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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, 2023

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)

 

1050 Crown Pointe Parkway, Suite 720 Atlanta GA 30338

(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

Series A 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 14, 2023 the registrant had 1,883,028 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, 2023 and December 31, 2022

3

Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022

4

Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2023 and 2022

5

Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022

6

Notes to Unaudited Consolidated Financial Statements

8

Item 2.

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

29

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4.

Controls and Procedures

38

 

Part II.

OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

38

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

41

Item 3.

Defaults upon Senior Securities

41

Item 4.

Mine Safety Disclosures

41

Item 5.

Other Information

41

Item 6.

Exhibits

41

 

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, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Property and equipment, net

 

$

45,806

 

 

$

46,611

 

 

Cash

 

 

1,427

 

 

 

843

 

 

Restricted cash

 

 

3,208

 

 

 

3,066

 

 

Accounts receivable, net of allowances of $1,579 and $1,298

 

 

2,035

 

 

 

6,289

 

 

Prepaid expenses and other

 

 

903

 

 

 

746

 

 

Notes receivable

 

 

1,060

 

 

 

1,099

 

 

Intangible assets - bed licenses

 

 

2,471

 

 

 

2,471

 

 

Intangible assets - lease rights, net

 

 

92

 

 

 

110

 

 

Right-of-use operating lease assets

 

 

2,588

 

 

 

2,848

 

 

Goodwill

 

 

1,585

 

 

 

1,585

 

 

Lease deposits and other deposits

 

 

4

 

 

 

 

 

Straight-line rent receivable

 

 

2,830

 

 

 

2,912

 

 

Total assets

 

$

64,009

 

 

$

68,580

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Senior debt, net

 

$

44,208

 

 

$

45,163

 

 

Bonds, net

 

 

5,989

 

 

 

6,120

 

 

Other debt, net

 

 

1,181

 

 

 

895

 

 

Accounts payable

 

 

2,783

 

 

 

3,293

 

 

Accrued expenses

 

 

4,806

 

 

 

5,036

 

 

Operating lease obligation

 

 

2,948

 

 

 

3,226

 

 

Other liabilities

 

 

1,707

 

 

 

1,131

 

 

Total liabilities

 

 

63,622

 

 

 

64,864

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Common stock and additional paid-in capital, no par value; 55,000 shares authorized; 1,894 and 1,793 shares issued and 1,883 and 1,784 shares outstanding at September 30, 2023 and December 31, 2022, respectively

 

 

63,023

 

 

 

62,702

 

 

Preferred stock, no par value; 5,000 shares authorized (including amounts authorized for Series A and Series B); shares issued and outstanding designated as follows:

 

 

 

 

 

 

 

Preferred stock, Series A, no par value; 560 shares authorized, issued and outstanding at September 30, 2023, with a redemption amount $426 at September 30, 2023; 5,000 shares authorized, 2,812 shares issued and outstanding at December 31, 2022, with a redemption amount of $70,288

 

 

426

 

 

 

62,423

 

 

Preferred stock, Series B, no par value; 2,812 shares authorized; 2,252 shares issued and outstanding at September 30, 2023, with a redemption amount $18,602 at September 30, 2023; no shares authorized, issued and outstanding at December 31, 2022

 

 

18,602

 

 

 

 

 

Accumulated deficit

 

 

(81,664

)

 

 

(121,409

)

 

Total stockholders' equity

 

 

387

 

 

 

3,716

 

 

Total liabilities and stockholders' equity

 

$

64,009

 

 

$

68,580

 

 

 

 

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,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Patient care revenues

$

2,136

 

 

$

7,769

 

 

$

6,577

 

 

$

14,650

 

Rental revenues

 

1,739

 

 

 

3,000

 

 

 

5,170

 

 

 

10,326

 

Management fees

 

263

 

 

 

255

 

 

 

788

 

 

 

774

 

Other revenues

 

 

 

 

6

 

 

 

107

 

 

 

20

 

Total revenues

 

4,138

 

 

 

11,030

 

 

 

12,642

 

 

 

25,770

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Patient care expense

 

2,313

 

 

 

7,476

 

 

 

7,010

 

 

 

14,040

 

Facility rent expense

 

149

 

 

 

1,451

 

 

 

446

 

 

 

4,725

 

Cost of management fees

 

156

 

 

 

140

 

 

 

442

 

 

 

459

 

Depreciation and amortization

 

526

 

 

 

600

 

 

 

1,738

 

 

 

1,819

 

General and administrative expense

 

972

 

 

 

1,378

 

 

 

3,190

 

 

 

3,432

 

Doubtful accounts expense

 

229

 

 

 

1,515

 

 

 

269

 

 

 

3,742

 

Other operating expenses

 

197

 

 

 

441

 

 

 

511

 

 

 

1,409

 

Total expenses

 

4,542

 

 

 

13,001

 

 

 

13,606

 

 

 

29,626

 

Loss from operations

 

(404

)

 

 

(1,971

)

 

 

(964

)

 

 

(3,856

)

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

708

 

 

 

564

 

 

 

2,066

 

 

 

1,855

 

Other (income) expense, net

 

(139

)

 

 

(2,164

)

 

 

620

 

 

 

(1,088

)

Total other (income) expense, net

 

569

 

 

 

(1,600

)

 

 

2,686

 

 

 

767

 

Net loss

$

(973

)

 

$

(371

)

 

$

(3,650

)

 

$

(4,623

)

Preferred stock dividends - undeclared

 

 

 

 

(2,249

)

 

 

 

 

 

(6,748

)

Preferred stock dividends - gain on extinguishment

 

 

 

 

 

 

 

43,395

 

 

 

 

Net profit (loss) attributable to Regional Health Properties, Inc. common stockholders

$

(973

)

 

$

(2,620

)

 

$

39,745

 

 

$

(11,371

)

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

 

 

 

 

 

 

 

 

 

 

 

Basic:

$

(0.52

)

 

$

(1.48

)

 

$

21.18

 

 

$

(6.40

)

Diluted:

$

(0.52

)

 

$

(1.48

)

 

$

21.18

 

 

$

(6.40

)

Weighted average shares of common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

1,883,028

 

 

 

1,768,720

 

 

 

1,876,138

 

 

 

1,775,637

 

Diluted:

 

1,883,028

 

 

 

1,768,720

 

 

 

1,876,138

 

 

 

1,775,637

 

 

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 Outstanding

 

 

Shares of
Preferred
Stock A

 

 

Shares of
Preferred
Stock B

 

 

Shares of Treasury Stock

 

 

Common stock and additional paid-in capital

 

 

Preferred stock A, no par value

 

 

Preferred stock B, no par value

 

 

Accumulated
Deficit

 

 

Total

 

Balance, December 31, 2022

 

 

1,784

 

 

 

2,812

 

 

 

 

 

 

(9

)

 

$

62,702

 

 

$

62,423

 

 

$

 

 

$

(121,409

)

 

$

3,716

 

Restricted stock issuance

 

 

99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

81

 

 

 

 

 

 

 

 

 

 

 

 

81

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,992

)

 

 

(1,992

)

Balances, March 31, 2023

 

 

1,883

 

 

 

2,812

 

 

 

 

 

 

(9

)

 

$

62,783

 

 

$

62,423

 

 

$

 

 

$

(123,401

)

 

$

1,805

 

Extinguishment of Series A Preferred Stock

 

 

 

 

 

(2,252

)

 

 

 

 

 

 

 

 

 

 

 

(61,997

)

 

 

 

 

 

 

 

 

(61,997

)

Exchange of Series A to Series B

 

 

 

 

 

 

 

 

2,252

 

 

 

 

 

 

 

 

 

 

 

 

18,602

 

 

 

43,395

 

 

 

61,997

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

155

 

 

 

 

 

 

 

 

 

 

 

 

155

 

Forfeitures of stock-based awards

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(685

)

 

 

(685

)

Balances, June 30, 2023

 

 

1,883

 

 

 

560

 

 

 

2,252

 

 

 

(11

)

 

$

62,938

 

 

$

426

 

 

$

18,602

 

 

$

(80,691

)

 

$

1,275

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

85

 

 

 

 

 

 

 

 

 

 

 

 

85

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(973

)

 

 

(973

)

Balances, September 30, 2023

 

 

1,883

 

 

 

560

 

 

 

2,252

 

 

 

(11

)

 

$

63,023

 

 

$

426

 

 

$

18,602

 

 

$

(81,664

)

 

$

387

 

 

 

 

Shares of
Common
Stock Outstanding

 

 

Shares of
Preferred
Stock A

 

 

Shares of
Preferred
Stock B

 

 

Shares of Treasury Stock

 

 

Common
Stock and
Additional
Paid-in
Capital

 

 

Preferred stock A, no par value

 

 

Preferred stock B, no par value

 

 

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

 

Forfeitures of stock-based awards

 

 

(30

)

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

4

 

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