IIPR 10-K & 10-Q changes, risk factors and insider trading

We are an internally-managed REIT focused on the acquisition, ownership and management of specialized industrial and commercial properties in the United States. Our properties are primarily leased to experienced, state-licensed operators for their regulated cannabis facilities. We have leasedacquired and expect to continue to leaseacquire our cannabis properties through sale-leaseback transactions and third-party purchases. These properties are generally leased, and we expect to continue leasing them, on a triple-net lease basis, wherepursuant to which the tenant is generally responsible for all aspects of and costs related to the property and its operation during the lease term, including structural repairs, maintenance, real estate taxes and insurance. Outside of the cannabis sector, our leases may include different lease structures that do not require tenants to assume all property-related expenses. In addition to our cannabis-related real estate portfolio, we also have financial investments in the life science industry and intend to actively pursue acquisitions of properties within that sector as a key component of our growth strategy. We may continue expanding our investment activities to include joint ventures, debt or mezzanine financing, preferred or joint venture equity interests, and interests in other real estate funds or REITs.

We do not include in our operating portfolio the following two properties (all of which were under development/redevelopment as of December 31, 2024,2025, and together are expected to comprise 491,000255,000 rentable square feet upon completion of development/redevelopment):

Our results of operations are affected by a number of factors and depend on the rental revenue we receive from the properties that we acquire, the timing of lease expirations, general market conditions, the regulatory environment in the cannabis industry, the regulatory and market conditions applicable to the life science industry, and the competitive environment for real estate assets that support thesupporting regulated cannabis industry.operators and life science tenants.

As of December 31, 2024,2025, we owned 109111 properties located in 19 states. Many of our tenants are tenants at multiple properties. We seek to manage our portfolio-level risk through geographic diversification and by minimizing dependence on any single property or tenant. At December 31, 2024,2025, our largest property was located in New York and accounted for 5.5% of our net real estate held for investment. No other properties accounted for more than 5% of our net real estate held for investment at December 31, 2024.2025. See Note 2 “Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements” in the notes to the consolidated financial statements for further information regarding the tenants in our portfolio that represented the largest percentage of our total rental revenues for the year ended December 31, 2024.2025.

Investments in Real Estate

Comparison of the Years Ended December 31, 2024 and 2023 (in thousands)

Other Revenues. Other revenues for the years ended December 31, 20242025 and 20232024 primarily consist of interest revenue related to leases for property acquisitions that did not satisfy the requirements for sale-leaseback accounting. The $1.1 million decrease in other revenuesrevenue for the year ended December 31, 20242025 was primarily due to non-collection of $0.6 million in rent fromrelated to one property,property partiallyleased offsetto by the application of $0.2 million of security deposits.4Front.

Property Expenses. Property expenses for the year ended December 31, 20242025 increased by $3.6$1.7 million, or 14%,6%, to $28.5$30.2 million, compared to $24.9$28.5 million for the year ended December 31, 2023.2024. The increase was primarily duedriven toby additional investment in existing properties, which resultedresulting in highera $2.1 million increase in property tax that we paid for our properties,expense, as well as highera property$0.8 million increase in expenses relatedassociated towith properties that we havetook regainedback possession of from defaulted tenants but not yet leased.re-leased. These increases were partially offset by a $1.2 million decrease in insurance expense due to lower premiums on the master property insurance policy renewed in August 2024 and 2025. Property expenses related to leased properties are generally reimbursable to us by the tenants under the terms of the leases.

Depreciation and Amortization Expense. Depreciation and amortization expense for the year ended December 31, 20242025 increased by $3.6$3.3 million, or 5%, to $70.8$74.1 million, compared to $67.2$70.8 million for the year ended December 31, 2023.2024. The increase in depreciation and amortization expense was primarily related to depreciation on the two properties we acquired in 20242024, one property acquired in 2025 and the placement into service of construction and improvements at certain of our properties.

Loss on Sale of Real Estate. AmountLoss relateson sale of real estate for the year ended December 31, 2025 related to the sale of onea property located in Mancos, Colorado, which was sold in December 2025. Loss on sale of real estate for the year ended December 31, 2024 related to the sale of a property located in Los Angeles, CaliforniaCalifornia, (seewhich was sold in May 2024. See Note 6 “Investments in Real Estate” to our consolidated financial statements included in this report for more information).information.

Interest and Other Income. Interest and other income for the year ended December 31, 20242025 increased by $2.6$2.0 million, or 30%,46%, to $11.0$6.4 million, compared to $8.4$4.4 million for the year ended December 31, 2023.2024. The increase in interest income was primarily due to an additional $3.3 million of interest receivedpayments on the MIH Note, which were previously recognized as a deposit liability on our constructionconsolidated loan,balance whichsheets but was partiallyrecognized offset by a $0.7 million decrease toas interest earned on our interest-bearing cash and cashother equivalentsincome andin short-termSeptember investments.2025 in connection with the termination of the note.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition and/or results of operations. Except to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors, there have been no material changes to the risk factors described in the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2025. The impact of macroeconomic conditions and industry-specific challenges have also had the effect of heightening many of the risks described in the “Risk Factors” included in our Annual Report on Form 10-K, such as those relating to tenant defaults and our ability to generate sufficient cash flows to service our indebtedness and make distributions to our shareholders.stockholders. You should not interpret the disclosure of a risk to imply that the risk has not already materialized. The risks as described in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or results of operations.

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report. We make statements in this report that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements pertaining to our capital resources, portfolio performance and results of operations contain forward-looking statements. Likewise, our statements regarding anticipated growth in our funds from operations and anticipated market and regulatory conditions, our strategic direction, demographics, results of operations, plans and objectives are forward-looking statements. Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise, and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: rates of default on leases for our assets; our ability to re-lease properties upon tenant defaults or lease terminations for the rent we currently receive, or at all; concentration of our portfolio of assets and limited number of tenants; the estimated growth in and evolving market dynamics of the regulated cannabis market; the demand for regulated cannabis cultivation and processing facilities; anticipated funding sources for our investment in IQHQ Preferred Stock (as defined in Note 7 to the consolidated financial statements); defaults on our investments in real estate-related assets, such as the IQHQ Credit Facility and IQHQ Preferred Stock (as defined in Note 7 to the consolidated financial statements); our ability to identify, acquire, or profitably operate life science properties; market dynamics in the life science sector; decreased economic activity due to fluctuations in trade policies, tariffs, and related government actions; inflation dynamics; the impact of pandemics on us, our business, our tenants, or the economy generally; war and other hostilities, including the conflicts in Ukraine and IsraelIran; our business and investment strategy; our projected operating results; actions and initiatives of the U.S. or state governments and changes to government policies and the execution and impact of these actions, initiatives and policies, including the fact that cannabis remains illegal under federal law; the timing, scope and impact of the April 23, 2026 final order issued by the U.S. Department of Justice and the Drug Enforcement Administration ("DEA") regarding the federal scheduling status of certain marijuana activities; availability of suitable investment opportunities in the regulated cannabis industry; our understanding of our competition and our potential tenants’ alternative financing sources; the expected medical-use or adult-use cannabis legalization in certain states; shifts in public opinion regarding regulated cannabis; the potential impact on us from litigation matters, including rising liability and insurance costs; the additional risks that may be associated with certain of our tenants cultivating, processing and/or dispensing adult-use cannabis in our facilities; the state of the U.S. economy generally or in specific geographic areas; economic trends and economic recoveries; our ability to access equity or debt capital; financing rates for our target assets; our level of indebtedness, which could reduce funds available for other business purposes and reduce our operational flexibility; covenants in our debt instruments, which may limit our flexibility and adversely affect our financial condition; our ability to maintain our investment grade credit rating; changes in the values of our assets; our expected portfolio of assets; our expected investments; interest rate mismatches between our assets and our borrowings used to fund such investments; changes in interest rates and the market value of our assets; the degree to which any interest rate or other hedging strategies may or may not protect us from interest rate volatility; the impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters; how and when any forward equity sales may settle; our ability to maintain our qualification as a REIT for U.S. federal income tax purposes; our ability to maintain our exemption from registration under the Investment Company Act of 1940; availability of qualified personnel; and market trends in our industry, interest rates, real estate values, the securities markets or the general economy.

We are an internally-managed real estate investment trust (“REIT”) focused on the acquisition, ownership and management of specialized industrial properties and investments in the life science industry. Our properties are primarily leased to experienced, state-licensed operators for their regulated cannabis facilities. We have acquired and intend to continue to acquire our cannabis properties through sale-leaseback transactions and third-party purchases. We have leased and expect to continue to primarily lease our properties on a triple-net lease basis, where the tenant is responsible for all aspects of and costs related to the property and its operation during the lease term, including structural repairs, maintenance, real estate taxes and insurance. Outside of the cannabis sector, our leases may include different lease structures that do not require tenants to assume all property-related expenses. In addition to our cannabis-related real estate portfolio, we also have investments in the life science industry and intend to actively pursue acquisitions of properties within that sector as a key component of our growth strategy. We may continue expanding our investment activities to include joint ventures, debt or mezzanine financing, preferred or joint venture equity interests, and interests in other real estate funds or REITs.

We were incorporated in Maryland on June 15, 2016. We conduct our business through a traditional umbrella partnership real estate investment trust, or UPREIT structure, in which our properties are owned by our Operating Partnership, directly or through subsidiaries. We are the sole general partner of our Operating Partnership and own, directly or through subsidiaries, 100% of the limited partnership interests in our Operating Partnership. As of MarchJune 31,30, 2026, we had 2324 full-time employees.

As of MarchJune 31,30, 2026, we owned 110108 properties comprising 8.98.4 million square feet (including 303,000240,000 rentable square feet under development/redevelopment) in 19 states. As of MarchJune 31,30, 2026, we had invested $2.5$2.4 billion in the aggregate (consisting of purchase price and funding of draws for construction and improvements submitted by tenants, if any, but excluding transaction costs) and had committed an additional $4.4$6.3 million to fund draws to certain tenants and vendors for improvements at our properties. Of the $4.4$6.3 million committed to fund draws to certain tenants and vendors for improvements at our properties, $0.9$0.8 million was incurred but not funded as of MarchJune 31,30, 2026.

Of these 110108 properties, we include 108107 properties in our operating portfolio, which were 97.8%95.8% leased as of MarchJune 31,30, 2026, with a weighted-average remaining lease term of 12.411.9 years. We do not include in our operating portfolio the followingproperty propertiesin San Bernardino, California (all of which werewas under development/redevelopment as of MarchJune 31,30, 2026, and together areis expected to comprise 255,000192,000 rentable square feet upon completion of development/redevelopment):.

On February 26, 2026, the Company entered into a settlement agreement (as amended, the “PharmaCann Settlement Agreement”) with PharmaCann Inc. (“PharmaCann”) to resolve pending lawsuitslitigation broughtrelating by certain indirect, wholly owned subsidiaries of the Company against PharmaCann and certain of its affiliates in connection withto rent defaults under leases (the “PharmaCann Leases”) for three properties owned by the Company located in New York, Ohio,Ohio and Pennsylvania. In connection with the PharmaCann Settlement Agreement, the parties also entered into consent orders, stipulations of judgment and stipulations of settlement with the respective courts in New York, Ohio and Pennsylvania, which were fully executed on March 13, 2026, and provide for judgments in favor of the Company's subsidiaries for possession of the premises and monetary damages, subject to dollar-for-dollar reduction for escrowed rent funds released to the Company. Pursuant to the PharmaCann Settlement Agreement, PharmaCann agreed to wind down and close its operations at each property and surrender possessionthe ofOhio, thePennsylvania and New York and Pennsylvania premises to the Company on or beforeby May 20, 2026, and the Ohio premises on or before May 26, 2026. Upon PharmaCann's vacating2026 and surrenderingJune of20, the2026, premisesrespectively, onat which time the applicable surrenderleases dates,would the PharmaCann Leases will be deemed terminated.terminate.

In March 2025, we initiated a strategic effort to improve long-term financial performance by repositioning a portion of our tenant base toward more financially viable, long-term operators. In connection with this effort, we declared certain tenants and their affiliates in default for failure to pay contractual rent in full, including 4Front Ventures Corp., Gold Flora, LLC and TILT Holdings Inc. We are actively pursuing our rights under these leases, which may include eviction proceedings. 4Front Ventures has filed for bankruptcy protection in Canada and for voluntary receivership in Massachusetts and Illinois, which may delay our enforcement efforts. As of MarchJune 31,30, 2026, we have terminated all three leases with affiliates of Gold Flora. As of MarchJune 31,30, 2026, 4Front Ventures Corp and TILT Holdings IncInc. collectively represented approximately 8.8%9.3% of our annualized contractual rent and owed $28.1$32.3 million and $6.6$7.6 million, respectively, for base rent, property management fees, and estimated tax and insurance payments.

During the quarter ended March 31, 2026, we also declared defaults under leases with two additional tenants, The Cannabist Company ("Cannabist") and Battle Green Holdings, Inc. ("Battle Green"), for failure to pay rent in full. As of MarchJune 31,30, 2026, these leases represented, in the aggregate, 5%6.0% of our annualized contractual rent.

The properties that we have acquired primarily consist of primarily real estate assets that support the regulated cannabis industry. Most states where we own properties issue licenses for cannabis operations for a limited period. If one or more of our tenants are unable to renew or otherwise maintain their licenses or other state and local authorizations necessary to continue their cannabis operations, such tenants may default on their lease payments to us. Current unfavorable market dynamics in the regulated cannabis industry have adversely affected our ability to re-lease properties upon tenant defaults at the rental rates we currently receive and, in some cases, for prolonged periods. Furthermore, changes in federal law and current favorable state or local laws in the cannabis industry may impair our ability to renew or re-lease properties and the ability of our tenants to fulfill their lease obligations and could materially and adversely affect our ability to maintain or increase rental rates for our properties.

Our tenants primarily operate in the regulated cannabis industry and continue to be affected by a combination of macroeconomic, industry-specific and regulatory factors. These include federal, state and local taxation burdens; competitive pressure from illicit, unlicensed cannabis operations; declines in unit pricing for regulated cannabis products; constrained access to capital; inflationary pressures; elevated interest rates; significant debt maturities; labor market constraints; supply chain disruptions; evolving trade policies; and broader U.S. consumer financial conditions. Market dynamics and regulatory frameworks vary by state and may influence tenant profitability and demand for regulated cannabis cultivation and production facilities. These conditions have already adversely affected the ability of certain tenants to meet their lease obligations and have had a material adverse effect on the Company’s financial condition, results of operations, and cash flows. If these challenges persist or worsen, additional tenants may default under their leases and we may be unable to re-lease affected properties on favorable terms, or at all. The extent and duration of these impacts depend on developments in the regulated cannabis markets in which we operate and remain subject to significant uncertainty. These tenant-related challenges are currently having a material adverse effect on the Company’s financial condition, results of operations, and cash flows. See “—Results of Operations—Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025—Rental Revenues” for more information. If these challenges persist or worsen, additional tenants may default under their leases and we may be unable to re-lease affected properties on favorable terms, or at all. The extendextent and duration of these impacts depend on developments in the regulated cannabis markets in which we operate and remain subject to significant uncertainty.

OnIn April 23, 2026, the U.S. Department of Justice (“DOJ”) and the Drug Enforcement Administration (“DEA”) announced a final order reclassifying FDA-approved marijuana drug products and certain state-licensed medical marijuana activities from Schedule I to Schedule III, while adult-use marijuana, synthetic tetrahydrocannabinols and unlicensed marijuana activities remain Schedule I. The final order creates an expedited DEA registration pathway for eligible state-licensed medical marijuana operators and, if such operators obtain registration, may eliminate the application of Section 280E to qualifying medical marijuana operations. However,Separately, nothe retrospectiveDEA taxheld reliefan oradministrative guidancehearing on the broader rescheduling of marijuana, including adult-use marijuana, from Schedule I to Schedule III, which began on June 29, 2026, and concluded on July 15, 2026, without a ruling. The presiding administrative law judge directed participating parties to submit post-hearing briefs and proposed corrections to the hearing transcript by August 17, 2026, following which the judge will issue a recommendation to the DEA Administrator, who retains sole authority to determine whether to issue a final rule rescheduling marijuana. No timeline has been issued,established andfor either the judge’s recommendation or the DEA Administrator’s final decision. In addition, the April 2026 final order remains subject to pending legal challenges before the U.S. Court of Appeals for the D.C. Circuit. Accordingly, significant uncertainty remains regarding dual-license operators, actions by the DEA, the U.S. Department of the Treasury, and the Internal Revenue Service, tenants’ ability to obtain DEA registration, and the ultimate outcome and timing of the DEAbroader administrativerescheduling hearingprocess, scheduledand no retrospective tax relief or guidance has been issued to begin on June 29, 2026.date. Accordingly, while we believe these developments represent a meaningful step forward for the industry and could improve operator economics, access to capital, and long-term growth, we continue to assess their impact on our tenants, properties, and business and cannot predict the effect on our financial condition, results of operations, or cash flows.

As of MarchJune 31,30, 2026, we owned 110108 properties located in 19 states leased to 3837 tenants. Many of our tenants are tenants at multiple properties. We seek to manage our portfolio-level risk through geographic diversification and by minimizing dependence on any single property or tenant. At MarchJune 31,30, 2026, our largest property was located in New York and accounted for 5.5%5.7% of our net real estate held for investment. No other properties accounted for more than 5% of our net real estate held for investment at MarchJune 31,30, 2026. See Note 2 “Concentration of Credit Risk” in the notes to our consolidated financial statements for further information regarding the tenants in our portfolio that represented the largest percentage of our total rental revenues for the three and six months ended MarchJune 31,30, 2026.

We face competition from a diverse mix of market participants, including but not limited to,to other companies with similar business models, independent investors, hedge funds, lenders and other real estate investors, as well as potential tenants (cannabis operators themselves), all of whom may compete with us in our efforts to acquire real estate zoned for regulated cannabis operations. Competition from others may diminish our opportunities to acquire a desired property on favorable terms or at all. In addition, this competition may put pressure on us to reduce the rental rates below those that we expect to charge for the properties that we acquire, which would adversely affect our financial results.

See Note 6 “InvestmentInvestments in Real Estate” in the notes to the consolidated financial statements for information regarding our investments in real estate activity and property portfolio activity during the threesix months ended MarchJune 31,30, 2026.

InvestmentInvestments in Life Science

See Note 7 "Life Science Investments" in the notes to the consolidated financial statements for information regarding our life science investment activity during the threesix months ended MarchJune 31,30, 2026.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

During the three months ended MarchJune 31,30, 2026, we applied $1.2 million of security deposits for payment of rent on properties leased to Battle Green and The Cannabist Company.Cannabist. During the three months ended MarchJune 31,30, 2025, we applied $5.8 million$18,000 of security deposits for payment of rent on propertiesa property leased to PharmaCann,Emerald GoldGrowth, Flora,which TILTwas andsold Sozo.in April 2025.

PropertyRental Expenses. Property expensesrevenues for the threesix months ended MarchJune 31,30, 2026 increaseddecreased by $0.2$2.8 millionmillion, or 2%, to $7.6$131.8 million, compared to $7.4$134.6 million for the threesix months ended MarchJune 31,30, 2025. The increasedecrease was primarily attributabledriven toby additionala investments$12.6 million reduction in existingrental revenue resulting from the sale of four properties, whichtenant resulteddefaults inand $0.6lease millionterminations. ofThese higherdecreases property taxes. This increase waswere partially offset by a $0.4$9.8 million decreaseincrease in insurancerental expenserevenue dueattributable to lowerannual premiumscontractual underrent theescalations masteron propertymultiple insuranceproperties, policynew renewedleases inexecuted Auguston 2025,existing asproperties, welland ascollections lowerfrom propertycourt expensessettlements related to properties repossessed fromcertain defaulted tenants. Property expenses related to leased properties are generally reimbursable by tenants under the terms of the leases.

Impairment Loss on Real Estate. ImpairmentWe recognized an impairment loss on real estate of $3.5 million forduring the three months ended March 31, 2025 related to one of our properties located in Palm Springs, CaliforniaCalifornia. whichThe property was under contract to be sold for less than its carrying value as of March 31, 2005 and was subsequently sold in June 2025. No other impairment loss on real estate was recognized during the three and six months ended June 30, 2026 and 2025.

Interest and Other Income. Interest and other income for the three and six months ended MarchJune 31,30, 2026 was $5.5$8.5 million and $14.0 million, respectively, and consisted of interest and dividend income earned on our investments in the IQHQ Credit Facility and IQHQ Preferred Stock. These investments were made starting in September 2025 and, accordingly, did not generatehave comparable income during the three and six months ended MarchJune 31,30, 2025.

General and Administrative Expense. General and administrative expenseexpenses for the three months ended MarchJune 31,30, 2026 increaseddecreased $1.9by $0.9 million to $10.3$7.7 million from $8.5$8.6 million for the three months ended MarchJune 31,30, 2025. The increasedecrease was primarily driven by alower $1.5compensation millionexpense, increaseprimarily indue to lower bonus expense, as well as lower consulting expenses. These decreases were partially offset by higher non-capitalizable financing expenses and legal expenses related to various litigation expense.matters.

Interest and Other Income. Interest and other income decreasedfor bythe $0.7three months ended June 30, 2026 increased slightly to $0.9 million tofrom $0.3$0.8 million for the three months ended MarchJune 31,30, 2026,2025. comparedInterest and other income for the six months ended June 30, 2026 decreased to $1.0$1.2 million from $1.8 million for the threesix months ended MarchJune 31,30, 2025. TheInterest decreaseand wasother dueincome tois lowerprimarily affected by prevailing market interest rates and the balance of our interest-bearing investments and lower rates earned on those investments.

Preferred Stock Dividends. Preferred stock dividends for the three months ended MarchJune 31,30, 2026 increased by $1.9$2.3 million,million to $2.7$3.2 million,million comparedfrom to $0.8$0.9 million for the three months ended MarchJune 31,30, 2025. Preferred stock dividends for the six months ended June 30, 2026 increased by $4.1 million to $5.8 million from $1.7 million for the six months ended June 30, 2025. The increaseincreases waswere primarily due to the issuance of additional shares of the Series A Preferred Stock issued under the ATM Program subsequent to MarchJune 31,30, 2025.

Comparison of the ThreeSix Months Ended MarchJune 31,30, 2026 and 2025 (in thousands)

Cash flows provided by operating activities for the threesix months ended MarchJune 31,30, 2026 and 2025 were $56.0$100.9 million and $54.2$102.7 million, respectively. Cash flows provided by operating activities were generally from contractual rent and tenant reimbursements from our properties, partially offset by our general and administrative expense, interest expense, property expenses in excess of tenant reimbursements and property expenses at properties that were not leased. For the threesix months ended MarchJune 31,30, 2026, cash flows provided by operating activities also included interest and dividend income earned on our investments in the IQHQ Credit Facility and IQHQ Preferred Stock. The increasedecrease in cash flows provided by operating activities for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 was primarily due to lower rental revenue and timing differences in working capital and application of tenant security deposits, partially offset by interest and dividend income earned on our investments in the IQHQ Credit Facility and IQHQ Preferred Stock, partially offset by lower rental revenue and timing differences in working capital and application of tenant security deposits.Stock.

For the threesix months ended MarchJune 31,30, 2026, cash flows used in investing activities consisted of $2.9a $120.0 million investment in life science financial instruments and $3.6 million in funding of draws for improvements and construction, partially offset by $2.6$45.2 million in proceeds from the sale of real estate asset.assets. For the threesix months ended MarchJune 31,30, 2025, net cash used in investing activities was $17.2$22.9 million, which was primarily driven by $16.9$24.4 million ofused for investments in real estate and funding of draws for improvementsimprovement and construction funding at our properties, andpartially $0.3offset by $1.8 million in proceeds related to netthe purchases and maturitiessale of short-termour investments.Palm Springs, California property.

Net cash usedprovided inby financing activities of $55.3$137.5 million during the threesix months ended MarchJune 31,30, 20252026 was primarilydriven drivenby $535.8 million of net proceeds from the issuance of the Exchangeable Notes and term loans, $81.2 million of net proceeds from the issuance of Series A Preferred Stock, and $44.0 million of net proceeds from the issuance of common stock. These amounts were partially offset by dividend payments of $54.8$112.0 million to common and preferred stockholders, a$89.0 partialmillion related to the repurchase of our common stock, net decrease in borrowings under our revolving credit facilities of $10.0 million, principal repaymentrepayments of $8.7$311.3 million on theour term loans and Notes due 20262026, and $0.7$1.3 million related to the net share settlement of equity awards to satisfy employee withholding taxes upon the vesting of restricted stock. These amounts were partially offset by $9.2 million in net proceeds from the issuance of Series A Preferred Stock under our at-the-market offering program.

Liquidity is a measure of our ability to meet potential cash requirements. Our principal future uses of cash and cash equivalents include the acquisition of additional properties and other investments (including the completion of our investment in IQHQ Preferred Stock),investments, associated acquisition and improvement costs, non-reimbursed expenses associated with unleased properties, operating and administrative expenses, scheduled debt service and repayments, and the payment of dividends to holders of our Commoncommon Stockstock and Preferredpreferred Stock,stock, as well as any future series of preferred stock we may issue. As of MarchJune 31,30, 2026, we had cash and cash equivalents of $89.1$204.7 million.

We derive substantially all of our income from leasing our properties and life science investments, collecting rental, interest and dividend income. These sources of income represent our primary source of liquidity to fund the acquisition of additional properties, the development and redevelopment of existing properties, the funding of our remaining investment in IQHQ Preferred Stock, dividends to our stockholders, scheduled debt service under our Notes due 2026, repayment of borrowings and interest payments under our Creditcredit Facilities,facilities, general and administrative expenses, property development and redevelopment activities, property operating expenses and other expenses incurred related to managing our existing portfolio and investing in additional properties. Because substantially all of our leases are triple net, our tenants are generally responsible for the maintenance, insurance and property taxes associated with the properties they lease from us. If a tenant defaults on one of our leases or the lease term expires with no tenant renewal, we would incur property costs not paid by the tenant during the time it takes to re-lease or sell the property.