All of the businesses discussed below are reported as discontinued operations and the condensed consolidated financial statements for all prior periods have been adjusted to reflect this presentation.

Sale of Trace Regional Hospital, medical office building, three patient clinics, and Trace Extended Care operations – On January 22, 2024, the Company's indirect subsidiary, Southern Health Corporation of Houston, Inc. (“Southern”), reached revised agreements (the "Revised Agreements") for the sale of Trace Regional Hospital, a vacant medical office building and three (3) patient clinics in Chickasaw County, MS, (collectively “Trace”) to Progressive Health of Houston, LLC (“Progressive”) pursuant to which (i) Southern sold certain personal and intangible property to Progressive for $500 under to an asset purchase agreement ('Trace Hospital Assets Sale"), (ii) entered into a six-month net lease of the real property of the hospital, medical office building and the clinics real property (the "Trace Real Estate") for $20 per month, (iii) entered into a contract to sell the Trace real estate to Progressive (the "Trace Real Estate Sale") for $2,000 and (iv) engaged Progressive under a management agreement to manage the operations of Trace pending receipt of certain regulatory approvals, which were received February 29, 2024. The Company recorded a loss of $962 on the Trace Hospital Assets Sale during the year ended June 30, 2024, which included sale expenses of $174. The Trace Real Estate Sale was completed on October 9, 2024. The Company reported an additional asset impairment reserve of $44 in the quarter ended September 30, 2024 for transaction expenses incurred at the sale date. SunLink earlier reported an impairment loss of $1,974 at December 31, 2023 to reduce the net value of the Trace hospital assets to the estimated sale proceeds under the revised agreement. An impairment reserve of $1,739 remains at September 30, 2024 for the Trace Real Estate Sale assets. On June 3, 2024, the Company's indirect subsidiary, Southern Health Corporation of Houston, Inc. and an affiliate completed the sale of its Trace Extended Care & Rehab senior care facility ('Trace Extended Care") and related real estate in Houston, Mississippi for approximately $7,100 (the "Trace Extended Care Facility Sale"). The net proceeds of approximately $6,522 have been retained for working capital and general corporate purposes. The Company recorded a gain of $5,584 during the fiscal year ended June 30, 2024 on the Trace Extended Care Facility Sale, which included sale expenses of $578.

Sold Hospitals– Subsidiaries of the Company have sold substantially all the assets of five (5) other hospitals (“Sold Facilities”) during the period July 2, 2012 to March 17, 2019. The loss before income taxes of the Sold Facilities results primarily from the effects of retained professional liability insurance and claims expenses and settlement of a lawsuit.

Life Sciences and Engineering Segment —SunLink retained a defined benefit retirement plan which covered substantially all the employees of this segment when the segment was sold in fiscal year 1998. Effective February 28, 1997, the plan was amended to freeze participant benefits and close the plan to new participants. Pension expense and related tax benefit or expense is reflected in the results of discontinued operations for this segment for the three months ended September 30, 2024 and 2023, respectively.

The components of pension expense for the three months ended September 30, 2024 and 2023, respectively, were as follows:


	Three Months Ended
	September 30,
	2024			2023
Interest cost	$	9		$	11
Expected return on assets		(13	)		(9	)
Amortization of prior service cost		0			0
Net pension (income) expense	$	(4	)	$	2

Per the Actuarial Valuation Report for the plan year beginning July 1, 2024, no minimum contribution amount is required for the pension plan year ended June 30, 2025. As such SunLink did not make any contributions to the plan during the three months ended September 30, 2024 and does not plan contribute any funds during the last nine months of the fiscal year ending June 30, 2025.

Statements of operations from discontinued operations for the three months ended September 30, 2024 and 2023. The results below primarily reflect the reporting of Trace as discontinued operations as a result of the Company's Revised agreement to sell Trace and its sale of Trace Extended Care, are as follows:


	Three Months Ended
	September 30,
	2024			2023
Net Revenues	$	16		$	2,672
Costs and Expenses:
Salaries, wages and benefits		11			1,898
Supplies		0			289
Purchased services		44			706
Other operating expense		24			528
Rent and lease expense		0			34
Depreciation and amortization		0			133
Operating Loss		(63	)		(916	)
Other Income (Expense):
Impairment loss of Trace Hospital Real Estate and related sale expenses		(44	)		0
Loss from Discontinued Operations before income taxes		(107	)		(916	)
Income Tax Expense		0			0
Loss from Discontinued Operations, net of tax	$	(107	)	$	(916	)

Details of assets and liabilities held for sale at September 30, 2024 and June 30, 2024, are as follows:


	September 30,			June 30,
	2024			2024
Property, plant and equipment, net	$	3,654		$	3,654
Impairment reserve		(1,739	)		(1,695	)
Total assets held for sale	$	1,915		$	1,959