UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed
by Registrant |
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Filed
by Party other than Registrant |
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Check
the appropriate box: |
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Preliminary
Proxy Statement |
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Confidential,
For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive
Proxy Statement |
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Definitive
Additional Materials |
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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): |
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No
fee required. |
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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(1) |
Title
of each class of securities to which transaction applies: |
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(2) |
Aggregate
number of securities to which transaction applies: |
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(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): |
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Proposed
maximum aggregate value of transaction: |
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(5) |
Total
fee paid: |
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Fee
paid previously with preliminary materials. |
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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. |
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Amount
previously paid: |
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(2) |
Form,
Schedule or Registration Statement No.: |
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(3) |
Filing
Party: |
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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 16, 2023
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 16, 2023, at 10:00 a.m., Eastern Time, at the offices of Infinity Healthcare Management, 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; |
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2. |
To
approve, in a non-binding advisory vote, the compensation of the Company’s Chief Executive Officer, Chief Financial Officer
and Chief Investment Officer, our three most highly compensated executive officers (the “Named Executive Officers”); |
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3. |
To
determine, in a non-binding advisory vote, the desired frequency of future non-binding advisory votes on the compensation of our
Named Executive Officers every year, every two years or every three years; |
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4. |
To
ratify the appointment of Hacker, Johnson & Smith, P.A. as our independent certified public accounting firm for the fiscal year
ending December 31, 2023; |
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5. |
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 |
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6. |
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 6, 2023
(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. 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.
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 10, 2023 we will begin mailing the proxy materials to all stockholders of record as of the Record Date.
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By
Order of the Board of Directors |
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/s/
Moishe Gubin |
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Moishe
Gubin |
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Chairman
of the Board and Chief Executive Officer |
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April
10, 2023 |
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South
Bend, Indiana |
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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.
TABLE
OF CONTENTS
STRAWBERRY
FIELDS REIT, INC.
6101
Nimtz Parkway
South
Bend, Indiana 46628
(574)
807-0800
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
TO
BE HELD ON MAY 16, 2023
PROXY
VOTING OPTIONS
YOUR
VOTE IS IMPORTANT!
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. |
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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 16, 2023
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 Company’s stockholders on or about April 10, 2023.
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.
The
Annual Meeting is the first that the Company will be holding as a public company.
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 6, 2023 (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 6,365,856 shares of Common Stock of
the Company issued and outstanding and entitled to vote representing approximately 508 holders of record. Stockholders may vote in person
or by proxy.
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 Company’s 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 nominee’s 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 nominee’s
achievement of a plurality.
Vote
Required to Approve Executive Compensation (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 improve the Executive Compensation for our
Named Executive Officers. This proposal is non-binding on the Company and the Board.
Vote
Required for the Advisory Resolution on the Frequency of the Stockholders’ Say-on-Pay (Proposal No. 3). The advisory resolution
on the frequency of the stockholders’ advisory resolution on the compensation of the Company’s Named Executive Officers is
selected by a plurality of the shares present, in person or by proxy, and voting on the matter. Accordingly, the option — every
one, two or three years — that receives the largest number of votes cast “FOR” is the option selected by the stockholders.
This proposal is non-binding on the Company and the Board.
Vote
Required to Approve Ratification of Appointment of Accounting Firm (Proposal No. 4). 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 Proposal No. 4 is considered “routine,” and the vote on all other proposals
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,
the advisory vote to approve Named Executive Officer compensation or the advisory vote on the frequency of future advisory votes on Named
Executive Officer compensation. 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 some other officer
of the Company.
Stockholders
will not be entitled to dissenter’s 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
Company’s charter. The Company is currently the owner of approximately 12.0 % of the outstanding OP units as of December 31, 2022.
The formation transactions were accounted for at historical cost.
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.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of March 15, 2023, 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 15, 2022, 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.
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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) | |
| |
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| | |
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| |
Moishe Gubin (3) | |
| 385,582 | | |
| 19,124,053 | | |
| 6.1 | % | |
| 35.9 | % |
Michael Blisko (4) | |
| 149,780 | | |
| 19,410,148 | | |
| 2.4 | % | |
| 36.4 | % |
Essel Bailey | |
| 45,503 | | |
| 45,503 | | |
| 0.7 | % | |
| 0.1 | % |
Jack Levine | |
| 91,005 | | |
| 91,005 | | |
| 1.4 | % | |
| 0.2 | % |
Reid Shapiro | |
| — | | |
| — | | |
| — | | |
| — | |
Nahman Eingal (5) | |
| 403,360 | | |
| 403,360 | | |
| 6.3 | % | |
| 0.8 | % |
Jeffrey Bajtner | |
| — | | |
| — | | |
| — | | |
| — | |
All Directors and Executive Officers as a group (six persons) | |
| 1,075,230 | | |
| 39,074,069 | | |
| 16.9 | % | |
| 73. 4 | % |
| |
| | | |
| | | |
| | | |
| | |
Beneficial Owners of More than Five Percent (5%) | |
| | | |
| | | |
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B&N Realty Investment LLC | |
| 623,864 | | |
| 1,015,870 | | |
| 9.8 | % | |
| 1.9 | % |
Moishe Gubin/Gubin Enterprises LP (3) | |
| 385,582 | | |
| 19,124,053 | | |
| 6.1 | % | |
| 35.9 | % |
Michael Blisko/Blisko Enterprises LP (4) | |
| 149,780 | | |
| 19,410,148 | | |
| 2.4 | % | |
| 36.4 | % |
Ted Lerman/A&F Realty LLC (6) | |
| 295,610 | | |
| 6,492,960 | | |
| 4.6 | % | |
| 12.2 | % |
Wissati Irrevocable Trust | |
| 520,147 | | |
| 520,147 | | |
| 8.2 | % | |
| 1.0 | % |
Hebrew Orthodox Congregation | |
| 623,864 | | |
| 750,000 | | |
| 9.8 | % | |
| 1.4 | % |
Nahman Eingal (5) | |
| 403,240 | | |
| 403,240 | | |
| 6.3 | % | |
| 0.8 | % |
Congregation Shaarei Halacha of Chestnut Ridge | |
| 522,788 | | |
| 522,788 | | |
| 8.2 | % | |
| 1.0 | % |
South Bend Kollel | |
| 623,864 | | |
| 750,000 | | |
| 9.8 | % | |
| 1.4 | % |
The Jewish Federation of Metropolitan Chicago | |
| 330,000 | | |
| 330,000 | | |
| 5.2 | % | |
| 0.6 | % |
(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 46,890,421 OP units (which excludes OP units held by the
Company) issued and outstanding on March 15, 2023.
(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. R&Q 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 2,063,857 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.. R&Q 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 2,063,857 OP units.
(5)
T&N Realty LLC, a limited liability company managed by Mr. Eingal, is the owner of 403,360 shares of our Common Stock.
(6)
A&F 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 281,828 shares of our Common Stock, excluding 2,289 shares held directly by Mr. Lerman.
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
The
Company’s 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 2024, 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 |
|
46 |
|
Chairman
of the Board and Chief Executive Officer |
Essel
Bailey |
|
78 |
|
Director |
Michael
Blisko |
|
47 |
|
Director |
Jack
Levine |
|
72 |
|
Director |
Reid
Shapiro |
|
52 |
|
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 Company’s
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 Nasdaq 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 international 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.
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 is a principal for
a myriad of ancillary companies including United Rx, a long-term pharmacy, Heritage Home Health and Hospice, Xcel Med, and Bella Monte
Recovery, a behavioral health addiction center. Currently, Mr. Blisko is on the national executive committee for Post-Acute Care 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 Master’s 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. As of June 2021,
Mr. Levine has served as chairman of the Audit Committee for EZFill Holdings Inc. (NASDAQ: EZFL), an app-based mobile-fueling company.
Since 2019, he has served as Chairman of the Audit Committee and Lead Director 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 AT&T, Elephant Group transitioned
to become DISH Network’s 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.
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 nominee’s 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 nominee’s achievement of a plurality.
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 is 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.
Board
Committees
Our
Board of Directors has established three standing committees: an audit committee, a nominating and corporate governance committee and
a compensation committee. 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
●
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 officer’s compensation,
evaluating our chief executive officer’s 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 all of our other officers;
●
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 three in person/virtual meetings in 2022. 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 he served, held while he has been a director.
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 Company’s 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).
During
2022, six initial reports on Form 3 were not filed on a timely basis by the directors (Messrs. Gubin, Bailey, Blisko, Levine
and Shapiro) and by Mr. Eingal. Additionally, three Form 4s were not filed on a timely basis by Mr. Gubin.
Director
Compensation
As
compensation for serving on our Board of Directors, each of our independent directors receives an annual fee of $25,000 and an additional
fee of $1,500 per meeting. 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 | |
$ | 29,500 | |
| |
| | |
Jack Levine | |
$ | 29,500 | |
| |
| | |
Essel Bailey | |
$ | 29,500 | |
| |
| | |
Reid Shapiro | |
$ | 29,500 | |
Executive
Compensation
The
annual base salaries of each executive officer for 2022 is set forth in the following table:
Name and Principal Position | |
Base Salary | |
| |
| |
Moishe Gubin | |
$ | 300,000 | |
Chairman and Chief Executive Officer | |
| | |
| |
| | |
Nahman Eingal | |
$ | 80,000 | |
Chief Financial Officer | |
| | |
| |
| | |
Jeffrey Bajtner | |
$ | 180,000 | |
Senior 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 executive officers 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 and 2022.
Name
and Principal Position |
|
Year |
|
|
Salary |
|
|
Bonus |
|
|
Total |
|
Moishe
Gubin(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman
and Chief Executive Officer |
|
|
2021 |
|
|
$ |
300,000 |
|
|
$ |
1,078,000 |
|
|
$ |
1,378,000 |
|
|
|
|
2022 |
|
|
$ |
300,000 |
|
|
$ |
- |
|
|
$ |
300,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nahman
Eingal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief
Financial Officer |
|
|
2021 |
|
|
$ |
80,000 |
|
|
$ |
- |
|
|
$ |
80,000 |
|
|
|
|
2022 |
|
|
$ |
80,000 |
|
|
$ |
- |
|
|
$ |
80,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
Bajtner |
|
|
2021 |
|
|
$ |
150,000 |
|
|
$ |
- |
|
|
$ |
150,000 |
|
Senior
Investment Officer |
|
|
2022 |
|
|
$ |
180,000 |
|
|
$ |
- |
|
|
$ |
180,000 |
|
| (1) | During
2021, the Board of Directors approved the payment of a bonus of $1,078,000 to Mr. Gubin for
his services for 2021, which was paid in January 2022. Any future bonuses to Mr. Gubin or
the other executive officers will be made at the discretion of the Board. |
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, 2022 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,
Michael Blisko, who is one of our directors, Ted Lerman, who is one of the controlling members of the Predecessor Company, Nahman Eingal,
who is our Chief Financial Officer, and Steven Blisko, who is the brother of Michael Blisko, and their affiliated entities. There were
no other reportable relationships and transactions with related parties.
Lease
Agreements with Related Parties
As
of December 31, 2022 and 2021, each of the Company’s facilities except for two were leased and operated by separate tenants. Each
tenant is an entity that leases the facility from one of the Company’s subsidiaries and operates the facility as a healthcare facility.
The Company had 41 tenants out of 83 who were related parties as of December 31, 2022 and 47 tenants out of 83 who were
related parties as of December 31, 2021. Most of the lease agreements are triple net leases.
On
April 4, 2022, an affiliated tenant in Illinois notified the Company of its intent to default with respect to two master lease agreements.
Each lease included three nursing home facilities with a combined rent of $225,000 per month, or $2.7 million annually. Default occurred
on June 30, 2022, and the Company recognized a loss of $1,075,000 due to the write-offs of straight-line rent receivables during the
year ended December 31, 2022. On July 1, 2022, the Company entered into new lease agreements with an unaffiliated third-party operator
to lease these properties. The new leases have terms of 10 years each and provide for combined average base rent of $180,000 per month,
or $2.3 million per year, on average, over the life of the leases. In February 2023 one facility under this master lease was closed.
The closure was a result of the tenant request and mainly for efficiency reasons. This facility is under a master lease with 5 other
facilities and the rent payment is continuing with no interruption and at the same amount.
In
April 2021, tenants for 13 of our properties located in Arkansas agreed to assign their leases to a group of unaffiliated third parties.
The prior tenants were related parties of the Company. The facilities located on these properties consist of 12 SNFs and 2 ALFs, with
one property housing both a SNF and an ALF. There were no changes to the terms of the existing leases. The assignment of the leases was
subject to the approval of the State of Arkansas, which was received in December 2021. In connection with the lease assignments, the
Company granted the new tenants an option to purchase the properties for an aggregate price of $90 million. These properties are subject
to claims by the prior owners of the properties. These claims did not impact the assignment of the leases, but they may interfere with
the exercise of the purchase option.
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 Tenant/Operator (see notes (1) and (2)) | | |
| | |
| | |
| | |
| |
|
State | | |
Lessor/ Company Subsidiary | |
Manager/Tenant/Operator | |
Moishe Gubin/Gubin Enterprises
LP | | |
Michael Blisko/Blisko Enterprises
LP | | |
Ted Lerman/A&F Realty
LLC (3) | | |
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 | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
$ | 1,045,506 | | |
| 3.00 | % | |
| 1.45 | % | |
8/1/2025 | |
2 five year |
IN | | |
12803 Lenover Street Realty LLC | |
The Waters of Dillsboro - Ross Manor II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 1,353,655 | | |
| 3.00 | % | |
| 1.87 | % | |
8/1/2025 | |
2 five year |
IN | | |
1350 North Todd Drive Realty, LLC | |
The Waters of Scottsburg II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 1,089,527 | | |
| 3.00 | % | |
| 1.51 | % | |
8/1/2025 | |
2 five year |
IN | | |
1600 East Liberty Street Realty LLC | |
The Waters of Covington II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 1,309,634 | | |
| 3.00 | % | |
| 1.81 | % | |
8/1/2025 | |
2 five year |
IN | | |
1601 Hospital Drive Realty LLC | |
The Waters of Greencastle II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 1,100,532 | | |
| 3.00 | % | |
| 1.52 | % | |
8/1/2025 | |
2 five year |
IN | | |
1712 Leland Drive Realty, LLC | |
The Waters of Huntingburg II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 1,045,506 | | |
| 3.00 | % | |
| 1.45 | % | |
8/1/2025 | |
2 five year |
IN | | |
2055 Heritage Drive Realty LLC | |
The Waters of Martinsville II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 1,133,548 | | |
| 3.00 | % | |
| 1.57 | % | |
8/1/2025 | |
2 five year |
IN | | |
3895 South Keystone Avenue Realty LLC | |
The Waters of Indianapolis II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 891,431 | | |
| 3.00 | % | |
| 1.23 | % | |
8/1/2025 | |
2 five year |
IN | | |
405 Rio Vista Lane Realty LLC | |
The Waters of Rising Sun II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 638,309 | | |
| 3.00 | % | |
| 0.88 | % | |
8/1/2025 | |
2 five year |
IN | | |
950 Cross Avenue Realty LLC | |
The Waters of Clifty Falls II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 1,518,735 | | |
| 3.00 | % | |
| 2.10 | % | |
8/1/2025 | |
2 five year |
IN | | |
958 East Highway 46 Realty LLC | |
The Waters of Batesville II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 946,458 | | |
| 3.00 | % | |
| 1.31 | % | |
8/1/2025 | |
2 five year |
IN | | |
2400 Chateau Drive Realty, LLC | |
The Waters of Muncie II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 792,383 | | |
| 3.00 | % | |
| 1.10 | % | |
8/1/2025 | |
2 five year |
IN | | |
The Big H2O LLC | |
The Waters of New Castle II LLC | |
| 39.10 | % | |
| 40.14 | % | |
| 20.20 | % | |
| 726,351 | | |
| 3.00 | % | |
| 1.00 | % | |
8/1/2025 | |
2 five year |
Lease
Agreements with Related Parties (cont.)
| | |
| |
| |
Related Party Ownership
in Tenant/Operator (see notes (1) and (2)) | | |
| | |
| | |
| | |
| |
|
State | | |
Lessor / Company Subsidiary | |
Tenant /Operator | |
Moishe Gubin /Gubin Enterprises
LP | | |
Michael Blisko /Blisko
Enterprises LP | | |
Ted Lerman /A&F Realty
LLC (3) | | |
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 | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,514,820 | | |
| 3.00 | % | |
| 1.81 | % | |
8/1/2031 | |
2 five year |
TN | | |
146 Buck Creek Road, LLC | |
The Waters of Roan Highlands, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,111,794 | | |
| 3.00 | % | |
| 1.33 | % | |
8/1/2031 | |
2 five year |
TN | | |
704 5th Avenue East,
LLC | |
The Waters of Springfield, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 917,230 | | |
| 3.00 | % | |
| 1.09 | % | |
8/1/2031 | |
2 five year |
TN | | |
2501 River Road, LLC | |
The Waters of Cheatham, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,111,794 | | |
| 3.00 | % | |
| 1.33 | % | |
8/1/2031 | |
2 five year |
TN | | |
202 Enon Springs Road East, LLC | |
The Waters of Smyrna, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,264,666 | | |
| 3.00 | % | |
| 1.51 | % | |
8/1/2031 | |
2 five year |
TN | | |
140 Technology Lane, LLC | |
The Waters of Johnson City, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,167,384 | | |
| 3.00 | % | |
| 1.39 | % | |
8/1/2031 | |
2 five year |
TN | | |
835 Union Street, LLC | |
The Waters of Shelbyville, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,334,153 | | |
| 3.00 | % | |
| 1.59 | % | |
8/1/2031 | |
2 five year |
Lease
Agreements with Related Parties (cont.)
| |
| |
| |
Related
Party Ownership in Tenant/Operator
(see notes (1) and (2)) | | |
| | |
| | |
| | |
| |
|
State | |
Lessor/ Company Subsidiary | |
Tenant/Operator | |
Moishe Gubin/Gubin Enterprises
LP | | |
Michael Blisko/Blisko Enterprises
LP | | |
Ted Lerman/A&F Realty
LLC (3) | | |
Average annual rent over
life of lease | | |
Annual Escalation | | |
% of total rent | | |
Lease maturity | |
Extension options |
| |
| |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| |
|
| |
Master Lease Tennessee 2 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
|
TN | |
505 North Roan, LLC | |
Agape Rehabilitation & Nursing Center, A Water’s Community
LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,628,910 | | |
| 3.00 | % | |
| 1.97 | % | |
7/1/2031 | |
2 five year |
TN | |
14510 Highway 79, LLC | |
Waters of McKenzie, A Rehabilitation & Nursing Center, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,279,858 | | |
| 3.00 | % | |
| 1.55 | % | |
7/1/2031 | |
2 five year |
TN | |
6500 Kirby Gate Boulevard, LLC | |
Waters of Memphis, A Rehabilitation & Nursing Center, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,745,261 | | |
| 3.00 | % | |
| 2.11 | % | |
7/1/2031 | |
2 five year |
TN | |
978 Highway 11 South, LLC | |
Waters of Sweetwater, A Rehabilitation & Nursing Center, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 1,745,261 | | |
| 3.00 | % | |
| 2.11 | % | |
7/1/2031 | |
2 five year |
TN | |
2830 Highway 394, LLC | |
Waters of Bristol, A Rehabilitiation & Nursing Center, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 2,327,014 | | |
| 3.00 | % | |
| 2.81 | % | |
7/1/2031 | |
2 five year |
Lease
Agreements with Related Parties (cont.)
| |
| |
| |
Related Party Ownership
in Tenant/Operator (see notes (1) and (2)) | | |
| | |
| | |
| | |
| |
|
State | |
Lessor/ Company Subsidiary | |
Tenant/ Operator | |
Moishe Gubin/Gubin Enterprises
LP | | |
Michael Blisko/Blisko Enterprises
LP | | |
Ted Lerman/A&F Realty
LLC (3) | | |
Average Annual rent over
life of lease | | |
Annual Escalation | | |
% of total rent | | |
Lease maturity | |
Extension options |
IL | |
516 West Frech Street, LLC | |
Parker Nursing & Rehabilitation Center, LLC | |
| 50.00 | % | |
| 50.00 | % | |
| 0.00 | % | |
$ | 498,350 | | |
| Varies
between $12,000 and $24,000 annually | | |
| 0.69 | % | |
3/31/2031 | |
None |
IN | |
1316 North Tibbs Avenue Realty, LLC | |
Westpark, a Waters Community, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 549,884 | | |
| 3.00 | % | |
| 0.76 | % | |
6/1/2024 | |
2 five year |
IL | |
Ambassador Nursing Realty, LLC | |
Ambassador Nursing and Rehabilitation Center II, LLC | |
| 37.50 | % | |
| 37.50 | % | |
| 5.00 | % | |
| 1,005,313 | | |
| 3.00 | % | |
| 1.39 | % | |
2/28/2026 | |
2 five year |
IL | |
Momence Meadows Realty, LLC | |
Momence Meadows Nursing & Rehabilitation Center, LLC | |
| 50.00 | % | |
| 50.00 | % | |
| 0.00 | % | |
| 1,038,000 | | |
| None | | |
| 1.44 | % | |
12/30/2025 | |
None |
IL | |
Oak Lawn Nursing Realty, LLC | |
Oak Lawn Respiratory and Rehabilitation Center, LLC | |
| 50.00 | % | |
| 50.00 | % | |
| 0.00 | % | |
| 1,083,048 | | |
| None | | |
| 1.50 | % | |
6/1/2031 | |
None |
IL | |
Forest View Nursing Realty, LLC | |
Forest View Rehabilitation and Nursing Center, LLC | |
| 50.00 | % | |
| 50.00 | % | |
| 0.00 | % | |
| 1,215,483 | | |
| 3.00 | % | |
| 1.68 | % | |
12/1/2024 | |
2 five year |
IL | |
Lincoln Park Holdings, LLC | |
Lakeview Rehabilitation and Nursing Center, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 0.00 | % | |
| 1,260,000 | | |
| None | | |
| 1.74 | % | |
5/31/2031 | |
None |
IL | |
Continental Nursing Realty, LLC | |
Continental Nursing and Rehabilitation Center, LLC | |
| 37.50 | % | |
| 37.50 | % | |
| 5.00 | % | |
| 1,575,348 | | |
| None | | |
| 2.18 | % | |
3/1/2031 | |
None |
IL | |
Westshire Nursing Realty, LLC | |
City View Multicare Center, LLC | |
| 50.00 | % | |
| 50.00 | % | |
| 0.00 | % | |
| 1,788,365 | | |
| 3.00 | % | |
| 2.47 | % | |
9/1/2025 | |
2 five year |
IL | |
Belhaven Realty, LLC | |
Belhaven Nursing and Rehabilitation Center, LLC | |
| 35.00 | % | |
| 35.00 | % | |
| 24.99 | % | |
| 2,134,570 | | |
| 3.00 | % | |
| 2.95 | % | |
2/28/2026 | |
2 five year |
IL | |
West Suburban Nursing Realty, LLC | |
West Suburban Nursing & Rehabilitation Center, LLC | |
| 37.50 | % | |
| 37.50 | % | |
| 5.00 | % | |
| 1,961,604 | | |
| None | | |
| 2.71 | % | |
11/1/2027 | |
None |
Lease
Agreements with Related Parties (cont.)
| |
| |
| |
Related Party Ownership
in Tenant/Operator (see notes (1) and (2)) | | |
| | |
| | |
| | |
| |
|
State | |
Lessor/ Company Subsidiary | |
Tenant/ Operator | |
Moishe Gubin/Gubin Enterprises
LP | | |
Michael Blisko/Blisko Enterprises
LP | | |
Ted Lerman/A&F Realty
LLC (3) | | |
Average Annual rent over
life of lease | | |
Annual Escalation | | |
% of total rent | | |
Lease maturity | |
Extension options |
IN | |
1585 Perry Worth Road, LLC | |
The Waters of Lebanon, LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
$ | 116,676 | | |
| 3.00 | % | |
| 0.16 | % | |
6/1/2027 | |
2 five year |
IL | |
Niles Nursing Realty LLC | |
Niles Nursing & Rehabilitation Center LLC | |
| 40.00 | % | |
| 40.00 | % | |
| 20.00 | % | |
| 2,409,998 | | |
| 3.00 | % | |
| 3.33 | % | |
2/28/2026 | |
2 five year |
IL | |
Parkshore Estates Nursing Realty, LLC | |
Parkshore Estates Nursing and Rehabilitation Center, LLC | |
| 30.00 | % | |
| 30.00 | % | |
| 20.00 | % | |
| 2,454,187 | | |
| 3.00 | % | |
| 3.39 | % | |
12/1/2024 | |
2 five year |
IL | |
Midway Neurological and Rehabilitation Realty, LLC | |
Midway Neurological and Rehabilitation Center, LLC | |
| 33.39 | % | |
| 33.39 | % | |
| 23.97 | % | |
| 2,547,712 | | |
| 3.00 | % | |
| 3.52 | % | |
2/28/2026 | |
2 five year |
IL | |
4343 Kennedy Drive, LLC | |
Hope Creek Nursing and Rehabilitation Center, LLC | |
| 50.00 | % | |
| 50.00 | % | |
| 0.00 | % | |
| 478,958 | | |
| 3.00 | % | |
| 0.58 | % | |
10/1/2030 | |
2 five year |
(1) |
The
interests of the three listed related parties are not held through any commonly owned holding companies. Mr. Gubin’s interests
are held through Gubin Enterprises LP. Mr. Blisko’s interests are held individually, and through Blisko Enterprises LP and
New York Boys Management, LLC. The interests held by Ted Lerman and A&F Realty LLC are held directly by them. |
(2) |
Each
of the tenants is a limited liability company. The percentages listed reflect the owners’ percentage ownership of the outstanding
membership interests in each tenant. Each tenant is managed by two or three managers, which currently consist of Mr. Gubin, Mr. Blisko
and in some cases Mr. Lerman or A&F Realty LLC. Decisions are made by majority vote of the managers, except (in some cases) for
certain major items that require the vote of a majority or greater percentage of the members. |
(3) |
In
January 2023, Gubin Enterprises LP and Blisko Enterprises LP reached an agreement with A&F Realty LLC to purchase their ownership
interest in all of the operating entities with a retroactive effective date of January 1, 2022. |
Guarantees
from Related Parties
As
of December 31, 2022, Mr. Gubin and Mr. Blisko were not parties to any guarantees of any debt of the Company and its subsidiaries. As
of December 31, 2021, Mr. Gubin and Mr. Blisko guaranteed $21.9 million in loans made by commercial banks to the Company’s subsidiaries.
Mr. Gubin and Mr. Blisko did not received any compensation for providing such guarantees.
| |
December 31, | |
| |
2022 | | |
2021 | |
| |
(amounts in $000s) | |
Straight-line rent receivable | |
$ | 11,591 | | |
$ | 15,261 | |
Tenant portion of replacement reserve | |
$ | 10,227 | | |
$ | 10,331 | |
Notes receivable | |
$ | 7,816 | | |
$ | 8,521 | |
Payments from and to Related Parties | |
| |
| |
Years ended December 31, | |
| |
2022 | | |
2021 | |
| |
(amounts in $000s) | |
Rental income received from related parties | |
$ | 54,386 | | |
$ | 61,310 | |
Other
Related Party Relationships
On
December 31, 2022 and 2021, the Company had approximately $4.7 million and $17.5 million, respectively, on deposit with OptimumBank.
Both Mr. Gubin, as Chairman, and Mr. Blisko are members of the Board of Directors of OptimumBank.
On
August 25, 2021, the Company acquired five properties located in Tennessee and one in Kentucky (the “Tennessee/Kentucky Properties”)
for an aggregate acquisition cost of $81.0 million, which was paid through the issuance of 1,545,217 OP units valued at $16,997,000,
including 90,909 of OP units paid to the broker valued at $1 million and a cash payment of $63,990,000. Moishe Gubin, our Chairman and
Chief Executive Officer, agreed to purchase the OP units issued to the sellers either at cost or fair market value (whichever is higher)
12 months after the closing at the option of the sellers. In November 2022 the Board of Directors of the Company approved a resolution
to allow the Operating Partnership, instead of Moishe Gubin personally, to repurchase the 1,454,308 OP Units from the seller of
the Tennessee/Kentucky Properties. The purchase has not yet been completed as of the date of these consolidated financials.
Leases
with Affiliates of Steven Blisko
Prior
to June 30, 2022, we leased six facilities to entities that are affiliates of Steven Blisko Steven Blisko is the brother of Michael Blisko,
who is one of our directors. Steven Blisko does not own, either directly or indirectly, any interest in the Predecessor Company, does
not serve as a manager, director or officer of the Predecessor Company and does not serve as a director or officer of the Company. Steven
Blisko owns 300 of shares of our Common Stock.
On
April 4, 2022, we were notified that the tenants under the master leases for 6 facilities located in central Illinois intended to default
with respect to their lease agreements due to operating losses. The tenants indicated that their operating losses were partially due
to decreased occupancy caused by COVID-19. The tenants are affiliates of Steven Blisko, who is the brother of Michael Blisko, one of
our directors. These leases provided for a combined rent of $225,000 per month, or $2.7 million per year. All payments due under these
leases were paid through mid-June 2022. Default occurred on June 30, 2022, and the Company recognized a loss of $1,075,000 in the second
quarter of 2022 due to write-offs of straight-line receivables. On July 1, 2022, the Company entered into new lease agreements with
an unaffiliated third-party operator to lease these properties. The new leases have terms of 10 years each and provide for combined average
base rent of $180,000 per month, or $2.3 million per year over the life of the leases.
Purchase
of Note from Related Party
As
noted above, in December 2021, tenants for 13 of our properties located in Arkansas transferred their leasehold interests in these properties
to a group of unaffiliated third parties. The prior tenants were affiliates of Infinity Healthcare Management, a company owned and controlled
by Mr. Blisko and Mr. Gubin, directors of the Company. As consideration for the transfer of the leasehold interests, the new tenants
issued a promissory note in the amount of $8.0 million to an affiliate of Infinity Healthcare Management. In June 2022, the Company purchased
the note from this affiliate for a purchase price of $8.0 million, which was equal to the outstanding balance of the note at the time
of purchase. In connection with the lease assignments, the Company granted the new tenants an option to purchase the 13 properties for
an aggregate price of $90 million. The option may be exercised following the release of the lien filed against the properties by the
prior owners in connection with litigation against Infinity Healthcare Management, the Company and certain of their affiliates. The note
bears interest at 7% per annum payable monthly. The principal amount of the note becomes 120 days after the date on which tenants are
first able to exercise the purchase option. If the tenants do not exercise the option within this period, then the outstanding balance
of the note will thereafter be payable in thirty-six (36) equal monthly installments of principal and interest.
Issuance
of Shares in Exchange for OP Units
In
June and November 2022, the Company issued 29,410 and 60,450 shares, respectively, of common stock in exchange for an equal number of
OP Units held by entities controlled by Michael Blisko, Moishe Gubin and Ted Lerman.
Purchases
of Equity Securities by the Issuer and Affiliated Purchasers
During
2022, affiliates of the Company purchased 3,220 shares of our common stock in the open market at an average price per share of $8.62
and an aggregate repurchase cost of $27,772.
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 Company’s 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 Company’s audited financial statements in the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2022, for filing with the SEC.
This
report has been furnished by the Audit Committee of the Board.
Jack
Levine-Chairman
Reid
Shapiro
Essel
Bailey
PROPOSAL
NO. 2
ADVISORY
VOTE TO APPROVE EXECUTIVE COMPENSATION
Section
14A of the Exchange Act, and related rules of the SEC, enable our stockholders to vote to approve, on an advisory, non-binding basis,
the compensation of our Named Executive Officers as disclosed in this Proxy Statement. This vote is advisory, and, therefore, not binding
on the Company, the Compensation Committee, or the Board. However, the Board and the Compensation Committee value the opinions of our
stockholders and to the extent there is a significant vote against the compensation of the Named Executive Officers, we will consider
our stockholders’ concerns, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
As
described in detail in the section of this Proxy Statement entitled, “Executive Compensation,” our executive compensation
program is designed to attract, motivate, and retain executive officers, while aligning their interests with those of our stockholders.
Under this program, our executive officers are rewarded for the achievement of strategic and operational objectives and the realization
of increased stockholder value. Please read the Executive Compensation section and the accompanying compensation tables of this Proxy
Statement for additional information about our executive compensation program, including information about the compensation of the Named
Executive Officers for fiscal year 2022.
By
way of this proposal, commonly known as a “Say-on-Pay” proposal, we are asking our stockholders to indicate their support
for the compensation of the Named Executive Officers as described in this Proxy Statement. Please note that this vote is not intended
to address any specific item of compensation, but rather the overall compensation of the Named Executive Officers and the philosophy,
policies, and practices described in this Proxy Statement.
The
stockholders are being asked to approve the following resolution at the Annual Meeting:
“RESOLVED,
that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including
the compensation tables and narrative discussion, is hereby APPROVED.”
RECOMMENDATION
OF THE BOARD OF DIRECTORS:
A
VOTE “FOR” THE APPROVAL OF PROPOSAL NO. 2
PROPOSAL
NO. 3
ADVISORY
RESOLUTION ON THE FREQUENCY OF THE STOCKHOLDERS’ SAY-ON-PAY
Summary
Section
14A of the Exchange Act and the SEC’s rules thereunder require that we include in this Proxy Statement a separate non-binding stockholder
vote to advise on whether the Say-on-Pay vote should occur every one, two or three years. You have the option to vote for any one of
the three options, or to abstain on the matter.
The
Board has determined that a stockholder advisory vote on executive compensation every three years is the best approach for the
Company based on a number of considerations, including the following:
Our
compensation program is designed to induce performance over a multi-year period. A vote held every three years would be more consistent
with and provide better input on, our long-term compensation, which constitutes a significant portion of the compensation of our Named
Executive Officers;
A
three-year vote cycle gives the Board sufficient time to thoughtfully consider the results of the advisory vote and to implement any
desired changes to our executive compensation policies and procedures; and
A
three-year vote cycle will provide stockholders sufficient time to evaluate the effectiveness of our short- and long-term compensation
strategies and the related business outcomes of the Company.
Vote
Required and Recommendation
The
advisory resolution on the frequency of the stockholders’ advisory resolution on the compensation of the Company’s Named
Executive Officers is selected by a plurality of the shares present, in person or by proxy, and voting on the matter. Accordingly, the
option — every one, two or three years — that receives the largest number of votes cast “FOR” is the option selected
by the stockholders. This proposal is non-binding on the Company and the Board.
Although
the advisory vote is non-binding, our Board and the Compensation Committee will consider the outcome of the vote when making future decisions
about the Company’s executive compensation policies and procedures. The Company’s stockholders also have the opportunity
to provide additional feedback on important matters involving executive compensation even in years when Say-on-Pay votes do not occur.
For example, as discussed under “Shareholder Communications with the Board”, the Company provides stockholders an opportunity
to communicate directly with the Board, including on issues of executive compensation.
RECOMMENDATION
OF THE BOARD OF DIRECTORS:
A
VOTE “FOR” THREE YEARS.
PROPOSAL
NO. 4
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, 2023. 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, 2023. 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, 2022, 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.
| |
2022 | | |
2021 | |
| |
| | |
| |
| |
| | |
| |
Audit Fees (1) | |
$ | 110,000 | | |
$ | 117,500 | |
Audit-Related Fees (2) | |
| - | | |
| - | |
Tax Fees (3) | |
| - | | |
| - | |
All Other Fees (4) | |
| 25,000 | | |
| 5,000 | |
Total Accounting fees and Services | |
$ | 135,000 | | |
$ | 122,500 | |
(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)
Audit-Related Fees. These are fees for assurance and related services by the principal accountant that are reasonably related to
the performance of the audit or review of the registrant’s financial statements.
(3)
Tax Fees. These are fees for professional services rendered by the principal accountant with respect to tax compliance, tax advice,
and tax planning.
(4)
All Other Fees. These are fees for products and services provided by the principal accountant, other than the services reported above.
Audit
Committee Pre-Approval Policies and Procedures
The
Company’s 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 Company’s 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 COMPANY’S INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM.
PROPOSAL
NO. 5
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. 5.
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.
FUTURE
STOCKHOLDER PROPOSALS
Proposals
of stockholders of the Company that are intended to be presented by such stockholders at the Company’s 2024 annual meeting of stockholders
and that stockholders desire to have included in the Company’s proxy materials relating to such meeting must be received by the
Company at its corporate offices no later than December 11, 2023, which is 120 calendar days prior to the anniversary of this
year’s 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 Company’s 2024 annual meeting or to nominate one or more directors and the proposal
is not intended to be included in the Company’s proxy statement relating to that meeting, the stockholder must give advance written
notice to the Company by February 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.
AVAILABILITY
OF ANNUAL REPORT ON FORM 10-K AND HOUSEHOLDING
A
copy of the Company’s 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 Company’s Annual Report on Form 10-K as filed with the SEC is available on the Company’s 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.
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
10, 2023 |
By
Order of the Board of Directors, |
|
|
|
/s/
Moishe Gubin |
|
Moishe
Gubin |
|
Chairman
of the Board and Chief Executive Officer |
Grafico Azioni Strawberry Fields REIT (AMEX:STRW)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Strawberry Fields REIT (AMEX:STRW)
Storico
Da Dic 2023 a Dic 2024