Georgia |
6519 |
81-5166048 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
☐ | |||
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
☐ |
Security |
CUSIP |
Symbol |
Shares Outstanding |
Exchange Consideration | ||||
10.875% Series A Cumulative Redeemable Preferred Shares |
75903M200 |
RHE-PA |
2,811,535 |
One share of Series B Preferred Stock per share of Series A Preferred Stock |
1. |
to have the holders of our Series A Preferred Stock approve a proposal to amend our Amended and Restated Articles of Incorporation (as currently in effect, the “ Charter ”) to (i) reduce the liquidation preference of 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, on the terms of the form of proposed amendments set forth as Annex A to the accompanying proxy statement/prospectus (the “Preferred Series A Charter Amendment Proposal ”; such amendments to the Charter being referred to herein as the “Series A Charter Amendments ”); |
2. |
to have the holders of our Series A Preferred Stock approve a proposal to (i) amend the Charter to increase the authorized number of shares of preferred stock to 6,000,000 shares, on the terms of the form of proposed amendments set forth as Annex B-1 to the accompanying proxy statement/prospectus, and (ii) approve the authorization, creation and designation by the Board of Directors of the Company (the “Board of Directors ” or the “Board ”) pursuant to Section 14-2-602 of the Official Code of Georgia Annotated, from the authorized but undesignated shares of preferred stock, of the Series B Preferred Stock having the rights, preferences and privileges substantially as set forth in the form of amendment to the Charter in Annex B-2 to the accompanying proxy statement/prospectus and as described under “Description of Capital Stock—Series B Preferred Stock,” which, if so approved by the holders of the Series A Preferred Stock as part of this proposal, will rank senior to the Series A Preferred Stock, and be “Senior Shares” to the Series A Preferred Stock, pursuant to and as contemplated by Section 3.7(e) of the Charter (the “Series B Preferred Stock Proposal ”; such amendments to the Charter being referred to herein as the “Series B Charter Amendments ”); |
3. |
to have the holders of our Common Stock approve a proposal to (i) amend the Charter for the Series A Charter Amendments, on the terms of the form of proposed amendments set forth as Annex A to the accompanying proxy statement/prospectus, and (ii) amend to the Charter to 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, on the terms of the form of proposed amendments set forth as Annex B-1 to the accompanying proxy statement/prospectus (the “Common Charter Amendment Proposal ” and, together with the Preferred Series A Charter Amendment Proposal and the Series B Preferred Stock Proposal, the “Required Proposals ”); and |
4. |
to have the holders of our Series A Preferred Stock and Common Stock, voting together as a single class, approve the adjournment of the Special Meeting, if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the Required Proposals (the “ Adjournment Proposal ” and, together with the Required Proposals, the “Proposals ”). |
Sincerely, |
Brent Morrison |
Chief Executive Officer and President |
Page |
||||
1 | ||||
2 | ||||
4 | ||||
5 | ||||
17 | ||||
17 | ||||
17 | ||||
18 | ||||
24 | ||||
30 | ||||
30 | ||||
38 | ||||
39 | ||||
39 | ||||
39 | ||||
40 | ||||
40 | ||||
41 | ||||
42 | ||||
45 | ||||
45 | ||||
45 | ||||
47 | ||||
48 | ||||
48 | ||||
49 | ||||
50 | ||||
50 | ||||
51 | ||||
51 | ||||
52 | ||||
52 | ||||
54 | ||||
55 | ||||
55 | ||||
55 | ||||
55 | ||||
55 | ||||
56 | ||||
57 | ||||
57 | ||||
58 | ||||
58 | ||||
58 | ||||
59 | ||||
60 | ||||
60 | ||||
60 |
61 | ||||
61 | ||||
61 | ||||
62 | ||||
63 | ||||
63 | ||||
63 | ||||
64 | ||||
64 | ||||
65 | ||||
65 | ||||
65 | ||||
65 | ||||
67 | ||||
67 | ||||
67 | ||||
68 | ||||
69 | ||||
69 | ||||
70 | ||||
70 | ||||
70 | ||||
70 | ||||
71 | ||||
72 | ||||
73 | ||||
74 | ||||
75 | ||||
76 | ||||
77 | ||||
77 | ||||
77 | ||||
78 | ||||
78 | ||||
78 | ||||
78 | ||||
78 | ||||
83 | ||||
84 | ||||
84 | ||||
84 | ||||
85 | ||||
85 | ||||
86 | ||||
86 | ||||
86 | ||||
87 | ||||
87 | ||||
87 | ||||
88 | ||||
88 |
88 | ||||
89 | ||||
89 | ||||
89 | ||||
91 | ||||
98 | ||||
109 | ||||
114 | ||||
129 | ||||
130 | ||||
132 | ||||
133 | ||||
133 | ||||
134 | ||||
138 | ||||
141 | ||||
141 | ||||
143 | ||||
143 | ||||
147 | ||||
147 | ||||
A-1 |
||||
B-1-1 | ||||
B-2-1 |
• | failure to consummate the Exchange Offer or any other liability management transactions we may pursue; |
• | failure to obtain shareholder approval for the Required Proposals; |
• | the increased risks associated with our portfolio stabilization measures; |
• | the duration and impact of the COVID-19 pandemic; |
• | our ability to raise capital through equity and debt financings, and the cost of such capital; |
• | our ability to meet the continued listing requirements of the NYSE American and to maintain the listing of our securities thereon; |
• | our dependence on the operating success of our tenants and their ability to meet their obligations to us; |
• | the effect of increasing healthcare regulation and enforcement on our tenants, and the dependence of our tenants on reimbursement from governmental and other third-party payors; |
• | the effect of our tenants’ potential financial or legal difficulties; |
• | the ability and willingness of our tenants to renew their leases with us upon expiration, and our ability to reposition our properties on the same or better terms in the event of nonrenewal or if we otherwise need to replace an existing tenant; |
• | the impact of liabilities associated with our legacy business of owning and operating healthcare properties, including pending and potential professional and general liability claims; |
• | the availability of, and our ability to identify, suitable acquisition opportunities, and our ability to complete such acquisitions and lease the respective properties on favorable terms; and |
• | other risks inherent in the real estate business, including uninsured or underinsured losses affecting our properties, the possibility of environmental compliance costs and liabilities, and the illiquidity of real estate investments. |
• | our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 22, 2022 (the “ Annual Report ”); and |
• | our Current Report on Form 8-K, filed with the SEC on January 6, 2022. |
Q: |
WHY IS THE COMPANY OFFERING TO EXCHANGE THE SERIES A PREFERRED STOCK AND REQUESTING APPROVAL OF THE SERIES A CHARTER AMENDMENTS AND THE SERIES B CHARTER AMENDMENTS? |
A. | The Exchange Offer is part of our recapitalization to improve our capital structure, enhance the value of our Common Stock and return value to holders of our new Series B Preferred Stock. The Series A Preferred Stock was issued with an annual dividend rate of 10.875% and since October 1, 2018 has had an annual dividend rate of 12.875%. We have not paid dividends on the Series A Preferred Stock since the fourth quarter of 2017, and we do not expect to pay or be able to pay accumulated and unpaid dividends or any other dividends on the Series A Preferred Stock for the foreseeable future. In order to remain competitive and grow our business, it is vital that we significantly reduce the Company’s weighted average cost of capital and enhance the value of the Common Stock. We believe the Exchange Offer, the issuance of the Series B Preferred Stock, the Series A Charter Amendments and the Series B Charter Amendments will have the following benefits to the Company: |
• | Reduce the Liquidation Preference of the Preferred Stock. final shares ”) of the Series B Preferred Stock outstanding, the liquidation preference will be reduced to $5.00 per share. This immediate reduction in liquidation preference will create value for holders of Common Stock, reduce our cost of capital and add flexibility to our capital structure. |
• | Raise Equity Capital for Acquisition Opportunities COVID-19 pandemic, which has led to reduced occupancy levels, lower profits and lower valuations at many senior housing facilities. The Company’s operating expenses are relatively fixed as it would not need to add staff to handle the leasing of more facilities, with the result that we believe the Company should be able to achieve accretive acquisitions if it can get access to equity capital at a reasonable price. |
• | Provide Capital to Underserved Operators. mid-size acquisition transactions with a focus on individual facilities with existing operators, as well as small groups of facilities and larger portfolios. In addition to pursuing acquisitions using triple-net lease structures, we may pursue other forms of investment, including partnering with investors, mortgage loans and joint ventures. |
• | Reduce the Burden of Accumulated and Unpaid Dividends on Series A Preferred Stock and Defer Dividend Accumulation. two-thirds of the shares of Series A Preferred Stock are exchanged) or eliminated if all of the shares of Series A Preferred Stock are exchanged. The aggregate liquidation preference for the Series B Preferred Stock will initially be $18.7 million, if two-thirds of the shares of Series A Preferred Stock are exchanged, and $28.1 million, if all of the Series A Preferred Stock is exchanged. The Series B Preferred Stock pays no dividends until April 1, 2026 (except for the payment of a penalty dividend in shares of Common Stock, if applicable, as described under “Description of Capital Stock—Series B Preferred Stock—Milestone Redemption”). We expect to use a combination of cash on hand, cash from operations, new equity capital and debt to repurchase or redeem a significant portion of the Series B Preferred Stock prior to December 31, 2025. We believe that the Exchange Offer is less expensive than any restructuring alternative the Company might seek if the Exchange Offer is not completed and allows the Company’s equity holders to retain and potentially accrue value. |
• | Preserve Cash for Strategic Initiatives. |
• | Enable Us to Repurchase, Redeem or Otherwise Acquire the Company’s Preferred Stock on a Reasonable Timeframe. |
such holders, the penalty dividend, payable in shares of Common Stock, described under “Description of Capital Stock—Series B Preferred Stock—Milestone Redemption.” Redemptions, repurchases or acquisitions meeting these milestones give the Company time to redeem, repurchase or otherwise acquire the Series B Preferred Stock and return value to holders of Series B Preferred Stock in an orderly manner using, in part, the Company’s own internally generated cash flows. |
Q: |
WHAT ARE THE CONSEQUENCES TO THE COMPANY IF THE EXCHANGE OFFER IS NOT CONSUMMATED AND THE PROPOSED AMENDMENTS ARE NOT ADOPTED? |
A. | If the Preferred Series A Charter Amendment Proposal and the Common Charter Amendment Proposal are not approved or if the other conditions to the Exchange Offer are not satisfied or waived, or if holders of our Series A Preferred Stock or Common Stock, as applicable, do not vote in favor of the Required Proposals at the Special Meeting and we are not able to complete the Exchange Offer, we will continue to be limited in our ability to raise new equity capital. If we are unable to raise new equity capital, we will be limited to only internally generated free cash flow, which could dramatically reduce our ability to grow and exposes us to significant operating and financial risk. If we are not able to complete the Exchange Offer or implement the Series A Charter Amendments and Series B Charter Amendments and thereby improve our capital structure, we will consider other restructuring alternatives that might be available to us at that time. Those alternatives may include, but are not limited to, (i) the sale of profitable assets, (ii) other forms of recapitalization, which could include (a) a distribution or spin-off of profitable assets, (b) alternative offers to exchange our Series A Preferred Stock, (c) the incurrence of additional debt and (d) obtaining additional equity capital on terms that may be onerous or highly dilutive, (iv) joint ventures or (v) seeking relief through the commencement of a Chapter 11 proceeding or otherwise under the U.S. Bankruptcy Code, including (a) pursuing a plan of reorganization that we would seek to confirm (or “cram down ”) despite any class of creditors who reject or are deemed to have rejected such plan, (b) seeking bankruptcy court approval for the sale of some, most or all of our assets pursuant to section 363(b) of the U.S. Bankruptcy Code and subsequent liquidation of the remaining assets in the bankruptcy case or (c) seeking another form of bankruptcy relief, all of which would involve uncertainties, potential delays and litigation risks. |
Q: |
WHY IS THE COMPANY CALLING A SPECIAL MEETING OF THE HOLDERS OF OUR SERIES A PREFERRED STOCK AND COMMON STOCK? |
A. | As conditions to the Exchange Offer, we are separately requesting that (i) holders of our Series A Preferred Stock vote to approve the amendment of our Charter to modify the terms of the Series A Preferred Stock, on the terms of the form of proposed Series A Charter Amendments set forth as Annex A to this proxy statement/prospectus, in the Preferred Series A Charter Amendment Proposal, (ii) holders of our Series A Preferred Stock vote to approve (a) the amendment of our Charter to increase the authorized number of shares of preferred stock to 6,000,000 shares, on the terms of the form of proposed amendments set forth as Annex B-1 to this proxy statement/prospectus, and (b) the authorization, creation and designation by the Board pursuant to Section 14-2-602 of the Official Code of Georgia Annotated, from the authorized but undesignated shares of preferred stock, of the Series B Preferred Stock having the rights, preferences and privileges substantially as set forth in the form of amendment to our Charter in Annex B-2 to this proxy |
statement/prospectus and as described under “Description of Capital Stock—Series B Preferred Stock,” in the Series B Preferred Stock Proposal and (iii) holders of our Common Stock vote to approve (a) the amendment of our Charter to modify the terms of the Series A Preferred Stock, on the terms of the form of proposed Series A Charter Amendments set forth as Annex A to this proxy statement/prospectus, and (b) the amendment of our Charter to 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, on the terms of the form of proposed amendments set forth as Annex B-1 to this proxy statement/prospectus, in the Common Charter Amendment Proposal. The approval of the Required Proposals by the requisite votes of the shareholders is a condition to the closing of the Exchange Offer. The affirmative vote of the holders of at least 66 2/3% of all shares of Series A Preferred Stock that are outstanding as of the Record Date will be required to approve the Preferred Series A Charter Amendment Proposal and the Series B Preferred Stock Proposal. The affirmative vote of the majority of votes entitled to be cast by the holders of the outstanding Common Stock as of the Record Date will be required to approve the Common Charter Amendment Proposal. In addition, holders of our Series A Preferred Stock and holders of our Common Stock will be asked to vote together as a single class to approve the adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes cast at the Special Meeting to approve the Required Proposals. The affirmative vote of a majority of the voting shares represented at the Special Meeting, whether in person or by proxy, voting together as a single class, will be required to approve the Adjournment Proposal. |
(1) | reduce the liquidation preference of the Series A Preferred Stock to $5.00 per share; |
(2) | eliminate accumulated and unpaid dividends on the Series A Preferred Stock; |
(3) | eliminate future dividends on the Series A Preferred Stock; |
(4) | eliminate penalty events and the right of holders of Series A Preferred Stock to elect directors upon the occurrence of a penalty event; |
(5) | reduce the redemption price of the Series A Preferred Stock in the event of an optional redemption to $5.00 per share; |
(6) | reduce the redemption price of the Series A Preferred Stock in the event of a “change of control” to $5.00 per share; and |
(7) | 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. |
Q. |
WHICH PROPOSALS WILL I BE ENTITLED TO VOTE ON AS A HOLDER OF SERIES A PREFERRED STOCK? |
A: | As a holder of Series A Preferred Stock, you will be entitled to vote on the Preferred Series A Charter Amendment Proposal, the Series B Preferred Stock Proposal and the Adjournment Proposal at the Special Meeting. |
Q: |
WHICH PROPOSALS WILL I BE ENTITLED TO VOTE ON AS A HOLDER OF COMMON STOCK? |
A: | As a holder of Common Stock, you will be entitled to vote on the Common Charter Amendment Proposal and the Adjournment Proposal at the Special Meeting. |
Q: |
WHY DOES THIS PROXY STATEMENT/PROSPECTUS INCLUDE DETAILED INFORMATION ABOUT THE EXCHANGE OFFER WHEN HOLDERS OF COMMON STOCK CANNOT PARTICIPATE IN ANY OF THESE TRANSACTIONS? |
A. | If you are a holder of Common Stock, you will not be able to participate in the Exchange Offer except to the extent that you also hold Series A Preferred Stock. We are required to obtain the affirmative vote of the majority of votes entitled to be cast by the holders of the outstanding Common Stock as of the Record Date for the Common Charter Amendment Proposal in connection with the Exchange Offer. The approval of the Common Charter Amendment Proposal creates risks for holders of Common Stock. Please read “Risk Factors.” |
Q: |
WHAT IF ANY OF THE REQUIRED PROPOSALS DO NOT PASS? |
A: | If any of the Required Proposals do not pass, the Exchange Offer will not close, and no shares of Series B Preferred Stock will be created, designated or issued. If the Series A Charter Amendments are not approved at the Special Meeting, then the accumulated and unpaid dividends on the Series A Preferred Stock would not be eliminated and will continue as accumulated and unpaid dividends to the holders of Series A Preferred Stock. Further, dividends on such Series A Preferred Stock will continue to accumulate until declared and paid. See our answer to “Why is the Company offering to exchange the Series A Preferred Stock and requesting approval of the Series A Charter Amendments and Series B Charter Amendments?” above. |
Q: |
WHAT IF HOLDERS OF SERIES A PREFERRED STOCK AND COMMON STOCK DO NOT VOTE? |
A: | If holders of Series A Preferred Stock do not vote on the Preferred Series A Charter Amendment Proposal or Series B Preferred Stock Proposal or holders of Common Stock do not vote on the Common Charter Amendment Proposal, their non-vote will have the same effect as a vote against the Preferred Series A Charter Amendment Proposal, Series B Preferred Stock Proposal or Common Charter Amendment Proposal, as applicable, but their failure to vote will have no effect on the outcome of the Adjournment Proposal. The Preferred Series A Charter Amendment Proposal and the Series B Preferred Stock Proposal must be approved by the affirmative vote of at least 66 2/3% of all shares of Series A Preferred Stock that are outstanding as of the Record Date. The Common Charter Amendment Proposal must be approved by the affirmative vote of the majority of votes entitled to be cast by the holders of the outstanding Common Stock as of the Record Date. The affirmative vote of a majority of the voting shares represented at the Special Meeting, whether in person or by proxy, voting together as a single class, will be required to approve the Adjournment Proposal. |
Q: |
DO THE HOLDERS OF SERIES A PREFERRED STOCK HAVE ANY APPRAISAL RIGHTS IN CONNECTION WITH THE EXCHANGE OFFER? |
A: | No. Holders of Series A Preferred Stock will not have appraisal rights, or any contract right to petition for fair value, with respect to the Exchange Offer. We will not independently provide such a right. |
Q: |
HOW MANY SHARES OF SERIES A PREFERRED STOCK IS THE COMPANY OFFERING TO EXCHANGE IN THE EXCHANGE OFFER? |
A. | We are offering to exchange any and all shares of the Series A Preferred Stock currently outstanding tendered in the Exchange Offer for newly issued shares of Series B Preferred Stock. In exchange for each share of Series A Preferred Stock properly tendered (and not validly withdrawn) prior to the Expiration Date and accepted by us, participating holders of Series A Preferred Stock will receive one share of Series B Preferred Stock. |
Q: |
WHAT WILL THE HOLDER RECEIVE IN THE EXCHANGE OFFER IF THE SHARES OF SERIES A PREFERRED STOCK ARE VALIDLY TENDERED AND ACCEPTED BY US? |
A. | In exchange for each share of Series A Preferred Stock properly tendered (and not validly withdrawn) prior to the Expiration Date and accepted by us, participating holders of Series A Preferred Stock will receive one share of Series B Preferred Stock. |
Q: |
WHAT ARE THE DIFFERENCES BETWEEN THE TERMS OF THE SERIES B PREFERRED STOCK AND THE SERIES A PREFERRED STOCK? |
A: | A comparison of the material differences between the rights, preferences and privileges of the Series A Preferred Stock and the rights, preferences and privileges of the Series B Preferred Stock is included in “Differences in Rights of Our Series A Preferred Stock and Series B Preferred Stock.” |
Q: |
WILL THE SERIES B PREFERRED STOCK TO BE ISSUED IN THE EXCHANGE OFFER BE FREELY TRADABLE? |
A. | Yes, provided that you are not an affiliate of the Company. |
Q: |
HOW WILL THE EXCHANGE OFFER AFFECT THE TRADING MARKET FOR THE SHARES OF SERIES A PREFERRED STOCK THAT ARE NOT ACCEPTED FOR EXCHANGE? |
A. | If the number of shares of Series A Preferred Stock that remain outstanding after the Exchange Offer is significantly reduced, the trading market for the remaining shares of Series A Preferred Stock may be less liquid and more sporadic, and market prices may fluctuate significantly depending on the volume of trading of such shares. If the Exchange Offer is consummated or if the Preferred Series A Charter Amendment Proposal and the Common Charter Amendment Proposal are approved, the NYSE American may delist the |
shares of Series A Preferred Stock that remain outstanding if it determines that the Series A Preferred Stock no longer meets its listing criteria, including number of shares outstanding, aggregate market value of Series A Preferred Stock or the terms of the Series A Preferred Stock as amended by the Series A Charter Amendments, such that continued listing is inadvisable or unwarranted. If the NYSE American delists our Series A Preferred Stock from trading on its exchange, our Series A Preferred Stock may be able to be quoted in the over-the-counter |
Q: |
WHAT RIGHTS WILL HOLDERS OF SERIES A PREFERRED STOCK LOSE IF THEY TENDER THEIR SHARES OF SERIES A PREFERRED STOCK IN THE EXCHANGE OFFER? |
A. | If your shares of Series A Preferred Stock are properly tendered and accepted for exchange pursuant to the Exchange Offer, you will lose the rights of a holder of such shares of Series A Preferred Stock, which are described below in this proxy statement/prospectus. For example, if your shares of Series A Preferred Stock are accepted for exchange in the Exchange Offer, you will lose your right to receive quarterly dividends in respect of the shares of Series A Preferred Stock, including previously accumulated and unpaid dividends, when and as declared by our Board of Directors. As of February 15, 2022, as a result of the suspension of the dividend payment on the Series A Preferred Stock commencing with the fourth quarter 2017 dividend period, the Company has approximately $38.0 million in accumulated and unpaid dividends on its Series A Preferred Stock, or approximately $13.52 per share. |
Q: |
IF THE EXCHANGE OFFER IS CONSUMMATED AND HOLDERS OF SERIES A PREFERRED STOCK DO NOT PARTICIPATE, HOW WILL THEIR RIGHTS AND OBLIGATIONS UNDER THEIR REMAINING OUTSTANDING SHARES OF SERIES A PREFERRED STOCK BE AFFECTED? |
A: | If the Series A Charter Amendments are effected, the rights of holders of Series A Preferred Stock will be significantly reduced, including in the following ways: |
(1) | the stated liquidation preference per share of Series A Preferred Stock will be reduced from $25.00 to $5.00 per share; |
(2) | the dividends payable quarterly in cash when and as declared by the Board of Directors, and the accumulation at a rate of 12.875% per annum of the $25.00 per share liquidation preference, would be eliminated; |
(3) | the approximately $38.0 million in accumulated and unpaid Series A Preferred Stock dividends would be eliminated; |
(4) | penalty events and the right of holders of Series A Preferred Stock to elect directors to the Board of Directors upon the occurrence of a penalty event would be eliminated; |
(5) | the redemption price of the Series A Preferred Stock in the event of an optional redemption will be reduced to $5.00 per share; |
(6) | the redemption price of the Series A Preferred Stock in the event of a “change of control” will be reduced to $5.00 per share; and |
(7) | the voting rights of holders of Series A Preferred Stock when voting as a single class with any other class or series of stock will be changed to one vote per $5.00 liquidation preference. |
Q: |
WHAT DOES THE COMPANY INTEND TO DO WITH THE SHARES OF SERIES A PREFERRED STOCK THAT ARE EXCHANGED IN THE EXCHANGE OFFER? |
A: | Shares of Series A Preferred Stock accepted for exchange by us in the Exchange Offer will be restored to the status of authorized but unissued shares of undesignated preferred stock. |
Q: |
IS THE COMPANY MAKING A RECOMMENDATION REGARDING WHETHER HOLDERS OF SERIES A PREFERRED STOCK SHOULD PARTICIPATE IN THE EXCHANGE OFFER? |
A: | No, we are not making any recommendation regarding whether you should tender or refrain from tendering your shares of Series A Preferred Stock for exchange in the Exchange Offer. None of the Board of Directors, our officers and employees, the Information Agent, the Exchange Agent, the Proxy Solicitor, or any other person is making any recommendation to any holder of Series A Preferred Stock as to whether or not you should tender shares of Series A Preferred Stock in the Exchange Offer. Accordingly, you must make your own investment decision regarding the Exchange Offer based upon your own assessment of the market value of the Series A Preferred Stock, the likely value of the Series B Preferred Stock you would receive in the Exchange Offer, the trading price and terms of the Series A Preferred Stock after approval of the Series A Charter Amendments, the potential consequences to the Company and your investment of the failure to effect |
the Series A Charter Amendments or the Series B Charter Amendments and consummate the Exchange Offer, your liquidity needs, your investment objectives and any other factors you deem relevant. Before making your decision, we urge you to read this proxy statement/prospectus carefully in its entirety, including the information set forth in the section of this proxy statement/prospectus entitled “Risk Factors.” |
Q: |
HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT HOLDERS OF SERIES A PREFERRED STOCK AND HOLDERS OF COMMON STOCK VOTE? |
A: | The Board of Directors recommends that the holders of Series A Preferred Stock vote “ FOR FOR |
Q: |
WHAT RISKS SHOULD HOLDERS OF SERIES A PRFERRED STOCK CONSIDER IN DECIDING WHETHER OR NOT TO TENDER THEIR SHARES OF SERIES A PREFERRED STOCK AND HOLDERS OF SERIES A PREFERRED STOCK AND HOLDERS OF COMMON STOCK CONSIDER IN DECIDING WHETHER OR NOT TO VOTE TO APPROVE THE PROPOSALS? |
A: | Holders of Series A Preferred Stock, in deciding whether to participate in the Exchange Offer, and holders of Series A Preferred Stock and holders of Common Stock, in deciding whether to vote to approve the Proposals, should carefully consider the discussion of risks and uncertainties affecting our business, the Series A Preferred Stock and the Common Stock that are described in “Risk Factors” in this proxy statement/prospectus and our Annual Report, which is incorporated by reference into this proxy statement/prospectus. |
Q: |
WHAT ARE THE CONDITIONS OF THE EXCHANGE OFFER? |
A: | The Exchange Offer is subject to several conditions, including, among other things: |
• | the Charter Amendment Conditions; |
• | the Series B Preferred Designation Condition; and |
• | the Registration Statement Condition. |
Q: |
IS THE EFFECTIVENESS OF THE SERIES A CHARTER AMENDMENTS SUBJECT TO THE COMPLETION OF THE EXCHANGE OFFER? |
A: | No, if the Preferred Series A Charter Amendment Proposal and the Common Charter Amendment Proposal are approved by our shareholders, then we will implement the Series A Charter Amendments by filing with |
the Secretary of State of the State of Georgia articles of amendment that include the Series A Charter Amendments, regardless of whether the Exchange Offer is consummated. |
Q: |
WHEN DOES THE EXCHANGE OFFER EXPIRE? |
A: | The Exchange Offer will expire at the Expiration Date, which is 11:59 p.m., New York City time, on , 2022, unless extended or earlier terminated by us. |
Q: |
UNDER WHAT CIRCUMSTANCES CAN THE EXCHANGE OFFER BE EXTENDED, AMENDED OR TERMINATED? |
A: | We reserve the right to extend the Exchange Offer for any reason at all. We also expressly reserve the right, at any time or from time to time, to amend the terms of the Exchange Offer in any respect prior to the Expiration Date. If we make a material change in the terms of the Exchange Offer or the information concerning the Exchange Offer, or waive a material condition of the Exchange Offer, we will promptly disseminate disclosure regarding the changes to the Exchange Offer as required by law. In addition, we will take steps to ensure that the Exchange Offer remains open for the minimum number of days, as required by law, following the date we disseminate disclosure regarding the changes. During any extension of the Exchange Offer, shares of Series A Preferred Stock that were previously tendered for exchange pursuant to the Exchange Offer and not validly withdrawn will remain subject to the Exchange Offer. We reserve the right, in our sole and absolute discretion, to terminate the Exchange Offer at any time prior to the Expiration Date if any condition is not met. If the Exchange Offer is terminated, no shares of Series A Preferred Stock tendered in the Exchange Offer will be accepted for exchange and any shares of Series A Preferred Stock that have been tendered for exchange will be returned to the holder promptly after the termination at our expense. For more information regarding our right to extend, amend or terminate the Exchange Offer, see “The Exchange Offer—Expiration Date; Extension; Termination; Amendment.” |
Q: |
HOW WILL HOLDERS OF SERIES A PREFERRED STOCK BE NOTIFIED IF THE EXCHANGE OFFER IS EXTENDED, AMENDED OR TERMINATED? |
A: | We will issue a press release or otherwise publicly announce any extension, amendment or termination of the Exchange Offer. In the case of an extension, we will promptly make a public announcement by issuing a press release no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled Expiration Date. For more information regarding notification of extensions, amendments or the termination of the Exchange Offer, see “The Exchange Offer—Expiration Date; Extension; Termination; Amendment.” |
Q: |
ARE THE COMPANY’S RESULTS OF OPERATIONS, FINANCIAL CONDITION AND BUSINESS PROSPECTS RELEVANT TO THE DECISION OF HOLDERS OF SERIES A PREFERRED STOCK TO TENDER THEIR SHARES OF SERIES A PREFERRED STOCK FOR EXCHANGE IN THE EXCHANGE OFFER? |
A: | Yes. The prices of our Common Stock and our Series A Preferred Stock are closely linked to our results of operations, financial condition and business prospects. For information about our results of operations and financial condition and factors affecting our business prospects, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” included herein and in our Annual Report, which is incorporated by reference into this proxy statement/prospectus. |
Q: |
WHAT IS THE ACCOUNTING TREATMENT OF THE EXCHANGE OFFER? |
A: | For each share of Series A Preferred Stock that is exchanged in the Exchange Offer, we will eliminate from our Series A Preferred Stock equity account an amount equal to the sum of $25.00 and an offset amount for |
the allocation of Series A Preferred Stock issuance costs. The amount eliminated, which nets to $22.20 per share of Series A Preferred Stock, will be replaced by an equivalent amount in our Series B Preferred Stock capital account. |
Q: |
WHAT IS THE EXPECTED U.S. FEDERAL INCOME TAX TREATMENT OF THE EXCHANGE OFFER? |
A: | The Exchange Offer is expected to constitute either a taxable sale or exchange of Series A Preferred Stock or a taxable distribution to the extent of our accumulated earnings and profits, which may depend in part upon the tendering owner’s situation. For a more fulsome discussion of the tax consequences of the Exchange Offer, please see the discussion under “Material U.S. Federal Income Tax Considerations.” |
Q: |
WHAT ARE THE EXPECTED U.S. FEDERAL INCOME TAX CONSEQUENCES OF OWNING THE SERIES B PREFERRED STOCK? |
A: |
Distributions in respect of the Series B Preferred Stock will generally be taxable as dividends to the extent of our current and accumulated earnings and profits, with any excess constituting a return of basis to the extent of a holder’s basis in such shares, and any amount in excess thereof being taxable as a capital gain. Holders of the Series B Preferred Stock will be deemed to receive distributions with respect to the scheduled increases in the liquidation preference on such shares, and, if made, the penalty dividend payable in shares of Common Stock, described under “Description of Capital Stock—Series B Preferred Stock—Milestone Redemption.” Additionally, if the initial redemption price of the Series B Preferred Stock exceeds the issue price of the Series B Preferred Stock, that excess will similarly be taxable as a series of deemed distributions. For a more fulsome discussion of the tax consequences of owning the Series B Preferred Stock, please see the discussion under “Material U.S. Federal Income Tax Considerations.” |
Q: |
WILL THE COMPANY RECEIVE ANY CASH PROCEEDS FROM THE EXCHANGE OFFER? |
A: | No. We will not receive any cash proceeds from the Exchange Offer. |
Q: |
HOW DO HOLDERS OF SERIES A PREFERRED STOCK TENDER THEIR SHARES OF SERIES A PREFERRED STOCK FOR EXCHANGE IN THE EXCHANGE OFFER? |
A: | If your shares of Series A Preferred Stock are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to participate in the Exchange Offer, you should contact that registered holder promptly and instruct such holder to tender your shares of Series A Preferred Stock on your behalf. If you are a participant of DTC, you may electronically transmit your acceptance through DTC’s ATOP. See “The Exchange Offer—Procedures for Tendering Shares of Series A Preferred Stock” and “The Exchange Offer—The Depository Trust Company Book-Entry Transfer Procedures.” |
Q: |
WHAT HAPPENS IF SOME OR ALL OF MY SHARES OF SERIES A PREFERRED STOCK ARE NOT ACCEPTED FOR EXCHANGE? |
A: | If we decide not to accept your shares of Series A Preferred Stock because of an invalid tender, the occurrence of the other events set forth in this proxy statement/prospectus or otherwise, the shares not accepted by us will be returned to you, at our expense, promptly after the expiration or termination of the Exchange Offer by book-entry transfer to your account at DTC, as applicable. |
Q: |
UNTIL WHEN MAY HOLDERS OF SERIES A PREFERRED STOCK WITHDRAW SHARES OF SERIES A PREFERRED STOCK PREVIOUSLY TENDERED FOR EXCHANGE? |
A: | If not previously returned, you may withdraw shares of Series A Preferred Stock that were previously tendered for exchange at any time prior to the expiration of the Exchange Offer. In addition, you may withdraw any shares of Series A Preferred Stock that you tender that are not accepted for exchange by us after the expiration of 40 business days from the commencement of the Exchange Offer, if such shares of Series A Preferred Stock have not been previously returned to you. For more information, see “The Exchange Offer—Withdrawal Rights.” |
Q: |
HOW DO HOLDERS OF SERIES A PREFERRED STOCK WITHDRAW SHARES OF SERIES A PREFERRED STOCK PREVIOUSLY TENDERED FOR EXCHANGE IN THE EXCHANGE OFFER? |
A: | For a withdrawal to be effective, the Exchange Agent must receive a computer-generated notice of withdrawal, transmitted by DTC on behalf of the holder in accordance with the standard operating procedure of DTC, or a written notice of withdrawal, sent by facsimile transmission, receipt confirmed by telephone, or letter, prior to the Expiration Date. For more information regarding the procedures for withdrawing shares of Series A Preferred Stock, see “The Exchange Offer—Withdrawal Rights.” |
Q: |
WHO CAN HOLDERS OF SERIES A PREFERRED STOCK AND HOLDERS OF COMMON STOCK CONTACT TO REQUEST ANOTHER COPY OF THIS PROXY STATEMENT/PROSPECTUS OR WITH QUESTIONS ABOUT THE SPECIAL MEETING? |
A: | You can contact the Information Agent engaged for the Exchange Offer and the Proxy Solicitor engaged for this proxy solicitation at: |
Offeror |
Regional Health Properties, Inc. |
Series A Preferred Stock Subject to the Exchange Offer |
All outstanding shares of our Series A Preferred Stock. |
Exchange Offer |
We are offering to exchange, upon the terms and subject to the conditions set forth in this proxy statement/prospectus and the accompanying Letter of Transmittal, any and all shares of our Series A Preferred Stock tendered in the Exchange Offer for newly issued Series B Preferred Stock. In exchange for each share of Series A Preferred Stock properly tendered (and not validly withdrawn) prior to the Expiration Date and accepted by us, participating holders of Series A Preferred Stock will receive one share of Series B Preferred Stock. |
Special Meeting Proposals |
As conditions to the Exchange Offer, we are separately requesting that (i) holders of our Series A Preferred Stock vote to approve the amendment of our Charter to modify the terms of the Series A Preferred Stock, on the terms of the form of proposed Series A Charter Amendments set forth as Annex A to this proxy statement/prospectus, in the Preferred Series A Charter Amendment Proposal, (ii) holders of our Series A Preferred Stock vote to approve (a) the amendment of our Charter to increase the authorized number of shares of preferred stock to 6,000,000 shares, on the terms of the form of proposed amendments set forth as Annex B-1 to this proxy statement/prospectus, and (b) the authorization, creation and designation by the Board pursuant to Section 14-2-602 of the Official Code of Georgia Annotated, from the authorized but undesignated shares of preferred stock, of the Series B Preferred Stock having the rights, preferences and privileges substantially as set forth in the form of amendment to the Charter in Annex B-2 to this proxy statement/prospectus and as described under “Description of Capital Stock—Series B Preferred Stock,” in the Series B Preferred Stock Proposal and (iii) holders of our Common Stock vote to approve (a) the amendment of our Charter to modify the terms of the Series A Preferred Stock, on the terms of the form of proposed Series A Charter Amendments set forth as Annex A to this proxy statement/prospectus, and (b) the amendment of our Charter to 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, on the terms of the form of proposed amendments set forth as Annex B-1 to this proxy statement/prospectus in the Common Charter Amendment Proposal. The approval of the Required Proposals by the requisite votes of the shareholders is a condition to the closing of the Exchange Offer. The affirmative vote of the holders of at least 66 2/3% of all shares of Series A Preferred Stock that are outstanding as of the Record Date will |
be required to approve the Preferred Series A Charter Amendment Proposal and the Series B Preferred Stock Proposal. The affirmative vote of the majority of votes entitled to be cast by the holders of the outstanding Common Stock as of the Record Date will be required to approve the Common Charter Amendment Proposal. In addition, holders of our Series A Preferred Stock and Common Stock will be asked to vote together as a single class to approve the adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes cast at the Special Meeting to approve the Required Proposals. The affirmative vote of a majority of the voting shares represented at the Special Meeting, whether in person or by proxy, voting together as a single class, will be required to approve the Adjournment Proposal. |
The following is a summary of the proposed Charter Amendments and is qualified in its entirety by reference to the Charter and the amended text of the affected provisions of the Charter reflecting the Series A Charter Amendments, set forth in Annex A to this proxy statement/prospectus. The Series A Charter Amendments, if approved by our shareholders, would: |
(1) | reduce the liquidation preference of the Series A Preferred Stock to $5.00 per share; |
(2) | eliminate accumulated and unpaid dividends on the Series A Preferred Stock; |
(3) | eliminate future dividends on the Series A Preferred Stock; |
(4) | eliminate penalty events and the right of holders of Series A Preferred Stock to elect directors upon the occurrence of a penalty event; |
(5) | reduce the redemption price of the Series A Preferred Stock in the event of an optional redemption to $5.00 per share; |
(6) | reduce the redemption price of the Series A Preferred Stock in the event of a “change of control” to $5.00 per share; and |
(7) | 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. |
In addition, if the Exchange Offer is consummated, each share of Series B Preferred Stock will be senior to each share of Series A Preferred Stock with respect to the payment of dividends and as to distribution of assets upon liquidation, dissolution or winding up. |
We will not consummate this Exchange Offer unless the Required Proposals have been approved by the requisite votes. For additional information regarding the Charter Amendment Conditions and the Series B Preferred Designation Condition, see “The Exchange Offer—Conditions of the Exchange Offer.” |
Expiration Date |
The Exchange Offer will expire at the Expiration Date, which is 11:59 p.m., New York City time, on , 2022, unless extended or earlier terminated by us. See “The Exchange Offer—Expiration Date; Extension; Termination; Amendment.” |
Withdrawal; Non-Acceptance |
You may withdraw shares of Series A Preferred Stock tendered in the Exchange Offer at any time prior to the expiration of the Exchange Offer. In addition, if not previously returned, you may withdraw any shares of Series A Preferred Stock tendered in the Exchange Offer that are not accepted by us for exchange after the expiration of 40 business days after the commencement of the Exchange Offer. To withdraw previously tendered shares of Series A Preferred Stock, you are required to submit a notice of withdrawal to the Exchange Agent in accordance with the procedures described herein and in the Letter of Transmittal. |
If we decide for any reason not to accept any shares of Series A Preferred Stock tendered for exchange, the shares will be returned to the tendering holder at our expense promptly after the expiration or termination of the Exchange Offer. |
Any withdrawn or unaccepted shares of Series A Preferred Stock that were tendered through ATOP will be credited to the tendering holder’s account at DTC. |
For further information regarding the withdrawal of tendered shares of Series A Preferred Stock, see “The Exchange Offer—Withdrawal Rights.” |
Settlement Date |
We will issue Series B Preferred Stock in exchange for shares of Series A Preferred Stock that are accepted for exchange promptly after the Expiration Date. |
Exchange Consideration |
In exchange for each share of Series A Preferred Stock properly tendered (and not validly withdrawn) by the Expiration Date and accepted by us, participating holders of Series A Preferred Stock will receive one share of Series B Preferred Stock. |
Holders that tender their shares of Series A Preferred Stock that are accepted for exchange will forfeit any claim to all accumulated and unpaid dividends on their Series A Preferred Stock, regardless of when accumulated, whether before or after the date hereof and including any interest that may accumulate through the settlement date for the Exchange Offer. |
Trading and Related Matters |
The Series B Preferred Stock issuable pursuant to the Exchange Offer is being registered under the Securities Act and will be freely tradable, except by our affiliates. |
We intend to apply for the listing of shares of our Series B Preferred Stock on the NYSE American, and we expect that the shares of Series B Preferred Stock will trade under the ticker symbol |
“RHE PRB.” No assurance can be given that our application for this listing will be approved or that a trading market will develop. |
Differences in Rights of Our Series A Preferred Stock and Series B Preferred Stock |
The Series A Preferred Stock and Series B Preferred Stock have different rights. For more information about these differences, see “Differences in Rights of Our Series A Preferred Stock and Series B Preferred Stock.” |
Holders Eligible to Participate in the Exchange Offer |
All holders of Series A Preferred Stock are eligible to participate in the Exchange Offer. See “The Exchange Offer—Terms of the Exchange Offer.” |
Conditions of the Exchange Offer |
The Exchange Offer is subject to the satisfaction of certain conditions, including the Charter Amendment Conditions and the Series B Preferred Designation Condition. For a complete description of the conditions of the Exchange Offer, see “The Exchange Offer—Conditions of the Exchange Offer.” |
Effectiveness of Charter Amendments |
If the Preferred Series A Charter Amendment Proposal and the Common Charter Amendment Proposal are approved by our shareholders, then we will implement the Series A Charter Amendments by filing with the Secretary of State of the State of Georgia articles of amendment that include the Series A Charter Amendments, regardless of whether the Exchange Offer is consummated. We will implement the Series B Charter Amendments by filing with the Secretary of State of the State of Georgia articles of amendment that include the Series B Charter Amendments if and only if the Preferred Series A Charter Amendment Proposal, the Series B Preferred Stock Proposal and the Common Charter Amendment Proposal are approved by our shareholders. |
Procedures for Tendering Shares of Series A Preferred Stock |
If your shares of Series A Preferred Stock are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to participate in the Exchange Offer, you should contact that registered holder promptly and instruct such holder to tender your shares of Series A Preferred Stock on your behalf. If you are a DTC participant, you may electronically transmit your acceptance through DTC’s ATOP. See “The Exchange Offer—Procedures for Tendering Shares of Series A Preferred Stock” and “The Exchange Offer—The Depository Trust Company Book-Entry Transfer Procedures.” |
For further information on how to tender shares of Series A Preferred Stock, contact the Information Agent or the Exchange Agent at the telephone number set forth on the back cover of this proxy statement/prospectus or consult your broker, dealer, commercial bank, trust company or other nominee for assistance. |
Amendment and Termination |
We have the right to terminate or withdraw, in our reasonable discretion, the Exchange Offer at any time and for any reason if the conditions to the Exchange Offer are not met by the Expiration Date, regardless of the circumstances giving rise to such condition (other than any action or failure to act by us). We reserve the right, subject to applicable law, (i) to waive certain of the conditions of the Exchange Offer on or prior to the Expiration Date and (ii) to amend the terms of the Exchange Offer. If we make a material change in the terms of the Exchange Offer or the information concerning the Exchange Offer, or waive a material condition of the Exchange Offer, we will promptly disseminate disclosure regarding the changes to the Exchange Offer as required by law. In addition, we will take steps to ensure that the Exchange Offer remains open for the minimum number of days, as required by law, following the date we disseminate disclosure regarding the changes. The Charter Amendment Conditions, the Series B Preferred Designation Condition and the Registration Statement Condition may not be waived. In the event that the Exchange Offer is terminated, validly withdrawn or otherwise not consummated on or prior to the Expiration Date, no consideration will be paid or become payable to holders who have properly tendered their shares of Series A Preferred Stock pursuant to the Exchange Offer. In any such event, the shares previously tendered pursuant to the Exchange Offer will be promptly returned to the tendering holders. See “The Exchange Offer—Expiration Date; Extension; Termination; Amendment.” |
Consequences of Failure to Exchange Series A Preferred Stock |
Shares of Series A Preferred Stock not accepted for exchange in the Exchange Offer will remain outstanding after consummation of the Exchange Offer. If a sufficiently large number of shares of Series A Preferred Stock do not remain outstanding after the Exchange Offer, the trading market for the remaining shares of Series A Preferred Stock may be less liquid and more sporadic, and market prices may fluctuate significantly depending on the volume of trading of the Series A Preferred Stock. Further, if the Series A Charter Amendments are effected, the rights of holders of Series A Preferred Stock will be significantly reduced. In addition, the terms of the Series B Preferred Stock, if issued, will prevent us from repurchasing or redeeming any shares of Series A Preferred Stock, so long as there are any accumulated accrued and unpaid dividends with respect to the Series B Preferred Stock. See “The Exchange Offer—Consequences of Failure to Exchange Series A Preferred Stock in the Exchange Offer” and “Risk Factors.” |
Material U.S. Federal Income Tax Considerations of the Exchange Offer |
See “Material U.S. Federal Income Tax Considerations.” You are urged to consult your own tax advisors for a full understanding of the tax considerations of participating in the Exchange Offer in light of your own particular circumstances. |
Brokerage Commissions |
No brokerage commissions are payable by the holders of Series A Preferred Stock to the Exchange Agent or us. If your shares of Series A Preferred Stock are held through a broker or other nominee who tenders the shares on your behalf, your broker or nominee may charge you a commission for doing so. You should consult with your broker or nominee to determine whether any charges will apply. |
Use of Proceeds |
We will not receive any cash proceeds from the Exchange Offer. |
No Appraisal Rights in Connection with the Exchange Offer |
Holders of Series A Preferred Stock will not have appraisal rights, or any contract right to petition for fair value, with respect to the Exchange Offer. We will not independently provide such a right. |
Risk Factors |
Your decision whether to participate in the Exchange Offer and to exchange your shares of Series A Preferred Stock for the Exchange Consideration will involve risk. You should be aware of and carefully consider the risk factors set forth in “Risk Factors,” along with all of the other information provided or referred to in this proxy statement/prospectus, before deciding whether to participate in the Exchange Offer. |
Regulatory Approvals |
We are not aware of any other material regulatory approvals necessary to complete the Exchange Offer, other than effectiveness of the Registration Statement of which this proxy statement/prospectus is a part and our obligation to file a Schedule TO/13E-3 with the SEC and to otherwise comply with applicable securities laws. |
Exchange Agent |
Continental Stock Transfer & Trust Company |
Proxy Solicitor and Information Agent |
Morrow Sodali LLC |
Further Information |
If you have questions about the terms of the Exchange Offer or the procedures for tendering shares of Series A Preferred Stock in the Exchange Offer or require assistance in tendering your shares of Series A Preferred Stock, please contact the Information Agent or the Exchange Agent. The contact information for the Information Agent and the Exchange Agent is set forth on the back cover of this proxy statement/prospectus. If you would like additional copies of this proxy statement/prospectus, our annual, quarterly and current reports and other information that we reference in this proxy statement/prospectus, please contact either the Information Agent or Exchange Agent or Investor Relations at the Company. The Company has also posted the documentation on its website at www.regionalhealthproperties.com |
Issuer |
Regional Health Properties, Inc. |
Securities to be Issued |
12.5% Series B Cumulative Redeemable Preferred Shares. |
Dividends |
Dividends on the Series B Preferred Stock will not be paid or accrue until April 1, 2026. Beginning on April 1, 2026, holders of the Series B Preferred Stock are entitled to receive, when, as and if approved by our Board of Directors, out of funds legally available for the payment of distributions and declared by us, cumulative dividends at the rate of 12.5% per annum of the liquidation preference of the Series B Preferred Stock in effect on the first calendar day of the applicable dividend period (as described under “Description of Capital Stock—Series B Preferred Stock—Dividends” and subject to the sixth paragraph under that section). Dividends will be paid in cash. Dividends on the Series B Preferred Stock accrue and accumulate on each issued and outstanding share of the Series B Preferred Stock on a daily basis from April 1, 2026 and are payable quarterly in equal amounts in arrears on or about the dividend payment date, which is the last calendar day of each dividend period commencing on April 1, 2026; provided that if any dividend payment date is not a business day, then the dividend which would have been payable on that dividend payment date will be paid on the next succeeding business day. |
In addition, the terms of the Series B Preferred Stock, if issued, will prevent us from repurchasing or redeeming any shares of Series A Preferred Stock, so long as there are any accumulated accrued and unpaid dividends with respect to the Series B Preferred Stock. |
Penalties as a Result of Failure to Pay Dividends |
If, at any time, there is a dividend default (with respect to the Series B Preferred Stock, as defined under “Description of Capital Stock—Series B Preferred Stock—Failure to Make Dividend Payments”) because dividends on the outstanding Series B Preferred Stock are accrued but not paid in full for any six consecutive or non-consecutive dividend periods, then, commencing on the first day after the dividend payment date on which a dividend default occurs and continuing until we have paid all accumulated accrued and unpaid dividends on the shares of the Series B Preferred Stock in full in cash (or declared such dividends and a sum of cash sufficient for the payment thereof is set apart for payment), the holders of the Series B Preferred Stock will |
have the voting rights described under “Description of Capital Stock—Series B Preferred Stock—Voting Rights.” Once we have paid all accumulated accrued and unpaid dividends in full in cash (or declared such dividends and a sum of cash sufficient for the payment thereof is set apart for such payment), the foregoing provisions will not be applicable, unless we again fail to pay any dividend for any future dividend period. |
Ranking |
The Series B Preferred Stock ranks: (i) senior to our Common Stock, our Series A Preferred Stock and any other shares of stock that we may issue in the future, the terms of which specifically provide that such stock ranks junior to the Series B Preferred Stock, in each case with respect to payment of dividends and amounts upon liquidation, dissolution or winding up; (ii) equal to any shares of stock that we may issue in the future, the terms of which specifically provide that such stock ranks on parity with the Series B Preferred Stock, in each case with respect to payment of dividends and amounts upon liquidation, dissolution or winding up; (iii) junior to all other shares of stock issued by us, the terms of which specifically provide that such stock ranks senior to the Series B Preferred Stock, in each case with respect to payment of dividends and amounts upon liquidation, dissolution or winding up (any such creation would require the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock); and (iv) junior to all our existing and future indebtedness. |
Optional Redemption |
We, at our option, upon not less than 30 nor more than 60 days’ written notice, may redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price equal to the then-applicable liquidation preference per share of Series B Preferred Stock (subject to the last paragraph under “Description of Capital Stock—Series B Preferred Stock—Redemption”), plus all accumulated accrued and unpaid dividends thereon (whether or not earned, approved or declared) to, but excluding, the date fixed for redemption, without interest. |
Cumulative Redemption |
Under the terms of the new Series B Preferred Stock, preferred shareholders may enforce certain director nomination rights against us, as described below, if we fail to redeem, repurchase or otherwise acquire, in the aggregate, (i) 400,000 shares of Series B Preferred Stock with respect to calendar year 2022, (ii) 900,000 shares of Series B Preferred Stock with respect to calendar year 2023, (iii) 1,400,000 shares of Series B Preferred Stock with respect to calendar year 2024 and (iv) 1,900,000 shares of Series B Preferred Stock with respect to calendar year 2025 (with each such number of shares of Series B Preferred Stock being cumulative of the number of shares of Series B Preferred Stock redeemed in previous calendar years). |
If, as of any cumulative redemption measurement date, we have failed to redeem, repurchase or otherwise acquire the applicable cumulative |
redemption amount, then (i) commencing on the first day after such cumulative redemption measurement date and continuing until the date a “correction event” (with respect to the Series B Preferred Stock, as defined under “Description of Capital Stock—Series B Preferred Stock—Voting Rights”) with respect to such cumulative redemption default occurs, the holders of Series B Preferred Stock will have the director nomination rights described under “Description of Capital Stock—Series B Preferred Stock—Director Nomination Rights”; and (ii) following any cumulative redemption default that has been cured by us, if we subsequently fail to redeem, repurchase or otherwise acquire the applicable cumulative redemption amount as of the applicable cumulative redemption measurement date, such subsequent failure shall constitute a separate cumulative redemption default, and the foregoing provisions of clause (i) of this sentence shall immediately apply until such time as a correction event occurs with respect to such subsequent cumulative redemption default. |
Milestone Redemption |
If, as of the date that is 18 months after the original date of issuance, we have failed to redeem, repurchase or otherwise acquire 1,000,000 shares of Series B Preferred Stock, then within 30 days of such date, we shall pay to the holders of Series B Preferred Stock, on a pro rata basis in proportion to the number of shares of Series B Preferred Stock held by such holders, the penalty dividend, payable in shares of Common Stock, described under “Description of Capital Stock—Series B Preferred Stock—Milestone Redemption.” |
Special Redemption Upon Change of Control |
If a change of control of us by a person, entity or group occurs, we (or the acquiring entity) will be required to redeem the Series B Preferred Stock, in whole but not in part, within 120 days after the date on which the change of control has occurred, for cash at a redemption price equal to the then-applicable liquidation preference per share of Series B Preferred Stock (subject to the last paragraph under “Description of Capital Stock—Series B Preferred Stock—Redemption”), plus all accumulated accrued and unpaid dividends thereon (whether or not earned, approved or declared) to, but excluding, the redemption date, without interest. |
Liquidation Preference |
The “ liquidation preference ” with respect to the Series B Preferred Stock means (i) from and including the original date of issuance to, but excluding, the date that is 18 months after the original date of issuance, $10.00 per share of Series B Preferred Stock, (ii) from and including the date that is 18 months after the original date of issuance to, but excluding, the date that is 24 months after the original date of issuance, $11.00 per share of Series B Preferred Stock, (iii) from and including the date that is 24 months after the original date of issuance to, but excluding, the date that is 36 months after the original date of issuance, $12.50 per share of Series B Preferred Stock, (iv) from and including the date that is 36 months after the original date of issuance to, but excluding, the date that is 48 months after the original date of |
issuance, $14.50 per share of Series B Preferred Stock and (v) from and including the date that is 48 months after the original date of issuance, $25.00 per share of Series B Preferred Stock, plus, in the case of this clause (v) only, an amount in cash equal to all accumulated accrued and unpaid dividends thereon (whether or not earned or declared) to, but excluding, the date fixed for redemption of the Series B Preferred Stock or the date of final distribution to such holders, as applicable, without interest; provided, however, that the liquidation preference for the final shares will be $5.00 per final share. |
If we liquidate, dissolve or wind up our operations, then the holders of the Series B Preferred Stock have the right to receive the then-applicable liquidation preference per share of Series B Preferred Stock, before any distributions or payments are made to the holders of any Common Stock, Series A Preferred Stock or any other class or series of junior shares. The rights of the holders of the Series B Preferred Stock to receive the liquidation preference will be subject to the proportionate rights of holders of each other future series or class of parity shares and subordinate to the rights of senior shares. |
Voting Rights |
Holders of Series B Preferred Stock generally have no voting rights, except as set forth below in this “—Voting Rights” section or under “—Director Nomination Rights” or as otherwise required by law. |
When a dividend default has occurred, then the holders of the Series B Preferred Stock (voting together as a class with all other classes or series of our stock we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of directors referred to below) will be entitled to vote for the election of two additional directors to serve on our Board of Directors until a correction event as described under “Description of Capital Stock—Series B Preferred Stock—Voting Rights” has occurred with respect to such dividend default. |
When a delisting event (with respect to the Series B Preferred Stock, as defined under “Description of Capital Stock—Series B Preferred Stock—“Failure to Maintain a Listing on a National Exchange”) has occurred, then the holders of the Series B Preferred Stock (voting together as a class with all other classes or series of our stock we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of directors referred to below) will be entitled to vote for the election of one additional director to serve on our Board of Directors until a correction event as described under “Description of Capital Stock—Series B Preferred Stock—Voting Rights” has occurred with respect to such delisting event. |
In addition, the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock is required for us to authorize or issue any class or series of senior shares or to amend |
any provisions of our Charter so as to materially and adversely affect any rights of the Series B Preferred Stock. See “Description of Capital Stock—Series B Preferred Stock—Voting Rights.” |
Director Nomination Rights |
If a cumulative redemption default has occurred and continuing until the date a correction event with respect to such cumulative redemption default occurs, we shall include in our proxy statement (including our form of proxy and ballot) for the next annual meeting of shareholders (or, if such default occurs less than 60 days before the date fixed for the next annual meeting, the second annual meeting after such occurrence), the name of any nominee for election to the Board submitted pursuant to these director nomination rights, subject to the requirements described under “Description of Capital Stock—Series B Preferred Stock—Director Nomination Rights.” |
If a correction event with respect to a cumulative redemption default has not occurred at or prior to the commencement of the applicable annual meeting, then one director shall be elected out of the preferred nominee(s) by a plurality of the votes cast by the shares of Series B Preferred Stock at the annual meeting. |
No Maturity |
The Series B Preferred Stock has no stated maturity and is not subject to any sinking fund or mandatory redemption, except following a change of control and the cumulative redemption provisions. Shares of the Series B Preferred Stock that are not required to be redeemed will remain outstanding indefinitely unless we decide to redeem them or we are required to redeem them following a change of control or we otherwise acquire them. See “Description of Capital Stock—Series B Preferred Stock—Cumulative Redemption,” “Description of Capital Stock—Series B Preferred Stock—Redemption,” and “Description of Capital Stock—Series B Preferred Stock—Special Redemption Upon Change of Control” for additional details. |
Information Rights |
During any period in which we are not subject to Section 13 or 15(d) of the Exchange Act and any shares of Series B Preferred Stock are outstanding, we will use our best efforts to: (i) transmit by mail (or other permissible means under the Exchange Act) to all holders of Series B Preferred Stock, as their names and addresses appear on our record books and without cost to such holders, copies of our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q that we would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject thereto (other than any exhibits that would have been required); and (ii) promptly, upon request, supply copies of such reports to any holders of Series B Preferred Stock. We will use our best efforts to mail (or otherwise provide) the information to the holders of the Series B Preferred Stock within 15 days after the respective dates by which a periodic report on Form 10-K or Form 10-Q, as the case may be, in respect of such information would have been required to be filed with the SEC, if we were subject to Section 13 or 15(d) of the Exchange Act, in each |
case, based on the dates on which we would be required to file such periodic reports if we were a “non-accelerated filer” within the meaning of the Exchange Act. |
Listing |
We intend to apply for the listing of shares of the Series B Preferred Stock on the NYSE American, and we expect that the shares of Series B Preferred Stock will trade under the ticker symbol “RHE PRB.” |
Material U.S. Federal Income Tax Considerations |
For a discussion of the material U.S. federal income tax consequences of acquiring, holding and disposing of Series B Preferred Stock received in the Exchange Offer, see “Material U.S. Federal Income Tax Considerations.” You should consult your own tax advisors for a full understanding of the tax considerations of owning the Series B Preferred Stock in light of your own particular circumstances. |
Book-Entry and Form |
The Series B Preferred Stock will be issued and maintained in book-entry form registered in the name of the nominee of DTC. |
Risk Factors |
Your decision whether to participate in the Exchange Offer and to exchange your shares of Series A Preferred Stock for the Exchange Consideration will involve risk. You should be aware of and carefully consider the risk factors set forth in “Risk Factors,” along with all of the other information provided or referred to in this proxy statement/prospectus, before deciding whether to participate in the Exchange Offer. |
(1) | the stated liquidation preference per share of Series A Preferred Stock will be reduced from $25.00 to $5.00 per share; |
(2) | the dividends payable quarterly in cash when and as declared by the Board of Directors, and the accumulation at a rate of 12.875% per annum of the $25.00 per share liquidation preference, would be eliminated; |
(3) | the approximately $38.0 million in accumulated and unpaid Series A Preferred Stock dividends would be eliminated; |
(4) | penalty events and the right of holders of Series A Preferred Stock to elect directors to the Board of Directors upon the occurrence of a penalty event would be eliminated; |
(5) | the redemption price of the Series A Preferred Stock in the event of an optional redemption will be reduced to $5.00 per share; |
(6) | the redemption price of the Series A Preferred Stock in the event of a “change of control” will be reduced to $5.00 per share; and |
(7) | the voting rights of holders of Series A Preferred Stock when voting as a single class with any other class or series of stock will be changed to one vote per $5.00 liquidation preference. |
• | our ability to raise additional capital; |
• | our ability to capitalize on business opportunities and react to competitive pressures; |
• | our ability to attract and retain employees; |
• | our liquidity; |
• | how our business is viewed by investors, lenders, strategic partners or customers; and |
• | our enterprise value. |
2021 |
2022 |
2023 |
2024 |
2025 |
||||||||||||||||
Balance, January 1 |
$ | 27,890 | $ | 36,887 | $ | 45,884 | $ | 54,881 | $ | 63,878 | ||||||||||
Accumulated and unpaid Series A Preferred Stock dividends |
$ | 8,997 | $ | 8,997 | $ | 8,997 | $ | 8,997 | $ | 8,997 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, December 31 |
$ | 36,887 | $ | 45,884 | $ | 54,881 | $ | 63,878 | $ | 72,875 | ||||||||||
|
|
|
|
|
|
|
|
|
|
• | the magnitude of the Company’s existing accumulated and unpaid dividends on the Series A Preferred Stock; the magnitude of the Company’s future dividend entitlements on the Series A Preferred Stock; and the rate that unpaid dividends would accumulate over the coming years; |
• | the uncertainty of the current- and post-COVID-19 business environment; and the lack of clarity with respect to the period of time it would likely take for the long-term care and senior living industry in general, and the Company’s operations in particular, to return to occupancy and cash flow levels sufficient to enable the Company to restore dividends on the Series A Preferred Stock; |
• | the market value of the Series A Preferred Stock; |
• | the Company’s recent and anticipated results of operations and cash flows in relation to working capital, financing, growth and distribution needs; |
• | the extent to which accumulated and unpaid dividends on the Series A Preferred Stock would result in an increasingly serious financial burden for the Company over time; and |
• | the terms of the Series B Preferred Stock. |
• | The overall financial condition of the Company and the impact of the Exchange Offer and the Charter Amendments, which the Company expects to increase the value to all stockholders of the Company, including those who were holders of Series A Preferred Stock at the time of the Exchange Offer, over time. |
• | The amount of accumulated and unpaid dividends on the Series A Preferred Stock is approximately $38.0 million as of February 15, 2022. The unpaid dividends on the Series A Preferred Stock continue to accumulate (whether or not declared or paid) at a rate of approximately $2.249 million per quarter, which will make it increasingly unlikely that the Company will ever be able to pay such accumulated dividends or raise new equity capital. As a result of the Exchange Offer, the Company would be better positioned to raise new equity capital, which can be used to make acquisitions of additional properties and to attract and retain qualified personnel. |
• | Through the Exchange Offer, holders of Series A Preferred Stock have the opportunity to exchange their shares for shares of Series B Preferred Stock, which will rank senior to each share of Series A Preferred Stock with respect to the payment of dividends and as to distribution of assets upon liquidation, dissolution or winding up and have an initial liquidation preference of $10.00 per share. The Series B Preferred Stock will also include, among others, the following features: |
• | The Company may redeem, repurchase or otherwise acquire a certain amount of shares of Series B Preferred Stock through calendar year 2025 at the then applicable liquidation preference, and if we fail to redeem, repurchase or otherwise acquire the shares according to this schedule, then the holders of the Series B Preferred Stock will have the director nomination rights described under “Description of Capital Stock—Series B Preferred Stock—Director Nomination Rights”; |
• | The liquidation preference with respect to the Series B Preferred Stock will initially be $10.00 per share and will increase over time to $25.00 per share upon the fourth anniversary of the original |
date of issuance, provided that once there are 200,000 or fewer shares of the Series B Preferred Stock outstanding, the liquidation preference will be reduced to $5.00 per share; and |
• | Dividends will be payable in cash and will accumulate from April 1, 2026 at a rate of 12.5% per annum of the liquidation preference of the Series B Preferred Stock in effect on the first calendar day of the applicable dividend period (subject to the sixth paragraph under “Description of Capital Stock—Series B Preferred Stock—Dividends”). |
• | Under the terms of the new Series B Preferred Stock, holders of the Series B Preferred Stock may enforce certain director nomination rights against us, as described under “Description of Capital Stock—Series B Preferred Stock—Director Nomination Rights,” if, by the applicable date, we have failed to redeem, repurchase or otherwise acquire, in the aggregate, (i) 400,000 shares of Series B Preferred Stock with respect to calendar year 2022, (ii) 900,000 shares of Series B Preferred Stock with respect to calendar year 2023, (iii) 1,400,000 shares of Series B Preferred Stock with respect to calendar year 2024 and (iv) 1,900,000 shares of Series B Preferred Stock with respect to calendar year 2025 (with each such number of shares of Series B Preferred Stock being cumulative of the number of shares of Series B Preferred Stock redeemed in previous calendar years). Redemptions, repurchases or other acquisitions meeting these milestones give the Company time to redeem, repurchase or otherwise acquire the Series B Preferred Stock and return value to holders of Series B Preferred Stock in an orderly manner and return value to holders of Series B Preferred Stock that uses, in part, the Company’s own internally generated cash flows. |
• | As of December 31, 2021, the book value per basic share of our Series A Preferred Stock was $22.20. |
• | The current market prices as well as the Company’s historical prices of its Common Stock and Series A Preferred Stock were important considerations for the Board of Directors. |
• | The holders of at least 66 2/3% of the outstanding shares of the Series A Preferred Stock must vote in favor of the Preferred Series A Charter Amendment Proposal and the Series B Preferred Stock Proposal for their shares of Series A Preferred Stock to be exchanged for Series B Preferred Stock. None of the Company, its Board of Directors, officers or employees, the Information Agent, the Exchange Agent, the Proxy Solicitor, any of the Company’s financial advisors or any other person is making any recommendation to any holder of Series A Preferred Stock as to whether or not you should tender shares of Series A Preferred Stock in the Exchange Offer. Each holder of Series A Preferred Stock must make an independent investment decision if that holder wants to participate in the Exchange Offer. |
• | The holders of Series A Preferred Stock will forfeit all rights to receive the accumulated and unpaid dividends on the Series A Preferred Stock, though the Board of Directors discussed that it is unlikely that these amounts will be paid regardless of whether the Company consummates the Exchange Offer. |
• | The Series B Preferred Stock will rank senior to our Series A Preferred Stock with respect to payment of dividends and amounts upon liquidation, dissolution or winding up. |
• | The terms of the Series B Preferred Stock will prevent us from repurchasing or redeeming any shares of Series A Preferred Stock, so long as there are any accumulated accrued and unpaid dividends with respect to the Series B Preferred Stock. |
• | The initial liquidation preference per share of the Series B Preferred Stock will be $10.00. At February 15, 2022, the liquidation preference per share of the Series A Preferred Stock was $25.00. |
• | The Series B Preferred Stock will not accrue dividends until April 1, 2026. |
• | The Company has not received any report, opinion or appraisal from an outside party with respect to the Exchange Offer, the Series A Charter Amendments or the Series B Charter Amendments. |
• | Holders of Series A Preferred Stock will not have appraisal rights, or any contract right to petition for fair value, with respect to the Exchange Offer, the Series A Charter Amendments or the Series B Charter Amendments. We will not independently provide such a right. |
• | An unaffiliated representative was not engaged by the Company to act solely on behalf of the affiliated and unaffiliated holders of Series A Preferred Stock for purposes of negotiating the terms of the Exchange Offer, the Series A Charter Amendments or the Series B Charter Amendments. |
• | Reduce the Liquidation Preference of the Preferred Stock. |
• | Raise Equity Capital for Acquisition Opportunities COVID-19 pandemic, which has led to reduced occupancy levels, lower profits and lower valuations at many senior housing facilities. The Company’s operating expenses are relatively fixed as it would not need to add staff to handle the leasing of more facilities, with the result that we believe the Company should be able to achieve accretive acquisitions if it can get access to equity capital at a reasonable price. |
• | Provide Capital to Underserved Operators. mid-size acquisition transactions with a focus on individual facilities with existing operators, as well as small groups of facilities and larger portfolios. In addition to pursuing acquisitions using triple-net lease structures, we may pursue other forms of investment, including partnering with investors, mortgage loans and joint ventures. |
• | Reduce the Burden of Accumulated and Unpaid Dividends on Series A Preferred Stock and Defer Dividend Accumulation. two-thirds of the shares of Series A Preferred Stock are exchanged) or eliminated if all of the shares of Series A Preferred Stock are exchanged. The aggregate liquidation preference for the Series B Preferred Stock will initially be $18.7 million, if two-thirds of the shares of Series A Preferred Stock are exchanged, and $28.1 million, if all of the Series A Preferred Stock is exchanged. The Series B Preferred Stock pays no dividends until April 1, 2026 (except for the payment of a penalty dividend in shares of Common Stock, if applicable, as described under “Description of Capital Stock—Series B Preferred Stock—Milestone Redemption”). We expect to use a combination of cash on hand, cash from operations, new equity capital and debt to repurchase or redeem a significant portion of the Series B Preferred Stock prior to December 31, 2025. We believe that the Exchange Offer is less expensive than any restructuring alternative the Company might seek if the Exchange Offer is not completed and allows the Company’s equity holders to retain and potentially accrue value. |
• | Preserve Cash for Strategic Initiatives. |
• | Enable Us to Repurchase, Redeem or Otherwise Acquire the Company’s Preferred Stock on a Reasonable Timeframe. |
Preferred Stock, then within 30 days of such date, we will pay to the holders of Series B Preferred Stock, on a pro rata basis in proportion to the number of shares of Series B Preferred Stock held by such holders, the penalty dividend, payable in shares of Common Stock, described under “Description of Capital Stock—Series B Preferred Stock—Milestone Redemption.” Redemptions, repurchases or acquisitions meeting these milestones give the Company time to redeem, repurchase or otherwise acquire the Series B Preferred Stock and return value to holders of Series B Preferred Stock in an orderly manner using, in part, the Company’s own internally generated cash flows. |
• | the stated liquidation preference per share of Series A Preferred Stock will be reduced from $25.00 to $5.00 per share; |
• | the dividends payable quarterly in cash when and as declared by the Board of Directors, and the accumulation at a rate of 12.875% per annum of the $25.00 per share liquidation preference, would be eliminated; |
• | the approximately $38.0 million in accumulated and unpaid Series A Preferred Stock dividends would be eliminated; |
• | penalty events and the right of holders of Series A Preferred Stock to elect directors to the Board of Directors upon the occurrence of a penalty event would be eliminated; |
• | the redemption price of the Series A Preferred Stock in the event of an optional redemption will be reduced to $5.00 per share; |
• | the redemption price of the Series A Preferred Stock in the event of a “change of control” will be reduced to $5.00 per share; and |
• | 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. |
• | terminate the Exchange Offer and not to accept for exchange any shares of Series A Preferred Stock not previously accepted for exchange upon the occurrence of any of the events specified below under “—Conditions of the Exchange Offer” that have not been waived by us; and |
• | amend the terms of the Exchange Offer in any manner permitted or not prohibited by law. |
• | the tender is made by or through a bank, broker dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity that is an “eligible guarantor institution,” as that term is defined in Rule 17Ad-15 promulgated under the Exchange Act (an “Eligible Institution ”); |
• | the Exchange Agent receives by hand, mail, overnight courier, facsimile or electronic mail transmission, prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery in the form attached as an exhibit to the Registration Statement of which this proxy statement/prospectus is a part, with signatures guaranteed by an Eligible Institution; and |
• | a confirmation of a book-entry transfer into the Exchange Agent’s account at DTC of all shares of Series A Preferred Stock delivered electronically, together with a properly completed and duly executed Letter of Transmittal with any required signature guarantees (or, in the case of a book-entry transfer, an agent’s message in accordance with ATOP), and any other documents required by the Letter of Transmittal, must be received by the Exchange Agent within two days that the NYSE American is open for trading after the date the Exchange Agent receives such Notice of Guaranteed Delivery. |
• | specify the name of the person that tendered the shares of Series A Preferred Stock to be withdrawn; |
• | identify the shares of Series A Preferred Stock to be withdrawn; |
• | specify the number of shares of Series A Preferred Stock to be withdrawn; |
• | include a statement that the holder is withdrawing its election to have the shares of Series A Preferred Stock exchanged; |
• | be signed by the holder in the same manner as the original signature on the Letter of Transmittal by which the shares of Series A Preferred Stock were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the transfer agent register the transfer of such shares of Series A Preferred Stock into the name of the person withdrawing the tender; and |
• | specify the name in which any shares of Series A Preferred Stock are to be registered, if different from that of the person that tendered the shares of Series A Preferred Stock. |
• | holders of at least 66 2/3% of the outstanding shares of the Series A Preferred Stock as of the Record Date have not approved each of the Preferred Series A Charter Amendment Proposal (the “ Preferred Series A Charter Amendment Condition ”), and the Series B Preferred Stock Proposal by March 28, 2022 (the “Series B Preferred Designation Condition ”); |
• | a majority of votes entitled to be cast by the holders of the outstanding Common Stock as of the Record Date have not approved the Common Charter Amendment Proposal by March 28, 2022 (the “ Common Charter Amendment Condition ” and, together with the Preferred Series A Charter Amendment Condition, the “Charter Amendment Conditions ”); |
• | the Registration Statement of which this proxy statement/prospectus is a part shall not have become effective in accordance with the provisions of the Securities Act, a stop order shall have been issued by the SEC or a proceeding seeking such stop order has been threatened or initiated by the SEC that remains pending (collectively, the “ Registration Statement Condition ”); |
• | there shall have been instituted, threatened in writing or be pending any action or proceeding before or by any court, governmental, regulatory or administrative agency or instrumentality, or by any other person, in connection with the Exchange Offer, that is, or is reasonably likely to be, in our reasonable judgment, materially adverse to our business, operations, properties, condition, assets, liabilities or prospects, or which would or might, in our reasonable judgment, prohibit, prevent, restrict or delay consummation of the Exchange Offer or materially impair the contemplated benefits to us (as set forth under “—Reasons for the Exchange Offer”) of the Exchange Offer; |
• | an order, statute, rule, regulation, executive order, stay, decree, judgment or injunction shall have been proposed, enacted, entered, issued, promulgated, enforced or deemed applicable by any court or governmental, regulatory or administrative agency or instrumentality that, in our reasonable judgment, would or would be reasonably likely to prohibit, prevent, restrict or delay consummation of the Exchange Offer or materially impair the contemplated benefits to us of the Exchange Offer, or that is, or is reasonably likely to be, materially adverse to our business, operations, properties, condition, assets, liabilities or prospects; |
• | there shall have occurred or be reasonably likely to occur any material adverse change to our business, operations, properties, condition, assets, liabilities, prospects or financial affairs; or |
• | there shall have occurred: |
• | any general suspension of, or limitation on prices for, trading in securities in U.S. securities or financial markets; |
• | a declaration of a banking moratorium or any suspension of payments in respect to banks in the United States; |
• | any limitation (whether or not mandatory) by any government or governmental, regulatory or administrative authority, agency or instrumentality, domestic or foreign, or other event that, in our reasonable judgment, would or would be reasonably likely to affect the extension of credit by banks or other lending institutions; or |
• | a natural disaster or the commencement or material worsening of a war, armed hostilities, act of terrorism, pandemic or other international or national calamity directly or indirectly involving the United States which, in our reasonable judgment, diminishes general economic activity to a degree sufficient to materially reduce demand for our business. |
Description |
Amount |
|||
Legal fees |
$ | 700,000 | ||
Accounting fees |
$ | 22,500 | ||
Printing, proxy solicitation, filing, mailing, special meeting and exchange offer costs |
$ | 195,000 | ||
SEC filing fee |
$ | 1,122 | ||
Miscellaneous |
$ | 5,000 | ||
|
|
|||
Total fees and expenses |
$ | 923,622 | ||
|
|
1. | to approve a proposal to amend our Charter to (i) reduce the liquidation preference of 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, on the terms of the form of proposed Series A Charter Amendments set forth as Annex A to this proxy statement/prospectus; |
2. | to approve a proposal to (i) amend our Charter to increase the authorized number of shares of preferred stock to 6,000,000 shares, on the terms of the form of proposed amendments set forth as Annex B-1 to this proxy statement/prospectus, and (ii) approve the authorization, creation and designation by the Board pursuant to Section 14-2-602 of the Official Code of Georgia Annotated, from the authorized but undesignated shares of preferred stock, of the Series B Preferred Stock having the rights, preferences and privileges substantially as set forth in the form of amendment to the Charter in Annex B-2 to this proxy statement/prospectus and as described under “Description of Capital Stock—Series B Preferred Stock,” which, if so approved by the holders of the Series A Preferred Stock as part of this proposal, will rank senior to the Series A Preferred Stock, and be “Senior Shares” to the Series A Preferred Stock, pursuant to and as contemplated by Section 3.7(e) of the Charter; and |
3. | to approve (together with the holders of Common Stock) the adjournment of the Special Meeting, if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the Required Proposals. |
1. | to approve a proposal to (i) amend our Charter to (a) reduce the liquidation preference of the Series A Preferred Stock to $5.00 per share, (b) eliminate accumulated and unpaid dividends on the Series A Preferred Stock, (c) eliminate future dividends on the Series A Preferred Stock, (d) eliminate penalty events and the right of holders of Series A Preferred Stock to elect directors upon the occurrence of a penalty event, (e) reduce the redemption price of the Series A Preferred Stock in the event of an optional redemption to $5.00 per share, (f) reduce the redemption price of the Series A Preferred Stock |
in the event of a “change of control” to $5.00 per share and (g) 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, on the terms of the form of proposed amendments set forth as Annex A to this proxy statement/prospectus and (ii) amend our Charter to 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, on the terms of the form of proposed amendments set forth as Annex B-1 to this proxy statement/prospectus; and |
2. | to approve (together with the holders of Series A Preferred Stock) the adjournment of the Special Meeting, if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the Required Proposals. |
Aggregate Votes Entitled to be Cast | ||
Preferred Series A Charter Amendment Proposal |
shares of Series A Preferred Stock | |
Series B Preferred Stock Proposal |
shares of Series A Preferred Stock | |
Common Charter Amendment Proposal |
shares of Common Stock | |
Adjournment Proposal |
shares of Series A Preferred Stock and shares of Common Stock |
• | shares of Series A Preferred Stock will be voted “ FOR |
• | shares of Series A Preferred Stock will be voted “ FOR |
• | shares of Common Stock will be voted “ FOR |
• | shares of Series A Preferred Stock and Common Stock will be voted “ FOR |
• | notify our Corporate Secretary in writing before your shares of voting stock have been voted at the Special Meeting; |
• | sign, date and mail a new proxy card to the Proxy Solicitor; or |
• | attend the Special Meeting and vote your shares of voting stock in person. |
Existing Charter Provision |
Proposed Amendment to Charter Provision | |||
Liquidation Preference | The liquidation preference is $25.00 per share. | The liquidation preference will be $5.00 per share. | ||
Payment of Dividends | Dividends on the Series A Preferred Stock are payable quarterly in cash when and as declared by the Board of Directors and accumulate at a rate of 12.875% per annum of the $25.00 per share liquidation preference. | Dividends on the Series A Preferred Stock will no longer be paid. | ||
Accumulated and Unpaid Dividends | Dividends shall accrue and accumulate on each issued and outstanding share of the Series A Preferred Stock on a daily basis from the original date of issuance of such share and are payable quarterly. | All accumulated and unpaid dividends will be eliminated. | ||
Penalty Events and Election of Directors | Whenever a penalty event has occurred, the number of directors constituting the Board of Directors will be automatically increased by two and the holders of the Series A Preferred Stock (voting together as a class with all other classes or series of stock we may issue upon which | There will no longer be any penalty events and holders of Series A Preferred Stock will no longer have the right to vote for the election of two directors whenever a penalty event has occurred. |
similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series A Preferred Stock in the election of those two directors) will be entitled to vote for the election of those two additional directors. | ||||
Optional Redemption Price | The redemption price for an optional redemption is $25.00 per share. | The redemption price for an optional redemption will be $5.00 per share. | ||
Change of Control Redemption Price | The redemption price for a redemption upon a change of control is $25.00 per share. | The redemption price for a redemption upon a change of control will be $5.00 per share. | ||
Voting Rights | When shares of any class or series of stock have the right to vote with the Series A Preferred Stock as a single class on any matter, the Series A Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of liquidation preference (excluding accumulated dividends). | When shares of any class or series of stock have the right to vote with the Series A Preferred Stock as a single class on any matter, the Series A Preferred Stock and the shares of each such other class or series will have one vote for each $5.00 of liquidation preference. |
Existing Charter Provision |
Proposed Amendment to Charter Provision | |||
Liquidation Preference | The liquidation preference is $25.00 per share. | The liquidation preference will be $5.00 per share. | ||
Payment of Dividends | Dividends on the Series A Preferred Stock are payable quarterly in cash when and as declared by the Board of Directors and accumulate at a rate of 12.875% per annum of the $25.00 per share liquidation preference. | Dividends on the Series A Preferred Stock will no longer be paid. | ||
Accumulated and Unpaid Dividends | Dividends shall accrue and accumulate on each issued and outstanding share of the Series A Preferred Stock on a daily basis from the original date of issuance of such share and are payable quarterly. | All accumulated and unpaid dividends will be eliminated. | ||
Penalty Events and Election of Directors | Whenever a penalty event has occurred, the number of directors constituting the Board of Directors will be automatically increased by | There will no longer be any penalty events and holders of Series A Preferred Stock will no longer have the right to vote for |
two and the holders of the Series A Preferred Stock (voting together as a class with all other classes or series of stock we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series A Preferred Stock in the election of those two directors) will be entitled to vote for the election of those two additional directors. | the election of two directors whenever a penalty event has occurred. | |||
Optional Redemption Price | The redemption price for an optional redemption is $25.00 per share. | The redemption price for an optional redemption will be $5.00 per share. | ||
Change of Control Redemption Price | The redemption price for a redemption upon a change of control is $25.00 per share. | The redemption price for a redemption upon a change of control will be $5.00 per share. | ||
Voting Rights | When shares of any class or series of stock have the right to vote with the Series A Preferred Stock as a single class on any matter, the Series A Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of liquidation preference (excluding accumulated dividends). | When shares of any class or series of stock have the right to vote with the Series A Preferred Stock as a single class on any matter, the Series A Preferred Stock and the shares of each such other class or series will have one vote for each $5.00 of liquidation preference. |
• | on an actual basis; |
• | on an as adjusted basis to give effect to the Exchange Offer (assuming 66 2/3% of the outstanding shares of Series A Preferred Stock (1,874,357 shares) are each exchanged for one share of Series B Preferred Stock); and |
• | on an as adjusted basis to give effect to the Exchange Offer (assuming 100% of the outstanding shares of Series A Preferred Stock (2,811,535 shares) are each exchanged for one share or Series B Preferred Stock). |
December 31, 2021 |
||||||||||||
Actual |
As Adjusted* |
As Adjusted** |
||||||||||
(In thousands) |
||||||||||||
Cash |
$ | 6,792 | $ | 6,792 | $ | 6,792 | ||||||
Restricted cash |
3,056 | 3,056 | 3,056 | |||||||||
|
|
|
|
|
|
|||||||
Total cash and cash equivalents |
$ | 9,848 | $ | 9,848 | $ | 9,848 | ||||||
|
|
|
|
|
|
|||||||
Senior debt, net |
$ | 46,043 | $ | 46,043 | $ | 46,043 | ||||||
Bonds, net |
6,239 | 6,239 | 6,239 | |||||||||
Other debt, net |
594 | 594 | 594 | |||||||||
|
|
|
|
|
|
|||||||
Total long-term debt |
52,876 | 52,876 | 52,876 | |||||||||
Stockholders’ equity: |
||||||||||||
Common stock and additional paid-in capital, no par value; 55,000 shares authorized; 1,775 issued and outstanding at December 31, 2021 |
62,515 | 62,515 | 62,515 | |||||||||
Series A Preferred stock, no par value; 5,000 shares authorized; 2,812 shares issued and outstanding, redemption amount $70,288† at December 31, 2021 |
62,423 | 20,808 | — | |||||||||
Series B Preferred stock, no par value |
— | 41,615 | 62,423 | |||||||||
Accumulated deficit |
(114,542 | ) | (114,542 | ) | (114,542 | ) | ||||||
|
|
|
|
|
|
|||||||
Total stockholders’ equity |
10,396 | 10,396 | 10,396 | |||||||||
Total long-term debt and stockholders’ equity |
$ |
63,272 |
|
$ | 63,272 | $ | 63,272 | |||||
|
|
|
|
|
|
* | Assuming 66 2/3% of the outstanding shares of Series A Preferred Stock (1,874,357 shares) are each exchanged for one share of Series B Preferred Stock. |
** | Assuming 100% of the outstanding shares of Series A Preferred Stock (2,811,535 shares) are each exchanged for one share of Series B Preferred Stock. |
† | Redemption amount does not include approximately $36.9 million in accumulated and unpaid dividends on the Series A Preferred Stock as of December 31, 2021. The amount of accumulated and unpaid dividends on the Series A Preferred Stock is approximately $38.0 million as of February 15, 2022. |
2022 |
High |
Low |
||||||
First Quarter to February 17, 2022 |
$ | 4.5500 | $ | 4.0800 | ||||
2021 |
High |
Low |
||||||
Fourth Quarter |
$ | 5.2200 | $ | 3.8600 | ||||
Third Quarter |
6.0100 | 4.8800 | ||||||
Second Quarter |
6.3000 | 2.7300 | ||||||
First Quarter |
2.9800 | 2.2400 | ||||||
2020 |
High |
Low |
||||||
Fourth Quarter |
$ | 2.4200 | $ | 1.9000 | ||||
Third Quarter |
2.2000 | 1.7800 | ||||||
Second Quarter |
2.2400 | 1.7500 | ||||||
First Quarter |
4.6700 | 1.8500 | ||||||
2019 |
High |
Low |
||||||
Fourth Quarter |
$ | 5.5490 | $ | 3.9600 | ||||
Third Quarter |
6.2500 | 2.9350 | ||||||
Second Quarter |
4.2300 | 2.7805 | ||||||
First Quarter |
4.0000 | 2.3000 |
Name and Address of Beneficial Owner |
Number of Shares of Series A Preferred Stock Beneficially Owned |
Percent of Outstanding Series A Preferred Stock |
||||||
Charles L. Frischer |
397,982 | (1) |
14.16 | % |
(1) |
Information obtained from the Schedule 13D/A filed by Charles L. Frischer and the Libby Frischer Family Partnership (“ LFFP ”), an entity that Mr. Frischer is the general partner of, with the SEC on July 6, 2021. Charles L. Frischer reports having sole voting power and sole dispositive power with respect to 397,982 shares of Series A Preferred Stock. LFFP reports having sole voting power and sole dispositive power with respect to 11,000 shares of Series A Preferred Stock. The principal business address of Charles L. Frischer and LFFP is 4404 52nd Avenue NE, Seattle, WA 98105. |
(i) | consulting with the Chairman of the Board (or the Chief Executive Officer, if there is no Chairman of the Board) regarding the agenda for Board meetings; |
(ii) | scheduling and preparing agendas for meetings of non-management directors; |
(iii) | presiding over meetings of non-management directors and executive sessions of meetings of the Board from which employee directors are excluded; |
(iv) | acting as principal liaison between non-management directors and the Chairman of the Board (or the Chief Executive Officer, if there is no Chairman of the Board) on sensitive issues; and |
(v) | raising issues with management on behalf of the non-management directors when appropriate. |
Name |
Audit Committee |
Compensation Committee |
Nominating Committee | |||
Michael J. Fox |
✓ | ✓ | Chair | |||
Brent Morrison |
— | — | — | |||
Kenneth W. Taylor |
Chair | ✓ | ✓ | |||
David A. Tenwick |
✓ | Chair | ✓ |
• | Shareholder Action Through Written Consent |
• | Special Meetings |
• | Removal of Directors |
• | Authorized But Unissued Stock |
• | Advance Notice Requirements |
• | Georgia “Fair Price” Statute |
• | Georgia “Business Combination” Statute |
• | the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of our directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and |
• | following the closing of any acquisition described in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American depositary receipts representing such securities) listed on a national exchange. |
• | a limited purpose trust company organized under the laws of the State of New York; |
• | a “banking organization” within the meaning of New York Banking Law; |
• | a member of the Federal Reserve System; |
• | a “clearing corporation” within the meaning of the Uniform Commercial Code; and |
• | a “Clearing Agency” registered pursuant to the provisions of Section 17A of the Exchange Act. |
• | the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of our directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and |
• | following the closing of any acquisition described in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American depositary receipts representing such securities) listed on a national exchange. |
• | a limited purpose trust company organized under the laws of the State of New York; |
• | a “banking organization” within the meaning of New York Banking Law; |
• | a member of the Federal Reserve System; |
• | a “clearing corporation” within the meaning of the Uniform Commercial Code; and |
• | a “Clearing Agency” registered pursuant to the provisions of Section 17A of the Exchange Act. |
• | any person from beneficially or constructively owning shares of Common Stock of any class or series (“ Equity Shares ”) to the extent that such ownership would cause the Company to fail to qualify as a REIT by reason of being “closely held” under the Code (without regard to whether the ownership interest is held during the last half of a taxable year); |
• | any person from beneficially or constructively owning Equity Shares that would cause the Company to otherwise fail to qualify as a REIT (including beneficial or constructive ownership that would result in the Company owning (actually or constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Company from such tenant would cause the Company to fail to satisfy any of the gross income requirements of Section 856(c) of the Code); |
• | any person from beneficially owning Equity Shares to the extent such beneficial ownership of Equity Shares would result in the Company failing to be “domestically controlled” within the meaning of Section 897(h)(4)(B) of the Code; and |
• | any person from beneficially owning Equity Shares to the extent such beneficial ownership of Equity Shares would result in the Company being “predominantly held” (within the meaning of Section 856(h)(3)(D)(iii) of the Code) by “qualified trusts” (within the meaning of Section 856(h)(3)(E) of the Code). |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
Voting Rights |
||||
On each matter on which holders of Series B Preferred Stock are entitled to vote (as further described below), each share of Series B Preferred Stock will be entitled to one vote, except that when shares of any other class or series of our stock have the right to vote with the Series B Preferred Stock as a single class on any matter, the Series B Preferred Stock and the shares of each such other class or series will have one vote per share. Holders of Series B Preferred Stock have no voting rights except as set forth below in this “—Voting Rights” section or under “—Director Nomination Rights” or as otherwise required by law: | On each matter on which holders of Series A Preferred Stock are entitled to vote (as further described below), each share of Series A Preferred Stock will be entitled to one vote, except that when shares of any other class or series of our stock have the right to vote with the Series A Preferred Stock as a single class on any matter, the Series A Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of liquidation preference (excluding accumulated dividends). Holders of Series A Preferred Stock have no voting rights except as set forth below or as otherwise required by law: | On each matter on which holders of Series A Preferred Stock are entitled to vote (as further described below), each share of Series A Preferred Stock will be entitled to one vote, except that when shares of any other class or series of our preferred stock have the right to vote with the Series A Preferred Stock as a single class on any matter, the Series A Preferred Stock and the shares of each such other class or series will have one vote for each $5.00 of liquidation preference. Holders of Series A Preferred Stock have no voting rights except as set forth below or as otherwise required by law: | ||
• When a dividend default has occurred, subject to the provisions under “Description of Capital Stock—Series B Preferred Stock—Voting Rights,” the number of directors constituting the Board of Directors will be automatically increased by two (if not already increased by two by reason of the election of directors by the holders of any other classes or series of stock we may issue upon which similar voting rights have been conferred and are exercisable and with which the Series B Preferred Stock is entitled to vote as a class with respect to the election of such two directors), and the holders of the Series B Preferred Stock |
• Whenever a penalty event has occurred, which is defined as either a dividend default or a delisting event, the number of directors constituting the Board of Directors will be automatically increased by two (if not already increased by two by reason of the election of directors by the holders of any other classes or series of stock we may issue upon which similar voting rights have been conferred and are exercisable and with which the Series A Preferred Stock is entitled to vote as a class with respect to the election of those two directors), and the holders of |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
(voting together as a class with all other classes or series of stock we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of such two directors) will be entitled to vote for the election of such two additional directors at a special meeting called by us at the request of the holders of record of at least 25% of the outstanding shares of Series B Preferred Stock or by the holders of any other classes or series of stock upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of such two directors (unless the request is received less than 60 days before the date fixed for the next annual or special meeting of our shareholders, in which case such vote will be held at the earlier of the second annual or special meeting of our shareholders after such date), and at each subsequent annual meeting until a correction event has occurred with respect to such dividend default. |
the Series A Preferred Stock (voting together as a class with all other classes or series of stock we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series A Preferred Stock in the election of those two directors) will be entitled to vote for the election of those two additional directors at a special meeting called by us at the request of the holders of record of at least 25% of the outstanding shares of Series A Preferred Stock or by the holders of any other classes or series of stock upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series A Preferred Stock in the election of those two directors (unless the request is received less than 90 days before the date fixed for the next annual or special meeting of our shareholders, in which case, such vote will be held at the earlier of the next annual or special meeting of our shareholders), and at each subsequent annual meeting until a correction event has occurred with respect to each penalty event then continuing. |
|||
• On the date a correction event with respect to a dividend default occurs, the right of holders of the Series B Preferred Stock to elect any directors pursuant to the dividend penalty right will cease and, unless there are other classes or series of our |
• On the date a correction event occurs, the right of holders of the Series A Preferred Stock to elect any directors will cease and, unless there are other classes or series of our stock upon which similar voting rights |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
stock upon which similar voting rights have been conferred and are exercisable, the term of any directors elected by holders of the Series B Preferred Stock pursuant to the dividend penalty right shall immediately terminate and the number of directors constituting our Board of Directors shall be reduced accordingly. For the avoidance of doubt, in no event shall the total number of directors elected by holders of the Series B Preferred Stock (voting together as a class with all other classes or series of stock we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of such directors) pursuant to the voting rights under the dividend penalty right exceed two. |
have been conferred and are exercisable, the term of any directors elected by holders of the Series A Preferred Stock shall immediately terminate and the number of directors constituting our Board of Directors shall be reduced accordingly. |
|||
• When a delisting event has occurred, subject to the provisions under “Description of Capital Stock—Series B Preferred Stock—Voting Rights,” the number of directors constituting the Board of Directors will be automatically increased by one (if not already increased by one by reason of the election of directors by the holders of any other classes or series of stock we may issue upon which similar voting rights have been conferred and are exercisable and with which the Series B Preferred Stock is entitled to vote as a class with respect to the election of such director), and the holders of the Series B Preferred Stock (voting together as a class with all other classes or series of stock we |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of such director) will be entitled to vote for the election of such additional director at a special meeting called by us at the request of the holders of record of at least 25% of the outstanding shares of Series B Preferred Stock or by the holders of any other classes or series of stock upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of such director (unless the request is received less than 60 days before the date fixed for the next annual or special meeting of our shareholders, in which case such vote will be held at the earlier of the second annual or special meeting of our shareholders after such date), and at each subsequent annual meeting until a correction event has occurred with respect to such delisting event. |
||||
• On the date a correction event with respect to a delisting event occurs, the right of holders of the Series B Preferred Stock to elect any director pursuant to the delisting penalty right will cease and, unless there are other classes or series of our stock upon which similar voting rights have been conferred and are exercisable, the term of any director elected by holders of the Series B Preferred Stock pursuant to the delisting penalty right shall immediately |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
terminate and the number of directors constituting our Board of Directors shall be reduced accordingly. For the avoidance of doubt, in no event shall the total number of directors elected by holders of the Series B Preferred Stock (voting together as a class with all other classes or series of stock we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of such directors) pursuant to the voting rights under (i) the delisting penalty right exceed one or (ii) the dividend penalty right and the delisting penalty right exceed two. If (A) a delisting event occurs while a previous dividend default remains uncured and (B) two directors are already serving on the Board pursuant to the dividend penalty right, then no additional director may be elected pursuant to the delisting penalty right. If a dividend default occurs while a previous delisting event remains uncured, then, upon the election of two directors pursuant to the dividend penalty right, the term of the director then serving on the Board pursuant to the delisting penalty right, if any, shall immediately terminate and the number of directors constituting the Board shall be reduced accordingly. |
||||
• If, at any time when the voting rights conferred upon the Series B Preferred Stock pursuant to the dividend penalty right or the delisting penalty right are exercisable, any vacancy in the office of a |
• If, at any time when the voting rights conferred upon the Series A Preferred Stock are exercisable, any vacancy in the office of a director elected shall occur, then such vacancy may be filled only |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
director elected or appointed pursuant to the dividend penalty right or the delisting penalty right shall occur, then such vacancy may be filled only by the remaining such director(s) or by vote of the holders of record of the outstanding Series B Preferred Stock and any other classes or series of stock upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of directors pursuant to the dividend penalty right or the delisting penalty right. Any director elected or appointed pursuant to the dividend penalty right or the delisting penalty right may be removed only by the affirmative vote of holders of the outstanding Series B Preferred Stock and any other classes or series of stock upon which similar voting rights have been conferred and are exercisable and which classes or series of stock are entitled to vote as a class with the Series B Preferred Stock in the election of directors pursuant to the dividend penalty right or the delisting penalty right, such removal to be effected by the affirmative vote of a majority of the votes entitled to be cast by the holders of the outstanding Series B Preferred Stock and any such other classes or series of stock, and may not be removed by the holders of the Common Stock. |
by the remaining such director or by vote of the holders of record of the outstanding Series A Preferred Stock and any other classes or series of stock upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series A Preferred Stock in the election of directors. Any director elected or appointed may be removed only by the affirmative vote of holders of the outstanding Series A Preferred Stock and any other classes or series of stock upon which similar voting rights have been conferred and are exercisable and which classes or series of stock are entitled to vote as a class with the Series A Preferred Stock in the election of directors, such removal to be effected by the affirmative vote of a majority of the votes entitled to be cast by the holders of the outstanding Series A Preferred Stock and any such other classes or series of stock, and may not be removed by the holders of the Common Stock. |
|||
• So long as any shares of Series B Preferred Stock remain outstanding, no more than six directors not elected or appointed pursuant to the |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
dividend penalty right, the delisting penalty right or the preceding bullet point may be elected or appointed. |
||||
• So long as any shares of Series B Preferred Stock remain outstanding, we will not, without the affirmative vote of the holders of at least two-thirds of the shares of the Series B Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting together as a series and also together as a class with all other classes or series of stock that we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock): (i) authorize or create, or increase the authorized or issued amount of, any class or series of senior shares or reclassify any of our authorized stock into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (ii) amend, alter or repeal the provisions of the Charter, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the Series B Preferred Stock (each, an “event ”); provided, however, with respect to the occurrence of any event set forth in clause (ii) above, so long as the Series B Preferred Stock remains outstanding with the terms thereof materially unchanged, taking into account that, upon an occurrence of an event, we may not be the |
• So long as any shares of Series A Preferred Stock remain outstanding, we will not, without the affirmative vote of the holders of at least two thirds of the shares of the Series A Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting together as a series and also together as a class with all other classes or series of stock that we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series A Preferred Stock): (i) authorize or create, or increase the authorized or issued amount of, any class or series of senior shares or reclassify any of our authorized stock into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (ii) amend, alter or repeal the provisions of the Charter, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Stock (each, an “ event ”); provided, however, with respect to the occurrence of any event set forth in (ii) above, so long as the Series A Preferred Stock |
• So long as any shares of Series A Preferred Stock remain outstanding, we will not, without the affirmative vote of the holders of at least two thirds of the shares of the Series A Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting together as a series and also together as a class with all other classes or series of stock that we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series A Preferred Stock): (i) authorize or create, or increase the authorized or issued amount of, any class or series of senior shares or reclassify any of our authorized stock into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (ii) amend, alter or repeal the provisions of the Charter, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Stock (each, an “ event ”); provided, however, with respect to the occurrence of any event set forth in (ii) above, so long as the Series A Preferred Stock |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
surviving entity (whether or not such event would constitute a change of control, the occurrence of any such event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of the Series B Preferred Stock (although we would be required to redeem the Series B Preferred Stock if such event constitutes a change of control) and, provided further, that any increase in the amount of the authorized Common Stock or other stock we may issue, including the Series B Preferred Stock, or the creation or issuance of any additional Common Stock, Series B Preferred Stock or other class or other series of stock that we may issue, or any increase in the amount of authorized shares of such class or series, in each case which are parity shares or junior shares, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers and shall not require any affirmative vote or consent of the holders of the Series B Preferred Stock. Notwithstanding the foregoing, (A) if any event set forth in clause (ii) above would adversely affect one or more but not all other classes or series of stock we may issue upon which similar voting rights have been conferred and are exercisable (including the Series B Preferred Stock for this purpose), then only such classes or series of stock as are adversely affected by and entitled to vote on the matter shall vote on the matter together as a class in lieu of all other classes or series of stock; |
remains outstanding with the terms thereof materially unchanged, taking into account that, upon an occurrence of an event, we may not be the surviving entity (whether or not such event would constitute a change of control), the occurrence of any such event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of the Series A Preferred Stock (although we would be required to redeem the Series A Preferred Stock if such event constitutes a change of control) and, provided further, that any increase in the amount of the authorized Common Stock or other stock we may issue, including the Series A Preferred Stock, or the creation or issuance of any additional Common Stock, Series A Preferred Stock or other class or other series of stock that we may issue, or any increase in the amount of authorized shares of such class or series, in each case which are parity shares or junior shares, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers and shall not require any affirmative vote or consent of the holders of the Series A Preferred Stock. |
remains outstanding with the terms thereof materially unchanged, taking into account that, upon an occurrence of an event, we may not be the surviving entity (whether or not such event would constitute a change of control), the occurrence of any such event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of the Series A Preferred Stock (although we would be required to redeem the Series A Preferred Stock if such event constitutes a change of control) and, provided further, that any increase in the amount of the authorized Common Stock or other stock we may issue, including the Series A Preferred Stock, or the creation or issuance of any additional Common Stock, Series A Preferred Stock or other class or other series of stock that we may issue, or any increase in the amount of authorized shares of such class or series, in each case which are parity shares or junior shares, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers and shall not require any affirmative vote or consent of the holders of the Series A Preferred Stock. |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
and (B) if all series of a class of preferred stock are not equally affected by the proposed event, there shall be required a two-thirds approval of the class and a two-thirds approval of each series that will have a diminished status. |
||||
Dividend Rights |
||||
Beginning on April 1, 2026, dividends on the Series B Preferred Stock are payable quarterly in cash when, as and if approved by the Board of Directors and declared by us and accumulate at a rate of 12.5% per annum of the liquidation preference of the Series B Preferred Stock in effect on the first calendar day of the applicable dividend period (subject to the sixth paragraph under “Description of Capital Stock—Series B Preferred Stock—Dividends”). If we have committed a “dividend default” by failing to pay dividends on the outstanding Series B Preferred Stock in full for any six consecutive or non-consecutive dividend periods, then commencing on the first day after the dividend payment date on which a dividend default occurs and continuing until we have paid all accumulated accrued and unpaid dividends on the shares of the Series B Preferred Stock for all dividend periods up to, and including, the dividend payment date on which the accumulated accrued and unpaid dividends are paid in full in cash (or declared such dividends and a sum of cash sufficient for the payment thereof is set apart for payment), the holders of the Series B Preferred Stock will have the voting rights described above under “—Voting Rights.” Once we have paid all accumulated accrued and unpaid dividends in full in cash (or declared such dividends and a sum of cash |
Dividends on the Series A Preferred Stock are payable quarterly in cash when and as declared by the Board of Directors and accumulate at a rate of 10.875% per annum of the $25.00 per share liquidation preference, equivalent to $2.7187 per annum per share. On June 8, 2018, our Board of Directors indefinitely suspended quarterly dividend payments on our Series A Preferred Stock. As of February 15, 2022, as a result of the suspension of the dividend payment on the Series A Preferred Stock commencing with the fourth quarter 2017 dividend period, the Company has approximately $38.0 million in accumulated and unpaid dividends on its Series A Preferred Stock. As the Company has failed to pay cash dividends on the outstanding Series A Preferred Stock in full for more than four dividend periods, a dividend default has occurred and, pursuant to the terms of the Charter, the annual dividend rate on the Series A Preferred Stock for the fifth, subsequent and future missed dividend periods has increased to 12.875%, which is equivalent to approximately $3.20 per share each year, which commenced on the first day after the missed fourth quarterly payment (October 1, 2018) and will continue until the second consecutive dividend payment |
Holders of Series A Preferred Stock under the amended Charter will have no dividend rights. |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
sufficient for the payment thereof is set apart for such payment), the foregoing provisions will not be applicable, unless we again fail to pay any dividend for any future dividend period. | date following such time as the Company has paid all accumulated and unpaid dividends on the Series A Preferred Stock in full in cash. Because the foregoing constituted a penalty event, the Board of Directors automatically increased by two and the holders of Series A Preferred Stock are entitled to vote for the Penalty Directors at a special meeting called by the Company at the request of holders of record of at least 25% of the outstanding Series A Preferred Stock until a correction event with respect to the penalty event occurs. As of the date of this proxy statement/prospectus, holders of record of at least 25% of the outstanding Series A Preferred Stock have not requested a special meeting to elect the Penalty Directors. | |||
Optional Redemption |
||||
• We, at our option, upon not less than 30 nor more than 60 days’ written notice, may redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price equal to the then-applicable Liquidation Preference per share of Series B Preferred Stock (subject to the last paragraph under “Description of Capital Stock—Series B Preferred Stock—Redemption”), plus all accumulated accrued and unpaid dividends thereon (whether or not earned, approved or declared) to, but excluding, the date fixed for redemption, without interest. If fewer than all of the outstanding shares of Series B Preferred Stock are to be redeemed, the number of shares to be redeemed will be determined by us and such shares may be redeemed pro rata from |
• We, at our option, upon not less than 30 nor more than 60 days’ written notice, may redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends thereon (whether or not earned or declared) to, but excluding, the date fixed for redemption, without interest. If fewer than all of the outstanding Series A Preferred Stock are to be redeemed, the number of shares to be redeemed will be determined by us and such shares may be redeemed pro rata from the holders of record of such shares in proportion to the number of such shares held by such holders (with adjustments to avoid redemption of |
• We, at our option, upon not less than 30 nor more than 60 days’ written notice, will be entitled to redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $5.00 per share. If fewer than all of the outstanding Series A Preferred Stock are to be redeemed, the number of shares to be redeemed will be determined by us and such shares may be redeemed pro rata from the holders of record of such shares in proportion to the number of such shares held by such holders (with adjustments to avoid redemption of fractional shares) or by lot in an equitable manner determined by us. |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
the holders of record of such shares in proportion to the number of such shares held by such holders (with adjustments to avoid redemption of fractional shares) or by lot in an equitable manner determined by us. |
fractional shares) or by lot in an equitable manner determined by us. |
|||
• With respect to a redemption as described above, unless all accumulated accrued and unpaid dividends on all Series B Preferred Stock and all parity shares shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum of cash sufficient for the payment thereof is set apart for payment for all past dividend periods and the then current dividend period, no Series B Preferred Stock or parity shares shall be redeemed unless all outstanding Series B Preferred Stock and parity shares are simultaneously redeemed; provided, however, that the foregoing shall not prevent the purchase or acquisition of Series B Preferred Stock or parity shares (A) pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding Series B Preferred Stock and parity shares or (B) by conversion into or exchange for junior shares and parity shares. |
• With respect to a redemption as described above, unless full cumulative dividends on all Series A Preferred Stock and all parity shares shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past dividend periods and the then current dividend period: (i) no Series A Preferred Stock or parity shares shall be redeemed unless all outstanding Series A Preferred Stock and parity shares are simultaneously redeemed; provided, however, that the foregoing shall not prevent the purchase or acquisition of Series A Preferred Stock or parity shares pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding Series A Preferred Stock and parity shares; and (ii) we shall not purchase or otherwise acquire directly or indirectly any Series A Preferred Stock or parity shares (except by conversion into or exchange for junior shares and parity shares). |
|||
Special Redemption |
||||
If a “change of control” of us by a person, entity or group occurs, we (or the acquiring entity) will be required to redeem the Series B Preferred Stock, in whole but not in part, within 120 days after the date on which the change of control has occurred, for cash at a redemption | If a “change of control” of us by a person, entity or group occurs, we (or the acquiring entity) will be required to redeem the Series A Preferred Stock, in whole but not in part, within 120 days after the date on which the change of control has occurred, for cash at a | If “change of control” of us by a person, entity or group occurs, we (or the acquiring entity) will be required to redeem the Series A Preferred Stock, in whole but not in part, within 120 days after the date on which the change of control has occurred, for cash at a |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
price equal to the then-applicable liquidation preference per share of Series B Preferred Stock (subject to the last paragraph under “Description of Capital Stock—Series B Preferred Stock—Redemption”), plus all accumulated accrued and unpaid dividends thereon (whether or not earned, approved or declared) to, but excluding, the redemption date, without interest. A “change of control” is deemed to occur when the following have occurred and are continuing: • the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of our directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and • following the closing of any acquisition described in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American depositary receipts representing such securities) listed on a national exchange. |
redemption price of $25.00 per share, plus all accrued and unpaid dividends thereon (whether or not earned or declared) to, but excluding, the redemption date, without interest. A “change of control” is deemed to occur when the following have occurred and are continuing: • the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of our directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and • following the closing of any acquisition described in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American depositary receipts representing such securities) listed on a national exchange. |
redemption price of $5.00 per share. A “change of control” is deemed to occur when the following have occurred and are continuing: • the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of our directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and • following the closing of any acquisition described in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American depositary receipts representing such securities) listed on a national exchange. |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
Milestone Redemption |
||||
If, as of the date that is 18 months after the original date of issuance, we have failed to redeem, repurchase or otherwise acquire 1,000,000 shares of Series B Preferred Stock, then within 30 days of such date, we shall pay to the holders of Series B Preferred Stock, on a pro rata basis in proportion to the number of shares of Series B Preferred Stock held by such holders, the penalty dividend, payable in shares of Common Stock, described under “Description of Capital Stock—Series B Preferred Stock—Milestone Redemption.” | ||||
Cumulative Redemption |
||||
If, as of any cumulative redemption measurement date, we have failed to redeem, repurchase or otherwise acquire the applicable cumulative redemption amount, then (i) commencing on the first day after such cumulative redemption measurement date and continuing until the date a correction event with respect to such cumulative redemption default occurs, the holders of Series B Preferred Stock will have the director nomination rights described below under “—Director Nomination Rights”; and (ii) following any cumulative redemption default that has been cured by us, if we subsequently fail to redeem, repurchase or otherwise acquire the applicable cumulative redemption amount as of the applicable cumulative redemption measurement date, such subsequent failure shall constitute a separate cumulative redemption default, and the foregoing provisions of clause (i) of this sentence shall immediately apply until such time as a correction event occurs with respect to such subsequent cumulative redemption default. |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
Liquidation |
||||
Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then, before any distribution or payment shall be made to the holders of any Common Stock, Series A Preferred Stock or any other class or series of junior shares in the distribution of assets upon any liquidation, dissolution or winding up of us, the holders of Series B Preferred Stock are entitled to receive out of our assets legally available for distribution to shareholders, liquidating distributions in the amount of the then-applicable liquidation preference per share of Series B Preferred Stock. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series B Preferred Stock will have no right or claim to any of our remaining assets. In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding Series B Preferred Stock and the corresponding amounts payable on all senior shares and parity shares, then after payment of the liquidating distributions on all outstanding senior shares, the holders of the Series B Preferred Stock and all other such classes or series of parity shares will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. For such purposes, the consolidation or merger of us with or into any other entity, or the sale, lease or conveyance of all or substantially all of our property or business, or a statutory share exchange will not be deemed to constitute a voluntary or | Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then, before any distribution or payment shall be made to the holders of any Common Stock or any other class or series of junior shares in the distribution of assets upon any liquidation, dissolution or winding up of us, the holders of Series A Preferred Stock are entitled to receive out of our assets legally available for distribution to shareholders, liquidating distributions in the amount of the liquidation preference, or $25.00 per share, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to, but excluding, the date of payment. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series A Preferred Stock will have no right or claim to any of our remaining assets. In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding Series A Preferred Stock and the corresponding amounts payable on all senior shares and parity shares, then after payment of the liquidating distribution on all outstanding senior shares, the holders of the Series A Preferred Stock and all other such classes or series of parity shares will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. For such purposes, the consolidation or | Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then, before any distribution or payment shall be made to the holders of any Common Stock or any other class or series of junior shares in the distribution of assets upon any liquidation, dissolution or winding up of us, the holders of Series A Preferred Stock are entitled to receive out of our assets legally available for distribution to shareholders, liquidating distributions in the amount of the liquidation preference, or $5.00 per share. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series A Preferred Stock will have no right or claim to any of our remaining assets. In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding Series A Preferred Stock and the corresponding amounts payable on all senior shares and parity shares, then after payment of the liquidating distribution on all outstanding senior shares, the holders of the Series A Preferred Stock and all other such classes or series of parity shares will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. For such purposes, the consolidation or merger of us with or into any other entity, or the sale, lease or conveyance of all or substantially all of our property or business, or a statutory share |
Series B Preferred Stock |
Series A Preferred Stock (Prior to Implementation of the Charter Amendments) |
Series A Preferred Stock (Following Implementation of the Charter Amendments) | ||
involuntary liquidation, dissolution or winding up of us. Under the Charter, we are not required to set aside funds to protect the liquidation preference of the Series B Preferred Stock. | merger of us with or into any other entity, or the sale, lease or conveyance of all or substantially all of our property or business, or a statutory share exchange will not be deemed to constitute a voluntary or involuntary liquidation, dissolution or winding up of us. Under the Charter, we are not required to set aside funds to protect the liquidation preference of the Series A Preferred Stock. | exchange will not be deemed to constitute a voluntary or involuntary liquidation, dissolution or winding up of us. Under the Charter, we are not required to set aside funds to protect the liquidation preference of the Series A Preferred Stock. | ||
Director Nomination Rights |
||||
If a cumulative redemption default has occurred and continuing until the date a correction event with respect to such cumulative redemption default occurs, we shall include in our proxy statement (including our form of proxy and ballot) for the next annual meeting of shareholders (or, if such default occurs less than 60 days before the date fixed for the next annual meeting, the second annual meeting after such occurrence), the name of any nominee for election to the Board submitted pursuant to these director nomination rights, subject to the requirements described under “Description of Capital Stock—Series B Preferred Stock—Director Nomination Rights.” If a correction event with respect to a cumulative redemption default has not occurred at or prior to the commencement of the applicable annual meeting, then one director shall be elected out of the preferred nominee(s) by a plurality of the votes cast by the shares of Series B Preferred Stock at the annual meeting. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any political subdivision thereof; |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source. |
• | is “not essentially equivalent to a dividend” with respect to a U.S. holder under Section 302(b)(1) of the Code; |
• | is a “substantially disproportionate” redemption with respect to a U.S. holder under Section 302(b)(2) of the Code; or |
• | results in a “complete redemption” of a U.S. holder’s stock interest in the Company under Section 302(b)(3) of the Code. |
• | Immediately after the redemption, the ratio of the shareholder’s voting stock to the corporation’s total outstanding voting stock is less than 80% of that ratio immediately before the redemption. The same 80% test must also be met with regard to the corporation’s common stock, voting and nonvoting, based on the fair market value of the aggregate shares of each class of common stock. |
• | Immediately after the redemption, the shareholder owns less than 50%, by vote, of the corporation’s voting stock. |
• | any amounts that are treated pursuant to the discussion above as dividend income generally will be subject to U.S. federal income tax withholding at the rate of 30% on the gross amount of any such amount unless either: |
• | a lower treaty rate applies and the non-U.S. holder furnishes a properly completed IRS Form W-8BEN or W-8BEN-E |
• | the non-U.S. holder furnishes a properly completed IRS Form W-8ECI to the applicable withholding agent claiming that such amount is effectively connected income. |
• | any amounts that are treated pursuant to the discussion above as capital gain generally will not be subject to U.S. federal income tax or withholding tax; unless, |
(A) | the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States (and, if the non-U.S. holder is entitled to the benefits of an applicable income tax treaty with the United States with respect to that gain, that gain is attributable to a permanent establishment maintained by the non-U.S. holder in the United States); or |
(B) | the non-U.S. holder is an individual who is present in the United States for 183 days or more during the taxable year in which the gain is recognized and certain other conditions are met. |
• | is “not essentially equivalent to a dividend” with respect to a U.S. holder under Section 302(b)(1) of the Code; |
• | is a “substantially disproportionate” redemption with respect to a U.S. holder under Section 302(b)(2) of the Code; |
• | results in a “complete redemption” of a U.S. holder’s stock interest in the Company under Section 302(b)(3) of the Code; or |
• | is a redemption of stock held by a non-corporate shareholder, which results in a partial liquidation of the Company under Section 302(b)(4) of the Code. |
• | the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States); |
• | the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition, and certain other conditions are met; or |
• | we are or have been a USRPHC for U.S. federal income tax purposes, as such term is defined in Section 897(c) of the Code, and such non-U.S. holder owned directly or pursuant to attribution rules at any time during the five-year period ending on the date of disposition more than 5% of the Series B Preferred Stock. This assumes that the Series B Preferred Stock is regularly traded on an established securities market, within the meaning of Section 897(c)(3) of the Code but no assurance can be given in this regard. |
(i) | the name and business address of the Proponent (including each beneficial owner, if any, on whose behalf the Shareholder Proposal is being made) and all Persons (as defined in Section 2.15(a) of our Bylaws) acting in concert with the Proponent (or such beneficial owner), and the name and address of all of the foregoing as they appear on the Company’s books (if they so appear); |
(ii) | the class and number of shares of the Company that are owned beneficially and of record by the Proponent (including each beneficial owner, if any, on whose behalf the Shareholder Proposal is being made) and the other Persons identified in clause (i); |
(iii) | a description of the Shareholder Proposal containing all material information relating thereto, including the information identified in Section 2.15(a)(iv) of our Bylaws; |
(iv) | a description of any agreement, arrangement or understanding with respect to the Shareholder Proposal between or among the Proponent and each beneficial owner, if any, on whose behalf the Shareholder Proposal is being made, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing; |
(v) | a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of such written notice by, or on behalf of, the Proponent and each beneficial owner, if any, on whose behalf the Shareholder Proposal is being made, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, the Proponent or such beneficial owner, with respect to the Company’s securities; |
(vi) | a representation that the Proponent is a holder of record of the capital stock of the Company entitled to vote at the meeting, will so remain at the time of the meeting, and intends to appear in person or by proxy at the meeting to propose such business; |
(vii) | a representation whether the Proponent or any beneficial owner on whose behalf the Shareholder Proposal is being made intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to approve or adopt the Shareholder Proposal or (b) otherwise to solicit proxies from shareholders in support of such Shareholder Proposal; and |
(viii) | any other information relating to the Proponent and such beneficial owner, if any, required to be disclosed in a proxy statement or other filing in connection with solicitations of proxies for the Shareholder Proposal under Section 14(a) of the Exchange Act. |
(a) |
Exhibit List |
* | Identifies a management contract or compensatory plan or arrangement. |
** | Filed herewith. |
+ | Previously filed. |
(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; |
(4) | That, for purposes of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided however |
(5) | That, for the purpose of determining liability of the registrants under the Securities Act to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) (1) | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form. |
(2) | The registrant undertakes that every prospectus (i) that is filed pursuant to paragraph (a)(1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as part of an amendment to the registration statement and will not be used until such an amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide |
(c) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by the registrant is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
(d) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(e) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
REGIONAL HEALTH PROPERTIES, INC. | ||
By: | /s/ Brent Morrison | |
Brent Morrison | ||
Chief Executive Officer and President |
Signature |
Title |
Date | ||
/s/ Brent Morrison Brent Morrison |
Director, Chief Executive Officer and President (Principal Executive Officer) |
February 22, 2022 | ||
/s/ Benjamin A. Waites Benjamin A. Waites |
Chief Financial Officer and Vice President (Principal Financial Officer and Principal Accounting Officer) |
February 22, 2022 | ||
* Michael J. Fox |
Director | February 22, 2022 | ||
* Kenneth W. Taylor |
Director | February 22, 2022 | ||
* David A. Tenwick |
Director | February 22, 2022 |
*By: | /s/ Brent Morrison | |
Brent Morrison, Attorney-in-Fact |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
Regional Health Properties, Inc.
Suwanee, Georgia
We hereby consent to the use, in this Registration Statement on Form S-4/A, of our report dated February 22, 2022, with respect to the consolidated balance sheets of Regional Health Properties, Inc. (the Company) as of December 31, 2021 and 2020, and the related consolidated statements of operations, stockholders equity, and cash flows for each of the years in the two-year period ended December 31, 2021, which appears in the Companys annual report on Form 10-K for the year ended December 31, 2021, and to the reference to our firm under the heading Experts.
/s/ Cherry Bekaert LLP |
Atlanta, Georgia
February 22, 2022
Exhibit 107
Calculation of Filing Fee Tables
Form S-4
(Form Type)
Regional Health Properties, Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered Securities
Security Type |
Security Class Title |
Fee Calculation or Carry Forward Rule |
Amount Registered |
Proposed Maximum Offering Price Per Unit |
Maximum Aggregate Offering Price |
Fee Rate | Amount of Registration Fee(3) |
|||||||||||||||||
Fees to Be Paid |
||||||||||||||||||||||||
Fees Previously Paid |
Equity | Common Stock, no par value |
Other(1) | 1,405,768 | N/A | $ | 14,282,597.80 | $ | 1,558.24 | (4)(5) | ||||||||||||||
Equity | Common Stock, no par value |
Other(2) | 0(2) | N/A | $ | 0.00 | $ | 0.00 | ||||||||||||||||
Equity | 12.5% Series B Cumulative Redeemable Preferred Shares, no par value |
Other(3) | 2,811,535 | N/A | $ | 12,103,658.18 | $ | 1,122.01 | ||||||||||||||||
Total Offering Amounts | $ | 12,103,658.18 | $ | 1,122.01 | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total Fees Previously Paid | $ | 2,065.88 | (4)(5) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total Fee Offsets | $ | 2,065.88 | (6) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Net Fee Due | $ | 0.00 | (6) | |||||||||||||||||||||
|
|
Table 2: Fee Offset Claims and Sources
Registrant or Filer Name |
Form or Filing Type |
File Number | Initial Filing Date | Filing Date | Fee Offset Claimed |
Fee Paid with Fee Offset Source |
||||||||||||
Rules 457(b) and 0-11(a)(2) | ||||||||||||||||||
Fees Offset Claims |
S-4 | 333-256667 | June 1, 2021 | $ | 2,065.88 | (5)(6) | ||||||||||||
Fees Offset Sources |
Regional Health Properties, Inc. |
S-4 | 333-256667 | June 1, 2021 | $ | 2,065.88 | (5)(6) |
(1) | Calculated pursuant to Rules 457(c) and 457(f)(1) under the Securities Act of 1933, as amended (the Securities Act), solely for the purpose of calculating the registration fee for this offering, based on the high and low prices of the Registrants 10.875% Series A Cumulative Redeemable Preferred Shares, no par value per share (the Series A Preferred Stock), as reported on the NYSE American LLC (the NYSE American) on June 28, 2021 ($5.08 per share), multiplied by the estimated maximum number of shares of Series A Preferred Stock (2,811,535) that could have been exchanged for the Registrants Common Stock, no par value per share (the Common Stock), that was previously registered. |
(2) | The Registrant registered 1,405,768 shares of its Common Stock pursuant to the initial filing of this Registration Statement on Form S-4 on June 1, 2021. Pursuant to Amendment No. 2 to this Registration Statement on Form S-4 (Amendment No. 2), the Registrant decreased the number of shares of Common Stock registered pursuant to this Registration Statement on Form S-4 to 0. |
(3) | Calculated pursuant to Rules 457(c) and 457(f)(1) under the Securities Act solely for the purpose of calculating the registration fee for this offering, based on the high and low prices of the Series A Preferred Stock as reported on the NYSE American on February 8, 2022 ($4.31 per share), multiplied by the estimated maximum number of shares of Series A Preferred Stock (2,811,535) that may be exchanged for the Registrants 12.5% Series B Cumulative Redeemable Preferred Shares, no par value per share (the Series B Preferred Stock), being registered. |
(4) | The Registration Fee for this Registration Statement on Form S-4 with respect to the 1,405,768 shares of Common Stock previously registered upon the initial filing of this Registration Statement on Form S-4 was recalculated pursuant to Amendment No. 1 to this Registration Statement on Form S-4 in accordance with Rules 457(c) and 457(f)(1) under the Securities Act and was lowered from $2,065.88 to $1,558.24. |
(5) | The Registrant previously paid $2,065.88 upon the initial filing of this Registration Statement on Form S-4 on June 1, 2021. |
(6) | Pursuant to the recalculation procedure set forth in Instruction 2.A.iv of the Instructions to the Calculation of Filing Fee Tables and Related Disclosure on Form S-4, the Registrant recalculated the filing fee due for this Registration Statement on Form S-4 and claimed an offset of $2,065.88 pursuant to Rule 457(b) under the Securities Act as set forth in Table 2. The $2,065.88 offset corresponded to the fee the Registrant previously paid in connection with the 1,405,768 shares of Common Stock previously registered upon the initial filing of this Registration Statement on Form S-4 on June 1, 2021. The number of shares of Common Stock registered on this Registration Statement on Form S-4 was decreased to 0 pursuant to Amendment No. 2. The Registrant confirms that (i) Amendment No. 2 was a pre-effective amendment, (ii) it increased the amount of shares of Series B Preferred Stock registered on this Registration Statement on Form S-4 pursuant to Amendment No. 2 from 0 to 2,811,535, (iii) it decreased the amount of shares of Common Stock registered on this Registration Statement on Form S-4 pursuant to Amendment No. 2 from 1,405,768 to 0, and (iv) it did not rely on Rule 457(o) under the Securities Act to calculate the filing fee due for the initial filing or any prior pre-effective amendments to this Registration Statement on Form S-4. |
*W)P J*M(1\9-,IA,0 *8 _/-2?;;+0(L:#C>S4Y$$M+0(;D:,
M@>.[",UADO+EZJAUZ,X"2$-E_3+3G8A,S$*!&P7::3A/HZ9J9COO0((5U#%$
MMB G#R)2^QU
M1F&44V<21C%$;';?)B0?JRB8$$"^5>'AFT1T5H.M.ZG$%*JS$]8=7M8=
M:J6FRUDQW3:G6K.T82*UDKCI6QR-P9F1!:-?R%XDG\S-61B*2QG$:*\R[CT"
M.5%(Y-%) +5!ER_3]&$F9<-:#8FSQ6]S J9'$Q%3-C+(HJ$-6,7@QO_V0$!
end
5++,D/8/OS8;G$V&M#
M6F
;M3V,V6V=PC <1V;A/AS$
MH\<&,9V8FX,S+_+PXT$N")%>AH2=]UYT;SP4%22SK^C3S^ZVQWS[#VYN Y'
MVXOUS #D>?;CCGGWXY >!#QISMB0;>XO_\ GPW)%7#98VH@T%$""C;F[&B3
ML!@Y45F,4 14IBDT[=Y22H^HE5>5"14UI>GS@+1++6OFX-LVYO,70+?16D0I
MBB='(H5BS(N7$):W3@*Y3E7YFMZ=KS+*%:C&J5^9<&!<&K?TJC@'!-9:(M/4
M^Z4IQO=MF "N\ #S0H*)1 BD6JNE0SD/LV,_?7^$-A("5=OW>.H#(M;4IZ3M
MPX59QL_+P;QS:VD.DH)D$$G"24$^DDV_:07JQ7!DP5
M!ZZ]6R%AR81LXBIV_JE9!9YL:1DK,4S7K&TMJ=!VI%LO%)1,I+64N:K53(UZ
M4S)Y
Cover Page |
Feb. 22, 2022 |
---|---|
Cover [Abstract] | |
Document Type | S-4/A |
Amendment Flag | true |
Entity Registrant Name | REGIONAL HEALTH PROPERTIES, INC. |
Entity Central Index Key | 0001004724 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Amendment Description | Amendment No. 3 |
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end
_%3J)QY!CDQ.IRB_,Q&:ZO? [8AMGD/?'Z:Z!ZO*;4[*%G_LH= M*<9!NOS.F0)=!A&6)XAWB(L\29(#J92OO*?$V,?O<+_'B_=;?8G@RE>[*%MN MPB[QX+AACL2!X7G-.W$J/0%@G3**AL7OUQ'%T=A["Y*29(%99J-7G_]?:>%;)W
-]782?-^XDMG02GL* "5HF).A/D?8,IBT"6F1@8Z&%/#')3
M8\T([@<+3^[.!C;D QB$*!D3-51VSEQ:.%SDDASG?I]D1PA)?4
MIW_5KL#D6)Q!DU1?]<*&Z@OC24O7IKP52F=IG#*4^%*7I;'&42H/J>137.3,
MD^&OTLE _@07A1#N"I"F&K$'8L,_VCG-V1(!:RF#Q]/^<0+
M[-#SL%(1QP.KZ?_R?@WH=^&L>9A8W/>$Z^,HBC!&G@WCPN9WV3\2IT#RU
M;U^JK#5D4R^B31ILP%T.&["Q'" FAN."$T#.!6(X,D(:@3:-4/$!3C=V (L3
M<$4@N,:8B!^F,=Q?%3;PO5_ @&Q>,(3
M@ORW-EXH5O[;8.1%SLRWH%2J;Q"&0C<.;& !B$9'%<@T,9PPA')ZD@;B)L+
MX*3H#T8#4"DHQS#*"]]ED\$;BZ&'?"2(!DA.2OOQ[>"7(*C(-07C1&H 7!]Q
M8D8 ;#@K"ZL-"CU?,H8JZP"W $X5$2$(AH"6!,LF#1^QR@>V 7K?T/?0.. %
M/$7,R.]00 %Z4YP8V<^BUC[@D6!O\!*@U-A#=H8X
M%U0D[3G F B(JPCW>T\6[O>>2;A'9]=#6@*]^P9 *WNFY7IW_[G(K2@?VB[H
M\H.>[+0GD836-6$(VELP5E''(.$57]FY.6?JN?*WD*=?VJG^KESH0\-V4+X
M/@1\((C&8Y*)9K1Z9!14+8(N$+B;![8#8@5LT 5$0LX@[#2R%0Z[X\2%)I$?
M1#ROR3^'WU RB4115*L&FXC<(6N0&PO U#T_QD+K#)90+1AL=IS+R^@YH=OP
M;:Q6A860O9>.?_"A5A)A858\Y@(F7:?ZLZ-;-&_3''Q?Y6@\SL"HQ(S6&,OA
M< Q>)=AP69Y,%E@11M<&L_+P#+)E"W"PX,2/$:S--@?.XRI+X#B"P5.A!26I
MJ"MY.K4 +;!=!;S\:Q7EQ&X?Z\?AE^$K";W=",O1L,='88X+5NQGLW@ 8YEU15QCF1.*PX)QBD5;-8
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M+X??PZ9$7GI/>R%%_H,U[O;*,5_0F##H;KC)J;Z4/,75L_5DT"(1Q5X!1Z27F(:D60 F$UG2/S58(2H-7V)^=4J2
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MW^/U<>)9=%FH]M=PEAY)KI5$ETDA[B *:;FR**,U'W\KN
2ZO!6UD<59LMZS8DK_H&H%7!?JFHBJ(ZJEV$\,1V^BH$NE(:'
M\OI48G3Q_2,KL =PG,'0E@&0=.9WMK@4R.Q<^*HH]"[YPM*.)HNU%* '\]>-
M[X%TA.D"H*>\D;HTNQ V8]B8L[YE$- 1 >\C(N#%S 0/:,SS2IK^\ DFS:66
M-3(EIDU.R%#)^",M8Z2FNVA/(D.7/9:U^98Y+7&L(=Q/JDVN>!SNSA -D6CA
M#(W$9A=_4 %$1BK@/=>URG9-)[+XET.@CY:]JY\#S0!
MPPDT,]#,0#.#S\$,D,)!W@<\"(#$I1(3!)YIDS)!C>11G4 %'T1_VT-% B6'
M_Q'>IS&\B!8#S1,T3] \X9EY A*G%:E<6M=B]GB"D1W2#/;L^0\GG3]:IQNU
M0XG?$YB2CVWS&]-4K:E:4_7'ONGQ%E!QZNR[<
M9^IG\:TXFQ<.(A(1(V+";(3/LOLV?=1BJ7,.;MYI)VB'YXY94F.*5@[EH\K3
MOFA8/,9021@YZV/6KB@%&I*C"^05N,#8T.'W=E+SN5#D3M7O*<%5KR]Y?
_/H>O'DJ9WLB9EL2U5C.\LDH5XG4CBL
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MY1.Z%-YS])YCG^=X]+\Q W%T&'S9/ML.WA\='IWN?PB./QV#P*SO?_M_)!&FC#&?\*]*%24##:,RV(J?\5USI%.O
MS&Y+[D2@-R::TPV_?0!2J^24T2R;Q--K1SW5NSJWT''4E)E\&O&&^.\YO2'E
M0,GTH_;U'%P5%Q7+MV6BQAD+[M\944F'87U$79JJ[\&^'([5J9E0*SEGO9UK
M,"=#A&
M$;L2S'4JGDWP)[DV1"3,ODV(Q6(^(>:OGK]Z:QN9-JO,ULDQFSLK[N+N'MKZ
MEF^<"\L1*GU*!>MT/AV-1U&V)W-#/5&>OZ<;[\>GV1E6W$S[00D2=[HW!G_L
M$$DQ+T10@9V;!/OS'/Z[&P9[.WNOMX-WH'_35!@\:G\+W9*OWF<2*X
PBC6XX'&G="T&21"=\T3WF_1/YGE,>(DJQU
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M_"$P2PTY,CE=!QLW5[0U.MX8DF(8O;JVI#%K
)2BJJ9-Q357:E]Q^JT&5WM"%=O'=; B9
M+H =5Z1?([_GWB=4GNH0+8R;ED']5<.JM8>.33O6?*J4MLD]LYGC1BN\3N!]
M-,GFY7(IB3?Z5E0DZN984C
5?Q26;6S^1"/94M 40I'S&^=VYC"RNXM2E#.T:V@9NB
M;6N 9\RJ*"CA !4
1)0#%D"+BR^D>)0D#W6KM,R[
M;(90%3/+;V(=UR/C_DT45Q@K7?[M%GL;TO-IQ%TQ'4H?&="M]I,2APOP.TM>
M$EE2QB@:QD_.M'!Z>R8&.+\FL337/(H0I:M'G(9:ZS5J3PU!G-6 WDS%Q8^
M/91V;:!L@>^Z#&0P-=I.3??&Q5Y()-6H4H.?
1]
M'.7Y-@W15^01'"S?$K*2]IT\-$$&;Z@5&$O#ZV
M!*A=SQ1D5J(H#)]SF]5[%\!ZKR;DB1&S2TG\?;!W2;0HT**AC+1.\!*')%]_
M\ ,UH1.+UA)S&3D+5WP+H>$A6?U.:MEI2CEJ$A\042#E+^.Y4.?JMA4HVHF?
M9BJSMV_1BGSJ@#0E,V!T#3*25L#^UXNW>S6:F^.48LX)W$>81*68[ 8^L?O;
MV]=$ ZPIZK;P.S=,,80/K[,+;0=?* C5M0CA4B*.,WKP139@%[>D002R1,E&
MX4I-AH4R*Z]V_LUV9-R"C23-\TR_-.Z*:)\ $]IX^OW5K C<6Q\8*566B-Q]U