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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed
by Registrant
☒
Filed
by Party other than Registrant
☐
Check
the appropriate box:
☐
Preliminary
Proxy Statement
☐
Confidential,
For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒
Definitive
Proxy Statement
☐
Definitive
Additional Materials
☐
Soliciting
Material Pursuant to 240.14a-12
STRAWBERRY
FIELDS REIT, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
☐
No
fee required.
☐
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title
of each class of securities to which transaction applies:
(2)
Aggregate
number of securities to which transaction applies:
(3)
Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4)
Proposed
maximum aggregate value of transaction:
(5)
Total
fee paid:
☐
Fee
paid previously with preliminary materials.
☐
Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its
filing.
(1)
Amount
previously paid:
(2)
Form,
Schedule or Registration Statement No.:
(3)
Filing
Party:
(4)
Date
Filed:
STRAWBERRY
FIELDS REIT, INC.
6101
Nimtz Parkway
South
Bend, Indiana 46628
(574)
807-0800
NOTICE
OF ANNUAL
MEETING
OF STOCKHOLDERS
TO
BE HELD ON MAY 30, 2024
TO
OUR STOCKHOLDERS:
You
are cordially invited to attend the Annual Meeting of Stockholders (the Annual Meeting) of Strawberry Fields REIT, Inc.,
a Maryland corporation (together with its subsidiaries, the Company, we, us or our),
which will be held on May 30, 2024, at 10:00 a.m., Eastern Time, at 2477 E. Commercial
Dr., Ft. Lauderdale, Florida 33308, for the following purposes:
1.
To
elect five directors to hold office for a one-year term and until each of their successors are elected and qualified;
2.
To ratify the appointment of Hacker, Johnson Smith, P.A. as our independent certified public accounting firm
for the fiscal year ending December 31, 2024;
3.
To authorize the amendment to the Companys
2021 Equity Incentive Plan;
4.
To authorize an adjournment of the Annual Meeting, if necessary, if a quorum is present, to solicit additional proxies
if there are not sufficient votes in favor of one or more of the above proposals; and
5.
To
transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof.
The
foregoing items of business are more fully described in the Proxy Statement that is attached and made a part of this Notice. Only holders
of record of our common stock, par value $0.0001 per share (the Common Stock), on the close of business on April 16, 2024
(the Record Date), will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment thereof.
All
stockholders are cordially invited to attend the Annual Meeting in person or virtually through the website
https://www.cstproxy.com/strawberryfieldsreit/2024. Your vote is important regardless of the number of shares you own. Only
record or beneficial owners of our Common Stock as of the Record Date may attend the Annual Meeting. When you arrive at the Annual
Meeting, you will be asked to identify yourself as a stockholder. Additionally, if you cannot attend in person or virtually, you
can listen telephonically by dialing 800-450-7155 Conference ID 8439513#.
Whether
or not you expect to attend the Annual Meeting, please submit a proxy to vote your shares either via the Internet, by phone or by mail.
If you choose to submit your proxy by mail, please complete, sign, date and return the enclosed proxy card in the enclosed postage-paid
envelope in order to ensure representation of your shares. It will help in our preparations for the meeting if you will check the box
on the form of proxy if you plan on attending the Annual Meeting. Your proxy is revocable in accordance with the procedures set forth
in the Proxy Statement.
We
will be mailing a printed copy of our proxy materials, to each shareholder of record.
Accordingly,
on or about April 22, 2024 we will begin mailing the proxy materials to all stockholders of record as of the Record Date.
By
Order of the Board of Directors
/s/
Moishe Gubin
Moishe
Gubin
Chairman
of the Board and Chief Executive Officer
April
16, 2024
South
Bend, Indiana
YOUR
VOTE IS IMPORTANT
WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, TO ASSURE THAT YOUR SHARES WILL BE REPRESENTED, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY WITHOUT DELAY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES.
YOU MAY ALSO VOTE VIA THE INTERNET OR BY PHONE. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO SO EVEN IF
YOU HAVE PREVIOUSLY SENT IN YOUR PROXY.
Whether
or not you expect to attend in person, we urge you to vote your shares via the Internet, or by signing, dating, and returning the enclosed
proxy card at your earliest convenience. This will ensure the presence of a quorum at the meeting. Promptly voting your shares will save
us the expense and extra work of additional solicitation. Submitting your proxy now will not prevent you from voting your stock at the
meeting if you want to do so, as your vote by proxy is revocable at your option.
Voting
by the
Internet
is fast and convenient, and your vote is immediately confirmed and tabulated. Most important, by using the Internet
or telephone, you help us reduce postage and proxy tabulation costs.
Or,
if you prefer, you can return the enclosed Proxy Card in the envelope provided.
PLEASE
DO NOT RETURN THE ENCLOSED PROXY CARD IF YOU ARE VOTING OVER THE INTERNET.
VOTE
BY INTERNET
:
24
hours a day / 7 days a week
INSTRUCTIONS:
Read
the accompanying Proxy Statement.
Go
to the following website:
http://www.cstproxyvote.com
Have
your Proxy Card in hand and follow the instructions.
GENERAL
INFORMATION ABOUT THE PROXY
STATEMENT
AND ANNUAL MEETING
General
This
Proxy Statement is being furnished to the stockholders of Strawberry Fields REIT, Inc. (together with its subsidiaries, the Company,
we, us or our) in connection with the solicitation of proxies by our Board of Directors (the
Board of Directors or the Board) for use at the Annual Meeting of Stockholders to be held on May 30, 2024
at 10 a.m., Eastern Time, at 2477 E. Commercial Dr., Ft. Lauderdale, Florida 33308, and at any and all adjournments or postponements
thereof (the Annual Meeting), for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.
Accompanying this Proxy Statement is a proxy/voting instruction form (the Proxy) for the Annual Meeting, which you may
use to indicate your vote as to the proposals described in this Proxy Statement. It is contemplated that this Proxy Statement and the
accompanying form of Proxy will be first mailed to the Companys stockholders on or about April 22, 2024.
The
Company will solicit stockholders by mail through its regular employees and will request banks and brokers and other custodians, nominees
and fiduciaries to solicit their customers who have stock of the Company registered in the names of such persons and will reimburse them
for reasonable, out-of-pocket costs. In addition, the Company may use the service of its officers and directors to solicit proxies, personally
or by telephone, without additional compensation.
Why
am I being provided with these proxy materials?
We
have delivered printed versions of these proxy materials to you by mail in connection with the solicitation by our Board of proxies for
the matters to be voted on at our Annual Meeting and at any adjournment or postponement thereof. You held shares of Common Stock on the
Record Date and are entitled to vote at the Annual Meeting.
What
do I do if my shares are held in street name?
If
your shares are held in a brokerage account or by a bank or other holder of record, you are considered the beneficial owner
of shares held in street name. As the beneficial owner, you have the right to direct your broker, bank or other holder
of record on how to vote your shares by following their instructions for voting. Please refer to information from your bank, broker or
other nominee on how to submit your voting instructions.
What
if other matters come up at the Annual Meeting?
At
the date of this Proxy Statement, we did not know of any matters to be properly presented at the Annual Meeting other than those referred
to in this Proxy Statement. If other matters are properly presented at the meeting or any adjournment or postponement thereof for consideration,
and you are a stockholder of record and have submitted a proxy card, the persons named in your proxy card will have the discretion to
vote on those matters for you.
Voting
Securities
Only
stockholders of record as of the close of business on April 16, 2024 (the Record Date) will be entitled to vote at the
Annual Meeting and any adjournment or postponement thereof. As of the Record Date, there were 6,458,014 shares of Common Stock
of the Company issued and outstanding and entitled to vote representing approximately 834 holders of record. Stockholders may
vote in person or by proxy.
1
Each
holder of shares of Common Stock is entitled to one vote for each share of stock held on the proposals presented in this Proxy Statement.
The Companys Bylaws, as amended, provide that at least a majority of the outstanding shares of stock entitled to vote, whether
present in person or represented by proxy, shall constitute a quorum for the transaction of business at the Annual Meeting. The enclosed
Proxy reflects the number of shares that you are entitled to vote. Shares of Common Stock may not be voted cumulatively.
Voting
of Proxies
All
valid proxies received prior to the Annual Meeting will be voted. The Board of Directors recommends that you vote by proxy even if you
plan to attend the Annual Meeting. You can vote your shares by proxy via the Internet, by phone or by mail. To vote via the Internet,
go to http://www.cstproxyvote.com and follow the instructions. To vote by mail, fill out the enclosed Proxy, sign and date it, and return
it in the enclosed postage-paid envelope to CONTINENTAL STOCK TRANSFER TRUST CO. 1 State St. FL. 30 New York City, N.Y.
10275. Voting by proxy will not limit your right to vote at the Annual Meeting if you attend the Annual Meeting and vote in person. However,
if your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy executed in your favor from
the holder of record to be able to vote at the Annual Meeting.
Revocability
of Proxies
All
Proxies which are properly completed and returned prior to the Annual Meeting, and which have not been revoked, will be voted in favor
of the proposals described in this Proxy Statement unless otherwise directed. A stockholder may revoke his or her Proxy at any time before
it is voted either by filing with the Secretary of the Company, at its principal executive offices located at 6101 Nimtz Parkway, South
Bend, Indiana 46628, a written notice of revocation or a duly executed Proxy bearing a later date or by attending the Annual Meeting
and voting in person.
Voting
Procedures and Vote Required
The
presence, in person or by proxy, of at least a majority of the outstanding shares of stock entitled to vote at the Annual Meeting is
necessary to establish a quorum for the transaction of business. Shares represented by proxies which contain an abstention, as well as
broker non-vote shares (described below) are counted as present for purposes of determining the presence or absence of
a quorum for the Annual Meeting.
All
properly completed proxies delivered pursuant to this solicitation and not revoked will be voted at the Annual Meeting as specified in
such proxies.
Vote
Required for Election of Directors (Proposal No. 1).
Our Articles of Incorporation, as amended, do not authorize cumulative voting.
Directors are to be elected by a plurality of the votes of the shares present in person or represented by proxy at the Annual Meeting
and entitled to vote on the election of directors. This means that the five candidates receiving the highest number of affirmative votes
at the Annual Meeting will be elected as directors. Only shares that are voted in favor of a particular nominee will be counted toward
that nominees achievement of a plurality. Shares present at the Annual Meeting that are not voted for a particular nominee or
shares present by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted toward that nominees
achievement of a plurality.
2
Vote
Required to Approve Ratification of Appointment of Accounting Firm (Proposal No. 2).
The affirmative vote of a majority of the shares
present, in person or by proxy, and voting on the matter, will be required for approval. Accordingly, the affirmative vote of a majority
of the shares present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve Proposal No.
4.
If
you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute
broker non-votes. Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter
without instructions from the beneficial owner and instructions are not given. Brokers that have not received voting instructions
from their clients cannot vote on their clients behalf on non-routine proposals. Broker non-votes are counted
for the purposes of obtaining a quorum for the Annual Meeting, and in tabulating the voting result for any particular proposal,
shares that constitute broker non-votes are not considered entitled to vote. The vote on Proposals No. 2, 3 and 4 are
considered routine, and the vote on Proposal 1 is considered non-routine. As a result, if a
broker does not receive voting instructions from the beneficial owner, those shares will not be voted and will be considered broker
non-votes. Broker non-votes will have no effect on the election of directors. Abstentions are
counted as shares present at the Annual Meeting for purposes of determining the presence of a quorum but are not
counted in the calculation of the vote.
Votes
at the Annual Meeting will be tabulated by one or more inspectors of election appointed by the Chairman of the Board or an other
officer of the Company.
Stockholders
will not be entitled to dissenters or appraisal rights with respect to any matter to be considered at the Annual Meeting.
Stockholders
List
For
a period of at least ten days prior to the Annual Meeting, a complete list of stockholders entitled to vote at the Annual Meeting will
be available at the principal executive offices of the Company located at 6101 Nimtz Parkway, South Bend, Indiana 46628.
Expenses
of Solicitation
The
Company will pay the cost of preparing, assembling and mailing this proxy-soliciting material, and all costs of solicitation, including
certain expenses of brokers and nominees who mail proxy material to their customers or principals.
The
Company
The
Company is a Maryland corporation formed in July 2019. The Company commenced operations on June 8, 2021, following the completion of
the formation transactions described below. The Company conducts its business through a traditional UPREIT structure in which substantially
all of 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 completed the formation transactions on June 8, 2021. In connection with the formation transaction, the Company, the Operating
Partnership and Strawberry Fields REIT, LLC (the Predecessor Company) entered into a contribution agreement, pursuant to
which the Predecessor Company contributed all of its assets to the Operating Partnership, and the Operating Partnership assumed all of
its liabilities. In exchange, the Operating Partnership issued limited partnership interests designated as common units (the OP
units) to the Predecessor Company, which immediately distributed them to its members and beneficial owners. The Company offered
certain of the holders of these OP units the opportunity to exchange their OP units for shares of Common Stock of the Company on a one-for-one
basis. The Company limited the number of OP units that could be exchanged by some of the holders so that such holders would not become
beneficial owners of more than 9.8% of the outstanding shares of the Company in violation of the ownership limitations set forth in the
Companys charter. The Company is currently the owner of approximately 12.6 % of the outstanding OP units as of December 31, 2023.
The formation transactions were accounted for at historical cost.
3
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.
As of the Record Date, the Company owned 97 properties and leased three properties that it in turn subleases to a
tenant that operates the facility.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of March 19, 2024, certain information regarding the beneficial ownership of shares of our Common
Stock and shares of Common Stock issuable upon redemption of OP units for (1) each person who is the beneficial owner of 5% or more of
our outstanding Common Stock, (2) each of our directors and named executive officers, and (3) all of our directors and executive officers
as a group. Each person named in the table has sole voting and investment power with respect to all of the shares of our Common Stock
shown as beneficially owned by such person, except as otherwise set forth in the footnotes to the table. The extent to which a person
holds shares of Common Stock as opposed to OP units is set forth in the footnotes below.
The
SEC has defined beneficial ownership of a security to mean the possession, directly or indirectly, of voting power and/or
investment power over such security. A stockholder is also deemed to be, as of any date, the beneficial owner of all securities that
such stockholder has the right to acquire within 60 days after that date through (1) the exercise of any option, warrant or right, (2)
the conversion of a security, (3) the power to revoke a trust, discretionary account or similar arrangement or (4) the automatic termination
of a trust, discretionary account or similar arrangement. In computing the number of shares beneficially owned by a person and the percentage
ownership of that person, shares of our Common Stock subject to options or other rights (as set forth above) held by that person that
are exercisable as of March 18, 2024, or will become exercisable within 60 days thereafter, are deemed outstanding, while such shares
are not deemed outstanding for purposes of computing percentage ownership of any other person.
Unless
otherwise indicated, the address of each named person is c/o Strawberry Fields REIT, Inc. at 6101 Nimtz Parkway, South Bend, Indiana
46628. No shares beneficially owned by any executive officer or director have been pledged as security for a loan.
Number of
Shares of
Common Stock
Beneficially
Owned
(1)
Number of Shares of
Common Stock and OP Units Beneficially Owned
Percentage of All Shares of Common Stock
(2)
Percentage of All Shares of Common Stock and OP Units
(2)
Moishe Gubin
(3)
385,582
19,060,076
6.0
%
36.8
%
Michael Blisko
(4)
149,880
19,346,271
2.3
%
37.3
%
Essel Bailey
45,503
45,503
0.7
%
0.1
%
Jack Levine
102,181
102,181
1.6
%
0.2
%
Reid Shapiro
Jeffrey Bajtner
Greg Flamion
All Directors and Executive Officers as a group (six persons)
683,146
38,554,031
10.6
%
74.4
%
Beneficial Owners of More than Five Percent (5%)
Moishe Gubin/Gubin Enterprises LP
(3)
385,582
19,060,076
6.0
%
36.8
%
5683 N Lincoln Ave.
Chicago IL 60659
Michael Blisko/Blisko Enterprises LP
(4)
149,880
19,346,271
2.3
%
37.3
%
2477 E. Commercial Blvd.
Ft. Lauderdale FL. 33308
Ted Lerman/AF Realty LLC
(6)
353,807
6,550,437
5.5
%
12.6
%
2722 W Tucker Dr.
South Bend IN. 46624
BN Realty Investment LLC
623,864
1,611,516
9.6
%
3.1
%
5218 14th Ave.
Brooklyn NY. 11219
Wissati Irrevocable Trust
520,147
520,147
8.0
%
1.0
%
2201 Main St.
Evanston IL. 60202
Hebrew Orthodox Congregation
623,864
750,000
9.6
%
1.4
%
2722 W Tucker Dr.
South Bend IN. 46624
TN
Realty LLC
(5)
403,360
403,360
6.2
%
0.8
%
5683 N Lincoln Ave.
Chicago IL 60659
Congregation Shaarei Halacha of Chestnut Ridge
522,788
522,788
8.1
%
1.0
%
41 Eastbourne Dr.
Spring Valley NY. 10977
South Bend Kollel
623,864
750,000
9.6
%
1.4
%
2722 W Tucker Dr.
South Bend IN. 46624
The Jewish Federation of Metropolitan Chicago
330,000
330,000
5.1
%
0.6
%
30 S. Wells St.
Chicago IL. 60606
(1)
Excludes shares of Common Stock that may be issued upon redemption of OP units.
(2)
Based on an aggregate of 6,365,855 shares of Common Stock and an aggregate of 45,373,615 OP units (which excludes OP units held
by the Company) issued and outstanding on March 15, 2024.
(3)
Gubin Enterprises LP, a limited partnership indirectly controlled by Mr. Gubin, is the owner of 16,035,535 OP units and 318,842 shares
of our Common Stock. In addition, Strawberry Patch Aleph LLC, a limited liability company managed by Mr. Gubin and Michael Blisko, is
the owner 54,713 shares of our Common Stock. New York Boys Management LLC, a limited liability company managed by Mr. Gubin and Michael
Blisko, is the owner of 102,690 shares of our Common Stock and 3,342,014 OP units. RQ Quest Insurance Limited for and on behalf
of the Empire Indemnity 2 Segregated Account a segregated account that Mr. Blisko and Mr. Gubin have indirect beneficial interests in,
is the owner of 1,935,904 OP units.
(4)
Blisko Enterprises LP, a limited partnership indirectly controlled by Mr. Blisko, is the owner of 16,557,432 OP units and 84,050 shares
of our Common Stock. In addition, Strawberry Patch Aleph LLC, a limited liability company managed by Mr. Gubin and Michael Blisko, is
the owner of 54,713 shares of our Common Stock. New York Boys Management LLC, a limited liability company managed by Mr. Gubin and Michael
Blisko, is the owner of 102,690 shares of our Common Stock and 3,342,014 OP units. RQ Quest Insurance Limited for and on behalf
of the Empire Indemnity 2 Segregated Account, a segregated account that Mr. Blisko and Mr. Gubin have indirect beneficial interests in,
is the owner of 1,935,904 OP units.
(5)
TN Realty LLC, a limited liability company managed by Mr. Eingal, the former Chief Financial Officer, is the owner
of 403,360 shares of our Common Stock.
(6)
AF Realty LLC, a limited liability company that Mr. Lerman is on the Board of Managers, is the direct and indirect owner of 6,197,350
OP units and 353,087 shares of our Common Stock, excluding 2,289 shares held directly by Mr. Lerman.
4
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
The
Companys Board of Directors is currently comprised of five directors. A total of five directors will be elected at the Annual
Meeting to serve until the next annual meeting of stockholders to be held in 2025, or until their successors are duly elected and qualified.
Each of our current directors has been nominated for election by the Board. The persons named as Proxies in the enclosed
Proxy will vote the shares represented by all valid returned proxies in accordance with the specifications of the stockholders returning
such proxies. If no choice has been specified by a stockholder, the shares will be voted FOR the nominees. If at the time of the Annual
Meeting any of the nominees named below should be unable or unwilling to serve, which event is not expected to occur, the discretionary
authority provided in the Proxy will be exercised to vote for such substitute nominee or nominees, if any, as shall be designated by
the Board of Directors. If a quorum is present and voting, the nominees for directors receiving the highest number of votes will be elected.
Abstentions and broker non-votes will have no effect on the vote.
NOMINEES
FOR ELECTION AS DIRECTOR
Nominees
The
persons nominated as directors are as follows:
Name
Age
Position
Moishe
Gubin
47
Chairman
of the Board and Chief Executive Officer
Essel
Bailey
79
Director
Michael
Blisko
48
Director
Jack
Levine
73
Director
Reid
Shapiro
53
Director
The
following sets forth certain information about each of the director nominees:
Moishe
Gubin
has served as the Chief Executive Officer and as a director of the Company since its organization. He has served as the Companys
Chairman of the Board since June 2021. He has served as the Chief Executive Officer of the Predecessor Company since 2014 and as the
Co-Chief Executive Officer and Chairman of the Board of the BVI Company since 2015. From 2004 to 2014, Mr. Gubin was the Chief Financial
Officer and a manager of Infinity Healthcare Management, LLC, a company engaged in managing skilled nursing facilities and other healthcare
facilities. Mr. Gubin graduated from Touro Liberal Arts and Science College, in New York, New York, with a B.S. in Accounting and Information
Systems and a Minor in Jewish Studies. Mr. Gubin is the founder of the Midwest Torah Center Inc., a non-profit spiritual outreach center
(www.midwesttorah.org). He also attended Yeshiva Bais Israel where he received a B.A. in Talmudic Law. Mr. Gubin is a licensed certified
public accountant in the State of New York. He also serves as a director of OptimumBank Holdings, Inc., a bank holding company based
in Ft. Lauderdale, Florida. Mr. Gubin was named as a director based on his substantial experience in acquiring, owning and operating
skilled nursing facility industries and similar healthcare facilities.
Essel
Bailey
has served as a director of the Company since June 2021. Mr. Bailey spent the last 50 years engaged in the public and private
capital markets, first as a lawyer specializing in corporate and real estate finance and then as a senior officer or director of several
healthcare companies. During the last 15 years, he has been a private investor in healthcare services and finance. From January 1992
to July 2000, he served as the chief executive officer of Omega Healthcare Investors, Inc., a NYSE listed REIT engaged in the
ownership and leasing of healthcare properties, and from 1996 also at Omega Worldwide, Inc., a Nasdaq company engaged in ownership and
leasing of healthcare properties in the United Kingdom and in Australia. He has previously served on the boards of Vitalink Pharmacy,
Inc. (Nasdaq), Evergreen Healthcare, Inc. (Nasdaq) and NAREIT, the national trade association of real estate investment trusts.
As a private investor, Mr. Bailey has served as an officer, director and stockholder of several private healthcare operating and finance
companies, and has served on the boards of charitable organizations related to education and the environment. Mr. Bailey received his
B.A. from Wesleyan University and his J.D. from University of Michigan Law School and is a member of the American Bar Association and
the Michigan Bar Association. Mr. Bailey was named as a director based on his substantial experience in acquiring, owning and operating
skilled nursing facilities and similar healthcare facilities.
5
Michael
Blisko
has served as a director of the Company since June 2021. Mr. Blisko is the Chief Executive Officer for Infinity Healthcare
Management. Mr. Blisko is a veteran of leading healthcare consultancy portfolios, as well as the architect in creating cutting edge leadership
teams. Mr. Blisko has served as a board member of Strawberry Fields REIT, LLC, the Predecessor Company. Mr. Blisko isa principal
for multiple ancillary companies including United Rx, a long-term pharmacy and Bella Monte Recovery, a behavioral health addiction
center. Currently, Mr. Blisko is on, both, the National Executive Committee for Post-Acute Care and Survey Regulatory
and Quality Committee for the American Healthcare Association (AHCA) in Washington D.C. Mr. Blisko founded and currently serves on
the Board of Directors of The Ambassador Group which represents regional Post-Acute Operators serving over one hundred thousand residents
throughout the country. He also serves on the Board of Directors for Optimum Bank (OPHC), a publicly traded bank based in Florida. Mr.
Blisko is on the Deans Advisory Board for Hofstra University Graduate School for Health and Applied Sciences. Mr. Blisko is a Licensed
Nursing Home Administrator with a masters degree in healthcare administration from Hofstra University and a BA in Talmudic
Law from Bais Yisroel, Jerusalem. Mr. Blisko was named as a director based on his substantial experience in acquiring, owning and operating
skilled nursing facilities and similar healthcare facilities.
Jack
Levine
is qualified as an SEC financial expert who has served as a director of the Company since June 2021. Mr. Levine is a
certified public accountant who has provided financial and consulting services to private and public companies for over 35 years.
Since 2019, he has served as Chairman of the Audit Committee for Blink Charging Co. (NASDAQ: BLNK), a leading
owner, operator, and supplier of proprietary electric vehicle (EV) charging equipment and networked EV charging
services. Since 2010, he has served as a board member and chairman of the audit committee of SignPath Pharma, Inc., a clinical stage
biopharmaceutical company. SignPath was a public reporting company prior to 2017. Mr. Levine also served as a chairman of the audit
committee for Provista Diagnostics, Inc., a cancer detection and diagnostics company from 2011 to 2018.
Mr.
Levine has been a licensed CPA in Florida since 1983 and in New York since 2009. He received an M.A from New York University and B.A
from Hunter College of City University of New York. Mr. Levine was named as a director based on his substantial experience on boards
of public entities
Reid
Shapiro
has served as a director of the Company since June 2021. Mr. Shapiro has been the owner of Shappy LLC, a company engaged
in business consulting since 2014. From 1998 to 2014, he was a partner and co-founder of Elephant Group, Inc., a company engaged in the
retail sale of electronic products which grew to approximately 120 locations. Mr. Shapiro was responsible for site selection for new
stores, lease negotiations, build-out and retail management. Following the sale of this business to ATT, Elephant Group transitioned
to become DISH Networks largest reseller of satellite television systems. It further diversified into the cable, telephone and
home security businesses. As part of his duties at Elephant Group, Mr. Shapiro also served as the Chief Development Officer of Saveology.com,
Inc., which operated a daily deal business on the internet. Mr. Shapiro has also served on the Florida Panthers NHL Advisory Board. Mr.
Shapiro graduated from Yeshiva University in New York. Mr. Shapiro was named as a director based on his substantial experience in creating
value for investors and entrepreneurial experience.
The
following sets forth certain information about our Executive Officers:
Moishe
Gubin
serves as the Chief Executive Officer and as a director of the Company.
Jeffrey
Bajtner
(39) has served as our Chief Investment Officer since March 2022. Jeffrey joined the Company in June 2021 to oversee all
acquisition and disposition activity for our portfolio. Mr. Bajtner is also our Director of Investor Relations working with shareholders
and prospective investors. From 2015 until joining the Company, Mr. Bajtner oversaw acquisitions and asset management at BlitzLake Partners,
a Chicago based real estate developer of mixed-use properties. From 2012 to 2015, Mr. Bajtner worked with the asset management and capital
market teams at NorthStar Realty Finance Corp. focusing on healthcare, multifamily and retail investments. Mr. Bajtner received a B.S.
in Accounting Finance from Yeshiva University in 2007. Lastly, Mr. Bajtner is a licensed Certified Public Accountant in the State
of Illinois.
Greg
Flamion (
47
)
has served as our Chief Financial Officer since joining the Company in January 2024. Previously, Mr. Flamion
was
a CFO of Zimmerman Advertising, an agency under Omnicom Group Inc. (NYSE: OMC) from 2014-2023. Mr. Flamion also held a number
of diverse accounting and finance positions at a variety of publicly traded companies, including Diageo (NYSE: DEO) and Bristol Myers
Squibb (NYSE: BMY). Mr. Flamion holds a degree in Economics from Purdue University and an MBA from the University of Florida. Lastly,
Mr. Flamion is a licensed Certified Public Accountant in the State of Indiana.
Required
Vote
Our
Articles of Incorporation, as amended, do not authorize cumulative voting. Directors are to be elected by a plurality of the votes of
the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors. This means
that the five candidates receiving the highest number of affirmative votes at the Annual Meeting will be elected as directors. Only shares
that are voted in favor of a particular nominee will be counted toward that nominees achievement of a plurality. Shares present
at the Annual Meeting that are not voted for a particular nominee or shares present by proxy where the stockholder properly withheld
authority to vote for such nominee will not be counted toward that nominees achievement of a plurality.
6
At
the Annual Meeting a vote will be taken on a proposal to approve the election of the five director nominees.
RECOMMENDATION
OF THE BOARD OF DIRECTORS:
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF (I) MOISHE GUBIN, (II) ESSEL BAILEY, (III) MICHAEL BLISKO, (IV)
JACK LEVINE, AND (V) REID SHAPIRO AS DIRECTORS.
CORPORATE
GOVERNANCE
Board
of Directors
Our
Articles of Incorporation, as amended, and bylaws provide that our Board of Directors will consist of such number of directors as may
from time to time be fixed by our Board of Directors but may not less than the minimum number required under the Maryland General Corporation
Law (MGCL), which is one, or more than 15. We currently have five directors. We believe that three of these directors meet
the requirement to be independent under the standards of NYSE American and the Exchange Act.
Corporate
Governance
We
have structured our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. The principal
features of our corporate governance structure include the following:
●
our Board of Directors is not classified, so that each of our directors will be elected annually;
●
of the five persons who serve on our Board of Directors, our Board of Directors has determined that three of our directors satisfy the
independence requirements on the NYSE American and Rule 10A-3 under the Exchange Act;
●
at least one of our directors qualifies as an audit committee financial expert as defined by the SEC;
●
we believe that we comply with the NYSE American qualification standards, including having board committees comprised solely of independent
directors;
●
we have opted out of the business combination and control share acquisition statutes in the MGCL; and
●
we do not have a stockholder rights plan.
Our
directors will stay informed about our business by attending meetings of our Board of Directors and its committees and through supplemental
reports and communications. Our independent directors will meet regularly in executive sessions without the presence of our corporate
officers or non-independent directors.
Role
of the Board in Risk Oversight
One
of the key functions of our Board of Directors is oversight of our risk management process. Our Board of Directors administers this oversight
function directly, with support from its three standing committees, the audit committee, the nominating and corporate governance committee
and the compensation committee, each of which addresses risks specific to their respective areas of oversight. In particular, our audit
committee has the responsibility to consider and discuss financial risk exposure and the steps our management should take to monitor
and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken.
The audit committee also monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of our
internal audit function. Our nominating and corporate governance committee monitors the effectiveness of our corporate governance guidelines,
including whether they are successful in preventing illegal or improper liability-creating conduct. Our compensation committee assesses
and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
The Company has not adopted a policy to separate
the roles of Chairman and Chief Executive Officer of the Company. At the present time, Moishe Gubin serves as both the Chairman of the
Board and the Chief Executive Officer.
7
Board
Committees
The principal functions of each committee are described below. We intend to comply with the qualification requirements
and other rules and regulations of NYSE American, as amended or modified from time to time, and each of these committees is comprised
exclusively of independent directors. Additionally, our Board of Directors may from time to time establish other committees to facilitate
the management of the Company.
Audit
Committee
The
Company has an audit committee that is comprised of three independent directors, consisting of Reid Shapiro, Jack Levine and Essel Bailey.
We believe that Mr. Levine is qualified as an audit committee financial expert as that term is defined by the applicable
SEC regulations and NYSE American corporate governance qualification standards and financially sophisticated as that term
is defined by NYSE American. Our board has adopted an audit committee charter, which details the principal functions of the audit committee,
including oversight related to:
●
our accounting and financial reporting processes;
●
the integrity of our consolidated financial statements and financial reporting process;
●
our systems of disclosure controls and procedures and internal control over financial reporting;
●
our compliance with financial, legal and regulatory requirements;
●
the evaluation of the qualifications, independence and performance of our independent registered public accounting firm;
●
the performance of our internal audit function; and
●
our overall risk profile.
The
audit committee is also responsible for engaging an independent registered public accounting firm, reviewing with the independent registered
public accounting firm the plans and results of the audit engagement, approving professional services provided by the independent registered
public accounting firm, including all audit and non-audit services, reviewing the independence of the independent registered public accounting
firm, considering the range of audit and non-audit fees and reviewing the adequacy of our internal accounting controls. The audit committee
also prepares the audit committee report required by SEC regulations to be included in our annual proxy statement.
Nominating
and Corporate Governance Committee
The
Company has a nominating and corporate governance committee that is comprised of three independent directors, consisting of Reid Shapiro,
Jack Levine and Essel Bailey. Our board has adopted a nominating and corporate governance committee charter, which details the principal
functions of the nominating and corporate governance committee, including:
●
identifying and recommending to the full Board of Directors qualified candidates for election as directors and recommending nominees
for election as directors at the annual meeting of stockholders;
●
developing and recommending to the Board of Directors corporate governance guidelines and implementing and monitoring such guidelines;
●
reviewing and making recommendations on matters involving the general operation of the Board of Directors, including board size and composition,
and committee composition and structure;
●
recommending to the Board of Directors nominees for each committee of the Board of Directors;
●
annually facilitating the assessment of the Board of Directors performance as a whole and of the individual directors, as required
by applicable law, regulations and NYSE American corporate governance qualification standards; and
8
●
overseeing the Board of Directors evaluation of management.
In
identifying and recommending nominees for directors, the nominating and corporate governance committee may consider diversity of relevant
experience, expertise and background
Compensation
Committee
The
Company has a compensation committee that is comprised of three independent directors, consisting of Reid Shapiro, Jack Levine and Essel
Bailey. Our board has adopted a compensation committee charter, which detailed the principal functions of the compensation committee,
including:
●
reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive officers compensation,
evaluating our chief executive officers performance in light of such goals and objectives and determining and approving the remuneration
of our chief executive officer based on such evaluation;
●
reviewing and approving the compensation of our Chief Executive Officer;
●
reviewing our executive compensation policies and plans;
●
implementing and administering our incentive compensation equity-based remuneration plans;
●
assisting management in complying with our proxy statement and annual report disclosure requirements;
●
producing a report on executive compensation to be included in our annual proxy statement; and
●
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
Code
of Business Conduct and Ethics
Our
Board of Directors has established a code of business conduct and ethics that applies to our officers, directors and employees. Among
other matters, our code of business conduct and ethics designed to deter wrongdoing and to promote:
●
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional
relationships;
●
full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications;
●
compliance with applicable laws, rules and regulations;
●
prompt internal reporting of violations of the code to appropriate persons identified in the code; and
●
accountability for adherence to the code of business conduct and ethics.
Any
waiver of the code of business conduct and ethics for our executive officers or directors must be approved by a majority of our independent
directors, and any such waiver shall be promptly disclosed as required by law or NYSE American regulations.
Board
Meetings and Attendance
The
Board held six in person/virtual meetings in 2023, including the annual shareholder meeting held on May 16, 2023.All Board actions
that were not taken at a meeting were approved by the unanimous written consent of the Board as permitted by Maryland law. Each of the
current members of the Board of Directors attended at least 75% of the meetings of the Board and committees on which they served,
held while they have been a director.
9
Attendance
by Directors at Annual Meeting
The
Company expects each of the directors to attend the Annual Meeting.
Stockholder
Communications with the Board
Stockholders
wishing to communicate with the Board, the non-management directors, or an individual Board member may do so by writing to the Board,
to the non-management directors, or to the particular Board member, and mailing the correspondence to: Strawberry Fields REIT/Board of
Directors, 6101 Nimtz Parkway, South Bend, Indiana 46628. The envelope should indicate that it contains a stockholder communication.
All such stockholder communications will be forwarded to the director or directors to whom the communications are addressed.
Family
Relationships
There
are no family relationships among any of our directors or executive officers.
Compliance
with Section 16(a) of the Exchange Act
Section
16(a) of the Exchange Act requires the Companys directors, executive officers and persons who beneficially own 10% or more of
a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial
ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of
the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).
Director
Compensation
As
compensation for serving on our Board of Directors, each of our independent directors receives an annual fee of $60,000. Directors who are also officers or employees of the Company do not receive any additional compensation as
directors. In addition, we reimburse our directors for the reasonable out-of-pocket expenses incurred in attending Board of Directors
and committee meetings. Our Board of Directors may change the compensation of our independent directors in its discretion.
Name of Director
Fees Earned or Paid in Cash
Michael Blisko
$
49,000
Jack Levine
$
49,000
Essel Bailey
$
49,000
Reid Shapiro
$
49,000
10
Executive
Compensation
The
annual base salaries of each executive officer for 2023 is set forth in the following table:
Name and Principal Position
Base Salary
Moishe Gubin
$
300,000
Chairman and Chief Executive Officer
Jeffrey Bajtner
$
200,000
Chief Investment Officer
The
Company has not adopted any compensation policies with respect to, among other things, setting base salaries, awarding bonuses or making
future grants of equity awards to our management team. We expect that our compensation committee will review the current compensation
of our Chief Executive Officer in conjunction with the establishment of compensation policies and objectives for executive
compensation. We anticipate that the compensation committee will design a compensation program that rewards, among other things, our
operating results, favorable stockholder returns, and individual contributions to our success. We expect compensation incentives designed
to further these goals will take the form of annual cash compensation and longer-term equity awards.
The
table below sets forth a summary of all compensation earned, awarded or paid, as applicable, to our executive officers for the years
ended December 31, 2021, 2022 and 2023.
Name and Principal Position
Year
Salary
Bonus
Total
Moishe Gubin
Chairman and Chief Executive Officer
2022
$
300,000
$
-
$
300,000
2023
$
300,000
$
-
$
300,000
Nahman Eingal
Former Chief Financial Officer
2022
$
80,000
$
-
$
80,000
2023
$
80,000
$
-
$
80,000
Jeffrey Bajtner
Chief Investment Officer
2022
$
180,000
$
-
$
180,000
2023
$
200,000
$
-
$
200,000
11
Employment
Agreements
None
of the officers of the Company are parties to any employment agreements.
Certain
Relationships and Related Transactions, and Director Independence
We
have had and currently have relationships and transactions with related parties. Our related parties consist of our directors, executive
officers, persons who beneficially own 5% or more of the shares of our Common Stock or 5% or more of the OP units of the Operating Partnership,
members of their immediate families and their affiliates, as well as managers of the Predecessor Company, persons who beneficially owned
more than 5% of the membership interests in the Predecessor Company, members of their immediate family members and their affiliates.
We
have described below relationships and transactions since January 1, 2023 with related parties in which the amount involved exceeded
$120,000, and all currently proposed transactions which exceed $120,000.
The
relationships and transactions described below relate to transactions with Moishe Gubin, who is our Chairman and Chief Executive Officer
and Michael Blisko, who is one of our directors, and their affiliated entities. There were no other reportable relationships
and transactions with related parties.
12
Lease
Agreements with Related Parties
As
of December 31, 2023 and 2022, each of the Companys facilities were leased and operated by separate tenants. Each tenant is
an entity that leases the facility from one of the Companys subsidiaries and operates the facility as a healthcare facility.
The Company had 64 tenants out of 107 who were related parties as of December 31, 2023 and 41 tenants out of 83 who were related
parties as of December 31, 2022. Most of the lease
agreements are triple net leases.
On
August 25, 2023, the Company acquired 24 healthcare facilities (19 properties) located in Indiana (the Indiana Facilities)
for $102.0 million. The Indiana Facilities are comprised of 19 skilled nursing facilities with 1,659 licensed beds and five assisted
living facilities with 193 beds, of which 29 beds are licensed. Annualized straight line rent for the facilities is expected to equal
$12.7 million representing a weighted average lease yield of 12.4%. Effective March 1, 2023 the company commenced a new master lease
for these facilities with initial annual base rents of $14.5 million dollars.
The
Indiana Facilities were leased under a master lease agreement dated November 1, 2022, between the sellers and a group of tenants affiliated
with two of the Companys directors, Moishe Gubin and Michael Blisko. Under the master lease, the tenants were required to pay
annual rent, on a triple net basis, commencing on November 1, 2022, in the amount of $9.5 million, which amount is subject to annual
increases set forth in the master lease. The master lease had an initial term of seven years. The tenants had three options to extend
the lease. The material terms of the master lease were not modified as a result of the purchase. The tenants operate the Indiana Facilities
as skilled nursing and assisted living facilities.
On
February 20, 2024 the Company entered into a new, replacement master lease for these properties. The tenant remains a group of tenants
affiliated with two of the Companys directors, Moishe Gubin and Michael Blisko. The new master lease has an initial term of ten
years and is subject to 2 five-year extensions. The initial annual base rent for the properties is $14.5 million dollars and is subject
to annual increases of 3%. In connection with the new master lease, the existing purchase option held by the tenant, which was granted
by the prior owner of the properties, of $127.0 million was terminated. Consideration for the termination of the purchase option and
inducement for entering into the new, replacement master lease was $18.0 million paid to the tenants. The $18.0 million payment was funded
by cash and the proceeds from the additional Series D Bond issuance in February 2024.
13
The following table sets forth details of the lease
agreements in force between the Company and its subsidiaries and lessees that are related parties:
Related
Party Ownership
in
Manager/Tenant/
Operator
(1) (2)
State
Lessor/
Company
Subsidiary
Tenant/
Operator
Moishe
Gubin/Gubin
Enterprises
LP
Michael
Blisko/Blisko
Enterprises
LP
Average
annual rent
over life of
lease
Annual
Escalation
% of
total rent
Lease
maturity
Extension
options
Master Lease Indiana
IN
1020 West Vine Street Realty, LLC
The Waters of Princeton II, LLC
49.49
%
50.51
%
$
1,045,506
3.00
%
1.07
%
8/1/2025
2 five year
IN
12803 Lenover Street Realty LLC
The Waters of Dillsboro – Ross Manor II LLC
49.49
%
50.51
%
1,353,655
3.00
%
1.39
%
8/1/2025
2 five year
IN
1350 North Todd Drive Realty, LLC
The Waters of Scottsburg II LLC
49.49
%
50.51
%
1,089,527
3.00
%
1.12
%
8/1/2025
2 five year
IN
1600 East Liberty Street Realty LLC
The Waters of Covington II LLC
49.49
%
50.51
%
1,309,634
3.00
%
1.35
%
8/1/2025
2 five year
IN
1601 Hospital Drive Realty LLC
The Waters of Greencastle II LLC
49.49
%
50.51
%
1,100,532
3.00
%
1.13
%
8/1/2025
2 five year
IN
1712 Leland Drive Realty, LLC
The Waters of Huntingburg II LLC
49.49
%
50.51
%
1,045,506
3.00
%
1.07
%
8/1/2025
2 five year
IN
2055 Heritage Drive Realty LLC
The Waters of Martinsville II LLC
49.49
%
50.51
%
1,133,548
3.00
%
1.16
%
8/1/2025
2 five year
IN
3895 South Keystone Avenue Realty LLC
The Waters of Indianapolis II LLC
49.49
%
50.51
%
891,431
3.00
%
0.92
%
8/1/2025
2 five year
IN
405 Rio Vista Lane Realty LLC
The Waters of Rising Sun II LLC
49.49
%
50.51
%
638,309
3.00
%
0.66
%
8/1/2025
2 five year
IN
950 Cross Avenue Realty LLC
The Waters of Clifty Falls II LLC
49.49
%
50.51
%
1,518,735
3.00
%
1.56
%
8/1/2025
2 five year
IN
958 East Highway 46 Realty LLC
The Waters of Batesville II LLC
49.49
%
50.51
%
946,458
3.00
%
0.97
%
8/1/2025
2 five year
IN
2400 Chateau Drive Realty, LLC
The Waters of Muncie II LLC
49.49
%
50.51
%
792,383
3.00
%
0.81
%
8/1/2025
2 five year
IN
The Big H2O LLC
The Waters of New Castle II LLC
49.49
%
50.51
%
726,351
3.00
%
0.75
%
8/1/2025
2 five year
14
Related
Party Ownership
in
Manager/Tenant/
Operator
(1) (2)
State
Lessor /
Company
Subsidiary
Tenant/
Operator
Moishe
Gubin/Gubin
Enterprises
LP
Michael
Blisko/Blisko
Enterprises
LP
Average
annual rent
over life of
lease
Annual
Escalation
% of
total rent
Lease
maturity
Extension
options
Master Lease Tennessee
TN
115 Woodlawn Drive, LLC
Lakebridge, a Waters Community, LLC
50.00
%
50.00
%
1,514,820
3.00
%
1.55
%
8/1/2031
2 five year
TN
146 Buck Creek Road, LLC
The Waters of Roan Highlands, LLC
50.00
%
50.00
%
1,111,794
3.00
%
1.14
%
8/1/2031
2 five year
TN
704
5
th
Avenue East, LLC
The Waters of Springfield, LLC
50.00
%
50.00
%
917,230
3.00
%
0.94
%
8/1/2031
2 five year
TN
2501 River Road, LLC
The Waters of Cheatham, LLC
50.00
%
50.00
%
1,111,794
3.00
%
1.14
%
8/1/2031
2 five year
TN
202 Enon Springs Road East, LLC
The Waters of Smyrna, LLC
50.00
%
50.00
%
1,264,666
3.00
%
1.30
%
8/1/2031
2 five year
TN
140 Technology Lane, LLC
The Waters of Johnson City, LLC
50.00
%
50.00
%
1,167,384
3.00
%
1.20
%
8/1/2031
2 five year
TN
835 Union Street, LLC
The Waters of Shelbyville, LLC
50.00
%
50.00
%
1,334,153
3.00
%
1.37
%
8/1/2031
2 five year
Master Lease Tennessee 2
TN
505 North Roan, LLC
Agape Rehabilitation Nursing Center, A Water’s
Community LLC
50.00
%
50.00
%
1,628,910
3.00
%
1.67
%
7/1/2031
2 five year
TN
14510 Highway 79, LLC
Waters of McKenzie, A Rehabilitation Nursing Center,
LLC
50.00
%
50.00
%
1,279,858
3.00
%
1.31
%
7/1/2031
2 five year
TN
6500 Kirby Gate Boulevard, LLC
Waters of Memphis, A Rehabilitation Nursing Center,
LLC
50.00
%
50.00
%
1,745,261
3.00
%
1.79
%
7/1/2031
2 five year
TN
978 Highway 11 South, LLC
Waters of Sweetwater, A Rehabilitation Nursing Center,
LLC
50.00
%
50.00
%
1,745,261
3.00
%
1.79
%
7/1/2031
2 five year
TN
2830 Highway 394, LLC
Waters of Bristol, A Rehabilitation Nursing Center,
LLC
50.00
%
50.00
%
2,327,014
3.00
%
2.38
%
7/1/2031
2 five year
15
Related
Party Ownership
in
Manager/Tenant/
Operator
(1) (2)
State
Lessor/
Company
Subsidiary
Tenant/
Operator
Moishe
Gubin/Gubin
Enterprises
LP
Michael
Blisko/Blisko
Enterprises
LP
Average
annual rent
over life of
lease
Annual
Escalation
%
of
total rent
Lease
maturity
Extension
options
Master Lease Indiana 2
IN
8400 Clearvista Place LLC
The Waters of Castleton SNF,
LLC
50.00
%
50.00
%
804,694
Varies(3)(4)
0.83
%
2029
One 3 years and two 5 years
IN
524 Anderson Road LLC
The Waters of Chesterfield SNF, LLC
50.00
%
50.00
%
423,523
Varies(3)(4)
0.43
%
2029
One 3 years and two 5 years
IN
640 West Ellsworth Street LLC
The Waters of Columbia City SNF, LLC
50.00
%
50.00
%
592,933
Varies(3)(4)
0.61
%
2029
One 3 years and two 5 years
IN
11563 West 300 South LLC
The Waters of Dunkirk SNF, LLC
50.00
%
50.00
%
324,701
Varies(3)(4)
0.33
%
2029
One 3 years and two 5 years
IN
5544 East State Boulevard LLC
The Waters of Fort Wayne SNF, LLC
50.00
%
50.00
%
543,522
Varies(3)(4)
0.56
%
2029
One 3 years and two 5 years
IN
548 South 100 West LLC
The Waters of Hartford City SNF, LLC
50.00
%
50.00
%
458,817
Varies(3)(4)
0.47
%
2029
One 3 years and two 5 years
IN
2901 West 37th Avenue LLC
The Waters of Hobart SNF, LLC
50.00
%
50.00
%
776,459
Varies(3)(4)
0.80
%
2029
One 3 years and two 5 years
IN
1500 Grant Street LLC
The Waters of Huntington SNF, LLC
50.00
%
50.00
%
599,991
Varies(3)(4)
0.62
%
2029
One 3 years and two 5 years
IN
787 North Detroit Street LLC
The Waters of LaGrange SNF, LLC
50.00
%
50.00
%
705,872
Varies(3)(4)
0.72
%
2029
One 3 years and two 5 years
IN
981 Beechwood Avenue LLC
The Waters of Middletown SNF, LLC
50.00
%
50.00
%
423,523
Varies(3)(4)
0.43
%
2029
One 3 years and two 5 years
IN
317 Blair Pike LLC
The Waters of Peru SNF, LLC
50.00
%
50.00
%
917,634
Varies(3)(4)
0.94
%
2029
One 3 years and two 5 years
IN
815 West Washington Street LLC
The Waters of Rockport SNF
50.00
%
50.00
%
423,523
Varies(3)(4)
0.43
%
2029
One 3 years and two 5 years
IN
612 East 11th Street LLC
The Waters of Rushville SNF
50.00
%
50.00
%
691,755
Varies(3)(4)
0.71
%
2029
One 3 years and two 5 years
16
Related
Party Ownership
in
Manager/Tenant/
Operator
(1) (2)
State
Lessor/ Company Subsidiary
Tenant/ Operator
Moishe Gubin/Gubin
Enterprises LP
Michael Blisko/Blisko
Enterprises LP
Average annual
rent over life of lease
Annual Escalation
% of total
rent
Lease maturity
Extension
options
IN
505 West Wolfe Street LLC
The Waters of Sullivan SNF
50.00
%
50.00
%
656,461
Varies(3)(4)
0.67
%
2029
One 3 years and two 5 years
IN
500 East Pickwick Drive LLC
The Waters of Syracuse SNF
50.00
%
50.00
%
465,876
Varies(3)(4)
0.48
%
2029
One 3 years and two 5 years
IN
300 Fairgrounds Road LLC
The Waters of Tipton SNF
50.00
%
50.00
%
1,058,808
Varies(3)(4)
1.09
%
2029
One 3 years and two 5 years
IN
1900 Alber Street LLC
The Waters of Wabash SNF East
50.00
%
50.00
%
592,933
Varies(3)(4)
0.61
%
2029
One 3 years and two 5 years
IN
1720 Alber Street LLC
The Waters of Wabash SNF West
50.00
%
50.00
%
310,584
Varies(3)(4)
0.32
%
2029
One 3 years and two 5 years
IN
300 North Washington Street LLC
The Waters of Wakarusa SNF
50.00
50.00
%
938,810
Varies(3)(4)
0.96
%
2029
One 3 years and two 5 years
IN
8400 Clearvista Place LLC
The Waters of Castleton ALF, LLC
50.00
50.00
%
381,171
Varies(3)(4)
0.39
%
2029
One 3 years and two 5 years
IN
787 North Detroit Street LLC
The Waters of LaGrange ALF, LLC
50.00
50.00
%
119,998
Varies(3)(4)
0.12
%
2029
One 3 years and two 5 years
IN
612 East 11th Street LLC
The Waters of Rushville ALF, LLC
50.00
50.00
%
204,703
Varies(3)(4)
0.21
%
2029
One 3 years and two 5 years
IN
505 West Wolfe Street LLC
The Waters of Sullivan ALF, LLC
50.00
50.00
%
225,879
Varies(3)(4)
0.23
%
2029
One 3 years and two 5 years
IN
300 North Washington Street LLC
The Waters of Wakarusa ALF, LLC
50.00
50.00
%
430,582
Varies(3)(4)
0.44
%
2029
One 3 years and two 5 years
17
Related
Party Ownership
in
Manager/Tenant/
Operator
(1) (2)
State
Lessor/
Company
Subsidiary
Manager/
Tenant/
Operator
Moishe
Gubin/Gubin
Enterprises
LP
Michael
Blisko/Blisko
Enterprises
LP
Average
Annual rent
over life of
lease
Annual
Escalation
% of
total
rent
Lease
maturity
Extension
options
IL
516 West Frech Street, LLC
Parker Rehab Nursing Center, LLC
50.00
%
50.00
%
498,351
Varies
between $12,000 and $24,000 annually
0.51
%
3/31/2031
None
IN
1316 North Tibbs Avenue Realty, LLC
Westpark A Waters Community, LLC
50.00
%
50.00
%
549,885
3.00
%
0.56
%
6/1/2024
2 five year
IL
Ambassador Nursing Realty, LLC
Ambassador Nursing and Rehabilitation Center II, LLC
40.00
%
40.00
%
1,005,313
3.00
%
1.03
%
2/28/2026
2 five year
IL
Momence Meadows Realty, LLC
Momence Meadows Nursing and Rehabilitation Center, LLC
50.00
%
50.00
%
1,038,000
None
1.07
%
12/30/2025
None
IL
Forest View Nursing Realty, LLC
Forest View Rehabilitation and Nursing Center, LLC
50.00
%
50.00
%
1,215,483
3.00
%
1.25
%
12/1/2024
2 five year
IL
Lincoln Park Holdings, LLC
Lakeview Rehabilitation and Nursing Center, LLC
40.00
%
40.00
%
1,260,000
None
1.29
%
5/31/2031
None
IL
Continental Nursing Realty, LLC
Continental Nursing and Rehabilitation Center, LLC
40.00
%
40.00
%
1,575,348
None
1.62
%
3/1/2031
None
IL
Westshire Nursing Realty, LLC
City View Multicare Center, LLC
50.00
%
50.00
%
1,788,365
3.00
%
1.84
%
9/1/2025
2 five year
IL
Belhaven Realty, LLC
Belhaven Nursing and Rehabilitation Center, LLC
50.00
%
50.00
%
2,134,570
3.00
%
2.19
%
2/28/2026
2 five year
IL
West Suburban Nursing Realty, LLC
West Suburban Nursing and Rehabilitation Center, LLC
40.00
%
40.00
%
1,961,604
None
2.01
%
11/1/2027
None
IN
1585 Perry Worth Road, LLC
The Waters of Lebanon, LLC
50.00
%
50.00
%
116,678
3.00
%
0.12
%
6/1/2027
2 five year
IL
Niles Nursing Realty LLC
Niles Nursing Rehabilitation Center LLC
50.00
%
50.00
%
2,409,998
3.00
%
2.48
%
2/28/2026
2 five year
IL
Parkshore Estates Nursing Realty, LLC
Parkshore Estates Nursing and Rehabilitation Center, LLC
50.00
%
50.00
%
2,454,187
3.00
%
2.52
%
12/1/2024
2 five year
IL
Midway Neurological and Rehabilitation Realty, LLC
Midway Neurological and Rehabilitation Center, LLC
50.00
%
50.00
%
2,547,713
3.00
%
2.62
%
2/28/2026
2 five year
IL
Oak Lawn Nursing Realty, LLC
Oak Lawn Respiratory and Rehab center, LLC
50.00
%
50.00
%
$
637,092
None
0.65
%
6/1/2031
None
Guarantees
from Related Parties
As
of December 31, 2023 and 2022, Mr. Gubin and Mr. Blisko were not parties to any guarantees of any debt of the Company and its
subsidiaries.
18
December 31,
2023
2022
(amounts in $000s)
Straight-line rent receivable
$
18,921
$
11,591
Tenant portion of replacement reserve
$
9,683
$
10,227
Notes receivable
$
7,075
$
7,816
Payments from and to Related Parties
Years ended December 31,
2023
2022
(amounts in $000s)
Rental income received from related parties
$
56,988
$
54,386
Other
Related Party Relationships
On
December 31, 2023 and 2022, the Company had approximately $1.2 million and $4.7 million, respectively, on deposit with OptimumBank. Mr.
Gubin is the Chairman of the Board of OptimumBank.
On June 14, 2022, the Company purchased a 7% note receivable with an outstanding balance of $8 million from
Infinity Healthcare Management, a company controlled by Mr. Blisko and Mr. Gubin. The note is interest only with a balloon payment due
July 1, 2024. The note receivable is due from certain unaffiliated tenants.
Purchases
of Equity Securities by the Issuer and Affiliated Purchasers
During
2023, affiliates of the Company purchased 9,176 shares of our common stock in the open market at an average price per share of $6.95
and an aggregate repurchase cost of $63,751.
During 2023, the Company converted 127,953 OP Units into shares of common stock.
On
November 9, 2023 the Board of Directors authorized the repurchase of up to $5 million of the Companys common stock. As of December
31, 2023 the Company purchased 5,953 shares of common stock at an average price per share of $7.84 and an aggregate repurchase priced
of $46,000. All common shares repurchased in the program have been retired and are now held as unissued shares available for use and
reissuance for purpose as and when determined by the Board.
19
AUDIT
COMMITTEE REPORT
The
following Report of the Audit Committee (the Audit Report) does not constitute soliciting material and should not be deemed
filed or incorporated by reference into any other Company filing under the Securities Act or the Exchange Act, except to the extent the
Company specifically incorporates this Audit Report by reference therein.
Role
of the Audit Committee
The
Audit Committee oversees our accounting and financial reporting processes and oversees the audit of our financial statements and the
effectiveness of our internal control over financial reporting. The board has adopted an Audit Committee charter, which details the principal
functions of the Audit Committee, including oversight related to:
●
our accounting and financial reporting processes;
●
the integrity of our consolidated financial statements and financial reporting process;
●
our systems of disclosure controls and procedures and internal control over financial reporting;
●
our compliance with financial, legal and regulatory requirements;
●
the evaluation of the qualifications, independence and performance of our independent registered public accounting firm;
●
the performance of our internal audit function; and
●
our overall risk profile.
The
audit committee is also responsible for engaging an independent registered public accounting firm, reviewing with the independent registered
public accounting firm the plans and results of the audit engagement, approving professional services provided by the independent registered
public accounting firm, including all audit and non-audit services, reviewing the independence of the independent registered public accounting
firm, considering the range of audit and non-audit fees and reviewing the adequacy of our internal accounting controls. The audit committee
also prepares the audit committee report required by SEC regulations to be included in our annual proxy statement.
With
respect to the Companys outside auditors, the Audit Committee, among other things, discussed with Hacker, Johnson Smith,
P.A. matters relating to its independence, including the disclosures made to the Audit Committee as required by the Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees).
Recommendations
of the Audit Committee.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board
that the Board approve the inclusion of the Companys audited financial statements in the Companys Annual Report on Form
10-K for the fiscal year ended December 31, 2023, for filing with the SEC.
This
report has been furnished by the Audit Committee of the Board.
Jack
Levine-Chairman
Reid
Shapiro
Essel
Bailey
20
PROPOSAL
NO. 2
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Board has appointed Hacker, Johnson Smith, P.A. (Hacker), as our independent registered public accounting firm to
examine the consolidated financial statements of the Company for the fiscal year ending December 31, 2024. The Board seeks an indication
from stockholders of their approval or disapproval of the appointment.
Hacker
will audit our consolidated financial statements for the fiscal year ending December 31, 2024. We anticipate that a representative of
Hacker will be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions.
Our
consolidated financial statements for the fiscal year ended December 31, 2023, were audited by Hacker.
In
the event stockholders fail to ratify the appointment of Hacker, the Board of Directors will reconsider this appointment. Even if the
appointment is ratified, the Board of Directors, in its discretion, may direct the appointment of a different independent registered
public accounting firm at any time during the year if the Board of Directors determines that such a change would be in the interests
of the Company and its shareholders.
The
following table presents for each of the last two fiscal years the aggregate fees billed in connection with the audits of our financial
statements and other professional services rendered by our independent registered public accounting firm Hacker, Johnson Smith,
P.A.
2023
2022
Audit Fees (1)
$
120,000
$
110,000
All Other Fees (2)
7,500
25,000
Total Accounting fees and Services
$
127,500
$
132,500
(1)
Audit Fees
. These are fees for professional services for the audit of our annual financial statements, and for the review of the
financial statements included in our filings on Form 10-K and Form 10-Q, and for services that are normally provided in connection with
statutory and regulatory filings or engagements.
(2)
All Other Fees
. These are fees that relate to professional services provided in connection with the Companys S-11 it filed with the Securities
and Exchange Commission in August 2023.
Audit
Committee Pre-Approval Policies and Procedures
The
Companys Audit Committee has adopted policies and procedures that shall require the pre-approval by the Audit Committee of all
fees paid to, and all services performed by, the Companys independent accounting firms. At the beginning of each year, the Audit
Committee shall approve the proposed services, including the nature, type and scope of services contemplated and the related fees, to
be rendered by these firms during the year. In addition, Audit Committee pre-approval is also required for those engagements that may
arise during the course of the year that are outside the scope of the initial services and fees pre-approved by the Audit Committee.
The
affirmative vote of the holders of a majority of the shares present, in person or by proxy, and voting at the Annual Meeting will be
required for approval of this proposal. Neither abstentions nor broker non-votes shall have any effect on the outcome of this vote.
RECOMMENDATION
OF THE BOARD OF DIRECTORS:
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF HACKER AS THE COMPANYS INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM.
21
PROPOSAL
NO. 3
APPROVAL
OF AN AMENDMENT TO THE COMPANYS 2021 EQUITY INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES THAT MAY BE ISSUED UNDER THE PLAN
The
Company has adopted the 2021 Equity Incentive Plan. The plan allows the Company to provide equity compensation to employees and directors,
under a shareholder-approved plan, and enables the Company to attract and retain qualified persons to serve as directors and officers.
As
of the date of this proxy statement, the Company has issued 250,000 shares under the plan. As a result, there are only 225,100 additional
shares available for issuance under the plan.
The
Board of Directors of the Company believes that equity compensation is a key aspect of the Companys ability to attract and retain
qualified directors and officers.
The
Board has approved an amendment to increase the aggregate number of shares of common stock authorized for issuance under the plan from
250,000 to 1,000,000 shares, subject to shareholder approval, in order to ensure that the Company is able to continue to grant equity
compensation at levels determined appropriate by the Board.
Summary
of the Plan
The
principal features of the plan are summarized below.
Plan
Administration
. The plan is administered by our Board of Directors, a majority of whom meet the NYSE standard for director independence,
and/or our Boards Compensation Committee, which consists of at least two members of the Board, each of whom meets the NYSE standard
for director independence. The Board through its Compensation Committee, has the sole authority, among other things, to:
●
Select participants and grant awards,
●
Determine the number of shares to be subject to the types of awards,
●
Determine the terms and conditions upon which awards will be granted under the plan, including the vesting requirements of awards,
●
Prescribe the form and terms of award agreements,
●
Establish procedures and regulations for the administration of the plan,
●
Interpret the plan, and
●
Make all determinations necessary or advisable for administration of the plan.
Eligibility
.
The directors and employees of the Company and its subsidiaries are eligible to participate in the plan.
Awards
.
The plan provides for the grant of incentive and non-statutory options, bonus shares, restricted shares, and performance shares, as such
terms are defined in the plan.
Shares
Subject to the Plan
. If the amendment is approved, the number of shares of common stock that may be issued under the plan will increase
from 250,000 shares to 1,000,000 shares. If any shares are subject to an award under the plan that is forfeited, cancelled, expires,
lapses or otherwise terminates without the issuance of such shares, those shares will again be available for grant under the plan. Likewise,
shares that are tendered to the Company by a participant as full or partial payment of the exercise price of any stock option granted
under the plan or in payment of any withholding tax incurred in connection with any award under the plan will be available for issuance
under the plan. The shares issued under the plan may consist, in whole or in part, of authorized but unissued shares or treasury shares.
Adjustments
.
In the event of a merger or consolidation (in each case where the shares of the Company are converted into stock and/or cash of another
entity), or any corporate structure affecting Company common stock, adjustments and other substitutions will be made to the plan, including
adjustments in the maximum number of shares subject to the plan and other numerical limitations. Adjustments will also be made to awards
under the plan as the Board in its sole discretion deems equitable or appropriate.
Options
.
Incentive and non-statutory options to purchase shares of Company common stock may be granted under the plan, either alone or in
addition to other awards and for no consideration or for such consideration as the Board and/or Compensation Committee may determine
or as may be required by applicable law. The price at which a share may be purchased under an option may not be less than the market
value of a share on the date the option is granted. Market value means the last reported sale price of Company common stock reported
on The NYSE on the relevant date of determination. The plan permits the Board and/or Compensation Committee to establish the term of
each option, but its term may not exceed ten years. Options may be exercised for whole shares only. If an option would otherwise be
exercisable for fractional shares, the option is rounded down to the nearest whole share amount. Options may vest and become fully
exercisable in the event a change in control occurs as described below. The plan contains various provisions governing the
participants right to exercise an option upon the termination of the participants employment with the
Company.
Restricted
Stock
. Restricted stock awards may be issued to participants for no cash consideration, or for such minimum consideration as may
be required by applicable law, either alone or in addition to other awards granted under the plan. Restricted stock vests and becomes
fully exercisable as determined by the Board. Restricted stock vests and becomes fully exercisable in the event: (i) a change in control
occurs, as described below, and service is terminated within 12 months thereafter; or (ii) of the death or disability of the participant.
If a participants service with the Company is terminated, the participant will forfeit any unvested restricted stock (except in
certain cases following a change in control).
Performance
Share Awards
. Other awards of Company common stock that are valued in whole or in part by reference to, or are otherwise based on,
Company common stock or the attainment by the Company of certain performance goals, may be granted to participants, either alone or in
addition to other awards. Stock awards are paid in shares of Company common stock. Shares granted as stock awards may be issued for no
cash consideration or for such minimum consideration as may be required by applicable law. At the time the performance goals established
have been attained or otherwise satisfied within the performance cycle, the payment of the performance shares in the name of the participant
will be made at the end of the performance cycle.
Bonus
Shares and Awards in Lieu of Obligations
. Bonus share awards may be issued to participants as a bonus or in consideration for past
services actually rendered for the Company, or in lieu of obligations of the Company to pay cash or deliver other property under the
plan or under other plans or compensation arrangements. The bonus shares can be awarded under terms and agreements that are determined
by the Compensation Committee and/or the Board.
22
Change
in Control
. Unless otherwise determined by the Board and/or Compensation Committee at the time of the grant of an award, in the event
of a change in control of the Company, all outstanding stock options will become fully vested. If a participants service with
the Company is involuntarily terminated at any time within twelve months after a change in control, and unless otherwise determined by
the Board and/or Compensation Committee at the time of the grant of an award, any restricted period with respect to restricted shares
will lapse and all such shares will become fully vested.
A
change in control means, with certain exceptions: (i) an acquisition of beneficial ownership of 50% or more of the outstanding
common stock; (ii) a merger in which the Company is not the surviving entity, or a sale by the Company or the Bank of all or substantially
all of its assets; or (iii) the acquisition by any person or group by means of a merger, consolidation or purchase of 80% or more of
its outstanding shares.
Effective
Date, Term, Amendment and Termination
. The plan will remain in effect until the earlier of (a) the date that no additional shares
are available for issuance, (b) the date the plan is terminated by the Board of Directors in accordance with its terms or (c) the tenth
anniversary of the date of the original shareholder approval of the plan. Termination will not affect grants and awards then outstanding
under the plan. The Board of Directors may terminate or amend the plan at any time without shareholder approval, unless such approval
is necessary to comply with the Securities Exchange Act of 1934, the Internal Revenue Code, NYSE rules, or other applicable law. No termination,
amendment or modification of the plan may in any manner affect any award previously granted under the plan without the consent of the
participant to whom the award was granted or the transferee of the award.
Restriction
on Transfer
. Awards granted under the plan are generally non-transferable, except by will or the laws of descent and distribution.
The Board may permit participants to transfer awards (other than stock options) to members of their immediate family, to one or more
trusts solely for the benefit of such immediate family members, and to partnerships into which such family members or trusts are the
only partners.
Other
Provisions
. The Board may establish procedures providing for the delivery of shares of Company common stock, in satisfaction of withholding
tax obligations.
Federal
Income Tax Consequences
. Under present law, the following are the U.S. federal income tax consequences generally arising with respect
to stock options, restricted stock, bonus shares and performance share awards.
Upon
exercising a non-statutory option, a participant must recognize ordinary compensation income equal to the difference between the fair
market value of the shares on the date of exercise and the exercise price. The Company will be entitled to a deduction for the same amount.
Upon sale of such shares by the optionee, any difference between the sales price and fair market value on the date of exercise will be
treated as a long-term capital gain (loss) if the stock has been held for at least 12 months.
For
an incentive stock option, the optionee generally will recognize no taxable income upon grant or exercise of the option. If the acquired
stock is held for at least two years from date of grant and one year from date of exercise, any gain or loss realized upon disposition
of the shares will be treated as long-term capital gain (loss). If the acquired stock is sold prior to the satisfaction of these holding
period requirements, the difference between the option price and the fair market value of the shares on the date of exercise will be
treated as ordinary compensation income. The Company will be entitled to a deduction for the same amount. If compensation is recognized
and the stock is sold, any difference between fair market value on date of exercise and the sales price will be recognized as either
short or long term capital gain or loss, depending upon the amount of time the acquired stock was held. For alternative minimum tax purposes,
the exercise of an incentive stock option will create an adjustment item in the year of exercise equal to the difference between the
option price and fair market value on date of exercise. This adjustment item will create an adjusted tax basis for alternative minimum
tax purposes different from regular tax purposes in the stock equal to the fair market value on date of exercise.
Recipients
of restricted stock awards will recognize ordinary income in an amount equal to the fair market value of the shares of Company common
stock granted to them at the time that the shares vest and become transferable. A recipient of a restricted stock award may, however,
elect to accelerate the recognition of income with respect to his or her grant to the time when shares of common stock are first transferred
to him or her, notwithstanding the vesting schedule of such awards. The Company will be entitled to deduct as a compensation expense
for tax purposes the same amounts recognized as income by recipients of restricted stock awards in the year in which such amounts are
included in income.
Performance
share and bonus share awards result in the recognition of ordinary income in an amount equal to the fair market value of shares of Company
common stock paid to participants. The Company will be entitled to deduct as a compensation expense for tax purposes the same amounts
recognized as income by plan participants.
Other
Information
The
Board has not made any determination as to the allocation of benefits or amounts under the plan if approved by shareholders. If the plan
is not approved by shareholders, the Board of Directors will consider other alternatives for performance-based compensation. The plan
is not exclusive and does not limit the authority of the Board or its Committees to grant awards or authorize any other compensation,
with or without reference to shares, under any other plan or authority.
Vote
Required and Recommendation of Board of Directors
Assuming
the presence of a quorum, the affirmative vote of the majority of the votes cast for this proposal will be required for approval. As
such, abstentions and broker non-votes will not affect the outcome of the vote, but will be counted for determining the existence of
a quorum.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE INCREASE IN THE NUMBER OF SHARES THAT MAY BE ISSUED UNDER COMPANYS
2021 EQUITY INCENTIVE PLAN.
23
PROPOSAL
NO. 4
ADJOURNMENT
OF THE ANNUAL MEETING IF NECESSARY TO PERMIT FURTHER SOLICITATION OF PROXIES
Our
stockholders are being asked to approve a proposal that will give us authority to adjourn the Annual Meeting, if necessary for the purpose
of soliciting additional proxies in favor of the above proposals, if there are not sufficient votes at the time of the Annual Meeting
to approve and adopt one or more of such proposals. If this adjournment proposal is approved, our board of directors could adjourn the
Annual Meeting to any date it chooses. In addition, our board of directors could postpone the Annual Meeting before it commences, whether
for the purpose of soliciting additional proxies or for other reasons. If the Annual Meeting is adjourned for the purpose of soliciting
additional proxies, stockholders who have already submitted their proxies at any time before their use do not need to submit new proxies
unless they desire to change their voting instructions. The Company does not intend to call a vote on this proposal if Proposals 1, 2,
and 4 have been approved at the Annual Meeting.
Approval
of this Proposal No. 5 requires the affirmative vote of a majority of the votes represented by the holders of our Common Stock at the
Annual Meeting. Abstentions and broker non-votes will have no effect on the outcome of this proposal. Unless instructions to the contrary
are specified in a properly executed and returned proxy, the proxy holder will vote the proxies received by them FOR this
Proposal No. 5.
THE
BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL NO. 4.
Interest
of Certain Persons in Opposition to Matters to be Acted Upon
No
officer or director has any substantial interest in any of the proposals scheduled to be considered at the Annual Meeting other than
in their roles as an officer or director.
24
FUTURE
STOCKHOLDER PROPOSALS
Proposals
of stockholders of the Company that are intended to be presented by such stockholders at the Companys 2024 annual meeting of stockholders
and that stockholders desire to have included in the Companys proxy materials relating to such meeting must be received by the
Company at its corporate offices no later than December 24, 2024, which is 120 calendar days prior to the anniversary of this
years mailing date. Upon timely receipt of any such proposal, the Company will determine whether or not to include such proposal
in the proxy statement and proxy in accordance with applicable regulations governing the solicitation of proxies. In order for stockholders
to give timely notice of nominations for directors for inclusion on a universal proxy card in connection with the 2024 annual meeting,
notice must be submitted by the same deadline as disclosed above and must include the information in the notice required by our Bylaws
and by Rule 14a-19(b)(2) and Rule 14a-19(b)(3) under the Exchange Act.
If
a stockholder wishes to present a proposal at the Companys 2025 annual meeting or to nominate one or more directors and
the proposal is not intended to be included in the Companys proxy statement relating to that meeting, the stockholder must give
advance written notice to the Company by December 24, 2024, as required by SEC Rule 14a-4(c)(1).
Our
bylaws provide that, with respect to an annual meeting of stockholders, nominations of individuals for election to our board of directors
and the proposal of other business to be considered by our stockholders at an annual meeting of stockholders may be made only (1) pursuant
to our notice of the meeting, (2) by or at the direction of our board of directors or (3) by any stockholder who was a stockholder of
record at the record date set by our board of directors for the purposes of determining stockholders entitled to vote at the meeting,
at the time of giving of notice and at the time of the meeting, who is entitled to vote at the meeting on the election of the individual
so nominated or such other business and who has complied with the advance notice procedures set forth in our bylaws, including a requirement
to provide certain information about the stockholder and its affiliates and the nominee or business proposal, as applicable.
With
respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting.
Nominations of individuals for election to our board of directors may be made at a special meeting of stockholders at which directors
are to be elected only (1) by or at the direction of our board of directors or (2) provided that the special meeting has been properly
called in accordance with our bylaws for the purpose of electing directors, by any stockholder who was a stockholder of record at the
record date set by our board of directors for the purposes of determining stockholders entitled to vote at the meeting, at the time of
giving of notice and at the time of the meeting, who is entitled to vote at the meeting on the election of each individual so nominated
and who has complied with the advance notice provisions set forth in our bylaws, including a requirement to provide certain information
about the stockholder and its affiliates and the nominee.
Any
stockholder filing a written notice of nomination for director must describe various matters regarding the nominee and the stockholder,
including such information as name, address, occupation and shares held. Any stockholder filing a notice to bring other business before
a stockholder meeting must include in such notice, among other things, a brief description of the proposed business and the reasons for
the business, and other specified matters. Copies of those requirements will be forwarded to any stockholder upon written request.
25
AVAILABILITY
OF ANNUAL REPORT ON FORM 10-K AND HOUSEHOLDING
A
copy of the Companys Annual Report on Form 10-K as filed with the SEC is available upon written request and without charge to
stockholders by writing to the Company at 6101 Nimtz Parkway, South Bend, Indiana 46628 or by calling telephone number (574) 807-0800.
Additionally, a copy of the Companys Annual Report on Form 10-K as filed with the SEC is available on the Companys website
at http://strawberryfieldsreit.com/.
In
certain cases, only one Proxy Statement may be delivered to multiple stockholders sharing an address unless the Company has received
contrary instructions from one or more of the stockholders at that address. The Company will undertake to deliver promptly upon written
or oral request a separate copy of the Proxy Statement, as applicable, to a stockholder at a shared address to which a single copy of
such documents was delivered. Such request should also be directed to Jeffrey Bajtner, at the address or telephone number indicated
in the previous paragraph. In addition, stockholders sharing an address can request delivery of a single copy of Proxy Statements if
they are receiving multiple copies of Proxy Statements by directing such request to the same mailing address.
26
OTHER
BUSINESS
We
have not received notice of and do not expect any matters to be presented for vote at the Annual Meeting, other than the proposals described
in this Proxy Statement. If you grant a proxy, the person named as proxy holder, Moishe Gubin, or his nominees or substitutes, will have
the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If for any unforeseen
reason, any of our nominees are not available as a candidate for director, the proxy holder will vote your proxy for such other candidate
or candidates nominated by our Board.
ADDITIONAL
INFORMATION
We
are subject to the information and reporting requirements of the Exchange Act, and in accordance therewith, we file periodic reports,
documents and other information with the SEC relating to our business, financial statements, and other matters. Such reports and other
information may be inspected and are available for copying at the offices of the SEC, 100 F Street, N.E., Washington, D.C. 20549 or may
be accessed at
www.sec.gov
. Information regarding the operation of the public reference rooms may be obtained by calling the SEC
at 1-800-SEC-0330. You are encouraged to review our Annual Report on Form 10-K, together with any subsequent information we filed or
will file with the SEC and other publicly available information.
*************
It
is important that the proxies be returned promptly and that your shares be represented. Stockholders are urged to mark, date, execute
and promptly return the accompanying proxy card.
April
22, 2024
By
Order of the Board of Directors,
/s/
Moishe Gubin
Moishe
Gubin
Chairman
of the Board and Chief Executive Officer
27
TABLE OF CONTENTS
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* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR
WHICH
THE 13F WAS FILED.
FUND
NUMBER OF SHARES
VALUE ($)
PUT OR CALL
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