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

Substantially all of our revenue and sources of cash flows are derived from management agreements, operating lease rentalsrentals, resident fees and services and interest earned on outstanding financing receivables, loans receivable and income from our preferred equity investments in unconsolidated joint ventures. Our investments in owned real properties, mortgage loans, mezzanine loans, financing receivables and preferred equity investments represent our primary source of liquidity to fund distributions. We do not implement operational decisions with respect to the daily management and marketing of care services offered at our properties. We therefore are dependent upon the performance of our operators andfor the income and rates we earn on leases and loans. A decrease in occupancy and/or increase in operating costs could have an adverse effect on our SHOP operators, lessees and borrowers. For example, due to the Covid-19 pandemic and related public health measures, our lessees and borrowers experienced a decrease in occupancy and an increase in operating costs. There can be no assurance that our SHOP operators, lessees and borrowers will have sufficient assets, income, and access to financing to enable them to satisfy, in full, their respective obligations to us. Our financial condition and ability to pay dividends could be adversely affected by financial or operational difficulties experienced by any of our SHOP operators, lessees or borrowers, or in the event any such operator does not renew and/or extend its relationship with us at similar or better financial terms.

The existence,existence and effect of public health crises and related government measures to prevent the spread of infectious diseases could adversely impact our company and the financial results of our operators. The operations and occupancy levels at the seniors housing and health care facilities of SHOP communities and of our lessees and borrowers could be adversely affected by a pandemic including future outbreaks of Covid and its variants, especially if there are infections on a large scale at our properties. The impact of another pandemic could include,include early resident move-outs, our operators delaying accepting new residents due to quarantines, potential occupants postponing moves to our operators’ facilities, and/or hospitals cancelling or significantly reducing elective surgeries thereby reducing the number of people in need of skilled nursing care. Operating costs, such as cost increases in staffing and pay, purchases of additional personal protective equipment (“PPE”), and implementation of additional safety protocols, of our SHOP operators, lessees and borrowers could rise due to a public health crisis such as another pandemic.

Additionally, health orders, rent moratoriums, and other initiatives by federal, state, and local authorities could affect our operators and our ability to collect rent and/or enforce remedies for the failure to pay rent. The extent to which another pandemic could impact our operationsoperations, and those of our operatorsoperators, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration, spread and severity of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. Further, future outbreaks of Covid and its variants, or another pandemic, could generate an adverse trend away from seniors housing and health care facilities to at-home and alternative care services, the occupancy rates of our operators and the value of our real estate investments could be negatively impacted.

OurWe and our SHOP operators, borrowers and lessees who operate health care facilities are subject to extensive regulation by federal, state and local governments. These laws and regulations are subject to frequent and substantial changes resulting from proposed and enacted legislation, adoption of rules and regulations, the scope, administration, and enforcement of regulatory frameworks, and judicial interpretations of preexisting and newly adopted law. These changes may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by both government and other third-party payors. These changes may be applied retroactively. The ultimate timing or effect of these changes cannot be predicted. For instance, CMS periodically adopts new regulations, and in April 2024 finalized minimum staffing standards for long-term care facilities participating in the Medicare and Medicaid programs. The final rule has been challenged in federal court and the rule may be subject to further revision or deferral due to the pending litigation, pending legislation, or administration changes. See Item 1. Business—Health Care Regulation. The failure of any borrower of funds from us or SHOP operator or lessee of any of our properties to comply with such laws, requirements and regulations could affect its ability to operate its facility or facilities and could adversely affect such SHOP operator’s, lessee’s or borrower’s abilitycontractual to make lease or debt paymentsobligations to us. Further, the ability of our operators to comply with applicable regulations, including minimum staffing requirements,regulations could be adversely impacted by shifts in the labor market and increases in inflation. Additionally, changes in federal, state, or local laws limiting REIT investment in the health care industry, reducing health care related benefits for REITs, or requiring additional approvals for health care entities to do business with REITs, could have a material adverse effect on our financial condition and operations.

The ability of our lesseesoperators to generate revenue and profit determines the underlying value of that property to us. Revenues of our skilled nursing center lessees are generally derived from payments for patient care. Sources of such payments include the federal Medicare program, state Medicaid programs, private insurance carriers, health care service plans, health maintenance organizations, preferred provider arrangements, self-insured employers, as well as the patients themselves.

The health care industry continues to face increased government and private payor pressure on health care providers to control costs. Federal legislative and regulatory policies have been adopted and may continue to be proposed that would reduce Medicare and/or Medicaid payments to nursing facilities. Moreover, state budget pressures continue to result in adoption of Medicaid provider payment reductions in some states. Increasingly, state Medicaid programs are providing coverage through managed care programs under contracts with private health plans, which is intended to decrease state Medicaid costs. In light of continuing federal and state Medicaid program reforms, budget cuts, and regulatory initiatives, no assurance can be given that the implementation of such regulations and reforms will not have an adverse effect on the financial condition or results of operations of our SHOP operators, lessees and/or borrowers which, in turn, could affect their ability to meet their contractual obligations to us.

Failure to comply with federal,applicable state,law or local regulations could prohibit operation of health care facilities.

The failure of our operators to comply with applicable federal, state, or local law or regulations could result in penalties which could include loss or restriction of license, loss of accreditation, denial of reimbursement, imposition of fines, suspension or decertification from federal and state health care programs, or closure of the facility. In our SHOP segment in particular, we may be held responsible for the failure by one of our third-party SHOP operators to comply with applicable law or regulation, which could subject us to similar penalties. The loss or imposition of restrictions on any required license, registration, certificate of need, provider agreement or certification would prevent a facility from operating in the manner intended by the operator.operator or us. Additionally, failure by any of our operators to comply with applicable laws and regulations could result in adverse publicity and reputational harm, and therefore could harm our business.

Operators of health care facilities may become subject to claims that their services have resulted in injury or other adverse effects. AsFor properties in our SHOP segment, we maintain and/or contractually require that our third-party SHOP operators maintain comprehensive liability insurance. For properties in our Triple-Net Portfolio, as a non-possessory landlord, we contend we are not generally responsible for what takes place at properties we do not possess. Although we require our operators to secure adequatemaintain comprehensive liability insurance that covers us as well as the operator, we could be subject to losses due to noncompliance or insufficient coverage. In addition, certain risks could be uninsurable or unavailable. There can be no assurance that we or our operators will have adequate insurance or funds to cover all contingencies. If an uninsured loss occurs or a loss exceeds policy limits, we could lose both invested capital and anticipated revenue from a property.

Inflation, both real or anticipated as well as any related governmental policies, could adversely affect the economy and the costs of labor, goods and services to our operators. The impact of inflation may increase the costs to manage and make capital improvements at our SHOP communities. Because lessees and borrowers are typically required to pay all property operating expenses, increases in property-level expenses at our leased and mortgaged properties generally do not directly affect us. However, increased operating costs could have an adverse impact on our lessees and borrowers if increases in their operating expenses exceed increases in their revenue, which may adversely affect their ability to pay rent and interest owed to us. An increase in our lessees’ and borrowers’operators’ expenses and a failure of their revenues to increase at least with inflation could adversely impact their net operating income and our results of operations. In addition, our long-term leases and loans typically contain provisions, such as rent escalators, designed to mitigate the adverse impact of inflation. If the contractual or actual increases in income we receive from our lessees and borrowers do not keep pace with a rise in inflation, our results of operations could be adversely impacted.

Real estate investments are relatively illiquid and therefore tend to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates, and other factors, including supply and demand, that are beyond our control. All of our real estate investments are special purpose properties that cannot be readily converted to other health care related services, general residential, retail, or office use. Transfers of operations of health care facilities are subject to regulatory approvals not required for transfers of other types of commercial operations and other types of real estate. If the operation of any of our properties becomes unprofitable or a SHOP operator, lessee or borrower becomes unable to meet its obligations on the lease orlease, mortgage loan, or management agreement, the liquidation value of the property could be substantially less than the net book value or the amount owing on any related mortgage loan than would be the case if the property were readily adaptable to other uses.

The business of providing seniors housing and health care is highly competitive. Our operators compete with other companies providing similar care services or alternatives such as home health agencies, hospices, life care at home, community-based service programs, retirement communities, and convalescent centers. Additionally, our operators are sensitive to changes in the labor market and wages and benefits offered to their employees, which can impact their ability to remain competitive. There can be no assurance that our operators will not encounter increased competition in the future which could limit their ability to attract residents or expand their businesses and therefore adversely affect their ability to manage our SHOP communities or to make their lease or loan payments to us.

If we fail to qualify as a REIT in any taxable year, we will be subject to federal and state income tax (including any applicable alternative minimum tax for taxable years ending prior to January 1, 2018) on our taxable income at regular corporate rates. We note that REITs are specifically excluded from the application of the corporate alternative minimum tax that was enacted as part of the Inflation Reduction Act of 2022 (H.R. 5376).2022. Unless we are entitled to relief under statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification. If we lose our REIT status, our net earnings available for investment or distribution to stockholders would be significantly reduced for each of the years involved. In addition, we would no longer be required to make distributions to stockholders.

Legislation, new regulations, administrative interpretations and/or court decisions could occur at any time and significantly change the tax laws with respect to our qualification as a REIT or the federal income tax consequences of such qualification. We cannot predict if or when any new or amended law, regulation, administrative interpretation, or case will be adopted, promulgated, decided or become effective, and any such change may apply retroactively. The last significant legislation affecting REITs was The Tax Cuts and Jobs Act, effective for tax years beginning in 2018. We and our security holders may be adversely affected by any new or amended law, regulation, administrative interpretation, or case law. Stockholders and prospective investors are urged to consult with their tax advisors with respect to the impact of the Tax Cuts and Jobs Act and any other regulatory, administrative or judicial developments and proposals and their potential effect on an investment in our securities.

The terms of our current indebtedness as well as debt instruments that we enter into in the future are subject to customary financial and operational covenants. These include requiring us to maintain debt service coverage, leverage ratios, and minimum net worth requirements. We may be unable to maintain compliance with these covenants and, if we fail to do so, we may be unable to obtain waivers and/or amend the covenants. If some or all of our debt is accelerated and becomes immediately due and payable, we may be unable to repay or refinance the debt. Our continued ability to incur debt and operate our business is subject to compliance with these covenants, which could limit operational flexibility.

We have in the past and may in the future develop and/or acquire properties in partnerships and similar joint ventures, including those in which we own a preferred interest, when we believe circumstances warrant this type of investment. Our organizational documents do not limit the amount of available funds that we can invest in partnerships or other joint venture structures. As of December 31, 2024,2025, we had eightfive active joint ventures with a total LTC equity investment of $378.6$330.6 million. Investments in partnerships and joint ventures, including limited liability companies, involve risks such as the following:

We generally will seek to maintain sufficient control of a partnershipspartnership or joint venture to permit us to achieve our business objectives. However, in the event that it fails to meet expectations or becomes insolvent, we could lose our investment in the partnership or joint venture.

No more than 50% in value of the outstanding shares of a REIT can be beneficially owned, directly or indirectly, by five or fewer individuals at any time during the last half of each taxable year. To ensure qualification under this test, our charter provideprovides that, subject to exceptions, no person is permitted to beneficially own more than 9.8% of outstanding shares of any class or series of our stock, including our common stock. Our Board of Directors could decide to exempt a person from the 9.8% ownership limit unless doing so would result in the termination of our status as a REIT. Shares of our stock in excess of the 9.8% ownership limitation that lack an applicable exemption may lose rights to dividends and voting, and may be subject to redemption. Additionally, acquisition of any shares of our stock that would result in our disqualification as a REIT may be limited or void. The 9.8% ownership limitation also could have the effect of delaying, deferring, or preventing a change in control of us, including a merger or acquisition or tender offer that might provide a premium price for holders of our stock.

Our foursix executive officers and other senior officers have a significant role in our success. Our ability to retain our management group or to attract suitable replacements should any member of the management group leave is dependent on the competitive nature of the employment market. The loss of services from key members of the management group or a limitation in their availability could adversely affect our business and could be negatively perceived in the capital markets.

Under various federal, state, and local environmental laws, owners or operators of real estate could be required to investigate and remediate the effects of contamination of currently or formerly owned real estate by hazardous substances, often regardless of knowledge of or responsibility for the contamination. Although our operatorsborrowers and lessees are primarily responsible for the condition of the property they occupy, we also could be held liable to a governmental authority or to third parties for property damage, personal injuries, and for investigation and clean-up costs incurred in connection with the contamination or we could be required to incur additional costs to change how the property is constructed or operated due to presence of such substances. The presence of hazardous substances or a failure to properly remediate any resulting contamination could adversely affect our ability to lease, mortgage, or sell an affected property.

We and our operators rely on information systems to process, transmit, and store financial transactions and records, operator and lease data, and other confidential information. We are not aware of any material losses to our business or results of operations due to information system failures, data breaches, or cybersecurity incidents. However, information systems are vulnerable to threats, failures, breaches, or incidents due to improper functioning and unauthorized access from physical or electronic break-ins, computer viruses, and similar disruptions, including by hackers, foreign governments, and cyber terrorists. We and our operators rely on information technology and on numerous third-party providers for information technology services, and we and our operators face similar risks relating to these providers. We cannot be certain that their information system and cybersecurity protocols are sufficient to withstand a data breach or cybersecurity incident. The inability to maintain proper function, security, and availability of our and our operators’ information systems and the data maintained in those systems could interrupt our operations, damage our reputation, harm our business relationships, or increase our information systems, cybersecurity and insurance costs. The rapid evolution and increasing prevalence of artificial intelligence technologiesAI may also increase our and our operators’ risks of information system failures, data breaches, or cybersecurity incidents. Further, an information system or cybersecurity threat, failure, data breach, or incident on an operator could impact their operations and ability to perform under the terms of their lease with us. While we maintain insurance coverage that may, subject to policy terms and conditions including deductibles, cover specific aspects of information system and cybersecurity risks, such insurance coverage may be insufficient to cover all losses. As information system and cybersecurity risks continue to evolve, we may be required to expend additional resources to continue to enhance our information system and cybersecurity measures and to investigate and remediate any information system and cybersecurity vulnerabilities.

We and our operators are subject to various federal and state laws governing privacy and security of personally identifiable information. Despite safeguards by us and our operators, a data privacy security failure or breach could occur as a result of unintentional or deliberate acts to obtain unauthorized access to information, or to destroy, manipulate, or sabotage data. Further, new technologies such as artificial intelligenceAI may be more capable atof evading safeguards. Information system threats, failuresfailures, breaches, or incidents also could result in the loss or release of personally identifiable information. A privacy or cybersecurity failure or breach could cause a loss of business, regulatory enforcement, substantial legal liability, and reputational harm. Where the failure or breach affects an operator, this could jeopardize the operator’s ability to fulfill its obligations to us. Further, the adoption of new privacy and cybersecurity laws at the federal and state level could require us and our operators to incur significant compliance costs.

In 2025, we are evaluating and anticipating entering into structures provided in the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008. Under a typical RIDEA structure, we would have certain oversight approval rights and the right to review operational and financial reporting information, but our independent third-party operators will ultimately control the day-to-day businessoperations of the property.property, pursuant to the terms of our management agreements. Offering RIDEA structures will berepresent a further aspect of our traditional strategy of investing through vehicles such as non-cancelable triple-net operating leases, mortgage loans, and structured finance. We believe that RIDEA structures will provide us with additional investment opportunities. We also have identified several opportunities to cooperatively convert existing triple-net leases into RIDEAour structures.new SHOP segment, and in certain instances have completed these conversions. To develop and implement RIDEA structures, we may need to continue to commit financial and operational resources. While we anticipate that adding RIDEA transactions will be positive for our business model, our ability to succeed in this new focussegment will be determined by numerous factors, including our ability to identify suitable investments and our relationship with operators of RIDEAour structures.SHOP communities. We rely on the SHOP operator’s personnel, expertise, resources, good faith, and judgement to manage our SHOP communities efficiently and effectively. We also rely on the SHOP operators to set appropriate resident fees, provide accurate property-level financial results for our properties in a timely manner, and otherwise operate our SHOP communities in compliance with the terms of our management agreements and all applicable laws and regulations.

Investment Portfolio Overview

The following tables summarize our transactions induring 2024the year ended December 31, 2025 (dollar amounts in thousand):

Investment in Mortgage Loans Receivable

Investment in Unconsolidated Joint Ventures

Our primary seniors housing and health care property classifications include independent living communities, assisted living communities, memory care communities and combinations thereof and skilled nursing centers (“SNF”),. For purposes of this quarterly report and other presentations, we generally include independent living communities, assisted living communities (“ALF”), independent living communities (“ILF”),communities, memory care communities (“MC”) and combinations thereof.thereof in the seniors housing communities classification (“SH”). We also have investments in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and a behavioral health care hospital. For purposes of this quarterly report and other presentations, we generally include ILF, ALF, MC, and combinations thereof in the seniors housing communities classification (“SH”).

Substantially all of our revenues and sources of cash flows from operations are derived from resident fees and services, rents from operating leases, resident fees and services, interest earned on financing receivables,receivables and interest earned on outstanding loans receivable and income from investments in unconsolidated joint ventures.receivable. Income from our investments representrepresents our primary source of liquidity to fund distributions and areis dependent upon the performance of our SHOP communities and operators on their lease and loan obligations and the rates earned thereon. To the extent that the operators experience operating difficulties and are unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by investment type, property type and operator. Our monitoring process includes periodic review of financial statements for each facility, periodic review of operator credit, scheduled property inspections and review of covenant compliance.

During the second quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (Commonlycommonly referred to as “RIDEA”) as permittedauthorized by the Housing and Economic Recovery Act of 2008. Under RIDEA, we are permitted to participate directly in the cash flow of qualified healthcare properties (compared to receiving solely contractual rental income) and have certain oversight approval rights and the right to review operational and financial reporting information. However, our independent third-party operators ultimately control the day-to-day operations of the property, pursuant to the terms of our management agreements. Offering RIDEA structures represents a further aspect of our traditional strategy of investing through vehicles such as non-cancelable triple-net operating leases, mortgage loans, and structured finance. We believe that RIDEA structures provide us with additional investment and higher growth opportunities.

Depending upon the availability and cost of external capital, we anticipate making additional investments in seniors housing communities. New investments are generally funded from cash on hand, proceeds from periodic asset sales, temporary borrowings under our unsecured revolving line of creditcredit, proceeds from sale of common stock under our ATM, and internally generated cash flows. Our investments generate internal cash from rent, resident fees and services, rent, interest from financing receivables and interest receipts and principal payments on loan receivables and income from unconsolidated joint ventures.receivables. Permanent financing for future investments, which replaces funds drawn under our unsecured revolving line of credit, may be provided through a combination of public and private offerings of debt and equity securities and secured and unsecured debt financing. The timing, source and amount of cash flows provided by financing activities and used in investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. Changes in the capital markets’ environment may impact the availability of cost-effective capital.

The following tables summarize our real estate investment portfolio as of MarchJune 31,30, 2026 (dollar amounts in thousands):

As of MarchJune 31,30, 2026, we had $2.0$2.1 billion in net carrying value of investments as follows (in thousands):

During the second quarter of 2025, we received written notice from Genesis Healthcare Inc. (“Genesis”) of its exercise of a 5-year extension option, which extended the term of the lease to April 30, 2031. During the third quarter of 2025, Genesis filed for Chapter 11 bankruptcy. Accordingly, we wrote-off the straight-line rent receivable balance of $1.3 million related to Genesis’ master lease. During the three months ended March 31, 2026, a federal bankruptcy judge approved the sale of Genesis’ assets to a newly formed investment group. Affiliates of Genesis lease six skilled nursing centers in New Mexico (five) and Alabama (one) with a total of 782 beds under a master lease with LTC. Genesis has paid their contractual rent through MayAugust 2026.

Prestige Healthcare (“Prestige”) operates 21 skilled nursing centers located in Michigan secured under four mortgage loans and two skilled nursing centers located in South Carolina under a master lease. Prestige is our largest operator based on total revenues and second largest operator based on total assets, representing 8.0%7.8% of our total revenues and 12.3%11.9% of our total assets as of MarchJune 31,30, 2026.

During the third quarter of 2025, Prestige’s $179.9 million mortgage loan was modified to increase the current interest paid by Prestige from 8.5% to the then full contractual interest rate of 11.14% escalating annually. Additionally, the modification providesprovide Prestige an option to prepay this mortgage loan at par and without penalty within a 12-month window beginning in July 2026. The modification was effective July 1, 2025. Under the modification, Prestige is requiredagreed to provide us with at least a 90-day notice of its intention to exercise the optionoption, and the ability for Prestige to exercise the pre-payment option is contingent on several factors including Prestige being current and in good standing on all its mortgage loans with LTC and obtaining replacement financing. During the third quarter of 2025, in conjunction with the loan amendment that provided the borrower with a penalty-free early payoff option, we wrote-off $41.5 million of effective interest previously accrued related to this loan. During the three months ended March 31, 2026, Prestige provided notice of its intent to repay its $179.9 million mortgage loan and we expect them to repay the loan during the thirdfourth quarter of 2026. Prestige is current on their contractual loan obligations through MayAugust 2026.

During the threesix months ended MarchJune 31,30, 2026, we continued to expand our SHOP segment. Accordingly, we acquired five seniors housing communities within our SHOP segment for $171.5 million. Also, we terminated atwo additional triple-net master leaseleases and converted twofour seniors housing communities covered under thethese master leaseleases into our SHOP segment. Upon conversion, we entered into a management agreementagreements with antwo operatoroperators new to us. The communities are located in Georgia, South Carolina and Texas (2) with a total of 88-units247 units and an aggregate gross book value of $26.3$59.4 million. As of June 30, 2026, our SHOP segment represented 32.1% of our gross portfolio investments and comprised of 34 seniors housing communities that are managed on our behalf by 11 independent operators pursuant to separate management agreements.

Additionally, we acquired a portfolio of three seniors housing communities in Georgia. The following table summarizes acquisitions within our SHOP segment during the threesix months ended MarchJune 31,30, 2026 (dollar amounts in thousands):

During the threesix months ended MarchJune 31,30, 2026, we funded capital improvement projects of $2.0$5.3 million within our SHOP segment.

During the three months ended March 31, 2026, we extended a master lease covering four seniors housing communities in Oklahoma. The following table provides information related to theour triple-net lease extensionextensions during the six months ended June 30, 2026 (dollar amounts in thousands):

During the threesix months ended MarchJune 31,30, 2026 and subsequently,2026, we terminated two triple-net master leases and converted thefour seniors housing communities covered under the master leases into our SHOP segment. SeeUpon Ownedconversion, Realwe Propertiesentered –into SHOPmanagement aboveagreements forwith moretwo informationindependent regardingoperators. theseThe mastercommunities leases.are located in Georgia, South Carolina and Texas (2) with a total of 247 units and an aggregate gross book value of $59.4 million.

During the threesix months ended MarchJune 31,30, 2026, we invested in the following improvement projects within our Triple-Net Portfolio (in thousands):

The following table summarizes our financing receivable activity for the threesix months ended MarchJune 31,30, 2026 (in thousands):

The following table summarizes our mortgage loan receivable activity for the threesix months ended MarchJune 31,30, 2026 (in thousands):

Preferred Equity Investment in Unconsolidated Joint Ventures

We havehad ana $12.7 million mortgage loan with a carrying value of $12.6 million. The acquisition, development and construction (“ADC”) loanloan, thatsecured meetsby a 104-bed skilled nursing center in Texas met the accounting criteria to be considered a variable interest entity (“VIE”). We arewere not the primary beneficiary of the VIE as we dodid not have both: 1) the power to direct the activities that most significantly affect the VIE’s economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we do havehad significant influence over the VIE. Therefore, we have accounted for the investment as a joint venture using the equity method of accounting. TheDuring followingthe tablethree providesmonths informationended regardingJune our30, unconsolidated2026, jointthe venturemortgage investmentloan atwas Marchpaid 31, 2026 (dollar amounts in thousands):off.

Concentration Risk. We evaluate a tenant/operator concentration based on whether revenues from transactions with a single external operator equal or exceed 10% of our total revenues. No single operator accounted for 10% or more of total revenues for the threesix months ended MarchJune 31,30, 2026.

We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved, and actual results may differ materially from our expectations. This may be a result of various factors, including, but not limited to:

Net operating income or NOI is a non-GAAP financial measure that is calculated as net income (loss) (computed in accordance with GAAP) before (i) general and administrative expenses, (ii) transaction costs, (iii) provision (recovery) provision for credit losses, (iv) impairment loss, (v) depreciation and amortization, (vi) interest expense, (vii) gain or loss on sale of real estate and (viii) income tax benefit or expense. We use NOI to reflect the operating performance of our portfolio because NOI excludes certain items that are not associated with the operations of our properties.

The following is a reconciliation of net income, which is the most directly comparable GAAP financial measure to NOI for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

Earnings before interest, taxes, depreciation and amortization for real estate or EBITDAre is calculated as net income available to common stockholders(loss) (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures.

Adjusted EBITDAre is a supplemental non-GAAP financial measure calculated by adjusting EBIDAre for non-recurringnon-core itemsadjustments unrelated to ongoing operations. We believe these metrics provide useful information to investors because they exclude the impact of various income and expense items that are not indicative of operating performance.

As of MarchJune 31,30, 2026, we had $583.3$829.0 million in liquidity as follows (amounts in thousands, except number of share amountsthousands):

The operating results of the facilities will be impacted by various factors over which the operators/owners may have no control. Those factors include, without limitation, the health of the economy, inflation pressures, employee availability and cost, changes in supply of or demand for competing seniors housing and health care facilities, ability to hire and maintain qualified staff, ability to control other rising operating costs, and the potential for significant reforms in the health care industryindustry, and related occupancy challenges that could be faced by our industry or in the markets where our properties are located. In addition, our future growth and net income may be adversely impacted by changes in the governmental regulations and financing of the health care industry or the impact of any other infectious disease and epidemic outbreaks. We cannot presently predict what impact these potential events may have, if any. We believe that adequate provision has been made for the possibility of loans proving uncollectible but we will continually evaluate the financial condition of the operations of our seniors housing and health care properties. In addition, we will monitor our borrowers and the underlying collateral for mortgage loans and will make future revisions to the provision, if considered necessary.

Our primary sources of cash include rent, resident fees and services, rent, interest receipts, borrowings under our unsecured credit facility, public and private issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), seniors housing operating expenses, property tax expenses, real property investments (including acquisitions, capital expenditures and construction advances), loan advances and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows as summarized below (in thousands):

Cash flows from operating activities increased $1.2$5.5 million during the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to net income generated from growth in our SHOP segment.

Net cash used in investing activities increased by $68.4$77.9 million during the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily driven by a $108.2$175.6 million increase in real estate investments and a $6.1 million increase in investments in mortgage loans receivable. These increases wereinvestments, partially offset by a $62.2 million increase in proceeds from the sale of properties accounted for as financing receivables, a financing$30.8 million decrease in investments in mortgage loans receivable and thea turnaround impact of $13.0$6.3 million increase in proceeds from the liquidationsale of ourreal investment in an unconsolidated joint venture during the three months ended March 31, 2025.estate.

Net cash provided by financing activities increased by $60.6$100.3 million during the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily driven by a $34.9$184.3 million increase in net proceeds from issuance of common stockstock, andpartially offset by a $25.6$77.1 million increasedecrease in net borrowings under our revolving line of credit.credit and a $5.4 million increase in distributions paid to stockholders.

Unsecured Credit Facility. We havehad an unsecured credit agreement (the “Credit Agreement”) that providesprovided for an aggregate commitment of the lenders of up to $800.0 million comprised of a $600.0 million revolving credit facility (the “Revolving Line of Credit”) and term loans totaling $200.0 million (the “Term Loans”). The Term Loans consist of $50.0 million, $55.0 million, $55.0 million and $40.0 million borrowings, with contractual maturities of three, four, five and seven years, respectively. The Credit Agreement providesprovided for the opportunity to increase the total commitment to an aggregate $1.2 billion (the “Accordion”) and allowsallowed for a one-year extension option, subject to customary conditions.

Based on our leverage at MarchJune 31,30, 2026, the facility provides for interest annually at SOFR plus 110105 basis points and a facility fee of 15 basis points.

Interest Rate Swap Agreements. During 2025, we entered into interest rate swaps with maturities of three, four, five and seven years, respectively (the “Interest Rate Swaps”) to effectively lock-in the forecasted interest payments on the Term Loans. TheAdditionally, Interestduring Ratethe Swapssecond quarter of 2026, we entered into three-year interest rate swap agreements to effectively fix the interest rate on $150.0 million of borrowings under our Amended Revolving Line of Credit. Our interest rate swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value in Prepaid expenses and other assets, with cumulative changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. During the threesix months ended MarchJune 31,30, 2026, we recorded an increase of $1.1$2.9 million to the fair value of Interestour Rateinterest Swaps.rate swaps.

The Credit Agreement and the senior unsecured notes and the Credit Agreement,notes, contain financial covenants, which are measured quarterly, that require us to maintain, among other things:

At MarchJune 31,30, 2026, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.

The debt obligations by component as of MarchJune 31,30, 2026 are as follows (dollar amounts in thousands):

During the threesix months ended MarchJune 31,30, 2026, our debt borrowings and repayments were as follows (in thousands):

At MarchJune 31,30, 2026, we had 49,778,52353,905,563 shares of common stock outstanding, total equity on our balance sheet was $1.2$1.3 billion and our equity securities had a market value of $1.8$2.1 billion. During the threesix months ended MarchJune 31,30, 2026, we declared and paid $29.2$59.0 million of cash dividends.

During the threesix months ended MarchJune 31,30, 2026, we acquired 149,745 shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Subsequent to MarchJune 31,30, 2026, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of April,July, MayAugust and JuneSeptember 2026, payable on AprilJuly 30,31, MayAugust 29,31, and JuneSeptember 30, 2026, respectively, to stockholders of record on AprilJuly 22,23, MayAugust 21, and JuneSeptember 22, 2026, respectively.

During the threesix months ended MarchJune 31,30, 2026, we sold 1,145,5655,257,220 shares of common stock for $43.4$198.1 million in net proceeds under our Equity Distribution Agreement. In conjunction with the sale of common stock,Additionally, we incurred $550,000$0.2 million of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At MarchJune 31,30, 2026, we had $244.5$88.6 million available under the Equity Distribution Agreement. Subsequent to March 31, 2026, we sold 1,402,933 shares of common stock for $51.9 million in net proceeds under our Equity Distribution Agreement. Accordingly, as of May 6, 2026, we have $192.4 million available under the Equity Distribution Agreement.

During the threesix months ended MarchJune 31,30, 2026, 125,176140,801 shares of restricted stock and 170,827 performance-based stock units vested. During the threesix months ended MarchJune 31,30, 2026, we awarded restricted stock and performance-based stock units as follows: