REGIONAL HEALTH PROPERTIES, INC
For the period ended Dec 31, 2025. Filed Apr 2, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 2, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0000950170-25-047742
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-02.
0001193125-26-140347
Item 7. 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 135 previous paragraphs and 111 current paragraphs.
31 unchanged; 20 reworded; 59 added; 82 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 5 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 (59)
Current report
The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations is to provide investors with management’s perspective on the Company’s financial condition, results of operations, liquidity and capital resources, including known trends, demands and uncertainties that management believes are reasonably likely to affect future performance.
Current report
Regional Health Properties, Inc. is a healthcare company that owns, operates and invests in healthcare real estate and operating businesses focused on long-term care, senior housing and pharmacy services. Historically, the Company operated primarily as a healthcare real estate platform that leased skilled nursing and senior housing facilities to third-party operators under long-term triple-net lease arrangements. Over time, and particularly following recent strategic initiatives and acquisitions, the Company has evolved toward a more integrated owner-operator model that combines healthcare real estate ownership with the direct operation of healthcare facilities and related healthcare services. As of December 31, 2025, the Company had investments of approximately $59.9 million in healthcare real estate and operated or leased a portfolio consisting primarily of skilled nursing facilities and senior housing communities located in five states. In addition, following the SunLink merger completed on August 14, 2025, the Company operates a pharmacy business located in Louisiana.
Current report
The Company operates through three reportable segments: Healthcare Services, Pharmacy Services and Real Estate. The Healthcare Services segment includes the direct operation of skilled nursing and senior housing communities that provide a range of healthcare and residential services, including sub-acute and post-acute skilled nursing care, intermediate nursing care, rehabilitative therapy, memory care, Alzheimer’s and dementia care, and senior living services. The Pharmacy Services segment includes retail pharmacy products and services, institutional pharmacy services and durable medical equipment. The Real Estate segment consists of investments in skilled nursing and senior housing properties that are leased or subleased to third-party operators under triple-net lease arrangements. These segments reflect the Company’s evolution from a healthcare landlord into a more diversified healthcare company with both real estate and operating capabilities.
Current report
The comparability of the Company’s 2025 and 2024 results is significantly affected by our changes in business mix during 2025. First, the SunLink merger added the Pharmacy Services segment beginning on August 14, 2025. Second, several facilities that were leased, subleased or managed in 2024 transitioned to operated status during 2025 and are now included in the Healthcare Services segment. As a result, year-over-year comparisons reflect not only changes in operating performance, but also a meaningful change in segment composition, including increased patient care revenues and patient care expenses in Healthcare Services, the addition of pharmacy revenues and cost of goods sold in Pharmacy Services, and lower rental revenues in Real Estate as certain properties are no longer operated under lease structures.
Current report
The Company funds its business and its three reportable segments primarily through operating cash flow, collections of patient, pharmacy and rent receivables, mortgage and other debt financing, asset sales and, when available, proceeds from the sale of securities.
Current report
Executive Summary
Current report
During 2025, the Company’s operating results were materially influenced by the integration of the SunLink merger, labor cost inflation, the addition of the Pharmacy Services segment and the transition of certain facilities from leased or managed status to operated status. These developments increased consolidated revenues, but also increased operating expenses and working capital requirements.
Current report
Management evaluates performance using both consolidated results and the performance of the Company’s three reportable segments. In 2025, Healthcare Services became a larger contributor to consolidated revenues as Georgetown, Southland and Sumter properties transitioned from leased or managed assets into operated facilities. The Real Estate segment continued to contribute recurring rental revenues, although those revenues declined year over year due to the transition of Mountain Trace and other facilities away from lease structures. Beginning in mid-August 2025, the Pharmacy Services segment contributed script volume, pharmacy revenues and related cost of goods sold following the SunLink merger.
Current report
Management’s primary operational areas of focus are occupancy and census growth within Healthcare Services, script count and reimbursement collections within Pharmacy Services, and rent collections, tenant credit quality and portfolio optimization within Real Estate. The Company also continues to focus on labor management, cash collections, refinancing activity and the integration of the businesses acquired in the SunLink merger.
Current report
Key Segment Operating Metrics
Current report
Management evaluates the performance of the Company’s business using selected operating and financial metrics that management believes are most relevant to each of the Company’s three reportable segments.
Current report
Healthcare Services
Current report
The most important operating metrics for the Healthcare Services segment are occupancy/census, payor mix, labor costs, and accounts receivable collections. Management believes these measures are the primary drivers of patient care revenue, operating margins and cash flow for the facilities the Company operates directly.
Current report
Occupancy and census are key indicators of demand and facility utilization. Management also monitors payor mix, including the relative percentage of Medicare, Medicaid, managed care and private-pay residents, because reimbursement rates and margins vary significantly by payor source. In addition, labor costs, including wage rates, agency staffing usage and employee benefit costs, are critical measures of operating performance given the labor-intensive nature of skilled nursing and senior housing operations. Management also closely monitors patient accounts receivable and collection trends, as increases in patient receivables can materially affect the segment’s working capital and liquidity.
Current report
Pharmacy Services
Current report
The most important operating metrics for the Pharmacy Services segment are script count, reimbursement collections, gross margin, and customer retention. Management believes these measures are the best indicators of the scale, profitability and cash-generation profile of the pharmacy business.
Current report
Script count is a key measure of pharmacy volume and operating activity. Management also monitors reimbursement collections and the timing of payment from government and commercial payors, because reimbursement levels and collection timing directly affect revenue realization and working capital. Gross margin is an important measure of the relationship between pharmacy revenues and the cost of pharmaceutical products sold or medicila equipment rented. Customer retention is also a significant operating measure because the stability of institutional and retail customer relationships affects recurring revenue and the long-term growth of the segment.
Current report
Real Estate
Current report
The most important operating metrics for the Real Estate segment are rent collections, tenant credit quality, lease performance, and portfolio optimization opportunities. Management believes these measures are the most relevant indicators of the segment’s recurring cash flow and asset value. Rent collections are a primary measure of current segment performance because rental income remains the principal source of revenue within the Real Estate segment. Management also monitors tenant credit quality and the financial performance of operators, as tenant distress or weak facility performance can affect rent collections, lease renewals and the recoverability of receivables. In addition, management evaluates lease restructurings, lease terminations and transition opportunities to determine whether a property is best held as a leased asset, transferred to another operator, or operated directly within the Healthcare Services segment. These evaluations are an important part of the Company’s broader portfolio optimization and owner-operator strategy.
Current report
The Company’s operations and those of its tenants continue to be affected by economic and market conditions, including labor shortages, inflation, supply chain disruptions, interest rate levels and reimbursement pressures. These factors have increased operating costs, particularly labor costs, and in certain cases have affected occupancy, cash collections and the availability of capital.
Current report
The Company also continues to operate in an environment in which healthcare labor availability, reimbursement trends and the performance of individual operators can influence whether an asset is best held as a leased property in the Real Estate segment or operated directly through the Healthcare Services segment. Management’s strategic response has included transitioning certain defaulted or underperforming leased facilities back to operated status where the Company believes direct oversight may improve operating performance and value creation. This strategy is consistent with the Company’s broader transition toward a more integrated owner-operator model.
Current report
Effective August 14, 2025, the Company completed its merger with SunLink Health Systems, Inc., with the Company continuing as the surviving corporation. Management believes the merger expanded the Company’s operating platform, adding pharmacy operations and creating opportunities for operational and corporate synergies.
Current report
On November 10, 2025, the Company sold the Coosa Valley facility for cash consideration of $10.6 million and recognized a gain on sale of approximately $3.8 million. In addition, during 2025, the Company terminated or transitioned several leases in an effort to maximize the value of owned properties, including Georgetown, Sumter, Southland and Mountain Trace, and in certain cases moved those facilities into the Healthcare Services segment.
Current report
Segment Reporting
Current report
Management believes the most meaningful way to understand 2025 results is by reference to the Company’s three reportable segments together with the consolidated statement of operations. Healthcare Services results reflect the direct operation of facilities, including the impact of taking back operations at certain properties during 2025. Pharmacy Services results reflect the partial-year contribution from the pharmacy business acquired in the SunLink merger. Real Estate results reflect rental income, credit loss expense and lease-related activity associated with facilities that remained leased or subleased to third-party operators.
Current report
At the consolidated level, patient care revenues, pharmacy revenues and patient care expense increased significantly in 2025 due primarily to the expanded Healthcare Services segment and the addition of Pharmacy Services, while rental revenues declined as certain facilities were transitioned out of the Real Estate segment and into operated status. Accordingly, line-item changes in the consolidated statement of operations should be evaluated in light of these changes in segment composition.
Current report
Rental revenues. Total rental revenue in our Real Estate segment decreased by approximately $1.6 million, or 22.9%, to $5.4 million for the year ended December 31, 2025, compared with $7.0 million for the year ended December 31, 2024. This decrease reflects the transition of Mountain Trace and certain other properties from leased status to operated status, which reduced rental income but increased Healthcare Services patient care revenues and related expenses. See Note 8 – Leases.
Current report
Pharmacy revenues. Pharmacy revenues of $11.7 million were for the year ended December 31, 2025 reflect the partial-year contribution of the Pharmacy Services segment following the SunLink merger. Because the Pharmacy Services segment was added in August 2025, there was no comparable pharmacy revenue in 2024.
Current report
Cost of goods sold—Cost of goods sold of $7.0 million for the year ended December 31, 2025 relates to the Pharmacy Services segment and reflects the cost of pharmacy products sold or rented during the post-merger period and relates to the Pharmacy Services segment.
Current report
Depreciation and amortization—Depreciation and amortization remained substantially unchanged at $2.1 million for the years ended December 31, 2025 and December 31, 2024.
Current report
General and administrative. General and administrative expense increased by $6.6 million, or 122.7%, to $12.0 million for the year ended December 31, 2025, compared with $5.4 million for the year ended December 31, 2024. The increase reflects the larger scale of the Company following the SunLink merger, the costs of supporting additional operated facilities within the Healthcare Services segment, and the addition of corporate and operating expenses associated with the Pharmacy Services segment.
Current report
Credit loss expense—Credit loss expense increased by approximately $0.1 million, or 19.0%, to approximately $0.8 million, for the year ended December 31, 2025, compared with $0.7 million for the year ended December 31, 2024. This increase reflects higher receivable balances associated with the growth of the Healthcare Services segment, together with tenant-related receivable exposure within the Real Estate segment.
Current report
Loss on lease termination. The loss on lease termination of $0.9 million for the year ended December 31, 2025 reflects lease-related restructuring activity within the Real Estate segment, including the write-off of straight-line rent associated with terminated lease arrangements.
Current report
Gain on asset sale. The gain on asset sale of $2.7 million for the year ended December 31, 2025 reflects the sale of the Coosa Valley facility in November 2025.
Current report
Gain on bargain purchase. The gain on bargain purchase of $5.8 million for the year ended December 31, 2025 resulted from the SunLink merger completed on August 14, 2025. See Note 3 –Business Combination.
Current report
The Company’s liquidity profile is determined by the operating performance and working capital needs of the Healthcare Services and Pharmacy Services segments, as well as rent collections, tenant performance and refinancing activity within the Real Estate segment. During 2025, the expansion of operated facilities increased the Company’s use of working capital, particularly accounts receivable, payroll-related expenditures and other operating costs, while the Real Estate segment continued to provide rental income and asset sale proceeds.
Current report
The Company’s primary sources of cash include revenues from its healthcare operations, pharmacy operations, rental income, collections of patient, pharmacy and rent receivables, refinancing transactions, debt borrowings and proceeds from asset sales. The Company’s primary uses of cash include salaries, wages and other operating costs of its Healthcare Services and Pharmacy Services segments, facility and rent expenses, debt service, capital expenditures and other working capital needs. Management monitors cash collections, facility-level operating performance, pharmacy reimbursement collections, tenant rent collections, refinancing activity, access to debt markets and access to equity capital as key liquidity drivers. Trading on the OTCQB may limit the Company’s ability to raise equity capital, which could affect future refinancing efforts, growth initiatives and overall financial flexibility.
Current report
Short-term Liquidity
Current report
Management expects the Company’s short-term liquidity requirements over the twelve months following the filing of this Annual Report will be funded primarily through collections of patient and rent accounts receivable, refinancing activity, including refinancing related to the Southland facility, additional debt borrowings and proceeds from the sale of assets classified as held for sale. The Company’s short-term liquidity continues to be affected by the transition of certain facilities from leased to operated status, which has increased working capital requirements, including payroll, supplies and patient receivables.
Current report
Long-term Liquidity
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Removed paragraphs (82)
Previous report
Overview
Previous report
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. As of December 31, 2024, we had investments of approximately $52.8 million in eleven health care real estate facilities consisting of nine SNFs and two multi-service campuses (of which one multi-service campus contains two co-located properties) located in five states. We also lease one SNF which we sublease to a third-party operator.
Previous report
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.
Previous report
We intend to increase revenue and income from operations through our Healthcare Services segment by taking back operations of our leased assets while reducing the size of our Real Estate segment. We intend to achieve these objectives primarily through partnerships directly or indirectly with health care operators, including investments in joint ventures with experienced skilled nursing operators.
Previous report
Our operations and our facility operations have been and are expected to continue to be impacted by economic and market conditions. Together with the ongoing impact of the COVID-19 pandemic, increases in interest rates, labor shortages, supply chain disruptions, high inflation and increased volatility in public equity and fixed income markets have led to increased costs and limited the availability of capital.
Previous report
On November 15, 2024, the Company and Vero entered into a Lease Termination Agreement relating to the lease of Mountain Trace Rehabilitation and Nursing Center. At the same time, we entered into a management agreement with CJM Advisors to provide day-to-day oversight of the facility operations.
Previous report
For more information, see Note 1 – Summary of Significant Accounting Policies, Note 7 –Leasesand Note 10 – Segment Results. to our audited consolidated financial statements in Part II, Item 8., “Financial Statements and
Previous report
Rental revenues.— Total rental revenue decreased by approximately $0.1 million, or 0.9%, to $7.0 million for the year ended December 31, 2024, compared with $7.1 million for the year ended December 31, 2023. The decrease was due to the transitioning the Mountain Trace facilities to our Healthcare Services segment. For further information see Note 7 - Leases, to our audited consolidated financial statements in Part II, Item 8., “Financial Statements and Supplementary Data” included in this Annual Report.
Previous report
Management fees.— Total management fees decreased by 100% as the one contract to manage three facilities ended on December 31, 2023.
Previous report
Other revenues—Other revenues decreased by approximately $0.1 million, or 72.9%, to $0.1 million for the year ended December 31, 2024, compared with approximately $0.2 million for the year ended December 31, 2023. The decrease in revenue is due to the December 2023 release of rent liability by Rookwood, the Covington landlord, for satisfying performance terms of the Covington lease.
Previous report
Depreciation and amortization—Depreciation and amortization decreased by approximately $0.2 million, or 8.6%, to $2.1 million for the year ended December 31, 2024, compared with $2.3 million for the year ended December 31, 2023. The decrease is primarily due to the reduction in depreciation from fully depreciated equipment and computer related assets in the current year.
Previous report
General and administrative— General and administrative costs decreased by $0.0 million, or 0.1%, to $5.4 million for the year ended December 31, 2024, compared with $5.4 million for the year ended December 31, 2023. Despite the modest overall change, the change between segments was higher. For the Real Estate segment, the lack of expense related to the management of the UVMC properties in 2024 was the primary driver of the year over year change. For the Healthcare Services segment, the increase in cost was driven predominantly by increased costs associated with the transitioning the of the Mountain Trace facility.
Previous report
The following table presents our general and administrative expenses by segment:
Previous report
Credit loss expense—Credit loss expense decreased by approximately $0.5 million, or 41.9%, to approximately $0.7 million, for the year ended December 31, 2024, compared with $1.2 million for the year ended December 31, 2023. This decrease in expense is primarily due to improved collections in our Healthcare Services segment, which were offset by a write off of approximately $0.4 million of notes receivable at Lumber City.
Previous report
The following table presents our credit loss expense by segment:
Previous report
The Company intends to pursue measures to grow its operations, streamline its cost infrastructure and otherwise increase liquidity, including: (i) refinancing or repaying debt to reduce interest costs and mandatory principal repayments, with such repayment to be funded through potentially expanding borrowing arrangements with certain lenders; (ii) increasing future lease revenue through acquisitions and investments in existing properties; (iii) modifying the terms of existing leases; (iv) replacing certain tenants who default on their lease payment terms; and (v) reducing other and general and administrative expenses.
Previous report
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 December 31, 2024, the Company had $0.6 million in unrestricted cash and $3.4 million of net accounts receivable, consisting of patient and rent account receivables, which the Company plans to collect over the next twelve months. See Note 15 –Subsequent Eventsto our audited consolidated financial statements included in Part II, Item 8., “Financial Statements and Supplementary Data” in this Annual Report for information on the Company's press release on January 6, 2024 announcing the execution of an Agreement and Plan of Merger.
Previous report
During the year ended December 31, 2024, the Company's cash provided by operating activitiesc was $1.9 million primarily due to the timing of accounts payable and accrued expense payments.. The Company is seeking collection of the past due rent. In addition, management is working to expedite the time it takes to collect and receive aged patient receivables. Cash flow from operations in the future will be based on the operational performance of the facilities the Company's operates: Glenvue, Meadowood and Mountain Trace.
Previous report
On January 6, 2025, the Company and SunLink Health Systems, Inc., a Georgia corporation (“SunLink”), issued a joint press release announcing the execution of an Agreement and Plan of Merger, dated as of January 3, 2025 (the “Merger Agreement”), by and between Regional and SunLink, pursuant to which, upon the terms and subject to the conditions set forth therein, SunLink will merge with and into Regional in exchange for the issuance of an aggregate of 1,410,000 shares of Regional common stock and 1,410,000 shares of Regional’s newly-authorized Series D 8% Cumulative Convertible Redeemable Preferred Stock with a liquidation preference of $10 per share. The merger has been approved unanimously by each company’s board of directors and completion of the transaction is subject to the receipt of the approvals of the shareholders of both Regional and SunLink, regulatory approvals and satisfaction of customary closing conditions, with Regional continuing as the surviving entity. Upon closing of the Merger transaction, the Company's shareholders will own approximately 57% of the combined company. For further information, see Note 15 -Subsequent Eventsto our audited consolidated financial statements included in Part II, Item 8., “Financial Statements and Supplementary Data” in this Annual Report.
Previous report
The Company's common stock and Series A Preferred Stock ("securities") was listed for trading on the NYSE American under the symbol “RHE” and "RHE-PA," respectively, up until February 05, 2025 when it was suspended from trading as a result of not meeting certain listing requirements. Currently, the Company's common stock and Series A Preferred Stock are listed on the OTC Market under the symbol "RHEP" and "RHEPA," respectively. On the OTC Market, selling our common stock and Series A Preferred Stock could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and any security analysts’ coverage of us may be reduced. In addition, broker-dealers have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in such securities, further limiting the liquidity of the common stock and Series A Preferred Stock. These factors could result in lower prices and larger spreads in the bid and ask prices for our securities. Such suspension from the NYSE American and continued or further declines in our share price could also greatly impair our ability to raise additional necessary capital through equity or debt financing and could significantly increase the ownership dilution to shareholders caused by our issuing equity in financing or other transactions. Any such limitations on our ability to raise debt and equity capital could prevent us from making future investments and satisfying maturing debt commitments.For further information, see Note 15 -Subsequent Eventsto our audited consolidated financial statements included in Part II, Item 8., “Financial Statements and Supplementary Data” in this Annual Report.
Previous report
Series A Preferred Stock Exchange Offer
Previous report
In connection with the completion of the Exchange Offer and the implementation of certain amendments to the Charter, 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 December 31, 2024 and December 31, 2023, there are no accumulated and unpaid dividends on the Series A Preferred Stock. Costs associated with these efforts have been expensed as incurred in “General and administrative expenses" and were $0.9 million for the year ended December 31, 2023. For further information regarding the Exchange Offer, see Note 11 –Common and Preferred Stock to our audited consolidated financial statements included in Part II, Item 8., “Financial Statements and Supplementary Data” in this Annual Report.
Previous report
Debt
Previous report
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.
Previous report
On November 8, 2024, the Company obtained a $0.5 million line of credit with Exchange Bank. The line of credit accrues interest at 7.75% per annum with interest only payments payable monthly. As of December 31, 2024, the amount borrowed under the line of credit was $0.5 million and is included in "Other debt, net" on our audited consolidated balance sheets included in Part II, Item 8., “Financial Statements and Supplementary Data” in this Annual Report.
Previous report
On November 22, 2024, the Company and Erin Property Holdings, LLC (the “Borrower”) entered into two Forbearance Agreements (the “Forbearance Agreements”) with Cadence Bank, N.A. (the “Lender”) relating to certain defaults by the Company and the Borrower under the loan agreements in the principal amount of $5.0 million due on July 27, 2036 (the “USDA Note”) and the principal amount of $0.8 million due on July 27, 2036 (the “SBA Note” and, together with the USDA Note, the “Notes”) that were issued by the Borrower to the Company to reflect payment obligations pursuant to the Security Agreement, dated as of July 27, 2011 (the “Security Agreement”), between the Borrower and the Lender.
Previous report
Pursuant to the Forbearance Agreements, (a) the Borrower agreed to make payments of $318,044 toward the USDA Note, $47,872 toward the SBA Note and $22,000 for estimated attorney fees incurred by the Lender no later than November 22, 2024, and (b) the Company and the Lender agreed, subject to the terms and conditions set forth in the Forbearance Agreements, to forbear from exercising its rights and remedies on account of the failure by the Company and the Borrower to pay the amounts due under the USDA Note and SBA Note by the expiration of the period (“Forebearance Period”) of May 22, 2025.
Previous report
During the Forebearance Period, the Company and the Borrower shall make monthly payments of principal and interest in accordance with the terms of the USDA Note and the SBA Note with interest continuing to accrue in accordance with the terms of the Notes which amounts shall remain the obligation of the Company and the Borrower.
Previous report
The remaining balances of the USDA Note and the SBA Note will be due at the end of the Forbearance Period and include all principal, interest, late charges and statutory attorney's fees.
Previous report
Debt Refinance. For the years ended December 31, 2024 and December 31, 2023, the Company did not refinance any debt.
Previous report
Debt Modification. For the years ended December 31, 2024 and December 31, 2023, the Company did not modify any debt.
Previous report
As of December 31, 2024, the Company had $49.7 million in indebtedness, net of $1.0 million deferred financing and unamortized discounts. The Company anticipates net principal repayments of approximately $7.0 million during the next twelve-month period, which include approximately $1.4 million of routine debt service amortization, approximately $1.3 million payments on other non-routine debt, $4.1 million of debt due from forbearance agreement, and a $0.2 million payment of bond debt.
Previous report
For further information see Note – 9 Notes Payable and Other Debt to our audited consolidated financial statements included in Part II, Item 8., “Financial Statements and Supplementary Data” in this Annual Report.
Previous report
Notes Receivable
Previous report
Peach Health Group
Previous report
In connection with a master sublease agreement as amended on March 30, 2018, originally dated June 18, 2016, that the Company entered into with affiliates of Peach Health, the Company extended a line of credit to Peach Health (the “Peach Line”), which was subordinated to a line of credit extended to Peach Health by a third-party lender (the “Peach Working Capital Facility”). On August 27, 2020, subsequent to Peach Health repaying their Peach Working Capital Facility, the Company and Peach Health modified the Peach Line to: (i) reduce the then-outstanding $1.3 million balance under the Peach Line to approximately $0.5 million, in connection with which Peach Health paid to the Company $0.45 million in cash and the Company accepted $0.35 million non-cash payment in exchange for Peach Health assuming from the Company certain bed tax liabilities related to facilities their affiliates operate; (ii) extend the maturity date of the Peach Line to August 1, 2025; (iii) decrease the interest rate from 16.5% to 8% per annum; and (iv) Peach Health agreed not to pledge, hypothecate or grant any security interest in their collateral to any other party, other than their current arrangement with the U.S. Small Business Administration (the “SBA”), without the Company’s prior written consent. The remaining balance under the Peach Line will be paid by Peach Health to the Company in 60 equal monthly installments. As of December 31, 2023, in accordance with the Peach Line terms, 20 such installments remain. In August 2024, the Company agreed to net the amount owed to Peach against the balance on the Peach Line to the Company. As of December 31, 2024, there are no remaining installment payments due under the Peach Line.
Previous report
Symmetry Healthcare Management
Previous report
Effective October, 21, 2022, the Company terminated the leases for two SNFs located in South Carolina with affiliates of Dawn Healthcare (a subsidiary of Symmetry Healthcare Management). As part of the termination, Dawn Healthcare entered into a promissory note to pay the Company $407,199 in 14 installments of $29,085 each beginning in January 2023. In February 2023, Symmetry Healthcare Management made the first of 14 monthly payments of $29,085. The Company accepted a lump sum payment of $250,000 as payoff for the remaining promissory note balance.
Previous report
Beacon Health Management
Previous report
In May 2022, in connection with the Operations Transfer Agreement for Lumber City, Beacon Health and the Company entered into a promissory note in the amount of $546,690. Under the terms of this promissory note, the balance was to be paid over 24 months in the amount of $24,000 per month, and the principal balance to accrue interest at the rate of 8% annually. In September 2024, the Company wrote off $395,000 of the promissory note as a credit loss expense . As of December 31, 2024, the principal note receivable balance remaining is $150,690.
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Reworded paragraphs (20)
Previous wording
The following table sets forth, for the periods indicated, statement of operations items and the amount and percentage of change of these items. The results of operations for any particular period are not necessarily indicative of results for any future period. The following data should be read in conjunction with our audited consolidated financial statements and the notes thereto, which are included in Part II, Item 8., “Financial Statements and Supplementary Data” in this Annual Report.
Current wording
The following table sets forth, for the periods indicated, statement of operations items and the amount and percentage of change of these items. The results of operations for any particular period are not necessarily indicative of results for any future period. The following data should be read in conjunction with our audited consolidated financial statements and the notes thereto, in Part II, Item 8., “Financial Statements and Supplementary Data” in this Annual Report.
Previous wording
Patient care revenues— Patient care revenues for our Healthcare Services segment, increased by approximately $2.5 million, or 27.6%, to $11.3 million for the year ended December 31, 2024 from approximately $8.8 million for the year ended December 31, 2023. The increase was due to an increase in patient reimbursement rates and facility census and the transition of the Mountain Trace facility to the Healthcare Services segment.
Current wording
Patient care revenues Patient care revenues in our Healthcare Services segment, increased by approximately $24.8 million, or 219.8%, to $36.1 million for the year ended December 31, 2025 from approximately $11.3 million for the year ended December 31, 2024. This increase was driven by the Healthcare Services segment and reflects improved patient reimbursement rates and facility census, as well as the transition of Georgetown, Southland and Sumter into operated facilities during 2025.
Previous wording
Patient care expense—Patient care expense increased by approximately $1.5 million, or 18.3%, to $9.4 million for the year ended December 31, 2024, compared with $8.0 million for the year ended December 31, 2023. The increase in patient care expense is primarily due to increase in staff wages and transitioning the Mountain Trace facility. .
Current wording
Patient care expense—Patient care expense increased by approximately $21.3 million, or 226.0%, to $30.8 million for the year ended December 31, 2025, compared with $9.4 million for the year ended December 31, 2024. This increase was driven primarily by the Healthcare Services segment and reflects the transition of Georgetown, Southland and Sumter into operated facilities, together with increased staff wages and other labor-related operating costs.
Previous wording
Facility rent expense—Facility rent remained consistent totaling $0.6 million for the year ended December 31, 2024 and 2023.
Current wording
Facility rent expense—Facility rent expense increased by $0.2 million, or 31.3%, to $0.8 million for the year ended December 31, 2025, compared with $0.6 million for the year ended December 31, 2024. The increase was driven primarily by additional leased locations and related occupancy costs associated with the Pharmacy Services segment following the SunLink merger.
Previous wording
Interest expense, net—Interest expense, net decreased by approximately $0.0 million, or 1.5%, to $2.7 million for the year ended December 31, 2024, compared with $2.8 million for the year ended December 31, 2023. The decrease was from the variable rate debt for the Mountain Trace and Southland mortgages. See Note 9– Notes Payableand Other Debt to our audited consolidated financial statements included in Part II, Item 8., “Financial Statements and Supplementary Data.” of this Annual Report.
Current wording
Interest expense, net—Interest expense, net decreased by approximately $0.0 million, or 1.4%, to $2.7 million for the year ended December 31, 2025, compared with $2.7 million for the year ended December 31, 2024. The decrease was due primarily to changes in variable-rate debt, including the Mountain Trace and Southland mortgages. See Note 10 –Notes Payable and Other Debt.
Previous wording
Other expense, net— Other expense, net remained consistent totaling $0.7 million for the years ended December 31, 2024 and 2023.
Current wording
Other expense, net. Other expense, net was $1.4 million for the year ended December 31, 2025, compared to $0.7 million for the year ended December 31, 2024. The increase was due primarily to legal, advisory and other transaction-related expenses associated with the SunLink merger and the integration of the acquired businesses.
Previous wording
The following table summarizes the Company's non-GAAP financial measure of results based on EBITDA for the years ending December 31, 2024 and 2023. 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.
Current wording
The following table summarizes the Company's non-GAAP financial measure of results based on EBITDA for the years ending December 31, 2025 and 2024. EBITDA represents net income (loss) before interest expense, provision for income taxes, and depreciation and amortization. Adjusted EBITDA represents EBITDA further adjusted to exclude certain items that management does not consider indicative of core operating performance, including stock-based compensation, credit loss expense, loss on lease termination, gain on asset sale, gain on bargain purchase, merger-related costs and certain other non-recurring items. These non-GAAP financial measures are not intended to replace financial performance measures determined in accordance with U.S. GAAP, such as net income (loss). Rather, we present EBITDA and Adjusted EBITDA as supplemental measures of our performance.
Previous wording
Our operations could be adversely affected if we experience significant delays in receipt of rental income from our operators and our patient care revenues. Our future liquidity will continue to be dependent upon the relative amounts of current assets (principally cash and accounts receivable) and current liabilities (principally accounts payable and accrued expenses). In that regard, accounts receivable can have a significant impact on our liquidity.
Current wording
As of December 31, 2025, we had approximately $8.8 million in gross patient receivables. Our liquidity could be adversely affected if we were to experience significant delays in the receipt of patient care revenues, pharmacy reimbursements or rental income from our operators. Our future liquidity will continue to depend in part on the relative amounts of current assets, principally cash and accounts receivable, and current liabilities, principally accounts payable and accrued expenses. Accordingly, the timing of accounts receivable collections remains an important component of our liquidity management.
Previous wording
Scheduled Minimum Debt Principal payments and Maturity payments
Current wording
The following tables provide a summary of our scheduled minimum debt principal payments and maturity payments as of December 31, 2025:
Previous wording
At December 31, 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 one USDA loan secured by the Southland 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. On November 22, 2024, the Company and Erin Property Holdings entered into two Forbearance Agreements with the lender relating to certain defaults by the Company and the Borrower under the loan agreements.
Current wording
As of December 31, 2025, the Company was in compliance with the financial and administrative covenants under its outstanding credit instruments, except with respect to the notice of default under one USDA loan and one SBA loan, both secured by the Southland facility.
Previous wording
As of December 31, 2024, ten facilities (nine owned by us and one leased to us) are leased or subleased on a triple net basis, meaning that the lessee (i.e., the third-party operator of the property, or the Company with respect to the operated facilities) is obligated under the lease or sublease, as applicable, for all liabilities of the property in respect to insurance, taxes and facility maintenance, as well as the lease or sublease payments, as applicable.
Current wording
As of December 31, 2025, five facilities (four owned by us and one leased to us) are leased or subleased on a triple net basis, meaning that the lessee (i.e., the third-party operator of the property, or the Company with respect to the operated facilities) is obligated under the lease or sublease, as applicable, for all liabilities of the property with respect to insurance, taxes and facility maintenance, as well as the lease or sublease payments, as applicable.
Previous wording
Net cash provided by operating activitiesfor the year ended December 31, 2023 was approximately $3.7 million, consisting primarily of non-cash expenses and changes in our working capital accounts totaling $7.8 million offset by our net loss of approximately $4.0 million.
Current wording
Net cash provided by operating activitiesfor the year ended December 31, 2024 was approximately $1.9 million. This source of cash consisted primarily of non-cash expenses and changes in working capital accounts totaling approximately $5.1 million, partially offset by the Company’s net loss of approximately $3.2 million.
Previous wording
Net cash used in investing activities for the year ended December 31, 2024, was approximately $0.5 million. The negative cash flow was mainly from new equipment, and finished capital expense projects.
Current wording
Net cash used in investing activities for the year ended December 31, 2024 was approximately $0.5 million. These expenditures related primarily to capital spending for equipment purchases and completed capital improvement projects.
Previous wording
Net cash used in financing activities for the year ended December 31, 2024 was approximately $2.2 million, consisting of routine repayments totaling $1.4 million towards our senior debt obligations and other debt payments of $1.2, offset by other debt proceeds of $0.4.
Current wording
Net cash used in financing activities for the year ended December 31, 2024 was approximately $2.2 million. This use of cash consisted primarily of routine repayments of approximately $1.4 million on senior debt obligations and other debt payments of approximately $1.2 million, partially offset by approximately $0.4 million in proceeds from other debt borrowings.
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 entity’s current financial condition, including its sources of liquidity at the date that the consolidated financial statements are issued, will enable the entity to meet its obligations as they come due 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 entity 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.
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 entity’s current financial condition, including its sources of liquidity as of the date our consolidated financial statements are issued, will enable the entity to meet its obligations as they come due 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 Regional Health 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.
Previous wording
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 as well as the Company’s recurring business operating expenses. The Company is able to conclude that it is probable that the Company will be able to meet its obligations arising within one year of the date of issuance of its consolidated financial statements within the parameters set forth in the accounting guidance.
Current wording
In applying applicable accounting guidance, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows, our obligations due over the next twelve months as well as our recurring business operating expenses. We were able to conclude that it is probable that the Company will be able to meet its obligations arising within one year of the date of issuance of its consolidated financial statements within the parameters set forth in the accounting guidance.
Previous wording
For a discussion of our critical accounting policies, see Note 1 – Summary of Significant Accounting Policies to our audited consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data”, in this Annual Report.
Current wording
We consider an accounting policy to be critical if it requires management to make assumptions that were uncertain at the time the estimate was made and if changes in those assumptions could have a material effect on our financial condition, results of operations or cash flows. Our most critical accounting policies relate to revenue recognition, allowances for credit losses, goodwill and long-lived asset impairment, lease accounting, business combinations and the valuation of contingent liabilities. For a more complete discussion of our significant accounting policies, see Note 1 to our audited consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report.
Previous wording
Patient Care Revenue. The Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”) requires a company to recognize revenue when the company transfers control of promised goods and services to a customer. Revenue is recognized in an amount that reflects the consideration to which a company expects to receive in exchange for such goods and services. Revenue from our Healthcare Services business segment is derived from services rendered to patients in the Glenvue, Meadowood and Mountain Trace Facilities. The Company receives payments from the following sources for services rendered in our facilities: (i) the federal government under the Medicare program administered by CMS; (ii) state governments under their respective Medicaid and similar programs; (iii) commercial insurers; and (iv) individual patients and clients. The vast majority (greater than 90%) of the revenue the Company has recognized is from government sources. The Company determines the transaction price based on established billing rates reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients and other price concessions. Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. The Company recognizes revenue at the amount that reflects the consideration the Company expects to receive in exchange for the services provided. These amounts are due from residents or third-party payors and include variable consideration for retroactive adjustments from estimated reimbursements, if any, under reimbursement programs. Performance obligations, such as providing room and board, wound care, intravenous drug therapy, physical therapy, and quality of life activities amongst others, are determined based on the nature of the services provided. Revenue is recognized as performance obligations are satisfied. Estimated uncollectible amounts due from patients are generally considered implicit price concessions that are a direct reduction to net patient care revenues.
Current wording
Patient Care Revenue. The Company recognizes patient care revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue from the Company’s Healthcare Services segment is derived from services rendered to patients at the facilities it operates. The Company receives payments for these services from several sources, including (i) the federal government under the Medicare program administered by the Centers for Medicare & Medicaid Services, (ii) state governments under their respective Medicaid and similar programs, (iii) commercial insurers, and (iv) patients and other private payors. A substantial portion of patient care revenue is derived from government reimbursement programs.
Previous wording
Leasing. The Company assesses any new contracts or modification of contracts in accordance with ASC 842, Leases, to determine the existence of a lease and its classification. We are reporting revenues and expenses for real estate taxes and insurance where the lessee has not made those payments directly to a third party in accordance with their respective leases with us. Additionally, we expense certain leasing costs, other than leasing commissions, as they are incurred. Current GAAP provides for the deferral and amortization of such costs over the applicable lease term. See Note 1 –Summary of Significant Accounting Policies and Note 7 -Leases to our audited consolidated financial statements in Part II, Item 8., “Financial Statements and Supplementary Data” in this Annual Report.
Current wording
Leasing Costs. The Company evaluates new contracts and contract modifications in accordance with ASC 842 to determine whether an arrangement contains a lease and, if so, the appropriate lease classification. In certain cases, the Company reports revenues and expenses for real estate taxes and insurance when the lessee has not paid those amounts directly to a third party, as required under the applicable lease. The Company expenses leasing costs, other than leasing commissions and other costs that qualify for capitalization under applicable accounting guidance, as incurred. See Note 1 – Summary of Significant Accounting Policies and Note 8 – Leases to the audited consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report.
Previous wording
As required by ASC Topic 740, “Income Taxes”, we established deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities at tax rates in effect when such temporary differences are expected to reverse. When necessary, we record a valuation allowance to reduce our net deferred tax assets to the amount that is more likely than not to be realized. At December 31, 2024, the Company has a valuation allowance of approximately $21.2 million. In future periods, we will continue to assess the need for and adequacy of the remaining valuation allowance. ASC 740 provides information and procedures for financial statement recognition and measurement of tax positions taken, or expected to be taken, in tax returns.
Current wording
As required by ASC Topic 740, “Income Taxes”, we established deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities at tax rates in effect when such temporary differences are expected to reverse. When necessary, we record a valuation allowance to reduce our net deferred tax assets to the amount that is more likely than not to be realized. At December 31, 2025, the Company has a valuation allowance of approximately $21.7 million. In future periods, we will continue to assess the need for and adequacy of the remaining valuation allowance. ASC 740 provides information and procedures for financial statement recognition and measurement of tax positions taken, or expected to be taken, in tax returns.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The Company determines transaction price based on established billing rates, reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients and other implicit price concessions. Contractual adjustments and discounts are based on contractual agreements, Company policies and historical experience. Patient care revenue is recognized as performance obligations that are satisfied over time as services are rendered. The amounts ultimately collected may differ from established billing rates as a result of variable consideration, including changes in reimbursement, settlements, audit adjustments and other retroactive adjustments under governmental or other reimbursement programs. The Company records revenue in the amount it expects to be entitled to receive in exchange for the services provided. Estimated uncollectible amounts due from patients are generally considered implicit price concessions and are recorded as a direct reduction of patient care revenue.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Supplementary Data” in this Annual Report.
Previous report — wording carried elsewhere
Future minimum lease payments for each of the next five years and thereafter ending December 31 are as follows: