0001004724
false
--12-31
0001004724
2023-02-13
2023-02-13
0001004724
RHE:CommonStockNoParValueMember
2023-02-13
2023-02-13
0001004724
RHE:Sec10.875SeriesCumulativeRedeemablePreferredStockNoParValueMember
2023-02-13
2023-02-13
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
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): February 13, 2023
Regional
Health Properties, Inc.
(Exact
Name of Registrant as Specified in Charter)
| Georgia |
|
001-33135 |
|
81-5166048 |
(State
or Other Jurisdiction
of
Incorporation) |
|
(Commission
File
Number) |
|
(I.R.S.
Employer
Identification
No.) |
454
Satellite Boulevard, NW
Suite
100
Suwanee,
Georgia 30024
(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 |
|
RHE |
|
NYSE
American |
| 10.875%
Series A Cumulative Redeemable Preferred Stock, no par value |
|
RHE-PA |
|
NYSE
American |
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
3.03. |
Material
Modification to Rights of Security Holders. |
The
disclosure set forth in Item 5.03 of this Current Report on Form 8-K is hereby incorporated into this Item 3.03 by reference.
| Item
5.03. |
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Series
E Preferred Stock
On
February 13, 2023, the board of directors (the “Board”) of Regional Health Properties, Inc. (“RHE,” the “Company,”
we,” “us” or “our”) declared a dividend of one one-thousandth (1/1,000th) of a share of the
Company’s Series E Redeemable Preferred Shares, no par value per share (the “Series E Preferred Stock”), for each outstanding
share of the Company’s common stock, no par value per share (the “Common Stock”), payable on February 28, 2023 to shareholders
of record at 5:00 p.m. Eastern Time on February 27, 2023 (the “Dividend Record Date”). The following is a summary of the
material terms and provisions of the Series E Preferred Stock.
General;
Transferability
Shares
of Series E Preferred Stock will be uncertificated and represented in book-entry form. No shares of Series E Preferred Stock may be transferred
by the holder thereof except in connection with a transfer by such holder of any shares of Common Stock held by such holder, in which
case a number of one one-thousandth (1/1,000th) of a share of Series E Preferred Stock equal to the number of shares of Common Stock
to be transferred by such holder will be automatically transferred to the transferee of such shares of Common Stock.
Voting
Rights
Each
share of Series E Preferred Stock will entitle the holder thereof to 1,000,000 votes per share (and, for the avoidance of doubt, each
fraction of a share of Series E Preferred Stock will have a ratable number of votes). Thus, each one-thousandth of a share of Series
E Preferred Stock will entitle the holder thereof to 1,000 votes. The outstanding shares of Series E Preferred Stock will vote together
with the outstanding shares of Common Stock of the Company as a single class exclusively with respect to (1) any proposal submitted to
holders of Common Stock to approve an amendment to the Company’s Amended and Restated Articles of Incorporation, as currently in
effect, to (A) (i) reduce the liquidation preference of the Company’s 10.875% Series A Cumulative Redeemable Preferred Shares,
no par value per share (the “Series A Preferred Stock”), to $5.00 per share, (ii) eliminate accumulated and unpaid dividends
on the Series A Preferred Stock, (iii) eliminate future dividends on the Series A Preferred Stock, (iv) eliminate penalty events and
the right of holders of Series A Preferred Stock to elect directors upon the occurrence of a penalty event, (v) reduce the redemption
price of the Series A Preferred Stock in the event of an optional redemption to $5.00 per share, (vi) reduce the redemption price of
the Series A Preferred Stock in the event of a “change of control” to $5.00 per share and (vii) change the voting rights
of holders of Series A Preferred Stock when voting as a single class with any other class or series of stock to one vote per $5.00 liquidation
preference and (B) temporarily increase the authorized number of shares of the Company to 61,000,000 shares, consisting of 55,000,000
shares of common stock and 6,000,000 shares of preferred stock, and subsequently decrease the authorized number of shares of the Company
to 60,000,000 shares, consisting of 55,000,000 shares of common stock and 5,000,000 shares of preferred stock (collectively, the “Common
Charter Amendment Proposal”), and (2) any proposal to approve the adjournment of any meeting of shareholders called for the purpose
of voting on the Common Charter Amendment Proposal (the “Adjournment Proposal”). The Series E Preferred Stock will not be
entitled to vote on any other matter, except to the extent required under the Georgia Business Corporation Code.
Unless
otherwise provided on any applicable proxy card or voting instructions with respect to the voting on the Common Charter Amendment Proposal
or the Adjournment Proposal, the vote of each share of Series E Preferred Stock (or fraction thereof) entitled to vote on the Common
Charter Amendment Proposal, the Adjournment Proposal or any other matter brought before any meeting of shareholders held to vote on the
Common Charter Amendment Proposal and the Adjournment Proposal shall be cast in the same manner as the vote, if any, of the share of
Common Stock (or fraction thereof) in respect of which such share of Series E Preferred Stock (or fraction thereof) was issued as a dividend
is cast on the Common Charter Amendment Proposal, the Adjournment Proposal or such other matter, as applicable, and the proxy card or
voting instructions with respect to shares of Common Stock held by any holder on whose behalf such proxy card or voting instructions
is submitted will be deemed to include all shares of Series E Preferred Stock (or fraction thereof) held by such holder. Holders of Series
E Preferred Stock will not receive a separate proxy card or opportunity to cast votes with respect to the Series E Preferred Stock on
the Common Charter Amendment Proposal, the Adjournment Proposal or any other matter brought before any meeting of shareholders held to
vote on the Common Charter Amendment Proposal.
Dividend
Rights
The
holders of Series E Preferred Stock, as such, will not be entitled to receive dividends of any kind.
Liquidation
Preference
The
Series E Preferred Stock will rank senior to the Common Stock as to any distribution of assets upon a liquidation, dissolution or winding
up of the Company, whether voluntarily or involuntarily (a “Dissolution”). The Series E Preferred Stock will rank junior
to the Series A Preferred Stock as to any distribution of assets upon a Dissolution. Upon any Dissolution, each holder of outstanding
shares of Series E Preferred Stock will be entitled to be paid out of the assets of the Company available for distribution to shareholders,
after the distribution to the holders of Series A Preferred Stock and prior and in preference to any distribution to the holders of Common
Stock, an amount in cash equal to $0.01 per outstanding share of Series E Preferred Stock.
Redemption
All
shares of Series E Preferred Stock that are not present in person or by proxy at any meeting of shareholders held to vote on the Common
Charter Amendment Proposal and the Adjournment Proposal as of immediately prior to the opening of the polls on the Common Charter Amendment
Proposal at such meeting (the “Initial Redemption Time”) will automatically be redeemed by the Company at the Initial Redemption
Time without further action on the part of the Company or the holder of shares of Series E Preferred Stock (the “Initial Redemption”).
Any outstanding shares of Series E Preferred Stock that have not been redeemed pursuant to an Initial Redemption will be redeemed in
whole, but not in part, (i) if such redemption is ordered by the Board in its sole discretion, automatically and effective on such time
and date specified by the Board in its sole discretion or (ii) automatically upon the approval by the Company’s shareholders of
the Common Charter Amendment Proposal at any meeting of shareholders held for the purpose of voting on such proposal.
Each
share of Series E Preferred Stock redeemed in any redemption described above will be redeemed for no consideration.
Miscellaneous
The
Series E Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities
of the Company. The Series E Preferred Stock has no stated maturity and is not subject to any sinking fund. The Series E Preferred Stock
is not subject to any restriction on the redemption or repurchase of shares by the Company while there is any arrearage in the payment
of dividends or sinking fund installments.
The
Articles of Amendment Establishing Series E Redeemable Preferred Shares (the “Articles of Amendment”) was filed with the
Secretary of State of the State of Georgia and became effective on February 14, 2023. The foregoing description of the Series E Preferred
Stock does not purport to be complete and is qualified in its entirety by reference to the Articles of Amendment, which is filed as Exhibit
3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item
5.07. |
Submission
of Matters to a Vote of Security Holders. |
On
February 14, 2023, the Company held its 2022 Annual Meeting of Shareholders at Sonesta Gwinnett Place Atlanta, located at 1775 Pleasant
Hill Road, Duluth, Georgia 30096 at 10:00 a.m. (the “Annual Meeting”). Following is a summary of the proposals that were
submitted to the holders of the Common Stock for approval at the Annual Meeting and a tabulation of the votes with respect to each proposal.
Each proposal is further described in the Company’s Notice of 2022 Annual Meeting of Shareholders with respect to the Annual Meeting
and the Definitive Proxy Statement with respect to the Annual Meeting (the “Proxy Statement”).
Proposal
1. To elect the six director nominees named in the Proxy Statement.
The
shareholders elected the following six individuals to the Board to serve until the Company’s 2023 Annual Meeting of Shareholders
and until their successors are elected and qualified, or until their earlier death, resignation or removal, other than Messrs. Grossman
and Martin, who will serve until the second consecutive dividend payment date following such time as the Company has paid all accumulated
and unpaid dividends on the Series A Preferred Stock. The voting results were as follows:
| Nominee | |
For | | |
Withheld | | |
Broker Non-Votes | |
| Michael J. Fox | |
| 543,735 | | |
| 744,650 | | |
| 1,346,780 | |
| Kenneth S. Grossman | |
| 1,093,412 | | |
| 194,973 | | |
| 1,346,780 | |
| Steven L. Martin | |
| 1,095,499 | | |
| 192,886 | | |
| 1,346,780 | |
| Brent Morrison | |
| 854,271 | | |
| 434,114 | | |
| 1,346,780 | |
| Kenneth W. Taylor | |
| 719,694 | | |
| 568,691 | | |
| 1,346,780 | |
| David A. Tenwick | |
| 562,463 | | |
| 725,922 | | |
| 1,346,780 | |
Proposal
2. To consider an advisory vote on executive compensation.
The
shareholders approved, on an advisory basis, the Company’s executive compensation. The voting results were as follows:
| For | | |
Against | | |
Abstain | | |
Broker Non-Votes | |
| | 669,880 | | |
| 604,155 | | |
| 14,350 | | |
| 1,346,780 | |
Proposal
3. To ratify the appointment of Cherry Bekaert LLP as the Company’s independent registered public accounting firm for the year
ending December 31, 2022.
The
shareholders ratified the appointment of Cherry Bekaert LLP as the Company’s independent registered public accounting firm for
the year ending December 31, 2022. The voting results were as follows:
| For | | |
Against | | |
Abstain | |
| | 2,449,745 | | |
| 174,265 | | |
| 11,155 | |
| Item
7.01. |
Regulation
FD Disclosure. |
On
February 17, 2023, the Company issued a press release announcing the Series E Preferred Stock dividend. A copy of that press release
is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
The
information provided pursuant to Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is “furnished” and
shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise subject to the liabilities of such section, and shall not be incorporated by reference in any filing made by
the Company under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except to the extent
expressly set forth by specific reference in any such filings.
Important
Cautions Regarding Forward-Looking Statements
This
Current Report on Form 8-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which
are beyond our control. We caution you that the forward-looking statements presented herein are not a guarantee of future events, and
that actual events and results may differ materially from those made in or suggested by the forward-looking statements contained herein.
Forward-looking
statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “will,”
“expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue”
or the negative thereof or variations thereon or similar terminology.
A
number of important factors could cause actual events and results to differ materially from those contained in or implied by the forward-looking
statements, including those factors discussed from time to time in our news releases, public statements and documents filed by us with
the Securities and Exchange Commission (the “SEC”) from time to time, including our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statements included herein are made only as of the date hereof,
and we do not undertake any obligation to update or revise such statements to reflect any changes in expectations, or any changes in
events or circumstances on which those statements are based, except as required by law.
No
Offer or Solicitation
This
Current Report on Form 8-K is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy
or sell any securities, or a solicitation of any 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 offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Additional
Information about the Exchange Offer and Where to Find It
In
connection with the proposed exchange offer (the “proposed transaction”), RHE filed with the SEC a registration statement
on Form S-4 on February 14, 2023 that includes a preliminary proxy statement and that also constitutes a preliminary prospectus. RHE
also filed with the SEC a joint statement on Schedule TO/13E-3 (the “Schedule TO/13E-3”) for the proposed transaction. RHE
intends to file other relevant documents with the SEC regarding the proposed transaction, including the definitive proxy statement/prospectus.
The information in the preliminary proxy statement/prospectus is not complete and may be changed. This document is not a substitute for
the preliminary proxy statement/prospectus or registration statement or any other document that RHE may file with the SEC. The definitive
proxy statement/prospectus (if and when available) will be mailed to stockholders of RHE. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE REGISTRATION STATEMENT, THE SCHEDULE TO/13E-3, THE PRELIMINARY PROXY STATEMENT/PROSPECTUS, THE DEFINITIVE PROXY STATEMENT/PROSPECTUS
IF AND WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
TO THOSE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT RHE AND THE PROPOSED
TRANSACTION. Investors and security holders are able to obtain free copies of the registration statement, the Schedule TO/13E-3, the
preliminary proxy statement/prospectus and all other documents containing important information about RHE and the proposed transaction,
once such documents are filed with the SEC, including the definitive proxy statement/prospectus if and when it becomes available, through
the website maintained by the SEC at www.sec.gov. The proxy statement/prospectus included in the registration statement and additional
copies of the proxy statement/prospectus will be available for free from RHE.
Participants
in the Solicitation
RHE
and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the
proposed transaction. Information about the directors and executive officers of RHE, including a description of their direct or indirect
interests, by security holdings or otherwise, is set forth in RHE’s proxy statement for its 2022 Annual Meeting of Shareholders,
which was filed with the SEC on December 30, 2022, and RHE’s Annual Report on Form 10-K for the fiscal year ended December 31,
2021, which was filed with the SEC on February 22, 2022. Investors may obtain additional information regarding the interests of those
persons and other persons who may be deemed participants in the proposed transaction by reading the preliminary proxy statement/prospectus,
including any amendments thereto, as well as the definitive proxy statement/prospectus if and when it becomes available and other relevant
materials to be filed with the SEC regarding the proposed transaction when such materials become available. Investors should read the
registration statement, the preliminary proxy statement/prospectus, and the definitive proxy statement/prospectus, if and when it becomes
available, carefully before making any voting or investment decisions. You may obtain free copies of these documents from RHE using the
sources indicated above.
| Item
9.01. |
Financial
Statements and Exhibits. |
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: |
February
17, 2023 |
/s/
Brent Morrison |
| |
|
Brent
Morrison |
| |
|
Chief
Executive Officer and President |
Exhibit
3.1
REGIONAL
HEALTH PROPERTIES, INC.
ARTICLES
OF AMENDMENT
ESTABLISHING
SERIES
E REDEEMABLE PREFERRED SHARES
Regional
Health Properties, Inc., a Georgia corporation (the “Corporation”), acting pursuant to Section 14-2-602 of the Georgia
Business Corporation Code (the “GBCC”), does hereby submit the following Articles of Amendment establishing its Series
E Redeemable Preferred Shares (“Articles of Amendment”).
FIRST:
The name of the Corporation is Regional Health Properties, Inc.
SECOND:
Shareholder approval is not required for these Articles of Amendment.
THIRD:
The amendment was duly adopted by the Board of Directors of the Corporation on February 13, 2023.
FOURTH:
By unanimous consent of the Board of Directors of the Corporation on February 13, 2023, the following resolutions were duly adopted:
WHEREAS
the Corporation’s Amended and Restated Articles of Incorporation, as amended (the “Articles of Incorporation”),
authorize preferred stock, no par value (the “Preferred Stock”), consisting of 5,000,000 shares issuable from time
to time in one or more series; and
WHEREAS
the Board of Directors of the Corporation is authorized, subject to limitations prescribed by law and by the provisions of Article
II of the Articles of Incorporation to establish and fix the number of shares to be included in any series of Preferred Stock and the
designation, powers, preferences and rights, and the qualifications, limitations and restrictions, of the shares of such series.
NOW,
THEREFORE, BE IT RESOLVED that pursuant to Article II of the Articles of Incorporation there is hereby established a new series of
1,894 shares of redeemable Preferred Stock of the Corporation to have the designation, powers, preferences and rights, and the qualifications,
limitations and restrictions, set forth as follows:
TERMS
OF PREFERRED STOCK
1.
Designation, Amount and Par Value. The series of Preferred Stock created hereby shall be designated as the Series E Redeemable Preferred
Shares (the “Series E Preferred Stock”), and the number of shares so designated shall be 1,894. Each share of Series
E Preferred Stock shall have no par value.
2.
Dividends. The holders of Series E Preferred Stock, as such, shall not be entitled to receive dividends of any kind.
3.
Voting Rights. Except as otherwise provided by the Articles of Incorporation or required by law, the holders of shares of Series
E Preferred Stock shall have the following voting rights:
3.1
Except as otherwise provided herein, each outstanding share of Series E Preferred Stock shall have 1,000,000 votes per share (and,
for the avoidance of doubt, each fraction of a share of Series E Preferred Stock shall have a ratable number of votes). The outstanding
shares of Series E Preferred Stock shall vote together with the outstanding shares of common stock, no par value (the “Common
Stock”), of the Corporation as a single class exclusively with respect to the Charter Amendment Proposal and the Adjournment
Proposal (all as defined below) and shall not be entitled to vote on any other matter except to the extent required under the GBCC. Notwithstanding
the foregoing, and for the avoidance of doubt, each share of Series E Preferred Stock (or fraction thereof) redeemed pursuant to the
Initial Redemption (as defined below) shall have no voting power with respect to, and the holder of each share of Series E Preferred
Stock (or fraction thereof) redeemed pursuant to the Initial Redemption shall have no voting power with respect to any such share of
Series E Preferred Stock (or fraction thereof) on, the Charter Amendment Proposal, the Adjournment Proposal or any other matter brought
before any meeting of shareholders held to vote on the Charter Amendment Proposal. As used herein, (1) the term “Charter Amendment
Proposal” means any proposal submitted to holders of Common Stock to approve an amendment to the Articles of Incorporation
to (A) (i) reduce the liquidation preference of the 10.875% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred
Stock”) to $5.00 per share, (ii) eliminate accumulated and unpaid dividends on the Series A Preferred Stock, (iii) eliminate
future dividends on the Series A Preferred Stock, (iv) eliminate penalty events and the right of holders of Series A Preferred Stock
to elect directors upon the occurrence of a penalty event, (v) reduce the redemption price of the Series A Preferred Stock in the event
of an optional redemption to $5.00 per share, (vi) reduce the redemption price of the Series A Preferred Stock in the event of a “change
of control” to $5.00 per share and (vii) change the voting rights of holders of Series A Preferred Stock when voting as a single
class with any other class or series of stock to one vote per $5.00 liquidation preference and (B) temporarily increase the authorized
number of shares of the Corporation to 61,000,000 shares, consisting of 55,000,000 shares of Common Stock and 6,000,000 shares of Preferred
Stock, and subsequently decrease the authorized number of shares of the Corporation to 60,000,000 shares, consisting of 55,000,000 shares
of Common Stock and 5,000,000 shares of Preferred Stock and (2) the term “Adjournment Proposal” means any proposal
to approve the adjournment of any meeting of shareholders called for the purpose of voting on the Charter Amendment Proposal.
3.2
Unless otherwise provided on any applicable proxy card, ballot or other voting option with respect to the voting on the Charter Amendment
Proposal or the Adjournment Proposal, the vote of each share of Series E Preferred Stock (or fraction thereof) entitled to vote on the
Charter Amendment Proposal, the Adjournment Proposal or any other matter brought before any meeting of shareholders held to vote on the
Charter Amendment Proposal and the Adjournment Proposal shall be cast in the same manner as the vote, if any, of the share of Common
Stock (or fraction thereof) in respect of which such share of Series E Preferred Stock (or fraction thereof) was issued as a dividend
is cast on the Charter Amendment Proposal, the Adjournment Proposal or such other matter, as applicable, and the proxy card, ballot or
other voting option with respect to shares of Common Stock held by any holder on whose behalf such proxy card, ballot or other voting
option is submitted will be deemed to include all shares of Series E Preferred Stock (or fraction thereof) held by such holder. Holders
of Series E Preferred Stock will not receive a separate proxy card, ballot or other voting option to cast votes with respect to the Series
E Preferred Stock on the Charter Amendment Proposal, the Adjournment Proposal or any other matter brought before any meeting of shareholders
held to vote on the Charter Amendment Proposal.
4.
Rank; Liquidation.
4.1
The Series E Preferred Stock shall rank senior to the Common Stock as to any distribution of assets upon a liquidation, dissolution
or winding up of the Corporation, whether voluntarily or involuntarily (a “Dissolution”). The Series E Preferred Stock
shall rank junior to the Series A Preferred Stock as to any distribution of assets upon a Dissolution. For the avoidance of any doubt,
but without limiting the foregoing, neither the merger or consolidation of the Corporation with or into any other entity, nor the sale,
lease, exchange or other disposition of all or substantially all of the Corporation’s assets shall, in and of itself, be deemed
to constitute a Dissolution.
4.2
Upon any Dissolution, each holder of outstanding shares of Series E Preferred Stock shall be entitled to be paid out of the assets
of the Corporation available for distribution to shareholders, after the distribution to the holders of Series A Preferred Stock and
prior and in preference to any distribution to the holders of Common Stock, an amount in cash equal to $0.01 per outstanding share of
Series E Preferred Stock.
5.
Redemption.
5.1
All shares of Series E Preferred Stock that are not present in person or by proxy at any meeting of shareholders held to vote on
the Charter Amendment Proposal and the Adjournment Proposal as of immediately prior to the opening of the polls on the Charter Amendment
Proposal at such meeting (the “Initial Redemption Time”) shall automatically be redeemed by the Corporation at the
Initial Redemption Time without further action on the part of the Corporation or the holder thereof (the “Initial Redemption”).
5.2
Any outstanding shares of Series E Preferred Stock that have not been redeemed pursuant to an Initial Redemption shall be redeemed
in whole, but not in part, (i) if such redemption is ordered by the Board of Directors in its sole discretion, automatically and effective
on such time and date specified by the Board of Directors in its sole discretion or (ii) automatically upon the approval by the Corporation’s
shareholders of the Charter Amendment Proposal at any meeting of shareholders held for the purpose of voting on such proposal (any such
redemption pursuant to this Section 5.2, the “Subsequent Redemption” and, together with the Initial Redemption, the
“Redemptions”). As used herein, the “Subsequent Redemption Time” shall mean the effective time
of the Subsequent Redemption, and the “Redemption Time” shall mean (i) with respect to the Initial Redemption, the
Initial Redemption Time and (ii) with respect to the Subsequent Redemption, the Subsequent Redemption Time.
5.3
Each share of Series E Preferred Stock redeemed in any Redemption pursuant to this Section 5 shall be redeemed for no consideration.
5.4
From and after the time at which any shares of Series E Preferred Stock are called for redemption (whether automatically or otherwise)
in accordance with Section 5.1 or Section 5.2, such shares of Series E Preferred Stock shall cease to be outstanding. The shares of Series
E Preferred Stock redeemed by the Corporation pursuant to these Articles of Amendment shall, upon such redemption, be automatically retired
and restored to the status of authorized but unissued shares of Preferred Stock. Notwithstanding anything to the contrary herein or otherwise,
and for the avoidance of doubt, any shares of Series E Preferred Stock (or fraction thereof) that have been redeemed pursuant to an Initial
Redemption shall not be deemed to be outstanding for the purpose of voting or determining the number of shares entitled to vote on any
matter submitted to shareholders (including the Charter Amendment Proposal, the Adjournment Proposal or any other matter brought before
any meeting of shareholders held to vote on the Charter Amendment Proposal) from and after the time of the Initial Redemption. Notice
of any meeting of shareholders for the submission to shareholders of any proposal to approve the Charter Amendment Proposal shall constitute
notice of a redemption of shares of Series E Preferred Stock pursuant to an Initial Redemption and result in the automatic redemption
of the applicable shares of Series E Preferred Stock (and/or fractions thereof) pursuant to the Initial Redemption at the Initial Redemption
Time pursuant to Section 5.1 hereof. Notice by the Corporation of the shareholders’ approval of the Charter Amendment Proposal,
whether by press release or by the filing of a Current Report on Form 8-K with the Securities and Exchange Commission, shall constitute
a notice of a redemption of shares of Series E Preferred Stock pursuant to a Subsequent Redemption and result in the automatic redemption
of the applicable shares of Series E Preferred Stock (and/or fractions thereof) pursuant to the Subsequent Redemption at the Subsequent
Redemption Time pursuant to Section 5.2 hereof.
6.
Transfer. Shares of Series E Preferred Stock will be uncertificated and represented in book-entry form. No shares of Series E Preferred
Stock may be transferred by the holder thereof except in connection with a transfer by such holder of any shares of Common Stock held
thereby, in which case a number of one one-thousandths (1/1,000ths) of a share of Series E Preferred Stock equal to the number of shares
of Common Stock to be transferred by such holder shall be automatically transferred to the transferee of such shares of Common Stock.
7.
Fractional Shares. The Series E Preferred Stock may be issued in whole shares or in any fraction of a share that is one one-thousandth
(1/1,000th) of a share or any integral multiple of such fraction, which fractions shall entitle the holder, in proportion to such holder’s
fractional shares, to exercise voting rights, participate in distributions upon a Dissolution and have the benefit of any other rights
of holders of Series E Preferred Stock.
8.
Severability. Whenever possible, each provision hereof shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision hereof is held to be prohibited by or invalid under applicable law, then such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions
hereof.
*
* * * * *
IN
WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed by its President and attested to by its Vice President
this 13th day of February, 2023.
| |
By:
|
/s/
Brent Morrison |
| |
Name: |
Brent
Morrison |
| |
Title: |
President |
| |
|
|
| |
ATTEST: |
/s/
Paul O’Sullivan |
| |
Name: |
Paul
O’Sullivan |
| |
Title: |
Vice
President |
| |
|
|
| |
[Seal] |
|
Exhibit
99.1
Regional
Health Properties, Inc. Announces Distribution of Series E Preferred Stock to Holders of its Common Stock
ATLANTA,
GA, February 17, 2023 — Regional Health Properties, Inc. (“RHE,” the “Company,” “we,” “us”
or “our”) (NYSE American: RHE) (NYSE American: RHE-PA) announced today that its Board of Directors declared a dividend of
one one-thousandth (1/1,000th) of a share of the Company’s newly-designated Series E Redeemable Preferred Shares, no
par value per share (the “Series E Preferred Stock”), for each outstanding share of the Company’s common stock (“Common
Stock”), payable on February 28, 2023 to shareholders of record as of 5:00 p.m. Eastern Time on February 27, 2023. The outstanding
shares of Series E Preferred Stock will vote together with the outstanding shares of Common Stock, as a single class, exclusively with
respect to (a) any proposal submitted to holders of Common Stock to amend the Company’s Amended and Restated Articles of Incorporation
to (i) make certain changes to the terms of the Company’s 10.875% Series A Cumulative Redeemable Preferred Shares and (ii) temporarily
increase the authorized number of shares of the Company (including the authorized shares of the Company’s preferred stock) (the
“Charter Amendment Proposal”), and (b) any proposal to adjourn any meeting of shareholders called for the purpose of voting
on the Charter Amendment Proposal, and will not be entitled to vote on any other matter, except to the extent required under the Georgia
Business Corporation Code. Subject to certain limitations, each outstanding share of Series E Preferred Stock will have 1,000,000 votes
per share (or 1,000 votes per one one-thousandth of a share of Series E Preferred Stock).
All
shares of Series E Preferred Stock that are not present in person or by proxy at any meeting of shareholders held to vote on the above-described
proposals as of immediately prior to the opening of the polls on the Charter Amendment Proposal at such meeting will automatically be
redeemed by the Company. Any outstanding shares of Series E Preferred Stock that have not been so redeemed will be redeemed if such redemption
is ordered by the Company’s Board of Directors or automatically upon the approval by the Company’s shareholders of the Charter
Amendment Proposal.
The
Series E Preferred Stock will be uncertificated, and no shares of Series E Preferred Stock may be transferred by the holder thereof except
in connection with a transfer by such holder of any shares of Common Stock held by such holder. In that case, a number of one one-thousandths
of a share of Series E Preferred Stock equal to the number of shares of Common Stock to be transferred by such holder will be automatically
transferred to the transferee of such shares of Common Stock.
Further
details regarding the Series E Preferred Stock will be contained in a report on Form 8-K to be filed by the Company with the Securities
and Exchange Commission (the “SEC”).
Important
Cautions Regarding Forward-Looking Statements
This
press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are
subject to known and unknown risks and uncertainties, many of which are beyond our control. We caution you that the forward-looking statements
presented herein are not a guarantee of future events, and that actual events and results may differ materially from those made in or
suggested by the forward-looking statements contained herein.
Forward-looking
statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “will,”
“expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue”
or the negative thereof or variations thereon or similar terminology.
A
number of important factors could cause actual events and results to differ materially from those contained in or implied by the forward-looking
statements, including those factors discussed from time to time in our news releases, public statements and documents filed by us with
the SEC from time to time, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Any forward-looking statements included herein are made only as of the date hereof, and we do not undertake any obligation to update
or revise such statements to reflect any changes in expectations, or any changes in events or circumstances on which those statements
are based, except as required by law.
No
Offer or Solicitation
This
communication is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any
securities, or a solicitation of any 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
offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Additional
Information about the Exchange Offer and Where to Find It
In
connection with the proposed exchange offer (the “proposed transaction”), RHE filed with the SEC a registration statement
on Form S-4 on February 14, 2023 that includes a preliminary proxy statement and that also constitutes a preliminary prospectus. RHE
also filed with the SEC a joint statement on Schedule TO/13E-3 (the “Schedule TO/13E-3”) for the proposed transaction. RHE
intends to file other relevant documents with the SEC regarding the proposed transaction, including the definitive proxy statement/prospectus.
The information in the preliminary proxy statement/prospectus is not complete and may be changed. This document is not a substitute for
the preliminary proxy statement/prospectus or registration statement or any other document that RHE may file with the SEC. The definitive
proxy statement/prospectus (if and when available) will be mailed to stockholders of RHE. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE REGISTRATION STATEMENT, THE SCHEDULE TO/13E-3, THE PRELIMINARY PROXY STATEMENT/PROSPECTUS, THE DEFINITIVE PROXY STATEMENT/PROSPECTUS
IF AND WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
TO THOSE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT RHE AND THE PROPOSED
TRANSACTION. Investors and security holders are able to obtain free copies of the registration statement, the Schedule TO/13E-3, the
preliminary proxy statement/prospectus and all other documents containing important information about RHE and the proposed transaction,
once such documents are filed with the SEC, including the definitive proxy statement/prospectus if and when it becomes available, through
the website maintained by the SEC at www.sec.gov. The proxy statement/prospectus included in the registration statement and additional
copies of the proxy statement/prospectus will be available for free from RHE.
Participants
in the Solicitation
RHE
and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the
proposed transaction. Information about the directors and executive officers of RHE, including a description of their direct or indirect
interests, by security holdings or otherwise, is set forth in RHE’s proxy statement for its 2022 Annual Meeting of Shareholders,
which was filed with the SEC on December 30, 2022, and RHE’s Annual Report on Form 10-K for the fiscal year ended December 31,
2021, which was filed with the SEC on February 22, 2022. Investors may obtain additional information regarding the interests of those
persons and other persons who may be deemed participants in the proposed transaction by reading the preliminary proxy statement/prospectus,
including any amendments thereto, as well as the definitive proxy statement/prospectus if and when it becomes available and other relevant
materials to be filed with the SEC regarding the proposed transaction when such materials become available. Investors should read the
registration statement, the preliminary proxy statement/prospectus, and the definitive proxy statement/prospectus, if and when it becomes
available, carefully before making any voting or investment decisions. You may obtain free copies of these documents from RHE using the
sources indicated above.
About
Regional Health Properties
Regional
Health Properties, Inc., a Georgia corporation, 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 www.regionalhealthproperties.com.
| Company
Contact |
|
Investor
Relations |
Brent
Morrison, CFA |
|
Brett
Maas |
| Chief
Executive Officer & President |
|
Managing
Partner |
| Regional
Health Properties, Inc. |
|
Hayden
IR |
| Tel
(678) 368-4402 |
|
Tel
(646) 536-7331 |
| Brent.morrison@regionalhealthproperties.com |
|
brett@haydenir.com |