REGIONAL HEALTH PROPERTIES, INC
For the period ended Mar 31, 2025. Filed May 15, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-19.
0000950170-24-128808
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0000950170-25-072625
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 64 current paragraphs.
32 unchanged; 25 reworded; 6 added; 36 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Depreciation and amortization—Depreciation and amortization was $0.4 million for the three months ended March 31, 2025, compared to $0.5 million for the same period in 2024. The decrease is primarily due to the reduction in depreciation from fully depreciated equipment and computer related assets in the current year and suspending depreciation expense on our assets held for sale.
Current report
Loss on Lease Termination-Expenses related to the termination of the two leases to Oak Hollow Healthcare Management were $0.3 million for the three months ended March 31, 2025. The losses consist of the writeoff of straight-line rent.
Current report
Gain on exchange of assets—The gain on exchange of assets were $0.1 million for the three months ended March 31, 2025. The Company took patient Accounts Receivable in leu of the outstanding Rent Receivable owed by Oak Hollow Healthcare Management as part of the lease termination.
Current report
The Company concludes that it is probable that the Company will be able to meet its obligations arising within one year of the date of issuance of these consolidated financial statements within the parameters set forth in the accounting guidance.
Current report
Three Months Ended March 31, 2025
Current report
Three Months Ended March 31, 2024
Removed paragraphs (36)
Previous report
Excludes three managed facilities in Ohio.
Previous report
Due to the Company exiting the Foster lease in December 2022, historical data no longer includes Thomasville, Powder Springs, Tara, LaGrange, Twiggs, Oceanside, and Savannah Beach.
Previous report
Meadowood's current and historical calculations have been changed from 161 licensed beds to 90 beds. This change reflects the actual total beds available by the business.
Previous report
See Note 6 -Leases to the consolidated financial statements included in Part I, Item 1 herein for a discussion of lease terminations.
Previous report
Depreciation and amortization—Depreciation and amortization remained consistent totaling $0.5 million for the three months ended September 30, 2024 and 2023.
Previous report
Glenvue facility, reserves taken against rental accounts receivable at the Southland facility and a write off of approximately $0.4 million of notes receivable at Lumber City.
Previous report
Other expense (income), net—Other (income) expense decreased by $.2 thousand for the three months ending September 30, 2024 compared to the same period in 2023 due to writing off escheatment liabilities in 2023.
Previous report
Nine Months Ended September 30, 2024 and 2023
Previous report
Patient care revenues—Patient care revenues for the Healthcare Services segment, as a result of the Company operating the Meadowood and Glenvue Facilities, totaled $7.4 million for the nine months ended September 30, 2024, compared to $6.6 million for the same period in 2023. The 12.8% increase is primarily due to an increase in the Medicaid reimbursement rate paid for the Glenvue facility and an increase in occupancy at the Glenvue facility.
Previous report
Rental revenues—Rental revenue for our Real Estate Services segment increased by approximately $.1 million to $5.3 million for the nine months ended September 30, 2024, compared with $5.2 million for the same period in 2023. The 1.7% increase is primarily due to the extension of the Greenfield lease and the increase in rent from the Southland facility.
Previous report
Patient care expense—Patient care expense remained consistent totaling $6.5 million for the nine months ended September 30, 2024 and 2023.
Previous report
Facility rent expense—Facility rent expense remained consistent totaling $0.4 million for the nine months ended September 30, 2024 and 2023.
Previous report
Depreciation and amortization—Depreciation and amortization was $1.5 million for the nine months ended September 30, 2024, compared to $1.7 million for the same period in 2023.
Previous report
General and administrative expenses—General and administrative expenses were $4.1 million for the nine months ended September 30, 2024, compared with $4.3 million for the same period in 2023. The decrease is primarily due to a reduction in corporate overhead.
Previous report
Credit loss expense—Credit loss expense was $0.6 million for nine months ended September 30, 2024, compared to $0.3 million for the same period in 2023. Credit loss expense represents reserves taken against patient accounts receivable at the Glenvue facility, reserves taken against rental accounts receivable at the Southland facility and a write off of approximately $0.4 million of notes receivable at Lumber City.
Previous report
Other expense (income), net—Other expense, net was 0.2 million for nine months ended September 30, 2024, compared to $0.6 million for the same period in 2023. The prior year expenses were related to professional and legal services incurred for the preferred exchange and legacy facility related expenses.
Previous report
Series A Preferred Stock Exchange Offer
Previous report
On June 30, 2023, the Company closed the Company’s offer to exchange (the “Exchange Offer”) any and all outstanding shares of the Company’s 10.875% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Stock”) for newly issued shares of the Company’s Series B Preferred Stock. In connection with the completion of the Exchange Offer and the implementation of the Series A Charter Amendments and the Series B Charter Amendments, the liquidation preference of the Series A Preferred Stock was reduced, accumulated and unpaid dividends on the Series A Preferred Stock were eliminated and future dividends on the Series A Preferred Stock were eliminated. As a result, $50.4 million in accumulated and unpaid dividends on the Series A Preferred Stock were eliminated and, as of September 30, 2024, there are no accumulated and unpaid dividends on the Series A Preferred Stock. For further information regarding the Exchange Offer, Series A Charter Amendments and Series B Charter Amendments, see Note 9 –Common and Preferred Stock. As of September 30, 2024, the Company has not redeemed any Series B Preferred Stock.
Previous report
In early 2020, the Company began ongoing efforts to investigate alternatives to retire or refinance our outstanding Series A Preferred Stock through privately negotiated transactions, open market repurchases, redemptions, exchange offers, tender offers, or otherwise.
Previous report
Costs associated with these efforts have been expensed as incurred in “Other expense, net” and there were no expenses incurred for the nine months ended September 30, 2024 and there were $0.5 million for the nine months ended nine months ended September 30, 2023.
Previous report
Series A Preferred Dividend Suspension
Previous report
Prior to the Exchange Offer, as discussed above, we suspended the quarterly dividend payment with respect to our Series A Preferred Stock commencing with the fourth quarter of 2017, and on June 8, 2018, the Board suspended quarterly dividend payments indefinitely with respect to the Series A Preferred Stock. The dividend suspension provided the Company with additional funds to meet its ongoing liquidity needs. As the Company had failed to pay cash dividends on the outstanding Series A Preferred Stock in full for more than four dividends periods, the annual dividend rate on the Series A Preferred Stock for the fifth and future missed dividend periods had increased to 12.875%, which was equivalent to approximately $3.20 per share each year, commencing on the first day after the missed fourth quarterly payment (October 1, 2018) and continuing until the second consecutive dividend payment date following such time as the Company had paid all accumulated and unpaid dividends on the Series A Preferred Stock in full in cash. As discussed above, in connection with the completion of the Exchange Offer, accumulated and unpaid dividends on the Series A Preferred Stock were eliminated.
Previous report
At September 30, 2024, the Company had cash on hand of $0.5 million. At September 30, 2024, the Company had an accumulated deficit of $84.6 million. For the nine months ended September 30, 2024, the Company had a net loss of $2.7 million and had $1.0 million of net cash provided by operations for the period, respectively. The Company received a notice of default under one USDA loan secured by Southland and an SBA loan secured by Southland totaling $4.1 million. On October 25, 2024, the Company received a notice of acceleration and demand for payment from the lenders of Southland stating that the covenants of the deed of trust have been violated for failure to pay principal and interest. The lender accelerated the maturity dates and is requesting for the loans to be paid in full plus unpaid interest and late fees immediately. We are working with the lender to reach a forbearance agreement and think it is likely we will reach an agreement. On November 8, 2024, Company obtained a line of credit and intends to pay all unpaid principal and interest payments to get back into compliance with the loan documents.
Previous report
These conditions raise doubt regarding our ability to continue as a going concern as the Company will need additional debt or equity financing or a combination of both to continue its operations and meet its financial obligations for twelve months from the date these consolidated financial statements were issued if we do not obtain a forbearance agreement with the lender. We think it is likely we will reach an agreement.
Previous report
We may consume available resources more rapidly than currently anticipated, resulting in the need for additional funding. We expect to incur continuing losses for the foreseeable future.
Previous report
Any additional debt or equity financing that the Company obtains may substantially dilute the ownership held by our existing stockholders. The economic dilution to our shareholders will be significant if our stock price does not materially increase, or if the effective price of any sale is below the price paid by a particular investor. The Company may be unable to access further equity or debt financing when needed or obtain additional financing under acceptable terms, if at all.
Previous report
We may decide to raise additional capital through a variety of sources in the short-term and in the long-term, including but not limited to:
Previous report
the public equity markets;
Previous report
private equity financings;
Previous report
collaborative arrangements;
Previous report
asset sales; and/or
Previous report
public or private debt.
Previous report
If the Company is unable to raise additional capital, there is a risk that the Company could be required to discontinue or significantly reduce the scope of its operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Previous report
Nine Months Ended September 30, 2024
Previous report
Nine Months Ended September 30, 2023
Previous report
Net cash used in investing activities—was approximately $0.9 million. The negative cash flow was mainly from reclassified capital expenditures, new equipment, and finished capital expense projects.
Reworded paragraphs (25)
Previous wording
Regional Health Properties, Inc., a Georgia corporation, is a self-managed real estate investment company that invests primarily in real estate purposed for long-term care and senior housing. We operate through two reportable segments: Real Estate and Healthcare Services. Our Real Estate segment consists of real estate investments in skilled nursing and senior housing facilities. We fund our real estate investments primarily through: (1) operational cash flow, (2) mortgages, and (3) sale of equity securities. Our Healthcare Services segment is comprised of an entity set up to operate our facilities as needed under our Portfolio Stabilization measures.
Current wording
Regional Health Properties, Inc., a Georgia corporation is a self-managed real estate investment company that invests primarily in real estate purposed for long-term care and senior housing. We operate through two reportable segments: Real Estate and Healthcare Services. Our Real Estate segment consists of real estate investments in skilled nursing and senior housing facilities. We fund our real estate investments primarily through: (1) operational cash flow, (2) mortgages, and (3) sale of equity securities. Our Healthcare Services segment is comprised of an entity set up to operate our facilities.
Previous wording
While the Company is a self-managed real estate investment company, the Company, when business conditions require, may undertake portfolio stabilization measures, such as operating a previously leased facility.
Current wording
While the Company is a self-managed real estate investment company, the Company, when business conditions require, may undertake initiatives to take back facilities in order operate the facilities ourselves or using a third manager.
Previous wording
As of September 30, 2024, we had investments of approximately $66.5 million in eleven health care real estate properties and one leased property. We currently own eleven properties, consisting of nine skilled nursing facilities (“SNFs”) and two multi-service facilities. Nine facilities are pursuant to triple-net leases, one is managed by an external manager, and one is managed internally by the Company. The Company has one leased facility that is subleased pursuant to a triple-net lease.
Current wording
As of March 31, 2025, we had investments of approximately $67.2 million in eleven health care real estate facilities and one leased facility. We currently own twelve properties, consisting of nine skilled nursing facilities and two multi-service facilities (of which one multi-service campus contains two co-located properties) Six facilities are pursuant to triple-net leases and six facilities are managed by two external managers. The Company has one leased facility that is subleased pursuant to a triple-net lease.
Previous wording
Multi-Service Campuses. Multi-service campuses generally include some combination of co-located skilled nursing, independent living, assisted living and/or memory care units all housed at a single location and operated as a continuum of care.
Current wording
Multi-Service Campuses. Multi-service campuses generally include some combination of co-located skilled nursing, independent living, assisted living and/or memory care units all housed at a single location and operated as a continuum of care. We also refer to continuing care retirement communities as multi-service campuses. These facilities are often marketed as an opportunity for residents to “age in place,” and tend to attract couples where the individuals may require or benefit from differing levels of care.
Previous wording
The following table provides summary information regarding the number of facilities and related licensed beds/units by operator affiliation as of September 30, 2024:
Current wording
The following table provides summary information regarding the number of facilities and related licensed beds/units by operator/manager affiliation as of March 31, 2025:
Previous wording
For a more detailed discussion of the above information, see Note 6 -Leasesto the consolidated financial statements included in Part I, Item 1 herein. Additionally, see "Portfolio of Healthcare Investments" included in Part I, Item 1 "Business" in the Annual Report.
Current wording
For a more discussion of the above information, see Note 7– Leasesto the consolidated financial statements included in Part I, Item 1 herein. Additionally, see "Portfolio of Healthcare Investments" included in Part I, Item 1 "Business" in the Annual Report.
Previous wording
Patient care revenues—Patient care revenues for the Healthcare Services segment, as a result of the Company operating the Meadowood and Glenvue Facilities, were $2.6 million for the three months ended September 30, 2024, compared to $2.1 million for the same period in 2023. The 21.0% increase is primarily due to an increase in the Medicaid reimbursement rate paid for the Glenvue facility and an increase in occupancy at the Glenvue facility.
Current wording
Patient care revenues—Patient care revenues for the Healthcare Services segment, as a result of the Company operating the Meadowood, Glenvue, Mountain Trace, Sumter, and Georgetown facilities, were $5.6 million for the three months ended March 31, 2025, compared to $2.3 million for the same period in 2024. The 144.3% increase is due to the transition of the Mountain Trace, Georgetown, and Sumter facilities to the Healthcare Services segment.
Previous wording
Rental revenues—Rental revenue for our Real Estate Services segment decreased by approximately $0.1 million to $1.6 million for the three months ended September 30, 2024, compared with $1.7 million for the same period in 2023.
Current wording
Rental revenues—Rental revenue for our Real Estate Services segment decreased by approximately $0.3 million to $1.5 million for the three months ended March 31, 2025, compared with $1.8 million for the same period in 2024. The 14.9% decrease is primarily due to transition of the Mountain Trace facility to our Healthcare Services segment.
Previous wording
Patient care expense—Patient care expense remained consistent totaling $2.2 million for the three months ended September 30, 2024 and 2023.
Current wording
Patient care expense—Patient care expense was $4.4 million for the three months ended March 31, 2025 compared with $2.1 million for the same period in 2024. The current period expense increase of $2.3 million was primarily due to the transition of the Mountain Trace, Georgetown, and Sumter facilities to the Healthcare Services segment.
Previous wording
Facility rent expense—Facility rent remained consisted totaling $0.1 million for the three months ended September 30, 2024 and 2023.
Current wording
Facility rent expense—Facility rent was $0.2 million for the three months ended March 31, 2025, which was the same amount for the three months ended March 31, 2024.
Previous wording
General and administrative expenses—General and administrative expenses were $1.2 million for the three months ended September 30, 2024 compared with $1.3 million for the same period in 2023.
Current wording
General and administrative expenses—General and administrative expenses were $2.2 million for the three months ended March 31, 2025 compared with $1.6 million for the same period in 2024. The difference is due to the transition of the Mountain Trace, Georgetown, and Sumter facilities to the Healthcare Services segment.
Previous wording
Credit loss expense—Credit loss expense was $0.5 million for the three months ended September 30, 2024 compared to $0.3 million for the same period in 2023. Credit loss expense represents reserves taken against patient accounts receivable at the
Current wording
Credit loss expenses—Credit loss expense primarily represents reserves taken against patient Accounts Receivable for the three months ended March 31, 2025 and for the same period in 2024.
Previous wording
The following table summarizes the Company's non-GAAP financial measure of results based on EBITDA for the three and six months ending September 30, 2024. EBITDA attributable to the Company's financial measure represents net income (loss) before interest expense (including amortization of deferred financing costs), amortization of stock-based compensation, and depreciation and amortization. Adjusted EBITDA represents EBITDA further adjusted to eliminate the impact of certain items that the Company does not consider indicative of core operating performance, such as recovery of previously reversed rent, lease termination revenue, property operating expenses, gains or losses from dispositions of real estate, real estate impairment charges, provision for loan losses, non-routine transaction costs, loss on extinguishment of debt, unrealized loss on other real estate related investments and provision for credit losses and lease restructuring, as applicable.
Current wording
The following table summarizes the Company's non-GAAP financial measure of results based on EBITDA for the quarters ending March 31, 2025 and 2024. EBITDA attributable to the Company's financial measure represents net income (loss) before interest expense (including amortization of deferred financing costs), provision for income tax, amortization of stock-based compensation, and depreciation and amortization. Adjusted EBITDA represents EBITDA further adjusted to eliminate the impact of certain items that the Company does not consider indicative of core operating performance, such as recovery of previously reversed rent, lease termination revenue, gains or losses from dispositions of real estate, real estate impairment charges, provision for loan losses, non-routine transaction costs, loss on extinguishment of debt, unrealized loss on other real estate related investments and provision for credit losses and lease restructuring, as applicable.
Previous wording
Management anticipates access to several sources of liquidity, including cash on hand, cash flows from operations, and debt refinancing during the twelve months following the date of this filing. The Company has committed to a plan to sell the Mt. Trace Property to increase cash available for operations and future investments. At September 30, 2024, the Company had $0.5 million in unrestricted cash and $2.0 million of net accounts receivable, mainly consisting of patient accounts receivables and rent receivables.
Current wording
Management anticipates access to several sources of liquidity, including but not limited to: cash on hand, collection of patient and rent accounts receivable, debt refinancing, and debt borrowings, asset sales, and/or through the sale of additional securities or otherwise during the twelve months from the date of this filing. At March 31, 2025, the Company had $0.5 million in unrestricted cash and 3.6 million of net accounts receivable, mainly consisting of patient accounts receivable and rent receivables.
Previous wording
During the nine months ended September 30, 2024, the Company's net cash provided by operating activities was $1.0 million primarily due timing of payments of accounts payable. Management anticipates collecting a portion of the past due rent after the filing date and is currently negotiating various methods to collect the remaining unpaid rent.
Current wording
During the three months ended March 31, 2025, the Company's net cash provided by operating activities was $0.2 million mainly due to the timing of accounts payable and accrued expense payments. Management anticipates collecting a portion of the past due rent after the filing date and is currently negotiating various methods to collect the remaining unpaid rent and notes receivable.
Previous wording
As of September 30, 2024, the Company recorded an estimated allowance of $2.2 million against a gross accounts receivable of $4.2 million.
Current wording
As of March 31, 2025, Regional recorded an estimated allowance of $0.1 million against a gross accounts receivable of $3.8 million.
Previous wording
As of September 30, 2024, the Company had $49.7 million in indebtedness, net of $1.0 million deferred financing costs and unamortized discounts. The Company anticipates net principal repayments of approximately $2.2 million during the next twelve-month period, approximately $1.6 million of routine debt service amortization, $0.4 million of insurance financing amortization, and $0.2 million payment of bond debt.
Current wording
As of March 31, 2025, the Company had $49.2 million in indebtedness, net of $1.0 million deferred financing, and unamortized discounts. The Company anticipates net principal repayments of approximately $6.8 million during the next twelve-month period, approximately $2.6 million of routine debt service amortization, $0.2 million payment of bond debt, and $4.0 million of Southland's maturing debt.
Previous wording
As of September 30, 2024, the Company was in compliance with the various financial and administrative covenants under the Company's outstanding credit related instruments with the exception of a notice of default under two USDA loans secured by the Southland and Mt. Trace Property and an SBA loan secured by Southland. On October 25, 2024, the Company received a notice of acceleration and demand for payment from the lenders of Southland stating that the covenants of the deed of trust have been violated for failure to pay principal and interest. The lender accelerated the maturity dates and is requesting for the loans to be paid in full plus unpaid interest and late fees immediately. We are working with the lender to reach a forbearance agreement and think it is likely we will reach an agreement. On November 8, 2024, Company obtained a line of credit and intends to pay all unpaid principal and interest payments to get back into compliance with the loan documents. The Company is working with the lender of the Mt. Trace Property to get back into compliance with the loan documents and received a waiver in November 2024.
Current wording
As of March 31, 2025, the Company was in compliance with the various financial and administrative covenants under all the Company's outstanding credit related instruments.
Previous wording
Under the accounting guidance related to the presentation of financial statements, the Company is required to evaluate, on a quarterly basis, whether or not the Company's current financial condition, including its sources of liquidity at the date that the consolidated financial statements are issued, will enable the Company to meet its obligations as they come due arising within one year of the date of the issuance of the Company's consolidated financial statements and to make a determination as to whether or not it is probable, under the application of this accounting guidance, that the Company will be able to continue as a going concern.
Current wording
Under the accounting guidance related to the presentation of financial statements, the Company is required to evaluate, on a quarterly basis, whether or not the Company's current financial condition, including its sources of liquidity at the date that the consolidated financial statements are issued, will enable the Company to meet its obligations as they come due arising within one year of the date of the issuance of the Company's consolidated financial statements and to make a determination as to whether or not it is probable, under the application of this accounting guidance, that the Company will be able to continue as a going concern. The Company's consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In applying applicable accounting guidance, management considered the Company's current financial condition and liquidity sources, including current funds available, forecasted future cash flows, the Company's obligations due over the next twelve months, and the Company's recurring business operating expenses.
Previous wording
For additional information regarding the Company's liquidity, see Note 2– Liquidityand Note 9 – Senior Debt and other debt, to the consolidated financial statements included in Part I, Item 1 herein.
Current wording
For additional information regarding the Company's liquidity, see Note 2– Liquidityand Note 9 – Notes Payable and other debt, to the consolidated financial statements included in Part I, Item 1 herein.
Previous wording
Net cash provided by operating activities—was approximately $1.0 million. The positive cash flow from operating activities was mainly due to the timing of working capital accounts.
Current wording
Net cash provided by operating activities—was approximately $0.2 million. The positive cash flow from operating activities was mainly due to the timing of working capital accounts.
Previous wording
Net cash used in investing activities—was approximately $0.4 million. This capital expenditure was primarily for leasehold improvements.
Current wording
Net cash used in investing activities—was approximately $65.0 thousand. This capital expenditure was primarily for leasehold improvements.
Previous wording
Net cash used in financing activities—was approximately $1.2 million. The cash was used to make routine payments totaling 1.0 million for our senior debt obligations, $0.2 million for other debt.
Current wording
Net cash used in financing activities—was approximately $0.6 million. The cash was used to make routine payments totaling $0.4 million for our Senior debt obligations, $0.2 million for other debt.
Previous wording
Net cash provided by operating activities—was approximately $3.5 million. The positive cash flow from operating activities were largely due to collection of the ERTC, collection of patient care receivables, and rent receivables.
Current wording
Net cash provided by operating activities—was approximately $0.6 million. The positive cash flow from operating activities was mainly due to the timing of working capital accounts.
Previous wording
Net cash used in financing activities—was approximately $1.8 million. The cash was used to make routine payments totaling $1.8 million for our debt obligations.
Current wording
Net cash used in financing activities—was approximately $0.8 million. The cash was used to make routine payments totaling $0.4 million for our Senior debt obligations, $0.4 million for other debt.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net cash used in investing activities—was approximately $55.0 thousand. This capital expenditure was primarily for leasehold improvements.