425: Regional Health Properties Delisted from NYSE American, Reaffirms Commitment to SunLink Merger

Regional Health Properties, Inc. has been delisted from NYSE American and its securities now trade on the OTCQB, while the company reconfirms its commitment to merge with SunLink Health Systems, Inc.

Summary

• Regional Health Properties, Inc. (Regional) has been delisted from NYSE American.
• The delisting was initiated by NYSE American LLC (NYSE American) due to Regional's inability to regain compliance with Sections 1003(a)(i) and (ii) of the NYSE American Company Guide by the November 10, 2024 deadline.
• The NYSE American Listing Qualifications Panel affirmed the delisting decision, and the full Committee for Review unanimously affirmed the Panel's determination on May 13, 2025.
• On June 11, 2025, NYSE American filed a Form 25 with the U.S. Securities and Exchange Commission (SEC) to officially delist Regional's common stock and Series A Redeemable Preferred Shares.
• Regional's Common Stock (RHE) and Series A Redeemable Preferred Shares (RHE-PA) now trade on the OTCQB under the symbols RHEP and RHEPA, respectively.
• Regional reconfirmed its commitment to the previously announced merger with SunLink Health Systems, Inc.
• The companies are diligently working towards completing the merger.

Sentiment

Score: 3

Explanation: The delisting from a major exchange (NYSE American) to the OTCQB is a significant negative event, indicating a failure to meet compliance standards. While the reconfirmation of the merger commitment is a positive, it does not fully offset the negative implications of the delisting, especially given the uncertainty about future exchange listings for merger-issued securities.

Positives

• Regional Health Properties reconfirmed its commitment to the previously announced merger with SunLink Health Systems, Inc.
• Both companies are diligently working on the transaction and are focused on completing the merger.

Negatives

• Regional Health Properties' common stock and Series A Redeemable Preferred Shares have been delisted from NYSE American.
• The delisting was due to the company's failure to regain compliance with NYSE American listing standards (Sections 1003(a)(i) and (ii)) by the maximum 18-month compliance plan period, which expired on November 10, 2024.
• There is no guarantee that any securities issued in the merger will be approved by a national securities exchange.

Risks

• The risk that the businesses of Regional and SunLink will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected.
• Expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame.
• Revenues following the merger may be lower than expected.
• Customer, vendor, and employee relationships and business operations may be disrupted by the merger.
• The ability to obtain required regulatory approvals or the approvals of Regional's or SunLink's shareholders, and the ability to complete the merger on the expected timeframe.
• The costs and effects of litigation and the possible unexpected or adverse outcomes of such litigation.
• The ability of Regional and SunLink to meet the continued listing requirements or rules of the NYSE American LLC or the OTCQB, as applicable, and to maintain the listing or trading, as applicable, of securities thereon.
• Possible changes in economic and business conditions.
• The impacts of epidemics, pandemics or other infectious disease outbreaks.
• The existence or exacerbation of general geopolitical instability and uncertainty.
• Possible changes in monetary and fiscal policies, and laws and regulations.
• Competitive factors in the healthcare industry.
• Regional's dependence on the operating success of its operators.
• The amount of, and Regional's ability to service, its indebtedness.
• Covenants in Regional's debt agreements that may restrict its ability to make investments, incur additional indebtedness and refinance indebtedness on favorable terms.
• The effect of increasing healthcare regulation and enforcement on Regional's operators and the dependence of Regional's operators on reimbursement from governmental and other third-party payors.
• The relatively illiquid nature of real estate investments.
• The impact of litigation and rising insurance costs on the business of Regional's operators.
• The effect of Regional's operators declaring bankruptcy, becoming insolvent or failing to pay rent as due.
• The ability of any of Regional's operators in bankruptcy to reject unexpired lease obligations and to impede its ability to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtors' obligations.
• Regional's ability to find replacement operators and the impact of unforeseen costs in acquiring new properties.

Future Outlook

The company reconfirms its commitment to the previously announced merger with SunLink Health Systems, Inc., with both companies diligently working towards completion. However, there is no guarantee that any securities issued in the merger will be approved by a national securities exchange. The proposed merger will be submitted to both Regional and SunLink shareholders for their consideration, and Regional will file a Registration Statement on Form S-4 with the SEC, which will include a joint proxy statement/prospectus.

Management Comments

• "Regional is reconfirming its commitment to the previously announced merger with SunLink Health Systems, Inc."
• "The companies have been working diligently on the transaction and are focused on completing the merger."

Industry Context

The document primarily focuses on company-specific events (delisting, merger) rather than broad industry trends. However, the risks section mentions "competitive factors in the healthcare industry" and "increasing healthcare regulation and enforcement," indicating the company operates within a regulated and competitive healthcare real estate sector.

Legal Proceedings

• The company underwent a review process by the NYSE American Listing Qualifications Panel and the Committee for Review regarding its continued listing, which resulted in the affirmation of the delisting decision.

Stakeholder Impact

• Shareholders: Impacted by the delisting from NYSE American to OTCQB, which typically means reduced liquidity and visibility. They will also vote on the proposed merger.
• Employees, Customers, Vendors: Potential disruption to relationships and business operations due to the proposed merger.

Next Steps

• Regional will file a Registration Statement on Form S-4 with the SEC, including a joint proxy statement/prospectus for Regional and SunLink.
• The proposed merger will be submitted to both Regional and SunLink shareholders for their consideration.
• Investors are urged to read the Registration Statement and joint proxy statement/prospectus when available.

Key Dates

Keywords

Regional Health Properties, RHE, RHEP, SunLink Health Systems, RHEPA, NYSE American, OTCQB, Delisting, Merger, Healthcare Real Estate, SEC Filing, Form 8-K, Corporate Governance, Listing Standards