Material Event (Form 8-K)

Item 8.01 Other Events

As previously disclosed, on April 14, 2025, SunLink Health Systems, Inc., a Georgia corporation ("SunLink"), entered into an Amended and Restated Agreement and Plan of Merger (the "Amended and Restated Merger Agreement") with Regional Health Properties, Inc., a Georgia corporation ("Regional"). The Amended and Restated Merger Agreement amended and restated in its entirety the previously announced Agreement and Plan of Merger, between Regional and SunLink, dated as of January 3, 2025 . On June 22, 2025, SunLink and Regional entered into an Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which Regional and SunLink each agreed to extend the Termination Date (as defined in the Amended and Restated Merger Agreement) until 5:00 p.m., Eastern time, on August 11, 2025 and make a clarifying clean-up change. The Amended and Restated Merger Agreement, as amended (the "Merger Agreement"), provides that, among other things and subject to the terms and conditions of the Merger Agreement, SunLink will be merged with and into Regional (the "Merger"), with Regional surviving the Merger.

Pursuant to the terms and conditions of the Merger Agreement, SunLink may pay, declare or set aside, as applicable, one or two special cash dividends to holders of shares of common stock, no par value per share, of SunLink ("SunLink Common Stock"). Subject to any upward adjustment pursuant to the terms and conditions of the Merger Agreement by reason of any Regional Debt Distress (as defined in the Merger Agreement), the SunLink special cash dividends are an amount not to exceed in the aggregate the sum of (i) $705,000, plus (ii) an amount, if any, by which the sum of the SunLink Cash and Cash Equivalents (as defined in the Merger Agreement) is in excess of $6,000,000 (subject to adjustment as provided in the Merger Agreement) calculated within a period of five days prior to the closing of the Merger (the "Closing"); provided that in no event shall the total of such dividends exceed in the aggregate $1,000,000, subject to adjustment pursuant to the terms and conditions of the Merger Agreement.

On July 18, 2025, the Board of Directors of SunLink (the "SunLink Board") declared a special cash dividend payable to holders of SunLink Common Stock of record as of the close of business on Tuesday, July 29, 2025 (the "Record Date"), in the amount of $0.10 per share and payable on July 30,2025 (the "Payment Date").

In declaring the Special Cash Dividend, the SunLink Board reserved the right, to the fullest extent permitted by applicable law, to revoke and rescind the declaration of the Special Cash Dividend and cancel or postpone the payment of the Special Cash Dividend at any time prior to payment of the Special Cash Dividend: (i) if the Merger is not approved at the Special Meeting of Shareholders of SunLink to be held in connection with the proposed Merger, which Special Meeting is scheduled to be held on July 29, 2025; (ii) if the Merger Agreement terminates in accordance with its terms other than as a result of the Closing, (iii) if the Merger Agreement is amended or if the Termination Date under the Merger Agreement is extended.

The completion of the Merger is subject to satisfaction or waiver of certain customary closing conditions, including (i) the receipt of the required approvals from the shareholders of SunLink, (ii) the receipt of the required approvals from the shareholders of Regional, (iii) the absence of any governmental order or law making illegal or otherwise prohibiting the consummation of the Merger or imposing, individually or in the aggregate, a burdensome condition, (iv) the effectiveness of the Registration Statement on Form S-4 filed by Regional (which was declared effective by the U.S. Securities and Exchange Commission (the "SEC") on June 25, 2025), and (v) the authorization for trading or listing, as applicable, of the shares of Regional common stock and Regional Series D preferred stock to be issued in connection with the Merger on the over-the-counter stock markets or NYSE American LLC ("NYSE American"). The obligation of each party to consummate the Merger is also conditioned upon certain other conditions precedent.