Healthcare Merger Deal: Regional Health-SunLink Negotiation Gets 6-Week Extension

Rhea-AI Filing Summary

Regional Health Properties (RHE) and SunLink Health Systems have amended their Merger Agreement, extending the termination deadline from June 30, 2025, to August 11, 2025, 5:00 PM ET. This extension comes as both companies acknowledge that required shareholder approvals have not been obtained and are unlikely to be secured by the original deadline.

Key developments include:

• NYSE American filed Form 25 on June 11, 2025, to delist Regional's common stock and Series A Preferred Stock
• Both securities now trade on OTCQB under symbols "RHEP" and "RHEPA"
• Regional will file an S-4 Registration Statement including a joint proxy statement/prospectus for the proposed merger

The merger remains subject to several risks, including integration challenges, potential revenue synergy shortfalls, regulatory approvals, and shareholder approvals. The company cautions investors about forward-looking statements and urges review of the forthcoming joint proxy statement/prospectus for complete merger details.

Positive

• Extension of merger agreement deadline with SunLink Health Systems from June 30 to August 11, 2025, demonstrating continued commitment to complete the strategic merger
• Potential for revenue synergies and cost savings through the proposed merger with SunLink, creating a stronger combined healthcare entity

Negative

• NYSE American delisting of both common stock and Series A Preferred Stock, with trading moved to OTCQB market, indicating reduced market visibility and potentially lower liquidity
• Failure to obtain required shareholder approvals from both Regional and SunLink shareholders by original deadline, suggesting potential resistance to the merger terms
• Integration risks highlighted including potential customer/vendor disruptions, lower-than-expected revenues, and uncertain cost savings realization

Insights

M&A Specialist

Regional Health Properties extended its merger deadline with SunLink to August 11, 2025 as both companies have failed to secure required shareholder approvals.

This filing reveals a crucial development in the proposed merger between Regional Health Properties and SunLink Health Systems. The companies have extended their merger termination deadline from June 30 to August 11, 2025 through an amendment to their Amended and Restated Agreement and Plan of Merger. The extension was necessitated because neither company has obtained the required shareholder approvals, with both parties acknowledging these approvals won't be secured by the original June 30 deadline.

The delay in securing shareholder approvals raises significant questions about investor sentiment toward the transaction. When merger timelines extend, it typically signals complications in the approval process that could ultimately impact deal certainty. The amendment doesn't modify any substantive terms of the merger agreement beyond the deadline extension, suggesting the core business combination remains intact - SunLink will merge into Regional, with Regional surviving.

It's notable that Regional's securities were delisted from NYSE American on June 11 and now trade on the OTCQB market under symbols "RHEP" and "RHEPA" for its common and preferred shares respectively. This market downgrade adds complexity to the merger dynamics and could potentially impact investor participation in the approval process. The delay could also expose the transaction to additional market risks and uncertainty during this extended period.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): June 22, 2025

Regional Health Properties, Inc.

(Exact Name of Registrant as Specified in its Charter)

Georgia		001-33135		81-5166048
(State or Other Jurisdiction of		(Commission		(I.R.S. Employer
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 (see 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:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, no par value		RHEP(1)		N/A(1)
Series A Redeemable Preferred Shares, no par value		RHEPA(1)		N/A(1)

(1) On June 11, 2025, NYSE American LLC (“NYSE American”) filed a Form 25 with the U.S. Securities and Exchange Commission to delist Regional Health Properties, Inc.’s (“Regional”) common stock, no par value (the “Common Stock”), and Regional’s Series A Redeemable Preferred Shares, no par value (the “Series A Preferred Stock”), from NYSE American. The Common Stock and the Series A Preferred Stock trade on the OTCQB under the symbols “RHEP” and “RHEPA,” respectively.

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. ☐

Item 1.01 Entry Into a Material Definitive Agreement

As previously disclosed, on April 14, 2025, Regional Health Properties, Inc., a Georgia corporation (“Regional”), and SunLink Health Systems, Inc., a Georgia corporation (“SunLink”), entered into an Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which SunLink will merge with and into Regional (the “Merger”), with Regional surviving the Merger as the surviving corporation. The Merger Agreement provides that it may be terminated if the Effective Time shall not have occurred by 5:00 p.m., Eastern time, on June 30, 2025 (“Termination Date”).

On June 22, 2025, Regional and SunLink entered into an Amendment to Amended and Restated Agreement and Plan of Merger (the “Amendment”) pursuant to which Regional and SunLink each agreed to extend the “Termination Date” until 5:00 p.m., Eastern time, on August 11, 2025 and make a clarifying clean-up change. Regional and SunLink acknowledge in the Amendment that the Regional Shareholder Approval (as defined in the Merger Agreement, as amended by the Amendment) and the SunLink Shareholder Approval (as defined in the Merger Agreement, as amended by the Amendment) have not been obtained and that Regional and SunLink have reasonably determined that such outstanding approvals will not be obtained by 5:00 p.m., Eastern time, on June 30, 2025. In light of these outstanding approvals, Regional and SunLink determined to approve the Amendment. As amended, the Merger Agreement may be terminated by each of Regional and SunLink under certain circumstances, including if the Merger is not consummated by 5:00 p.m., Eastern time, on August 11, 2025.

The foregoing description of the Amendment is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 2.1 hereto and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
2.1		Amendment to Amended and Restated Agreement and Plan of Merger, dated as of June 22, 2025, by and between Regional Health Properties, Inc. and SunLink Health Systems, Inc.
104		Cover page in Inline XBRL format

* * *

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NO OFFER OR SOLICITATION

Communications in this Current Report on Form 8-K 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 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 U.S. Securities and Exchange Commission (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.

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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 can also be obtained, without charge, by directing a request to Investor Relations, Regional Health Properties, Inc., 1050 Crown Pointe 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 Part III of Regional’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “Regional Annual Report”), 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 Part III of SunLink’s Amendment No. 1 to Annual Report on Form 10-K/A for the fiscal year ended June 30, 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 Current Report on Form 8-K 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 expected timing and benefits of the proposed merger between Regional and SunLink, including statements of Regional’s goals, intentions and expectations; statements regarding Regional’s business plan and growth strategies; and the ability of Regional to meet the continued listing requirements of the NYSE American and to maintain the listing of securities thereon.

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;

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	●	the ability of Regional and SunLink to meet the continued listing requirements or rules of the NYSE American LLC or the OTCQB, as applicable, and to maintain the listing or trading, as applicable, of securities thereon;
	●	possible changes in economic and business conditions;
	●	the impacts of epidemics, pandemics or other infectious disease outbreaks;
	●	the existence or exacerbation of general geopolitical instability and uncertainty;
	●	possible changes in monetary and fiscal policies, and laws and regulations;
	●	competitive factors in the healthcare industry;
	●	Regional’s dependence on the operating success of its operators;
	●	the amount of, and Regional’s ability to service, its indebtedness;
	●	covenants in Regional’s debt agreements that may restrict its ability to make investments, incur additional indebtedness and refinance indebtedness on favorable terms;
	●	the effect of increasing healthcare regulation and enforcement on Regional’s operators and the dependence of Regional’s operators on reimbursement from governmental and other third-party payors;
	●	the relatively illiquid nature of real estate investments;
	●	the impact of litigation and rising insurance costs on the business of Regional’s operators;
	●	the effect of Regional’s operators declaring bankruptcy, becoming insolvent or failing to pay rent as due;
	●	the ability of any of Regional’s operators in bankruptcy to reject unexpired lease obligations and to impede its ability to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the 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 the Regional Annual Report, 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 Current Report on Form 8-K. 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.

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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 hereunto duly authorized.

	REGIONAL HEALTH PROPERTIES, INC.
Date: June 23, 2025	/s/ Brent Morrison
	Brent Morrison
	Chief Executive Officer and President

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FAQ

What is the new termination date for RHE's merger with SunLink Health Systems?

According to the Amendment signed on June 22, 2025, the termination date for the merger between Regional Health Properties (RHE) and SunLink Health Systems has been extended to 5:00 p.m., Eastern time, on August 11, 2025, from the previous date of June 30, 2025.

Why did RHE get delisted from NYSE American?

On June 11, 2025, NYSE American LLC filed a Form 25 to delist RHE's common stock and Series A Redeemable Preferred Shares. Following the delisting, both securities now trade on the OTCQB market under the symbols 'RHEP' and 'RHEPA' respectively.

Why was RHE's merger with SunLink delayed?

The merger was delayed because both Regional Shareholder Approval and SunLink Shareholder Approval have not been obtained, and the companies determined these approvals would not be secured by the original June 30, 2025 deadline, necessitating an extension to August 11, 2025.

What are the main risks of RHE's merger with SunLink?

Key risks include: 1) potential difficulties in business integration, 2) possibility that expected revenue synergies and cost savings may not be fully realized, 3) potential disruption of customer, vendor and employee relationships, 4) regulatory and shareholder approval challenges, and 5) possible litigation risks.

How can RHE shareholders access information about the merger with SunLink?

Shareholders can access merger information through: 1) the SEC website (www.sec.gov), 2) Regional's website (www.regionalhealthproperties.com) under 'Investor Relations', 3) the upcoming Registration Statement on Form S-4 and joint proxy statement/prospectus, or 4) by contacting RHE's Investor Relations at 678-869-5116.