Litigation Proceedings. On July 11, 2025, a putative class action lawsuit alleging violations of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), was filed in the United States District Court, Northern District of Georgia, against the Company, its Chief Executive Officer and certain current directors of the Company's Board (the “Shareholder Lawsuit”). Additionally, on July 11, 2025, an emergency motion for preliminary injunction was filed in connection with disclosures and shareholder voting leading up to the Merger.

The Company believes that the claims asserted in the Shareholder Lawsuit are without merit and supplemental disclosures are not required or necessary under applicable laws. However, in order to avoid the risk that the Shareholder Lawsuit delay or otherwise adversely affect the Merger, and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, the Company provided supplemental information to the joint proxy statement/prospectus as described in the Current Report on Form 8-K filed on July 18, 2025 with the SEC. The Company and the other named defendants deny that they have violated any laws.

Unsolicited Offer. On July 18, 2025, Black Pearl Equities, LLC (“Black Pearl”), which above is referred to as “Party B,” filed a Tender Offer Statement on Schedule TO (the “Schedule TO”) with the Securities & Exchange Commission (the “SEC”) containing a tender offer to purchase up to 1,118,877 shares of Regional common stock at a price per share of $4.25 (the “Third Unsolicited Offer”). The filing indicates that the tender offer will be in effect from August 1, 2025, until August 31, 2025,

subject to possible further extension by Black Pearl. The Schedule TO indicates that the tender offer is subject to a number of conditions. At a meeting of the Regional Board held on July 25, 2025, the Regional Board, in consultation with its outside legal counsel, carefully reviewed the Third Unsolicited Offer and the clarifying information that had been provided and determined that, despite the offer’s price per share of $4.25, it did not represent a Superior Regional Proposal.

Asset Purchase Agreement. On July 30, 2025, the Company, Coosa Nursing ADK LLC, a wholly-owned subsidiary of Regional (“Coosa”), and Coosa Valley SNF Realty LLC (the “Purchaser”) entered into a binding asset purchase agreement (the “APA”), whereby Coosa would sell Coosa Valley Health and Rehab (the “Facility”) to the Purchaser, subject to a 45-day due diligence window in favor of the Purchaser. Under the terms contemplated by the APA, the Purchaser would acquire the Facility for a purchase price of $10,600,000.

Operating Lease. On July 31, 2025, the Company subleased certain office space located in Atlanta, Georgia expired. On July 30, 2025, the Company entered into a two year lease with the landlord which the lease will commence August 1, 2025 and will expire on July 31, 2027. The lease payments are:


(Amounts in 000’s)
2025 (5 months remaining)	$	23
2026		69
2027		47
Total	$	138

Merger Agreement. On August 04, 2025, the Company's common stock shareholders approved the Merger Agreement, dated as of April 14, 2025, by and between the Company and SunLink. In addition, in connection with the Merger Agreement, the Company's common stock shareholders approved the issuance of shares of Common Stock, no par value, and Series D 8% Cumulative Convertible Redeemable Participating Preferred Stock (the Series D Preferred Stock"), no par value per share.

On August 5, 2025, the Company filed Articles of Amendment (the "Articles of Amendment") to its Amended and Restated Articles of Incorporation with the Secretary of State of the State of Georgia to establish its Series D Preferred Stock. Shares of Series D Preferred Stock will form part of the merger consideration to be issued in connection with the closing of the merger.