10-Q

Part I. Financial Information

Item 1. Financial Statements

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in 000's)


	June 30, 2026 (Unaudited)			December 31, 2025
ASSETS
Cash	$	1,728		$	3,013
Restricted cash		2,052			1,631
Accounts receivable, net of allowances of $1,057 and $727		10,294			8,025
Inventory		1,520			1,354
Notes receivable		594			644
Prepaid expenses and other		1,532			1,623
Total current assets		17,720			16,290
Property and equipment, net		35,189			35,805
Assets held for sale, net		4,251			4,207
Restricted cash		796			1,420
Intangible assets		4,607			4,660
Other assets		3,815			3,842
Goodwill		1,585			1,585
Total assets	$	67,963		$	67,809
LIABILITIES AND EQUITY (DEFICIT)
Accounts payable	$	7,337		$	6,986
Accrued expenses		9,329			7,888
Other liabilities		1,982			867
Debt related to assets held for sale, net		3,072			3,001
Current portion of long-term debt		5,366			5,414
Total current liabilities		27,086			24,156
Long-term debt, net - less current maturities		34,123			34,738
Operating lease obligation		2,276			2,325
Other liabilities		1,499			1,550
Total liabilities		64,984			62,769
Preferred stock, Series D, no par values, 1,420 shares authorized; 1,405 shares issued and outstanding at June 30, 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; 3,936 issued and 3,925 outstanding at June 30, 2026 and 3,946 issued and 3,935 outstanding at December 31, 2025.		67,465			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; 560 shares authorized, issued and outstanding at June 30, 2026 and December 31, 2025, with a redemption amount $426 at June 30, 2026 and December 31, 2025		426			426
Preferred stock, Series B, no par value; 2,812 shares authorized; 1,706 and 1,741 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively, with a redemption amount $14,100 and $14,382 at June 30, 2026 and December 31, 2025, respectively		14,091			14,382
Accumulated deficit		(83,716	)		(81,777	)
Accumulated other comprehensive earnings		22			22
Total stockholders' equity (deficit)		(1,712	)		349
Total liabilities, Series D preferred stock and stockholders' equity (deficit)	$	67,963		$	67,809

See accompanying notes to unaudited consolidated financial statements.

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Amounts in 000's except per share amounts)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Revenues:
Patient care revenues	$	14,001		$	8,774		$	26,716		$	14,416
Rental revenues		801			1,283			1,661			2,831
Pharmacy revenues		9,640			—			17,227			—
Total revenues		24,442			10,057			45,604			17,247
Expenses:
Cost of goods sold		6,089			—			10,581			—
Patient care expense		10,654			7,184			20,368			11,585
Facility rent expense		247			149			481			356
Depreciation and amortization		757			403			1,479			805
General and administrative expense		6,696			2,429			13,216			4,659
Loss on lease termination		—			—			—			303
Credit loss expense		215			400			397			470
Gain on operations transfer		—			—			—			(106	)
Total expenses		24,658			10,565			46,522			18,072
Loss from operations		(216	)		(508	)		(918	)		(825	)
Other expense:
Interest expense, net		567			615			1,089			1,268
Loss on disposal of assets		8			—			8			—
Other (income) expense, net		—			326			(3	)		618
Total other expense, net		575			941			1,094			1,886
Net loss		(791	)		(1,449	)		(2,012	)		(2,711	)
Preferred stock dividends		—			—			—			(603	)
Deemed contribution related to Preferred Series B purchases		9			—			73			—
Net loss attributable to Regional Health Properties, Inc. common stockholders	$	(782	)	$	(1,449	)	$	(1,939	)	$	(3,314	)
Net loss per share of common stock attributable to Regional Health Properties, Inc.
Basic and Diluted	$	(0.20	)	$	(0.68	)	$	(0.49	)	$	(1.60	)
Weighted average shares of common stock outstanding:
Basic and Diluted		3,928			2,143			3,931			2,068

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	)
Repurchase of Preferred B Shares		—			—		(5	)		—			—		—		(41	)		9			—		(32	)
Forfeitures of stock-based awards		(10	)		—		—			—			—		—		—			—			—		—
Stock-based compensation		—			—		—			—			73		—		—			—			—		73
Net loss		—			—		—			—			—		—		—			(791	)		—		(791	)
Balances, June 30, 2026		3,925			560		1,706			(11	)	$	67,465	$	426	$	14,091		$	(83,716	)	$	22	$	(1,712	)


	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	)
Stock-based compensation		—		—		—		—			25		—		—		—			—		25
Restricted stock issuance		65		—		—		—			—		—		—		—			—		—
Exercise of stock options		48		—		—		—			129		—		—		—			—		129
Net loss		—		—		—		—			—		—		—		(1,449	)		—		(1,449	)
Balances, June 30, 2025		2,242		560		2,252		(11	)	$	63,952	$	426	$	18,602	$	(88,434	)	$	—	$	(5,454	)

See accompanying notes to unaudited consolidated financial statements.

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in 000's)

(Unaudited)


	Six Months Ended June 30,
	2026			2025
Cash flows from operating activities:
Net loss	$	(2,012	)	$	(2,711	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		1,479			805
Stock-based compensation expense		169			47
Rent expense less than cash paid		(115	)		(27	)
Rent revenue less than (in excess) of cash received		151			(265	)
Amortization of deferred financing costs, debt discounts and premiums		30			37
Loss on lease termination		—			303
Gain on operations transfer		—			(106	)
Loss on disposal of fixed assets		8			—
Credit loss expense		397			470
Changes in operating assets and liabilities:
Accounts receivable		(2,666	)		(1,420	)
Prepaid expenses and other assets		366			(60	)
Inventory		(166	)		—
Accounts payable and accrued expenses		1,792			3,949
Other liabilities		1,064			(217	)
Net cash provided by operating activities		497			805
Cash flows from investing activities:
Purchase of property and equipment		(862	)		(360	)
Net cash used in investing activities		(862	)		(360	)
Cash flows from financing activities:
Payment of senior debt		(925	)		(800	)
Payment of other debt		(258	)		(569	)
Repurchase of Preferred B Shares		(218	)		—
Proceeds from the exercise of stock options		—			129
Proceeds from other debt		278			532
Net cash used in financing activities		(1,123	)		(708	)
Net change in cash and restricted cash		(1,488	)		(263	)
Cash and restricted cash, beginning		6,064			3,472
Cash and restricted cash, ending	$	4,576		$	3,209

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in 000's)

(Unaudited)


	Six Months Ended June 30,
	2026		2025
Supplemental disclosure of cash flow information:
Cash interest paid		1,094	$	1,285
Vendor-financed insurance		225		560
Gain on operations transfer		—		(106	)
Preferred stock dividends paid in common stock		—		603
Loss on lease termination		—		303

See accompanying notes to unaudited consolidated financial statements.

REGIONAL HEALTH PROPERTIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 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 June 30, 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. For revenue recognized under Topic 606, 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 credit loss 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		64
Write offs		(1	)
June 30, 2026 balance	$	318

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		13
Write offs		(13	)
June 30, 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		384
Write offs		(117	)
June 30, 2026 balance	$	668

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


(Amounts in 000’s)	June 30, 2026			December 31, 2025
Gross receivables
Pharmacy Services	$	3,796		$	3,024
Real Estate Services		674			679
Healthcare Services		6,881			5,049
Subtotal		11,351			8,752
Allowance
Pharmacy Services		(318	)		(255	)
Real Estate Services		(71	)		(71	)
Healthcare Services		(668	)		(401	)
Subtotal		(1,057	)		(727	)
Accounts receivable, net of allowance	$	10,294		$	8,025

Inventory

As of June 30, 2026 and December 31, 2025, the Company had approximately $1.5 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 June 30, 2026 and December 31, 2025, the Company had approximately $1.5 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 recognized when amounts previously recorded as accounts receivable are converted into promissory notes that evidence an unconditional obligation to pay a specified principal amount, generally together with interest, under defined repayment terms. Promissory notes are executed as an alternative to accounts receivable to formalize payment arrangements with customers. The Company's payment terms vary based on the specific facts and circumstances of each arrangement; however, promissory notes generally have maturities ranging from one to three years.

The Company evaluates outstanding notes receivable for expected credit losses at each reporting date. In estimating expected credit losses, management considers a variety of factors, including, but not limited to, payment history and current payment status, the financial condition and ability of the customer to repay, collateral or other credit enhancements, historical loss experience, and current and expected economic conditions, as applicable.We may establish reserves, accept modified payment terms, or book direct write-offs for any estimated credit loss with generally corresponding charge to credit loss expense in our Consolidated Statements of Operations and Comprehensive Loss. Subsequent changes in our estimate of credit losses may result in a corresponding increase or decrease to the credit loss expense in our Consolidated Statements of Operations and Comprehensive Loss.

Based on its evaluation as of June 30, 2026, management concluded that no allowance for expected credit losses on notes receivable was necessary, as all outstanding balances were considered collectible. Accordingly, no allowance for credit losses has been recorded related to notes receivable. The Company will continue to monitor the collectability of these balances each reporting period and will record an allowance for expected credit losses if warranted by changes in facts and circumstances.

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 June 30, 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)	June 30, 2026		December 31, 2025
Accounts payable
Pharmacy Services	$	1,664	$	956
Real Estate Services		1,419		615
Healthcare Services		4,254		5,415
Total Accounts payable	$	7,337	$	6,986

Other Liabilities

As of June 30, 2026 and December 31, 2025, the Company had approximately $2.0 million and $0.9 million, respectively in short-term other liabilities, which mainly represent short-term operating lease obligations.

As of June 30, 2026 and December 31, 2025, the Company had approximately $1.5 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 June 30, 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 and six months ended June 30, 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)	June 30, 2026		June 30, 2025
Restricted stock units - employee		135		—
Stock options - employee		100		—
Stock options - non employee		15		—
Total anti-dilutive securities		250		—

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 June 30, 2026, the Company held approximately $1.7 million in unrestricted cash and $10.3 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 six months ended June 30, 2026, the Company generated $0.5 million of cash in operating activities. Operating cash flows were primarily affected by working capital investments associated with the assumption of operations at Autumn Breeze, which was partially offset by non-cash adjustments. 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 Autumn Breeze, 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 June 30, 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 $8.0 million during the next twelve-month period, approximately $4.0 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 June 30, 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)	June 30, 2026		December 31, 2025
Cash	$	1,728	$	3,013
Restricted cash:
Cash collateral		17		61
HUD and other replacement reserves		1,859		1,463
Escrow deposits		655		1,210
Restricted investments for debt obligations		317		317
Total restricted cash		2,848		3,051
Total cash and restricted cash	$	4,576	$	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)	June 30, 2026			December 31, 2025
Buildings and improvements	5-40	$	51,192		$	51,069
Equipment and computer related	2-10		4,884			4,354
Land	-		2,335			2,330
Property and equipment			58,411			57,753
Less: accumulated depreciation			(23,222	)		(21,948	)
Property and equipment, net		$	35,189		$	35,805

The following table summarizes total depreciation and amortization expense three and six months ended June 30, 2026 and 2025:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in 000’s)	2026		2025		2026		2025
Depreciation	$	639	$	310	$	1,253	$	619
Amortization		118		93		226		186
Total depreciation and amortization expense	$	757	$	403	$	1,479	$	805

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)	June 30, 2026			December 31, 2025
Buildings and improvements	5 - 40	$	5,262		$	5,218
Equipment and computer related	2 - 10		459			459
Land	—		100			100
			5,821			5,777
Less: accumulated depreciation and amortization			(1,570	)		(1,570	)
Assets held for sale, net		$	4,251		$	4,207

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


(Amounts in 000's)	June 30, 2026		December 31, 2025
Meadowood		4,251		4,207
Assets held for sale, net	$	4,251	$	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, June 30, 2026
Gross	$	11,796		$	2,471	$	176		$	1,427		$	15,870		$	740	$	1,585
Accumulated amortization		(5,056	)		—		(133	)		(74	)		(5,263	)		—		—
Net carrying amount	$	6,740		$	2,471	$	43		$	1,353		$	10,607		$	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 and six months ended June 30, 2026 and 2025:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in 000’s)	2026		2025		2026		2025
Bed licenses	$	89	$	87	$	176	$	176
Lease rights		4		6		9		10
Pharmacy Intangibles		25		—		41		—
Total amortization expense	$	118	$	93	$	226	$	186

Expected amortization expense for the years ending December 31, for all definite-lived intangibles, for the remaining six months ending December 31, 2026 and each of the next four years and thereafter is as follows:


(Amounts in 000’s)	Pharmacy Intangibles		Bed Licenses		Lease Rights
For the remaining six months ending December 31, 2026	$	44	$	176	$	9
2027		88		352		18
2028		88		352		16
2029		88		352		—
2030		88		352		—
Thereafter		957		5,156		—
Total expected amortization expense	$	1,353	$	6,740	$	43

NOTE 7. LEASES

Operating Leases

As of June 30, 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 2.3 years as of June 30, 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 July 2027 to March 2031 and office equipment leases. As of June 30, 2026, the Company's total Right of Use asset balance was $3.0 million and is a part of the Company's Other assets balance of $3.8 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 June 30, 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 the remaining six months ending December 31, 2026 and each of the next four years and thereafter is as follows:


(Amounts in 000’s)	Future rental payments		Accretion of lease liability (1)			Operating lease obligation
For the remaining six months ending December 31, 2026	$	566	$	(87	)	$	479
2027		1,076		(124	)		952
2028		998		(66	)		932
2029		546		(17	)		529
2030		313		(5	)		308
Thereafter		29		(1	)		28
Total	$	3,528	$	(300	)	$	3,228

(1)

Weighted average discount rate 7.98% and weighted average remaining term 3.25 years.

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 June 30, 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 June 30, 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 the remaining six months ending December 31, 2026 and each of the next four years and thereafter is as follows:


(Amounts in 000’s)	Lease Receivables
For the remaining six months ending December 31, 2026	$	1,573
2027		3,167
2028		2,924
2029		-
2030		-
Thereafter		-
Total	$	7,664

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)	June 30, 2026		December 31, 2025
Accrued employee benefits and payroll-related	$	2,176	$	1,637
Real estate and other taxes		5,931		5,032
Accrued interest		177		189
Other accrued expenses (1)		1,045		1,030
Total accrued expenses	$	9,329	$	7,888

(1) As of June 30, 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)	June 30, 2026			December 31, 2025
Senior debt—guaranteed by HUD	$	26,837		$	27,281
Senior debt—guaranteed by USDA (1)		6,392			6,575
Senior debt—guaranteed by SBA(2)		494			509
Senior debt—bonds		5,638			5,811
Senior debt—other mortgage indebtedness		3,072			2,979
Other debt		930			805
Subtotal		43,363			43,960
Deferred financing costs		(704	)		(706	)
Unamortized discount on bonds		(98	)		(101	)
Notes payable and other debt	$	42,561		$	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)			June 30, 2026		December 31, 2025
Senior debt - guaranteed by HUD (2)
The Pavilion Care Center	Newpoint Capital	12/01/2039	Fixed	3.97	%	$	707	$	727
Hearth and Care of Greenfield	Newpoint Capital	08/01/2050	Fixed	3.97	%		1,803		1,825
Woodland Manor	Newpoint Capital	11/01/2052	Fixed	3.97	%		4,654		4,703
Glenvue	Newpoint Capital	10/01/2044	Fixed	3.75	%		6,489		6,611
Autumn Breeze	KeyBank	01/01/2045	Fixed	3.65	%		5,646		5,751
Georgetown	Newpoint Capital	10/01/2046	Fixed	2.98	%		2,872		2,923
Sumter Valley	KeyBank	01/01/2047	Fixed	3.70	%		4,666		4,741
Total						$	26,837	$	27,281
Senior debt - guaranteed by USDA (3)
Mountain Trace	Community B&T	12/24/2036	Prime + 1.75%	10.25	%		3,114		3,193
Southland	Cadence Bank, NA	07/27/2036	Prime + 1.50%	10.00	%		3,278		3,382
Total						$	6,392	$	6,575
Senior debt - guaranteed by SBA
Southland(4)	Cadence Bank, NA	07/27/2036	Prime + 2.25%	10.75	%		494		509
Total						$	494	$	509

(1)

Represents interest rates as of June 30, 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)

         June 30, 2026

         December 31, 2025

         Senior debt - bonds

         Eaglewood Bonds Series A

         City of Springfield, Ohio

         05/01/2042

         Fixed

         7.65%

         $5,638

         $5,811

(1)

Represents cash interest rates as of June 30, 2026. The rates exclude amortization of deferred financing of approximately 0.10% per annum.

         (Amounts in 000’s)

         Facility

         Lender

         Maturity

         Interest Rate (1)

         June 30,
2026

         December 31,
2025

         Senior debt - other mortgage indebtedness

         Meadowood (2)

         Exchange Bank of Alabama

         10/01/2026

         Fixed

         4.50%

         $2,889

         $2,979

         Meadowood - Line of Credit

         Exchange Bank of Alabama

         02/15/2027

         Fixed

         6.75%

         183

         —

(1)

Represents cash interest rates as of June 30, 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			June 30, 2026		December 31, 2025
Other debt
First Insurance Funding (1)	08/15/2026	Fixed	10.95	%	$	229	$	254
AFCO Insurance	08/09/2026	Fixed	9.50	%		—		34
Cavalier Senior Living	11/15/2026	Fixed	6.00	%		19		22
First Horizon Bank	02/24/2031	Fixed	7.25	%		187		—
Key Bank (2)	08/25/2030	Fixed	0.00	%		495		495
Total					$	930	$	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 June 30, 2026, the Company had 18 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 June 30, 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 June 30, 2026 for the remaining six months ending December 31, 2026 and each of the next four years and thereafter.


For the Twelve Months Ended December 31,	(Amounts in 000’s)
For the remaining six months ending December 31, 2026	$	7,401
2027		1,393
2028		1,393
2029		1,611
2030		2,180
Thereafter		29,385
Subtotal	$	43,363
Less: unamortized discounts		(98	)
Less: deferred financing costs, net		(704	)
Total notes and other debt	$	42,561

NOTE 10. COMMON AND PREFERRED STOCK

Common Stock

As of June 30, 2026, the Company had 55,000,000 shares of Common Stock authorized and 3,935,557 shares issued and 3,924,677 shares outstanding. There were no dividends declared or paid on the common stock during the three and six months ended June 30, 2026 and 2025.

Preferred Stock

As of June 30, 2026, the Company had 5,000,000 shares of Preferred Stock authorized and 3,670,813 shares issued and outstanding.

Series A Preferred Stock

As of June 30, 2026, the Company had 560,000 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 and six months ended June 30, 2026 and 2025.

Series B Preferred Stock

During the six months ended June 30, 2026, the Company purchased 35,232 shares of its Series B Preferred Stock for a cost of $217 thousand 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 June 30, 2026, the Company had 1,705,941 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 and

six months ended June 30, 2026 and 2025.

Series D Preferred Stock

As of June 30, 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 and six months ended June 30, 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 June 30, 2026, the number of securities remaining available for future issuance under the Company's A&R Plan is 351,000.

For the three and six months ended June 30, 2026 and 2025, the Company recognized stock-based compensation expense as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in 000’s)	2026		2025		2026		2025
Employee compensation:
Restricted stock awards	$	38	$	25	$	89	$	47
Restricted stock units		19		—		32		—
Stock options		16		—		28		—
Total employee stock-based compensation expense		73		25		149		47
Non-employee compensation:
Board stock options		—		—		20		—
Total non-employee stock-based compensation expense		—		—		20		—
Total stock-based compensation expense, net of forfeitures	$	73	$	25	$	169	$	47

Restricted Stock Awards

The following table summarizes the Company's restricted stock awards ("RSAs") activity for the six months ended June 30, 2026:


	Number of Shares (000's)			Weighted Avg. Grant Date (per Share) Fair Value
Unvested, December 31, 2025		185		$	2.40
Vested		(61	)	$	2.71
Forfeited		(10	)	$	2.18
Unvested, June 30, 2026		114		$	2.26

No RSAs were granted for the six months ended June 30, 2026. The remaining unvested shares at June 30, 2026 will vest over the next 1.0 year with $192 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 six months ended June 30, 2026:


	Number of Shares (000's)		Weighted Avg. Grant Date (per Share) Fair Value
Unvested, December 31, 2025		—	$	—
Granted		135	$	1.29
Unvested, June 30, 2026		135	$	1.29

For the six months ended June 30, 2026, RSU awards with respect to 135,000 shares of common stock were granted under the A&R Plan, which will vest in two equal annual installments beginning on their first anniversary date. The remaining unvested shares at June 30, 2026 will vest over the next 1.9 years with $143 thousand in compensation expense recognized over this period.

Common Stock Options

The following summarizes the Company's employee stock option activity for the six months ended June 30, 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		153		$	1.29	$	1.13		—
Forfeited		(3	)	$	1.30	$	1.10		—	$	—
Outstanding, June 30, 2026		150		$	1.29	$	1.13		9.6	$	—
Vested and exercisable, June 30, 2026		15		$	1.30	$	1.10		9.5	$	—
Vested and expected to vest, June 30, 2026		150		$	1.29	$	1.13		9.6	$	—

For the six months ended June 30, 2026, stock option awards with respect to 153,000 shares of common stock were granted under the A&R Plan. The remaining unvested shares at June 30, 2026 will vest over the next 1.9 years with $125 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 six months ended June 30, 2026 and 2025:


	Six Months Ended June 30,
	2026			2025
Dividend yield	—%			—%
Expected volatility		123.44	%	—%
Risk-free interest rate		3.91	%	—%
Expected term (in years)		5.7			—

The following summary information reflects stock options outstanding, vested, and related details as of June 30, 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
$1.29-$1.30	150	9.6	$1.29	15	9.5	$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 June 30, 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 June 30, 2026, the Company was a defendant in one professional and general liability action arising from care provided to a former patient at one of the Company's facilities. The complaint alleges, among other things, 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 intends to vigorously defend this matter and believes that any losses, other than punitive damages, if awarded, would be covered by applicable insurance, subject to the terms, conditions, deductibles, and coverage limits of the applicable insurance policies. Punitive damages, if awarded, are not covered by the Company's insurance policies.

The Company evaluates this matter in accordance with ASC 450, Contingencies. Based on the information currently available, management has concluded that a loss is not probable; therefore, no liability has been accrued as of June 30, 2026. While an unfavorable outcome is reasonably possible, the Company is unable to estimate the amount or range of reasonably possible loss, if any, in excess of available insurance coverage due to the inherent uncertainties associated with litigation.

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 June 30,											Three Months Ended June 30,
	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	$	—		$	14,001	$	—		$	14,001		$	—		$	8,774		$	—	$	8,774
Rental revenues		786			—		15			801			1,283			—			—		1,283
Pharmacy revenues		—			—		9,640			9,640			—			—			—		—
Total revenues		786			14,001		9,655			24,442			1,283			8,774			—		10,057
Expenses:
Cost of goods sold		—			—		6,089			6,089			—			—			—		—
Patient care expense		—			10,654		—			10,654			—			7,184			—		7,184
Facility rent expense		149			—		98			247			149			—			—		149
Depreciation and amortization		318			106		333			757			322			81			—		403
General and administrative expense		1,107			2,312		3,277			6,696			729			1,700			—		2,429
Credit loss expense		(8	)		223		—			215			200			200			—		400
Total expenses		1,566			13,295		9,797			24,658			1,400			9,165			—		10,565
Income (loss) from operations	$	(780	)	$	706	$	(142	)	$	(216	)	$	(117	)	$	(391	)	$	—	$	(508	)


	Six Months Ended June 30,											Six Months Ended June 30,
	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	$	—		$	26,716	$	—		$	26,716		$	—		$	14,416		$	—	$	14,416
Rental revenues		1,632			—		29			1,661			2,831			—			—		2,831
Pharmacy revenues		—			—		17,227			17,227			—			—			—		—
Total revenues		1,632			26,716		17,256			45,604			2,831			14,416			—		17,247
Expenses:
Cost of goods sold		—			—		10,581			10,581			—			—			—		—
Patient care expense		—			20,368		—			20,368			—			11,585			—		11,585
Facility rent expense		297			—		184			481			298			58			—		356
Depreciation and amortization		637			204		638			1,479			646			159			—		805
General and administrative expense		2,716			4,276		6,224			13,216			1,750			2,909			—		4,659
Loss on lease termination		—			—		—			—			303			—			—		303
Credit loss expense		13			384		—			397			200			270			—		470
Gain on operations transfer		—			—		—			—			—			(106	)		—		(106	)
Total expenses		3,663			25,232		17,627			46,522			3,197			14,875			—		18,072
Income (loss) from operations	$	(2,031	)	$	1,484	$	(371	)	$	(918	)	$	(366	)	$	(459	)	$	—	$	(825	)

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

Subsequent to quarterly period ended June 30, 2026, the company repurchased 9,200 shares of its Series B Preferred shares.

The Company has evaluated all subsequent events through the date the consolidated financial statements were issued and filed with the SEC. There were no other material subsequent events to June 30, 2026.

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 June 30, 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 June 30, 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 and six months ended June 30, 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

“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.

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 loss should be evaluated in light of these changes in segment composition.

Real Estate Portfolio

As of June 30, 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 June 30, 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)	—	—	$5,820,870	$5,820,870
Georgia	21,564,347	—	—	21,564,347
North Carolina	7,402,207	—	—	7,402,207
Ohio(b)	8,452,266	88,222	6,716,420	15,256,908
South Carolina	10,185,484	—	—	10,185,484
	$47,604,304	$88,222	$12,537,290	$60,229,816

     (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 June 30, 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	September 30, 2025	December 31, 2025	March 31, 2026	June 30, 2026
Occupancy (%)	67.3%	74.3%	73.2%	74.9%

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	355	100.0%	2,839	100.0%
Total	5	355	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 loss 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 June 30,									Six Months Ended June 30,
(Amounts in 000’s)	2026			2025			Percent Change			2026			2025			Percent Change
Revenues:
Patient care revenues	$	14,001		$	8,774			59.6	%	$	26,716		$	14,416			85.3	%
Rental revenues		801			1,283			(37.6	)%		1,661			2,831			(41.3	)%
Pharmacy revenues		9,640			—			100.0	%		17,227			—			100.0	%
Total revenues		24,442			10,057			143.0	%		45,604			17,247			164.4	%
Expenses:
Cost of goods sold		6,089			—			100.0	%		10,581			—			100.0	%
Patient care expense		10,654			7,184			48.3	%		20,368			11,585			75.8	%
Facility rent expense		247			149			65.8	%		481			356			35.1	%
Depreciation and amortization		757			403			87.8	%		1,479			805			83.7	%
General and administrative expense		6,696			2,429			175.7	%		13,216			4,659			183.7	%
Loss on lease termination		—			—		N/M				—			303		N/M
Credit loss expense		215			400			(46.3	)%		397			470			(15.5	)%
Gain on operations transfer		—			—		N/M				—			(106	)	N/M
Total expenses		24,658			10,565			133.4	%		46,522			18,072			157.4	%
Loss from operations		(216	)		(508	)		(57.5	)%		(918	)		(825	)		11.3	%
Other expense:
Interest expense, net		567			615			(7.8	)%		1,089			1,268			(14.1	)%
Loss on disposal of fixed assets		8			—		N/M				8			—		N/M
Other (income) expense, net		—			326		N/M				(3	)		618		N/M
Total other expense, net		575			941			(38.9	)%		1,094			1,886			(42.0	)%
Net loss	$	(791	)	$	(1,449	)		(45.4	)%	$	(2,012	)	$	(2,711	)		(25.8	)%

For the three and six months ended June 30, 2026, total revenues increased to $24.4 million and $45.6 million, respectively, from $10.1 million and $17.2 million for the same prior-year periods, 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 for the three and six months ended June 30, 2026 was $0.8 million and $2.0 million, respectively, from $1.4 million and $2.7 million for the same prior-year periods, as the increase in loss from operations was partially offset by lower interest expense and lower other expense.

Three Months Ended June 30, 2026 and 2025

Patient care revenues—Patient care revenues were $14.0 million for the three months ended June 30, 2026, compared to $8.8 million for the same period in 2025. The 59.6% 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 $0.5 million to $0.8 million for the three months ended June 30, 2026, compared with $1.3 million for the same period in 2025. The 37.6% decrease is primarily due to transition of the Autumn Breeze, Georgetown and Sumter facilities to our Healthcare Services segment.

Pharmacy revenue— Pharmacy revenues were $9.6 million for the three months ended June 30, 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 June 30, 2025.

Cost of goods sold—Cost of goods sold was $6.1 million for the three months ended June 30, 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 June 30, 2025.

Patient care expense—Patient care expense was $10.7 million for the three months ended June 30, 2026 compared with $7.2 million for the same period in 2025. The current period expense increase of $3.5 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 June 30, 2026, which was generally consistent for the three months ended June 30, 2025.

Depreciation and amortization—Depreciation and amortization was $0.8 million for the three months ended June 30, 2026, compared to $0.4 million for the same period in 2025. The 87.8% increase was primarily due to depreciation on assets acquired in the SunLink acquisition.

General and administrative expenses—General and administrative expenses were $6.7 million for the three months ended June 30, 2026 compared with $2.4 million for the same period in 2025. The 175.7% increase was primarily due to the transition of the Autumn Breeze, Georgetown, Southland and Sumter facilities to the Healthcare Services segment and the addition of operations acquired in the SunLink merger.


	Three Months Ended June 30,
(Amounts in 000’s)	2026		2025		Percent Change
General and administrative expenses:
Real Estate Services	$	1,107	$	729		51.9	%
Healthcare Services		2,312		1,700		36.0	%
Pharmacy		3,277		—		100.0	%
Total	$	6,696	$	2,429		175.7	%

Loss on Lease Termination—There were no expenses related to lease terminations for the three months ended June 30, 2026 and for the same period in 2025.

Credit loss expenses—Credit loss expense was $0.2 million for the three months ended June 30, 2026 and $0.4 million for the same period in 2025. The loss primarily represents reserves taken against patient accounts receivable in the period.

Six Months Ended June 30, 2026 and 2025

Patient care revenues—Patient care revenues were $26.7 million for the six months ended June 30, 2026, compared to $14.4 million for the same period in 2025. The 85.3% 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 $1.1 million to $1.7 million for the six months ended June 30, 2026, compared with $2.8 million for the same period in 2025. The 41.3% decrease is primarily due to transition of the Autumn Breeze, Georgetown and Sumter facilities to our Healthcare Services segment.

Pharmacy revenue— Pharmacy revenues were $17.2 million for the six months ended June 30, 2026. These revenues reflect the Pharmacy Services segment added in connection with the SunLink merger. There was no comparable Pharmacy Services revenue for the six months ended June 30, 2025.

Cost of goods sold—Cost of goods sold was $10.6 million for the six months ended June 30, 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 six months ended June 30, 2025.

Patient care expense—Patient care expense was $20.4 million for the six months ended June 30, 2026 compared with $11.6 million for the same period in 2025. The current period expense increase of $8.8 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 $0.5 million for the six months ended June 30, 2026, which was generally consistent for the six months ended June 30, 2025.

Depreciation and amortization—Depreciation and amortization was $1.5 million for the six months ended June 30, 2026, compared to $0.8 million for the same period in 2025. The 83.7% increase was primarily was primarily due to depreciation on assets acquired in the SunLink acquisition.

General and administrative expenses—General and administrative expenses were $13.2 million for the six months ended June 30, 2026, compared with $4.7 million for the same period in 2025. The 183.7% increase was primarily due to the transition of the Autumn Breeze, Georgetown, Southland and Sumter facilities to the Healthcare Services segment and the addition of operations acquired in the SunLink merger.


	Six Months Ended June 30,
(Amounts in 000’s)	2026		2025		Percent Change
General and administrative expenses:
Real Estate Services	$	2,716	$	1,750		55.2	%
Healthcare Services		4,276		2,909		47.0	%
Pharmacy		6,224		—		100.0	%
Total	$	13,216	$	4,659		183.7	%

Loss on Lease Termination—There were no material expenses related to lease terminations for the six months ended June 30, 2026, compared to $0.3 million for the same period in 2025, which related to the termination of the two leases to Oak Hollow Healthcare Management, and the losses consist of the write-offs of straight-line rent.

Credit loss expenses—Credit loss expense was $0.4 million for the six months ended June 30, 2026, compared to $0.5 million for the same period in 2025. The loss primarily represents reserves taken against patient accounts receivable in the period.

Gain on operations transfer—There was no gain on operations transfer for the six months ended June 30, 2026, compared to $0.1 million for the same period in 2025. 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 June 30, 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 June 30,						Six Months Ended June 30,
	2026			2025			2026			2025

Net loss	$	(791	)	$	(1,449	)	$	(2,012	)	$	(2,711	)
Depreciation and amortization		757			403			1,479			805
Interest expense, net		567			615			1,089			1,268
EBITDA		533			(431	)		556			(638	)
Amortization of employee stock compensation		73			25			169			47
Merger and other one-time costs		—			357			—			618
Loss on lease termination		—			—			—			303
Gain on operations transfer		—			—			—			(106	)
Tail insurance on legacy facilities		—			19			—			74
Other one-time costs		143			86			363			196
Adjusted EBITDA from operations	$	749		$	56		$	1,088		$	494

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.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐


		Page Number
Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	3
	Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025	3
	Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2026 and 2025	4
	Consolidated Statements of Stockholders' (Deficit) for the three and six months ended June 30, 2026 and 2025	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	42

Signatures		45


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)


		REGIONAL HEALTH PROPERTIES, INC.
		(Registrant)

Date:	August 12, 2026	/s/ Brent Morrison
		Brent Morrison
		Chairman, Chief Executive Officer, and Director (Principal Executive Officer)

Date:	August 12, 2026	/s/ Marlie Davis
		Marlie Davis
		Chief Financial Officer (Principal Financial Officer)