting Policies (Cont.)**

***Basic
and Diluted Income Per Common Share***

The
Company calculates basic income per common share by dividing net income attributable to common stockholders by the weighted average
number of common shares outstanding during the period. At June 30, 2026 and 2025, there were 41,803,503 and 42,452,408 OP units outstanding and 2,603,936 warrants which were potentially dilutive securities. During the three and six month periods ended June 30, 2026 and 2025 the assumed
conversion of the OP units and warrants had no impact on basic and diluted income per share.

***Foreign
Currency Translation and Transactions***

Assets
and liabilities denominated in foreign currencies that are translated into U.S. dollars use exchange rates in effect at the end of the
period, and revenues and expenses denominated in foreign currencies that are translated into U.S. dollars use average rates of exchange
in effect during the related period. Gains or losses resulting from translation are included in accumulated other comprehensive loss,
a component of equity on the condensed consolidated balance sheets.

Gains
or losses resulting from foreign currency transactions are translated into U.S. dollars at the rates of exchange prevailing at the
dates of the transactions. The effects of transaction gains or losses, if any, are included in other (loss) income, in the
condensed consolidated statements of income.

***Fair
Value Measurement***

The
Company measures and discloses the fair value of nonfinancial and financial assets and liabilities utilizing a hierarchy of valuation
techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace.
Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market
assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value
hierarchy:

- Level 1—quoted prices for identical instruments in active markets;
- Level 2—quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets
that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active
markets; and

- Level 3—fair value measurements derived from valuation techniques in which one or more significant inputs or significant value
drivers are unobservable.

The
Company measures fair value using a set of standardized procedures that are outlined herein for all assets and liabilities which are
required to be measured at fair value. When available, the Company utilizes quoted market prices from an independent third-party source
to determine fair value and classifies such items in Level 1. In instances where a market price is available, but the instrument is in
an inactive or over-the-counter market, the Company consistently applies the dealer (market maker) pricing estimate and classifies the
asset or liability in Level 2. If quoted market prices or inputs are not available, fair value measurements are based upon valuation
models that utilize current market or independently sourced market inputs, such as interest rates, option volatilities, credit spreads
and/or market capitalization rates. Items valued using such internally generated valuation techniques are classified according to the
lowest level input that is significant to the fair value measurement. As a result, the asset or liability could be classified in either
Level 2 or Level 3 even though there may be some significant inputs that are readily observable. Internal fair value models and techniques
used by the Company include discounted cash flow valuation models.

***Real
Estate Investments – Held for Sale***

As
of June 30, 2026 and December 31, 2025, the Company had one property included in real estate investments which was held for sale and
carried at the lower of its net book value or fair value on a non-recurring basis on the condensed consolidated balance sheets. The Company’s
real estate investments held for sale were classified as Level 3 of the fair value hierarchy.

***Stock-Based
Compensation***

The
Company accounts for share-based payment awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC
718”). ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the condensed consolidated
financial statements. ASC 718 requires all entities to apply a fair value-based measurement method in accounting for share-based payment
transactions. The Company recognizes share-based payments over the vesting period.

***Warrants***

Warrants issued with our Series
C Bonds (Inc) are accounted for under the fair value and relative fair value method. The warrant is first analyzed per its terms as to
whether it has derivative features or not. If the warrant is determined to be a derivative and not qualify for equity treatment, then
it is measured at fair value using the Black Scholes Option pricing model and recorded as a liability on the condensed consolidated balance
sheets. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is “marked-to-market”).
If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes Option
pricing model, however, limited to a relative fair value based upon the percentage of its fair value to the total fair value including
the fair value of the Series C Bonds (Inc). Bonds are recorded at fair value, limited to a relative fair value based upon the percentage
of its fair value to the total fair value including the fair value of the warrant. The warrant relative fair values are also recorded
as a discount to the Series C Bonds (Inc).

***Recent
Accounting Pronouncements***

In
November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03,
“Expense Disaggregation Disclosures.” ASU 2024-03 requires disclosure to disaggregate prescribed expenses within relevant
income statement captions. The standard is effective for fiscal years beginning after December 15, 2026 and for interim periods after
December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes to its existing disclosures.

In
July 2025, the FASB issued ASU No. 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for
Accounts Receivable and Contract Assets The ASU provides an optional practical expedient for estimating future credit losses based on
current conditions as of the balance sheet date and assuming those conditions do not change over the remaining life of the accounts receivable.
This standard is effective January 1, 2026. The Company does not expect this ASU to have a material impact on the condensed consolidated
results of operations and financial condition.

In
September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted
Improvements to the Accounting for Internal-Use Software. The ASU removes references to prescriptive software development stages and
includes an updated framework for capitalizing internal software costs. This standard is effective January 1, 2028. The Company is currently
evaluating this ASU’s impact on the condensed consolidated results of operations and financial condition.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 3. Restricted Cash and Equivalents**

The
following table presents the Company’s restricted cash and equivalents and escrow deposits:

Schedule of Restricted Cash and Equivalents and Escrow Deposits

_(amounts in $000’s)_

| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Escrow with Trustee | - | $2,170 |
| MIP escrow accounts | 1,293 | 790 |
| Other escrow and debt deposits | 708 | 270 |
| Property tax and insurance escrow | 5,670 | 6,815 |
| Interest and expense reserve bonds escrow | 14,162 | 12,696 |
| HUD replacement reserves | 13,625 | 12,205 |
| Total restricted cash and equivalents | $35,458 | $34,946 |

*Escrow
with trustee* - The Company transfers funds to the trustee for its Series A, B, C (BVI), C (Inc) and D bonds to cover principal
and interest payments prior to the payment date.

*MIP
escrow* accounts - The Company is required to make monthly escrow deposits for mortgage insurance premiums on the HUD guaranteed mortgage
loans.

*Other
escrow and debt deposits* – The Company funds various escrow accounts under certain of its loan agreements, primarily to cover
debt service on underlying loans.

*Property
tax and insurance escrow* - The Company funds escrows for real estate taxes and insurance under certain of its loan agreements.

*Interest
and expense reserve bonds escrow -* The indentures for the Series A, B, C (BVI), C (Inc) and D Bonds require the funding of a
six-month interest reserve as well as an expense reserve. See Note 7 - Bonds, Note Payable and Other Debt.

*HUD
replacement reserves* - The Company is required to make monthly payments into an escrow for replacement and improvement of the project
assets covered by HUD guaranteed mortgage loans. A portion of the replacement reserves are required to be maintained until the applicable
loan is fully paid.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 4. Real Estate Investments, net**

***Acquisition
of Properties***

There
were no acquisitions of properties during the six month period ending June 30, 2026.

On
January 1, 2025, the Company entered into a new master lease for 10 Kentucky properties formally part of the Landmark Master Lease. Base
rent is $23.3 million a year and is subject to an increase based on CPI with a minimum increase of 2.50%. The initial lease term is 10
years with four 5-year extension options. Also, as part of the negotiation of the new Kentucky Master Lease, the Company entered into
a 5 year note payable with the parent of the Landmark tenant for $50.9 million, included in the note payable in the accompanying
condensed consolidated balance sheets.

On
January 2, 2025, the Company acquired 6 facilities consisting of 354 beds in Kansas. The acquisition was $24.0 million and the Company
funded the acquisition utilizing the cash from the condensed consolidated balance sheets. The Company formed a new master lease for an
initial 10-year period that included two 5-year extension options on a triple-net basis. Additionally, the lease will increase the Company’s
annual rents by $2.4 million and is subject to 3% annual increases.

On
March 31, 2025, the Company acquired a skilled nursing facility with 100 licensed beds near Oklahoma City, Oklahoma. The acquisition
was $5.0 million and was funded utilizing cash from the condensed consolidated balance sheets. The initial term of the lease is 10 years
and includes two 5-year extension options. Base rent for the property is $0.5 million annually and is subject to 3% annual increases.

On
April 4, 2025, the Company completed the acquisition for a skilled nursing facility with 112 licensed beds near Houston, Texas. The acquisition
was for $11.5 million. Base rent for this property is $1.3 million dollars annually. The property was added to an existing master lease
and is subject an annual base rate increase of 3%. The initial term is approximately 10 years and includes two 5 year extensions.

On May 11, 2026, the Company sold a skilled nursing facility that was part of 8200 National Drive, a property in
Oklahoma that was formally in independent lease, to a third-party operator. The property sold for $4.4 million. A loss of $0.15 million resulted from this sale. The Company still retains ownership interest in the Long-Term Acute Care Hospital that is part
of the 8200 National Drive property.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 4. Real Estate Investments, net (Cont.)**

Real
estate investments consist of the following:

Schedule of Real Estate Investment 

_(Years) · (Amounts in $000’s)_

| Line item | Estimated Useful Lives | June 30, 2026 | December 31, 2025 |
| --- | --- | --- | --- |
| Buildings and improvements | 7-45 | $769,218 | $773,555 |
| Equipment and personal property | 2-18 | 123,072 | 123,072 |
| Land | - | 72,524 | 72,586 |
| Real estate investments, gross |  | 964,814 | 969,213 |
| Less: accumulated depreciation |  | (300,487) | (282,062) |
| Real estate investments, net |  | $664,327 | $687,151 |

For
the three-month periods ended June 30, 2026 and 2025, total depreciation expense was $9.2 million and $8.7 million, respectively. For
the six-month periods ended June 30, 2026 and 2025, total depreciation expense was $18.4 million and $17.4 million, respectively.

### **NOTE 5. Intangible Assets and Goodwill**

Intangible
assets consist of the following goodwill, Certificate of Need (“CON”) licenses and lease rights:

Schedule of Intangible Assets and Goodwill 

_(Amounts in $000’s)_

| Balances, December 31, 2024 | Goodwill including CON Licenses | Lease Rights | Total |
| --- | --- | --- | --- |
| Gross | $1,323 | 78,577 | 79,900 |
| Accumulated amortization | - | (51,953) | (51,953) |
| Net carrying amount | 1,323 | 26,624 | 27,947 |
| Acquisition of lease rights | - | 50,880 | 50,880 |
| Amortization | - | (5,217) | (5,217) |
| Balances, June 30, 2025 |  |  |  |
| Gross | 1,323 | 129,457 | 130,780 |
| Accumulated amortization | - | (57,170) | (57,170) |
| Net carrying amount | $1,323 | 72,287 | 73,610 |
| Balances, December 31, 2025 |  |  |  |
| Gross | $1,323 | 129,457 | 130,780 |
| Accumulated amortization | - | (62,428) | (62,428) |
| Net carrying amount | 1,323 | 67,029 | 68,352 |
| Amortization | - | (4,200) | (4,200) |
| Balances, June 30, 2026 |  |  |  |
| Gross | 1,323 | 129,457 | 130,780 |
| Accumulated amortization | - | (66,629) | (66,629) |
| Net carrying amount | $1,323 | 62,828 | 64,151 |

Estimated
amortization expense for all lease rights for each of the future years ending December 31, is as follows:

Schedule
of Estimated Amortization Expenses For Lease Rights 

_(Amounts in $000’s)_

| Line item | Amortization of Lease Rights |
| --- | --- |
| 2026 (six months) | $3,975 |
| 2027 | 7,949 |
| 2028 | 7,564 |
| 2029 | 7,488 |
| 2030 | 7,488 |
| Thereafter | 28,364 |
| Total | $62,828 |

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 6. Leases**

As
of June 30, 2026 and December 31, 2025, the Company had leased 133 properties to tenant/operators in the States of Arkansas, Illinois,
Indiana, Kansas, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas. As of June 30, 2026 and December 31, 2025, all the Company’s
facilities were leased. Most of these facilities are leased on a triple net basis, meaning that the lessee (*i.e*., operator of
the facility) is obligated under the lease for all expenses of the property in respect to insurance, taxes and property maintenance,
as well as the lease payments.

The
following table provides additional information regarding the properties owned/leased by the Company for the periods indicated:

Schedule of Properties Owned/Leased Information 

| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Cumulative number of properties | 133 | 133 |
| Cumulative number of operational beds | 15,496 | 15,602 |

The
following table provides additional information regarding the facilities leased by the Company as of June 30, 2026:

Schedule of Additional Information on Properties Facilities Leased 

| State | Number of Operational Beds/Units | Owned by Company | Leased by Company | Total |
| --- | --- | --- | --- | --- |
| Illinois | 4,226 | 20 | - | 20 |
| Indiana | 3,404 | 35 | 1 | 36 |
| Ohio | 238 | 4 | - | 4 |
| Tennessee | 1,412 | 15 | - | 15 |
| Kentucky | 1,163 | 10 | - | 10 |
| Arkansas | 1,568 | 13 | - | 13 |
| Oklahoma | 371 | 5 | - | 5 |
| Texas | 839 | 6 | - | 6 |
| Missouri | 1,921 | 18 | - | 18 |
| Kansas | 354 | 6 | - | 6 |
| Total Properties | 15,496 | 132 | 1 | 133 |
| Facility Type |  |  |  |  |
| Skilled Nursing Facilities | 15,089 | 129 | 1 | 130 |
| Long-Term Acute Care Hospitals | 63 | 2 | - | 2 |
| Assisted Living Facility | 344 | 10 | - | 10 |
| Total facilities | 15,496 | 141 | 1 | 142 |

As
of June 30, 2026, total future minimum rental revenues for the Company’s tenants are as follows:

Schedule of Future Minimum Rental Revenues 

| Year | Amount |
| --- | --- |
| (Amounts in $000s) |  |
| 2026 (six month period) | $67,770 |
| 2027 | 137,720 |
| 2028 | 135,913 |
| 2029 | 130,132 |
| 2030 | 131,165 |
| Thereafter | 404,725 |
| Total | $1,007,425 |

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 6. Leases (Cont.)**

The
following table provides summary information regarding the number of operational beds associated with a property leased by the Company
and subleased to a third-party operator:

  Schedule of Property Leases to Third Parties 

| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Number of facilities leased and subleased to third parties | 1 | 1 |
| Number of operational beds | 68 | 68 |

Right
of use asset and operating lease liability are disclosed as separate line items in the condensed consolidated balance sheets and are
valued based on the present value of the future minimum lease payments at the lease commencement. As the Company’s leases do not
provide an implicit rate, the Company used its incremental borrowing rate based on the information available at the adoption date in
determining the present value of future payments. Lease expense is recognized on a straight-line basis over the lease term. The Company’s
operating lease obligation is for one skilled nursing facility in Indiana. The Indiana lease has an initial term that expires on March
1, 2028, and has two five-year renewal options. The lease is a triple net lease, which requires the Company to pay real and personal
property taxes, insurance expenses and all capital improvements. The Company subleases the building as part of the Indiana master lease.
Based on the sublease with the Company’s tenant, the tenant is required to pay real and personal property taxes, insurance expenses
and all capital improvements.

The
components of lease expense and other lease information are as follows (dollars in thousands):

Schedule of Components of Lease Expense 

| Line item | Six Month Period ended June 30, 2026 | Six Month Period ended June 30, 2025 | Three Month Period ended June 30, 2026 | Three Month Period ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Operating lease cost | $199 | 198 | 99 | 99 |

| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Operating lease right of use asset | $669 | $851 |
| Operating lease liability | $669 | $851 |
| Weighted average remaining lease term-operating leases (in years) | 1.7 | 2.2 |
| Weighted average discount rate | 4.1% | 4.1% |

Future
minimum operating lease payments under non-cancellable leases as of June 30, 2026, reconciled to the Company’s operating lease
liability presented on the condensed consolidated balance sheets are:

Schedule of Future Minimum Lease Payments on Non-Cancellable Leases

_(Amounts in $’000s)_

|  |  |
| --- | --- |
| $2026 (six months) | $206 |
| 2027 | 397 |
| 2028 | 99 |
| Total | $702 |
| Less interest | (33) |
| Total operating lease liability | $669 |

**Other
Properties leased by the Company**

The
Company, through one of its subsidiaries, leases its office spaces from a related party. Rental expense under the leases for the six-month
periods ended June 30, 2026 and 2025, was $112,000 and $110,000, respectively. Rental expense under the leases for the three-month periods
ended June 30, 2026 and 2025, were $56,000 and $55,000, respectively.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt**

Bonds,
Note Payable, and Other Debt consist of the following:

 Schedule
of Note Payable and Other Debt

| Line item | Weighted Interest Rate at June 30, 2026 | June 30, 2026 | December 31, 2025 |
| --- | --- | --- | --- |
|  |  | (Amounts in $’000s) |  |
| HUD guaranteed loans | 3.26% | $249,954 | $254,085 |
| Bank loans | 6.40% | 162,635 | 163,177 |
| Series A Inc, B Inc, C (Inc), C (BVI) and D bonds | 7.08% | 359,477 | 334,766 |
| Note payable | 10.0% | 38,177 | 42,624 |
| Gross bonds, note payable, and senior debt |  | $810,243 | $794,652 |
| Debt issuance costs |  | (7,607) | (4,154) |
| Net bonds, note payable, and senior debt |  | $802,636 | $790,498 |

Principal
payments on the Bonds, Note Payable, and Senior Debt payable through maturity are as follows (amounts in $’000s):

 Schedule
of Notes Payable and Other Debt Payables Maturity

| Year Ending December 31, | Amount |
| --- | --- |
| 2026 (six months) | $204,299 |
| 2027 | 27,516 |
| 2028 | 28,969 |
| 2029 | 280,085 |
| 2030 | 57,716 |
| Thereafter | 211,658 |
| Total | $810,243 |

***Debt
Covenant Compliance***

As
of June 30, 2026 and December 31, 2025, the Company was party to approximately 44 and 45 outstanding credit related instruments, respectively.
These instruments included note payable, credit facilities, mortgage notes, bonds and other credit obligations. Some of the instruments
include financial covenants. Covenant provisions include, but are not limited to, debt service coverage ratios, and minimum levels of
EBITDA (defined as earnings before interest, tax, and depreciation and amortization) or EBITDAR (defined as earnings before interest,
tax, depreciation and amortization and rental expense). Some covenants are based on annual financial metric measurements, and some are
based on quarterly financial metric measurements. The Company routinely tracks and monitors its compliance with its covenant provisions.
As of June 30, 2026, the Company was in compliance with all financial and administrative covenants.

***Senior
Debt—Mortgage Loans Guaranteed by HUD***

As
of June 30, 2026 and December 31, 2025, the Company had HUD guaranteed mortgage loans from financial institutions of $250.0 million
and $254.1 million, respectively. These loans were secured by first mortgage liens on the applicable properties, assignments of rent
and second liens on the operator’s assets. The Company pays HUD annual mortgage insurance premiums of 0.65% of the loan balances
in addition to the interest rate. As a result, the overall interest rate paid by the Company with respect to the HUD guaranteed loans
as of June 30, 2026 and December 31, 2025 was 3.91%, respectively (including the mortgage insurance premium).

***Senior
Debt – Commercial Bank Mortgage Loan Facility***

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.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

***Senior
Debt – Commercial Bank Mortgage Loan Facility (Cont.)***

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 beared 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.

**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 Inc 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 was 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 and December 31, 2025 the outstanding balance of the Series A Bonds was $101.5 million and $94.7 million, respectively. Increases in the outstanding balance is due to a change in the exchange rate.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

***Interest***

The
Series A Bonds have an interest rate of 6.97% per annum. In July 2024, Standard & Poor’s provided an initial rating for the
Series A Bonds of ilA+.

Interest
on the Series A Bonds is payable semi-annually in arrears on March 31 and September 30 of each year. The interest rate may increase if
certain financial ratios are not achieved, as discussed below.

***Payment
Terms***

The
principal amount of the Series A Bonds is payable in three annual installments due on September 30 of each of the years 2024 through
2026. The first two principal payments are equal to 6% of the original principal amount of the Series A Bonds, and the last principal
payment is equal to the outstanding principal amount of the Series A Bonds.

***Financial
Covenants***

Until
the date of full repayment of the Series A Bonds, the Company must comply with certain financial covenants described below. The application
of the covenants is based on the financial statements of the Company as prepared under the GAAP accounting method. The financial covenants
are as follows:

- On the last day of each calendar quarter, the consolidated equity of the Company (excluding minority rights), as set forth in the Company’s
financial statements, will not be less than USD 20 million

- On the last day of each calendar quarter, the ratio between the Financial Debt and EBITDA shall not exceed 10
- The DSCR shall not be less than 1.05

***Dividend
Restrictions***

As
long as the Company does not breach any of the Financial Covenants, no distribution restriction shall hinder the Company. If the Company
is in non-compliance one or more of the Financial Covenants, the Company can make a distribution in an amount that does not exceed the
amount required to meet the U.S. legal requirements applicable to REITs.

***Increase
in Interest Rate***

In
the event that:

- The Company’s bond rating ilA+ or equivalent is lowered
- The financial debt to EBITDA ratio exceeds 8
- EBITDA to total debt service payments fall below 1.10
- Consolidated Equity is less than USD $30 million

An
additional rate of 0.25% will take place per deviation from the financial covenants, with a maximum additions rate not to exceed 1.5%
above the interest rate determined on the tender.

***Security***

The
Company has committed not to pledge its assets under general liens without obtaining the consent in advance of the Bond holders. Nevertheless,
The Company is entitled to register specific liens on its properties and also to provide guarantees; and its subsidiaries are entitled
to register liens, including general and specific, on their assets.

***Additional
Bonds***

Inc
Company can issue additional Series A Bonds at any time not to exceed a maximum outstanding of NIS 550 million (or $184.7 million).

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

***Redemption
Provisions***

- the  market value of the balance of the Series A Bonds in circulation which will be determined based on the average closing price of the  Series A Bonds for thirty (30) trading days before the date on which the board of directors resolves to undertake the early redemption;
- the  par value of the Series A Bonds available for early redemption in circulation (i.e., the principal balance of the Series A Bonds  plus accrued interest until the date of the actual early redemption); or
- the  balance of the payments under the Series A Bonds (consisting of future payments of principal and interest), when discounted to their  present value based on the annual yield of the Israeli government bonds plus an “additional rate” of 3.0% per annum.

***Change
of Control***

The
holders of a majority of the Series A Bonds may accelerate the outstanding balance of the Bonds if the control of the Company is transferred,
directly or indirectly, unless the transfer of control is approved by the holders of a majority of the Series A Bonds.

For
the purpose of this provision, a transfer of control means a change of control of the Company such that the Company has a controlling
stockholder that is not any of the “controlling stockholders” and/or is in the hands of any of their immediate family members
(including through trusts that the controlling stockholders and/or any of their immediate family members are the beneficiaries under
and/or are their managers). In this regard, “control” is defined in the Israeli Companies Law

***Series
B Bonds***

In
June 2025, Strawberry Fields REIT, Inc completed, directly, an initial offering on the TASE of Series B Bonds with a par value of NIS312 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. On December 16, 2025, Strawberry Fields REIT issued additional Series B Bonds with a par value of NIS 30.0 million (gross).
The bonds were issued at 99.21 and raised a net amount of NIS 29.4 million ($9.2 million), offering and issuance costs of approximately
$0.2 million incurred at closing. As of June 30, 2026 and December 31, 2025, the outstanding balance of the Series B Bonds was $110.2 million and $107.2 million, respectively. Increases in the outstanding balance are due to a change in the exchange rate.

***Interest***

The
Series B Bonds have an interest rate of 6.70% per annum. In June 2025, Standard & Poor’s provided an initial rating for the
Series B Bonds of ilA+.

Interest
on the Series B Bonds is payable semi-annually in arrears on June 30 and December 31 of each year. The interest rate may increase if
certain financial ratios are not achieved, as discussed below.

***Payment
Terms***

The
principal amount of the Series B Bonds is payable in four annual installments due on June 30 of each of the years 2026 through 2029.
The first three principal payments are equal to 4% of the original principal amount of the Series B Bonds, and the last principal payment
is equal to the outstanding principal amount of the Series B Bonds.

***Financial
Covenants***

Until
the date of full repayment of the Series B Bonds, the Company must comply with certain financial covenants described below. The application
of the covenants is based on the consolidated financial statements of the Company as prepared under the GAAP accounting method. The financial
covenants are as follows:

- On the last day of each calendar quarter, the consolidated equity of the Company (excluding minority rights), as set forth in the Company’s
consolidated financial statements, will not be less than USD 20 million.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

***Financial
Covenants (Cont.)***

- On the last day of each calendar quarter, the ratio between the Financial Debt and EBITDA shall not exceed 10
- The DSCR shall not be less than 1.05

***Dividend
Restrictions***

As
long as the Company does not breach any of the Financial Covenants, no distribution restriction shall hinder the Company. If the Company
is in non-compliance with one or more of the Financial Covenants, the Company can make a distribution in an amount that does not exceed
the amount required to meet the U.S. legal requirements applicable to REITs.

***Increase
in Interest Rate***

In
the event that:

- The Company’s bond rating ilA+ or equivalent is lowered
- The financial debt to EBITDA ratio exceeds 8
- EBITDA to total debt service payments fall below 1.10
- Consolidated Equity is less than USD $30 million

An
additional rate of 0.25% will take place per deviation from the financial covenants, with a maximum additions rate not to exceed 1.5%
above the interest rate determined on the tender.

***Security***

The
Company has committed not to pledge its assets under general liens without obtaining the consent in advance of the Bond holders. Nevertheless,
The Company is entitled to register specific liens on its properties and also to provide guarantees; and its subsidiaries are entitled
to register liens, including general and specific, on their assets.

***Additional
Bonds***

Inc
Company can issue additional Series B Bonds at any time and the series does not have a formal ceiling. However, the new issuances are
subject to regulatory oversight.

***Redemption
Provisions***

The
Company may, at its discretion, call the Series B Bonds for early repayment. In the event of the redemption of all of the Series B Bonds,
the Company would be required to pay the highest of the following amounts:

- the market value of the balance of the Series B Bonds in circulation which will be determined based on the average closing price of the
Series B Bonds for thirty (30) trading days before the date on which the board of directors resolves to undertake the early redemption;
or

- the par value of the Series B Bonds available for early redemption in circulation (i.e., the principal balance of the Series B Bonds
plus accrued interest until the date of the actual early redemption); or

- the balance of the payments under the Series B Bonds (consisting of future payments of principal and interest), when discounted to their
present value based on the annual yield of the Israeli government bonds plus an “additional rate” of 3.0% per annum.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

***Change
of Control***

The
holders of the majority of the Series B Bonds may accelerate repayment of the outstanding balance of the Bonds if the control of the
Company is transferred, directly or indirectly, unless the transfer of control is approved by the holders of a majority of the Series
B Bonds.

For
the purpose of this provision, a transfer of control means a change of control of the Company such that the Company has a controlling
stockholder that is not any of the “controlling stockholders” and/or is in the hands of any of their immediate family members
(including through trusts that the controlling trusts that the controlling stockholders and/or any of their immediate family members
are the beneficiaries under and/or are their managers). In this regard, “control” is defined in the Israeli Companies Law.

***Series
C Bonds (Inc)***

In
June 2026, Strawberry Fields REIT, Inc completed, directly, an initial offering on the TASE of Series C 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 $4.6 million
were incurred at closing. As of June 30, 2026, the outstanding balance of the Series C Bonds (Inc) was $54.7 million.

***Warrants***

The
Company offered 16 Series 1 Warrants in conjunction with each NIS 1,000 par value Series C Bonds (Inc). As a result of the tender offer, approximately 2.6 million Series 1 Warrants were allocated to holders of the Series C Bonds (Inc). The Series 1 Warrants were initially issued with
an exercise price of NIS 39.70 ($13.23) per warrant and are exercisable from the date of issuance through June 30, 2027. The exercise price is subject to
adjustment for dividends and bonus share distributions by the Company. As of June 30, 2026, the exercise price had been adjusted to
USD 13.23 per share pursuant to such anti-dilution provisions. The fair value of the Series 1 Warrants was NIS 39.40 (USD 13.23)
per warrant as of June 30, 2026. The closing price of Strawberry Fields REIT, Inc. common stock was $13.75 per share on June 30, 2026.

The relative fair value of the warrant component of
the Series C Bonds (Inc) sold to investors totaled $3.6 million. The Black-Scholes model was used to calculate relative fair value, further
discounted by the beneficial conversion feature, if any and the value of the Series C Bonds (Inc) component.

***Warrant Fair Value***

The Company used the Black-Scholes option pricing
model to determine the relative fair value of warrants issued in conjunction with Series C Bonds (Inc), With respect to bonds, relative
fair value is amortized over the life of the bonds. The principal assumptions we used in applying the Black-Scholes model were as follows:

Schedule of Warrant Fair Value Assumptions

| 2026 |  |
| --- | --- |
| Risk free interest rate | 3.81% |
| Expected volatility | 35.37% |
| Expected dividend yield | 4.75% |
| Forfeiture rate | 0% |
| Expected life in years | 1 |

***Interest***

The
Series C Bonds (Inc) have an interest rate of 6.85% per annum. In May 2026, Standard & Poor’s provided an initial rating for
the Series C Bonds (Inc) of ilA+.

Interest
on the Series C Bonds (Inc) is payable semi-annually in arrears on December 31, 2026, and thereafter on June 30 and December 31 of each
year during the term ending December 31, 2030. The interest rate may increase if certain financial ratios are not achieved, as discussed
below.

***Payment
Terms***

The
principal amount of the Series C Bonds (Inc) is payable in four annual installments due on June 30 of each of the years 2027 through
2029, and on December 31, 2030. The first three principal payments are equal to 4% of the original principal amount of the Series C Bonds
(Inc), and the last principal payment is equal to the outstanding principal amount of the Series C Bonds (Inc).

***Financial
Covenants***

Until
the date of full repayment of the Series C Bonds (Inc), the Company must comply with certain financial covenants described below. The
application of the covenants is based on the consolidated financial statements of the Company as prepared under the GAAP accounting method.
The financial covenants are as follows:

- On the last day of each calendar quarter, the consolidated equity of the Company (excluding minority rights), as set forth in the Company’s
consolidated financial statements, will not be less than USD 30 million.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

***Financial
Covenants (Cont.)***

- On the last day of each calendar quarter, the ratio between the Financial Debt and EBITDA shall not exceed 8
- The DSCR shall not be less than 1.35

***Dividend
Restrictions***

As
long as the Company does not breach any of the Financial Covenants, no distribution restriction shall hinder the Company. If the Company
is in non-compliance with one or more of the Financial Covenants, the Company can make a distribution in an amount that does not exceed
the amount required to meet the U.S. legal requirements applicable to REITs.

***Increase
in Interest Rate***

In
the event that:

- The Company’s bond rating ilA+ or equivalent is lowered
- The financial debt to EBITDA ratio exceeds 8
- EBITDA to total debt service payments fall below 1.35
- Consolidated Equity is less than USD 30 million

An
additional rate of 0.25% will take place per deviation from the financial covenants, with a maximum additions rate not to exceed 1.5%
above the interest rate determined on the tender.

***Security***

The
Company has committed not to pledge its assets under general liens without obtaining the consent in advance of the Bond holders. Nevertheless,
The Company is entitled to register specific liens on its properties and also to provide guarantees; and its subsidiaries are entitled
to register liens, including general and specific, on their assets.

***Additional
Bonds***

Inc
Company can issue additional Series C Bonds (Inc) at any time not to exceed a maximum outstanding of NIS 550 million (or $184.7 million).

***Redemption
Provisions***

The
Company may, at its discretion, call Series C Bonds (Inc) for early repayment. In the event of the redemption of all the Series C Bonds
(Inc), the Company would be required to pay the highest of the following amounts:

- the market value of the balance of the Series C Bonds (Inc) in circulation which will be determined based on the average closing price
of the Series C Bonds (Inc) for thirty (30) trading days before the date on which the board of directors resolves to undertake the early
redemption; or

- the par value of the Series C Bonds (Inc) available for early redemption in circulation (i.e., the principal balance of the Series C
Bonds (Inc) plus accrued interest until the date of the actual early redemption); or

- the balance of the payments under the Series C Bonds (Inc) (consisting of future payments of principal and interest), when discounted
to their present value based on the annual yield of the Israeli government bonds plus an “additional rate” of 2.5% per annum.

***Change
of Control***

The
holders of the majority of the Series C Bonds (Inc) may accelerate repayment of the outstanding balance of the Bonds if the control of
the Company is transferred, directly or indirectly, unless the transfer of control is approved by the holders of a majority of the Series
C Bonds (Inc).

For
the purpose of this provision, a transfer of control means a change of control of the Company such that the Company has a controlling
stockholder that is not any of the “controlling stockholders” and/or is in the hands of any of their immediate family members
(including through trusts that the controlling trusts that the controlling stockholders and/or any of their immediate family members
are the beneficiaries under and/or are their managers). In this regard, “control” is defined in the Israeli Companies Law.

**Series
C Bonds (BVI)**

In
July 2021, the BVI Company completed an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series C Bonds (BVI)
with a par value of NIS 208.0 million ($64.7 million). These Series C Bonds (BVI) were issued at par. Offering and issuance costs of approximately $1.7 million were incurred at closing. In February 2023, the BVI Company issued an additional NIS 40.0 million ($11.3 million) in Series C Bonds (BVI), offering and issuance costs of approximately $0.9 million were incurred at closing. In October 2024, the BVI company issued an additional NIS 62.0 million ($16.6 million) in Series C Bonds (BVI), offering and issuance costs of approximately $0.8 million were incurred at closing. On June 1, 2026, the Company completed an early redemption totaling NIS 149.2 million ($53.1 million). The redemption consisted of a principal payment of NIS 146.4 million ($49.2 million) and an interest payment of NIS 2.8 million ($1.0 million).

At
June 30, 2026 and December 31, 2025 the total Series C Bond (BVI) outstanding was $34.1 million and $77.7 million, respectively.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

**Series
C Bonds (BVI) (Cont.)**

***Interest***

The
Series C Bonds (BVI) initially bore interest at a rate of 5.7%
per annum. In July 2021, Standard & Poor’s provided an initial rating for the Series C Bonds (BVI) of ilA+.

Interest
on the Series C Bonds (BVI) is payable semi-annually in arrears on July 31 and January 31 of each year. The interest rate may
increase if certain financial ratios are not achieved, as discussed below.

***Payment
Terms***

The
principal amount of the Series C Bonds (BVI) is payable in five annual installments due on July 31 of each of the years 2022 through
2026. The first four principal payments are equal to 6% of the original principal amount of the Series C Bonds (BVI), and the last
principal payment is equal to the outstanding principal amount of the Series C Bonds (BVI).

***Financial
Covenants***

Until
the date of full repayment of the Series C Bonds (BVI), the BVI Company must comply with certain financial covenants described below. The
application of the covenants is based on the financial statements of the BVI Company as prepared under the IFRS accounting method.
The financial covenants are as follows:

- The stockholders’ equity of the BVI Company may not be less than $230 million.
- The ratio of the condensed consolidated stockholders’ equity of the BVI Company to its total condensed consolidated balance sheet
may not be less than 25%.

- The ratio of the adjusted net financial debt to adjusted EBITDA of the BVI Company (for the past four quarters) may not exceed 12.
- The ratio of the outstanding amount of the Series C Bonds (BVI) to the fair market value of the collateral may not exceed 75%.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

**Series
C Bonds (BVI) (Cont.)**

***Dividend
Restrictions***

The
indenture for the Series C Bonds (BVI) limits the amount of dividends that may be paid by the BVI Company to the Operating
Partnership. The BVI Company may not make any distribution unless all of the following conditions are fulfilled (with all amounts
calculated under IFRS):

- The distribution amount may not exceed 80% of the net profit after tax that is recognized in the most recent condensed consolidated financial
statements of the BVI Company, less profits or losses arising from a change in accounting methods, net of revaluation profits/losses
(that have not yet been realized) arising from a change in the fair value of the assets with respect to the fair value in the prior reporting
period.

- The ratio of the consolidated stockholders’ equity of the BVI Company to its total consolidated balance sheet may not be less than30%.
- The distributable profits for which no distribution was performed in a specific year will be added to the following quarters.
- The BVI Company’s equity at the end of the last quarter, before the distribution of dividends, less the dividends distributed,
may not be less than $250 million.

As
of June 30, 2026, the BVI Company met these financial conditions, and the BVI Company was not in violation of any of its material undertakings
to the holders of the Series C Bonds (BVI).

***Increase
in Interest Rate***

In
the event that:

(i)
the stockholders’ equity of the BVI Company (excluding minority interests) is less than $250 million;

(ii)
the ratio of the adjusted net financial debt to adjusted EBITDA (for the latest four quarters) exceeds 11;

(iii)
the ratio of the consolidated equity of the BVI Company to total consolidated assets of the BVI Company is below 27%; or

(iv)
the ratio of outstanding amount of the Series C Bonds (BVI) to the fair market value of the collateral for the Series C Bonds (BVI)
exceeds 75%,

then,
in each case, the interest on the Series C Bonds (BVI) will increase by an additional 0.5%
annually, but only once with respect to each failure to meet these requirements. Compliance with these financial covenants is
measured quarterly.

Additionally,
if a decline in the rating of the Series C Bonds (BVI) should take place, then for each single ratings decrease, the interest will
be increased by 0.25%
per year, up to a maximum increment of 1.25%
annually.

In
any case, the total increase in the interest rate as a result of the above adjustments will not exceed 1.5% per year. The increases in
the interest rate will also be reversed if the BVI Company regains compliance.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

**Series
C Bonds (BVI) (Cont.)**

***Security***

The
Series C Bonds (BVI) are secured by first mortgage liens on nine properties. In addition, the Series C Bonds (BVI) are also secured
by interest and expenses reserves. The BVI Company has agreed not to pledge its assets pursuant to a general lien without obtaining
the prior consent of the holders of the Series C Bonds, provided that the BVI Company is entitled to register specific liens on its
properties and also to provide guarantees and its subsidiaries are entitled to register general and specific liens on their
assets.

Under
the terms of the indenture for the Series C Bonds (BVI), the BVI Company can take out properties from the collateral (in case of HUD
refinancing) or to add properties and increase the Series C Bonds (BVI) as long as the ratio of outstanding amount of the Series C
Bonds (BVI) to fair market value of the collateral is not more than 65%. In addition, starting from July 1, 2023, if the fair market
value of the collateral is below 55%, the BVI Company can request to release collateral so the fair market value will increase to
55%.

***Additional
Bonds***

The
BVI Company can issue additional Series C Bonds (BVI) at any time not to exceed a maximum outstanding of NIS 630 million (or $211.6 million).

***Redemption
Provisions***

The
BVI Company may, at its discretion, call the Series C Bonds (BVI) for early repayment. In the event of the redemption of all of the
Series C Bonds (BVI), the BVI Company would be required to pay the highest of the following amounts:

- the  market value of the balance of the Series C Bonds (BVI) in circulation which will be determined based on the average closing price  of the Series C Bonds (BVI) for thirty (30) trading days before the date on which the board of directors resolves to undertake the  early redemption;
- the  par value of the Series C Bonds (BVI) available for early redemption in circulation (i.e., the principal balance of the Series C  Bonds (BVI) plus accrued interest until the date of the actual early redemption); or
- the  balance of the payments under the Series C Bonds (BVI) (consisting of future payments of principal and interest), when discounted to  their present value based on the annual yield of the Israeli government bonds plus an “additional rate.” The additional  rate will be 1.0%  per annum for early repayment of 3.0%.

***Change
of Control***

The
holders of a majority of the Series C Bonds (BVI) may accelerate the outstanding balance of the Bonds if the control of the BVI
Company (BVI) is transferred, directly or indirectly, unless the transfer of control is approved by the holders of a majority of the
Series C Bonds (BVI).

For
purposes of the Series C Bonds (BVI), the “controlling stockholders” of the BVI Company are deemed to be Moishe Gubin and
Michael Blisko.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

**Series
C Bonds (Cont.)**

***Change
of Control (Cont.)***

For
the purpose of this provision, a transfer of control means a change of control of the BVI Company such that the BVI Company has a controlling
stockholder that is not any of the “controlling stockholders” and/or is in the hands of any of their immediate family members
(including through trusts that the controlling stockholders and/or any of their immediate family members are the beneficiaries under
and/or are their managers). In this regard, “control” is defined in the Israeli Companies Law.

**Series
D Bonds**

In
June 2023, the BVI Company completed an initial offering on the TASE of Series D Bonds with a par value of NIS 82.9 million ($22.9 million).
These Series D Bonds were issued at par. Offering and issuance costs of approximately $0.6 million were incurred at closing. In July
2023, the BVI Company issued an additional NIS 70 million ($19.2 million) in Series D Bonds. On February 8, 2024, the BVI Company issued
additional Series D Bonds with a par value of NIS 100.0 million (gross) and raised a net amount of NIS 98.2 million ($25.7 million),
offering and issuance costs of approximately $.05 million incurred at closing.

**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
A Bonds is 6.97% 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 and December 31, 2025, the outstanding balance of the Series D Bonds were $59.0 million and $55.1 million, respectively.
Increases in the outstanding balance is due to a change in the exchange rate.

***Interest***

The
Series D Bonds initially bore interest at a rate of 9.1% per annum. In June 2023, Standard & Poor’s provided an initial rating
for the Series D Bonds of ilA.

Interest
on the Series D Bonds is payable semi-annually in arrears on March 31 and September 30 of each year. The interest rate may increase if
certain financial ratios are not achieved, as discussed below.

***Payment
Terms***

The
principal amount of the Series D Bonds is payable in three annual installments due on September 30 of each of the years 2024 through
2026. The first two principal payments are equal to 6% of the original principal amount of the Series D Bonds, and the last principal
payments is equal to the outstanding principal amount of the Series D Bonds.

***Financial
Covenants***

Until
the date of full repayment of the Series D Bonds, the BVI Company must comply with certain financial covenants described below. The application
of the covenants is based on the financial statements of the BVI Company as prepared under the IFRS accounting method. The financial
covenants are as follows:

- The stockholders’ equity of the BVI Company may not be less than $230 million.
- The ratio of the condensed consolidated stockholders’ equity of the BVI Company to its total condensed consolidated balance sheet
may not be less than 25%.

- The ratio of the adjusted net financial debt to adjusted EBITDA of the BVI Company (for the past four quarters) may not exceed 12.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

**Series
D Bonds (Cont.)**

***Dividend
Restrictions***

The
indenture for the Series D Bonds limits the amount of dividends that may be paid by the BVI Company to its stockholders. The BVI Company
may not make any distribution unless all of the following conditions are fulfilled (with all amounts calculated under IFRS):

- The distribution amount may not exceed 80% of the net profit after tax that is recognized in the most recent condensed consolidated financial
statements of the BVI Company, less profits or losses arising from a change in accounting methods, net of revaluation profits/losses
(that have not yet been realized) arising from a change in the fair value of the assets with respect to the fair value in the prior reporting
period.

- The ratio of the consolidated stockholders’ equity of the BVI Company to its total consolidated balance sheet may not be less than30%.
- The distributable profits for which no distribution was performed in a specific year will be added to the following quarters.
- The BVI Company’s equity at the end of the last quarter, before the distribution of dividends, less the dividends distributed,
may not be less than $250 million.

The
BVI Company meets the financial conditions described above, and the BVI Company is not in violation of all and/or any of its material
undertakings to the holders of the Series D Bonds as of June 30, 2026.

***Increase
in Interest Rate***

In
the event that:

(i)
the stockholders’ equity of the BVI Company (excluding minority interests) is less than $250 million;

(ii)
the ratio of the adjusted net financial debt to adjusted EBITDA (for the latest four quarters) exceeds 11;

(iii)
the ratio of the consolidated equity of the BVI Company to total consolidated assets of the BVI Company is below 27%; or

then,
in each case, the interest on the Series D Bonds will increase by an additional 0.5% annually, but only once with respect to each failure
to meet these requirements. Compliance with these financial covenants is measured quarterly.

Additionally,
if a decline in the rating of the Series D Bonds should take place, then for each single ratings decrease, the interest will be increased
by 0.25% per year, up to a maximum increment of 1.25% annually.

In
any case, the total increase in the interest rate as a result of the above adjustments will not exceed 1.5% per year. The increases in
the interest rate will also be reversed if the BVI Company regains compliance.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

**Series
D Bonds (Cont.)**

***Security***

The
BVI Company has committed not to pledge its assets under general liens without obtaining the consent in advance of the Bond holders.
Nevertheless, the BVI Company is entitled to register specific liens on its properties and also to provide guarantees; and its subsidiaries
are entitled to register liens, including general and specific, on their assets.

***Additional
Bonds***

The
BVI Company can issue additional Series D Bonds at any time not to exceed a maximum outstanding of NIS 450 million (or $151.1 million).

***Redemption
Provisions***

The
BVI Company may, at its discretion, call the Series D Bonds for early repayment. In the event of the redemption of all of the Series
D Bonds, the BVI Company would be required to pay the highest of the following amounts:

- the market value of the  balance of the Series D Bonds in circulation which will be determined based on the average closing price of the Series D Bonds for  thirty (30) trading days before the date on which the board of directors resolves to undertake the early redemption;
- the par value of the Series  D Bonds available for early redemption in circulation (i.e., the principal balance of the Series D Bonds plus accrued interest until  the date of the actual early redemption); or
- the balance of the payments  under the Series D Bonds (consisting of future payments of principal and interest), when discounted to their present value based  on the annual yield of the Israeli government bonds plus an “additional rate.” The additional rate will be 1.0% per annum  for early repayment of 3.0%.

***Change
of Control***

The
holders of a majority of the Series D Bonds may accelerate the outstanding balance of the Bonds if the control of the BVI Company is
transferred, directly or indirectly, unless the transfer of control is approved by the holders of a majority of the Series D Bonds.

For
purposes of the Series D Bonds, the “controlling stockholders” of the BVI Company are deemed to be Moishe Gubin and Michael
Blisko.

**STRAWBERRY
FIELDS REIT, INC. and SUBSIDIARIES**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 7. Bonds, Note Payable and Other Debt (Cont.)**

**Series
D Bonds (Cont.)**

***Change
of Control (Cont.)***

For
the purpose of this provision, a transfer of control means a change of control of the BVI Company such that the BVI Company has a controlling
stockholder that is not any of the “controlling stockholders” and/or is in the hands of any of their immediate family members
(including through trusts that the controlling stockholders and/or any of their immediate family members are the beneficiaries under
and/or are their managers). In this regard, “control” is defined in the Israeli Companies Law.

***Note
Payable***

On
January 1, 2025, the Company created a new Kentucky Master Lease with a new third-party operator. This master lease was created from
10 properties that were formally in the Landmark Master Lease. In order to release the properties from the Landmark Master Lease,
the Company entered into a $50.9 million dollar note payable with the parent of the Landmark operator. The note is for equal monthly payments of $1.1 million dollars for 5 years and bears interest of 10.0%.
As of June 30, 2026 and December 31, 2025, the outstanding balance of the note payable was $38.2 million and $42.6 million, respectively.

### **NOTE 8. Commitments and Contingencies**

***Commitments***

The
Company guarantees from time-to-time obligations of its wholly-owned subsidiaries.

**Contingencies**

We
are not currently a party to any material legal proceedings, that are not covered by insurance and expected to be resolved within policy
limits, other than the following:

In
March 2020, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a complaint in the U.S. District Court for the
Northern District of Illinois against Moishe Gubin, Michael Blisko, the Predecessor Company and 21 of its subsidiaries, as well as the
operators of 17 of the facilities operated at our properties. The complaint was related to the Predecessor Company’s acquisition
of 16 properties located in Arkansas and Kentucky that were completed between May 2018 and April 2019 and the attempt to purchase an
additional five properties located in Massachusetts. The complaint was dismissed by the Court in 2020 on jurisdictional grounds. The
plaintiffs did not file an appeal with respect to this action, and the time for an appeal has expired.

In
August 2020, Joseph Schwartz, Rosie Schwartz and several companies controlled by them filed a second complaint in the Circuit Court in
Pulaski County, Arkansas. The second complaint had nearly identical claims as the federal case, but was limited to matters related to
the Predecessor Company’s acquisition of properties located in Arkansas. The sellers, which were affiliates of Skyline Health Care,
had encountered financial difficulties and requested the Predecessor Company to acquire these properties. The defendants have filed an
answer denying the plaintiffs’ claims and asserting counterclaims based on breach of contract. This case has been dismissed without
prejudice.

In
January 2021, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a third complaint in Illinois state court in
Cook County, Illinois, which has nearly identical claims to the initial federal case, but was limited to claims related to the Kentucky
and Massachusetts properties. The complaint has not been properly served on any of the defendants, and, accordingly, the defendants did
not respond to the complaint. Instead, the defendants filed a motion to quash service of process. On January 11, 2023, the Cook County
Circuit Court entered an order granting such motion, quashing service of process on all defendants. In March 2023, the plaintiffs filed
a new complaint and again attempted to serve it on the defendants. It is the defendants’ position that service was (once again,
potentially) defective and sought a dismissal of the matter for want of prosecution by Joseph Schwartz, Rosie Schwartz and certain companies
owned by them. The dismissal was granted, but has been appealed to the Illinois Appellate Court, with no substantive movement on the
matter to date.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 8. Commitments and Contingencies (Cont.)**

In
April of 2024, Joseph Schwartz, Rosie Schwartz and several companies controlled by them filed a third complaint in the Circuit Court
in Pulaski County, Arkansas. This third complaint had nearly identical claims as the federal case and the Illinois state court matter.

In
each of these complaints, the plaintiffs asserted claims for fraud, breach of contract and rescission arising out of the defendants’
alleged failure to perform certain post-closing obligations under the purchase contracts. We have potential direct exposure for these
claims because the subsidiaries of the Predecessor Company that were named as defendants are now subsidiaries of the Operating Partnership.
Additionally, the Operating Partnership is potentially liable for the claims made against Moishe Gubin, Michael Blisko and the Predecessor
Company pursuant to the provisions of the contribution agreement, under which the Operating Partnership assumed all of the liabilities
of the Predecessor Company and agreed to indemnify the Predecessor Company and its affiliates for such liabilities. We and the named
defendants believe that the claims set forth in the complaints are without merit. The named defendants intend to vigorously defend the
litigation and to assert counterclaims against the plaintiffs based on their failure to fulfill their obligations under the purchase
contracts, interim management agreement, and operations transfer agreements. We believe this matter will be resolved without a material
adverse effect to the Company.

As
noted above, the March 2020, January 2021 and April 2024 complaints also related to the Predecessor Company’s planned acquisition
of five properties located in Massachusetts. A subsidiary of the Predecessor Company purchased loans related to these properties in 2018
for a price of $7.74 million with the expectation that the subsidiaries would acquire title to the properties and the loans would be
retired. The subsidiary subsequently advanced $3.1 million under the loans to satisfy other liabilities related to the properties. The
planned acquisition/settlement with the sellers/owners and/borrowers was not consummated because the underlying tenants of the properties
surrendered their licenses to operate healthcare facilities on these properties.

The
Predecessor Company intends to institute legal proceedings to collect the outstanding amount of these loans and to assert related claims
against the sellers and their principals for the unpaid principal balances as well as protective advances and collection costs. In connection
with enforcing their rights, in July 2022, the Company foreclosed, and (as lender) sold four of the five properties at auction for the
total amount of $4.4 million. In December 2022, the Company took title on the fifth property with an estimated fair value of $1.2 million.

### **Note 9. Equity Incentive Plan**

The
Company has adopted the 2021 Equity Incentive Plan (the “Plan”). The Plan permits the grant of both options qualifying
under Section 422 of the Internal Revenue Code (“incentive stock options”) and options not so qualifying, and the grant
of stock appreciation rights, stock awards, incentive awards, performance units, and other equity-based awards. A total of 250,000 shares had been authorized to be granted under the Plan. On May 30, 2024, shareholders approved an amendment to increase the number
of shares authorized to be granted under the plan to 1,000,000 shares. As of June 30, 2026, 961,975 shares were available for grant. On January 31, 2025, 6,450 shares were used from the incentive plan as an employee bonus. Stock based compensation expense related to this issuance was
$72,000. On January 16, 2026, 6,675 shares were used from the incentive plan as an employee bonus. Stock based compensation expense related to this issuance was
$88,000. No other shares were issued during the six-month period June 30, 2026.

In January 2026, the Company
approved a compensation adjustment for its Chief Executive Officer delivered in the form of limited partnership units of the OP (“OP
Units”). The Company recognized stock-based compensation of $0.2 million and $1.7 million during the three- and six-months
period June 30, 2026, respectively.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 10. Stockholders’ Equity and Distributions**

The
Company elected and qualified to be treated as a REIT commencing with the taxable year ended December 31, 2022. U.S. federal income tax
law requires that a REIT distribute annually at least 90% of its net taxable income, excluding net capital gains, and that it pays tax
at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income, including net capital
gains. In addition, a REIT is required to pay a 4% nondeductible excise tax on the amount, if any, by which the distributions that it
makes in a calendar year are less than the sum of 85% of its ordinary income, 95% of its capital gain net income and 100% of its undistributed
income from prior years.

On
November 9, 2023, the Board of Directors authorized the repurchase of up to $5 million of the Company’s common stock. As of June
30, 2026 the Company had purchased 319,584 shares in aggregate of common stock at an average price per share of $9.93 and an aggregate
repurchase price of $3.2 million.

As
of June 30, 2026, there were a total of 14,069,238 shares of common stock issued and outstanding. The outstanding shares were held by
a total of approximately 5,600 stockholders of record, including certain affiliates of the Company who held 1,161,883 of these shares.

As
of June 30, 2026, there were 41,803,503 OP units outstanding. Under the terms of the partnership agreement for the Operating Partnership,
such holders have the right to request the cash redemption of their OP units. If a holder requests redemption, the Company has the option
of issuing shares of common stock to the requesting holder instead of cash. The OP unit holders are required to obtain Company approval
prior to the sale or transfer of any or all of such holder’s OP units.

The
Company has reserved a total of 41,803,503 shares of common stock that may be issued, at the Company’s option, upon redemption
of the OP units outstanding as of June 30, 2026.

### **NOTE 11. Related Party Transactions and Economic Dependence**

The following entities and individuals are considered to be Related Parties and are the only Related Parties with
which the Company currently engages in material transactions:

Moishe Gubin CEO & Chairman  of the Board and a stockholder of the Company

Michael Blisko Director and a stockholder  of the Company

Operating entities See list below

**Lease
Agreements with Related Parties**

As
of June 30, 2026 and December 31, 2025, each of the Company’s facilities was leased and operated by separate tenants. Each tenant
is an entity that leases the facility from one of the Company’s subsidiaries and operates the facility as a healthcare facility.
The Company had 64 tenants out of 143 who were related parties as of June 30, 2026 and 66 tenants out of 144 who were related parties
as of December 31, 2025. Most of the lease agreements are triple net leases.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 11. Related Party Transactions and Economic Dependence (cont.)**

**Lease
Agreements with Related Parties (cont.)**

The
related party interests were via Gubin Enterprises LP and Blisko Enterprises LP. Gubin Enterprises LP is controlled by Moishe Gubin,
Chairman of the Board. Blisko Enterprises LP is controlled by Michael Blisko, who serves as Director on the Board of Directors. The related
party facilities are concentrated in 3 states: Indiana, Tennessee and Illinois. As of June 30, 2026, in these states, the Company leased
41, 15, and 8 facilities, respectively to related parties.

**Balances
with Related Parties**

Schedule
of Balances with Related Parties

_(amounts in $000s)_

| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Straight-line rent receivable | $17,787 | $16,324 |
| Tenant portion of replacement reserve | $10,242 | $8,759 |
| Notes receivable | $5,823 | $5,823 |

**Payments
from and to Related Parties**

Schedule
of Payments From and to Related Parties

_(amounts in $000s) · (amounts in $000s)_

| Line item | 2026 / Six Months ended June 30, | 2025 / Six Months ended June 30, | 2026 / Three Months ended June 30, | 2025 / Three Months ended June 30, |
| --- | --- | --- | --- | --- |
| Rental income received from related parties | $34,708 | 34,890 | $17,159 | 17,445 |

**Other
Related Party Relationships**

On
June 30, 2026 and December 31, 2025, the Company had approximately $0.4 million and $0.8 million, respectively, on deposit with OptimumBank.
Mr. Gubin is the Chairman of the Board of OptimumBank, and Mr. Blisko is a director.

### **NOTE 12. Income Taxes**

The
Company elected and qualified to be taxed as a REIT for federal income tax purposes commencing with the year ended December 31, 2022.

As
a REIT, the Company generally is not subject to federal income tax on its net taxable income that it distributes currently to its stockholders.
Under the Code, REITs are subject to numerous organizational and operational requirements, including a requirement that they distribute
each year at least 90% of their REIT taxable income, determined without regard to the deduction for dividends paid and excluding any
net capital gains. If the Company fails to qualify for taxation as a REIT in any taxable year and does not qualify for certain statutory
relief provisions, the Company’s income for that year will be taxed at regular corporate rates, and the Company would be disqualified
from taxation as a REIT for the four taxable years following the year during which the Company ceased to qualify as a REIT. Even if the
Company qualifies as a REIT for federal income tax purposes, it may still be subject to state and local taxes on its income and assets
and to federal income and excise taxes on its undistributed income.

The
Company follows recent accounting guidance relating to accounting for uncertainty in income taxes, which sets out a consistent framework
to determine the appropriate level of tax reserves to maintain for uncertain tax positions.

A
tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of
tax benefit that has a greater than fifty percent likelihood of being realized upon settlement with a taxing authority that has full
knowledge of all relevant information. The determination of whether or not a tax position has met the more-than-likely-than-not recognition
threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment.
Management is not aware of any uncertain tax positions that would have material effect on the Company’s condensed consolidated
financial statements.

**STRAWBERRY
FIELDS REIT, INC. and Subsidiaries**

**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

### **NOTE 13. Fair Value of Financial Instruments**

The
Company is required to disclose the fair value of financials instruments for which it is practicable to estimate that value. The fair
value of short-term financial instruments such as cash and cash equivalents, restricted cash, accounts payable and accrued expenses approximate
their carrying value on the condensed consolidated balance sheets due to their short-term nature. The Company’s foreclosed real
estate is recorded at fair value on a non-recurring basis and is included in real estate investments on the condensed consolidated balance
sheets. Estimates of fair value are determined based on a variety of information, including the use of available appraisals, estimates
of market values by licensed appraisers or local real estate brokers and knowledge and experience of management. The fair values of the
Company’s remaining financial instruments that are not reported at fair value on the condensed consolidated balance sheets are
reported below:

 Schedule
of Fair Value on the Consolidated Balance Sheets

| (amounts in $000s) | Level | June 30, 2026 / Carrying Amount | June 30, 2026 / Fair Value | December 31, 2025 / Carrying Amount | December 31, 2025 / Fair Value |
| --- | --- | --- | --- | --- | --- |
| Bonds, note payable, and senior debt | 3 | $810,243 | $815,615 | $794,652 | $802,800 |
| Notes receivable, net | 3 | $24,171 | $23,380 | $20,821 | $20,462 |

The
fair value of the bonds, note payable, senior debt, and notes receivable are estimated using a discounted cash flow analysis.

### **NOTE 14. 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.

### **NOTE 15. Financing Income (Expenses), Net**

Schedule
of Financing Income (Expenses), Net

_(amounts in $000s) · (amounts in $000s)_

| Line item | 2026 / Six months ended June 30, | 2025 / Six months ended June 30, | 2026 / Three months ended June 30 | 2025 / Three months ended June 30 |
| --- | --- | --- | --- | --- |
| Financing expenses |  |  |  |  |
| Interest expenses with respect to bonds | $(12,711) | $(9,861) | $(6,214) | $(4,405) |
| Interest expenses on notes payable and senior debt | (12,015) | (14,770) | (5,973) | (7,342) |
| Interest expenses with respect to leases | (16) | (28) | (8) | (16) |
| Total financing expenses | $(24,742) | $(24,659) | $(12,195) | $(11,763) |
| Financing income | $836 | $658 | $375 | $398 |
| Interest Expense, Net | $(23,906) | $(24,001) | $(11,820) | $(11,365) |

**Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.**

**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;

**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.

**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.

**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:***

| (dollars in thousands except per share data) | Three Months Ended June 30, 2026 | Increase / / (Decrease) | Percentage / Difference |
| --- | --- | --- | --- |
| Revenues: |  |  |  |
| Rental revenues | $40,049 | $$2,188 | 6% |
| Expenses: |  |  |  |
| Depreciation | 9,183 | 488 | 6% |
| Amortization | 1,987 | (642) | (24 |
| General and administrative expenses | 3,247 | 1,248 | 62% |
| Property and other taxes | 3,962 | 187 | 5% |
| Facility rent expenses | 175 | 28 | 19% |
| Total Expenses | 18,554 | 1,309 | 8% |
| Interest expense, net | 11,820 | 455 | 4% |
| Amortization of interest expense | 209 | 8 | 4% |
| Mortgage insurance premium | 377 | (11) | (3 |
| Total Interest Expenses | 12,406 | 452 | 4% |
| Other loss |  |  |  |
| Other loss | (151) | (151) | (100 |
| Net income | 8,938 | 276 | 3% |
| Net income attributable to non-controlling interest | (6,780) | (74)) | (1 |
| Net income attributable to common stockholders | 2,158 | 202 | 10% |
| Basic and diluted income per common share | $0.16 | $$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.

**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:***

| (dollars in thousands) | Six Months Ended June 30, 2026 | Increase / / (Decrease) | Percentage / Difference |
| --- | --- | --- | --- |
| Revenues: |  |  |  |
| Rental revenues | $80,033 | $$4,840 | 6% |
| Expenses: |  |  |  |
| Depreciation | 18,423 | 1,046 | 6% |
| Amortization | 4,200 | (1,017) | (19 |
| General and administrative expenses | 5,769 | 1,713 | 42% |
| Property and other taxes | 7,699 | 274 | 4% |
| Facility rent expenses | 304 | 10 | 3% |
| Total Expenses | 36,395 | 2,026 | 6% |
| Interest expense, net | 23,906 | (95) | (.4 |
| Amortization of interest expense | 410 | 8 | 2% |
| Mortgage insurance premium | 759 | (17) | (2 |
| Total Interest Expenses | 25,075 | (104) | (.4 |
| Other (loss) income |  |  |  |
| Other (loss) income | (151) | (159) | (1,988 |
| Net income | 18,412 | 2,759 | 18% |
| Net income attributable to non-controlling interest | 13,974 | 1,861 | 15% |
| Net income attributable to common stockholders | 4,438 | 898 | 25% |
| Basic and diluted income per common share | $0.33 | $$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.

**Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (continued)**

**Results
of Operations (continued)**

*Net
incom*e: 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.

**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:

| Line item | Six Months Ended June 30, 2026 | Six Months Ended June 30, 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 |

**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

**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).

**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**

_(Amounts in $000s)_

| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Fixed rate loans | $647,606 | $634,168 |
| Variable rate loans | 162,637 | 160,484 |
| Gross Note payable and senior debt | $810,243 | $794,652 |

**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**

| Line item | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Three Months Ended June 30, 2026 | Three Months Ended June 30, 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 |

**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
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.

## Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 3. Quantitative and Qualitative Disclosures about Market Risks

Market
risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other
market changes that affect market sensitive instruments. In pursuing our business and investment objectives, we expect that the primary
market risk to which we will be exposed is interest rate risk.

We
may be exposed to the effects of interest rate changes primarily as a result of long-term debt used to acquire properties. As of
June 30, 2026, we had $101.5 million outstanding under our Series A Bonds, which bear interest at a fixed 6.97% per annum, we had
$110.2 million outstanding under our Series B Bonds, which bear interest at a fixed rate of 6.70% per annum, we had $54.7 million
outstanding under our Series C Bonds (Inc), which bear interest at a fixed rate of 6.85% per annum , we had $34.1 million
outstanding under our Series C Bonds (BVI), which bear interest at a fixed rate of 5.7% per annum, $59.0 million outstanding under our
Series D Bonds, which bear interest at a fixed rate of 9.1% per annum, and $412.6 million in senior debt notes, of which $162.6
million (19.7% of total debt) are floating rate debt, which bears interest at a variable rate equal to one-month SOFR plus a margin.
At June 30, 2026, one month SOFR was 3.65%. Assuming no increase in the amount of our variable interest rate debt, if one-month SOFR
increased 100 basis points, our annual cash flow would decrease by approximately $1.6 million. Our interest rate risk management
objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To
achieve our objectives, we may borrow at fixed rates or variable rates. We also may enter into derivative financial instruments such
as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument.

**Item
3. Quantitative and Qualitative Disclosures about Market Risks** **(continued)**

In
addition to changes in interest rates, the value of our future investments is subject to fluctuations based on changes in local and regional
economic conditions, changes in currency rates between the Israeli Shekel and the U.S. Dollar and changes in the creditworthiness of
tenants/operators, which may affect our ability to refinance our debt if necessary.

**Item
4. Controls and Procedures**

**Disclosure
Controls and Procedures**

We
maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934, as amended (“Exchange Act”) that are designed to ensure that information required to be disclosed in our reports
under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and
regulations and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure
controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating
the cost-benefit relationship of possible controls and procedures.

As
of June 30, 2026, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive
Officer and Chief Financial Officer, regarding the effectiveness of our disclosure controls and procedures. Based on the foregoing, our
Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable
assurance level, as of June 30, 2026.

**Changes
in Internal Control over Financial Reporting**

There
has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the quarter ended June 30, 2026 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

**PART
II – OTHER INFORMATION**

**Item
1. Legal Proceedings**

We
are not currently a party to any material legal proceedings, that are not covered by insurance and expected to be resolved within policy
limits, other than the following:

In
March 2020, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a complaint in the U.S. District Court for the
Northern District of Illinois against Moishe Gubin, Michael Blisko, the Predecessor Company and 21 of its subsidiaries, as well as the
operators of 17 of the facilities operated at our properties. The complaint was related to the Predecessor Company’s acquisition
of 16 properties located in Arkansas and Kentucky that were completed between May 2018 and April 2019 and the attempt to purchase an
additional five properties located in Massachusetts. The complaint was dismissed by the Court in 2020 on jurisdictional grounds. The
plaintiffs did not file an appeal with respect to this action, and the time for an appeal has expired.

In
August 2020, Joseph Schwartz, Rosie Schwartz and several companies controlled by them filed a second complaint in the Circuit Court in
Pulaski County, Arkansas. The second complaint had nearly identical claims as the federal case but was limited to matters related to
the Predecessor Company’s acquisition of properties located in Arkansas. The sellers, which were affiliates of Skyline Health Care,
had encountered financial difficulties and requested the Predecessor Company to acquire these properties. The defendants have filed an
answer denying the plaintiffs’ claims and asserting counterclaims based on breach of contract. This case has been dismissed without
prejudice.

In
April 2024, they filed yet another complaint in Arkansas, and this time dealing with the properties located in Arkansas, Kentucky and
Massachusetts. There has been some motion practice where the Court dismissed some of the Plaintiff’s remedies and claims.

In
January 2021, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a third complaint in Illinois state court in
Cook County, Illinois, which has nearly identical claims to the initial federal case, but was limited to claims related to the Kentucky
and Massachusetts properties. The complaint has not been properly served on any of the defendants, and, accordingly, the defendants did
not respond to the complaint. Instead, the defendants filed a motion to quash service of process. On January 11, 2023, the Cook County
Circuit Court entered an order granting such motion, quashing service of process on all defendants. In March 2023, the plaintiffs filed
a new complaint and again attempted to serve it on the defendants. It is the defendants’ position that service was (once again,
potentially) defective and sought a dismissal of the matter for want of prosecution by Joseph Schwartz, Rosie Schwartz and certain companies
owned by them. The dismissal was granted, but has been appealed to the Illinois Appellate Court, with no substantive movement on the
matter to date. In April of 2024, Joseph Schwartz, Rosie Schwartz and several companies controlled by them filed a fourth complaint in
the Circuit Court in Pulaski County, Arkansas. This fourth complaint had nearly identical claims as the federal case and the Illinois
state court matter. In November 2024, the court dismissed all rescission claims, finding plaintiffs had an adequate remedy at law in
the form of monetary damages, ordered dissolution of a lis pendens plaintiffs had filed against certain properties, and identified additional
pleading deficiencies in the complaint. The court granted plaintiffs leave to amend, and plaintiffs filed a second amended complaint.
On March 10, 2026, the court dismissed the second amended complaint with prejudice as to all defendants, finding that plaintiffs failed
to cure the previously identified deficiencies. The court also denied plaintiffs’ motion for a temporary and permanent restraining
order, finding no irreparable harm, an adequate remedy at law, and no likelihood of success on the merits. The dismissal with prejudice
bars plaintiffs from refiling these claims, subject to any appeal. The Plaintiffs have filed an appeal.

In
each of these complaints, the plaintiffs asserted claims for fraud, breach of contract and rescission arising out of the defendants’
alleged failure to perform certain post-closing obligations under the purchase contracts. We had potential direct exposure for these
claims because the subsidiaries of the Predecessor Company that were named as defendants are now subsidiaries of the Operating Partnership.
Additionally, the Operating Partnership was potentially liable for the claims made against Moishe Gubin, Michael Blisko and the Predecessor
Company pursuant to the provisions of the contribution agreement, under which the Operating Partnership assumed all the liabilities of
the Predecessor Company and agreed to indemnify the Predecessor Company and its affiliates for such liabilities. As described above,
the federal action was dismissed for lack of subject matter jurisdiction, the first Arkansas action was dismissed without prejudice,
the Illinois state court action has been dismissed, and the second Arkansas action (filed April 2024) was dismissed with prejudice on
March 10, 2026. The Plaintiffs have appealed the Arkansas trial court decision.

As
noted above, the March 2020 and January 2021 complaints also related to the Predecessor Company’s planned acquisition of five properties
located in Massachusetts. A subsidiary of the Predecessor Company purchased loans related to these properties in 2018 for a price of
$7.74 million with the expectation that the subsidiaries would acquire title to the properties and the loans would be retired. The subsidiary
subsequently advanced $3.1 million under the loans to satisfy other liabilities related to the properties. The planned acquisition/settlement
with the sellers/owners and/borrowers was not consummated because the underlying tenants of the properties surrendered their licenses
to operate healthcare facilities on these properties.

The
Predecessor Company has instituted legal proceedings to collect the outstanding amount of these loans and to assert related claims against
the sellers and their principals for the unpaid principal balances as well as protective advances and collection costs. In connection
with enforcing their rights, in July 2022, the Company foreclosed, and (as lender) sold four of the five properties at auction for the
total amount of $4.4 million. In December 2022, the Company took title on the fifth property with an estimated fair value of $1.2 million.

## Item 1A. Risk Factors

In addition to the other information contained in
this report, investors should carefully consider the risk factors discussed in Exhibit 99.1 to the Company’s Current Report on Form 8-K
filed with the SEC on April 15, 2026. There have been no material changes to those risk factors. Any of these risks could materially and
adversely affect the Company’s business, financial condition, liquidity, results of operations, and prospects, and could cause actual
results to differ materially from those expressed in or implied by the forward-looking statements contained in this report.

## Item 2. Unregistered Sales of Equity Securities Item
2. Unregistered Sales of Equity Securities and Use of Proceeds**

No
redemptions occurred in the first half of 2026.

## Item 3. Defaults Upon Senior Securities

As of June 30, 2026, the Company
had made timely payments under its debt agreements.

## Item 4. Mine Safety Disclosures

Not applicable.

**Item
5. Other Information**

None

**Item
6. Exhibits**

| Exhibit No. |  |
| --- | --- |
| 3.1 | Articles of Amendment and Restatement of Strawberry Fields REIT, Inc., incorporated herein by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022. |
| 3.2 | Amended and Restated Bylaws of Strawberry Fields REIT, Inc., incorporated herein by reference to Exhibit to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022. |
| 4.1 | Description of Capital Stock incorporated herein by reference to Exhibit 4.1 to the Form 10-K filed with the Securities and Exchange Commission as of March 19, 2024. |
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Strawberry Fields REIT, Inc.* |
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Strawberry Fields REIT, Inc.* |
| 32.1 | Section 1350 Certification of the Principal Executive Officer of Strawberry Fields REIT, Inc.** |
| 32.2 | Section 1350 Certification of the Principal Financial Officer of Strawberry Fields REIT, Inc.** |
| 101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL: (i) condensed consolidated Balance Sheets, (ii) condensed consolidated Statements of Income and Comprehensive Income, (iii) condensed consolidated Statements of Changes in Equity, (iv) condensed consolidated Statements of Cash Flows, and (v) Notes to condensed consolidated Financial Statements, tagged as blocks of text and including detailed tags. |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101). |

*
Exhibits that are filed herewith.

**
Exhibits that are furnished herewith

**SIGNATURES**

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

**Strawberry Fields REIT, Inc.**

Date: August 6, 2026 By: */s/  Moishe Gubin*

Name: Moishe Gubin

Title: Chief Executive Officer and Chairman

Date: August 6, 2026 By: */s/ Greg  Flamion*

Name: Greg Flamion

Title: Chief Financial Officer

---

## EX-31.1

SEC source: [ex31-1.htm](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/ex31-1.htm)

**EXHIBIT
31.1**

**CERTIFICATION
OF THE PRINCIPAL EXECUTIVE OFFICER**

**REQUIRED
BY RULE 13A-14(A)/15D-14(A)**

**UNDER
THE SECURITIES EXCHANGE ACT OF 1934**

I
certify that:

| 1. | I have reviewed this report on Form 10-Q of Strawberry Fields REIT, Inc. (the “Company”); |
| --- | --- |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within that entity, particularly during the period in which this report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and

(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s  other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,  to the Company’s auditors and the Audit Committee of the Company’s Board of Directors:

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.

*/s/  Moishe Gubin*

Moishe Gubin

Principal Executive Officer

Date: August 6, 2026

---

## EX-31.2

SEC source: [ex31-2.htm](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/ex31-2.htm)

**EXHIBIT
31.2**

**CERTIFICATION
OF PRINCIPAL FINANCIAL OFFICER**

**REQUIRED
BY RULE 13A-14(A)/15D-14(A)**

**UNDER
THE SECURITIES EXCHANGE ACT OF 1934**

I
certify that:

| 1. | I have reviewed this report on Form 10-Q of Strawberry Fields REIT, Inc. (the “Company”); |
| --- | --- |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within that entity, particularly during the period in which this report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and

(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s  other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,  to the Company’s auditors and the Audit Committee of the Company’s Board of Directors:

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.

*/s/  Greg Flamion*

Greg Flamion

Principal Financial Officer

Date: August 6, 2026

---

## EX-32.1

SEC source: [ex32-1.htm](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/ex32-1.htm)

**EXHIBIT
32.1**

**CERTIFICATION
OF CHIEF EXECUTIVE OFFICER**

**PURSUANT
TO 18 U.S.C. SECTION 1350,**

**AS
ADDED BY**

**SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002**

In
connection with the Quarterly Report of Strawberry Fields REIT, Inc. (the “Company”) on Form 10-Q for the three and six months
ended June 30, 2026 as filed with the Securities and Exchange Commission (the “Report”), I, as the Principal Executive Officer
of the Company, certify, pursuant to 18 U.S.C. § 1350, as added by § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies  with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. To my knowledge, the information  contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company  as of and for the period covered by the Report.

*/s/  Moishe Gubin*

Moishe Gubin

Chief  Executive Officer

Date: August 6, 2026

---

## EX-32.2

SEC source: [ex32-2.htm](https://www.sec.gov/Archives/edgar/data/1782430/000149315226036400/ex32-2.htm)

**EXHIBIT
32.2**

**CERTIFICATION
OF CHIEF FINANCIAL OFFICER**

**PURSUANT
TO 18 U.S.C. SECTION 1350,**

**AS
ADDED BY**

**SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002**

In
connection with the Quarterly Report of Strawberry Fields REIT, Inc. (the “Company”) on Form 10-Q for the three and six months
ended June 30, 2026 as filed with the Securities and Exchange Commission (the “Report”), I, as the Principal Financial Officer
of the Company, certify, pursuant to 18 U.S.C. § 1350, as added by § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies  with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. To my knowledge, the information  contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company  as of and for the period covered by the Report.

*/s/  Greg Flamion*

Greg Flamion

Chief  Financial Officer

Date: August 6, 2026