Item 1.01. Entry into a Material Definitive Agreement.
On December 30, 2022, Regional Health Properties, Inc. (NYSE American: RHE)
(NYSE American: RHE-PA) (the "Company"), ADK Georgia, LLC, a subsidiary of the
Company ("Tenant"), and Spring Valley, LLC ("Landlord") entered into a Lease
Termination Agreement (the "Lease Termination Agreement") relating to the lease
(the "Lease") of the following eight nursing facilities: the Powder Springs
facility, the Thomasville facility, the Jeffersonville facility, the Lumber City
facility, the LaGrange facility, the Tara facility, the Oceanside facility and
the Savannah Beach facility (collectively, the "Facilities"). The Lease
Termination Agreement provides that the Lease was terminated effective as of
December 7, 2022 (the "Lease Termination Date"). In connection with the
foregoing, Tenant entered into certain Operations Transfer Agreements (the
"Operations Transfer Agreements") with each of TV Thomasville LLC, LC Lumber
City LLC, LG Lagrange LLC and TB Thunderbolt LLC (the "New Operators"), each
with an effective date as of the Lease Termination Date. The Operations Transfer
Agreements contain market industry terms.
Pursuant to the Lease Termination Agreement, (a) Landlord forgave all past due
and current rent, late penalties, and additional rent for taxes due under the
Lease as of the Lease Termination Date, as well as all accrued and unpaid
interest and unpaid principal under the Promissory Note dated September 30,
2022, (b) Tenant and the Company remain liable to Landlord for any nursing home
provider fees owed to the State of Georgia arising on or before the Lease
Termination Date ("Unpaid Provider Fees"), (c) to fund any reimbursement for
Unpaid Provider Fees, Tenant agreed to enter into a Promissory Note with a line
of credit feature in favor of Landlord in the principal sum of $2,700,000
bearing an interest rate of 6.25%, payable monthly over 24 months, secured by
Tenant's accounts receivables associated with the facilities and earned prior to
the Lease Termination Date, and guaranteed by the Company, and (d) except as set
forth in the Lease Termination Agreement, Landlord, Tenant and the Company
agreed to a release of claims. As consideration for Landlord's agreement to
enter into the Lease Termination Agreement and accelerate the expiration date of
the term of the Lease, Tenant and its affiliates, including the Company, agreed
to cooperate with Landlord and any third parties, including the New Operators,
to continue the operation of and transfer the ownership of the Facilities with
an effective date as of the Lease Termination Date.
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference in this Item 1.02.
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On January 6, 2023, the Company announced that it received a letter on January
3, 2023 from NYSE American (the "Exchange"), wherein the Exchange advised that
the Company is not in compliance with its continued listing standard set forth
in Section 704 of the NYSE American Company Guide as the Company did not hold an
annual meeting of shareholders for the fiscal year ended December 31, 2021 (the
"2022 Annual Meeting") by December 31, 2022. The Company has scheduled the 2022
Annual Meeting for February 14, 2023 at Sonesta Gwinnett Place Atlanta, located
at 1775 Pleasant Hill Road, Duluth, Georgia 30096, at 10:00 a.m. local time. The
Company believes that once the 2022 Annual Meeting is held, the Company will
regain compliance with Section 704 of the NYSE American Company Guide.
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Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Forward-looking
statements are subject to known and unknown risks and uncertainties, many of
which are beyond our control. We caution you that the forward-looking statements
presented herein are not a guarantee of future events, and that actual events
and results may differ materially from those made in or suggested by the
forward-looking statements contained herein.
Forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "plan," "will," "expect," "intend,"
"estimate," "anticipate," "believe" or "continue" or the negative thereof or
variations thereon or similar terminology. Forward-looking statements contained
herein include, without limitation, statements regarding the timing of the 2022
Annual Meeting and related expectations and assumptions.
A number of important factors could cause actual events and results to differ
materially from those contained in or implied by the forward-looking statements,
including those factors discussed in our Annual Report on Form 10-K filed on
February 22, 2022 and our Quarterly Report on Form 10-Q filed on November 22,
2022. Any forward-looking statements included herein are made only as of the
date hereof, and we do not undertake any obligation to update or revise such
statements to reflect any changes in expectations, or any changes in events or
circumstances on which those statements are based, except as required by law.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1 Press Release dated January 6, 2022.
104 Cover Page Interactive Data File (embedded within Inline XBRL
document)
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