# EDGAR Filing Document

**Accession Number:** 0001004724
**File Stem:** 0001493152-25-020243
**Filing Date:** 2025-10
**Character Count:** 30051
**Document Hash:** 76894b8a05423226015f09228878c2c9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-020243.hdr.sgml**: 20251030

**ACCESSION NUMBER**: 0001493152-25-020243

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20250814

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20251030

**DATE AS OF CHANGE**: 20251030

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** REGIONAL HEALTH PROPERTIES, INC
- **CENTRAL INDEX KEY:** 0001004724
- **STANDARD INDUSTRIAL CLASSIFICATION:** LESSORS OF REAL PROPERTY, NEC [6519]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 815166048
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-33135
- **FILM NUMBER:** 251436171

**BUSINESS ADDRESS:**
- **STREET 1:** 1050 CROWN POINTE PARKWAY
- **STREET 2:** SUITE 720
- **CITY:** ATLANTA
- **STATE:** GA
- **ZIP:** 30338
- **BUSINESS PHONE:** 678-869-5116

**MAIL ADDRESS:**
- **STREET 1:** 1050 CROWN POINTE PARKWAY
- **STREET 2:** SUITE 720
- **CITY:** ATLANTA
- **STATE:** GA
- **ZIP:** 30338

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ADCARE HEALTH SYSTEMS, INC
- **DATE OF NAME CHANGE:** 20130530

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ADCARE HEALTH SYSTEMS INC
- **DATE OF NAME CHANGE:** 19951208

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K/A**

**(Amendment No. 1)**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the**

**Securities Exchange Act of 1934**

**Date of report (Date of earliest event reported): August 14, 2025**

**Regional Health Properties, Inc.**

**(Exact Name of Registrant as Specified in its Charter)**

---

| | | |
|:---|:---|:---|
| **Georgia** | **001-33135** | **81-5166048** |
| **(State or Other Jurisdiction** | **(Commission** | **(I.R.S. Employer** |
| **of Incorporation)** | **File Number)** | **Identification No.)** |

---

**1050 Crown Pointe Parkway**

**Suite 720**

**Atlanta, Georgia 30338**

**(Address of Principal Executive Offices, and Zip Code)**

**(678) 869-5116**

**(Registrant**'**s telephone number, including area code)**

**Not applicable.**

**(Former Name or Former Address, if Changed Since Last Report)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<u>see</u> General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Explanatory Note**

Effective August 14, 2025 (the "Closing Date"), Regional Health Properties, Inc., a Georgia corporation (the "Company"), completed its previously announced merger with SunLink Health Systems, Inc., a Georgia corporation ("SunLink"), pursuant to that certain Amended and Restated Agreement and Plan of Merger, dated as of April 14, 2025, by and between the Company and SunLink (the "Original Merger Agreement"), as amended by that certain Amendment to Amended and Restated Agreement and Plan of Merger, dated as of June 22, 2025, by and between the Company and SunLink (the "Merger Agreement Amendment") (the Original Merger Agreement, as amended by the Merger Agreement Amendment, the "Merger Agreement"). Pursuant to the Merger Agreement, on the Closing Date, SunLink merged with and into the Company, with the Company continuing as the surviving corporation (the "Merger").

On the Closing Date, the Company filed a Current Report on Form 8-K reporting the completion of the Merger (the "Original Report"). This Amendment No. 1 to the Original Report is being filed with the Securities and Exchange Commission (the "Commission") solely to amend and supplement Item 9.01 of the Original Report, as described in Item 9.01 below. This Amendment No. 1 makes no other amendments to the Original Report.

**Item 9.01 Financial Statements and Exhibits.**

---

| | |
|:---|:---|
| (a) | Financial statements of businesses acquired.<br>|
|  | Pursuant to General Instruction B.3 of Form 8-K, the audited consolidated financial statements of SunLink as of and for the years ended June 30, 2024 and 2023, including the independent auditor's report, the unaudited condensed consolidated balance sheet of SunLink as of March 31, 2025 and the unaudited condensed consolidated financial statements as of March 31, 2025 and for the three and nine month periods ended March 31, 2025 and 2024 are not required to be filed again by this Current Report on From 8-K, because substantially the same information was previously filed in the Company's Registration Statement on Form S-4, as originally filed with the Commission on May 5, 2025 (File No. 333-286975) and as thereafter amended. |
| (b) | Pro forma financial information |
|  | The unaudited pro forma condensed consolidated combined financial information as of and for the six months ended June 30, 2025 and for the year ended December 31, 2024 is filed herewith as Exhibit 99.1 and is incorporated by reference into this Item 9.01(b) |
| (c) | Shell company transactions. None. |
| (d) | Exhibits. |

---

99.1 [Unaudited Pro Forma Condensed Combined Consolidated Financial Information as of and for the six months ended June 30, 2025 and for the year ended December 31, 2024](ex99-1.htm) <br> 104 Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL)

**SIGNATURES**

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

---

| | | | |
|:---|:---|:---|:---|
|  |  | **REGIONAL HEALTH PROPERTIES, INC.** | **REGIONAL HEALTH PROPERTIES, INC.** |
| Date: | October 30, 2025 | By: | */s/ Brent Morrison* |
|  |  |  | Brent Morrison |
|  |  |  | Chief Executive Officer and President |

---

## Exhibit 99.1

**Exhibit 99.1**

**UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS**

The following unaudited pro forma condensed combined financial information and the accompanying notes (the "**pro forma financial information**") are presented to illustrate the estimated effects of the August 14, 2025 merger between Regional Health Properties, Inc. ("**Regional**") and SunLink Health Systems, Inc. ("**SunLink**") pursuant to that certain Amended and Restated Agreement and Plan of Merger, dated as of April 14, 2025, by and between Regional and SunLink (the "**Original Merger Agreement**"), as amended by that certain Amendment to Amended and Restated Agreement and Plan of Merger, dated as of June 22, 2025, by and between Regional and SunLink (the "**Merger Agreement Amendment**") (the Original Merger Agreement, as amended by the Merger Agreement Amendment, the "**merger agreement**"). Regional will consolidate SunLink into its financial statements. This reflects the accounting treatment of the merger, where Regional is the acquirer and SunLink is the acquiree.

The following transactions are expected to occur in accordance with the merger agreement:

● On August 14, 2025, SunLink merged with and into Regional, with Regional continuing as the surviving corporation.

● Each five shares of SunLink common stock, other than excluded shares, were converted into (i) 1.1330 shares of Regional common stock and (ii) one share of Regional Series D preferred stock, and each SunLink equity award that is then outstanding and unexercised was cancelled and ceased to exist and no consideration was delivered in exchange for the SunLink equity award. At the merger, 1,595,400 Shares of Regional common stock and 1,408,121 Regional Series D preferred stock were issued.

● After consummation of the merger agreement transactions, the current stockholders of Regional owned approximately 56.94% of the combined company, and the current stockholders of SunLink owned approximately 43.06% of the combined company, which includes 100,000 shares of Regional common stock issued to Mr. Robert Thornton.

The pro forma financial information has been prepared using the following assumptions:

● The unaudited pro forma condensed combined balance sheet of the combined company as of June 30, 2025 assumes that the merger had occurred on June 30, 2025.

● The unaudited pro forma condensed combined statement of operations of the combined company for the year ended December 31, 2024 and unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2024 assumes that the merger had occurred on January 1, 2024, the beginning of the earliest period presented.

The pro forma financial information has been compiled using, and should be read in conjunction with the following:

● The audited consolidated financial statements for the year ended December 31, 2024 included in the Form 10-K filed by Regional with the SEC on March 31, 2025. Unaudited consolidated financial statements for the six months ended June 30, 2025 as included in the Form 10-Q filed by Regional with the SEC on August 14, 2025;

● The audited consolidated financial statements and notes of SunLink as of and for the year ended June 30, 2024, are included in the Form 10-K filed by SunLink with the SEC on September 30, 2024. Unaudited consolidated financial statements for the six months ended December 31, 2024 are included in the Form 10-Q filed by SunLink with the SEC on February 12, 2025, respectively; and

● The accompanying notes to the unaudited pro forma condensed combined financial information;

The pro forma financial information is for informational purposes only and is not necessarily indicative of what the actual consolidated results of operations and financial position of the combined company would have been had the merger taken place on the dates indicated, nor are they indicative of future consolidated results of operations or financial position of the combined company. The pro forma financial information is based on the information available to management at the time of preparation and assumptions that management believes are reasonable and supportable.

**UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET**

**As of June 30, 2025**

***(in thousands)***

 ****

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Regional Health**<br> **Properties, Inc.**<br> **(Historical)** | **SunLink Health**<br> **Systems, Inc.**<br> **(Historical)** | **Transaction**<br> **Accounting**<br> **Adjustments**<br> **(Note 3)** | **Accounting**<br> **Adjustment**<br> **(Note 3)**  | **Pro Forma**<br> **Combined** |
| Property and equipment, net | $33015 | $1759 | $1441 | $— **D** | $36215 |
| Assets held for sale, net | 10372 |  |  |  | 10372 |
| Cash | 401 | 7407 | (705) | — **G** | 4355 |
|  |  |  |  | (2748) **H** |  |
| Restricted Cash | 2808 |  |  |  | 2808 |
| Receivables, net | 6805 | 2861 |  |  | 9666 |
| Prepaids and other assets | 692 | 1139 |  |  | 1831 |
| Inventory |  | 1419 |  |  | 1419 |
| Intangible assets | 4116 | 1180 | 830 | — **D** | 6126 |
| ROU operating lease assets | 1929 | 646 |  |  | 2575 |
| Total Assets | $60138 | $16411 | $1566 | $(2748) | $75367 |
| Debt, net | $47945 | $— | $— | $— | $47945 |
| Accounts Payable | 7082 | 1308 | 734 | — **A** | 9124 |
| Operating lease obligation | 2220 | 616 |  |  | 2836 |
| Accrued expenses and other liabilities | 8345 | 1936 |  |  | 10281 |
| Total Liabilities | 65592 | 3860 | 734 |  | 70186 |
| Common stock and APIC | 63952 | 14268 | (14268) | — **F** | 67111 |
|  |  |  | 3159 | **B** |  |
| Preferred Stock - Series A | 426 |  |  |  | 426 |
| Preferred Stock - Series B | 18602 |  |  | (3026) **H** | 15576 |
| Preferred Stock - Series D |  |  | 4691 | — **C** | 4691 |
| &nbsp;&nbsp;&nbsp;(Accumulated deficit) Retained Earnings | (88434) | (1717) | 1717 | — **F** | (82623) |
|  |  |  | (734) | **A** |  |
|  |  |  | 6267 | **E** |  |
|  |  |  |  | 278 **H** |  |
| Total Equity | (5454) | 12551 | 832 | (2748) **I** | 5181 |
| &nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $60138 | $16411 | $1566 | $(2748) | $75367 |

---

 ****

*See accompanying notes to the unaudited pro forma condensed combined financial statements.*

 ****

 ****

**UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS**

**For the Year Ended December 31, 2024**

***(in thousands)***

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Regional Health <br>Properties, Inc. <br>(Historical)** | **SunLink Health <br>Systems, Inc. <br>(Historical)** | **Transaction <br>Accounting <br>Adjustments <br>(Note 3)** | **Accounting**<br> **Adjustment**<br> **(Note 3)**  | **Pro Forma <br>Combined** |
| **Revenues:** |  |  |  |  |  |
| Patient care revenues | $11273 | $— | $— | $— | $11273 |
| Rental revenues | 7005 |  |  |  | 7005 |
| Management fees |  | 31233 |  |  | 31233 |
| Other revenues | 57 |  |  |  | 57 |
| &nbsp;&nbsp;&nbsp;Total revenues | 18335 | 31233 |  |  | 49568 |
| **Expenses:** |  |  |  |  |  |
| Cost of goods sold |  | 17814 |  |  | 17814 |
| Patient care expense | 9442 |  |  |  | 9442 |
| Facility rent expense | 594 |  |  |  | 594 |
| Cost of management fees |  |  |  |  |  |
| Depreciation and amortization | 2062 | 1392 |  | 316 **B** | 3770 |
| General and administrative expense | 5408 | 12800 |  |  | 18208 |
| Credit loss expense | 668 |  |  |  | 668 |
| Other operating expenses |  | 2961 | 734 | — **A** | 3695 |
| &nbsp;&nbsp;&nbsp;Total expenses | 18174 | 34967 | 734 | 316 | 54191 |
| &nbsp;&nbsp;&nbsp;Income (Loss) from operations | 161 | (3734) | (734) | (316) d | (4623) |
| **Other (income) expense:** |  |  |  |  |  |
| Interest expense, net | 2710 | 42 |  |  | 2752 |
| Gain on sale of assets |  | (694) |  |  | (694) |
| Gain on bargain purchase |  |  | (6267) | — **C** | (6267) |
| Other expense (income), net | 669 | (200) |  |  | 469 |
| &nbsp;&nbsp;&nbsp;Total other expense, net | 3379 | (852) | (6267) |  | (3740) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings (loss) from continuing operations before income taxes | (3218) | (2882) | 5533 | (316) | (883) |
| Income tax benefit |  | (10) |  |  | (10) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings (loss) from continuing operations after income taxes | (3218) | (2872) | 5533 | (316) | (873) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deemed contribution related to |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Series B purchases |  |  |  | 278 **D** | 278 |
| &nbsp;&nbsp;&nbsp;Net profit (loss) | (3218) | (2872) | 5533 | (38) | (595) |
| &nbsp;&nbsp;&nbsp;Earnings (loss) from discontinued operations, net of income taxes |  | 1593 |  |  | 1593 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net profit (loss) attributable to common stockholders | (3218) | (1279) | 5533 | (38) | 998 |
| &nbsp;&nbsp;&nbsp;Net profit (loss) per share of common stock: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic: | $(1.73) | $(0.18) |  |  | $0.29 |
| &nbsp;&nbsp;&nbsp;Diluted: | $(1.73) | $(0.18) |  |  | $0.29 |
| &nbsp;&nbsp;&nbsp;Weighted average shares of common stock outstanding: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic: | 1858 | 7041 |  | 1595 | 3453 |
| &nbsp;&nbsp;&nbsp;Diluted: | 1858 | 7041 |  | 1595 | 3453 |

---

*See accompanying notes to the unaudited pro forma condensed combined financial statements.*

 ****

 ****

**UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS**

**For the Six Months Ended June 30, 2025**

***(in thousands)***

 ****

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Regional Health** <br> **Properties, Inc.** <br> **(Historical)** | **SunLink Health** <br> **Systems, Inc.** <br> **(Historical)** | **Transaction** <br> **Accounting** <br> **Adjustments**<br> **(Note 3)** | **Accounting** <br> **Adjustment** <br> **(Note 3)** | **Pro Forma** <br> **Combined** |
| **Revenues:** |  |  |  |  |  |
| Patient care revenues | $14416 | $— | $— | $— | $14416 |
| Rental revenues | 2831 |  |  |  | 2831 |
| Pharmacy revenues |  | 15218 |  |  | 15218 |
| Other revenues |  | 40 |  |  | 40 |
| &nbsp;&nbsp;&nbsp;Total revenues | 17247 | 15258 |  |  | 32505 |
| **Expenses:** |  |  |  |  |  |
| Cost of goods sold |  | 9002 |  |  | 9002 |
| Patient care expense | 11585 |  |  |  | 11585 |
| Facility rent expense | 356 | 97 |  |  | 453 |
| Cost of management fees |  |  |  |  |  |
| Depreciation and amortization | 805 | 685 |  | 159 **A** | 1649 |
| General and administrative expense | 4659 | 7223 |  |  | 11882 |
| Credit loss expense | 470 |  |  |  | 470 |
| Loss on lease transfer | 303 |  |  |  | 303 |
| Gain on operations transfer | (106) |  |  |  | (106) |
| Other operating expenses |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total expenses | 18072 | 17007 |  | 159 | 35238 |
| &nbsp;&nbsp;&nbsp;Loss from operations | (825) | (1749) |  | (159) | (2733) |
| **Other (income) expense:** |  |  |  |  |  |
| Interest expense, net | 1268 | (114) |  |  | 1154 |
| Gain on sale of assets |  | (186) |  |  | (186) |
| Gain on bargain purchase |  |  |  |  |  |
| Other expense (income), net | 618 |  |  |  | 618 |
| &nbsp;&nbsp;&nbsp;Total other expense, net | 1886 | (300) |  |  | 1586 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from continuing operations before income taxes | (2711) | (1449) |  | (159) | (4319) |
| Income tax benefit |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from continuing operations after income taxes | (2711) | (1449) |  | (159) | (4319) |
| &nbsp;&nbsp;&nbsp;Net loss | (2711) | (1449) |  | (159) | (4319) |
| &nbsp;&nbsp;&nbsp;Preferred stock dividend | (603) |  |  |  | (603) |
| &nbsp;&nbsp;&nbsp;Loss from discontinued operations, net of income taxes |  | (85) |  |  | (85) |
| &nbsp;&nbsp;&nbsp;Loss attributable to common stockholders | (3314) | (1534) |  | (159) | (5007) |
| &nbsp;&nbsp;&nbsp;Net loss per share of common stock: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic: | $(1.60) | $(0.22) |  |  | $(1.37) |
| &nbsp;&nbsp;&nbsp;Diluted: | $(1.60) | $(0.22) |  |  | $(1.37) |
| &nbsp;&nbsp;&nbsp;Weighted average shares of common stock outstanding: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic: | 2068 | 7041 |  | 1595 | 3663 |
| &nbsp;&nbsp;&nbsp;Diluted: | 2068 | 7041 |  | 1595 | 3663 |

---

 ****

*See accompanying notes to the unaudited pro forma condensed combined financial statements.*

 

 ****

**NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS**

**Note 1 — Basis of Presentation**

The pro forma financial information has been prepared in accordance with Article 11 of Regulation S-X, as amended by the final rule, Release 33-10786 "Amendments to Financial disclosures about Acquired and Disposed Businesses" ("**Article 11 of Regulation S-X**"), and the assumptions set forth herein. The pro forma adjustments include transaction accounting adjustments, which reflect the application of required accounting for the merger and other transactions contemplated by the merger agreement. Article 11 of Regulation S-X permits presentation of reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur ("**Management's Adjustments**"). Regional has elected not to present Management's Adjustments as the specificity of the timing and nature of such items is still under evaluation as of the date of this joint proxy statement/prospectus.

**Accounting for the Merger**

The merger is accounted for as a business combination pursuant to Accounting Standards Codification Topic 805, *Business Combinations* ("**ASC 805**"), where Regional is determined to be the accounting acquirer of SunLink, based upon an evaluation of the following primary factors:

● Immediately following the merger, former Regional shareholders held 54.08% of the voting rights, and former SunLink shareholders are expected to hold 45.92% of the voting rights, including 100,000 shares of Regional common stock issued to Mr. Robert Thornton.

● Regional surpasses SunLink in size as measured by enterprise value.

The assets and liabilities of SunLink on the closing date will be consolidated into Regional at their respective fair values, and the excess or shortfall of the purchase price consideration over the fair value of SunLink's net assets will be recognized as goodwill or gain on bargain purchase, respectively. Fair value is defined in Accounting Standards Codification Topic 820, *Fair Value Measurements and Disclosures* ("**ASC 820**") as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." Fair value measurements can be highly subjective, and it is possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances.

**Purchase price consideration**

The acquirer's stock price is used to measure the consideration transferred in the acquisition.

The consideration transferred is $7.85 million which is calculated as (a) the product of Regional's closing bid stock price as of August 14, 2025, on the OTCQB and the amount of Regional common stock expected to be issued plus (b) the product of Regional Series D preferred stock expected to be issued at $3.33. Over-the-market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

**Purchase price allocation**

The allocation of the purchase price consideration, including any related tax effects, is preliminary and pending finalization of various estimates, inputs and analyses used in the valuation assessment of the specifically identifiable tangible and intangible assets acquired. This preliminary determination is subject to further assessment and adjustments pending additional information sharing between the parties, more detailed third-party appraisals, and other potential adjustments.

The unaudited pro forma condensed combined financial information reflects a gain on bargain purchase because the estimated fair value of the identifiable net assets acquired exceeds the estimated preliminary purchase price consideration. Since the pro forma financial information has been prepared based on preliminary estimates of consideration and fair values attributable to the business combination, the actual amounts eventually recorded may differ materially from the information presented, which may increase, reduce, or eliminate the gain on bargain purchase.

The preliminary allocation of the purchase price consideration is as follows (in thousands):

---

| | |
|:---|:---|
| Regional common stock issued to SunLink shareholders | $3159 |
| Regional Series D preferred stock issued to SunLink shareholders | 4691 |
| **Fair value of consideration transferred** | $**7850** |
| Property and equipment, net | 3200 |
| Cash | 6702 |
| Receivables, net | 2861 |
| Prepaids and other assets | 1139 |
| Inventory | 1419 |
| Intangible assets | 2010 |
| ROU operating lease assets | 646 |
| **Estimated fair value of total assets acquired** | $**17977** |
| Accounts Payable | 1308 |
| Operating lease obligation | 616 |
| Accrued expenses and other liabilities | 1936 |
| **Estimated fair value of total liabilities assumed** | $**3860** |
| **Estimated fair value of net assets acquired** | $**14117** |
| **Gain on bargain purchase** | $**(6267)** |

---

**Note 2 — Accounting Policies**

After consummation of the merger, management is performing a comprehensive review of the two entities' accounting policies. As a result of the review, management may identify differences between the accounting policies of the two entities which, when confirmed, could have a material impact on the combined financial statements of the combined company. Based on its initial analysis, management did not identify any differences that would have a material impact on the unaudited pro forma condensed combined financial information.

**Note 3 — Pro Forma Adjustments**

Explanations of the adjustments to the unaudited condensed combined pro financial statements are as follows:

*Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2025*

**A** Represents the accrual of transaction costs directly attributable to the merger that have been incurred or are expected to be incurred by Regional and SunLink.

**B** Reflects the issuance of shares of Regional common stock to SunLink shareholders.

**C** Reflects the issuance of shares of Regional Series D preferred stock to SunLink shareholders.

**D** Represents the increase in property and equipment, net, and intangible assets to fair value of the acquired SunLink assets at the merger date.

**E** Represents the gain realized from a bargain purchase in accordance with ASC 805 when the estimated fair value of the identifiable net assets acquired exceeds the estimated preliminary purchase price consideration.

**F** Cancellation of SunLink equity

**G** $.10 dividend paid to SunLink shareholders on July 30, 2025.

**H** Purchase of 366,359 Preferred Series B shares by Regional in September 2025 for $2,748.

**I** Net adjustment to Stockholder's Equity

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Retirement of**<br> **SunLink Equity<sup>(1)</sup>** | **Fair Value of**<br> **Purchase Price**<br> **Consideration<sup>(2)</sup>** | **Estimated**<br> **Transaction**<br> **Costs<sup>(3)</sup>** | **Purchase of Series B Shares<sup>(4)</sup>** | **Gain on**<br> **bargain**<br> **purchase<sup>(5)</sup>** | **Net**<br> **Adjustment<sup>(6)</sup>** |
| Common stock and APIC | (14268) | 3159 |  |  |  | (11109) |
| Preferred Series B |  |  |  | (3026) |  | (3026) |
| Preferred Series D |  | 4691 |  |  |  | 4691 |
| Accumulated deficit | 1717 |  | (734) | 278 | 6267 | 7528 |
| **Total stockholders' equity** | $(12551) | $7850 | $(734) | (2748) | $6267 | $(1916) |

---

(1) To
 remove the historical equity of SunLink, the accounting acquiree, as a result of the merger.

(2) To
 recognize the fair value of the purchase price consideration paid by Regional in the acquisition of SunLink. Refer to Note 1 for
 the components of the purchase price consideration.

(3) Estimated
 transaction costs.

(4) Effect
 of repurchase of 366,359 Preferred Series B shares in September 2025.

(5) Amounts
 recognized as gain on bargain purchase, see E above.

(6) Net
 adjustments to stockholder's equity.

 

*Unaudited Pro Forma Condensed Combined Statement of Operations as of December 31, 2024*

 

**A** Represents the accrual of transaction costs directly attributable to the merger that have been incurred or are expected to be incurred by Regional and SunLink.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** Presents the increased depreciation expense and intangible assets amortization expense resulting from the increase in property and equipment, net, and intangible assets to fair value of the acquired SunLink assets at the merger date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** Represents the gain realized from a bargain purchase in accordance with ASC 805 when the estimated fair value of the identifiable net assets acquired exceeds the estimated preliminary purchase price consideration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** Represents the proforma deemed contribution to Accumulated Deficit resulting from the September 2025 purchase of 366,359 Preferred Series B shares by Regional for $2,748.

 

*Unaudited Pro Forma Condensed Combined Statement of Operations as of June 30, 2025*

 

**A.** Presents the increased depreciation expense and intangible assets amortization expense resulting from the increase in property and equipment, net, and intangible assets to fair value of the acquired SunLink assets at the merger date.

**Note 4—Loss per Share**

As the unaudited pro forma condensed combined statement of operations assumes that the merger had occurred at January 1, 2024, the beginning of the earliest period presented, the calculation of weighted average shares outstanding for basic and diluted earnings per share assumes that the shares issuable relating to the merger have been outstanding for the entirety of the period presented. As the combined company is in a pro forma net loss position, and all potentially dilutive securities were determined to be anti-dilutive, the combined company's pro forma diluted net loss per share is the same as its pro forma basic net loss per share.

The table below presents the components of the pro forma earnings per share calculation (in thousands, except per share data):

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| | | |
|:---|:---|:---|
|  | **For the year**<br> **ended<br> December 31, 2024** | **For the six months**<br> **ended**<br> **June 30, 2025** |
| **Pro Forma net earnings (loss)** | $873 | $(5007) |
| **Basic Shares:** |  |  |
| Regional historical weighted average shares outstanding | 1858 | 2068 |
| New Regional Issued to SunLink holders | 1595 | 1595 |
| Basic weighted average shares outstanding | 3453 | 3663 |
| Pro forma net earnings (loss) per share, basic and diluted | $0.29 | $(1.37) |

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