As of June 30, 2025 and December 31, 2024, the Company leases one Skilled Nursing Facility ("SNF") in Covington, Ohio under a non-cancelable lease, which has rent escalation clauses and provisions for payments of real estate taxes, insurance, and maintenance costs. The remaining lease term for the Covington facility is approximately 3.8 years as of June 30, 2025. The Company subleases the Covington facility to a third party.

The Company also leased certain office space located in Suwanee, Georgia through the termination date of June 30, 2023. Effective July 1, 2023, the Company signed a sublease for 2,000 sq ft of office space in Atlanta, Georgia. The sublease expires on July 31, 2025.

As of June 30, 2025, the Company is in compliance with all operating lease financial covenants.

Future minimum lease payments for the twelve months ending December 31, for each of the next five years and thereafter is as follows:


(Amounts in 000’s)	Future rental payments		Accretion of lease liability (1)			Operating lease obligation
2025 (6 months remaining)	$	328	$	(83	)	$	245
2026		658		(134	)		524
2027		671		(90	)		581
2028		685		(42	)		643
2029		230		(3	)		227
Thereafter		—		—			—
Total	$	2,572	$	(352	)	$	2,220

(1)

Weighted average discount rate 7.98%.

On February 1, 2025, Regional and SL SNF, LLC entered into a At-Risk-Management in order to transition the Southland facility back to the Company. The Company filed the Change of Ownership ("CHOW") application with the state of Georgia on February 22, 2025. On April 1, 2025 the State of Georgia approved the Company's application to change the ownership of the Southland facility from SL SNF, LLC to Southland Operations, LLC.

In March 2025, Oak Hollow Healthcare Management and the Company entered into an Operations Transfer Agreement ("OTA") to transition the two facilities leased by Oak Hollow back to the Company due to an inability to safely operate the facilities. As part of the OTA, in exchange for a release of the Personal Guaranty securing the lease obligations, the Company received the patient receivables. The result of the exchange was a $0.1 million gain recognized. The Company submitted the CHOW application with the state of South Carolina with an effective date of May 1, 2025.

As of June 30, 2025, seven facilities (six owned by Regional and one leased to Regional) are leased or subleased on a triple net basis, meaning that the lessee (i.e., the third-party operator of the property, or the Company with respect to the operated facilities) is obligated under the lease or sublease, as applicable, for all liabilities of the property in respect to insurance, taxes and facility maintenance, as well as the lease or sublease payments, as applicable.

Future minimum lease receivables for the twelve months ending December 31, for each of the next five years and thereafter is as follows:


	(Amounts in 000's)
2025 (6 months remaining)	$	2,597
2026		5,249
2027		5,323
2028		5,137
2029		2,336
Thereafter		1,674
Total	$	22,316

For further details regarding the Company's leased and subleased facilities to third-party operators, including a full summary of the Company's leases to third-parties and which comprise the future minimum lease receivables of the Company, see Note 7 - Leases and Leasing Transactions in Part I, Item 1, Financial Statements and Supplementary Data, included in the Annual Report.