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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-33135

 

Regional Health Properties, Inc.

(Exact name of registrant as specified in its charter)

 

Georgia

 

81-5166048

(State or other jurisdiction

of incorporation)

 

(I.R.S. Employer

Identification Number)

 

454 Satellite Boulevard NW, Suite 100, Suwanee, GA 30024

(Address of principal executive offices)

(678) 869-5116

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, no par value

 

RHE

 

NYSE American

10.875% Series A Cumulative Redeemable
Preferred Stock, no par value

 

RHE-PA

 

NYSE American

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.:

 

Large accelerated filer

 

 

Accelerated filer

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes No

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of November 11, 2022 the registrant had 1,768,720 shares of common stock, no par value, outstanding.

 

 


Regional Health Properties, Inc.

Form 10-Q

Table of Contents

 

 

 

 

 

Page
Number

Part I.

 

FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements (unaudited)

 

3

 

 

Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021

 

3

 

 

Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021

 

4

 

 

Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2022 and 2021

 

5

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021

 

7

 

 

Notes to Consolidated Financial Statements

 

9

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

28

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

37

Item 4.

 

Controls and Procedures

 

37

 

 

 

 

 

Part II.

 

OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

37

Item 1A.

 

Risk Factors

 

37

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

39

Item 3.

 

Defaults upon Senior Securities

 

39

Item 4.

 

Mine Safety Disclosures

 

39

Item 5.

 

Other Information

 

39

Item 6.

 

Exhibits

 

39

 

 

 

 

 

Signatures

 

44

 

2


Part I. Financial Information

Item 1. Financial Statements

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in 000's)

 

 

September 30, 2022

 

 

December 31,
2021

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

Property and equipment, net

$

48,509

 

 

$

50,127

 

Cash

 

2,373

 

 

 

6,792

 

Restricted cash

 

3,024

 

 

 

3,056

 

Accounts receivable, net of allowances of $580 and $177

 

6,230

 

 

 

2,145

 

Prepaid expenses and other

 

1,251

 

 

 

460

 

Notes receivable

 

297

 

 

 

362

 

Intangible assets - bed licenses

 

2,471

 

 

 

2,471

 

Intangible assets - lease rights, net

 

116

 

 

 

134

 

Right-of-use operating lease assets

 

22,981

 

 

 

29,909

 

Goodwill

 

1,585

 

 

 

1,585

 

Lease deposits and other deposits

 

398

 

 

 

398

 

Straight-line rent receivable

 

6,190

 

 

 

8,257

 

Total assets

$

95,425

 

 

$

105,696

 

LIABILITIES AND EQUITY

 

 

 

 

 

Senior debt, net

$

44,887

 

 

$

46,043

 

Bonds, net

 

6,119

 

 

 

6,239

 

Other debt, net

 

1,562

 

 

 

594

 

Accounts payable

 

3,478

 

 

 

3,749

 

Accrued expenses

 

6,854

 

 

 

4,987

 

Operating lease obligation

 

25,258

 

 

 

32,059

 

Other liabilities

 

1,367

 

 

 

1,629

 

Total liabilities

 

89,525

 

 

 

95,300

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

Common stock and additional paid-in capital, no par value; 55,000 shares authorized; 1,769 and 1,775 shares issued and 1,760 and 1,775 shares outstanding at September 30, 2022 and December 31, 2021, respectively

 

62,642

 

 

 

62,515

 

Preferred stock, no par value; 5,000 shares authorized; 2,812 shares issued and outstanding, redemption amount $70,288 at September 30, 2022 and December 31, 2021

 

62,423

 

 

 

62,423

 

Accumulated deficit

 

(119,165

)

 

 

(114,542

)

Total stockholders' equity

 

5,900

 

 

 

10,396

 

Total liabilities and stockholders' equity

$

95,425

 

 

$

105,696

 

 

 

See accompanying notes to unaudited consolidated financial statements.

3


REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in 000's, except per share data)

(Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Patient care revenues

$

7,769

 

 

$

2,309

 

 

$

14,650

 

 

$

7,444

 

Rental revenues

 

3,000

 

 

 

4,136

 

 

 

10,326

 

 

 

11,980

 

Management fees

 

255

 

 

 

248

 

 

 

774

 

 

 

743

 

Other revenues

 

6

 

 

 

9

 

 

 

20

 

 

 

84

 

Total revenues

 

11,030

 

 

 

6,702

 

 

 

25,770

 

 

 

20,251

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Patient care expense

 

7,476

 

 

 

2,454

 

 

 

14,040

 

 

 

6,911

 

Facility rent expense

 

1,451

 

 

 

1,640

 

 

 

4,725

 

 

 

4,919

 

Cost of management fees

 

140

 

 

 

153

 

 

 

459

 

 

 

468

 

Depreciation and amortization

 

600

 

 

 

651

 

 

 

1,819

 

 

 

1,953

 

General and administrative expense

 

1,378

 

 

 

980

 

 

 

3,432

 

 

 

2,975

 

Doubtful accounts expense (recovery)

 

1,515

 

 

 

(1

)

 

 

3,742

 

 

 

76

 

Other operating expenses

 

441

 

 

 

219

 

 

 

1,409

 

 

 

755

 

Total expenses

 

13,001

 

 

 

6,096

 

 

 

29,626

 

 

 

18,057

 

(Loss) income from operations

 

(1,971

)

 

 

606

 

 

 

(3,856

)

 

 

2,194

 

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

564

 

 

 

669

 

 

 

1,855

 

 

 

2,022

 

Gain on extinguishment of debt

 

 

 

 

(146

)

 

 

 

 

 

(146

)

Other (income) expense, net

 

(2,164

)

 

 

122

 

 

 

(1,088

)

 

 

839

 

Total other (income) expense, net

 

(1,600

)

 

 

645

 

 

 

767

 

 

 

2,715

 

Net loss

$

(371

)

 

$

(39

)

 

$

(4,623

)

 

$

(521

)

Preferred stock dividends - undeclared

 

(2,249

)

 

 

(2,250

)

 

 

(6,748

)

 

 

(6,748

)

Net Loss attributable to Regional Health Properties, Inc. common stockholders

$

(2,620

)

 

$

(2,289

)

 

$

(11,371

)

 

$

(7,269

)

Net loss per share of common stock attributable to Regional Health Properties, Inc.

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted:

$

(1.48

)

 

$

(1.27

)

 

$

(6.40

)

 

$

(4.21

)

Weighted average shares of common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

1,769

 

 

 

1,775

 

 

 

1,778

 

 

 

1,728

 

 

See accompanying notes to unaudited consolidated financial statements.

4


REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Amounts in 000's)

(Unaudited)

 

 

 

Shares of
Common
Stock

 

 

 

Shares of
Preferred
Stock

 

 

 

Shares of Treasury Stock

 

 

Common
Stock and
Additional
Paid-in
Capital

 

 

Preferred
Stock

 

 

Accumulated
Deficit

 

 

Total

 

Balances, December 31, 2021

 

 

1,775

 

 

 

 

2,812

 

 

 

 

(1

)

 

$

62,515

 

 

$

62,423

 

 

$

(114,542

)

 

$

10,396

 

Restricted stock issuance

 

 

24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

111

 

 

 

 

 

 

 

 

 

111

 

Exercise of restricted share awards net settlement option

 

 

 

 

 

 

 

 

 

 

(8

)

 

 

(46

)

 

 

 

 

 

 

 

 

(46

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,927

)

 

 

(2,927

)

Balances, March 31, 2022

 

 

1,799

 

 

 

 

2,812

 

 

 

 

(9

)

 

$

62,580

 

 

$

62,423

 

 

$

(117,469

)

 

$

7,534

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

58

 

 

 

 

 

 

 

 

 

58

 

Forfeitures of stock based awards

 

 

(30

)

 

 

 

 

 

 

 

 

 

 

(54

)

 

 

 

 

 

 

 

 

(54

)

Net loss

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

 

 

 

(1,325

)

 

 

(1,325

)

Balances, June 30, 2022

 

 

1,769

 

 

 

 

2,812

 

 

 

 

(9

)

 

$

62,584

 

 

$

62,423

 

 

$

(118,794

)

 

$

6,213

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

58

 

 

 

 

 

 

 

 

 

58

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(371

)

 

 

(371

)

Balances, September 30, 2022

 

 

1,769

 

 

-

 

 

2,812

 

 

-

 

 

(9

)

 

$

62,642

 

 

$

62,423

 

 

$

(119,165

)

 

$

5,900

 

 

 

 

 

Shares of
Common
Stock

 

 

Shares of
Preferred
Stock

 

 

Shares of Treasury Stock

 

 

Common
Stock and
Additional
Paid-in
Capital

 

 

Preferred
Stock

 

 

Accumulated
Deficit

 

 

Total

 

Balances, December 31, 2020

 

 

1,688

 

 

 

2,812

 

 

 

 

 

$

62,041

 

 

$

62,423

 

 

$

(113,360

)

 

$

11,104

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

 

 

 

21

 

Balances, March 31, 2021

 

 

1,688

 

 

 

2,812

 

 

 

 

 

$

62,041

 

 

$

62,423

 

 

$

(113,339

)

 

$

11,125

 

Stock-based compensation

 

 

39

 

 

 

 

 

 

 

 

 

123

 

 

 

 

 

 

 

 

 

123

 

Exercise of restricted share awards net settlement option

 

 

(1

)

 

 

 

 

 

 

 

 

(7

)

 

 

 

 

 

 

 

 

(7

)

Treasury shares, no par value

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(503

)

 

 

(503

)

Balances, June 30, 2021

 

 

1,727

 

 

 

2,812

 

 

 

 

 

$

62,157

 

 

$

62,423

 

 

$

(113,842

)

 

$

10,738

 

5


Stock-based compensation

 

 

48

 

 

 

 

 

 

 

 

 

179

 

 

 

 

 

 

 

 

 

179

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(39

)

 

 

(39

)

Balances, September 30, 2021

 

 

1,775

 

 

 

2,812