Regional Health Properties(RHE) - 2025 Q2 - Quarterly Report

Financial Performance - Patient care revenues for the three months ended June 30, 2025, were $8.8 million, a 247.5% increase compared to $2.5 million for the same period in 2024, primarily due to the transition of certain facilities to the Healthcare Services segment [141]. - Total revenues for the three months ended June 30, 2025, reached $10.1 million, reflecting a 132.5% increase from $4.3 million in the same period of 2024 [140]. - The company reported a net loss of $1.4 million for the three months ended June 30, 2025, compared to a net loss of $0.7 million for the same period in 2024, representing a 105.2% increase in losses [140]. - Total expenses for the three months ended June 30, 2025, were $10.6 million, a 157.0% increase from $4.1 million in the same period of 2024 [140]. - The Company recorded a net loss of $2.7 million for the six months ended June 30, 2025, compared to a net loss of $1.7 million in 2024 [157]. Patient Care and Expenses - Patient care expenses for the three months ended June 30, 2025, were $7.2 million, a 229.1% increase from $2.2 million in the same period of 2024 [143]. - Patient care revenues for the Healthcare Services segment increased by 198.3% to $14.4 million for the six months ended June 30, 2025, compared to $4.8 million in 2024 [148]. - Patient care expenses increased by 170.5% to $11.6 million for the six months ended June 30, 2025, compared to $4.3 million in 2024 [150]. Revenue and Occupancy - The occupancy rate for the portfolio as of June 30, 2025, was 66.2%, showing a slight decline from 67.2% as of September 30, 2024 [137]. - The company experienced a 28.7% decrease in rental revenues, which fell to $1.3 million for the three months ended June 30, 2025, from $1.8 million in the same period of 2024 [142]. - Rental revenue for the Real Estate Services segment decreased by 21.7% to $2.8 million for the six months ended June 30, 2025, down from $3.6 million in 2024 [149]. General and Administrative Expenses - General and administrative expenses increased by 123.7% to $2.4 million for the three months ended June 30, 2025, compared to $1.2 million for the same period in 2024 [145]. - General and administrative expenses rose by 74.1% to $4.7 million for the six months ended June 30, 2025, compared to $2.9 million in 2024 [152]. - The Company experienced a 62.9% increase in total general and administrative expenses for the six months ended June 30, 2025, totaling $4.7 million compared to $2.9 million in 2024 [153]. Debt and Cash Position - As of June 30, 2025, the Company had $48.9 million in indebtedness, with anticipated net principal repayments of approximately $3.3 million over the next twelve months [162]. - The Company had $0.4 million in unrestricted cash and $4.4 million in net accounts receivable as of June 30, 2025 [159]. - Net cash provided by operating activities was approximately $1.1 million, primarily due to the timing of working capital accounts [175]. - Net cash used in investing activities was approximately $0.4 million, mainly for leasehold improvements [175]. - Net cash used in financing activities was approximately $1.3 million, including $0.7 million for senior debt obligations and $0.6 million for other debt [176][177]. Strategic Initiatives - The Company plans to pursue measures to grow operations and streamline costs, including refinancing debt and increasing lease revenue through acquisitions [158]. - The merger agreement with SunLink Health Systems, Inc. has been amended to increase the common stock consideration and improve the liquidation preference [164]. Legal and Compliance - The Company has agreed to indemnify Aspire against liabilities from the former operator, capped at $8.0 million [178]. - Financial statements are prepared in accordance with GAAP, requiring estimates and judgments that may affect reported amounts [179]. - Actual results may vary from estimates based on historical experience and other assumptions deemed reasonable [179]. - Disclosure in response to Item 3 of Form 10-Q is not required for smaller reporting companies [181].