10-Q

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 March 31, 2026

☐ 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:

N.A.

Securities registered under Section 12(g) of the Exchange Act: Common Stock, no par value (OTCQB: RHEP); Series A Redeemable Preferred Stock, no par value (OTCQB:RHEPA), Series D Redeemable Preferred Stock, no par value (OTCQB:RHEPZ)

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 May 13, 2026 the registrant had 3,924,667 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 March 31, 2026 and December 31, 2025	3
	Consolidated Statements of Operations and Comprehensive Earnings for the three months ended March 31, 2026 and 2025	4
	Consolidated Statements of Stockholders' (Deficit) for the three months ended March 31, 2026 and 2025	5
	Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025	6
	Notes to Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
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	38
Item 3.	Defaults upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	38

Signatures		41

Part I. Financial Information

Item 1. Financial Statements

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in 000's)


	March 31, 2026 (Unaudited)			December 31, 2025
ASSETS
Cash	$	1,058		$	3,013
Restricted cash		1,508			1,631
Accounts receivable, net of allowances of $933 and $727		10,057			8,025
Inventory		1,625			1,354
Notes receivable		624			644
Prepaid expenses and other		1,355			1,623
Total current assets		16,227			16,290
Property and equipment, net		35,445			35,805
Assets held for sale, net		4,229			4,207
Restricted cash		1,509			1,420
Intangible assets		4,640			4,660
Other assets		3,648			3,842
Goodwill		1,585			1,585
Total assets	$	67,283		$	67,809
LIABILITIES AND EQUITY (DEFICIT)
Accounts payable	$	7,712		$	6,986
Accrued expenses		8,583			7,888
Other liabilities		892			867
Debt related to assets held for sale, net		2,935			3,001
Current portion of long term debt		5,140			5,414
Total current liabilities		25,262			24,156
Long-term debt, net - less current maturities		34,546			34,738
Operating lease obligation		2,163			2,325
Other liabilities		1,583			1,550
Total liabilities		63,554			62,769
Preferred stock, Series D, no par values, 1,420 shares authorized; 1,405 shares issued and outstanding at March 31, 2026 and December 31, 2025.		4,691			4,691
Stockholders' equity:
Common stock and additional paid-in capital, no par value; 55,000 shares authorized; 3,946 issued and 3,935 outstanding at March 31, 2026 and December 31, 2025.		67,392			67,296
Preferred stock, no par value; 5,000 shares authorized (including amounts authorized for Series A, Series B and Series D); shares issued and outstanding designated separately
Preferred stock, Series A, no par value; 559 shares authorized, issued and outstanding at March 31, 2026 and December 31, 2025, with a redemption amount $426 at March 31, 2026 and December 31, 2025		426			426
Preferred stock, Series B, no par value; 2,812 shares authorized; 1,711 and 1,741 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively, with a redemption amount $14,196 and $14,382 at March 31, 2026 and December 31, 2025, respectively		14,132			14,382
Accumulated deficit		(82,934	)		(81,777	)
Accumulated other comprehensive earnings		22			22
Total stockholders' equity (deficit)		(962	)		349
Total liabilities, Series D preferred stock and stockholders' equity (deficit)	$	67,283		$	67,809

See accompanying notes to unaudited consolidated financial statements.

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS

(Amounts in 000's except per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2026			2025
Revenues:
Patient care revenues	$	12,715		$	5,642
Rental revenues		860			1,548
Pharmacy revenues		7,587			—
Total revenues		21,162			7,190
Expenses:
Cost of goods sold		4,492			—
Patient care expense		9,715			4,401
Facility rent expense		234			207
Depreciation and amortization		722			402
General and administrative expense		6,519			2,231
Loss on lease termination		—			303
Credit loss expense		182			70
Gain on operations transfer		—			(106	)
Total expenses		21,864			7,508
Loss from operations		(702	)		(318	)
Other expense:
Interest expense, net		522			653
Other (income) expense, net		(3	)		291
Total other expense, net		519			944
Net loss		(1,221	)		(1,262	)
Preferred stock dividends		—			(603	)
Deemed contribution related to Preferred Series B purchases		64			—
Net loss attributable to Regional Health Properties, Inc. common stockholders	$	(1,157	)	$	(1,865	)
Net loss per share of common stock attributable to Regional Health Properties, Inc.
Basic and Diluted	$	(0.29	)	$	(0.94	)
Weighted average shares of common stock outstanding:
Basic and Diluted		3,935			1,993

See accompanying notes to unaudited consolidated financial statements.

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(Amounts in 000's)

(Unaudited)


	Outstanding
	Shares of Common Stock		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			Accumulated other comprehensive earnings		Total
Balance, December 31, 2025		3,935		560		1,741			(11	)	$	67,296	$	426	$	14,382		$	(81,777	)	$	22	$	349
Repurchase of Preferred B Shares		—		—		(30	)		—			—		—		(250	)		64			—		(186	)
Stock-based compensation		—		—		—			—			96		—		—			—			—		96
Net loss		—		—		—			—			—		—		—			(1,221	)		—		(1,221	)
Balances, March 31, 2026		3,935		560		1,711			(11	)	$	67,392	$	426	$	14,132		$	(82,934	)	$	22	$	(962	)


	Outstanding
	Shares of Common Stock		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			Accumulated other comprehensive earnings		Total
Balance, December 31, 2024		1,879		560		2,252		(11	)	$	63,173	$	426	$	18,602	$	(85,120	)		—	$	(2,919	)
Stock-based compensation		—		—		—		—			22		—		—		—			—		22
Common stock issued in connection with Preferred Stock Series B dividends		250		—		—		—			603		—		—		(603	)		—		—
Net loss		—		—		—		—			—		—		—		(1,262	)		—		(1,262	)
Balances, March 31, 2025		2,129		560		2,252		(11	)	$	63,798	$	426	$	18,602	$	(86,985	)	$	—	$	(4,159	)

See accompanying notes to unaudited consolidated financial statements.

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in 000's)

(Unaudited)


	Three Months Ended March 31,
	2026			2025
Cash flows from operating activities:
Net loss	$	(1,221	)	$	(1,262	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		722			402
Stock-based compensation expense		96			22
Rent expense (less than) in excess of cash paid		(8	)		(13	)
Rent revenue less than (in excess) of cash received		76			(190	)
Amortization of deferred financing costs, debt discounts and premiums		17			25
Loss on lease termination		—			303
Gain on operations transfer		—			(106	)
Credit loss expense		182			70
Changes in operating assets and liabilities:
Accounts receivable		(2,214	)		(449	)
Prepaid expenses and other assets		288			223
Inventory		(271	)		—
Accounts payable and accrued expenses		1,421			1,424
Other liabilities		22			(213	)
Net cash (used in) provided by operating activities		(890	)		236
Cash flows from investing activities:
Purchase of property and equipment		(364	)		(65	)
Net cash used in investing activities		(364	)		(65	)
Cash flows from financing activities:
Payment of senior debt		(377	)		(409	)
Payment of other debt		(172	)		(178	)
Repurchase of Preferred B Shares		(186	)		—
Net cash used in financing activities		(735	)		(587	)
Net change in cash and restricted cash		(1,989	)		(416	)
Cash and restricted cash, beginning		6,064			3,472
Cash and restricted cash, ending	$	4,075		$	3,056

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in 000's)

(Unaudited)


	For the Three Months Ended March 31,
	2026		2025
Supplemental disclosure of cash flow information:
Cash interest paid		562	$	646
Vendor-financed insurance		—		14
Gain on operations transfer		—		106
Preferred stock dividends paid in common stock		—		603

See accompanying notes to unaudited consolidated financial statements.

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2026

NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Regional Health Properties, Inc. (the "Company") 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 healthcare operating model that combines healthcare real estate ownership with the direct operation of healthcare facilities and related healthcare services.

Through its subsidiaries, the Company owns and operates 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. In addition to operating healthcare facilities, the Company owns healthcare real estate that is leased to third-party operators pursuant to triple-net lease arrangements.

Since August 14, 2025, as part of the merger with SunLink Health Systems, the Company also acquired a pharmacy business located in Crowley, Louisiana that provides retail pharmacy services, institutional pharmacy services and durable medical equipment. The pharmacy business expands the Company’s participation across the care continuum and provides additional operating capabilities that complement its healthcare facility operations.

The Company currently operates across six states, with the majority of its facilities located in the Southeastern United States. The Company has three reportable segments: (i) Healthcare Services, which consists of the operation of skilled nursing and senior housing communities; (ii) Pharmacy Services, which consists of retail and institutional pharmacy services and durable medical equipment; and (iii) Real Estate, which consists of the leasing and subleasing of healthcare properties to third-party tenants. These segments reflect the Company’s evolution from a healthcare landlord into a more diversified owner-operator with both real estate and operating capabilities.

As of March 31, 2026, the Company’s common stock, Series A Redeemable Preferred Stock, 12.5% Series B Cumulative Redeemable Preferred Shares, and Series D 8% Cumulative Convertible Redeemable Participating Preferred Shares were quoted on the OTCQB under the symbols “RHEP,” “RHEPA,” “RHEPB,” and “RHEPZ,” respectively.

Basis of Presentation

The accompanying condensed consolidated financial statements ("consolidated financial statements") are prepared in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP") in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"). The accompanying condensed consolidated financial statements are unaudited and should be read in conjunction with the 2025 audited consolidated financial statements and notes thereto, which are included in the 2025 Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on April 2, 2026.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported results of operations during the reporting period. Significant estimates include patient care revenues, rent revenues, allowance for doubtful accounts and credit losses, contractual allowances for Medicaid, Medicare, and managed care reimbursements, deferred tax valuation allowance, valuation of goodwill and other long-lived assets, and cash flow projections. Actual results could differ materially from those estimates.

Revenue Recognition and Allowance for Credit Losses

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, and ASC Topic 842, Leases, as applicable to the nature of the underlying revenue-generating activity. Revenue is recognized in an amount that reflects the consideration the Company expects to receive in exchange for goods or services transferred to customers or, in the case of lease arrangements, in accordance with the terms of the applicable lease agreements. The Company’s revenues are derived primarily from (i) patient care and other healthcare services provided through its Healthcare Services segment, (ii) pharmacy goods and services and durable medical equipment provided through its Pharmacy Services segment, and (iii) rental income from healthcare properties leased to third-party operators through its Real Estate segment. The Company evaluates the collectability of receivables and records allowances for credit losses and other valuation adjustments in accordance with ASC Topic 326, Financial Instruments—Credit Losses.

Patient Care Revenue. Revenue from the Healthcare Services segment is derived from services rendered to residents and patients at the Company’s skilled nursing and senior housing communities. The Company receives payment for these services from several sources, including: (i) the federal government under the Medicare program administered by the Centers for Medicare & Medicaid Services (“CMS”), (ii) state governments under their respective Medicaid and similar programs, (iii) commercial insurers and managed care organizations, and (iv) private pay residents and other individual patients. The transaction price is based on established billing rates, reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients, and other implicit price concessions. The Company recognizes revenue in the amount it expects to be entitled to receive in exchange for the services provided, including variable consideration for estimated retroactive reimbursement adjustments, if any. Performance obligations are satisfied over time as services are rendered to residents and patients. Amounts assessed as uncollectible from residents and patients are generally recorded as implicit price concessions and reflected as a direct reduction of patient care revenue.

Pharmacy Services Revenue. Revenue from the Pharmacy Services segment is derived primarily from the sale of pharmacy products and the provision of pharmacy-related services, including retail pharmacy services, institutional pharmacy services, and durable medical equipment. Revenue is recognized when control of the promised goods or services is transferred to the customer, generally on the date the applicable goods are dispensed or delivered and services are provided. Each prescription claim or sale represents a separate performance obligation. Significant portions of Pharmacy Services revenue are reimbursed by the federal Medicare Part D program and, to a lesser extent, state Medicaid programs and other third-party insurance payors. The Company records Pharmacy Services revenue at amounts billable to patients or payors, adjusted at the time of revenue recognition for estimates of variable consideration arising from anticipated differences between billed charges and amounts expected to be reimbursed. Accordingly, Pharmacy Services revenue and related receivables are reported at the net amount the Company expects to ultimately realize from patients, governmental programs, and other third-party payors.

Rental Revenue. Revenue from the Real Estate segment is recognized in accordance with ASC Topic 842, Leases. The Company’s triple-net leases generally provide for fixed rental payments and may include periodic and determinable increases in rent. Rental revenue is recognized on a straight-line basis over the non-cancelable lease term when collectability of substantially all lease payments is probable. The recognition of rental income on a straight-line basis may result in revenues recognized in advance of contractual cash receipts, creating straight-line rent receivables that are included in other assets on the consolidated balance sheets. If collectability of lease payments is no longer considered probable, the Company ceases recognition of rental income on a straight-line basis, limits future rental revenue recognition to cash received, and writes off or reserves against any existing straight-line rent receivables or other related balances, as appropriate.

Receivables and Allowance for Credit Losses. The Company measures financial assets carried at amortized cost, including trade accounts receivable, tenant receivables, straight-line rent receivables, and certain other financing-related receivables, at the net amount expected to be collected in accordance with ASC Topics 326 and 842, accordingly.

In estimating expected credit losses, the Company evaluates relevant available information, including historical collection experience, the age of receivables, current collection trends, the financial condition and credit quality of patients, customers, tenants, and payors, the nature and level of any collateral or guarantees, and current and reasonable and supportable forecasts of future economic conditions. Expected credit losses are measured over the contractual life of the asset, adjusted for expected prepayments when appropriate.

For patient care receivables in the Healthcare Services segment, the Company considers the payer mix, the aging of receivables, historical collections, and expected reimbursements from Medicare, Medicaid, managed care, and private-pay sources. Amounts due from residents and patients that are not expected to be collected are generally treated as implicit price concessions and recorded as reductions of patient care revenue. To the extent a receivable is established and collection subsequently becomes not probable due to a change in circumstances, the Company records an allowance for credit losses or bad debt expense, as appropriate.

For Pharmacy Services receivables, the Company evaluates concession allowances and expected credit losses based on historical collection trends, customer and payor mix, the age and nature of receivables, and current and expected future economic conditions. Pharmacy accounts receivable are presented net of estimated variable consideration and expected credit losses, such that the reported balance reflects the amount expected to be ultimately collected.

For Real Estate receivables, including straight-line rent receivables and working capital or other tenant-related receivables, the Company assesses collectability based on the tenant’s payment history, financial condition, the strength of any guarantors, the value of underlying collateral, lease-level operating performance, and broader economic conditions. If facts and circumstances indicate that amounts due may not be collectible, the Company records an allowance for credit losses or, if collectability of lease payments is no longer probable, adjusts rental revenue recognition prospectively to a cash basis.

Changes in estimates regarding variable consideration, contractual adjustments, implicit price concessions, or expected credit losses are recognized in the period in which the change in estimate becomes known.

Activity in the allowance for credit losses in the Pharmacy segment for the periods presented included the following:


Pharmacy
(Amounts in 000’s)
December 31, 2025 balance	$	255
Concession allowances expense		66
Write offs		(18	)
March 31, 2026 balance	$	303

Activity in the allowance for credit losses in the Real Estate segment for the periods presented included the following:


Real Estate
(Amounts in 000’s)
December 31, 2025 balance	$	71
Credit loss expense		21
Write offs		(21	)
March 31, 2026 balance	$	71

Activity in the allowance for credit losses in the Healthcare segment for periods presented included the following:


Healthcare
(Amounts in 000’s)
December 31, 2025 balance	$	401
Credit loss expense		161
Write offs		(3	)
March 31, 2026 balance	$	559

The following table presents the Company's Accounts receivable, net of allowance for the periods presented:


(Amounts in 000’s)	March 31, 2026			December 31, 2025
Gross receivables
Pharmacy Services		3,513			3,024
Real Estate Services		802			679
Healthcare Services		6,675			5,049
Subtotal		10,990			8,752
Allowance
Pharmacy Services		(303	)		(255	)
Real Estate Services		(71	)		(71	)
Healthcare Services		(559	)		(401	)
Subtotal		(933	)		(727	)
Accounts receivable, net of allowance	$	10,057		$	8,025

Inventory

As of March 31, 2026 and December 31, 2025, the Company had approximately $1.6 million and $1.4 million, respectively, in inventory of the Pharmacy Services segment. Inventory consists of pharmacy supplies, which are stated at the lower of cost (standard cost method), or net realizable value. Use of this method does not result in a material difference from the methods required by GAAP.

Prepaid Expenses and Other

As of March 31, 2026 and December 31, 2025, the Company had approximately $1.4 million and $1.6 million, respectively, in prepaid expenses and other, which primarily relate to insurance for the facilities we operate, directors’ and officers’ insurance, and mortgage insurance premiums

Notes Receivable

Notes receivable are initially recorded when accounts receivable are transferred into a promissory note and are recorded as an alternative to accounts receivable to memorialize an unqualified promise to pay a specific sum, typically with interest, in accordance with a defined payment schedule. The Company’s payment terms with customers on promissory notes can vary based on several factors and the circumstances of each promissory note, however typically promissory notes mature over a 1 to 3 year period. Similar to accounts receivable, each reporting period the Company evaluates the collectability of outstanding notes receivable balances. We evaluate the collectability of our notes receivable based on a combination of credit quality indicators, including, but not limited to payment status, financial strength of the customer, and historical write-offs. We may establish reserves, accept modified payment terms, or book direct write offs for any estimated credit loss with generally a corresponding charge to credit loss expense in our Consolidated Statement of Operations and Comprehensive Earnings. Subsequent changes in our estimate of credit losses may result in a corresponding increase or decrease to the credit loss expense in our Consolidated Statement of Operations and Comprehensive Earnings.

Assets Held for Sale and Discontinued Operations

The Company may decide to sell properties that are held for use. The Company records these properties as assets held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. Assets classified as held for sale are reported at the lower of their carrying value or their fair value, less estimated costs to sell. When the carrying value exceeds the fair value, less estimated costs to sell, an impairment expense is recognized. The Company estimates fair value, less estimated closing costs, based on similar real estate sales transactions. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 and 3 inputs. Level 2 inputs are quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. See Note 5 – Assets Held for Sale for additional details on assets held for sale as of March 31, 2026 and December 31, 2025. Any debt related to assets held for sale or sold during the period are classified as debt related to assets held for sale for the current and prior periods presented in the accompanying consolidated financial statements.

Assets held for sale are presented as discontinued operations in all periods presented if the disposition represents a strategic shift that has, or will have, a major effect on the Company's financial position or results of operations. This includes the net gain (or loss) upon disposal of property held for sale, the property's operating results, depreciation and interest expense.

Accounts Payable

The following table presents the Company's Accounts payable for the periods presented:


(Amounts in 000’s)	March 31, 2026		December 31, 2025
Accounts payable
Pharmacy Services		1,283	$	956
Real Estate Services		710		615
Healthcare Services		5,719		5,415
Total Accounts payable	$	7,712	$	6,986

Other Liabilities

As of March 31, 2026 and December 31, 2025, the Company had approximately $0.9 million and $0.9 million, respectively in short-term other liabilities, which mainly represent short-term operating lease obligations.

As of March 31, 2026 and December 31, 2025, the Company had approximately $1.6 million and $1.6 million, respectively in long-term other liabilities, consisting of security lease deposits and sublease improvement funds.

Leases and Leasehold Improvements

The Company leases certain facilities and equipment in the normal course of business. At the inception of each lease, the Company performs an evaluation to determine whether the lease should be classified as an operating lease or finance lease. As of March 31, 2026, the Company's leased facility is accounted for as an operating lease. For operating leases that contain scheduled rent increases, the Company records rent expense on a straight-line basis over the term of the lease. Leasehold improvements are amortized over the shorter of the useful life of the asset or the lease term.

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.

Insurance

The Company maintains insurance for professional and general liability claims for its Healthcare Services segment and Pharmacy segments and maintains coverage amounts that are required by its mortgage lenders. The Company elects to maintain a high deductible policy for working compensation. In addition, the Company maintains certain other insurance programs, including commercial general liability, property, casualty, directors’ and officers’ liability, crime, and employment practices liability.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the respective period. Diluted earnings per share is similar to basic net loss per share except that the net loss is adjusted by the impact of the weighted-average number of shares of common stock outstanding including potentially dilutive securities (such as options, warrants and non-vested common stock) when such securities are not anti-dilutive. Potentially dilutive securities from options, warrants and unvested restricted shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all options and warrants with exercise prices exceeding the average market value are used to repurchase common stock at market value. The incremental shares remaining after the proceeds are exhausted represent the potentially dilutive effect of the securities.

For the three months ended March 31, 2026 and 2025, diluted net loss per share attributable to common stockholders is the same as basic net loss per share since the effect of potentially dilutive securities is anti-dilutive given the net loss position of the

Company. Securities outstanding that were excluded from the computation, because they would have been anti-dilutive were as follows:



(Share amounts in 000’s)	March 31, 2026		March 31, 2025
Restricted stock units - employee		100		—
Stock options - employee		100		48
Stock options - non employee		18		—
Warrants - employee		—		15
Total anti-dilutive securities		218		63

For further information regarding the Company's Equity Plans, see Note 11 - Stock Based Compensation.

New Accounting Pronouncements Issued But Not Yet Effective

In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), which requires disclosure of incremental income statement expense information on an annual and interim basis, primarily through enhanced disclosures of specified costs and expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statement disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), which aims to: (i) specify form and content choices for interim financial statements and accompanying notes; (ii) add a comprehensive list of required disclosures from numerous Codification Topics to Topic 270; and (iii) introduce a disclosure principle requiring events since the end of the previous annual reporting period to be disclosed if they materially affect the entity. ASU 2025-11 is effective for interim periods in fiscal years beginning after December 14, 2027, with early adoption permitted. The Company is currently evaluating the impact that ASU 2025-11 will have on its consolidated financial statement disclosures.

No other new accounting pronouncement issued or effective has had, or is expected to have, a material impact on the Company's financial statements.

NOTE 2. LIQUIDITY

Overview

The Company’s liquidity profile is influenced by the operating performance and working capital needs of its Healthcare Services and Pharmacy Services segments, as well as rent collections, tenant performance and refinancing activity within its Real Estate segment. In 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. As of March 31, 2026, the Company held approximately $1.1 million in unrestricted cash and $10.1 million in net accounts receivable, primarily comprised of Healthcare Services and Pharmacy Services patient accounts receivable.

The Company also experienced changes in its listing status in 2025. Until February 5, 2025, the Company’s common stock and Series A Preferred Stock were listed on the NYSE American under the ticker symbols “RHE” and “RHE-PA,” respectively. Trading was suspended on that date due to noncompliance with listing standards. On June 11, 2025, the NYSE American formally delisted both securities. They now trade on the OTCQB under the symbols “RHEP” and “RHEPA,” respectively. Trading on the OTC Markets presents challenges, including reduced liquidity, wider bid-ask spreads, limited analyst coverage and greater regulatory burdens on broker-dealers, which may further discourage trading activity. These limitations could depress trading prices and negatively impact the Company’s ability to raise capital through equity or debt offerings.

Short-term Liquidity

Management expects that the Company’s short-term liquidity requirements over the twelve months following the issuance of these unaudited condensed consolidated financial statements 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. Regional has committed to a plan to sell an additional asset classified as held for sale to generate additional liquidity in support of operations and potential investment opportunities. See Note 5 – Assets Held for Sale.

During the quarter ended March 31, 2026, the Company used $0.9 million of cash in operating activities, largely due to working capital needs and timing differences in accounts payable and accrued expense payments. Management continues to focus on collections of aged patient receivables and on stabilizing the operating performance of the Company’s Healthcare Services and Pharmacy Services segments. 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.

The Company’s future short-term liquidity will also depend on the financial performance of the Company’s leased facilities and the facilities managed by CJM Advisors, including Georgetown, Glenvue, Mountain Trace, Southland and Sumter, as well as the performance of the Pharmacy Services business. In addition, the Real Estate segment consists of leases to one operator. Aspire Regional Partners, through a group of affiliated tenants, leases five facilities. The Company therefore depends on tenants affiliated with Aspire for all of its rent revenues, and there can be no assurance that such tenants will have sufficient assets, income or access to financing to enable them to make rental payments or otherwise satisfy their lease obligations.

Long-term Liquidity

Management expects that the Company’s long-term liquidity needs will be funded primarily from cash generated in the ordinary course of business and, as needed, from the sale of securities. The Company’s ability to generate cash from operations on a long-term basis will depend on the operating performance of its Healthcare Services, Pharmacy Services and Real Estate segments, including occupancy, reimbursement levels, labor costs, pharmacy reimbursement collections, rent collections and overall operating margins.

The Company’s ability to raise capital through the sale of securities will depend on market conditions, investor interest, the trading price and liquidity of its securities and its overall financial performance. Because the Company’s securities trade on the OTCQB rather than a national securities exchange, access to equity capital may be more limited than that of issuers listed on a national securities exchange. Accordingly, there can be no assurance that long-term liquidity from the sale of securities will be available on acceptable terms, if at all.

Debt

As of March 31, 2026, the Company had $42.6 million in indebtedness, net of $0.8 million deferred financing costs and unamortized discounts. The Company anticipates net principal repayments of approximately $8.1 million during the next twelve-month period, approximately $4.1 million of routine debt service amortization, $0.2 million payment of bond debt, and $3.8 million of Southland's maturing debt.

Debt Covenant Compliance

At March 31, 2026, the Company was in compliance with the various financial and administrative covenants related to all of the Company's credit facilities, except with respect to the Southland-related USDA and SBA notes that are subject to the forbearance arrangements. Management continues to monitor compliance closely and evaluate refinancing and other liquidity alternatives.

Evaluation of the Company's Ability to Continue as a Going Concern

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 performing this evaluation, management considered the Company’s current financial condition and liquidity sources, including unrestricted cash, forecasted future cash flows, anticipated collections of receivables, expected refinancing activity,

expected debt borrowings, anticipated proceeds from assets held for sale and the Company’s obligations due within the next twelve months, together with recurring operating expenses. Based on this evaluation, management concluded that it is probable that the Company will be able to meet its obligations arising within one year after the date these consolidated financial statements are issued.

NOTE 3. CASH AND RESTRICTED CASH

The following presents the Company's cash and restricted cash:


(Amounts in 000’s)	March 31, 2026		December 31, 2025
Cash	$	1,058	$	3,013
Restricted cash:
Cash collateral		71		61
HUD and other replacement reserves		1,927		1,463
Escrow deposits		702		1,210
Restricted investments for debt obligations		317		317
Total restricted cash		3,017		3,051
Total cash and restricted cash	$	4,075	$	6,064

Cash collateral—In securing mortgage financing from certain lending institutions, the Company and certain of its wholly-owned subsidiaries are required to deposit cash to be held as collateral in accordance with the terms of such loan agreements.

HUD and other replacement reserves—The regulatory agreements entered into in connection with the financing secured through HUD require monthly escrow deposits for replacement and improvement of the HUD project assets.

Escrow deposits—In connection with financing secured through the Company's lenders, several wholly-owned subsidiaries of the Company are required to make monthly escrow deposits for taxes and insurance.

Restricted cash for debt obligations—In compliance with certain financing and insurance agreements, the Company and certain wholly-owned subsidiaries of the Company are required to deposit cash held as collateral by the lender or in escrow with certain designated financial institutions.

NOTE 4. PROPERTY AND EQUIPMENT

The following table sets forth the Company's property and equipment:


(Amounts in 000’s)	Estimated Useful Lives (Years)	March 31, 2026			December 31, 2025
Buildings and improvements	5-40	$	51,090		$	51,069
Equipment and computer related	2-10		4,577			4,354
Land	-		2,316			2,330
Property and equipment			57,983			57,753
Less: accumulated depreciation			(22,538	)		(21,948	)
Property and equipment, net		$	35,445		$	35,805

The following table summarizes total depreciation and amortization expense three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,
(Amounts in 000’s)	2026		2025
Depreciation	$	614	$	310
Amortization		108		92
Total depreciation and amortization expense	$	722	$	402

NOTE 5. ASSETS HELD FOR SALE

The following table sets forth the Company's assets held for sale by asset description:


(Amounts in 000's)	Lives (Years)	March 31, 2026			December 31, 2025
Buildings and improvements	5 - 40	$	5,240		$	5,218
Equipment and computer related	2 - 10		459			459
Land	—		100			100
			5,799			5,777
Less: accumulated depreciation and amortization			(1,570	)		(1,570	)
Assets held for sale, net		$	4,229		$	4,207

The following table sets for the Company's assets held for sale by facility:


(Amounts in 000's)	March 31, 2026		December 31, 2025
Meadowood		4,229		4,207
Assets held for sale, net	$	4,229	$	4,207

NOTE 6. INTANGIBLE ASSETS AND GOODWILL

Intangible assets and Goodwill consist of the following:


(Amounts in 000’s)	Bed licenses (included in property and equipment)1)			Bed Licenses - Separable (2)		Lease Rights			Pharmacy Intangibles			Total			Pharmacy Intangibles - Trade Name (2)		Goodwill (2)
Balances, December 31, 2025
Gross	$	11,796		$	2,471	$	176		$	1,430		$	15,873		$	740	$	1,585
Accumulated amortization		(4,880	)		—		(124	)		(33	)		(5,037	)		—		—
Net carrying amount	$	6,916		$	2,471	$	52		$	1,397		$	10,836		$	740	$	1,585

Balances, March 31, 2026
Gross	$	11,796		$	2,471	$	176		$	1,430		$	15,873		$	740	$	1,585
Accumulated amortization		(4,967	)		—		(129	)		(48	)		(5,144	)		—		—
Net carrying amount	$	6,829		$	2,471	$	47		$	1,382		$	10,729		$	740	$	1,585

(1)

Non-separable bed licenses are included in property and equipment as is the related accumulated amortization expense (see Note 4 – Property and Equipment).

(2)

The Company does not amortize indefinite-lived intangibles, which consist of separable bed licenses and goodwill.

The following table summarizes amortization expense for the three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,
(Amounts in 000’s)	2026		2025
Bed licenses	$	87	$	88
Lease rights		5		4
Pharmacy Intangibles		16		—
Total amortization expense	$	108	$	92

Expected amortization expense for the years ending December 31, for all definite-lived intangibles, for each of the next five years and thereafter is as follows:


(Amounts in 000’s)	Pharmacy Intangibles		Bed Licenses		Lease Rights
For the remaining nine months ending December 31, 2026	$	58	$	265	$	13
2027		77		352		18
2028		77		352		16
2029		77		352		—
2030		77		352		—
Thereafter		1,016		5,156		—
Total expected amortization expense	$	1,382	$	6,829	$	47

NOTE 7. LEASES

Operating Leases

As of March 31, 2026 and December 31, 2025, the Company leases one Skilled Nursing Facility ("SNF") in Covington, Ohio under a non-cancelable lease, which has rent escalation clauses and provisions for payments of real estate taxes, insurance, and maintenance costs. The remaining lease term for the Covington facility is approximately 2.6 years as of March 31, 2026. The Company subleases the Covington facility to a third party.

The Company subleases certain office space located in Atlanta, Georgia, which will expire on July 31, 2027.

The Pharmacy Segment business assets at the Merger included $593 thousand of Right of Use assets, consisting primarily of four non-cancellable property leases with expiration dates ranging from May 2026 to December 2030 and office equipment leases. As of March 31, 2026, the Company's total Right of Use asset balance was $2.8 million and is a part of the Company's Other assets balance of $3.6 million. As of December 31, 2025, the Company's total Right of Use asset balance was $2.9 million and is a part of the Company's Other assets balance of $3.8 million.

As of March 31, 2026, the Company is in compliance with all operating lease financial covenants.

Future Minimum Lease Payments

Future minimum lease payments for the twelve months ending December 31, for each of the next five years and thereafter is as follows:


(Amounts in 000’s)	Future rental payments		Accretion of lease liability (1)			Operating lease obligation
For the remaining nine months ending December 31, 2026	$	768	$	(112	)	$	656
2027		977		(100	)		877
2028		896		(47	)		849
2029		442		(6	)		436
2030		209		1			210
Thereafter		1		—			1
Total	$	3,293	$	(264	)	$	3,029

(1)

Weighted average discount rate 7.98%.

Facilities Leased or Subleased by the Company

On February 1, 2026, the Company terminated the lease with C-Ross for the Autumn Breeze facility. We have subsequently entered into a management agreement with CJM Advisors to provide day-to-day management services.

As of March 31, 2026, five facilities (four owned by Regional and one leased to Regional) 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. As of March 31, 2026, all facilities are operated by Aspire Regional Partners.

Future Minimum Lease Receivables

Future minimum lease receivables for the twelve months ending December 31, for each of the next five years and thereafter is as follows:


(Amounts in 000’s)	Lease Receivables
For the remaining nine months ending December 31, 2026	$	2,358
2027		3,167
2028		2,924
2029		-
2030		-
Thereafter		-
Total	$	8,449

For further details regarding the Company's leased and subleased facilities to third-party operators, including a full summary of the Company's leases to third-parties and which comprise the future minimum lease receivables of the Company, see Note 8 - Leases and Leasing Transactions in Part I, Item 1, Financial Statements and Supplementary Data, included in the Annual Report.

NOTE 8. ACCRUED EXPENSES

Accrued expenses consist of the following:


(Amounts in 000’s)	March 31, 2026		December 31, 2025
Accrued employee benefits and payroll-related	$	2,107	$	1,637
Real estate and other taxes (1)		5,469		5,032
Accrued interest		147		189
Other accrued expenses (2)		860		1,030
Total accrued expenses	$	8,583	$	7,888

(1)

As of March 31, 2026 and December 31, 2025 includes approximately $0.7 million of bed taxes in arrears related to the Wellington Transition in 2020.

(2)

As of March 31, 2026 and December 31, 2025, the remaining escheatment liabilities for discontinued operations are $0.3 million and are included in other accrued expenses.

NOTE 9. NOTES PAYABLE AND OTHER DEBT

Entry into Forbearance Agreements

On February 27, 2026, the Company and Erin Property Holdings, LLC (the “Borrower”) entered into two Forbearance Agreements with effective dates of February 1, 2026 (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 $5,000,000 due on July 27, 2036 (the “USDA Note”) and the principal amount of $800,000 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.

Pursuant to the Forbearance Agreements, (a) the Borrower agreed to make payments of $21,047.76 as a one-time forbearance payment and $6,764.21 for the 2026 USDA annual renewal fee toward the SBA Note no later than February 27, 2026, 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 (“Forbearance Period”) of February 1, 2027.

During the Forbearance 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.

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.

See Note 10 – Notes Payable and Other Debt in Part II, Item 8, Financial Statements and Supplementary Data, included in the Annual Report for a detailed description of all the Company's debt facilities.

Notes payable and other debt consists of the following:


(Amounts in 000’s)	March 31, 2026			December 31, 2025
Senior debt—guaranteed by HUD	$	27,060		$	27,281
Senior debt—guaranteed by USDA (1)		6,476			6,575
Senior debt—guaranteed by SBA(2)		502			509
Senior debt—bonds		5,811			5,811
Senior debt—other mortgage indebtedness		2,934			2,979
Other debt		632			805
Subtotal		43,415			43,960
Deferred financing costs		(695	)		(706	)
Unamortized discount on bonds		(99	)		(101	)
Notes payable and other debt	$	42,621		$	43,153

(1)

U.S. Department of Agriculture (USDA)

(2)

U.S. Small Business Administration (SBA)

The following is a detailed listing of the debt facilities that comprise each of the above categories:


(Amounts in 000’s)
Facility	Lender	Maturity	Interest Rate (1)			March 31, 2026		December 31, 2025
Senior debt - guaranteed by HUD (2)
The Pavilion Care Center	Newpoint Capital	12/01/2039	Fixed	3.97	%	$	718	$	727
Hearth and Care of Greenfield	Newpoint Capital	8/01/2050	Fixed	3.97	%		1,814		1,825
Woodland Manor	Newpoint Capital	11/01/2052	Fixed	3.97	%		4,678		4,703
Glenvue	Newpoint Capital	10/01/2044	Fixed	3.75	%		6,550		6,611
Autumn Breeze	KeyBank	1/01/2045	Fixed	3.65	%		5,699		5,751
Georgetown	Newpoint Capital	10/01/2046	Fixed	2.98	%		2,898		2,923
Sumter Valley	KeyBank	1/01/2047	Fixed	3.70	%		4,703		4,741
Total						$	27,060	$	27,281
Senior debt - guaranteed by USDA (3)
Mountain Trace	Community B&T	12/24/2036	Prime + 1.75%	8.50	%		3,145		3,193
Southland	Cadence Bank, NA	07/27/2036	Prime + 1.50%	8.25	%		3,331		3,382
Total						$	6,476	$	6,575
Senior debt - guaranteed by SBA
Southland(4)	Cadence Bank, NA	07/27/2036	Prime + 2.25%	9.00	%		502		509
Total						$	502	$	509

(1)

Represents interest rates as of March 31, 2026 as adjusted for interest rate floor limitations, if applicable. The rates exclude amortization of deferred financing costs which are approximately 0.16% per annum.

(2)

For the seven SNF’s, the Company has term loans insured 100% by HUD with financial institutions. The loans are secured by, among other things, an assignment of all rents paid under any existing or future leases and rental agreements with respect to the underlying facility. The loans contain customary events of default, including fraud or material misrepresentations or material omission, the commencement of a forfeiture action or proceeding, failure to make required payments, and failure to perform or comply with certain agreements. Upon the occurrence of certain events of default, the lenders may, after receiving the prior written approval of HUD, terminate the loans and all amounts under the loans will become immediately due and payable. In connection with entering into loans, the facilities entered into a healthcare regulatory agreement and a promissory note, each containing customary terms and conditions.

(3)

For the two SNF’s, the Company has term loans with financial institutions, which are insured 70% to 80% by the USDA. The loans have an annual renewal fee for the USDA guarantee of 0.25% of the guaranteed portion. The loans have prepayment penalties of 1% through 2020, capped at 1% for the remainder of the first 10 years of the term and 0% thereafter.

(4)

For one SNF, commonly known as Southland, the Company has a term loan with a financial institution, which is insured 75% by the SBA.

         (Amounts in 000’s)

         Facility

         Lender

         Maturity

         Interest Rate (1)

         March 31, 2026

         December 31, 2025

         Senior debt - bonds

         Eaglewood Bonds Series A

         City of Springfield, Ohio

         5/01/2042

         Fixed

         7.65%

         $5,811

         $5,811

(1)

Represents cash interest rates as of March 31, 2026. The rates exclude amortization of deferred financing of approximately 0.10% per annum.

         (Amounts in 000’s)

         Facility

         Lender

         Maturity

         Interest Rate (1)

         March 31,
2026

         December 31,
2025

         Senior debt - other mortgage indebtedness

         Meadowood (2)

         Exchange Bank of Alabama

         10/01/2026

         Fixed

         4.50%

         $2,934

         $2,979

(1)

Represents cash interest rates as of March 31, 2026 as adjusted for interest rate floor limitations, if applicable. The rates exclude amortization of deferred financing costs of 0.34% per annum.

(2)

The Meadowood Credit Facility is secured by the Meadowood Facility and the assets of Coosa, which is guaranteed by Regional Health Properties, Inc.


(Amounts in 000’s)
Lender	Maturity	Interest Rate			March 31, 2026		December 31, 2025
Other debt
First Insurance Funding (1)	8/15/2026	Fixed	3.65	%	$	13	$	254
AFCO Insurance	8/9/2026	Fixed	9.50	%		—		34
Cavalier Senior Living	11/15/2026	Fixed	6.00	%		22		22
First Horizon Bank	2/24/2031	Fixed	7.25	%		102		—
Key Bank (2)	8/25/2030	Fixed	0.00	%		495		495
Total					$	632	$	805

(1)

Annual Insurance financing primarily for the Company's directors and officers insurance.

(2)

On December 30, 2022, Key Bank and the Company extended the maturity date from August 25, 2025 to August 25, 2030.

Debt Covenant Compliance

As of March 31, 2026, the Company had 17 credit related instruments outstanding that include various financial and administrative covenant requirements. Covenant requirements include, but are not limited to, fixed charge coverage ratios, debt service coverage ratios, minimum earnings before interest, taxes, depreciation, and amortization or earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs, and current ratios. Certain financial covenant requirements are based on consolidated financial measurements whereas others are based on measurements at the subsidiary level (i.e., facility, multiple facilities or a combination of subsidiaries). The subsidiary level requirements are as follows: (i) financial covenants measured against subsidiaries of the Company; and (ii) financial covenants measured against third-party operator performance.

Some covenants are based on annual financial metric measurements, whereas others are based on monthly and quarterly financial metric measurements. The Company routinely tracks and monitors its compliance with its covenant requirements.

As of March 31, 2026, the Company was in compliance with the various financial and administrative covenants related to all of the Company’s credit facilities, except with respect to the Southland-related USDA and SBA notes that are subject to the forbearance arrangements.

Scheduled Maturities

The schedule below summarizes the scheduled gross maturities as of March 31, 2026 for each of the next five years and thereafter.


For the Twelve Months Ended December 31,	(Amounts in 000’s)
For the remaining nine months ending December 31, 2026	$	8,084
2027		1,353
2028		1,429
2029		1,506
2030		2,082
Thereafter		28,960
Subtotal	$	43,415
Less: unamortized discounts		(99	)
Less: deferred financing costs, net		(695	)
Total notes and other debt	$	42,621

NOTE 10. COMMON AND PREFERRED STOCK

Common Stock

As of March 31, 2026, the Company had 55,000,000 shares of Common Stock authorized and 3,945,557 shares issued and 3,934,667 shares outstanding. There were no dividends declared or paid on the common stock during the three months ended March 31, 2026 and 2025.

Preferred Stock

As of March 31, 2026, the Company had 5,000,000 shares of Preferred Stock authorized and 3,675,813 shares issued and outstanding.

Series A Preferred Stock

As of March 31, 2026, the Company had 559,263 shares of Series A Preferred Stock issued and outstanding. There were no dividends declared or paid on the Series A Preferred Stock for the three months ended March 31, 2026 and 2025.

Series B Preferred Stock

In January 2026, the Company purchased 30,232 shares of its Series B Preferred Stock for a cost of $184,677 under the Company's Stock Repurchase Plan authorized on November 25, 2025.

In January 2025, the board of directors of the Company declared a dividend to the holders of its Series B Preferred Stock, on a pro rata basis in proportion to the number of shares of Series B Preferred Stock held by such holders of 250,000 shares of the Company’s common stock, rounded down to the nearest whole share of Common Stock. The dividend was paid in February 2025 to holders of record of the Series B Preferred Stock as of the close of business on February 10, 2025 and 249,990 shares of the Company's common stock were issued. The Company is required to pay the dividend of Common Stock to such holders of Series B Preferred Stock pursuant to the terms of Regional’s Amended and Restated Articles of Incorporation, which governs the terms of the Series B Preferred Stock.

As of March 31, 2026, the Company had 1,710,941 shares of Series B Preferred Stock issued and outstanding. Except for the dividends declared in January 2025, no other dividends were declared or paid on the Series B Preferred Stock for the three months ended March 31, 2026.

Series D Preferred Stock

As of March 31, 2026, the Company had 1,405,609 shares of Series D Preferred Stock issued and outstanding. No dividends were declared or paid on the Series D Preferred Stock for the three months ended March 31, 2026.

See Note 12 – Common and Preferred Stock in Part II, Item 8, Financial Statements and Supplementary Data, included in the Annual Report for more information on our stock.

NOTE 11. STOCK BASED COMPENSATION

On January 5, 2026, the Company's shareholders approved the Regional Health Properties, Inc. Amended and Restated 2023 Omnibus Incentive Compensation Plan (the “A&R Plan”). The A&R Plan (i) increased the number shares of our common stock authorized for issuance under the A&R Plan by 550,000 shares, which increased the total number of authorized shares available for issuance under the A&R Plan to 775,000 and (ii) increased the number of share of our common stock that may be issued pursuant to incentive stock options under the A&R Plan to 775,000. All other terms of the 2023 Omnibus Incentive Compensation Plan remained the same.

Stock Incentive Plans

As of March 31, 2026, the number of securities remaining available for future issuance under the Company's A&R Plan is 408,000.

For the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation expense as follows:


	Three Months Ended March 31,
(Amounts in 000’s)	2026		2025
Employee compensation:
Restricted stock awards	$	51	$	22
Restricted stock units		13		—
Stock options		12		—
Total employee stock-based compensation expense	$	76	$	22
Non-employee compensation:
Board stock options	$	20	$	—
Total non-employee stock-based compensation expense	$	20	$	—
Total stock-based compensation expense	$	96	$	22

Restricted Stock Awards

The following table summarizes the Company's restricted stock awards ("RSAs") activity for the three months ended March 31, 2026:


	Number of Shares (000's)			Weighted Avg. Grant Date (per Share) Fair Value
Unvested, December 31, 2025		185		$	2.40
Vested		(13	)	$	3.61
Unvested, March 31, 2026		172		$	2.31

No RSAs were granted for the three months ended March 31, 2026. The remaining unvested shares at March 31, 2026 will vest over the next 1.3 years with $252 thousand in compensation expense recognized over this period.

Restricted Stock Units

The following table summarizes the Company's restricted stock units ("RSUs") activity for the three months ended March 31, 2026:


	Number of Shares (000's)		Weighted Avg. Grant Date (per Share) Fair Value
Unvested, December 31, 2025		—	$	—
Granted		100,000	$	1.30
Vested		—	$	—
Unvested, March 31, 2026		100,000	$	1.30

On January 16, 2026, a RSU award with respect to 100,000 shares of common stock was granted under the A&R Plan, which will vest in two equal annual installments on January 16, 2027 and January 16, 2028. The remaining unvested shares at March 31, 2026 will vest over the next 1.8 years with $116 thousand in compensation expense recognized over this period.

Common Stock Options

The following summarizes the Company's employee stock option activity for the three months ended March 31, 2026:


	Number of Shares (000's)		Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (000's)
Outstanding, December 31, 2025		—	$	—	$	—		—	$	—
Granted		118	$	1.30	$	1.13		—
Outstanding, March 31, 2026		118	$	1.30	$	1.13		9.8	$	—
Vested and exercisable, March 31, 2026		18	$	1.30	$	1.10		9.8	$	—
Unvested and unexercisable, March 31, 2026		100	$	1.30	$	1.13		9.8	$	—

For the three months ended March 31, 2026, stock option awards with respect to 118,000 shares of common stock were granted under the A&R Plan. For the three months ended March 31, 2025, no stock option awards were granted.

The remaining unvested shares at March 31, 2026 will vest over the next 1.8 years with $102 thousand in compensation expense recognized over this period.

The following summarizes the weighted average information on our stock option awards granted using the Black-Scholes option-pricing model inputs for the three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,
	2026			2025
Dividend yield	—%			—%
Expected volatility		124.00	%	—%
Risk-free interest rate		3.85	%	—%
Expected term (in years)		5.6			—

The following summary information reflects stock options outstanding, vested, and related details as of March 31, 2026:


	Stock Options Outstanding			Stock Options Exercisable
Exercise Price	Number of Shares (000's)	Weighted Average Remaining Contractual Term (in years)	Weighted Average Exercise Price	Number of Shares (000's)	Weighted Average Remaining Contractual Term (in years)	Weighted Average Exercise Price
$1.30	118.00	9.8	$1.30	18	9.8	$1.30

NOTE 12. COMMITMENTS AND CONTINGENCIES

Regulatory Matters

Laws and regulations governing federal Medicare and state Medicaid programs are complex and subject to interpretation. Compliance with such laws and regulations may be subject to future governmental review, audit, investigation and interpretation, as well as significant regulatory action, including fines, penalties and exclusion from certain governmental programs.

As of March 31, 2026, the Company’s facilities that are operated by the Company, leased or subleased to third-party operators, or otherwise managed by third parties were certified by the Centers for Medicare & Medicaid Services (“CMS”) and were operational. Because the Company operates through Healthcare Services, Pharmacy Services and Real Estate segments, regulatory exposure may arise directly from the Company’s operated businesses, indirectly through tenant and operator performance at leased facilities, or from legacy matters relating to prior periods of direct operations. Based on information currently available, the Company believes that it is in compliance in all material respects with applicable laws and regulations relating to its current operations, although there can be no assurance that governmental agencies will not reach different conclusions in the future.

Legal Matters

The Company is party to various legal actions and administrative proceedings and is subject to various claims arising in the ordinary course of business, including claims relating to prior direct facility operations, current operated facilities, employment matters, staffing requirements, commercial disputes and other business matters. The Company believes that many of these matters are defensible and intends to defend them vigorously unless settlement is determined to be in the best interests of the Company. However, there can be no assurance that the resolution of any such matters will not have a material adverse effect on the Company’s business, results of operations or financial condition.

In addition, the Company’s tenants and operators conduct business in a highly regulated industry and are subject to continuing state and federal scrutiny, supervision and control. Such scrutiny may include inquiries, investigations, examinations, audits, site visits and surveys, some of which are non-routine. The Company believes that governmental investigations and enforcement activity involving long-term care providers have increased, particularly in areas involving Medicare and Medicaid reimbursement, false claims, staffing requirements and quality-of-care matters. Adverse determinations in legal proceedings or governmental investigations involving the Company, its prior operations, or its tenants and operators could have a material adverse effect on the Company’s business, results of operations and financial condition.

Professional and General Liability Claims Covered by Insurance

As of March 31, 2026, the Company was a defendant in two professional and general liability actions arising from care provided to former patients at the Company’s facilities. The plaintiff alleges negligence, including alleged failures to provide adequate and competent staffing, and seeks unspecified actual, compensatory and punitive damages for alleged injuries, pain and suffering, mental anguish and malnutrition. The Company believes this matter is covered by insurance, except that any punitive damages that may be awarded would be excluded from coverage.

NOTE 13. SEGMENT RESULTS

The chief operating decision maker (“CODM”) is the President and Chief Executive Officer. The Company represents three reportable segments, based on how its CODM evaluates the business and allocates resources. The CODM assesses performance for the Company and decides how to allocate resources based on each segments Income (Loss) From Operations ("Operating Income"). The CODM uses Operating Income to evaluate the performance of each segment in deciding whether to reinvest profits into the segment. The CODM evaluates performance based on Operating Income, as noted in the table below. The Company reports segment information based on the "significant expense principle” defined in ASC 280, Segment Reporting along with other segment items, which is the difference between segment revenue and less segment expenses disclosed under the significant expense principle for each reported measure of segment profit or loss.

The Company has three primary reporting segments: (i) Real Estate Services, which consists of the leasing and subleasing of long-term care and senior living facilities to third-party tenants, (ii) Healthcare Services, which consists of the operation of the Autumn Breeze, Georgetown, Glenvue, Meadowood, Sumter, Southland, and Mountain Trace facilities and (iii) Pharmacy Service Segment, which consists of four operational areas, retail pharmacy products and services, institutional pharmacy services, which consists of specialty and non-specialty pharmaceutical and products to institutional clients or to patients in institutional settings, non-institutional pharmacy services consisting of the provision specialty and non-specialty pharmacy and biological products to clients or patients in non-institutional settings including private residential homes and durable medical equipment, consisting primarily of the sale and rental products for institutional clients or to patients and institutional settings and patient-administered home care.

The table below presents the results of operations for our reporting segments for the periods presented.


	Three Months Ended March 31,											Three Months Ended March 31,
	2026			2026		2026			2026			2025			2025			2025		2025
(Amounts in 000’s)	Real Estate Services			Healthcare Services		Pharmacy Services			Total			Real Estate Services			Healthcare Services			Pharmacy Services		Total
Revenues:
Patient care revenues	$	—		$	12,715	$	—		$	12,715		$	—		$	5,642		$	—	$	5,642
Rental revenues		846			—		14			860			1,548			—			—		1,548
Pharmacy revenues		—			—		7,587			7,587			—			—					—
Total revenues		846			12,715		7,601			21,162			1,548			5,642			—		7,190
Expenses:
Cost of goods sold		—			—		4,492			4,492			—			—			—		—
Patient care expense		27			9,688		—			9,715			—			4,401			—		4,401
Facility rent expense		—			148		86			234			149			58			—		207
Depreciation and amortization		319			98		305			722			324			78			—		402
General and administrative expense		1,609			1,964		2,946			6,519			1,021			1,210			—		2,231
Loss on lease termination		—			—		—			—			303			—			—		303
Credit loss expense		21			161		—			182			—			70			—		70
Gain on operations transfer		—			—		—			—			—			(106	)		—		(106	)
Total expenses		1,976			12,059		7,829			21,864			1,797			5,711			—		7,508
Income (loss) from operations	$	(1,130	)	$	656	$	(228	)	$	(702	)	$	(249	)	$	(69	)	$	—	$	(318	)

The CODM does not regularly review total assets for our reportable segments as total assets are not used to assess performance or allocate resources.

NOTE 14. SUBSEQUENT EVENTS

The Company has evaluated all subsequent events through the date the consolidated financial statements were issued and filed with the SEC. There were no material subsequent events in the quarter.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Quarterly Report and certain information incorporated herein by reference contain forward-looking statements and information within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This information includes assumptions made by, and information currently available to management, including statements regarding future economic performance and financial condition, liquidity and capital resources, and management's plans and objectives. In addition, certain statements included in this Quarterly Report, in the Company's future filings with the SEC, in press releases, and in oral and written statements made by us or with our approval, which are not statements of historical fact, are forward-looking statements.

Words such as "may," "could," "should," "would," "believe," "expect," "anticipate," "estimate," "intend," "seek," "plan," "project," "continue," "predict," "will," and other words or expressions of similar meaning are intended by us to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are based on the Company's current expectations about future events or results and information that is currently available to us, involve assumptions, risks, and uncertainties, and speak only as of the date on which such statements are made.

All forward-looking statements are subject to the risks and uncertainties inherent in predicting the future. The Company's actual results may differ materially from those projected, stated or implied in these forward-looking statements as a result of many factors, including the Company's critical accounting policies and risks and uncertainties related to, but not limited to, the operating results of the Company's tenants, the overall industry environment, the Company's financial condition, and the impact of the COVID-19 pandemic on the Company's business. These and other risks and uncertainties are described in more detail in the Annual Report and in Part II, Item 1A "Risk Factors" of this Quarterly Report, as well as other reports that the Company files with the SEC.

Forward-looking statements speak only as of the date they are made and should not be relied upon as representing the Company's views as of any subsequent date. The Company undertakes no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by applicable laws, and you are urged to review and consider disclosures that the Company makes in this Quarterly Report and other reports that the Company files with the SEC that discuss factors germane to the Company's business.

Overview

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 March 31, 2026 the Company had investments of approximately $60.0 million in healthcare real estate, operated or leased a portfolio consisting primarily of skilled nursing facilities and senior housing communities located in five states, and operates a pharmacy business located in Louisiana, which was acquired following the SunLink merger completed on August 14, 2025.

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.

The comparability of the Company’s results for the three months ended March 31, 2026 and 2025 is affected by the SunLink merger, which added the Pharmacy Services segment beginning on August 14, 2025. In addition, one facility that was included in the Real Estate segment in 2025 transitioned to the Healthcare Services segment on February 1, 2026. As a result,

year-over-year comparisons reflect not only changes in operating performance, but also a meaningful change in segment composition. These changes resulted in increased patient care revenues and patient care expenses in Healthcare Services, the addition of pharmacy revenues and related cost of goods sold in Pharmacy Services, and lower rental revenues in Real Estate because one property is no longer operated under a lease structure. Accordingly, the Company’s consolidated and segment results for the three months ended March 31, 2026 are not directly comparable to the prior-year period.

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.

Key Segment Operating Metrics

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.

Healthcare Services

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.

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.

Pharmacy Services

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.

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 medical 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.

Real Estate

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.

Recent Activities

Entry into Forbearance Agreements

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.

Segment Reporting

Management believes the most meaningful way to understand 2026 results is by reference to the Company’s three reportable segments together with the consolidated statement of operations and comprehensive earnings. 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.

At the consolidated level, patient care revenues, pharmacy revenues and patient care expense increased significantly in 2026 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 and comprehensive earnings should be evaluated in light of these changes in segment composition.

Real Estate Portfolio

As of March 31, 2026, we had investments of approximately $60.0 million in a portfolio of twelve healthcare facilities, consisting of eleven owned properties and one leased facility. Our owned properties consisted of nine skilled nursing facilities and two senior housing communities. Of the twelve facilities, five were leased or subleased to third-party operators under triple-net lease arrangements, and seven were managed on the Company’s behalf by two external managers. The Company’s leased facility is subleased to a third-party operator under a triple-net lease arrangement.

Skilled nursing facilities. SNFs provide services that include daily nursing, therapeutic rehabilitation, social services, activities, housekeeping, nutrition, medication management and administrative services for individuals requiring certain assistance for activities in daily living. A typical skilled nursing facility includes mostly one and two bed units, each equipped with a private or shared bathroom and community dining facilities.

Independent Living Communities

Independent living communities are age-restricted residential communities designed for seniors who are able to live independently but prefer the security, convenience and social setting of community living. These communities typically offer lifestyle services and limited support services for residents who do not require a high level of daily care.

Assisted Living Facilities

Assisted living facilities provide assistance with activities of daily living while allowing residents to maintain a degree of independence. Services commonly include meals, housekeeping, medication reminders, personal care support and other services

that help residents live in a supportive residential setting.

Memory Care Communities

Memory care communities provide specialized care for individuals suffering from Alzheimer’s disease and other forms of dementia. These communities typically operate in a more secure setting and offer staff, programming and care plans specifically designed to address cognitive impairment and memory loss.

Portfolio

The following table provides summary information regarding the number of facilities and related licensed beds/units as of March 31, 2026:


Location	Owned Skilled Nursing Facilities	Leased Skilled Nursing Facilities	Owned Senior Housing Facilities	Total Properties
Alabama(a)	0	0	1	1
Georgia	3	0	0	3
North Carolina	1	0	0	1
Ohio(b)	3	1	1	5
South Carolina	2	0	0	2
	9	1	2	12

Location	Owned Skilled Nursing Beds/Units	Leased Skilled Nursing Beds/Units	Owned Senior Housing Beds/Units	Total Beds/Units
Alabama(a)	0	0	90	90
Georgia	395	0	0	395
North Carolina	106	0	0	106
Ohio(b)	185	75	95	355
South Carolina	180	0	0	180
	866	75	185	1,126

Location	Owned Skilled Nursing Investment	Leased Skilled Nursing Investment	Owned Senior Housing Investment	Total Investment
Alabama(a)	—	—	$5,798,312	$5,798,312
Georgia	21,492,952	—	—	21,492,952
North Carolina	7,366,718	—	—	7,366,718
Ohio(b)	8,492,164	88,222	6,716,420	15,296,805
South Carolina	10,096,578	—	—	10,096,578
	$47,448,412	$88,222	$12,514,732	$60,051,366

     (a) Meadowood Retirement Village offers assisted living, memory care, and independent living. 

    

     (b) Eaglewood Village offers assisted living and Eaglewood Care Center offers skilled nursing. 

    

The following table provides summary information regarding the number of facilities and related licensed beds/units by operator/manager affiliation as of March 31, 2026:


Operator Affiliation	Number of Facilities (1)	Beds / Units
Aspire Regional Partners	5	355
Subtotal	5	355
Manager Affiliation	Number of Facilities (1)	Beds / Units
CJM Advisors	6	681
Cavalier Senior Living	1	90
Subtotal	7	771
Total	12	1,126

(1)

Represents the number of owned facilities leased or subleased to separate tenants, of which each tenant is an affiliate of the entity named in the table above.

For a more discussion of the above information, see Note 7 – Leases to 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.

Portfolio Occupancy Rates

The following table provides summary information regarding our portfolio facility-level occupancy rates for the periods shown:



Operating Metric	June 30, 2025	September 30, 2025	December 31, 2025	March 31, 2026
Occupancy (%)	67.1%	67.3%	74.3%	73.2%

Lease Expiration

The following table provides summary information regarding our lease expirations for the years shown as of December 31,:


		Licensed Beds		Annual Lease Revenue
	Number of Facilities	Count	Percent	Amount ($) '000's (1)	Percent (%)
2028	5	379	100.0%	2,839	100.0%
Total	5	379	100.0%	2,839	100.0%

(1)

Straight-line rent.

Results of Operations

The following table sets forth, for the periods indicated, an unaudited statement of operations and comprehensive earnings items and the amounts and percentages 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 consolidated financial statements and the notes thereto, which are included herein.


	Three Months Ended March 31,
(Amounts in 000’s)	2026			2025			Percent Change
Revenues:
Patient care revenues	$	12,715		$	5,642			125.4	%
Rental revenues		860			1,548			(44.4	)%
Pharmacy revenues		7,587			—		N/M
Total revenues		21,162			7,190			194.3	%
Expenses:
Cost of goods sold		4,492			—		N/M
Patient care expense		9,715			4,401			120.7	%
Facility rent expense		234			207			13.0	%
Depreciation and amortization		722			402			79.6	%
General and administrative expense		6,519			2,231			192.2	%
Loss on lease termination		—			303		N/M
Credit loss expense		182			70			160.0	%
Gain on operations transfer		—			(106	)	N/M
Total expenses		21,864			7,508			191.2	%
Loss from operations		(702	)		(318	)		120.8	%
Other expense:
Interest expense, net		522			653			(20.1	)%
Other (income) expense, net		(3	)		291		N/M
Total other expense, net		519			944			(45.0	)%
Net loss	$	(1,221	)	$	(1,262	)		(3.2	)%

For the three months ended March 31, 2026, total revenues increased to $21.2 million from $7.2 million for the prior-year period, primarily due to the addition of Pharmacy Services revenues following the SunLink merger and increased Healthcare Services revenues from facilities transitioned to operated status. Total expenses also increased as the Company incurred the related cost of goods sold, patient care expenses and general and administrative expenses associated with the expanded operating platform. Net loss was $1.2 million for both periods, as the increase in loss from operations was partially offset by lower interest expense and lower other expense.

Three Months Ended March 31, 2026 and 2025

Patient care revenues—Patient care revenues were $12.7 million for the three months ended March 31, 2026, compared to $5.6 million for the same period in 2025. The 125.4% increase is due to the transition of the Autumn Breeze, Georgetown, and Sumter facilities to the Healthcare Services segment and to a lesser extent an increase in census at our Glenvue facility.

Rental revenues—Rental revenue decreased by approximately $0.6 million to $0.9 million for the three months ended March 31, 2026, compared with $1.5 million for the same period in 2025. The 44.4% decrease is primarily due to transition of the Autumn Breeze, Georgetown and Sumter facilities to our Healthcare Services segment.

Pharmacy revenue— Pharmacy revenues were $7.6 million for the three months ended March 31, 2026. These revenues reflect the Pharmacy Services segment added in connection with the SunLink merger. There was no comparable Pharmacy Services revenue for the three months ended March 31, 2025.

Cost of goods sold—Cost of goods sold was $4.5 million for the three months ended March 31, 2026 and relates to the cost of pharmacy products sold or rented by the Pharmacy Services segment. There was no comparable cost of goods sold for the three months ended March 31, 2025.

Patient care expense—Patient care expense was $9.7 million for the three months ended March 31, 2026 compared with $4.4 million for the same period in 2025. The current period expense increase of $5.3 million was primarily due to the transition of the Autumn Breeze, Georgetown, and Sumter facilities to the Healthcare Services segment and to a lesser extent an increase in census at our Glenvue facility.

Facility rent expense—Facility rent was $0.2 million for the three months ended March 31, 2026, which was generally consistent for the three months ended March 31, 2025.

Depreciation and amortization—Depreciation and amortization was $0.7 million for the three months ended March 31, 2026, compared to $0.4 million for the same period in 2025. The increase was primarily was primarily due to depreciation on assets acquired in the SunLink acquisition.

General and administrative expenses—General and administrative expenses were $6.5 million for the three months ended March 31, 2026 compared with $2.2 million for the same period in 2025. The increase was primarily due to the transition of the Autumn Breeze, Georgetown, Southland and Sumter facilities to the Healthcare Services segment and addition of the Sunlink merger.


	Three Months Ended March 31,
(Amounts in 000’s)	2026		2025		Percent Change
General and administrative expenses:
Real Estate Services	$	1,609	$	1,021		57.6	%
Healthcare Services		1,964		1,210		62.3	%
Pharmacy		2,946		—	N.M.
Total	$	6,519	$	2,231		192.2	%

Loss on Lease Termination—There were no expenses related to lease terminations for the three months ended March 31, 2026. 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 write-offs of straight-line rent.

Credit loss expenses—Credit loss expense was $0.2 million for the three months ended March 31, 2026 and $0.1 million for the same period in 2025. The loss primarily represents reserves taken against patient accounts receivable in the period.

Gain on operations transfer—The gain on operations transfer was $0.1 million for the three months ended March 31, 2025 and there was no such gain or loss for the three months ended March 31, 2026. In March 2025, The Company took patient accounts receivable in lieu of the outstanding Rent Receivable owed by Oak Hollow Healthcare Management as part of the lease termination.

NON-GAAP Financial Measures

The following table summarizes the Company's non-GAAP financial measure of results based on EBITDA for the quarters ending March 31, 2026 and 2025. 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, 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, amortization of stock-based compensation, 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.


REGIONAL HEALTH PROPERTIES, INC.
RECONCILIATION OF NET LOSS TO NON-GAAP FINANCIAL MEASURES
(in thousands)
(Unaudited)

	Three Months Ended March 31,
	2026			2025

Net loss	$	(1,221	)	$	(1,262	)
Depreciation and amortization		722			402
Interest expense, net		522			653
EBITDA		23			(207	)
Amortization of employee stock compensation		96			22
Credit loss expense		182			70
Merger and other one-time costs		220			291
Loss on lease termination		—			303
Gain on operations transfer		—			(106	)
Tail insurance on legacy facilities		—			55
Adjusted EBITDA from operations	$	521		$	428

Liquidity and Capital Resources

Overview

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.

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.

Short-term Liquidity

Management expects the Company’s short-term liquidity requirements over the twelve months following the filing of this Quarterly Report to be funded primarily through collections of patient accounts receivable, rent receivable and other receivables, mortgage refinancing activity, including the potential refinancing of 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 the Autumn Breeze facility from leased to operated status, which has increased working capital requirements, including payroll, supplies, patient care costs and patient accounts receivable.

The Company continues to evaluate financing and liquidity alternatives. The Company remains in discussions with potential lenders regarding the refinancing of the Southland facility. In addition, the Company has received a non-binding term sheet for the refinancing of several mortgage loans, which, if completed, could provide additional liquidity for working capital and general corporate purposes. The proposed refinancing remains subject to lender due diligence, credit approval, definitive documentation, third-party reports and other customary closing conditions, and there can be no assurance that any such refinancing will be completed on the terms contemplated, within the expected timeframe, or at all.

The Company also continues to evaluate asset sale opportunities. During the quarter ended March 31, 2026, the Company engaged a new broker to assist with the sale of the Meadowood facility, which is classified as held for sale. The sale process is ongoing, and the Company is not yet able to estimate the amount or timing of potential net proceeds. There can be no assurance

that the Company will complete a sale of the Meadowood facility or any other assets on acceptable terms, within the expected timeframe, or at all.

During the three months ended March 31, 2026, the Company's net cash used in operating activities was $0.9 million primarily due to working capital needs and the timing of accounts payable and accrued expense payments. Management continues to focus on collections of patient accounts receivable, rent receivables, past due rent and notes receivable. The Company anticipates collecting a portion of past due rent subsequent to quarter end and is negotiating various methods to collect the remaining unpaid rent and notes receivable. However, the timing and amount of collections remain subject to tenant and patient payor performance, reimbursement timing, collection efforts and other factors outside the Company’s control.

At March 31, 2026, the Company had $1.1 million in unrestricted cash and 10.1 million of net accounts receivable, mainly consisting of patient accounts receivable and rent receivables.

As of March 31, 2026, the Company had $42.6 million in indebtedness, net of $0.8 million of deferred financing costs, and unamortized discounts. The Company anticipates net principal repayments of approximately $8.1 million during the next twelve-month period, consisting of approximately $4.1 million of routine debt service amortization, $0.2 million of bond debt payments, and $3.8 million of Southland's maturing debt.

Long-term Liquidity

Management expects the Company’s long-term liquidity needs will be funded primarily from cash generated in the ordinary course of business in conjunction with the sale of securities. The Company’s ability to generate long-term liquidity from operations will depend on the operating performance of its Healthcare Services, Pharmacy Services and Real Estate segments, including occupancy, reimbursement levels, labor costs, pharmacy reimbursement collections, rent collections and overall operating margins. The Company’s ability to raise capital through the sale of securities will depend on market conditions, investor interest, the trading price and liquidity of its securities and its overall financial performance. Because the Company’s securities trade on the OTCQB rather than a national securities exchange, access to equity capital may be more limited than that of issuers listed on a national securities exchange.

Debt Covenant Compliance

As of March 31, 2026, the Company was in compliance with the various financial and administrative covenants under all the Company's outstanding credit related instruments, except with respect to the Southland-related USDA and SBA notes that are subject to the forbearance arrangements.

Evaluation of the Company's Ability to Continue as a Going Concern

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.

For additional information regarding the Company's liquidity, see Note 2 – Liquidity and Note 9 – Notes Payable and other debt, to the consolidated financial statements included in Part I, Item 1 herein.

Cash Flows

The following table presents selected data from our consolidated statements of cash flows for the periods presented:


	Three Months Ended March 31,
(Amounts in 000’s)	2026			2025
Net cash (used in) provided by operating activities	$	(890	)	$	236
Net cash used in investing activities		(364	)		(65	)
Net cash used in financing activities		(735	)		(587	)
Net change in cash and restricted cash		(1,989	)		(416	)
Cash and restricted cash at beginning of period		6,064			3,472
Cash and restricted cash, ending	$	4,075		$	3,056

Three Months Ended March 31, 2026

Net cash used by operating activities—was approximately $0.9 million. The negative cash flow from operating activities was mainly due to the timing of working capital accounts.

Net cash used in investing activities —was approximately $0.4 million. This capital expenditure was primarily for leasehold improvements.

Net cash used in financing activities—was approximately $0.7 million. The cash was used to make routine payments totaling $0.4 million for our Senior debt obligations and $0.2 million for other debt; and cash used for the repurchase of our Series B Preferred Stock was $0.2 million.

Three Months Ended March 31, 2025

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.

Net cash used in investing activities—was approximately $65.0 thousand. This capital expenditure was primarily for leasehold improvements.

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 and $0.2 million for other debt.

Off-Balance Sheet Arrangements

Guarantee

The Company subleased five facilities located in Ohio to the Aspire Sublessees, formerly affiliated with MSTC Development Inc., pursuant to the Aspire Subleases, whereby the Aspire Sublessees took possession of, and commenced operating, the Aspire Facilities as subtenant. The Company agreed to indemnify Aspire against any and all liabilities imposed on them as arising from the former operator, capped at $8.0 million. The Company has assessed the fair value of the indemnity agreements as not material to the financial statements at March 31, 2026. For further information see Note 7 – Leases, to the consolidated financial statements included in Part I, Item 1 herein and also and Note 8 – Leases included in Part II, Item 8 of the Annual Report.

Critical Accounting Policies

We prepare our financial statements in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Article 8 of Regulation S-X. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses. On an ongoing basis, we review our judgments and estimates, including, but not limited to, those related to doubtful accounts, income taxes, stock compensation, intangible assets and loss contingencies. We base our estimates on historical experience, business knowledge and on various other assumptions that we believe to be reasonable under the circumstances at the time. Actual results may vary from our estimates. These estimates are evaluated by management and revised as circumstances change.

For a discussion of our critical accounting policies, see Note 1 – Organization and Significant Accounting Policies to the consolidated financial statements included in Part I, Item 1 herein and also Note 1 – Summary of Significant Accounting Policies included in Part II, Item 8 of the Annual Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Disclosure in response to Item 3 of Form 10-Q is not required to be provided by smaller reporting companies.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report (the "Evaluation Date"). Based on such evaluation, our management has concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company's internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings.

The Company is a defendant in various legal actions and administrative proceedings arising in the ordinary course of business, including claims that the services the Company provided during the time it operated skilled nursing facilities resulted in injury or death to patients. Although the Company settles cases from time to time when settlement can be achieved on a reasonable basis, the Company vigorously defends any matter in which it believes the claims lack merit and the Company has a reasonable chance to prevail at trial or in arbitration. Litigation is inherently unpredictable. There is no assurance that the outcomes of these matters will not have a material adverse effect on the Company's financial condition. Although arising in the ordinary course of the Company's business, certain of these matters are described in Note 12 – Commitments and Contingencies.

Item 1A. Risk Factors.

For a detailed description of certain risk factors that could affect our business, operations and financial condition, see Part I, Item 1A., Risk Factors, included in the Annual Report, as supplemented and modified by the risk factors set forth below in this Item 1A. The risk factors described in the Annual Report and this Quarterly Report (collectively, the “Risk Factors”) do not describe all risks applicable to our business, and we intend it only as a summary of certain material factors. The Risk Factors should be considered in connection with evaluating the forward-looking statements contained in this Quarterly Report because the Risk Factors could cause the actual results and conditions to differ materially from those projected in forward-looking statements. If any of the risks actually occur, our business, financial condition, or results of operations could be negatively affected. In that case, the trading price of the common stock, no par value per share (the "common stock"), the Series A Redeemable Preferred Shares, no par value per share (the "Series A Preferred Stock"), and the 12.5% Series B Cumulative Redeemable Preferred Shares, no par value per share (the "Series B Preferred Stock"), could decline.

There are no material changes to the risk factors set forth in Part I, Item 1A, in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on April 2, 2026.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

In January 2026, the Company purchased 30,232 shares of its 12.5% Series B Cumulative Preferred shares for a total cost of approximately $185 thousand. The shares were funded from cash on hand and were cancelled and returned to the status of authorized but unissued. There were no open-market repurchases of the Company's other securities.

Item 3. Defaults upon Senior Securities.

Entry into Forbearance Agreements

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.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Trading Arrangement

During the first quarter of 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408(c) of Regulation S-K of the Securities Act of 1933, as amended).

Item 6. Exhibits.

The agreements included as exhibits to this Quarterly Report are included to provide information regarding the terms of these agreements and are not intended to provide any other factual or disclosure information about the Company, its business or the other parties to these agreements. These agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

•

should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

•

have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

•

may apply standards of materiality in a way that is different from what may be viewed as material to investors; and

•

were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time, and should not be relied upon by investors.

EXHIBIT INDEX


Exhibit No.	Description	Method of Filing
3.1	Amended and Restated Articles of Incorporation of Regional Health Properties, Inc., effective July 3, 2023	Incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed on July 6, 2023

3.2	Amended and Restated Bylaws of Regional Health Properties, Inc., effective September 21, 2017	Incorporated by reference to Exhibit 3.3 of the Registrant’s Current Report on Form 8-K12B filed on October 10, 2017


3.2(a)	Amendment No. 1 to Amended and Restated Bylaws of Regional Health Properties, Inc., effective June 27, 2023	Incorporated by reference to Exhibit 3.6 of the Registrant’s Post-Effective Amendment No. 1 to Registration Statement on Form S-4 (Reg. No. 333-269750) filed on June 28, 2023

3.2(b)	Articles of Amendment to Amended and Restated Articles of Incorporation of Regional Health Properties, Inc., effective August 5, 2025	Incorporated by reference to Exhibit 3.1 of Registrant's Current Report of Form 8-K filed on August 5, 2025

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act	Filed herewith
31.1		Filed herewith
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act	Filed herewith
31.2		Filed herewith
32.1	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith
32.1		Filed herewith
32.2	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith
32.2		Filed herewith
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.	Filed herewith
101.SCH	Inline XBRL Taxonomy Extension Schema	Filed herewith
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned, thereunto duly authorized.


		REGIONAL HEALTH PROPERTIES, INC.
		(Registrant)

Date:	May 15, 2026	/s/ Brent Morrison
		Brent Morrison
		Chairman, Chief Executive Officer, and Director (Principal Executive Officer)

Date:	May 15, 2026	/s/ Marlie Davis
		Marlie Davis
		Chief Financial Officer (Principal Financial Officer)