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Regional Health Properties, Inc. Announces Distribution of Common Stock to Holders of its 12.5% Series B Cumulative Redeemable Preferred Shares

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Regional Health Properties (RHE) has announced a dividend distribution of 250,000 shares of common stock to holders of its 12.5% Series B Cumulative Redeemable Preferred Shares. The distribution will be made on a pro rata basis, with shares rounded down to the nearest whole share. The dividend is scheduled for payment around February 19, 2025, with a record date of February 10, 2025.

The distribution is mandatory under Regional's Amended and Restated Articles of Incorporation. Shareholders will receive their shares in book entry form, with no physical certificates being issued. Notably, Series B Preferred Stock holders won't need to pay any cash, provide other consideration, or surrender their existing preferred shares to receive this distribution.

Regional Health Properties (RHE) ha annunciato una distribuzione di dividendi di 250.000 azioni di azioni ordinarie agli azionisti delle sue azioni preferenziali cumulative rimborsabili di tipo B al 12,5%. La distribuzione avverrà su base pro rata, con le azioni arrotondate al ribasso all'azione intera più vicina. Il pagamento del dividendo è previsto intorno al 19 febbraio 2025, con una data di registrazione del 10 febbraio 2025.

La distribuzione è obbligatoria ai sensi dei Documenti di Incorporazione Modificati e Ripristinati di Regional. Gli azionisti riceveranno le loro azioni in forma di registrazione contabile, senza l'emissione di certificati fisici. È importante notare che i detentori delle azioni preferenziali di tipo B non dovranno pagare contante, fornire altre valutazioni o rinunciare alle proprie azioni preferenziali esistenti per ricevere questa distribuzione.

Regional Health Properties (RHE) ha anunciado una distribución de dividendos de 250,000 acciones de acciones ordinarias a los tenedores de sus acciones preferentes acumulativas redimibles de la Serie B al 12,5%. La distribución se realizará de forma proporcional, redondeando las acciones hacia abajo a la acción entera más cercana. Se programó el pago del dividendo alrededor del 19 de febrero de 2025, con una fecha de registro del 10 de febrero de 2025.

La distribución es obligatoria bajo los Artículos de Incorporación Enmendados y Restablecidos de Regional. Los accionistas recibirán sus acciones en forma de anotación en cuenta, sin que se emitan certificados físicos. Es notable que los tenedores de acciones preferentes de la Serie B no necesitarán pagar en efectivo, proporcionar otra consideración ni renunciar a sus acciones preferentes existentes para recibir esta distribución.

Regional Health Properties (RHE)는 12.5% 시리즈 B 누적 환매우선주 보유자에게 250,000주의 보통주 배당금을 분배한다고 발표했습니다. 분배는 비율에 따라 이루어지며, 주식은 가장 가까운 정수로 내림하여 반올림됩니다. 배당금 지급은 2025년 2월 19일경으로 예정되어 있으며, 기록일은 2025년 2월 10일입니다.

이 분배는 Regional의 수정된 정관에 따라 의무적입니다. 주주들은 물리적인 증서 없이 장부 기입 형태로 주식을 받을 것입니다. 특히, 시리즈 B 우선주 보유자는 현금을 지급하거나 다른 대가를 제공하거나 기존의 우선주를 포기할 필요 없이 이 분배를 받을 수 있습니다.

Regional Health Properties (RHE) a annoncé une distribution de dividendes de 250 000 actions d'actions ordinaires aux détenteurs de ses actions privilégiées cumulatives remboursables de Série B à 12,5 %. La distribution sera faite au prorata, les actions étant arrondies à la baisse à l'action entière la plus proche. Le paiement du dividende est prévu autour du 19 février 2025, avec une date d'enregistrement du 10 février 2025.

La distribution est obligatoire selon les Statuts modifiés et révisés de Regional. Les actionnaires recevront leurs actions sous forme d'inscription en compte, sans émissions de certificats physiques. Notamment, les détenteurs d'actions privilégiées de Série B n'auront pas besoin de payer d'argent, de fournir d'autres contreparties ou de céder leurs actions privilégiées existantes pour recevoir cette distribution.

Regional Health Properties (RHE) hat eine Dividendenverteilung von 250.000 Aktien Stammaktien an die Inhaber ihrer 12,5% Serie B kumulierten, rückzahlbaren Vorzugsaktien angekündigt. Die Verteilung erfolgt anteilig, wobei die Aktien auf die nächstliegende ganze Aktie abgerundet werden. Die Dividende soll voraussichtlich am 19. Februar 2025 ausgezahlt werden, mit einem Stichtag am 10. Februar 2025.

Die Verteilung ist gemäß den geänderten und neu gefassten Unternehmenssatzungen von Regional obligatorisch. Die Aktionäre erhalten ihre Aktien in Form von Bucheinträgen, ohne dass physische Zertifikate ausgegeben werden. Es ist erwähnenswert, dass Inhaber der Serie B Vorzugsaktien kein Bargeld zahlen, keine andere Gegenleistung erbringen oder ihre bestehenden Vorzugsaktien abgeben müssen, um diese Verteilung zu erhalten.

Positive
  • Distribution of 250,000 common shares to preferred shareholders at no additional cost
  • No surrender or exchange of preferred shares required for distribution
Negative
  • Potential dilution of existing common stockholders due to issuance of 250,000 new shares

Insights

The announced distribution of 250,000 common shares to Series B Preferred stockholders represents a significant corporate action with notable implications for Regional Health Properties' capital structure. This mandatory distribution to holders of the 12.5% Series B Cumulative Redeemable Preferred Shares will result in immediate dilution for existing common shareholders.

The distribution's timing and structure reveal important insights about Regional's financial strategy. By issuing common shares instead of cash dividends, the company is preserving its cash resources while fulfilling its obligations to preferred shareholders. This approach suggests potential liquidity management considerations, particularly given the company's micro-cap status with a market capitalization of approximately $4.77 million.

For preferred shareholders, this distribution provides additional equity exposure and potential upside through common stock ownership, while maintaining their preferred share positions. The pro-rata distribution ensures equitable treatment among preferred shareholders, with the February 19 payment date allowing sufficient time for market participants to adjust their positions.

From a market perspective, this action could create near-term selling pressure on the common stock as some preferred shareholders may choose to liquidate their newly acquired common shares. The book-entry format of the distribution and the absence of any cash requirements for preferred shareholders streamlines the process but may contribute to increased trading volume and potential price volatility around the distribution date.

The mandatory nature of this distribution, as specified in the company's Amended and Restated Articles of Incorporation, underscores the rigid obligations Regional Health Properties has to its preferred shareholders, which is particularly relevant given the company's size and market position.

Atlanta, GA, Jan. 30, 2025 (GLOBE NEWSWIRE) -- Regional Health Properties, Inc. (“Regional”) (NYSE American: RHE) (NYSE American: RHE-PA) announced today that its Board of Directors declared a dividend to the holders of its 12.5% Series B Cumulative Redeemable Preferred Shares (the “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 (“Common Stock”), rounded down to the nearest whole share of Common Stock. The dividend will be paid on or about February 19, 2025 to holders of record of the Series B Preferred Stock as of the close of business on February 10, 2025. Regional 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.

The distribution of shares of Common Stock will be made in book entry form, and no physical share certificates of Common Stock will be issued.

Series B Preferred Stock shareholders will not be required to pay cash or other consideration for the shares of Common Stock to be distributed to them or to surrender or exchange their shares of Series B Preferred Stock to receive the distribution.

About Regional Health Properties

Regional Health Properties, Inc., headquartered in Atlanta, Georgia, is a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term care. For more information, visit https://www.regionalhealthproperties.com.

NO OFFER OR SOLICITATION

Communications in this press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any proxy vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”).

ADDITIONAL INFORMATION

The proposed merger of SunLink Health Systems, Inc., a Georgia corporation (“SunLink”), with and into Regional, with Regional surviving the merger, will be submitted to both the Regional and SunLink shareholders for their consideration. In connection with the proposed merger, Regional will file a Registration Statement on Form S-4 (the “Registration Statement”) with the SEC that will include a joint proxy statement/prospectus for Regional and SunLink and other relevant documents concerning the proposed merger.

INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE CORRESPONDING JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS, AS THEY WILL CONTAIN IMPORTANT INFORMATION.

You will be able to obtain a copy of the joint proxy statement/prospectus once filed, as well as other filings containing information about Regional and SunLink, without charge, at the SEC’s website (http://www.sec.gov) or by accessing Regional’s website (http://www.regionalhealthproperties.com) under the tab “Investor Relations” or by accessing SunLink’s website (http://www.sunlinkhealth.com) under the tab “Investors.” Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to Investor Relations, Regional Health Properties, Inc., 1050 Crowne Point Parkway, Suite 720, Atlanta, Georgia, 30338, telephone 678-869-5116 or to Investor Relations, SunLink Health Systems, Inc., 900 Circle 75 Parkway, Suite 690, Atlanta, Georgia, 30339, telephone 770-933-7004.

Regional and SunLink and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Regional and SunLink in connection with the proposed merger. Information about the directors and executive officers of Regional is set forth in the proxy statement for Regional’s 2024 annual meeting of shareholders, as filed with the SEC on Schedule 14A on December 13, 2024, which information may be updated by Regional from time to time in subsequent filings with the SEC. Information about the directors and executive officers of SunLink is set forth in the proxy statement for SunLink’s 2024 annual meeting of shareholders, as filed with the SEC on Schedule 14A on June 6, 2024, which information may be updated by SunLink from time to time in subsequent filings with the SEC. Additional information about the interests of those participants and other persons who may be deemed participants in the transaction may also be obtained by reading the joint proxy statement/prospectus relating to the proposed merger when it becomes available. Free copies of this document may be obtained as described above.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These forward-looking statements include, but are not limited to, statements relating to the payment of a Common Stock dividend to holders of Regional’s Series B Preferred Stock; the expected timing and benefits of the proposed merger between Regional and SunLink, including future financial and operating results, cost savings, enhanced revenues, and accretion/dilution to reported earnings that may be realized from the merger, as well as other statements of expectations regarding the merger, and other statements of Regional’s goals, intentions and expectations; statements regarding Regional’s business plan and growth strategies; estimates of Regional’s risks and future costs and benefits, whether with respect to the merger or otherwise; and the payment of a cash dividend by SunLink.

These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things:

  • the risk that the businesses of Regional and SunLink will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected;
  • expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame;
  • revenues following the merger may be lower than expected;
  • customer, vendor and employee relationships and business operations may be disrupted by the merger;
  • the ability to obtain required regulatory approvals or the approvals of Regional’s or SunLink’s shareholders, and the ability to complete the merger on the expected timeframe;
  • the costs and effects of litigation and the possible unexpected or adverse outcomes of such litigation;
  • the ability of Regional and SunLink to meet the continued listing requirements of the NYSE American LLC and to maintain the listing of securities thereon;
  • possible changes in economic and business conditions;
  • the impacts of epidemics, pandemics or other infectious disease outbreaks;
  • the existence or exacerbation of general geopolitical instability and uncertainty;
  • possible changes in monetary and fiscal policies, and laws and regulations;
  • competitive factors in the healthcare industry;
  • Regional’s dependence on the operating success of its operators;
  • the amount of, and Regional’s ability to service, its indebtedness;
  • covenants in Regional’s debt agreements that may restrict its ability to make investments, incur additional indebtedness and refinance indebtedness on favorable terms;
  • the effect of increasing healthcare regulation and enforcement on Regional’s operators and the dependence of Regional’s operators on reimbursement from governmental and other third-party payors;
  • the relatively illiquid nature of real estate investments;
  • the impact of litigation and rising insurance costs on the business of Regional’s operators;
  • the effect of Regional’s operators declaring bankruptcy, becoming insolvent or failing to pay rent as due;
  • the ability of any of Regional’s operators in bankruptcy to reject unexpired lease obligations and to impede its ability to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor’s obligations;
  • Regional’s ability to find replacement operators and the impact of unforeseen costs in acquiring new properties; and
  • other risks and factors identified in (i) Regional’s cautionary language included under the headings “Statement Regarding Forward-Looking Statements” and “Risk Factors” in Regional’s Annual Report on Form 10-K for the year ended December 31, 2023, and other documents subsequently filed by Regional with the SEC and (ii) SunLink’s cautionary language included under the headings “Forward-Looking Statements” and “Risk Factors” in SunLink’s Annual Report on Form 10-K for the year ended June 30, 2024, and other documents subsequently filed by SunLink with the SEC.

Neither Regional nor SunLink undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this press release. In addition, Regional’s and SunLink’s past results of operations do not necessarily indicate either of their anticipated future results, whether the merger is effectuated or not.

Regional Contact
Brent Morrison, CFA
Chief Executive Officer & President
Regional Health Properties, Inc.
Tel (404) 823-2359
Brent.morrison@regionalhealthproperties.com


FAQ

When will RHE distribute the common stock dividend to Series B preferred shareholders?

RHE will distribute the common stock dividend on or about February 19, 2025, to Series B preferred shareholders of record as of February 10, 2025.

How many common shares will RHE distribute to Series B preferred shareholders?

RHE will distribute 250,000 shares of common stock to Series B preferred shareholders on a pro rata basis.

Do RHE Series B preferred shareholders need to pay for the common stock distribution?

No, Series B preferred shareholders are not required to pay cash or provide any other consideration for the common stock distribution.

Will RHE issue physical certificates for the distributed common shares?

No, the distribution will be made in book entry form, and no physical share certificates will be issued.

Do RHE Series B preferred shareholders need to surrender their preferred shares for this distribution?

No, Series B preferred shareholders do not need to surrender or exchange their preferred shares to receive the common stock distribution.

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Medical Care Facilities
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United States
ATLANTA