SEDAR Interim Financial Statements

FLAGSHIP COMMUNITIES REAL ESTATE INVESTMENT TRUST CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (In US Dollars) See accompanying notes to the condensed consolidated interim financial statements. 2 Flagship Communities Real Estate Investment Trust Condensed Consolidated Interim Statements of Financial Position (Unaudited) (In thousands of US dollars) Note September 30, 2025 (Audited) December 31, 2024 Current Assets Cash and cash equivalents 9,814 $ 7,264 $ Tenant and other receivables, net 4 1,261 1,984 Prepaids and other assets 5 1,800 3,344 Lender escrow deposits 6 6,765 3,206 19,640 15,798 Other non-current assets 7 1,824 615 Investment properties 8 1,207,791 1,087,348 Property and equipment, net 9 3,341 3,274 Note receivable - related party 16 2,460 2,460 1,215,416 1,093,697 Total Assets 1,235,056 $ 1,109,495 $ Current Liabilities Trade and other payables 1,308 $ 1,925 $ Line of credit 10 5,000 3,000 Other liabilities 11 21,490 15,647 Mortgages and note payable, net 12 710 45,271 Class B Units 13, 23 105,971 83,159 134,479 149,002 Mortgages and note payable, net 12 448,437 374,552 Other non-current liabilities 14 5,786 290 454,223 374,842 Total Liabilities 588,702 523,844 Unitholders' Equity Unitholders' equity 15 646,354 585,651 Total Liabilities and Unitholders' Equity 1,235,056 $ 1,109,495 $ See accompanying notes to the condensed consolidated interim financial statements. 3 Flagship Communities Real Estate Investment Trust Condensed Consolidated Interim Statements of Net Income and Comprehensive Income (Unaudited) (In thousands of US dollars) Note 2025 2024 2025 2024 Rental revenue and related income 17 26,087 $ 23,228 $ 75,935 $ 64,380 $ Property operating expenses 18 9,130 8,126 25,891 21,881 Net Operating Income 16,957 15,102 50,044 42,499 Other Expenses/(Income) General and administrative expenses 19 2,895 2,665 8,771 7,808 Finance costs from operations 20 5,082 5,068 15,371 16,392 Accretion of mark-to-market adjustment on mortgages payable 12 (56) (257) (167) (772) Depreciation 9 130 124 384 353 Other (income) (139) (1,204) (1,177) (2,051) Fair value adjustment - Class B Units 13 5,633 6,972 22,812 (4,243) Distributions on Class B Units 865 824 2,595 2,471 Fair value adjustment - investment properties 8 (22,316) (23,042) (69,546) (55,751) Fair value adjustment - unit based compensation 22 290 165 878 (75) Net Income and Comprehensive Income 24,573 $ 23,787 $ 70,123 $ 78,367 $ For the three months ended September 30, For the nine months ended September 30, See accompanying notes to the condensed consolidated interim financial statements. 4 Flagship Communities Real Estate Investment Trust Condensed Consolidated Interim Statements of Changes in Unitholders’ Equity (Unaudited) (In thousands of US dollars) Note Units Units Distributions Cumulative Net Income Unitholders' Equity Balance, December 31, 2023 15,492,056 243,352 $ (22,404) $ 215,126 $ 436,074 $ Units issued, net of issuance costs 15 3,910,000 57,082 - - 57,082 Net income and comprehensive income - - - 78,367 78,367 Distributions 15 - - (8,014) - (8,014) Balance, September 30, 2024 19,402,056 300,434 $ (30,418) $ 293,493 $ 563,509 $ Balance, December 31, 2024 19,402,056 300,434 $ (33,427) $ 318,644 $ 585,651 $ Issuance costs 15 - (392) - - (392) Net income and comprehensive income - - - 70,123 70,123 Distributions 15 - - (9,028) - (9,028) Balance, September 30, 2025 19,402,056 300,042 $ --- (42,455) $ 388,767 $ 646,354 $ See accompanying notes to the condensed consolidated interim financial statements. 5 Flagship Communities Real Estate Investment Trust Condensed Consolidated Interim Statements of Cash Flows (Unaudited) (In thousands of US dollars) Note 2025 2024 Cash flow provided by operating activities Net income and comprehensive income 70,123 $ 78,367 $ Add (deduct): Unit based compensation 1,140 775 Finance costs from operations 15,371 16,392 Accretion of mark-to-market adjustment on mortgages payable (167) (772) Depreciation 384 353 Non-cash (gain) loss on disposals (50) - Interest received (234) (441) Fair value adjustments (45,856) (60,069) Distributions declared on Class B Units 2,595 2,471 Change in non-cash working capital 24 1,116 2,679 44,422 $ 39,755 $ Cash flow (used in) provided by financing activities Proceeds from issuance of Units, net of costs (392) 57,082 Distributions paid to Unitholders (9,028) (7,822) Distributions paid to Class B Unitholders (2,595) (2,472) Cash paid for redemption of Class B Units - (78) Change in line of credit 2,000 (10,000) Proceeds from mortgages payable 64,874 118,894 Financing costs associated with financing activities (2,180) (1,734) Repayment of mortgages payable and note payable (45,203) (48,968) Interest paid (14,480) (13,395) Mortgages payable settlement expense - (2,060) (7,004) $ 89,447 $ Cash flow (used in) investing activities Cash paid for investment property acquisitions (14,403) (100,007) Change in other non-current assets (1,209) - Cash received for investment property disposal 1,486 2,012 Capital expenditures on investment properties (20,508) (27,354) Cash paid for property and equipment (451) (886) Interest received 217 424 (34,868) $ (125,811) $ Increase in cash and cash equivalents 2,550 $ 3,391 $ Cash and cash equivalents, beginning of period 7,264 7,814 Cash and cash equivalents, end of period 9,814 $ 11,205 $ For the nine months ended September 30, Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 6 1. Nature of Operations Flagship Communities Real Estate Investment Trust (the “REIT” or the “Trust”) is an unincorporated, open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. The registered office of the REIT is located at 199 Bay Street, Suite 4000, Toronto, ON, M5L 1A9. The head office of the REIT is located at 2220 Grandview Dr, Suite 280, Fort Mitchell, KY 41017, United States. The REIT was formed on August 12, 2020, and the operations of the REIT commenced on October 7, 2020 when it completed an initial public offering, for the purpose of owning and operating a portfolio of income-producing manufactured housing communities (“MHCs”) located in the United States. The trust units (“Units”) of the REIT trade on the Toronto Stock Exchange in U.S. dollars under the symbol “MHC.U” and in Canadian dollars under the symbol “MHC.UN”. As at September 30, 2025, the REIT owns 81 MHCs, 2 recreational vehicle resort communities, and 2 commercial real estate buildings located across Arkansas, Illinois, Indiana, Kentucky, Missouri, Ohio, Tennessee, and West Virginia (December 31, 2024 – 80, 2 and 2, respectively). 2. Basis of Presentation (A) Statement of compliance The condensed consolidated int --- erim financial statements of the REIT have been prepared in accordance with International Accounting Standard 34 (“IAS 34”), Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"). These condensed consolidated interim financial statements were approved by the Board of Trustees on November 12, 2025. (B) Basis of presentation The condensed consolidated interim financial statements have been prepared on a historical cost basis except for investment properties, class B units (“Class B Units”) of the REIT’s subsidiary, Flagship Operating, LLC, restricted units (“RUs”) and deferred trust units (“DTUs”), which have been measured at fair value. The condensed consolidated interim financial statements are presented in thousands of U.S. dollars, which is the REIT's functional currency. Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 7 (C) Principles of consolidation The REIT consolidates its interest in entities in which it has control. Control is defined by the power to govern an entity’s financial and operating policies so as to be able to obtain benefits from its activities. These condensed consolidated interim financial statements comprise the financial statements of the REIT and its subsidiaries, including, Flagship Operating, LLC, which owns Legacy Properties GP, LLC and Flagship Properties, LLC. Subsidiaries are entities controlled by the REIT. The financial statements of the subsidiaries are prepared for the same reporting periods as the REIT using consistent accounting policies. All intercompany balances, transactions and unrealized (gains) losses arising from intercompany transactions are eliminated upon consolidation. 3. Material Accounting Policies The condensed consolidated interim financial statements do not include all the information required for full annual financial statements and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024, which have been prepared in accordance with IFRS® Accounting Standards (“IFRS”), as issued by the IASB. The condensed consolidated interim financial statements follow the same accounting policies as described in the consolidated financial statements for the year ended December 31, 2024. 4. Tenant and Other Receivables, Net The change in expected credit loss provision of tenant and other receivables was as follows: Tenant receivables include lot rent, utilities, miscellaneous fees, and other recoverable charges. Other receivables primarily consist of a balance due from a related party debtor (See Note 16). An allowance for credit losses is maintained for estimated losses resulting from the inability of tenants to meet obligations under lease agreements. The REIT actively reviews receivables and determines the potentially uncollectible accounts on a per-tenant basis. A tenant receivable is written down to its estimated realizable value when the REIT has reason to believe that the tenant will not be able to fulfill its obligations under the lease agreement. As at As at September 30, 2025 December 31, 2024 Tenant receivables 875 $ 985 $ Other receivables 432 1,044 Allowance for doubtful accounts (46) (45) Total 1,261 $ 1,984 $ Allowance for doubtful accounts, opening balance 45 $ 47 $ --- Change in expected credit loss provision 1 (2) Allowance for doubtful accounts, ending balance 46 $ 45 $ For the nine months ended September 30, 2025 For the year ended December 31, 2024 Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 8 5. Prepaids and Other Assets The REIT’s prepaids and other assets consist of the following: 6. Lender Escrow Deposits Escrows for real estate taxes, insurance, capital repairs, and interest are maintained under the control of the mortgagor for payment on behalf of the REIT. As at September 30, 2025 and December 31, 2024, the REIT had lender escrow deposits of $6,765 and $3,206, respectively. 7. Other Non-Current Assets Other non-current assets include funds held in escrow for future investment property acquisitions, funds held in escrow for future financing, as well as deferred issuance costs related to the re-establishment of the base shelf prospectus dated August 8, 2025. As at September 30, 2025 and December 31, 2024, the REIT had other non- current assets of $1,824 and $615, respectively. 8. Investment Properties A reconciliation of the carrying value for investment properties at the beginning and end of the reporting period is set out below: (1) During the nine months ended September 30, 2025 and the year ended December 31, 2024 the REIT added 154 rental homes totaling $9,258 and 293 rental homes totaling $16,834, respectively (see Note 16). As at As at Note September 30, 2025 December 31, 2024 Prepaid insurance 599 $ 1,739 $ Deferred issuance costs 15 27 392 Other prepaids and deposits 1,174 1,213 Total 1,800 $ 3,344 $ Investment properties, opening balance 1,087,348 $ 880,310 $ Capital expenditures (1) 20,508 38,919 Acquisition of investment properties 31,825 100,007 Disposal of investment properties (2) (1,436) (2,529) Fair value adjustment - investment properties 69,546 70,641 Investment properties, ending balance 1,207,791 $ 1,087,348 $ For the nine months ended September 30, 2025 For the year ended December 31, 2024 Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 9 During the year ended December 31, 2024, $1,157 of head office building and land was reclassified as investment property as the REIT moved to a new head office and began offering this now unused space for lease. (2) During the nine months ended September 30, 2025 and the year ended December 31, 2024 the REIT disposed of 75 rental homes totaling $1,436 and 117 rental homes totaling $2,529, respectively. Disposal of these rental homes was at fair value resulting in no (gain) loss recognized in the condensed consolidated interim statements of net income and comprehensive income. During the nine months ended September 30, 2025 and the year ended December 31, 2024, the REIT had the following investment property activity: (1) Both the March 21, 2025 and August 22, 2025 acquisitions were purchased from a related party (see Note 16) (2) The May 14, 2024 acquisitions were funded with proceeds from an equity offering (see Note 15) as well as a bridge note. The REIT used a combination of internal valuation metho --- dologies and external appraisals to value the investment properties as at September 30, 2025 and December 31, 2024. A significant change in occupancy rates, rents or capitalization rates per annum would result in a significant change in the fair value of the MHCs. Due to elevated estimation uncertainty as a result of the current economic environment the REIT monitors market trends and changes in the economic environment on the valuation of its investment properties. If there are changes in the critical and key assumptions used in valuing the investment properties, in regional, national or international economic conditions, including but not limited to heightened inflation, rising interest rates, or general economic slowdown, the fair value of investment properties may change materially. Liabilities Community Acquisition Date Investment properties All additional assets Liabilities Cash and cash equivalents Assumed Mortgages and Note Payable Madison 627 (1 ) 3/21/2025 1,133 $ - $ - $ 1,133 $ - $ Sawyier Pointe (1 ) 8/22/2025 30,692 - 5,970 13,270 11,452 31,825 $ - $ 5,970 $ 14,403 $ 11,452 $ Expansion Acquisitions (2) 5/14/2024 93,041 $ - $ Bluegrass Village 13,996 $ - $ 172 $ Blue Spruce 5,962 - 86 Cedar Park 18,553 - 149 Hummingbird Hills 2,197 - 19 Independence Hill 25,365 2 195 Old Hickory 22,825 - 172 White Pines WV 5,000 - 66 Grandview MHO 8/30/2024 6,109 22 - 6,131 - 100,007 $ 24 $ 859 $ 99,172 $ - $ Assets Consideration from the REIT Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 10 Key metrics of the capitalization rates applicable to the REIT’s MHCs were as follows: 9. Property and Equipment, Net (1) During the year ended December 31, 2024, $1,157 of head office building and land, was reclassified as investment property as the REIT moved to a new head office and began offering this now unused space for lease. As at As at Capitalization Rates High 9.00 % 8.75 % Low 4.50 % 4.50 % Weighted Average 5.09 % 5.11 % % Change + 0.25% (4.81) % (4.90) % - 0.25% 5.11 % 4.98 % $ Change + 0.25% ($53,952) ($49,591) - 0.25% $57,242 $50,416 September 30, 2025 December 31, 2024 Autos & Trucks Equipment - Office and Maintenance Furniture and Fixtures Head Office Building and Land Total Cost As at December 31, 2023 155 $ 3,018 $ 296 $ 1,235 $ 4,704 $ Additions 55 825 185 12 1,077 Reclassification (1) - - - (1,247) (1,247) As at December 31, 2024 210 $ 3,843 $ 481 $ - $ 4,534 $ Additions - 400 51 - 451 As at September 30, 2025 210 $ 4,243 $ 532 $ - 4,985 $ Accumulated depreciation As at December 31, 2023 33 $ 725 $ 43 $ 64 $ 865 $ Additions 21 386 52 26 485 Reclassification (1) - - - (90) (90) As at December 31, 2024 54 $ 1,111 $ 95 $ - $ 1,260 $ Additions 19 314 51 - 384 As at September 30, 2025 73 $ 1,425 $ 146 $ - 1,644 $ Net book value As at December 31, 2023 122 $ 2,293 $ 253 $ 1,171 $ 3,839 $ As at December 31, 2024 156 $ 2,732 $ 386 $ - $ 3,274 $ As at September 30, 2025 137 $ 2,818 $ 386 $ - $ 3,341 $ Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 11 10. Line of Credit The REIT’s revolving line of credit (th --- e “Line of Credit”) is secured by two MHCs and two resort communities and has a total available capacity of $10,000. The Line of Credit matures on December 23, 2025 and incurs interest at Prime plus 0.50%. As at September 30, 2025 and December 31, 2024 there was $5,000 and $3,000 outstanding on the Line of Credit and unamortized deferred financing costs were $2 and $22, respectively. The Line of Credit requires the REIT to comply with various covenants all of which the REIT was in compliance with as at September 30, 2025 and December 31, 2024. The REIT intends to renew or replace the Line of Credit during the three months ending December 31, 2025. 11. Other Liabilities 12. Mortgages and Note Payable, Net Mortgages and note payable are shown net of unamortized mark-to-market adjustments and unamortized deferred financing costs. The balances are as follows: The REIT’s weighted average contractual annual interest rate on its mortgages and note payable as at September 30, 2025 and December 31, 2024 was approximately 4.31% and 4.41%, respectively, which excludes the impact of the amortization of the mark-to-market adjustment and amortization of deferred financing costs. The REIT’s mortgages and note payable consists of both fixed rate mortgages and a variable rate note. As at As at September 30, 2025 December 31, 2024 Property related accruals 6,672 $ 4,149 $ Finance costs payable 1,505 1,095 Tenant security deposits 4,784 4,322 Distributions payable 1,291 1,291 Unearned revenue 3,082 2,816 Unit based compensation payable 4,156 1,974 Total 21,490 $ 15,647 $ As at As at September 30, 2025 December 31, 2024 Mortgages and note payable 452,636 $ 421,513 $ Unamortized mark-to market adjustment 1,037 1,204 Unamortized deferred financing costs (4,526) (2,894) Total mortgages and note payable $ 449,147 $ 419,823 Less: current portion (710) (45,271) Amount classified as non-current portion 448,437 $ 374,552 $ Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 12 The mortgages and note payable balances as at September 30, 2025, excluding unamortized mark-to-market adjustments and unamortized deferred financing costs, are due as follows: The REIT’s mortgages and note payable contains customary representations, warranties, and events of default, which require the REIT to comply with affirmative and negative covenants. As at September 30, 2025 and December 31, 2024, the REIT was in compliance with all financial covenants relating to its mortgages and note payable. Cash flows and non-cash changes related to the mortgages and note payable, net are as follows: For the year ending December 31, Principal payments 2025 524 $ 2026 11,485 2027 704 2028 2,108 2029 16,859 Thereafter 420,956 Total 452,636 $ Mortgages and note payable, net, opening balance 419,823 $ 353,369 $ Cash Flows Proceeds from mortgages payable 64,874 118,894 Financing costs associated with financing activities (2,180) (1,734) Repayment of mortgages payable (45,203) (49,035) $ 437,314 $ 421,494 Non-Cash Changes Acquisitions of investment property (Note 8) 11,452 $ $ - (Gain) from mortgages payable settlement - (2,277) Mortgages payable settlement expense 228 463 Accretion of mark-to-market adjustment on mortgages payable (167) (290) Amortization of deferred financing costs 320 43 --- 3 Mortgages and note payable, net, ending balance 449,147 $ 419,823 $ For the year ended December 31, 2024 For the nine months ended September 30, 2025 Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 13 13. Class B Units The fair value was calculated using the Unit closing price as at September 30, 2025 and December 31, 2024. As at both September 30, 2025 and December 31, 2024, distributions payable on Class B Units was $288. For the periods presented, the following table presents the outstanding Class B Units and the change in fair value of the Class B Units. 14. Other Non-Current Liabilities Other non-current liabilities consist of unvested RUs and a contractual obligation expected to convert to a note payable upon completion of an infrastructure project. As at September 30, 2025 and December 31, 2024, the REIT had other non-current liabilities of $5,786 and $290, respectively. 15. Unitholders’ Equity The REIT is authorized to issue an unlimited number of Units. Units are ordinary trust units of the REIT, each of which represents a unitholders’ proportionate undivided beneficial interest and voting rights in the REIT. Transaction costs relating to equity offerings and over-allotment options are charged directly to transaction expense, as applicable. Class B Units Value Class B Units, December 31, 2023 5,582,594 89,042 $ Class B units redeemed (5,183) (78) Fair value adjustment (5,805) Class B Units, December 31, 2024 5,577,411 83,159 $ Fair value adjustment 22,812 Class B Units, September 30, 2025 5,577,411 105,971 $ Number of Units Value Units outstanding, December 31, 2023 15,492,056 243,352 $ Units issued on equity offering closed April 24, 2024 (1) 3,910,000 60,019 Less: issuance costs (2) (2,937) Units outstanding, December 31, 2024 19,402,056 300,434 $ Less: issuance costs (2) (392) Units outstanding, September 30, 2025 19,402,056 300,042 $ Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 14 Following the lapsing of the REIT's previous short form base shelf prospectus dated May 7, 2021, the REIT filed a new base shelf prospectus dated June 7, 2023. Subsequently, the REIT re-established the ATM Offering pursuant to a new prospectus supplement dated June 28, 2023. The short form base shelf prospectus and ATM Offering prospectus supplement lapsed on July 8, 2025. As at September 30, 2025 and December 31, 2024 the REIT had issued a total of 1,350,871 Units under the ATM Offering prior to it lapsing on July 8, 2025. Following the lapsing of the REIT's previous short form base shelf prospectus dated June 7, 2023, the REIT filed a new base shelf prospectus dated August 8, 2025. (1) On April 19, 2024, the REIT filed a supplement to its base shelf prospectus dated June 7, 2023 and entered into an underwriting agreement for the purpose of completing an equity offering (the “April 2024 Offering”) that closed on April 24, 2024. Pursuant to the April 2024 Offering, the REIT raised gross proceeds of $60,019 through the issuance of 3,910,000 Units at a price of $15.35 per Unit. (2) Issuance costs relating to the --- April 2024 Offering, including underwriters’ fees and other costs directly associated, were approximately $3,329 and were charged directly to unitholders’ equity. Of this amount, $392 resulted from deferred issuance costs that were charged directly to unitholders’ equity subsequently. On October 1, 2024 the REIT announced that the Board of Trustees approved a 5% increase to its cash distribution to unitholders to $0.0517 per Unit per month or $0.6204 per Unit per year. The new monthly cash distribution commenced with the October 2024 distribution, paid in November 2024. On October 15, 2025 the REIT announced that the Board of Trustees approved a 5.4% increase to its cash distribution to unitholders to $0.0545 per Unit per month or $0.654 per Unit per year. The new monthly cash distribution will commence with the October 2025 distribution, to be paid in November 2025. For the nine months ended September 30, 2025 and the year ended December 31, 2024 the REIT declared distributions to unitholders of record in the amount of $9,028 ($0.0517 per Unit per month) and $11,023 ($0.0492 per Unit per month until the November 15, 2024 distribution at which time the amount increased to $0.0517 per Unit per month), respectively. Total distributions payable as at both September 30, 2025 and December 31, 2024 was $1,003. 16. Related Party Transactions The REIT and Empower, an entity majority-owned by the REIT’s Chief Executive Officer and Chief Investment Officer, are party to certain agreements that govern the relationships between such parties and their affiliates. Empower will acquire and develop MHCs that do not meet the REIT’s investment criteria and conduct home sales, including sales of manufactured homes located on investment properties, under the ‘‘You Got it Homes’’ brand. Transactions between the REIT and Empower are governed by the Services Agreement (see "Services Agreement" in the Annual Information Form) or agreements relating directly to the specific transaction. Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 15 The condensed consolidated interim financial statements include the following related party transactions: (1) On July 2, 2021 the REIT entered into a promissory note (“Note Receivable-Related Party”) in the amount of $2,460 with Empower. The Note Receivable-Related Party includes monthly interest-only payments and matures on July 2, 2031 at which time the entire principal balance and any unpaid interest is due. The Note Receivable-Related Party incurs interest at the Prime rate. For the three and nine months ended September 30, 2025, interest revenue, included in other (income) in the consolidated statements of net income and comprehensive income, was $53 and $158, respectively ($53 and $159 for the three and nine months ended September 30, 2024). (2) On March 21, 2025 the REIT acquired a 6-acre parcel of land adjoining an existing manufactured housing community from a related party, Empower, for $1,133 (See Note 8). This parcel of land is fully developed and shares the infrastructure of the adjoining community. (3) On August 22, 2025 the REIT acquired a 504 lot manufactured housing community from a related party, Empower, for $30,590 which represented 95% of the appraised value (See Note 8). Total consideration --- exchanged was $24,722 and consisted of $13,270 of cash along with the assumption of $11,452 of existing mortgages. (4) During the nine months ended September 30, 2025 and the year ended December 31, 2024 the REIT added 154 rental homes totaling $8,142 and 293 rental homes totaling $14,565, respectively, from a related party, Empower. Some of these rental homes required additional capital expenditure to bring them to a condition suitable for leasing (see Note 8). (5) Payroll and benefits include $532 and $2,169 incurred to key management personnel during the three and nine months ended September 30, 2025, which includes short-term employee payroll and benefits, and RUs ($451 and $1,883 for the three and nine months ended September 30, 2024). (6) For the three and nine months ended September 30, 2025, the REIT billed Empower a total of $614 and $2,021, of which, $581 and $1,872 was payroll and benefits, $28 and $134 was management fees, and $5 and $15 was other miscellaneous items, respectively ($637 and $1,782; $595 and $1,671; $37 and $98; $5 and $13, respectively, for the three and nine months ended September 30, 2024). These amounts are recorded as an offset to the expense in which they relate, or in the case of management fees, in other (income), in the consolidated statements of net income and comprehensive income. As at September 30, 2025 and December 31, 2024, the REIT had a receivable, included in tenant and other receivables, net, from Empower of $299 and $906, respectively. (7) For the three and nine months ended September 30, 2025 and 2024, the REIT was billed for services provided by related parties that included HVAC, paving/concrete repair and landscape services. These amounts are capitalized to investment property on the consolidated statements of financial position or expensed to the appropriate expense account, including property operating expense, general and administrative expense, or finance costs from operations, on the consolidated statements of net income and comprehensive income. As at September 30, 2025 and December 31, 2024, the REIT had total accounts payable and accrued liabilities due to related parties of $635 and $493, respectively. Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 16 The following table breaks out billings for each related party. 1 Entity is 50% owned by the REIT’s Chief Executive Officer (“CEO”) and Chief Investment Officer (“CIO”). The managing member is a non- related party. The entity provides HVAC services to various properties, including installation of new air conditioning units and maintenance of existing systems 2 Entity is 100% owned by the brother of the REIT’s CEO. It provides landscaping and construction services to various properties. 3 Entity is wholly owned by the REIT’s CEO and CIO. It acquires and develops MHCs that do not meet the REIT’s investment criteria, sells manufactured homes located on the REIT’s investment properties, and conducts home sales to the REIT for use in its rental fleet. These transactions are quantified in Note 16 outside of this table. The REIT has agreed to pay floor plan interest on homes located on its investment properties and reimburse Empower for any losses incurred from home sales within those properties which is quantified here --- . 17. Rental Revenue and Related Income The REIT’s revenues consist of rental revenue and related income, including reimbursements of utility costs. Rental revenue and related income are generated from leasing investment properties to tenants under short term non- cancellable leases. Long term leases may be recognized on a straight line basis over the non-cancellable lease term. No tenant accounted for more than 10% of the REIT’s total rental revenue for the three and nine months ended September 30, 2025 or 2024, respectively. As at September 30, 2025, the total future contractual minimum base rent lease payments expected to be received under non-cancellable leases are as follows: 2025 2024 2025 2024 Call Now HVAC1 $ 310 $ 344 $ 846 $ 863 BG32 140 382 430 795 Empower Park3 183 267 693 896 Total $ 633 $ 993 $ 1,969 $ 2,554 Company Name For the three months ended September 30, For the nine months ended September 30, 2025 2024 2025 2024 Rental revenue 21,352 $ 19,222 $ 62,501 $ 53,961 $ Utilities reimbursement 3,991 3,293 11,272 8,448 Fee income 735 639 2,138 1,707 Other 9 74 24 264 Total 26,087 $ 23,228 $ 75,935 $ 64,380 $ For the three months ended September 30, For the nine months ended September 30, Year ending September 30, Base rent 2026 688 $ 2027 622 2028 568 2029 543 2030 387 Thereafter 7,627 Total 10,435 $ Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 17 18. Property Operating Expenses Property operating expenses incurred and charged to net income and comprehensive income are recorded as follows: 19. General and Administrative Expenses General and administrative expenses incurred and charged to net income and comprehensive income are recorded as follows: 20. Finance Costs from Operations Finance costs incurred and charged to net income and comprehensive income are as follows: 2025 2024 2025 2024 Utility costs 3,421 $ 2,950 $ 9,768 $ 8,213 $ Payroll and benefits 1,825 1,716 5,321 4,797 Taxes and insurance 2,311 2,089 6,475 5,505 Repairs and maintenance 570 585 1,819 1,406 Other property-based costs 1,003 786 2,508 1,960 Total 9,130 $ 8,126 $ 25,891 $ 21,881 $ For the three months ended September 30, For the nine months ended September 30, 2025 2024 2025 2024 Payroll and benefits 1,547 $ 1,456 $ 4,643 $ 4,235 $ Legal / Consulting 450 421 1,430 1,072 Audit and tax fees 201 176 584 488 Taxes and insurance 312 182 853 544 Trustee fees 138 128 428 385 Travel 65 99 272 343 Other 182 203 561 741 Total 2,895 $ 2,665 $ 8,771 $ 7,808 $ For the three months ended September 30, For the nine months ended September 30, 2025 2024 2025 2024 Interest expense 154 $ 230 $ 568 $ 726 $ Interest - mortgages and note payable 4,792 4,694 14,255 12,834 Mortgages payable settlement expense - - 228 2,523 Amortization of deferred financing costs from mortgages and note payable 136 144 320 309 Total 5,082 $ 5,068 $ 15,371 $ 16,392 $ For the three months ended September 30, For the nine months ended September 30, Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 18 21. Employee Benefit Plan Management of the REIT has adopted a d --- efined contribution plan (“Plan”) under Internal Revenue Service code section 401(k) for all eligible employees. A participant may elect to defer up to the maximum percentage of compensation permissible under code section 401(k). Management of the REIT elects to match employee deferrals under the Basic Safe Harbor Match: The REIT matches 100% of the first 3% of each employee’s contributions and 50% of the next 2%. Employer matching contributions to the Plan totaled $53 and $168 during the three and nine months ended September 30, 2025, respectively ($54 and $152 during the three and nine months ended September 30, 2024, respectively). 22. Unit-based Compensation (A) Restricted Units Under the Equity Incentive Plan, RUs can be issued to better align the interests of the recipient with the interests of Unitholders and to facilitate the retention of key employees through long term ownership of Units. The number of RUs to be awarded to a recipient is equal to (i) the monetary value of the award, (ii) divided by the closing price of a Unit on the TSX for the day immediately preceding the date of grant. RUs are granted at the discretion of the executive team, with approval from the Board of Trustees, and vest over six years in equal installments. For the periods presented, the following table summarizes the number of RUs outstanding. (1) On August 09, 2024 the REIT granted 148,593 RUs at a fair value of $13.86 per RU for a total grant date fair value of $2,060. (2) During the year ended December 31, 2024 the REIT has settled 63 RUs at settlement date fair values ranging from $13.94 to $15.81. Number of Units Units outstanding, December 31, 2023 185,242 Restricted Unit issuance (1) 148,593 Distribution reinvestment 9,640 Settlement (2) (63) Units forfeited (2,420) Units outstanding, December 31, 2024 340,992 Restricted Unit issuance (3) 125,354 Distribution reinvestment 9,601 Settlement (4 ) (1,036) Units forfeited (10,535) Units outstanding, September 30, 2025 464,376 Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 19 (3) On August 08, 2025 the REIT granted 125,637 RUs at a fair value of $17.65 per RU for a total grant date fair value of $2,218. (4) During the nine months ended September 30, 2025 the REIT has settled 1,036 RUs at settlement date fair values ranging from $15.00 to $19.23. For the periods presented, the following table summarizes the RUs activity. As at September 30, 2025 and December 31, 2024, 98,870 and 42,026 RUs are fully vested and recorded in Other liabilities while 6,715 and 19,441 RUs are unvested and recorded in Other non-current liabilities, respectively. (B) Deferred Trust Units Under the Equity Incentive Plan, non-employee trustees have the option to elect to receive up to 100% of trustee fees, which are otherwise payable in cash, in the form of DTUs. Accordingly, the number of DTUs to be awarded to a non-employee trustee is equal to (i) the value of the trustee fees that the non-employee trustee elects to receive in the form of DTUs, (ii) divided by the closing price of a Unit on the TSX for the day immediately preceding the date of grant. DTUs are granted on the first day of the month following the quarter in which they were earned. Once made, elections are irrevocable for the year in respect of wh --- ich they are made and are effective for subsequent calendar years until terminated by the non-employee trustee. DTUs granted to non-employee trustees vest immediately upon grant. For the periods presented, the following table summarizes DTU activity and the number of DTUs outstanding. As at As at September 30, 2025 December 31, 2024 Restricted Units, opening balance 916 $ 330 $ Payroll and benefits 647 638 Fair value adjustment - unit based compensation 442 (52) Restricted Units, ending balance 2,005 $ 916 $ Number of Units Value Units outstanding, December 31, 2023 55,656 887 $ Trustee fees 31,793 486 Distribution reinvestment 2,948 45 Fair value adjustment - unit based compensation (70) Units outstanding, December 31, 2024 90,397 1,348 $ Trustee fees (1) 26,558 443 Distribution reinvestment (2) 2,907 50 Fair value adjustment - unit based compensation 436 Units outstanding, September 30, 2025 119,862 2,277 $ Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 20 (1) Trustee fees related to the issuance of DTU for the three and nine months ended September 30, 2025 were $150 and $443, resulting in 8,331 and 26,558 DTUs being issued, respectively ($114 and $332, resulting in 8,288 and 21,647 DTUs being issued for the three and nine months ended September 30, 2024, respectively). (2) Distributions, that would otherwise be payable in cash, resulted in additional DTUs of 965 and 2,907 being issued for the three and nine months ended September 30, 2025, respectively (DTUs of 799 and 2,058 for the three and nine months ended September 30, 2024, respectively). 23. Fair Value Measurement The following summarizes the significant methods and assumptions used in estimating fair values of the REIT's financial instruments or the significant methods and assumptions related to financial instruments carried at amortized cost where carrying value approximates fair value: The carrying values of the REIT’s short-term financial assets and liabilities, except for DTUs and vested RUs which are carried at fair value, are carried at amortized cost which approximate their fair values due to their short periods to maturity. The Note Receivable – Related Party is carried at amortized cost, which approximates fair value. The effective interest rate method exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount on initial recognition. As at September 30, 2025 and December 31, 2024 the RUs, DTUs, and Class B Units are carried at fair value which is based on the market trading price of a Unit (Level 1). The mortgages and note payable, net are carried at amortized cost. For disclosure purposes, the fair value of the mortgages and note payable as at September 30, 2025 and December 31, 2024 was estimated by discounting expected cash flows using a rate of 5.76% and 6.00%, respectively, which is the expected rate available for debt of similar terms at the end of each respective period (Level 2). Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 21 The following tables summarizes --- the categories and fair values of the REIT’s financial instruments. 24. Changes in Non-cash Working Capital Changes in non-cash working capital are recorded as follows: 25. Segment Reporting The REIT owns, manages and operates multifamily properties located in the United States. Management, when measuring the REIT’s performance, does not distinguish or group its operations on a geographical or any other basis. Accordingly, the REIT has a single reportable segment for disclosure purposes in accordance with IFRS. Level 1 Level 2 Level 3 Financial Assets and Liabilities RUs (2,005) $ - - DTUs (2,277) $ - - Class B Units (105,971) $ - - Mortgages and note payable - (401,927) $ - Level 1 Level 2 Level 3 Financial Assets and Liabilities RUs (916) $ - - DTUs (1,348) $ - - Class B Units (83,159) $ - - Mortgages and note payable - (356,007) $ - Fair value as at September 30, 2025 Fair value as at December 31, 2024 2025 2024 Tenant and other receivables, net 740 $ (917) $ Prepaids and other assets 1,544 788 Lender escrow deposits (3,559) (1,656) Trade and other payables (617) (190) Other liabilities 3,008 4,654 Change in non-cash working capital 1,116 $ 2,679 $ For the nine months ended September 30, Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 22 26. Commitment and Contingencies The REIT is subject to claims and litigation in the ordinary course of business. The impact of such claims and ligation can, at times, be difficult to estimate with certainty. Moreover, the REIT carries insurance to cover a broad spectrum of matters that may give rise to claims and litigation. As at September 30, 2025 management does not believe that any existing claim or litigation will have a material adverse effect on the business, assets, or results of operations of the REIT and no provision has been recorded as a result. 27. Capital Management The REIT’s policy is to maintain an appropriate capital base to support ongoing operations, maintain creditor and market confidence and sustain future developments of the business. Capital consists of cash and cash equivalents, Line of Credit, mortgages and note payable, net, Class B Units and unitholders’ equity. The REIT monitors capital using tools designed to anticipate cash needs and to maintain adequate working capital, while also making appropriate distributions to the unitholders on a regular basis. The REIT’s mortgages and note payable contains customary representations, warranties, and events of default, which require the REIT to comply with affirmative and negative covenants. As at September 30, 2025 and December 31, 2024, the REIT was in compliance with all financial covenants relating to its mortgages and note payable. 28. Financial Risk Management The REIT’s risk exposure and the impact on the REIT’s financial instruments are summarized below: (A) Credit Risk Financial instruments that potentially subject the REIT to significant concentrations of credit risk consist principally of cash and cash equivalents, tenant and other receivables, net, and Note Receivable – Related Party. The only debtor to comprise more than 10% of the REITs outstanding tenant and other receivables, net balance as at September 30, 2025 and December 31, 2024 was a related party debtor (See Note 16). Additionally, the Note --- Receivable – Related Party accounted for 18.18% and 21.02% of the aforementioned financial instruments, respectively. The REIT regularly monitors its credit risk exposure and takes steps to mitigate the likelihood of these exposures resulting in actual loss. Credit risk arises from the possibility that residents in investment properties may not fulfill their lease or contractual obligations. The REIT mitigates its credit risks by attracting residents of sound financial standing and by diversifying its mix of residents. It also monitors resident payment patterns and discusses potential resident issues with property managers on a regular basis. Cash and cash equivalents carry minimal credit risk as all funds are maintained with reputable financial institutions. The related party receivable, included in tenant and other receivables, net, and the Note Receivable – Related Party also carries minimal credit risk due to the nature of the relationship of the debtor to the REIT. The carrying amount of financial assets represents the maximum credit exposure. Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 23 (B) Liquidity risk The REIT is exposed to liquidity risk or the risk of not meeting its financial obligations as they come due. The REIT manages maturities of the fixed rate mortgages payable, as well as the variable rate note payable, and monitors the repayment dates to ensure sufficient capital will be available to cover obligations. The REIT constantly monitors and manages its cash flows to assess the liquidity necessary to fund operations. The REIT expects to be able to meet all obligations as they become due using some or all of the following sources of liquidity - cash flow generated from property operations; property-specific mortgages; unsecured notes payable, existing cash and cash equivalents on hand; and available capacity on lines of credit. All of the REIT’s financial liabilities are due within one year except for a portion of the mortgages and note payable. The following tables provide information on the carrying balance and the non-discounted contractual maturities of financial liabilities of the REIT as at September 30, 2025 and December 31, 2024, respectively. (C) Interest rate risk The REIT is exposed to interest rate risk as a result of the Line of Credit and its mortgages and note payable; however, this risk is mitigated through management's strategy to primarily structure its mortgages and note payable in fixed-rate arrangements. The REIT may, from time to time, enter into mortgages and notes payable with variable rates. The REIT also structures its financings so as to stagger the maturities of its debt, minimizing the exposure to interest rate volatility in any one year. 29. Subsequent Events On October 31, 2025, REIT acquired a 744 lot MHC, located in Seymor, Indiana, for approximately $45,000. This acquisition was funded through proceeds from the October 2025 Bridge Note (as defined below). As at September 30, 2025 Carrying Contractual Within 1 year 1 to 2 years 2 to 5 years 5+ years Trade and other payables 1,308 $ 1,308 $ 1,308 $ - $ - $ - $ Line of credit 5,000 5,000 5,000 - - - Other liabilities 21,490 21,490 21,490 - - - Mortgages and note payable 449,147 629,283 22,088 51,910 176,001 379,284 Tota --- l 476,945 $ 657,081 $ 49,886 $ 51,910 $ 176,001 $ 379,284 $ As at December 31, 2024 Carrying Contractual Within 1 year 1 to 2 years 2 to 5 years 5+ years Trade and other payables 1,925 $ 1,925 $ 1,925 $ - $ - $ - $ Line of credit 3,000 3,000 3,000 - - - Other liabilities 15,647 15,647 15,647 - - - Mortgages and note payable 419,823 573,768 63,379 31,602 165,123 313,664 Total 440,395 $ 594,340 $ 83,951 $ 31,602 $ 165,123 $ 313,664 $ Flagship Communities Real Estate Investment Trust Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Amounts in thousands of U.S. dollars, except for unit and per unit amounts) 24 On October 31, 2025, the REIT entered a draw note commitment with a commercial lender for $70,000 (the “October 2025 Bridge Note”). As at November 12, 2025, $45,500 of the note commitment had been drawn. The interest rate on the October 2025 Bridge Note is variable at 2.25% over the Secured Overnight Financing Rate and the interest rate is adjusted each month until the note is paid in full. The October 2025 Bridge Note matures in 12 months, with options to extend and with monthly payments being interest only until maturity, at which time any accrued and unpaid interest and the principal balance are due in full. The October 2025 Bridge Note was unsecured and held at the REIT level. A portion of the proceeds from the October 2025 Bridge Note were used to fund the October 31, 2025 acquisition.