Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | REGIONAL HEALTH PROPERTIES, INC | |
Entity Central Index Key | 1,004,724 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 19,762,036 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,115 | $ 14,045 |
Restricted cash | 960 | 1,600 |
Accounts receivable, net of allowance of $2,946 and $7,529, respectively | 1,086 | 2,429 |
Prepaid expenses and other | 1,384 | 2,395 |
Total current assets | 4,545 | 20,469 |
Restricted cash and investments | 2,580 | 3,864 |
Property and equipment, net | 82,441 | 79,168 |
Intangible assets - bed licenses | 2,471 | 2,471 |
Intangible assets - lease rights, net | 2,253 | 2,754 |
Goodwill | 2,105 | 2,105 |
Lease deposits | 808 | 1,411 |
Notes receivable | 3,589 | 3,000 |
Other assets | 6,407 | 4,244 |
Total assets | 107,199 | 119,486 |
Current liabilities: | ||
Current portion of notes payable and other debt | 6,828 | 4,018 |
Current portion of convertible debt, net | 1,499 | 9,136 |
Accounts payable | 3,617 | 3,037 |
Accrued expenses and other | 8,582 | 9,077 |
Total current liabilities | 20,526 | 25,268 |
Notes payable and other debt, net of current portion: | ||
Senior debt, net | 58,212 | 60,189 |
Bonds, net | 6,548 | 6,586 |
Other debt, net | 731 | 41 |
Other liabilities | 3,785 | 3,677 |
Deferred tax liabilities | 226 | 226 |
Total liabilities | 90,028 | 95,987 |
Commitments and contingencies (Note 15) | ||
Preferred stock, no par value; 5,000 shares authorized; 2,812 and 2,762 shares issued and outstanding, redemption amount $70,288 and $69,038 at September 30, 2017 and December 31, 2016, respectively | 62,423 | 61,446 |
Stockholders’ equity (deficit): | ||
Common stock and additional paid-in capital, no par value; 55,000 shares authorized; 19,762 and 19,927 issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 61,738 | 61,643 |
Accumulated deficit | (106,990) | (99,590) |
Total stockholders’ equity (deficit) | 17,171 | (37,947) |
Total liabilities and stockholders’ equity (deficit) | $ 107,199 | $ 119,486 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance (in dollars) | $ 2,946 | $ 7,529 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 2,812,000 | 2,762,000 |
Preferred stock, shares outstanding (in shares) | 2,812,000 | 2,762,000 |
Preferred stock, redemption amount | $ 70,288 | $ 69,038 |
Common stock and additional paid-in capital, par value (in dollars per share) | $ 0 | $ 0 |
Common stock and additional paid-in capital, shares authorized (in shares) | 55,000,000 | 55,000,000 |
Common stock and additional paid-in capital, shares issued (in shares) | 19,762,000 | 19,927,000 |
Common stock and additional paid-in capital, shares outstanding (in shares) | 19,762,000 | 19,927,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Rental revenues | $ 5,983 | $ 6,912 | $ 17,703 | $ 20,651 |
Management fee and other revenues | 362 | 253 | 1,081 | 760 |
Total revenues | 6,345 | 7,165 | 18,784 | 21,411 |
Expenses: | ||||
Facility rent expense | 2,171 | 2,176 | 6,512 | 6,523 |
Depreciation and amortization | 1,193 | 1,124 | 3,499 | 4,176 |
General and administrative expense | 1,063 | 1,598 | 3,507 | 6,275 |
Other operating expenses | 517 | 241 | 1,395 | 1,413 |
Total expenses | 4,944 | 5,139 | 14,913 | 18,387 |
Income from operations | 1,401 | 2,026 | 3,871 | 3,024 |
Other expense: | ||||
Interest expense, net | 1,011 | 1,801 | 3,049 | 5,377 |
Loss on extinguishment of debt | 0 | 0 | 63 | 0 |
Other expense | 105 | 0 | 388 | 51 |
Total other expense, net | 1,116 | 1,801 | 3,500 | 5,428 |
Income (loss) from continuing operations before income taxes | 285 | 225 | 371 | (2,404) |
Income tax expense | 19 | 3 | 20 | 3 |
Income (loss) from continuing operations | 266 | 222 | 351 | (2,407) |
Loss from discontinued operations, net of tax | (1,032) | (2,210) | (2,049) | (6,513) |
Net loss | (766) | (1,988) | (1,698) | (8,920) |
Preferred stock dividends | 1,912 | 1,879 | 5,702 | 5,457 |
Net loss attributable to Regional Health Properties, Inc. common stockholders | $ (2,678) | $ (3,867) | $ (7,400) | $ (14,377) |
Net loss per share of common stock attributable to Regional Health Properties, Inc. | ||||
Continuing operations, basic and diluted (in dollars per share) | $ (0.08) | $ (0.08) | $ (0.27) | $ (0.39) |
Discontinued operations, basic and diluted (in dollars per share) | (0.05) | (0.11) | (0.10) | (0.33) |
Net loss per share of common stock attributable to Regional Health Properties, Inc. | $ (0.13) | $ (0.19) | $ (0.37) | $ (0.72) |
Weighted average shares of common stock outstanding: | ||||
Basic and diluted (in shares) | 19,762 | 19,917 | 19,784 | 19,909 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) - 9 months ended Sep. 30, 2017 - USD ($) shares in Thousands, $ in Thousands | Total | Shares of Common Stock | Shares of Preferred Stock | Common Stock and Additional Paid-in Capital | Preferred Stock (a) | [1] | Accumulated Deficit |
Balance at beginning of period (in shares) at Dec. 31, 2016 | 19,927 | 19,927 | |||||
Balance at beginning of period (in shares) at Dec. 31, 2016 | 2,762 | 0 | |||||
Balance at beginning of period at Dec. 31, 2016 | $ (37,947) | $ 61,643 | $ 0 | $ (99,590) | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Reclassification of preferred stock, shares | 2,812 | ||||||
Reclassification of preferred stock, value | 62,423 | 62,423 | |||||
Stock-based compensation | 281 | 281 | |||||
Common stock repurchase program (in shares) | (118) | ||||||
Common stock repurchase program | (186) | (186) | |||||
Issuance of restricted stock, net of forfeitures (in shares) | (47) | ||||||
Issuance of restricted stock, net of forfeitures | 0 | ||||||
Preferred stock dividends | (5,702) | (5,702) | |||||
Net loss | $ (1,698) | (1,698) | |||||
Balance at end of period (in shares) at Sep. 30, 2017 | 19,762 | 19,762 | |||||
Balance at end of period (in shares) at Sep. 30, 2017 | 2,812 | 2,812 | |||||
Balance at end of period at Sep. 30, 2017 | $ 17,171 | $ 61,738 | $ 62,423 | $ (106,990) | |||
[1] | (a) Adoption of the classification of the Regional Health Properties, Inc.'s Series A Preferred Stock as permanent equity, as a result of the ownership and transfer restrictions contained in the Amended and Restated Articles of Incorporation of Regional Health Properties, Inc. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (1,698) | $ (8,920) |
Loss from discontinued operations, net of tax | 2,049 | 6,513 |
Income (loss) from continuing operations | 351 | (2,407) |
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 3,499 | 4,176 |
Settlement agreements in excess of cash paid | 300 | 0 |
Stock-based compensation expense | 281 | 890 |
Rent expense in excess of cash paid | 440 | 721 |
Rent revenue in excess of cash received | (2,138) | (1,941) |
Amortization of deferred financing costs | 230 | 614 |
Amortization of debt discounts and premiums | 11 | 11 |
Bad debt expense | 455 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 409 | (657) |
Prepaid expenses and other | 202 | 929 |
Other assets | (16) | 39 |
Accounts payable and accrued expenses | 324 | (199) |
Other liabilities | 167 | 630 |
Net cash provided by operating activities - continuing operations | 4,515 | 2,806 |
Net cash used in operating activities - discontinued operations | (961) | (3,470) |
Net cash provided by (used in) operating activities | 3,554 | (664) |
Cash flows from investing activities: | ||
Change in restricted cash | 1,889 | 3,625 |
Purchase of real estate, net | (1,375) | 0 |
Purchase of property and equipment | (774) | (704) |
Proceeds from the sale of property and equipment | 0 | 1,546 |
Earnest money deposit | 0 | 1,750 |
Net cash (used in) provided by investing activities - continuing operations | (260) | 6,217 |
Net cash used in investing activities - discontinued operations | 0 | 0 |
Net cash (used in) provided by investing activities | (260) | 6,217 |
Cash flows from financing activities: | ||
Proceeds from debt | 0 | 3,940 |
Repayment on notes payable | (3,038) | (10,496) |
Repayment on bonds payable | (90) | (85) |
Repayment of convertible debt | (7,700) | 0 |
Debt issuance costs | 0 | (116) |
Proceeds from preferred stock issuances, net | 977 | 6,790 |
Repurchase of common stock | (186) | (312) |
Dividends paid on preferred stock | (5,702) | (5,457) |
Net cash used in financing activities - continuing operations | (15,739) | (5,736) |
Net cash used in financing activities - discontinued operations | (485) | (1,080) |
Net cash used in financing activities | (16,224) | (6,816) |
Net change in cash and cash equivalents | (12,930) | (1,263) |
Cash and cash equivalents, beginning | 14,045 | 2,720 |
Cash and cash equivalents, ending | 1,115 | 1,457 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 2,840 | 4,846 |
Income taxes paid | 13 | 3 |
Supplemental disclosure of non-cash activities: | ||
Non-cash proceeds from debt to purchase real estate | 4,125 | 0 |
Surrender of security deposit | 500 | 0 |
Non-cash proceeds from vendor-financed insurance | 198 | 0 |
Non-cash proceeds from financing of South Carolina Medicaid audit repayment | $ 385 | $ 0 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES See Part II, Item 8, Notes to Consolidated Financial Statements , Note 1 - Organization and Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 , filed with the Securities and Exchange Commission (the “SEC”) on April 17, 2017 (the “Annual Report”), for a description of all significant accounting policies. Description of Business Regional Health Properties, Inc. (“Regional Health”), through its subsidiaries (together, the “Company” or “we”), is a self-managed real estate investment company that invests primarily in real estate purposed for long-term care and senior living. The Company’s business primarily consists of leasing and subleasing healthcare facilities to third-party tenants, which operate such facilities. The operators of the Company’s facilities provide a range of healthcare services, including skilled nursing and assisted living services, social services, various therapy services, and other rehabilitative and healthcare services for both long-term and short-stay patients and residents. Regional Health’s predecessor was incorporated in Ohio on August 14, 1991, under the name Passport Retirement, Inc. In 1995, the company acquired substantially all of the assets and liabilities of AdCare Health Systems, Inc. and changed its name to AdCare Health Systems, Inc. (“AdCare”). AdCare completed its initial public offering in November 2006. Initially based in Ohio, AdCare expanded its portfolio through a series of strategic acquisitions to include properties in a number of other states, primarily in the Southeast. In 2012, AdCare relocated its executive offices and accounting operations to Georgia, and AdCare changed its state of incorporation from Ohio to Georgia on December 12, 2013. On September 29, 2017, AdCare merged (the “Merger”) with and into Regional Health a Georgia corporation and wholly owned subsidiary of AdCare formed for the purposes of the Merger with Regional Health continuing as the surviving corporation in the Merger. As a consequence of the Merger: • the outstanding shares of AdCare’s common stock, no par value per share (the “AdCare common stock”), converted, on a one for one basis, into the same number of shares of Regional Health’s common stock, no par value per share (the “RHE common stock”); • the outstanding shares of AdCare’s 10.875% Series A Cumulative Redeemable Preferred Stock (the “AdCare Series A Preferred Stock”) converted, on a one for one basis, into the same number of shares of Regional Health’s 10.875% Series A Cumulative Redeemable Preferred Stock (the “RHE Series A Preferred Stock”); • the board of directors (the “AdCare Board”) and executive officers of AdCare immediately prior to the Merger are the board of directors (the “RHE Board”) and executive officers, respectively, of Regional Health immediately following the Merger, and each director and executive officer continued his directorship or employment, as the case may be, with Regional Health under the same terms as his directorship or employment with AdCare immediately following the Merger; • Regional Health assumed all of AdCare’s equity incentive compensation plans, and all rights to acquire shares of AdCare common stock under any AdCare equity incentive compensation plan converted into rights to acquire RHE common stock pursuant to the terms of the equity incentive compensation plans and other related documents, if any; • Regional Health began public trading as a NYSE American LLC (“NYSE American”) listed company as the successor issuer to AdCare and succeeded to the assets and continued the business and assumed the obligations of AdCare; • the rights of the holders of RHE common stock and RHE Series A Preferred Stock are governed by the amended and restated articles of incorporation of RHE (the “RHE Charter”) and the amended and restated bylaws of RHE (the “RHE Bylaws”). The RHE Charter is substantially equivalent to AdCare’s articles of incorporation, as amended (the “AdCare Charter”), except that the RHE Charter includes ownership and transfer restrictions related to the RHE common stock. The RHE Bylaws are substantially equivalent to the Bylaws of AdCare, as amended; • there was no change in the assets we hold or in the business we conduct; and • there is no fundamental change to our current operational strategy. When used in this Quarterly Report on Form 10-Q, unless otherwise specifically stated or the context otherwise requires, the terms: • “Board” or “Board of Directors” refers to the AdCare Board with respect to the period prior to the Merger and to the RHE Board with respect to the period after the Merger; • “Company”, “we”, “our” and “us” refer to AdCare and its subsidiaries with respect to the period prior to the Merger and to Regional Health and its subsidiaries with respect to the period after the Merger; • “common stock” refers to the AdCare common stock with respect to the period prior to the Merger and to the RHE common stock with respect to the period after the Merger; • “Series A Preferred Stock” refers to the AdCare Series A Preferred Stock with respect to the period prior to the Merger and to the RHE Series A Preferred Stock with respect to the period after the Merger; and • “Charter” refers to the AdCare Charter with respect to the period prior to the Merger and to the RHE Charter with respect to the period after the Merger. The Company leases its currently-owned healthcare properties, and subleases its currently-leased healthcare properties, on a triple-net basis, meaning that the lessee ( i.e ., the third-party operator of the property) is obligated under the lease or sublease, as applicable, for all costs of operating the property including insurance, taxes and facility maintenance, as well as the lease or sublease payments, as applicable. These leases are generally long-term in nature with renewal options and annual rent escalation clauses. The Company has many of the characteristics of a real estate investment trust (“REIT”) and is focused on the ownership, acquisition and leasing of healthcare properties. As a result of the Merger, the RHE Charter contains ownership and transfer restrictions with respect to the common stock. These ownership and transfer restrictions will better position the Company to comply with certain U.S. federal income tax rules applicable to REITs under the Internal Revenue Code of 1986, as amended (the “Code”) to the extent such rules relate to the common stock. The Board continues to analyze and consider: (i) whether and, if so, when, the Company could satisfy the requirements to qualify as a REIT under the Code; (ii) the structural and operational complexities which would need to be addressed before the Company could qualify as a REIT, including the disposition of certain assets or the termination of certain operations which may not be REIT compliant; and (iii) if the Company were to qualify as a REIT, whether electing REIT status would be in the best interests of the Company and its shareholders in light of various factors, including our significant consolidated federal net operating loss carryforwards. There is no assurance that the Company will qualify as a REIT in future taxable years or, if it were to so qualify, that the Board would determine that electing REIT status would be in the best interests of the Company and its shareholders. As of September 30, 2017 , the Company owns, leases, or manages 30 facilities, which are located primarily in the Southeast. Of the 30 facilities, the Company: (i) leased 14 owned facilities and subleased 11 leased skilled nursing facilities to third-party tenants; (ii) leased two owned assisted living facilities to third-party tenants; and (iii) managed on behalf of third-party owners two skilled nursing facilities and one independent living facility (see Note 7 - Leases herein and Part II, Item 8, Notes to Consolidated Financial Statements , Note 7 - Leases in the Annual Report for a more detailed description of the Company’s leases). Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Article 8 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included. Operating results for the three and nine months ended September 30, 2017 and 2016 are not necessarily indicative of the results that may be expected for the fiscal year. The balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. You should read the unaudited consolidated financial statements together with the historical audited consolidated financial statements of the Company for the year ended December 31, 2016 , included in the Annual Report. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported results of operations during the reporting period. Examples of significant estimates include allowance for doubtful accounts, self-insurance reserves, deferred tax valuation allowance, fair value of employee and nonemployee stock based awards, valuation of goodwill and other long-lived assets, and cash flow projections. Actual results could differ materially from those estimates. Adoption of the Classification of the Regional Health Properties, Inc.'s Series A Preferred Stock as Permanent Equity The common stock is subject to the ownership and transfer restrictions set forth in the RHE Charter, which restrictions permit classification of the Series A Preferred Stock as permanent equity, under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ ASC”) Topic 480-10-S99-3A. The reclassification of the Series A Preferred Stock as permanent equity was adopted on a prospective basis as of September 29, 2017, upon completion of the Merger. Revenue Recognition and Allowances Triple-Net Leased Properties. The Company's triple-net leases provide for periodic and determinable increases in rent. The Company recognizes rental revenues under these leases on a straight-line basis over the applicable lease term when collectibility is reasonably assured. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our consolidated balance sheets. In the event the Company cannot reasonably estimate the future collection of rent from one or more tenant(s) of the Company’s facilities, rental income for the affected facilities will be recognized only upon cash collection, and any accumulated straight-line rent receivable will be reversed in the period in which the Company first deems rent collection no longer reasonably assured. Management Fee Revenue and Other. The Company recognizes management fee revenues as services are provided. Further, the Company recognizes income from lease inducement receivables and interest income from loans and investments, using the effective interest method when collectibility is reasonably assured. We apply the effective interest method on a loan-by-loan basis. Allowances. The Company assesses the collectibility of our rent receivables, including straight-line rent receivables and working capital loans to tenants. The Company bases its assessment of the collectibility of rent receivables and working capital loans to tenants on several factors, including payment history, the financial strength of the tenant and any guarantors, the value of the underlying collateral, and current economic conditions. If the Company's evaluation of these factors indicates it is probable that the Company will be unable to receive the rent payments or payments on a working capital loan, the Company provides a reserve against the recognized straight-line rent receivable asset or working capital loan for the portion that we estimate may not be recovered. If the Company changes its assumptions or estimates regarding the collectibility of future rent payments required by a lease or required from a working capital loan to a tenant, the Company may adjust its reserve to increase or reduce the rental revenue or interest revenue from working capital loans to tenants recognized in the period the Company makes such change in its assumptions or estimates. As of September 30, 2017 and December 31, 2016 , the Company allowed for approximately $2.9 million and $7.5 million , respectively, of gross patient care related receivables arising from our legacy operations. Allowance for patient care receivables are estimated based on an aged bucket method as well as additional analyses of remaining balances incorporating different payor types. Any changes in patient care receivable allowances are recognized as a component of discontinued operations. All uncollected patient care receivables were fully allowed at September 30, 2017 and December 31, 2016 . Accounts receivable, net totaled $1.1 million at September 30, 2017 and $2.4 million at December 31, 2016 , of which $0.2 million and $0.9 million , respectively, related to patient care receivables from our legacy operations. Self-Insurance The Company has self-insured against professional and general liability claims since it discontinued its healthcare operations during 2014 and 2015 (see Part II, Item 8, Notes to Consolidated Financial Statements , Note 15 - Commitments and Contingencies in the Annual Report for more information). The Company evaluates quarterly the adequacy of its self-insurance reserve based on a number of factors, including: (i) the number of actions pending and the relief sought; (ii) analyses provided by defense counsel, medical experts or other information which comes to light during discovery; (iii) the legal fees and other expenses anticipated to be incurred in defending the actions; (iv) the status and likely success of any mediation or settlement discussions; and (v) the venues in which the actions have been filed or will be adjudicated. The Company currently believes that most of the professional and general liability actions, and particularly many of the most recently filed actions, are defensible and intends to defend them through final judgment. Consequently, the self-insurance reserve primarily reflects the Company's estimated legal costs of litigating the pending actions accordingly. Because the self-insurance reserve is based on estimates, the amount of the self-insurance reserve may not be sufficient to cover the legal costs actually incurred in litigating the pending actions. Since these reserves are based on estimates, the actual expenses we incur may differ from the amount reserved (see Note 8 - Accrued Expenses ). Fair Value Measurements and Financial Instruments Accounting guidance establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The categorization of a measurement within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1— Quoted market prices in active markets for identical assets or liabilities Level 2— Other observable market-based inputs or unobservable inputs that are corroborated by market data Level 3— Significant unobservable inputs The respective carrying value of certain financial instruments of the Company approximates their fair value. These instruments include cash and cash equivalents, restricted cash and investments, accounts receivable, notes receivable, and accounts payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values, they are receivable or payable on demand, or the interest rates earned and/or paid approximate current market rates. Adopted Standards On April 1, 2017, we adopted Accounting Standards Update (“ ASU ”) 2017-01, Clarifying the Definition of a Business (“ ASU 2017-01 ”), which narrows the FASB definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. ASU 2017-01 states that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the acquired asset is not a business. If this initial test is not met, an acquired asset cannot be considered a business unless it includes an input and a substantive process that together significantly contribute to the ability to create output. The primary differences between business combinations and asset acquisitions include recognition of goodwill at the acquisition date and expense recognition for transaction costs as incurred. We are applying ASU 2017-01 prospectively for acquisitions after April 1, 2017. Regardless of whether an acquisition is considered a business combination or an asset acquisition, we record the cost of the businesses (or assets) acquired as tangible and intangible assets and liabilities based upon their estimated fair values as of the acquisition date. Intangibles primarily include certificates of need ("CON") but could include value of in-place leases and acquired lease contracts. For an asset acquisition, the cost of the acquisition is allocated to the assets and liabilities acquired on a relative fair value basis and no goodwill is recognized. We estimate the fair value of assets in accordance with FASB ASC 805 and ASC 820 . The fair value is estimated under market conditions observed at the time of the measurement date and depreciated over the remaining life of the assets. In March 2016, the FASB issued ASU 2016-09, with the intention to simplify aspects of the accounting for share-based payment transactions, including income tax impacts, classification on the statement of cash flows, and forfeitures. ASU 2016-09 is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The various amendments within the standard require different approaches to adoption, on a retrospective, modified retrospective or prospective basis. The Company adopted the various amendments in its consolidated financial statements for the three month period ending March 31, 2017 with an effective date of January 1, 2017. The Company has elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The adoption of ASU 2016-09 did not have a material effect on the Company’s consolidated financial statements. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09 as codified in ASC 606 , which requires revenue to be recognized in an amount that reflects the consideration expected to be received in exchange for goods and services. This new standard requires the disclosure of sufficient quantitative and qualitative information for financial statement users to understand the nature, amount, timing and uncertainty of revenue and associated cash flows arising from contracts with customers. The new guidance does not affect the recognition of revenue from leases, which is approximately 95% of our revenue. The new revenue standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early application is permitted, beginning after December 15, 2016. Our revenue streams also include loan interest and management fees. Based on our initial assessment, management fees for providing back office services and support in our Consolidated Statements of Income are subject to ASC 606, and the Company believes the pattern and timing of recognition of income for the management fees will be consistent with the current accounting model. The Company does not expect adoption of this guidance to have a material impact on the Company’s consolidated financial condition, results of operations or cash flows. In January 2016, the FASB issued ASU 2016-01, which provides revised accounting guidance related to the accounting for and reporting of financial instruments. This guidance significantly revises an entity’s accounting related to (i) the classification and measurement of investments in equity securities and (ii) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017; earlier adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, as a comprehensive new lease standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. It will require companies to recognize lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance, ASC 840, Leases . ASU 2016-02 creates a new Topic, ASC 842, Leases . This new Topic retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years; earlier adoption is permitted. In the financial statements in which the ASU is first applied, leases shall be measured and recognized at the beginning of the earliest comparative period presented with an adjustment to equity. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations and cash flows. In June 2016, the FASB issued ASU 2016-13 , which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for annual and interim periods beginning after December 15, 2018. We are currently evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-1 5, guidance which clarifies the treatment of several cash flow categories. In addition, the guidance clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18 , which requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. Therefore, amounts generally described as restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted using a retrospective transition method to each period presented. We are currently evaluating the impact of adopting ASU 2016-18 on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, which simplifies the required periodic test for goodwill impairment and modifies the concept of impairment of goodwill under previous guidance, ASC 350, Intangibles - Goodwill and Other . Under the updated guidance, a goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the total amount of goodwill allocated to that reporting unit. This simplification eliminates previous requirements to determine the implied fair value of goodwill and record a loss on impairment equal to the carrying value of goodwill less the implied fair value. Further, the ASU modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. ASU 2017-04 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted on a prospective basis for annual and interim periods beginning after January 1, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations or cash flows. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is computed by dividing net income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the respective period. Diluted earnings per share is similar to basic earnings per share except: (i) net income or loss is adjusted by the impact of the assumed conversion of convertible debt into shares of common stock; and (ii) the weighted average number of shares of common stock outstanding includes potentially dilutive securities (such as options, warrants and additional shares of common stock issuable under convertible debt outstanding during the period) when such securities are not anti-dilutive. Potentially dilutive securities from options and warrants are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all options and warrants with exercise prices exceeding the average market value are used to repurchase common stock at market value. The incremental shares remaining after the proceeds are exhausted represent the potentially dilutive effect of the securities. Potentially dilutive securities from convertible debt are calculated based on the assumed issuance at the beginning of the period, as well as any adjustment to income that would result from their assumed issuance. For the three and nine months ended September 30, 2017 and 2016 , approximately 2.4 million and 4.5 million shares, respectively, of potentially dilutive securities were excluded from the diluted income (loss) per share calculation because including them would have been anti-dilutive for such periods. The following tables provide a reconciliation of net loss for continuing and discontinued operations and the number of shares of common stock used in the computation of both basic and diluted earnings per share: Three Months Ended Nine Months Ended (Amounts in 000’s, except per share data) 2017 2016 2017 2016 Numerator: Income (loss) from continuing operations $ 266 $ 222 $ 351 $ (2,407 ) Preferred stock dividends 1,912 1,879 5,702 5,457 Basic and diluted loss from continuing operations (1,646 ) (1,657 ) (5,351 ) (7,864 ) Loss from discontinued operations, net of tax (1,032 ) (2,210 ) (2,049 ) (6,513 ) Net loss attributable to Regional Health Properties, Inc. common stockholders $ (2,678 ) $ (3,867 ) $ (7,400 ) $ (14,377 ) Denominator: Basic - weighted average shares 19,762 19,917 19,784 19,909 Diluted - adjusted weighted average shares (a) 19,762 19,917 19,784 19,909 Basic and diluted loss per share: Loss from continuing operations attributable to Regional Health $ (0.08 ) $ (0.08 ) $ (0.27 ) $ (0.39 ) Loss from discontinued operations (0.05 ) (0.11 ) (0.10 ) (0.33 ) Loss attributable to Regional Health Properties, Inc. common stockholders $ (0.13 ) $ (0.19 ) $ (0.37 ) $ (0.72 ) (a) Securities outstanding that were excluded from the computation, because they would have been anti-dilutive were as follows: September 30, (Share amounts in 000’s) 2017 2016 Stock options 245 355 Warrants - employee 1,350 1,559 Warrants - non employee 437 437 Shares issuable upon conversion of convertible debt 353 2,165 Total anti-dilutive securities 2,385 4,516 |
Liquidity and Profitability
Liquidity and Profitability | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
LIQUIDITY AND PROFITABILITY | LIQUIDITY AND PROFITABILITY Sources of Liquidity The Company continues to undertake measures to grow its operations and to reduce its expenses by: (i) increasing future lease revenue through acquisitions and investments in its existing properties; (ii) modifying the terms of existing leases; (iii) refinancing or repaying debt to reduce interest costs and mandatory principal repayments; and (iv) reducing general and administrative expenses. At September 30, 2017 , the Company had $1.1 million in cash and cash equivalents as well as restricted cash and investments of $3.5 million . In addition, management anticipates access to several sources of liquidity, including cash flows from operations and cash on hand. Management holds routine ongoing discussions with existing lenders and potential new lenders to refinance current debt on a longer term basis and, in recent years, has refinanced shorter term acquisition debt with traditional longer term mortgage notes, many of which have been executed under government guaranteed lending programs. Historically, the Company has raised capital through other sources, including issuances of preferred stock and convertible debt. On May 27, 2017, the Company entered into an At Market Issuance Sales Agreement (the “2017 Sales Agreement”) with JMP Securities LLC to sell, from time to time, shares of the Series A Preferred Stock, having an aggregate offering price of up to $4,618,472 , through an “at-the-market” offering program (the “ATM”). From the inception of the ATM through September 30, 2017 , the Company sold 50,000 shares of the Series A Preferred Stock generating net proceeds of approximately $1.0 million (see Note 12 - Common and Preferred Stock ). On August 2, 2017 the Company terminated the 2017 Sales Agreement and discontinued sales under the ATM. On July 31, 2017, the Company extended the maturity date of a $1.2 million credit facility entered into in December 2012 between a certain wholly-owned subsidiary of the Company and First Commercial Bank associated with its Northwest Oklahoma facility (the “Northwest Credit Facility”), from December 31, 2017 to July 31, 2020. On August 11, 2017, the Company extended the maturity date of the credit facilities entered into in April 2015, with respect to an aggregate of $0.5 million of indebtedness between certain wholly-owned subsidiaries of the Company and the KeyBank National Association (the “Key Bank Credit Facility”), from October 17, 2017 to August 2, 2019. To conserve cash while working towards a settlement of our on-going professional and general liability claims, the Company’s Board of Directors (the “Board”) voted to postpone the payment of the fourth quarter 2017 dividend on the Series A Preferred Stock. The Board will revisit the dividend payment in the first quarter 2018 meeting. The dividend suspension will allow the Company to pay outstanding vendors and fund ongoing legal expenses and settlement payments. The dividend suspension does not trigger a default under its outstanding indebtedness. Beginning in the first quarter of 2018, the Company expects to receive full rent with respect to all the facilities (the “Peach Facilities”) subleased by a subsidiary of the Company to affiliates (collectively, “Peach Health Sublessee”) of Peach Health Group, LLC (“Peach Health”). The Peach Facilities were previously subleased to affiliates of New Beginnings Care, LLC (“New Beginnings”) prior to the bankruptcy of New Beginnings and are comprised of: (i) an 85 -bed skilled nursing facility located in Tybee Island, Georgia (the “Oceanside Facility”); (ii) a 50 -bed skilled nursing facility located in Tybee Island, Georgia (the “Savannah Beach Facility”); and (iii) a 131 -bed skilled nursing facility located in Jeffersonville, Georgia (the “Jeffersonville Facility”). Rent for the Savannah Beach Facility, the Oceanside Facility, and the Jeffersonville Facility is $0.3 million , $0.4 million and $0.6 million per annum, respectively; but such rent was only $1 per month for the Oceanside Facility and Jeffersonville Facility until the date such facilities were recertified by the Centers for Medicare and Medicaid Services (“CMS”) or April 1, 2017, whichever occurred first (the “Rent Commencement Date”). The Oceanside Facility and Jeffersonville Facility were recertified by CMS in February 2017 and December 2016, respectively. Furthermore, with respect to the Oceanside Facility and Jeffersonville Facility, Peach Health Sublessee is entitled to three months of $1 per month rent following the Rent Commencement Date and, following such three -month period, five months of rent discounted by 50% . On September 19, 2016, the Company obtained options to extend the maturity date, subject to customary conditions, of a $4.3 million credit facility entered into in September 2013 between a certain wholly-owned subsidiary of the Company and Housing & Healthcare Funding, LLC (the "Quail Creek Credit Facility") from September 2017 to September 2018. On August 10, 2017, the Company extended the maturity date of the Quail Creek Credit Facility to December 31, 2017 and retains the option to further extend the maturity date of such credit facility to September 2018. There is no assurance that we will be able to refinance or further extend the maturity date of this credit facility on terms that are favorable to the Company or at all. Cash Requirements At September 30, 2017 , the Company had $73.8 million in indebtedness of which the current portion is $8.3 million . The current portion is comprised of the following components: (i) convertible debt of $1.5 million , (ii) senior debt of $4.3 million attributable to the Company’s skilled nursing facility known as the Quail Creek Nursing & Rehabilitation Center located in Oklahoma City, Oklahoma (the “Quail Creek Facility”); and (iii) other debt of approximately $2.5 million which includes senior debt - bond and mortgage indebtedness (for a detailed listing of our debt, see Note 9 - Notes Payable and Other Debt ). The Company anticipates net principal disbursements, over the next twelve months, of approximately $8.3 million , which includes $1.5 million of convertible debt, $4.3 million of senior debt attributable to the Quail Creek Facility, approximately $0.2 million of payments on shorter term vendor notes, $1.6 million of routine debt service amortization, and $0.7 million payment of other debt. Based on the described sources of liquidity, the Company expects sufficient funds for its operations and scheduled debt service, at least through the next twelve months. On a longer term basis, at September 30, 2017 , the Company had approximately $11.0 million of debt maturities due over the two -year period ending September 30, 2019 . These debt maturities include the aforementioned $1.5 million of convertible promissory notes, which are convertible into shares of the common stock, in addition to $4.3 million with respect to the Quail Creek Credit Facility. The Company believes its long-term liquidity needs will be satisfied by cash flows from operations, cash on hand, borrowings as required to refinance indebtedness as well as other sources, including issuances of convertible debt. The Company is a defendant in a total of 42 unsettled professional and general liability cases. The claims generally seek unspecified compensatory and punitive damages for former patients of the Company who were allegedly injured or died while patients of facilities operated by the Company due to professional negligence or understaffing. The Company established a self-insurance reserve for these professional and general liability claims, included within “Accrued expenses and other” in the Company’s unaudited consolidated balance sheets, of $6.7 million and $6.9 million at September 30, 2017 , and December 31, 2016 , respectively. The Company currently believes that most of the professional and general liability actions, and particularly many of the most recently filed actions, are defensible and intends to defend them through final judgment. Accordingly, the self-insurance reserve primarily reflects the Company's estimated legal costs of litigating the pending actions, which are expected to be paid over time as litigation continues. The duration of such legal proceedings could be greater than one year subsequent to the period ended September 30, 2017 ; however, management cannot reliably estimate the exact timing of payments. The Company expects to fund litigation and potential indemnity costs through cash on hand as well as other sources as described above. During the three months ended September 30, 2017 , the Company generated positive cash flow from operations and anticipates positive cash flow from operations through the remainder of the current year. In order to satisfy the Company’s capital needs, the Company seeks to: (i) refinance debt where possible to obtain more favorable terms; (ii) raise capital through the issuance of debt or equity securities; and (iii) increase operating cash flows through acquisitions. The Company anticipates that these actions, if successful, will provide the opportunity to maintain its liquidity, thereby permitting the Company to better meet its operating and financing obligations for the next twelve months. However, there is no guarantee that such actions will be successful. Management’s ability to raise additional capital through the issuance of equity securities and the terms upon which we are able to raise such capital may be adversely affected if we are unable to maintain the listing of the common stock and the Series A Preferred Stock on the NYSE American, formerly known as the NYSE MKT. |
Restricted Cash and Investments
Restricted Cash and Investments | 9 Months Ended |
Sep. 30, 2017 | |
Restricted Cash and Investments [Abstract] | |
RESTRICTED CASH AND INVESTMENTS | RESTRICTED CASH AND INVESTMENTS The following presents the Company's restricted cash, escrow deposits and investments: (Amounts in 000’s) September 30, 2017 December 31, 2016 Cash collateral $ 40 $ 260 Replacement reserves 278 811 Escrow deposits 642 529 Total current portion 960 1,600 Restricted investments for other debt obligations and certificates of deposit 405 2,274 HUD and other replacement reserves 2,175 1,590 Total noncurrent portion 2,580 3,864 Total restricted cash and investments $ 3,540 $ 5,464 Cash collateral —In securing mortgage financing from certain lending institutions, the Company and certain of its wholly-owned subsidiaries are required to deposit cash to be held as collateral in accordance with the terms of such loan agreements. Replacement reserves —Cash reserves set aside for non-critical building repairs to be completed within the next 12 months, pursuant to loan agreements. Escrow deposits —In connection with financing secured through our lenders, several wholly-owned subsidiaries of the Company are required to make monthly escrow deposits for taxes and insurance. Restricted investments for other debt obligations and certificates of deposit —In compliance with certain financing and insurance agreements, the Company and certain wholly-owned subsidiaries of the Company are required to deposit cash and/or certificates of deposit held as collateral by the lender or in escrow with certain designated financial institutions. HUD and other replacement reserves —The regulatory agreements entered into in connection with the financing secured through the U.S. Department of Housing and Urban Development (“HUD”) require monthly escrow deposits for replacement and improvement of the HUD project assets. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The following table sets forth the Company’s property and equipment: (Amounts in 000’s) Estimated Useful Lives (Years) September 30, 2017 December 31, 2016 Buildings and improvements 5-40 $ 89,954 $ 84,108 Equipment and computer related* 2-10 10,883 12,286 Land — 4,248 3,988 Construction in process — — 602 105,085 100,984 Less: accumulated depreciation and amortization* (22,644 ) (21,816 ) Property and equipment, net $ 82,441 $ 79,168 *The Company retired approximately $2.2 million of fully depreciated assets during the nine months ended September 30, 2017 . On May 1, 2017, the Company completed the acquisition of an assisted living and memory care community with 106 operational beds in Glencoe, Alabama (“the Meadowood Facility”) from Meadowood Retirement Village, LLC and Meadowood Properties, LLC (see Note 10 - Acquisitions) . Buildings and improvements includes the capitalization of costs incurred for the respective CON’s. For additional information on the CON amortization, see Note 6 - Intangible Assets and Goodwill . The following table summarizes total depreciation and amortization for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended September 30, Nine Months Ended September 30, (Amounts in 000’s) 2017 2016 2017 2016 Depreciation $ 857 $ 786 $ 2,486 $ 3,000 Amortization 336 338 1,013 1,176 Total depreciation and amortization $ 1,193 $ 1,124 $ 3,499 $ 4,176 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible assets consist of the following: (Amounts in 000’s) CON (included in property and equipment) Bed Licenses - Separable Lease Rights Total Balances, December 31, 2016 Gross $ 22,811 $ 2,471 $ 6,881 $ 32,163 Accumulated amortization (3,483 ) — (4,127 ) (7,610 ) Net carrying amount $ 19,328 $ 2,471 $ 2,754 $ 24,553 Amortization expense (512 ) — (501 ) (1,013 ) Balances, September 30, 2017 Gross 22,811 2,471 6,881 32,163 Accumulated amortization (3,995 ) — (4,628 ) (8,623 ) Net carrying amount $ 18,816 $ 2,471 $ 2,253 $ 23,540 The following table summarizes total amortization for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended September 30, Nine Months Ended September 30, (Amounts in 000’s) 2017 2016 2017 2016 CON $ 169 $ 171 $ 512 $ 676 Lease rights 167 167 501 500 Total amortization $ 336 $ 338 $ 1,013 $ 1,176 Expected amortization expense for all definite-lived intangibles for each of the years ended December 31 is as follows: (Amounts in 000’s) Bed Licenses Lease Rights 2017 (a) $ 171 $ 166 2018 683 667 2019 683 667 2020 683 482 2021 683 203 Thereafter 15,913 68 Total expected amortization expense $ 18,816 $ 2,253 (a) Estimated amortization expense for the year ending December 31, 2017 , includes only amortization to be recorded after September 30, 2017 . The following table summarizes the carrying amount of goodwill: (Amounts in 000’s) September 30, 2017 December 31, 2016 Goodwill $ 2,945 $ 2,945 Accumulated impairment losses (840 ) (840 ) Net carrying amount $ 2,105 $ 2,105 The Company does not amortize indefinite-lived intangibles, which consist of separable bed licenses and goodwill. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
LEASES | LEASES Operating Leases The Company leases a total of eleven skilled nursing facilities from unaffiliated owners under non-cancelable leases, all of which have rent escalation clauses and provisions requiring payment of real estate taxes, insurance and maintenance costs by the lessee. Each of the skilled nursing facilities that are leased by the Company are subleased to and operated by third-party tenants. The Company also leases certain office space located in Suwanee, Georgia and Atlanta, Georgia. The Atlanta office space is subleased to a third-party tenant. As of September 30, 2017 , the Company is in compliance with all operating lease financial covenants. Future Minimum Lease Payments Future minimum lease payments for each of the next five years ending December 31, are as follows: (Amounts in 000’s) 2017 (a) $ 2,069 2018 8,331 2019 8,492 2020 8,671 2021 8,830 Thereafter 46,456 Total $ 82,849 (a) Estimated minimum lease payments for the year ending December 31, 2017 include only payments to be recorded after September 30, 2017 . Leased and Subleased Facilities to Third-Party Operators The Company leases or subleases 27 facilities ( 16 owned by the Company and 11 leased to the Company) to third-party tenants on a triple net basis, meaning that the lessee (i.e., the third-party tenant of the property) is obligated under the lease or sublease, as applicable, for all costs of operating the property, including insurance, taxes and facility maintenance, as well as the lease or sublease payments, as applicable. Peach Health. On June 18, 2016, the Company entered into a master sublease agreement (the “Peach Health Sublease”) with Peach Health Sublessee, providing that Peach Health Sublessee would take possession of and operate the Peach Facilities as subtenant. The Jeffersonville Facility and the Oceanside Facility were previously decertified by CMS in February and May 2016, respectively, for deficiencies related to the operations and maintenance of the facility while operated by the previous sublessee ( see Part II, Item 8, Notes to Consolidated Financial Statements, Note 7 - Leases included in the Annual Report for additional information). The Jeffersonville Facility and the Oceanside Facility were recertified by CMS as of December 20, 2016 and February 7, 2017, respectively, which are the Rent Commencement Dates for such facilities. The Peach Health Sublease became effective for the Jeffersonville Facility on June 18, 2016, and for the Savannah Beach Facility and the Oceanside Facility on July 13, 2016 (the date on which the Company accepted possession of the facilities from the previous sublessee). The Peach Health Sublease is structured as a triple net lease, except that the Company assumes responsibility for the cost of certain deferred maintenance at the Savannah Beach Facility and capital improvements that may be necessary for the Oceanside Facility and the Jeffersonville Facility in connection with recertification by CMS. Rent for the Savannah Beach Facility, the Oceanside Facility and the Jeffersonville Facility is $0.3 million , $0.4 million and $0.6 million per annum, respectively; provided, however, that rent was only $1 per month for the Oceanside Facility and the Jeffersonville Facility until the respective Rent Commencement Dates. In addition, for the Oceanside Facility and the Jeffersonville Facility, Peach Health Sublessee is entitled to three months of $1 per month rent following the respective Rent Commencement Dates and, following such three -month period, five months of rent discounted by 50% . The annual rent for each of the Peach Facilities will escalate at a rate of 3% each year pursuant to the Peach Health Sublease, and the term of the Peach Health Sublease for all three Peach Facilities expires on August 31, 2027. In connection with the Peach Health Sublease, the Company extended a line of credit to Peach Health Sublessee for up to $1.0 million for operations at the Peach Facilities (the “Peach Line”), with interest accruing on the unpaid balance under the Peach Line at a starting interest rate of 13.5% , increasing by 1% per annum. The entire principal amount due under the Peach Line, together with all accrued and unpaid interest thereunder, was due one year from the date of the first disbursement. The Peach Line is secured by a first priority security interest in Peach Health Sublessee’s assets and accounts receivable pursuant to a security agreement executed by Peach Health Sublessee. On April 6, 2017, the Company modified certain terms of the Peach Line in connection with Peach Health Sublessee's securing a $2.5 million working capital loan from a third party lender (the “Peach Working Capital Facility”). Borrowings under the Peach Working Capital Facility are based on a borrowing base of eligible accounts receivable. The modifications of the Peach Line include (as so amended, the “Peach Note”): (i) reducing the loan balance to $0.8 million and restricting further borrowings; (ii) extending the maturity of the loan to October 1, 2020 and adding a six month extension option by Peach Health Sublessee, assuming certain conditions precedent are met at the time of the exercise of the option; (iii) increasing the interest rate from 13.5% per annum by 1% per year; and (iv) establishing a four year amortization schedule. Payment of principal and interest under the Peach Note shall be governed by certain financial covenants limiting distributions under the Peach Working Capital Facility. Furthermore, the Company guaranteed Peach Health Sublessee’s borrowings under the Peach Working Capital Facility subject to certain burn-off provisions (i.e., the Company’s obligations under such guaranty cease after the later of 18 months or achievement of a certain financial ratio by Peach Health Sublessee). At September 30, 2017 , there was a $0.9 million outstanding balance on the Peach Note. Arkansas Leases and Facilities . Until February 3, 2016, the Company subleased through its subsidiaries (the “Aria Sublessors”) nine facilities located in Arkansas (collectively, the “Arkansas Facilities”) to affiliates (the “Aria Sublessees”) of Aria Health Group, LLC (“Aria”) pursuant to separate sublease agreements (the “Aria Subleases”). Effective February 3, 2016, the Company terminated each Aria Sublease due to the applicable Aria Sublessee’s failure to pay rent pursuant to the terms of such sublease. From February 5, 2016 to October 6, 2016, nine wholly-owned subsidiaries of the Company (each, a “Skyline Lessor”) leased the Arkansas Facilities to Skyline Healthcare LLC (“Skyline”), or an affiliate of Skyline (the “Skyline Lessee”), pursuant to a Master Lease Agreement, dated February 5, 2016 (the “Skyline Lease”). The term of the Skyline Lease commenced on April 1, 2016. In connection with the Skyline Lease, the Skyline Lessors entered into an Option Agreement, dated February 5, 2016, with Joseph Schwartz, the manager of Skyline, pursuant to which Mr. Schwartz, or an entity designated by Mr. Schwartz (the “Purchaser”), had an exclusive and irrevocable option to purchase the Arkansas Facilities at a purchase price of $55.0 million , consisting of cash consideration in the amount of $52.0 million and a promissory note with a principal amount of $3.0 million . The Company completed the sale of the Arkansas Facilities to the Purchaser on October 6, 2016. For further information see Part II, Item 8, Notes to Consolidated Financial Statements, Note 7 - Leases included in the Annual Report). Meadowood. On March 8, 2017, AdCare executed a purchase and sale agreement with Meadowood Retirement Village, LLC and Meadowood Properties, LLC (the “Meadowood Purchase Agreement”) to acquire the Meadowood Facility for $5.5 million cash. On March 21, 2017, AdCare executed a long-term lease with an affiliate of C.R. Management (the “Meadowood Operator”) to lease the Meadowood Facility effective on May 1, 2017. For further information, see Note 10 - Acquisitions . Future minimum lease receivables from the Company’s facilities leased and subleased to third party tenants for each of the next five years ending December 31 are as follows: (Amounts in 000's) 2017 (a) $ 5,460 2018 22,281 2019 22,764 2020 23,299 2021 23,886 Thereafter 136,813 Total $ 234,503 (a) Estimated minimum lease receivables for the year ending December 31, 2017 , include only payments to be received after September 30, 2017 . For further details regarding the Company’s leased and subleased facilities to third-party operators, see Note 10 - Acquisitions below and Part II, Item 8, Notes to Consolidated Financial Statements, Note 7 - Leases included in the Annual Report. |
Accrued Expenses and Other
Accrued Expenses and Other | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER | ACCRUED EXPENSES AND OTHER Accrued expenses and other consist of the following: (Amounts in 000’s) September 30, 2017 December 31, 2016 Accrued employee benefits and payroll-related $ 387 $ 442 Real estate and other taxes 435 557 Self-insured reserve (1) 6,683 6,924 Accrued interest 248 251 Other accrued expenses 829 903 Total accrued expenses and other $ 8,582 $ 9,077 (1) The Company self-insures against professional and general liability cases and uses a third party administrator and outside counsel to manage and defend the claims. The decrease in the reserve at September 30, 2017 primarily reflects the legal and associated settlement amounts paid (see Note 15 - Commitments and Contingencies) . |
Notes Payable and Other Debt
Notes Payable and Other Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND OTHER DEBT | NOTES PAYABLE AND OTHER DEBT See Part II, Item 8, Notes to Consolidated Financial Statements, Note 9 - Notes Payable and Other Debt included in the Annual Report for a detailed description of all the Company’s debt facilities. Notes payable and other debt consists of the following: (Amounts in 000’s) September 30, 2017 December 31, 2016 Senior debt—guaranteed by HUD $ 33,887 $ 34,473 Senior debt—guaranteed by USDA (a) 20,477 22,518 Senior debt—guaranteed by SBA (b) 2,236 2,319 Senior debt—bonds 7,055 7,145 Senior debt—other mortgage indebtedness 9,572 5,639 Other debt 1,322 1,063 Convertible debt 1,500 9,200 Subtotal 76,049 82,357 Deferred financing costs, net (2,050 ) (2,196 ) Unamortized discount on bonds (181 ) (191 ) Total debt 73,818 79,970 Less: current portion of debt 8,327 13,154 Notes payable and other debt, net of current portion $ 65,491 $ 66,816 (a) U.S. Department of Agriculture (“USDA”) (b) U.S. Small Business Administration (“SBA”) The following is a detailed listing of the debt facilities that comprise each of the above categories: (Amounts in 000’s) Facility Lender Maturity Interest Rate (a) September 30, 2017 December 31, 2016 Senior debt - guaranteed by HUD The Pavilion Care Center Red Mortgage 12/01/2027 Fixed 4.16% $ 1,355 $ 1,434 Hearth and Care of Greenfield Red Mortgage 08/01/2038 Fixed 4.20% 2,143 2,191 Woodland Manor Midland State Bank 10/01/2044 Fixed 3.75% 5,363 5,447 Glenvue Midland State Bank 10/01/2044 Fixed 3.75% 8,327 8,457 Autumn Breeze KeyBank 01/01/2045 Fixed 3.65% 7,238 7,352 Georgetown Midland State Bank 10/01/2046 Fixed 2.98% 3,664 3,723 Sumter Valley KeyBank 01/01/2047 Fixed 3.70% 5,797 5,869 Total $ 33,887 $ 34,473 Senior debt - guaranteed by USDA (b) Attalla Metro City 09/30/2035 Prime + 1.50% 5.50% $ 6,218 $ 7,189 Coosa Metro City 09/30/2035 Prime + 1.50% 5.50% 5,607 6,483 Mountain Trace Community B&T 01/24/2036 Prime + 1.75% 5.75% 4,292 4,384 Southland Bank of Atlanta 07/27/2036 Prime + 1.50% 6.00% 4,360 4,462 Total $ 20,477 $ 22,518 Senior debt - guaranteed by SBA College Park CDC 10/01/2031 Fixed 2.81% $ 1,545 $ 1,611 Southland Bank of Atlanta 07/27/2036 Prime + 2.25% 5.75% 691 708 Total $ 2,236 $ 2,319 (a) Represents cash interest rates as of September 30, 2017 as adjusted for applicable interest rate floor limitations, if applicable. The rates exclude amortization of deferred financing costs which range from 0.08% to 0.53% per annum. (b) For the four skilled nursing facilities, the Company has term loans insured 70% to 80% by the USDA with financial institutions. The loans have an annual renewal fee for the USDA guarantee of 0.25% of the guaranteed portion. The loans have prepayment penalties of 3% to 4% through 2017, which declines 1% each year, capped at 1% for the remainder of the first 10 years of the term and 0% thereafter. (Amounts in 000’s) Facility Lender Maturity Interest Rate (a) September 30, 2017 December 31, 2016 Senior debt - bonds Eaglewood Bonds Series A City of Springfield, Ohio 05/01/2042 Fixed 7.65% $ 6,610 $ 6,610 Eaglewood Bonds Series B City of Springfield, Ohio 05/01/2021 Fixed 8.50% 445 535 Total $ 7,055 $ 7,145 (a) Represents cash interest rates as of September 30, 2017 . The rates exclude amortization of deferred financing of approximately 0.26% per annum. (Amounts in 000’s) Facility Lender Maturity Interest Rate (a) September 30, 2017 December 31, 2016 Senior debt - other mortgage indebtedness Quail Creek (b) Congressional Bank 12/31/2017 LIBOR + 4.75% 5.75% $ 4,346 $ 4,432 Northwest (c) First Commercial 07/31/2020 Prime 5.00% 1,143 1,207 Meadowood (d) Exchange Bank of Alabama 05/01/2022 Fixed 4.50% 4,083 — Total $ 9,572 $ 5,639 (a) Represents cash interest rates as of September 30, 2017 as adjusted for applicable interest rate floor limitations, if applicable. The rates exclude amortization of deferred financing costs which approximate 1.03% per annum. (b) On September 19, 2016, the Company obtained an option to extend the maturity date, subject to customary conditions, of the Quail Creek Credit Facility from September 2017 to September 2018, which management intends to exercise. On August 10, 2017, the Company extended the maturity date of the Quail Creek Credit Facility to December 31, 2017 and retains the option to further extend the maturity date of such credit facility to September 2018. (c) On July 31, 2017, the Company extended the maturity date of the Northwest Credit Facility from December 2017 to July 31, 2020. (d) On May 1, 2017, in connection with the Meadowood Purchase Agreement, a wholly-owned subsidiary of the Company entered into a Loan Agreement (the “Meadowood Credit Facility”) with the Exchange Bank of Alabama, which provides for a $4.1 million principal amount secured credit facility maturing on May 1, 2022. Interest on the Meadowood Credit Facility accrues on the principal balance thereof at 4.5% per annum. The Meadowood Credit Facility is secured by the Meadowood Facility. (Amounts in 000’s) Lender Maturity Interest Rate September 30, 2017 December 31, 2016 Other debt First Insurance Funding 02/28/2018 Fixed 4.24% $ 81 $ 20 Key Bank (a) 08/02/2019 Fixed 0.00% 495 496 McBride Note (b) 09/30/2019 Fixed 4.00% 300 — Pharmacy Care of Arkansas 02/08/2018 Fixed 2.00% 169 547 South Carolina Department of Health & Human Services (c) 02/24/2019 Fixed 5.75% 277 — Total $ 1,322 $ 1,063 (a) On August 11, 2017, the Company extended the maturity date of the Key Bank Credit Facility from October 17, 2017 to August 2, 2019. (b) The Company executed an unsecured promissory note in favor of William McBride III, the Company’s former Chairman and Chief Executive Officer, pursuant to a settlement agreement dated September 26, 2017, between Mr. McBride and the Company. (c) On February 21, 2017, the South Carolina Department of Health and Human Services (“SCHHS”) issued fiscal year 2013 Medicaid audit reports for two facilities operated by the Company during 2013. In its fiscal year 2013 Medicaid audit reports, SCHHS determined that the Company owed an aggregate $0.4 million related to patient-care related payments made by SCHHS during 2013. Repayment of the $0.4 million began on March 24, 2017 in the form of a two -year note bearing interest of 5.75% per annum. (Amounts in 000’s) Facility Maturity Interest Rate (a) September 30, 2017 December 31, 2016 Convertible debt Issued July 2012 (C) 04/30/2018 Fixed 14.00% $ 1,500 $ 1,500 Issued March 2015 (b) 04/30/2017 Fixed 10.00% — 7,700 Total $ 1,500 $ 9,200 (a) Represents cash interest rates as of September 30, 2017 . The rates exclude amortization of deferred financing costs which range from 0.25% to 1.92% per annum. (b) On December 8, 2016, the Company announced a tender offer (the “Tender Offer”) for any and all of the Company’s 10% convertible subordinated notes due April 30, 2017 (the “2015 Notes”) at a cash purchase price equal to $1,000 per $1,000 principal amount of the 2015 Notes purchased, plus accrued and unpaid interest to, but not including, the payment date. The Tender Offer expired on January 9, 2017, and $6.7 million in aggregate principal amount of the 2015 Notes were tendered and paid on January 10, 2017. On April 30, 2017, the remaining $1.0 million in aggregate principal amount of the 2015 Notes outstanding was repaid plus accrued and unpaid interest in accordance with the terms of such notes, and all related obligations owed under the 2015 Notes were extinguished at that time. (c) On November 8, 2017, the Company extended the maturity date of the convertible debt issued in July 2012 from October 31, 2017 to April 30, 2018. Pursuant to the maturity date extension, the interest rate increased to 14.00% from 10.00% and the annual default interest rate increased from 14.00% to 18.00% per annum. In addition the Company agreed to grant a second priority security interest in the Company’s College Park facility, located in College Park, Georgia (the “College Park Facility”) no later than December 22, 2017. Failure to grant the security interest by December 22, 2017, will constitute an event of default under the promissory note. Debt Covenant Compliance As of September 30, 2017 , the Company had approximately 28 credit related instruments outstanding that include various financial and administrative covenant requirements. Covenant requirements include, but are not limited to, fixed charge coverage ratios, debt service coverage ratios, minimum EBITDA or EBITDAR, and current ratios. Certain financial covenant requirements are based on consolidated financial measurements whereas others are based on measurements at the subsidiary level (i.e., facility, multiple facilities or a combination of subsidiaries). The subsidiary level requirements are as follows: (i) financial covenants measured against subsidiaries of the Company; and (ii) financial covenants measured against third-party operator performance. Some covenants are based on annual financial metric measurements whereas others are based on monthly and quarterly financial metric measurements. The Company routinely tracks and monitors its compliance with its covenant requirements. The Company’s credit-related instruments were all in compliance as of September 30, 2017 . Scheduled Maturities The schedule below summarizes the scheduled maturities for the twelve months ended September 30 of the respective year (not adjusted for commitments to refinance or extend the maturities of debt as noted above): For the twelve months ended September 30, (Amounts in 000’s) 2018 $ 8,328 2019 2,719 2020 2,955 2021 2,088 2022 5,552 Thereafter 54,407 Subtotal $ 76,049 Less: unamortized discounts (181 ) Less: deferred financing costs, net (2,050 ) Total notes and other debt $ 73,818 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On March 8, 2017, the Company executed the Meadowood Purchase Agreement with Meadowood Retirement Village, LLC and Meadowood Properties, LLC to acquire the Meadowood Facility for $5.5 million cash. In addition, on March 21, 2017, the Company executed a long-term, triple net operating lease with the Meadowood Operator to lease the facility upon purchase. Lease terms include: (i) a 13 -year initial term with one five -year renewal option; (ii) base rent of $37,500 per month; (iii) a rental escalator of 2.0% per annum in the initial term and 2.5% per annum in the renewal term; (iv) a cross renewal provision, whereby the Meadowood Operator may exercise the lease renewal for the Meadowood Facility if its affiliate exercises the lease renewal option for Coosa Valley Health Care, a 124 -bed skilled nursing facility located in Gadsden, Alabama (the “Coosa Valley Facility”); and (v) a security deposit equal to one month of base rent. The Company completed the purchase of the Meadowood Facility on May 1, 2017 pursuant to the Meadowood Purchase Agreement, at which time the lease commenced and operations of the Meadowood Facility transferred to the Meadowood Operator. The following table sets forth the preliminary purchase price allocation of the Meadowood Facility: (Amounts in 000’s) Estimated Useful Lives (Years) May 1, 2017 Buildings and improvements 15-32 $ 4,700 Equipment and computer related 10 400 Land — 100 Property and equipment 5,200 In place occupancy (a) 32 300 Purchase Price $ 5,500 (a) In place occupancy is included in property and equipment, net on the Company’s unaudited consolidated balance sheets. On May 1, 2017, in connection with the Meadowood Purchase Agreement, a wholly-owned subsidiary of the Company entered into the Meadowood Credit Facility with the Exchange Bank of Alabama, which provides for a $4.1 million principal amount secured credit facility maturing on May 1, 2022. Interest on the Meadowood Credit Facility accrues on the principal balance thereof at 4.5% per annum. The Meadowood Credit Facility is secured by the Meadowood Facility. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS For the discontinued operations, the patient care revenue and related cost of services prior to the commencement of subleasing are classified in the activities below. For a historical listing and description of the Company’s discontinued entities, see Part II, Item 8, Notes to Consolidated Financial Statements, Note 11 - Discontinued Operations included in the Annual Report. The following table summarizes certain activity of discontinued operations for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended September 30, Nine Months Ended September 30, (Amounts in 000’s) 2017 2016 2017 2016 Total revenues $ — $ — $ — $ — Cost of services 1,026 2,200 2,032 6,478 Interest expense, net 6 10 17 35 Net loss $ (1,032 ) $ (2,210 ) $ (2,049 ) $ (6,513 ) |
Common and Preferred Stock
Common and Preferred Stock | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
COMMON AND PREFERRED STOCK | COMMON AND PREFERRED STOCK Common and Preferred Stock Repurchase Activity In November 2016, the Board approved two share repurchase programs (collectively, the "November 2016 Repurchase Program"), pursuant to which AdCare was authorized to repurchase up to 1.0 million shares of the common stock and 100,000 shares of the Series A Preferred Stock during a twelve -month period. The November 2016 Repurchase Program succeeded the repurchase program announced on November 12, 2015 (the “November 2015 Repurchase Program”), which terminated in accordance with its terms. Share repurchases under the November 2016 Repurchase Program could be made from time to time through open market transactions, block trades or privately negotiated transactions and were subject to market conditions, as well as corporate, regulatory and other considerations. The Company could suspend or continue the November 2016 Repurchase Program at any time and had no obligation to repurchase any amount of the common stock or the Series A Preferred Stock under such program. The November 2016 Repurchase Program was suspended in February 2017. During the nine months ended September 30, 2016 , the Company repurchased 150,000 shares of common stock pursuant to the November 2015 Repurchase Program for $0.3 million at an average purchase price of approximately $2.05 per share, exclusive of commissions and related fees and made no repurchases during the three months ended September 30, 2016 . Pursuant to the November 2015 Repurchase Program, the Company was authorized to repurchase up to 500,000 shares of its outstanding common stock during a twelve -month period. During the three and nine months ended September 30, 2016 , the Company made no repurchases of the Series A Preferred Stock. During the nine months ended September 30, 2017 , the Company repurchased 118,199 shares of the common stock pursuant to the November 2016 Repurchase Program for $0.2 million at an average price of $1.54 per share, exclusive of commissions and related fees and made no repurchases during the three months ended September 30, 2016 . During the three and nine months ended September 30, 2017 , the Company made no repurchases of the Series A Preferred Stock. Preferred Stock Offerings and Dividends Dividends declared and paid on shares of the Series A Preferred Stock were $0.68 per share per quarter, or $1.9 million and $5.7 million for the three and nine months ended September 30, 2017 , respectively, and $1.9 million and $5.5 million for the three and nine months ended September 30, 2016 , respectively. During the three and nine months ended September 30, 2016 , the Company sold 106,796 and 336,905 shares of Series A Preferred Stock under the Company’s At Market Issuance Sales Agreement, dated July 21, 2015 (the “2015 Sales Agreement”), at an average sale price of $21.49 and $20.60 (excluding fees and commissions) per share, respectively. The Company received net proceeds of approximately $2.2 million during the three months ended September 30, 2016 and $6.8 million during the nine months ended September 30, 2016 , after payment of sales commissions and discounts and all other expenses incurred by the Company. The 2015 Repurchase Program expired in accordance with its terms. During the nine months ended September 30, 2017 , the Company sold, under the ATM and pursuant to the 2017 Sales Agreement, dated May 26,2017, a total of 50,000 shares of the Series A Preferred Stock generating net proceeds of $1.0 million at an average price of $21.80 per share, exclusive of commissions and related fees, and made no sales during the three months ended September 30, 2017 . As of September 30, 2017 , the Company had 2,811,535 shares of the Series A Preferred Stock issued and outstanding. On August 2, 2017, the Company terminated the 2017 Sales Agreement and discontinued sales under the ATM. Holders of the Series A Preferred Stock generally have no voting rights but have limited voting rights under certain circumstances. The Company may not redeem the Series A Preferred Stock before December 1, 2017, except the Company is required to redeem the Series A Preferred Stock following a "Change of Control," as defined in the Charter. On and after December 1, 2017, the Company may, at its option, redeem the Series A Preferred Stock, in whole or in part, by paying $25.00 per share, plus any accrued and unpaid dividends to the redemption date. Prior to the Merger, the Company was required to classify the Series A Preferred Stock as temporary equity due to the change-in-control redemption provision contained in the Charter because, although deemed a remote possibility, a purchaser could acquire a majority of the voting power of the outstanding common stock without Company approval, thereby triggering redemption of the Series A Preferred Stock. FASB ASC Topic 480-10-S99-3A, SEC Staff Announcement: Classification and Measurement of Redeemable Securities, requires classification outside of permanent equity for redeemable instruments for which the redemption triggers are outside of the issuer's control. The assessment of whether the redemption of an equity security could occur outside of the issuer's control is required to be made without regard to the probability of the event or events that may result in the instrument becoming redeemable. As a result of the Merger, the rights of the holders of the common stock and Series A Preferred Stock are now governed by the RHE Charter and the RHE Bylaws. The RHE Charter contains ownership and transfer restrictions with respect to the common stock which, among other things, prohibit any person (as defined in the RHE Charter) from beneficially or constructively owning, or being deemed to beneficially or constructively own by virtue of the attribution provisions of the Code, more than 9.9%, by value or number of shares, whichever is more restrictive, of the outstanding shares of common stock. As such, a change of control redemption can no longer be triggered outside of the Company’s control, thus permitting the Series A Preferred Stock to be classified as permanent equity. As a result, the Company reclassified the Series A Preferred Stock from temporary equity to permanent equity on a prospective basis as of September 29, 2017, the effective date of the Merger, in accordance with applicable accounting guidance. For historical information regarding the Series A Preferred Stock, the ATM and prior share repurchase programs, see Part II, Item 8, Notes to Consolidated Financial Statements, Note 12 - Common and Preferred Stock included in the Annual Report. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION For the three and nine months ended September 30, 2017 and 2016 , the Company recognized stock-based compensation expense as follows: Three Months Ended September 30, Nine Months Ended September 30, (Amounts in 000’s) 2017 2016 2017 2016 Employee compensation: Restricted stock $ 47 $ 118 $ 81 $ 494 Stock options — — — 112 Warrants 19 62 23 213 Total employee stock-based compensation expense $ 66 $ 180 $ 104 $ 819 Non-employee compensation: Board restricted stock $ 48 $ (23 ) $ 140 $ 34 Board stock options 13 13 37 37 Total non-employee stock-based compensation expense $ 61 $ (10 ) $ 177 $ 71 Total stock-based compensation expense $ 127 $ 170 $ 281 $ 890 Stock Incentive Plan The AdCare Health Systems, Inc. 2011 Stock Incentive Plan, as amended (the “2011 Stock Incentive Plan”), was assumed by Regional Health pursuant to the Merger. As a result of the Merger, all rights to acquire shares of AdCare common stock under any AdCare equity incentive compensation plan have been converted into rights to acquire RHE common stock pursuant to the terms of the equity incentive compensation plans and other related documents, if any. The 2011 Stock Incentive Plan expires March 28, 2021 and provides for a maximum of 2,027,393 shares of common stock to be issued. The 2011 Stock Incentive Plan permits the granting of incentive or nonqualified stock options and the granting of restricted stock. The plan is administered by the Compensation Committee of the Board (the “Compensation Committee”), pursuant to authority delegated to it by the Board. The Compensation Committee is responsible for determining the employees to whom awards will be made, the amounts of the awards, and the other terms and conditions of the awards. As of September 30, 2017 , the number of securities remaining available for future issuance is 594,179 . In addition to the 2011 Stock Incentive Plan, the Company grants stock warrants to officers, directors, employees and certain consultants to the Company from time to time as determined by the Board and, when appropriate, the Compensation Committee. The assumptions used in calculating the fair value of employee common stock options and warrants granted during the nine months ended September 30, 2017 and September 30, 2016 , using the Black-Scholes-Merton option-pricing model, are set forth in the following table: Nine Months Ended September 30, 2017 * 2016 Dividend yield — % — % Expected volatility — % 41 % Risk-free interest rate — % 1.43 % Expected term (in years) n/a 5.0 * No issuances of common stock options or warrants during the current period. Common Stock Options The following table summarizes the Company’s common stock option activity for the nine months ended September 30, 2017 : Number of Shares (000's) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in 000's) Outstanding, December 31, 2016 355 $ 3.21 5.6 $ — Granted — $ — Forfeited — $ — Expired (110 ) $ 2.62 Outstanding, September 30, 2017 245 $ 3.48 5.8 $ — Vested, September 30, 2017 210 $ 3.41 5.5 $ — The following table summarizes the common stock options outstanding and exercisable as of September 30, 2017 : Stock Options Outstanding Options Exercisable Exercise Price Number of Shares Weighted Average Remaining Contractual Term (in years) Weighted Average Exercise Price Vested, September 30, 2017 Weighted Average Exercise Price $1.31 - $3.99 180 5.7 $ 3.25 145 $ 3.09 $4.00 - $4.30 65 6.0 $ 4.12 65 $ 4.12 Total 245 5.8 $ 3.48 210 $ 3.41 For options unvested at September 30, 2017 , $0.01 million in compensation expense will be recognized over the next 0.2 years. Common Stock Warrants The following table summarizes the Company’s common stock warrant activity for the nine months ended September 30, 2017 : Number of Warrants (000's) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in 000's) Outstanding, December 31, 2016 1,887 $ 3.58 4.1 $ 11 Granted — $ — Forfeited (100 ) $ 4.49 Expired — $ — Outstanding, September 30, 2017 1,787 $ 3.53 3.1 $ — Vested, September 30, 2017 1,695 $ 3.49 2.9 $ — The following table summarizes the common stock warrants outstanding and exercisable as of September 30, 2017 : Warrants Outstanding Warrants Exercisable Exercise Price Number of Shares (000's) Weighted Average Remaining Contractual Term (in years) Weighted Average Exercise Price Vested at September 30, 2017 Weighted Average Exercise Price $0 - $1.99 218 0.1 $ 1.82 218 $ 1.82 $2.00 - $2.99 335 0.8 $ 2.58 335 $ 2.58 $3.00 - $3.99 500 2.1 $ 3.59 500 $ 3.59 $4.00 - $4.99 711 5.8 $ 4.38 619 $ 4.40 $5.00 - $5.90 23 5.6 $ 5.90 23 $ 5.90 Total 1,787 3.1 $ 3.53 1,695 $ 3.49 For warrants unvested at September 30, 2017 , $0.04 million in compensation expense will be recognized over the next 0.5 years. Restricted Stock The following table summarizes the Company’s restricted stock activity for the nine months ended September 30, 2017 : Number of Shares (000's) Weighted Avg. Grant Date Fair Value Unvested, December 31, 2016 404 $ 2.84 Granted 23 $ 1.07 Vested (78 ) $ 3.21 Forfeited (70 ) $ 4.29 Unvested, September 30, 2017 279 $ 2.22 For restricted stock unvested at September 30, 2017 , $0.4 million in compensation expense will be recognized over the next 1.5 years. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES Non-consolidated Variable Interest Entities Aria. On April 30, 2015, the Company entered into a lease inducement (the “Aria Lease Inducement”) with Aria Health Consulting, LLC with respect to the Aria Subleases. The Aria Lease Inducement provided for a one-time payment from the Company to Aria Health Consulting, LLC equal to $2.0 million minus the security deposits and first month’s base and special rent for all Aria Subleases. On April 30, 2015, in connection with the Aria Lease Inducement, eight of the Aria Subleases were amended to, among other things, provide that the Aria Sublessees shall, collectively, pay to the Aria Sublessors special rent in the amount of $29,500 per month payable in advance on or before the first day of each month (except for the first special rent payment, which was subtracted from the lease inducement fee paid by the Company under the Aria Lease Inducement). On July 17, 2015, the Company made a short-term loan to Highlands Arkansas Holdings, LLC, an affiliate of Aria (“HAH”), for working capital purposes, and, in connection therewith, HAH executed a promissory note (the “ HAH Note”) in favor of the Company. Since July 17, 2015, the HAH Note has been amended from time to time and currently has an outstanding principal amount of $ 1.0 million and matured on December 31, 2016 . On October 6, 2015, HAH and the Company entered into a security agreement, whereby HAH granted the Company a security interest in all accounts arising from the business of HAH and the Aria Sublessees, and all rights to payment from patients, residents, private insurers and others arising from the business of HAH and the Aria Sublessees (including any proceeds thereof), as security for payment of the HAH Note, as amended, and certain rent and security deposit obligations of the Aria Sublessees under Aria Subleases. Effective February 3, 2016, each Aria Sublessor terminated the applicable Aria Sublease due to the applicable Aria Sublessee’s failure to pay rent pursuant to the terms of such sublease. On May 31, 2016, HAH and nine of its affiliates filed petitions for relief under Chapter 7 (“Chapter 7”) of the United States Bankruptcy Code, as amended (see Note 15 - Commitments and Contingencies ). On March 1, 2017, the bankruptcy trustee in the Aria bankruptcy proceeding, advised the Company that $0.8 million was available for repayment of all of Aria’s remaining obligations, including the HAH Note. Accordingly, the Company has charged a $0.2 million bad debt expense to the Company’s unaudited consolidated statement of operations during the nine months ended September 30, 2017 . Though management continues to believe that the remaining receivable balance on the HAH Note is collectible, there is no guarantee that the bankruptcy court will approve full repayment of the HAH Note to the Company or that the Company will prevail in any avoidance action that may be filed against it, which could have an adverse effect on the Company’s business, results of operations and financial condition. For further information, see Note 7 - Leases and Note 15 - Commitments and Contingencies . The Aria Lease Inducement and HAH Note entered into by the Company create a variable interest that may absorb some or all of the expected losses of the Variable Interest Entity (“VIE”). The Company does not consolidate the operating activities of the Aria Sublessees as the Company does not have the power to direct the activities that most significantly impact the VIE’s economic performance. Peach Health. In connection with the Peach Health Sublease, the Company extended the Peach Line to Peach Health Sublessee in an amount of up to $1.0 million , with interest accruing on the unpaid balance under the Peach Line at a rate of 13.5% per annum. The entire principal amount due under the Peach Line, together with all accrued and unpaid interest thereunder, was due one year from the date of the first disbursement. The Peach Line is secured by a first priority security interest in Peach Health Sublessee’s assets and accounts receivable pursuant to a security agreement executed by Peach Health Sublessee. On April 6, 2017, the Company modified certain terms of the Peach Line in connection with Peach Health Sublessee's securing the Peach Working Capital Facility in the amount of $2.5 million . Borrowings under the Peach Working Capital Facility are based on a borrowing base of eligible accounts receivable. The modifications of the Peach Line include: (i) reducing the loan balance to $0.8 million and restricting further borrowings; (ii) extending the maturity of the loan to October 1, 2020 and adding a six month extension option by Peach Health Sublessee, assuming certain conditions precedent are met at the time of the exercise of the option; (iii) increasing the interest rate from 13.5% per annum by 1% per year; and (iv) establishing a four year amortization schedule. Payment of principal and interest under the Peach Note shall be governed by certain financial covenants limiting distributions under the Peach Working Capital Facility. Furthermore, the Company guaranteed Peach Health Sublessee’s borrowings under the Peach Working Capital Facility subject to certain burn-off provisions (i.e., the Company’s obligations under such guaranty cease after the later of 18 months or achievement of a certain financial ratio by Peach Health Sublessee). As of September 30, 2017 , $0.9 million was outstanding on the Peach Note. For further information on the Peach Health Sublease and Peach Line and Note, see Note 7 - Leases . The Peach Note creates a variable interest that may absorb some or all of a VIE’s expected losses. The Company does not consolidate the operating activities of the affiliates of Peach Health as the Company does not have the power to direct the activities that most significantly impact the VIE’s economic performance. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Regulatory Matters Laws and regulations governing federal Medicare and state Medicaid programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from certain governmental programs. As of September 30, 2017 , all of the Company’s facilities leased and subleased to third-party operators and managed for third-parties are certified by CMS and operational (see Note 7 - Leases ). Legal Matters The Company is party to various legal actions and administrative proceedings and is subject to various claims arising in the ordinary course of business, including claims that the services the Company provided during the time it operated skilled nursing facilities resulted in injury or death to the patients of the Company’s facilities and claims related to professional and general negligence, employment, staffing requirements and commercial matters. Although the Company intends to vigorously defend itself in these matters, there is no assurance that the outcomes of these matters will not have a material adverse effect on the Company’s business, results of operations and financial condition. The Company previously operated, and the Company’s tenants now operate, in an industry that is extremely regulated. As such, in the ordinary course of business, the Company’s tenants are continuously subject to state and federal regulatory scrutiny, supervision and control. Such regulatory scrutiny often includes inquiries, investigations, examinations, audits, site visits and surveys, some of which are non-routine. In addition, we believe that there has been, and will continue to be, an increase in governmental investigations of long-term care providers, particularly in the area of Medicare/Medicaid false claims, as well as an increase in enforcement actions resulting from these investigations. Adverse determinations in legal proceedings or governmental investigations against or involving the Company, for the Company’s prior operations, or the Company’s tenants, whether currently asserted or arising in the future, could have a material adverse effect on the Company’s business, results of operations and financial condition. Professional and General Liability Claims . As of September 30, 2017 , the Company was a defendant in a total of 42 unsettled professional and general liability actions commenced on behalf of former patients, of which 28 cases were filed in the State of Arkansas by the same plaintiff attorney who represented the plaintiffs in the lawsuit captioned Amy Cleveland et. al. v. APHR&R Nursing, LLC et. al. filed on March 4, 2015 with the Circuit Court of Pulaski County, Arkansas, 16th Division, 6th Circuit. During the three months ended September 30, 2017 , one professional and general liability claim against the Company was settled for $0.8 million and two previously dismissed without prejudice cases were refiled. These actions generally seek unspecified compensatory and punitive damages for former patients of the Company who were allegedly injured or died while patients of facilities operated by the Company due to professional negligence or understaffing. Two of the pending actions are covered by insurance, except that any award of punitive damages would be excluded from such coverage. The actions are in various stages of discovery, and the Company intends to vigorously defend the claims. The Company established a self-insurance reserve for these professional and general liability claims, included within “Accrued expenses and other” in the Company’s unaudited consolidated balance sheets of $6.7 million and $6.9 million at September 30, 2017 , and December 31, 2016 , respectively. The decrease in the reserve at September 30, 2017 , primarily reflects the legal and associated settlement amounts paid. For additional information regarding the Company’s self-insurance reserve, please see Part II, Item 8, Notes to Consolidated Financial Statements, Note 15 - Commitments and Contingencies included in the Annual Report. Ohio Attorney General Action. On October 27, 2016, the Attorney General of Ohio (the “OAG”) filed in the Court of Common Pleas, Franklin County, Ohio a complaint against The Pavilion Care Center, LLC, Hearth & Home of Greenfield, LLC (each a subsidiary of the Company), and certain other parties (including parties for which the Company provides or provided management services). The lawsuit alleges that defendants submitted improper Medicaid claims for independent laboratory services for glucose blood tests and capillary blood draws and further alleges that defendants (i) engaged in deception, (ii) willfully received Medicaid payments to which they were not entitled or in a greater amount than that to which they were entitled, and (iii) obtained payments under the Medicaid program to which they were not entitled pursuant to their provider agreements and applicable Medicaid rules and regulations. The OAG is seeking, among other things, triple the amount of damages proven at trial (plus interest) and not less than $5,000 and not more than $10,000 for each deceptive claim or falsification. As previously disclosed, the Company received a letter from the OAG in February 2014 demanding repayment of allegedly improper Medicaid claims related to glucose blood tests and capillary blood draws and penalties of approximately $1.0 million , and the Company responded to such letter in July 2014 denying all claims. The Company filed an answer to the complaint on January 27, 2017 in which it denied the allegations. An order granting a motion to stay this proceeding was granted in the Court of Common Pleas, Franklin County, Ohio on July 12, 2017. Although there is no assurance as to the ultimate outcome of this matter or its impact on the Company’s business or its financial condition, the Company believes it has meritorious defenses and intends to vigorously defend the claim. Aria Bankruptcy Proceeding . On May 31, 2016, HAH and nine affiliates of HAH (Highland of Stamps, LLC; Highlands of Rogers Dixieland, LLC; Highlands of North Little Rock John Ashley, LLC; Highlands of Mountain View SNF, LLC; Highlands of Mountain View RCF, LLC; Highlands of Little Rock West Markham, LLC; Highlands of Little Rock South Cumberland, LLC; Highlands of Little Rock Riley, LLC; and Highlands of Fort Smith, LLC (collectively with HAH, the “Debtors”)), filed petitions in the United States Bankruptcy Court for the District of Delaware for relief under Chapter 7. Following venue transfer from the Delaware court, these cases are pending in the United States Bankruptcy Court for the Eastern District of Arkansas. On April 21, 2017, the Company moved for relief from the automatic stay seeking release of its collateral, the Debtors’ accounts and their proceeds, which the trustee has represented total approximately $800,000 . The Company’s motion was opposed by the Chapter 7 trustee and another creditor, in May 2017. In its objection, the Chapter 7 trustee asserts that the Company is not entitled to any of the $800,000 with respect to the HAH Note. Discovery with respect to the motion is ongoing and the matter is currently not on the calendar. In addition to opposing the Company’s claim to the $800,000 , the Chapter 7 trustee has also taken the position that he is investigating avoidance claims against the Company with respect to funds it received from the Debtors prior to the bankruptcy filings. The trustee’s statute of limitation for filing avoidance actions runs on May 31, 2018. There is no guarantee that the bankruptcy court will approve repayment of the HAH Note to the Company or that the Company will prevail in any avoidance action that may be filed against it. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS For additional information regarding the Company’s related party transactions, see Part II, Item 8, Notes to Consolidated Financial Statements, Note 18 - Related Party Transactions included in the Annual Report. Park City Capital On March 31, 2015, the Company accepted a Subscription Agreement from Park City Capital Offshore Master, Ltd. (“Park City Offshore”), an affiliate of Michael J. Fox, for a 2015 Note with an aggregate principal amount of $1,000,000 and, in connection therewith, issued such note to Park City Capital Offshore on April 30, 2015. The 2015 Note was offered to Park City Offshore on the same terms and conditions as all other investors in the offering. In January 2017, the Company repurchased the $1,000,000 2015 Note held by Park City Offshore pursuant to the terms of the Tender Offer for any and all of the outstanding 2015 Notes (for a description of the Tender Offer, see Note 9 - Notes Payable and Other Debt ). Mr. Fox is an affiliate of Park City Offshore, a director of the Company since October 2013, Lead Independent Director since April 1, 2015, and a beneficial owner of greater than 5% of the outstanding common stock. Doucet Asset Management, LLC On June 10, 2014 and on subsequent dates, Doucet Capital, LLC, Doucet Asset Management, LLC, Christopher L. Doucet and Suzette A. Doucet jointly filed with the SEC a Schedule 13D reporting beneficial ownership of greater than 5% of the common stock. In January 2017, the Company repurchased the 2015 Notes held by Mr. and Ms. Doucet , which had an aggregate principal amount of $250,000 , pursuant to the terms of the Tender Offer for any and all of the outstanding 2015 Notes (for a description of the Tender Offer, see Note 9 - Notes Payable and Other Debt ). On January 19, 2017, Doucet Capital, LLC, Doucet Asset Management, LLC and Mr. and Ms. Doucet jointly filed with the SEC a Schedule 13D reporting beneficial ownership of less than 5% of the common stock as a result of the 2015 Notes repurchased by the Company pursuant to the Tender Offer. Brogdon Matters Brogdon Promissory Note. On November 10, 2016, the Company and Mr. Brogdon (a beneficial owner of greater than 5% of the outstanding common stock) agreed to further amend the promissory note issued by Mr. Brogdon on December 31, 2013 to the Company to extend its maturity date to December 31, 2017. As a condition to such amendment, Winter Haven Homes, Inc. (“Winter Haven”), an entity owned and controlled by Mr. Brogdon, has agreed to waive payment of certain charges otherwise due and owing from the Company to Winter Haven from January 1, 2016 to July 31, 2016. As of September 30, 2017, principal due and payable under the promissory note issued by Mr. Brogdon to the Company was $268,663 , which was fully allowed for in the Company’s unaudited consolidated statement of operations during the quarter ended March 31, 2017. Indemnification Claim . On May 25, 2017, McKesson Corporation (“McKesson”) obtained a judgment against the Company in the principal amount of $232,439 , plus accrued interest, court costs and legal fees, related to an unpaid debt incurred by certain entities affiliated with Mr. Brogdon located in Oklahoma, pursuant to a supply agreement between McKesson and Mr. Brogdon, as to which the Company was a guarantor. The Company has accrued for this judgment during the quarter ended June 30, 2017. Management has entered into settlement negotiations with McKesson and notified Mr. Brogdon of the amount owed. The Company intends to seek recovery of the judgment amount, or negotiated settlement amount, if applicable, from Mr. Brogdon under the Settlement and Indemnity Agreement entered into by the Company and Mr. Brogdon on March 26, 2015. McBride Matters On September 26, 2017, the Company entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”), with Mr. McBride, our former Chief Executive Officer and director, pursuant to which, among other things, and in lieu of any other rights or obligations under Mr. McBride’s employment agreement: (i) the Company agreed to pay Mr. McBride $60,000 in cash for wage claims; (ii) the Company issued to Mr. McBride an Unsecured Negotiable Promissory Note with an original principal amount of $300,000 (the “McBride Note”); (iii) Mr. McBride released the Company from all claims and liabilities, including those arising out of his employment, and his employment agreement, with the Company and his separation therefrom (but excluding claims to enforce the provisions of the Settlement Agreement, the McBride Note and the indemnification provisions under his employment agreement); (iv) the Company released Mr. McBride from all claims and liabilities arising out of his employment, and his employment agreement, with the Company and his separation therefrom (excluding (a) claims for intentional tortious conduct, fraud or arising out criminal misconduct other than in connection with such separation (provided such claims were not known to, or reasonably discoverable by the Company), and (b) claims to enforce the provisions of the Settlement Agreement and the restrictive covenants under the employment agreement); and (v) from after the effective date of the Settlement Agreement, the termination of Mr. McBride’s employment shall be deemed a resignation by Mr. McBride. The McBride Note accrues interest at an annual rate of 4% and principal and interest is payable in 24 equal monthly installments of $13,027.42 , which payments commenced on October 31, 2017 and shall end on September 30, 2019. Upon the existence and continuation of an Event of Default (as defined in the McBride Note), interest accrues at a default rate of eighteen percent 18% per annum. Further it was agreed that the Company would pay Mr. McBride $200.00 per hour and reimburse other customary business expenses for consultancy services in relation to matters that may arise from his tenure with the Company. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company has evaluated all subsequent events through the date the consolidated financial statements were issued and filed with the SEC. The following is a summary of the material subsequent events. Maturity Date Extension on Convertible Debt On November 8, 2017, the Company entered into an Amendment No. 2 to Subordinated Convertible Note, with Cantone Asset Management LLC (“CAM”), which amended, effective October 31, 2017 , the $1.5 million convertible promissory note originally issued by the Company to CAM in July 2012, as subsequently amended, to: (i) extend the maturity date from October 31, 2017 to April 30, 2018; (ii) increase the annual interest rate from 10.00% to 14.00% ; and (iii) increase the default annual interest rate from 14.00% to 18.00% . In addition, the Company agreed to grant to CAM a second security interest in the Company’s College Park Facility no later than December 22, 2017. The security may be converted to 352,941 shares at a conversion price of $4.25 at the option of the holder. Failure to grant the security interest by December 22, 2017, will constitute an event of default under the promissory note. Preferred Dividend Suspension On November 8, 2017, the Board voted to postpone the payment of the fourth quarter dividend on the Series A Preferred Stock. The Board will revisit the dividend payment in the first quarter 2018 meeting. The dividend suspension will allow the Company to pay outstanding vendors and fund ongoing legal expenses and settlement payments. The dividend suspension does not trigger a default under the Company’s outstanding indebtedness. Dividends on the Series A Preferred Stock will continue to accrue regardless of whether declared by the Board. A “dividend default” is deemed to occur if we fail to pay the accrued cash dividends on the outstanding Series A Preferred Stock in full for any four consecutive or non-consecutive quarterly periods. If we have committed a dividend default, then until we have paid all accrued dividends on the shares of the Series A Preferred Stock for all dividend periods up to, and including, the dividend payment date on which the accumulated and unpaid dividends are paid in full: (i) the annual dividend rate on the Series A Preferred Stock will be increased to 12.875% per annum, which we refer to as the “penalty rate,” commencing on the first day after the missed fourth quarterly payment; and (ii) the holders of the Series A Preferred Stock will have limited voting rights, namely to elect two additional directors, at a special meeting called upon the request of the holders of record of at least 25.00% of the outstanding shares of Series A Preferred Stock. Once we have paid all accumulated and unpaid dividends in full and have paid cash dividends at the penalty rate in full for an additional two consecutive quarters (or declared such dividends provided that a sum sufficient for the payment thereof is set aside for such payment), the dividend rate will be restored to the stated rate and the foregoing provisions will not be applicable, unless we again fail to pay any quarterly dividend for any future quarter, at which time 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. |
Organization and Significant 24
Organization and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Article 8 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included. Operating results for the three and nine months ended September 30, 2017 and 2016 are not necessarily indicative of the results that may be expected for the fiscal year. The balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported results of operations during the reporting period. Examples of significant estimates include allowance for doubtful accounts, self-insurance reserves, deferred tax valuation allowance, fair value of employee and nonemployee stock based awards, valuation of goodwill and other long-lived assets, and cash flow projections. Actual results could differ materially from those estimates. |
Adoption of the classification of the Regional Health Properties, Inc.'s Series A Preferred Stock as permanent equity | Adoption of the Classification of the Regional Health Properties, Inc.'s Series A Preferred Stock as Permanent Equity The common stock is subject to the ownership and transfer restrictions set forth in the RHE Charter, which restrictions permit classification of the Series A Preferred Stock as permanent equity, under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ ASC”) Topic 480-10-S99-3A. The reclassification of the Series A Preferred Stock as permanent equity was adopted on a prospective basis as of September 29, 2017, upon completion of the Merger. |
Revenue Recognition and Allowances | Revenue Recognition and Allowances Triple-Net Leased Properties. The Company's triple-net leases provide for periodic and determinable increases in rent. The Company recognizes rental revenues under these leases on a straight-line basis over the applicable lease term when collectibility is reasonably assured. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our consolidated balance sheets. In the event the Company cannot reasonably estimate the future collection of rent from one or more tenant(s) of the Company’s facilities, rental income for the affected facilities will be recognized only upon cash collection, and any accumulated straight-line rent receivable will be reversed in the period in which the Company first deems rent collection no longer reasonably assured. Management Fee Revenue and Other. The Company recognizes management fee revenues as services are provided. Further, the Company recognizes income from lease inducement receivables and interest income from loans and investments, using the effective interest method when collectibility is reasonably assured. We apply the effective interest method on a loan-by-loan basis. Allowances. The Company assesses the collectibility of our rent receivables, including straight-line rent receivables and working capital loans to tenants. The Company bases its assessment of the collectibility of rent receivables and working capital loans to tenants on several factors, including payment history, the financial strength of the tenant and any guarantors, the value of the underlying collateral, and current economic conditions. If the Company's evaluation of these factors indicates it is probable that the Company will be unable to receive the rent payments or payments on a working capital loan, the Company provides a reserve against the recognized straight-line rent receivable asset or working capital loan for the portion that we estimate may not be recovered. If the Company changes its assumptions or estimates regarding the collectibility of future rent payments required by a lease or required from a working capital loan to a tenant, the Company may adjust its reserve to increase or reduce the rental revenue or interest revenue from working capital loans to tenants recognized in the period the Company makes such change in its assumptions or estimates. As of September 30, 2017 and December 31, 2016 , the Company allowed for approximately $2.9 million and $7.5 million , respectively, of gross patient care related receivables arising from our legacy operations. Allowance for patient care receivables are estimated based on an aged bucket method as well as additional analyses of remaining balances incorporating different payor types. Any changes in patient care receivable allowances are recognized as a component of discontinued operations. All uncollected patient care receivables were fully allowed at September 30, 2017 and December 31, 2016 . |
Self Insurance | Self-Insurance The Company has self-insured against professional and general liability claims since it discontinued its healthcare operations during 2014 and 2015 (see Part II, Item 8, Notes to Consolidated Financial Statements , Note 15 - Commitments and Contingencies in the Annual Report for more information). The Company evaluates quarterly the adequacy of its self-insurance reserve based on a number of factors, including: (i) the number of actions pending and the relief sought; (ii) analyses provided by defense counsel, medical experts or other information which comes to light during discovery; (iii) the legal fees and other expenses anticipated to be incurred in defending the actions; (iv) the status and likely success of any mediation or settlement discussions; and (v) the venues in which the actions have been filed or will be adjudicated. The Company currently believes that most of the professional and general liability actions, and particularly many of the most recently filed actions, are defensible and intends to defend them through final judgment. Consequently, the self-insurance reserve primarily reflects the Company's estimated legal costs of litigating the pending actions accordingly. Because the self-insurance reserve is based on estimates, the amount of the self-insurance reserve may not be sufficient to cover the legal costs actually incurred in litigating the pending actions. Since these reserves are based on estimates, the actual expenses we incur may differ from the amount reserved (see Note 8 - Accrued Expenses ). |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Accounting guidance establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The categorization of a measurement within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1— Quoted market prices in active markets for identical assets or liabilities Level 2— Other observable market-based inputs or unobservable inputs that are corroborated by market data Level 3— Significant unobservable inputs The respective carrying value of certain financial instruments of the Company approximates their fair value. These instruments include cash and cash equivalents, restricted cash and investments, accounts receivable, notes receivable, and accounts payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values, they are receivable or payable on demand, or the interest rates earned and/or paid approximate current market rates. |
Adopted Standards and Recent Accounting Pronouncements | Adopted Standards On April 1, 2017, we adopted Accounting Standards Update (“ ASU ”) 2017-01, Clarifying the Definition of a Business (“ ASU 2017-01 ”), which narrows the FASB definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. ASU 2017-01 states that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the acquired asset is not a business. If this initial test is not met, an acquired asset cannot be considered a business unless it includes an input and a substantive process that together significantly contribute to the ability to create output. The primary differences between business combinations and asset acquisitions include recognition of goodwill at the acquisition date and expense recognition for transaction costs as incurred. We are applying ASU 2017-01 prospectively for acquisitions after April 1, 2017. Regardless of whether an acquisition is considered a business combination or an asset acquisition, we record the cost of the businesses (or assets) acquired as tangible and intangible assets and liabilities based upon their estimated fair values as of the acquisition date. Intangibles primarily include certificates of need ("CON") but could include value of in-place leases and acquired lease contracts. For an asset acquisition, the cost of the acquisition is allocated to the assets and liabilities acquired on a relative fair value basis and no goodwill is recognized. We estimate the fair value of assets in accordance with FASB ASC 805 and ASC 820 . The fair value is estimated under market conditions observed at the time of the measurement date and depreciated over the remaining life of the assets. In March 2016, the FASB issued ASU 2016-09, with the intention to simplify aspects of the accounting for share-based payment transactions, including income tax impacts, classification on the statement of cash flows, and forfeitures. ASU 2016-09 is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The various amendments within the standard require different approaches to adoption, on a retrospective, modified retrospective or prospective basis. The Company adopted the various amendments in its consolidated financial statements for the three month period ending March 31, 2017 with an effective date of January 1, 2017. The Company has elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The adoption of ASU 2016-09 did not have a material effect on the Company’s consolidated financial statements. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09 as codified in ASC 606 , which requires revenue to be recognized in an amount that reflects the consideration expected to be received in exchange for goods and services. This new standard requires the disclosure of sufficient quantitative and qualitative information for financial statement users to understand the nature, amount, timing and uncertainty of revenue and associated cash flows arising from contracts with customers. The new guidance does not affect the recognition of revenue from leases, which is approximately 95% of our revenue. The new revenue standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early application is permitted, beginning after December 15, 2016. Our revenue streams also include loan interest and management fees. Based on our initial assessment, management fees for providing back office services and support in our Consolidated Statements of Income are subject to ASC 606, and the Company believes the pattern and timing of recognition of income for the management fees will be consistent with the current accounting model. The Company does not expect adoption of this guidance to have a material impact on the Company’s consolidated financial condition, results of operations or cash flows. In January 2016, the FASB issued ASU 2016-01, which provides revised accounting guidance related to the accounting for and reporting of financial instruments. This guidance significantly revises an entity’s accounting related to (i) the classification and measurement of investments in equity securities and (ii) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017; earlier adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, as a comprehensive new lease standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. It will require companies to recognize lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance, ASC 840, Leases . ASU 2016-02 creates a new Topic, ASC 842, Leases . This new Topic retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years; earlier adoption is permitted. In the financial statements in which the ASU is first applied, leases shall be measured and recognized at the beginning of the earliest comparative period presented with an adjustment to equity. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations and cash flows. In June 2016, the FASB issued ASU 2016-13 , which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for annual and interim periods beginning after December 15, 2018. We are currently evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-1 5, guidance which clarifies the treatment of several cash flow categories. In addition, the guidance clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18 , which requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. Therefore, amounts generally described as restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted using a retrospective transition method to each period presented. We are currently evaluating the impact of adopting ASU 2016-18 on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, which simplifies the required periodic test for goodwill impairment and modifies the concept of impairment of goodwill under previous guidance, ASC 350, Intangibles - Goodwill and Other . Under the updated guidance, a goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the total amount of goodwill allocated to that reporting unit. This simplification eliminates previous requirements to determine the implied fair value of goodwill and record a loss on impairment equal to the carrying value of goodwill less the implied fair value. Further, the ASU modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. ASU 2017-04 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted on a prospective basis for annual and interim periods beginning after January 1, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations or cash flows. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of net income (loss) for continuing and discontinued operations and the number of common shares used in the computation of both basic and diluted earnings per share | The following tables provide a reconciliation of net loss for continuing and discontinued operations and the number of shares of common stock used in the computation of both basic and diluted earnings per share: Three Months Ended Nine Months Ended (Amounts in 000’s, except per share data) 2017 2016 2017 2016 Numerator: Income (loss) from continuing operations $ 266 $ 222 $ 351 $ (2,407 ) Preferred stock dividends 1,912 1,879 5,702 5,457 Basic and diluted loss from continuing operations (1,646 ) (1,657 ) (5,351 ) (7,864 ) Loss from discontinued operations, net of tax (1,032 ) (2,210 ) (2,049 ) (6,513 ) Net loss attributable to Regional Health Properties, Inc. common stockholders $ (2,678 ) $ (3,867 ) $ (7,400 ) $ (14,377 ) Denominator: Basic - weighted average shares 19,762 19,917 19,784 19,909 Diluted - adjusted weighted average shares (a) 19,762 19,917 19,784 19,909 Basic and diluted loss per share: Loss from continuing operations attributable to Regional Health $ (0.08 ) $ (0.08 ) $ (0.27 ) $ (0.39 ) Loss from discontinued operations (0.05 ) (0.11 ) (0.10 ) (0.33 ) Loss attributable to Regional Health Properties, Inc. common stockholders $ (0.13 ) $ (0.19 ) $ (0.37 ) $ (0.72 ) (a) Securities outstanding that were excluded from the computation, because they would have been anti-dilutive were as follows: September 30, (Share amounts in 000’s) 2017 2016 Stock options 245 355 Warrants - employee 1,350 1,559 Warrants - non employee 437 437 Shares issuable upon conversion of convertible debt 353 2,165 Total anti-dilutive securities 2,385 4,516 |
Schedule of securities outstanding that were excluded from the computation, prior to the use of the treasury stock method, because they would have been anti-dilutive | Securities outstanding that were excluded from the computation, because they would have been anti-dilutive were as follows: September 30, (Share amounts in 000’s) 2017 2016 Stock options 245 355 Warrants - employee 1,350 1,559 Warrants - non employee 437 437 Shares issuable upon conversion of convertible debt 353 2,165 Total anti-dilutive securities 2,385 4,516 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restricted Cash and Investments [Abstract] | |
Schedule of restricted cash, escrow deposits and investments | The following presents the Company's restricted cash, escrow deposits and investments: (Amounts in 000’s) September 30, 2017 December 31, 2016 Cash collateral $ 40 $ 260 Replacement reserves 278 811 Escrow deposits 642 529 Total current portion 960 1,600 Restricted investments for other debt obligations and certificates of deposit 405 2,274 HUD and other replacement reserves 2,175 1,590 Total noncurrent portion 2,580 3,864 Total restricted cash and investments $ 3,540 $ 5,464 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | The following table sets forth the Company’s property and equipment: (Amounts in 000’s) Estimated Useful Lives (Years) September 30, 2017 December 31, 2016 Buildings and improvements 5-40 $ 89,954 $ 84,108 Equipment and computer related* 2-10 10,883 12,286 Land — 4,248 3,988 Construction in process — — 602 105,085 100,984 Less: accumulated depreciation and amortization* (22,644 ) (21,816 ) Property and equipment, net $ 82,441 $ 79,168 *The Company retired approximately $2.2 million of fully depreciated assets during the nine months ended September 30, 2017 . The following table summarizes total depreciation and amortization for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended September 30, Nine Months Ended September 30, (Amounts in 000’s) 2017 2016 2017 2016 Depreciation $ 857 $ 786 $ 2,486 $ 3,000 Amortization 336 338 1,013 1,176 Total depreciation and amortization $ 1,193 $ 1,124 $ 3,499 $ 4,176 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consist of the following: (Amounts in 000’s) CON (included in property and equipment) Bed Licenses - Separable Lease Rights Total Balances, December 31, 2016 Gross $ 22,811 $ 2,471 $ 6,881 $ 32,163 Accumulated amortization (3,483 ) — (4,127 ) (7,610 ) Net carrying amount $ 19,328 $ 2,471 $ 2,754 $ 24,553 Amortization expense (512 ) — (501 ) (1,013 ) Balances, September 30, 2017 Gross 22,811 2,471 6,881 32,163 Accumulated amortization (3,995 ) — (4,628 ) (8,623 ) Net carrying amount $ 18,816 $ 2,471 $ 2,253 $ 23,540 |
Schedule of total amortization expense | The following table summarizes total amortization for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended September 30, Nine Months Ended September 30, (Amounts in 000’s) 2017 2016 2017 2016 CON $ 169 $ 171 $ 512 $ 676 Lease rights 167 167 501 500 Total amortization $ 336 $ 338 $ 1,013 $ 1,176 |
Schedule of estimated amortization expense for all definite lived intangibles | Expected amortization expense for all definite-lived intangibles for each of the years ended December 31 is as follows: (Amounts in 000’s) Bed Licenses Lease Rights 2017 (a) $ 171 $ 166 2018 683 667 2019 683 667 2020 683 482 2021 683 203 Thereafter 15,913 68 Total expected amortization expense $ 18,816 $ 2,253 (a) Estimated amortization expense for the year ending December 31, 2017 , includes only amortization to be recorded after September 30, 2017 . |
Summary of the changes in the carrying amount of goodwill | The following table summarizes the carrying amount of goodwill: (Amounts in 000’s) September 30, 2017 December 31, 2016 Goodwill $ 2,945 $ 2,945 Accumulated impairment losses (840 ) (840 ) Net carrying amount $ 2,105 $ 2,105 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments for each of the next five years ending December 31, are as follows: (Amounts in 000’s) 2017 (a) $ 2,069 2018 8,331 2019 8,492 2020 8,671 2021 8,830 Thereafter 46,456 Total $ 82,849 (a) Estimated minimum lease payments for the year ending December 31, 2017 include only payments to be recorded after September 30, 2017 . |
Schedule of Future Minimum Rental Payments Receivable for Operating Leases | Future minimum lease receivables from the Company’s facilities leased and subleased to third party tenants for each of the next five years ending December 31 are as follows: (Amounts in 000's) 2017 (a) $ 5,460 2018 22,281 2019 22,764 2020 23,299 2021 23,886 Thereafter 136,813 Total $ 234,503 (a) Estimated minimum lease receivables for the year ending December 31, 2017 , include only payments to be received after September 30, 2017 . |
Accrued Expenses and Other (Tab
Accrued Expenses and Other (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses and other consist of the following: (Amounts in 000’s) September 30, 2017 December 31, 2016 Accrued employee benefits and payroll-related $ 387 $ 442 Real estate and other taxes 435 557 Self-insured reserve (1) 6,683 6,924 Accrued interest 248 251 Other accrued expenses 829 903 Total accrued expenses and other $ 8,582 $ 9,077 (1) The Company self-insures against professional and general liability cases and uses a third party administrator and outside counsel to manage and defend the claims. The decrease in the reserve at September 30, 2017 primarily reflects the legal and associated settlement amounts paid (see Note 15 - Commitments and Contingencies) . |
Notes Payable and Other Debt (T
Notes Payable and Other Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable and other debt | Notes payable and other debt consists of the following: (Amounts in 000’s) September 30, 2017 December 31, 2016 Senior debt—guaranteed by HUD $ 33,887 $ 34,473 Senior debt—guaranteed by USDA (a) 20,477 22,518 Senior debt—guaranteed by SBA (b) 2,236 2,319 Senior debt—bonds 7,055 7,145 Senior debt—other mortgage indebtedness 9,572 5,639 Other debt 1,322 1,063 Convertible debt 1,500 9,200 Subtotal 76,049 82,357 Deferred financing costs, net (2,050 ) (2,196 ) Unamortized discount on bonds (181 ) (191 ) Total debt 73,818 79,970 Less: current portion of debt 8,327 13,154 Notes payable and other debt, net of current portion $ 65,491 $ 66,816 (a) U.S. Department of Agriculture (“USDA”) (b) U.S. Small Business Administration (“SBA”) The following is a detailed listing of the debt facilities that comprise each of the above categories: (Amounts in 000’s) Facility Lender Maturity Interest Rate (a) September 30, 2017 December 31, 2016 Senior debt - guaranteed by HUD The Pavilion Care Center Red Mortgage 12/01/2027 Fixed 4.16% $ 1,355 $ 1,434 Hearth and Care of Greenfield Red Mortgage 08/01/2038 Fixed 4.20% 2,143 2,191 Woodland Manor Midland State Bank 10/01/2044 Fixed 3.75% 5,363 5,447 Glenvue Midland State Bank 10/01/2044 Fixed 3.75% 8,327 8,457 Autumn Breeze KeyBank 01/01/2045 Fixed 3.65% 7,238 7,352 Georgetown Midland State Bank 10/01/2046 Fixed 2.98% 3,664 3,723 Sumter Valley KeyBank 01/01/2047 Fixed 3.70% 5,797 5,869 Total $ 33,887 $ 34,473 Senior debt - guaranteed by USDA (b) Attalla Metro City 09/30/2035 Prime + 1.50% 5.50% $ 6,218 $ 7,189 Coosa Metro City 09/30/2035 Prime + 1.50% 5.50% 5,607 6,483 Mountain Trace Community B&T 01/24/2036 Prime + 1.75% 5.75% 4,292 4,384 Southland Bank of Atlanta 07/27/2036 Prime + 1.50% 6.00% 4,360 4,462 Total $ 20,477 $ 22,518 Senior debt - guaranteed by SBA College Park CDC 10/01/2031 Fixed 2.81% $ 1,545 $ 1,611 Southland Bank of Atlanta 07/27/2036 Prime + 2.25% 5.75% 691 708 Total $ 2,236 $ 2,319 (a) Represents cash interest rates as of September 30, 2017 as adjusted for applicable interest rate floor limitations, if applicable. The rates exclude amortization of deferred financing costs which range from 0.08% to 0.53% per annum. (b) For the four skilled nursing facilities, the Company has term loans insured 70% to 80% by the USDA with financial institutions. The loans have an annual renewal fee for the USDA guarantee of 0.25% of the guaranteed portion. The loans have prepayment penalties of 3% to 4% through 2017, which declines 1% each year, capped at 1% for the remainder of the first 10 years of the term and 0% thereafter. (Amounts in 000’s) Facility Lender Maturity Interest Rate (a) September 30, 2017 December 31, 2016 Senior debt - bonds Eaglewood Bonds Series A City of Springfield, Ohio 05/01/2042 Fixed 7.65% $ 6,610 $ 6,610 Eaglewood Bonds Series B City of Springfield, Ohio 05/01/2021 Fixed 8.50% 445 535 Total $ 7,055 $ 7,145 (a) Represents cash interest rates as of September 30, 2017 . The rates exclude amortization of deferred financing of approximately 0.26% per annum. (Amounts in 000’s) Facility Lender Maturity Interest Rate (a) September 30, 2017 December 31, 2016 Senior debt - other mortgage indebtedness Quail Creek (b) Congressional Bank 12/31/2017 LIBOR + 4.75% 5.75% $ 4,346 $ 4,432 Northwest (c) First Commercial 07/31/2020 Prime 5.00% 1,143 1,207 Meadowood (d) Exchange Bank of Alabama 05/01/2022 Fixed 4.50% 4,083 — Total $ 9,572 $ 5,639 (a) Represents cash interest rates as of September 30, 2017 as adjusted for applicable interest rate floor limitations, if applicable. The rates exclude amortization of deferred financing costs which approximate 1.03% per annum. (b) On September 19, 2016, the Company obtained an option to extend the maturity date, subject to customary conditions, of the Quail Creek Credit Facility from September 2017 to September 2018, which management intends to exercise. On August 10, 2017, the Company extended the maturity date of the Quail Creek Credit Facility to December 31, 2017 and retains the option to further extend the maturity date of such credit facility to September 2018. (c) On July 31, 2017, the Company extended the maturity date of the Northwest Credit Facility from December 2017 to July 31, 2020. (d) On May 1, 2017, in connection with the Meadowood Purchase Agreement, a wholly-owned subsidiary of the Company entered into a Loan Agreement (the “Meadowood Credit Facility”) with the Exchange Bank of Alabama, which provides for a $4.1 million principal amount secured credit facility maturing on May 1, 2022. Interest on the Meadowood Credit Facility accrues on the principal balance thereof at 4.5% per annum. The Meadowood Credit Facility is secured by the Meadowood Facility. (Amounts in 000’s) Lender Maturity Interest Rate September 30, 2017 December 31, 2016 Other debt First Insurance Funding 02/28/2018 Fixed 4.24% $ 81 $ 20 Key Bank (a) 08/02/2019 Fixed 0.00% 495 496 McBride Note (b) 09/30/2019 Fixed 4.00% 300 — Pharmacy Care of Arkansas 02/08/2018 Fixed 2.00% 169 547 South Carolina Department of Health & Human Services (c) 02/24/2019 Fixed 5.75% 277 — Total $ 1,322 $ 1,063 (a) On August 11, 2017, the Company extended the maturity date of the Key Bank Credit Facility from October 17, 2017 to August 2, 2019. (b) The Company executed an unsecured promissory note in favor of William McBride III, the Company’s former Chairman and Chief Executive Officer, pursuant to a settlement agreement dated September 26, 2017, between Mr. McBride and the Company. (c) On February 21, 2017, the South Carolina Department of Health and Human Services (“SCHHS”) issued fiscal year 2013 Medicaid audit reports for two facilities operated by the Company during 2013. In its fiscal year 2013 Medicaid audit reports, SCHHS determined that the Company owed an aggregate $0.4 million related to patient-care related payments made by SCHHS during 2013. Repayment of the $0.4 million began on March 24, 2017 in the form of a two -year note bearing interest of 5.75% per annum. (Amounts in 000’s) Facility Maturity Interest Rate (a) September 30, 2017 December 31, 2016 Convertible debt Issued July 2012 (C) 04/30/2018 Fixed 14.00% $ 1,500 $ 1,500 Issued March 2015 (b) 04/30/2017 Fixed 10.00% — 7,700 Total $ 1,500 $ 9,200 (a) Represents cash interest rates as of September 30, 2017 . The rates exclude amortization of deferred financing costs which range from 0.25% to 1.92% per annum. (b) On December 8, 2016, the Company announced a tender offer (the “Tender Offer”) for any and all of the Company’s 10% convertible subordinated notes due April 30, 2017 (the “2015 Notes”) at a cash purchase price equal to $1,000 per $1,000 principal amount of the 2015 Notes purchased, plus accrued and unpaid interest to, but not including, the payment date. The Tender Offer expired on January 9, 2017, and $6.7 million in aggregate principal amount of the 2015 Notes were tendered and paid on January 10, 2017. On April 30, 2017, the remaining $1.0 million in aggregate principal amount of the 2015 Notes outstanding was repaid plus accrued and unpaid interest in accordance with the terms of such notes, and all related obligations owed under the 2015 Notes were extinguished at that time. (c) On November 8, 2017, the Company extended the maturity date of the convertible debt issued in July 2012 from October 31, 2017 to April 30, 2018. |
Summary of the scheduled maturities | The schedule below summarizes the scheduled maturities for the twelve months ended September 30 of the respective year (not adjusted for commitments to refinance or extend the maturities of debt as noted above): For the twelve months ended September 30, (Amounts in 000’s) 2018 $ 8,328 2019 2,719 2020 2,955 2021 2,088 2022 5,552 Thereafter 54,407 Subtotal $ 76,049 Less: unamortized discounts (181 ) Less: deferred financing costs, net (2,050 ) Total notes and other debt $ 73,818 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table sets forth the preliminary purchase price allocation of the Meadowood Facility: (Amounts in 000’s) Estimated Useful Lives (Years) May 1, 2017 Buildings and improvements 15-32 $ 4,700 Equipment and computer related 10 400 Land — 100 Property and equipment 5,200 In place occupancy (a) 32 300 Purchase Price $ 5,500 (a) In place occupancy is included in property and equipment, net on the Company’s unaudited consolidated balance sheets |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of operations, assets and liabilities of the disposal groups held for sale | The following table summarizes certain activity of discontinued operations for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended September 30, Nine Months Ended September 30, (Amounts in 000’s) 2017 2016 2017 2016 Total revenues $ — $ — $ — $ — Cost of services 1,026 2,200 2,032 6,478 Interest expense, net 6 10 17 35 Net loss $ (1,032 ) $ (2,210 ) $ (2,049 ) $ (6,513 ) |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of recognized stock based compensation | For the three and nine months ended September 30, 2017 and 2016 , the Company recognized stock-based compensation expense as follows: Three Months Ended September 30, Nine Months Ended September 30, (Amounts in 000’s) 2017 2016 2017 2016 Employee compensation: Restricted stock $ 47 $ 118 $ 81 $ 494 Stock options — — — 112 Warrants 19 62 23 213 Total employee stock-based compensation expense $ 66 $ 180 $ 104 $ 819 Non-employee compensation: Board restricted stock $ 48 $ (23 ) $ 140 $ 34 Board stock options 13 13 37 37 Total non-employee stock-based compensation expense $ 61 $ (10 ) $ 177 $ 71 Total stock-based compensation expense $ 127 $ 170 $ 281 $ 890 |
Schedule of assumptions | The assumptions used in calculating the fair value of employee common stock options and warrants granted during the nine months ended September 30, 2017 and September 30, 2016 , using the Black-Scholes-Merton option-pricing model, are set forth in the following table: Nine Months Ended September 30, 2017 * 2016 Dividend yield — % — % Expected volatility — % 41 % Risk-free interest rate — % 1.43 % Expected term (in years) n/a 5.0 * No issuances of common stock options or warrants during the current period. |
Summary of the Company's stock option activity | The following table summarizes the Company’s common stock option activity for the nine months ended September 30, 2017 : Number of Shares (000's) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in 000's) Outstanding, December 31, 2016 355 $ 3.21 5.6 $ — Granted — $ — Forfeited — $ — Expired (110 ) $ 2.62 Outstanding, September 30, 2017 245 $ 3.48 5.8 $ — Vested, September 30, 2017 210 $ 3.41 5.5 $ — |
Schedule of exercise price range | The following table summarizes the common stock options outstanding and exercisable as of September 30, 2017 : Stock Options Outstanding Options Exercisable Exercise Price Number of Shares Weighted Average Remaining Contractual Term (in years) Weighted Average Exercise Price Vested, September 30, 2017 Weighted Average Exercise Price $1.31 - $3.99 180 5.7 $ 3.25 145 $ 3.09 $4.00 - $4.30 65 6.0 $ 4.12 65 $ 4.12 Total 245 5.8 $ 3.48 210 $ 3.41 The following table summarizes the common stock warrants outstanding and exercisable as of September 30, 2017 : Warrants Outstanding Warrants Exercisable Exercise Price Number of Shares (000's) Weighted Average Remaining Contractual Term (in years) Weighted Average Exercise Price Vested at September 30, 2017 Weighted Average Exercise Price $0 - $1.99 218 0.1 $ 1.82 218 $ 1.82 $2.00 - $2.99 335 0.8 $ 2.58 335 $ 2.58 $3.00 - $3.99 500 2.1 $ 3.59 500 $ 3.59 $4.00 - $4.99 711 5.8 $ 4.38 619 $ 4.40 $5.00 - $5.90 23 5.6 $ 5.90 23 $ 5.90 Total 1,787 3.1 $ 3.53 1,695 $ 3.49 |
Schedule of common stock warrant activity | The following table summarizes the Company’s common stock warrant activity for the nine months ended September 30, 2017 : Number of Warrants (000's) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in 000's) Outstanding, December 31, 2016 1,887 $ 3.58 4.1 $ 11 Granted — $ — Forfeited (100 ) $ 4.49 Expired — $ — Outstanding, September 30, 2017 1,787 $ 3.53 3.1 $ — Vested, September 30, 2017 1,695 $ 3.49 2.9 $ — |
Summary of the Company's restricted stock activity | The following table summarizes the Company’s restricted stock activity for the nine months ended September 30, 2017 : Number of Shares (000's) Weighted Avg. Grant Date Fair Value Unvested, December 31, 2016 404 $ 2.84 Granted 23 $ 1.07 Vested (78 ) $ 3.21 Forfeited (70 ) $ 4.29 Unvested, September 30, 2017 279 $ 2.22 |
Organization and Significant 35
Organization and Significant Accounting Policies (Details Textual) $ in Thousands | Sep. 29, 2017 | Sep. 30, 2017USD ($)facility | Dec. 31, 2016USD ($) |
Operating Leased Assets [Line Items] | |||
Number of facilities | 30 | ||
Number of sublease agreements executed, owned by company | 14 | ||
Number of sublease agreements executed, leased by company | 11 | ||
Number of skilled nursing facility, managed on behalf of third party | 2 | ||
Number of independent living facilities | 1 | ||
Patient care receivables, estimated allowance for uncollectible accounts | $ | $ 2,900 | $ 7,500 | |
Accounts receivable, net of allowance | $ | 1,086 | 2,429 | |
Patient Care Receivables | |||
Operating Leased Assets [Line Items] | |||
Accounts receivable, net of allowance | $ | $ 200 | $ 900 | |
Third Party Operators | |||
Operating Leased Assets [Line Items] | |||
Number of sublease agreements executed, owned by company | 16 | ||
Number of owned assisted living facilities leased | 2 | ||
Sales Revenue, Net | |||
Operating Leased Assets [Line Items] | |||
Concentration risk, percentage | 95.00% | ||
Redeemable Preferred Stock | |||
Operating Leased Assets [Line Items] | |||
Preferred stock, fixed interest rate (percentage) | 10.875% |
Earnings Per Share (Reconciliat
Earnings Per Share (Reconciliation of Net Income (Loss) for Continuing and Discontinued Operations) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Income (loss) from continuing operations | $ 266 | $ 222 | $ 351 | $ (2,407) |
Preferred stock dividends | 1,912 | 1,879 | 5,702 | 5,457 |
Loss from discontinued operations, net of tax | (1,032) | (2,210) | (2,049) | (6,513) |
Net loss attributable to Regional Health Properties, Inc. common stockholders | $ (2,678) | $ (3,867) | $ (7,400) | $ (14,377) |
Denominator: | ||||
Basic earnings per share - weighted average shares (in shares) | 19,762 | 19,917 | 19,784 | 19,909 |
Diluted earnings per share—adjusted weighted average shares (in shares) | 19,762 | 19,917 | 19,784 | 19,909 |
Basic and diluted loss per share: | ||||
Loss from continuing operations attributable to Regional Health (in dollars per share) | $ (0.08) | $ (0.08) | $ (0.27) | $ (0.39) |
Loss from discontinued operations (in dollars per share) | (0.05) | (0.11) | (0.10) | (0.33) |
Net loss per share of common stock attributable to Regional Health Properties, Inc. | $ (0.13) | $ (0.19) | $ (0.37) | $ (0.72) |
Continuing Operations | ||||
Numerator: | ||||
Net loss attributable to Regional Health Properties, Inc. common stockholders | $ (1,646) | $ (1,657) | $ (5,351) | $ (7,864) |
Earnings Per Share (Anti-diluti
Earnings Per Share (Anti-dilutive Securities) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Anti-dilutive securities outstanding that were excluded from the computation | ||||
Total anti-dilutive securities (in shares) | 2,400 | 4,500 | 2,385 | 4,516 |
Stock options | ||||
Anti-dilutive securities outstanding that were excluded from the computation | ||||
Total anti-dilutive securities (in shares) | 245 | 355 | ||
Warrants - employee | ||||
Anti-dilutive securities outstanding that were excluded from the computation | ||||
Total anti-dilutive securities (in shares) | 1,350 | 1,559 | ||
Warrants - non employee | ||||
Anti-dilutive securities outstanding that were excluded from the computation | ||||
Total anti-dilutive securities (in shares) | 437 | 437 | ||
Shares issuable upon conversion of convertible debt | ||||
Anti-dilutive securities outstanding that were excluded from the computation | ||||
Total anti-dilutive securities (in shares) | 353 | 2,165 |
Liquidity and Profitability (So
Liquidity and Profitability (Source of Liquidity) (Details) | May 27, 2017USD ($) | Sep. 30, 2017USD ($)bedshares | Sep. 30, 2017USD ($)bedshares | Sep. 30, 2017USD ($)bed | Aug. 11, 2017USD ($) | Jul. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 19, 2016USD ($) | Dec. 31, 2015USD ($) |
Liquidity and Profitability [Line Items] | ||||||||||
Cash and cash equivalents | $ 1,115,000 | $ 1,115,000 | $ 1,115,000 | $ 14,045,000 | $ 1,457,000 | $ 2,720,000 | ||||
Restricted cash and investments | $ 3,540,000 | $ 3,540,000 | 3,540,000 | $ 5,464,000 | ||||||
Rent revenue, property under rectification | $ 1 | |||||||||
Rent revenue, period for dollar one rent | 3 months | |||||||||
Rent revenue, period for discounted rent | 5 months | |||||||||
Rent revenue, discount, percentage (percentage) | 50.00% | |||||||||
Credit Facility Indebtedness | Key Bank National Association | Key Bank Facility | ||||||||||
Liquidity and Profitability [Line Items] | ||||||||||
Amount of aggregate indebtedness under credit facility | $ 500,000 | |||||||||
Senior Debt | Quail Creek Credit Facility | ||||||||||
Liquidity and Profitability [Line Items] | ||||||||||
Amount of aggregate indebtedness under credit facility | $ 4,300,000 | |||||||||
Northwest Oklahoma Facility | ||||||||||
Liquidity and Profitability [Line Items] | ||||||||||
Extend maturity for current maturities | $ 1,200,000 | |||||||||
Oceanside Facility | ||||||||||
Liquidity and Profitability [Line Items] | ||||||||||
Number of beds | bed | 85 | 85 | 85 | |||||||
Annual rent per agreement | $ 400,000 | |||||||||
Savannah Beach Facility | ||||||||||
Liquidity and Profitability [Line Items] | ||||||||||
Number of beds | bed | 50 | 50 | 50 | |||||||
Annual rent per agreement | $ 300,000 | |||||||||
Jefferson Facility | ||||||||||
Liquidity and Profitability [Line Items] | ||||||||||
Number of beds | bed | 131 | 131 | 131 | |||||||
Annual rent per agreement | $ 600,000 | |||||||||
At Market Issuance Sales Agreement, May 27, 2017 | Series A Preferred Stock | ||||||||||
Liquidity and Profitability [Line Items] | ||||||||||
Preferred stock, shares issued (in shares) | shares | 50,000 | 50,000 | ||||||||
Net proceeds | $ 1,000,000 | $ 1,000,000 | ||||||||
At Market Issuance Sales Agreement, May 27, 2017 | Series A Preferred Stock | Maximum | ||||||||||
Liquidity and Profitability [Line Items] | ||||||||||
Aggregate purchase price | $ 4,618,472 |
Liquidity and Profitability (Ca
Liquidity and Profitability (Cash Requirement) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)case | Dec. 31, 2016USD ($) | |
Liquidity and Profitability [Line Items] | ||
Total debt | $ 73,818 | |
Current debt | 8,300 | |
Current portion of convertible debt, net | 1,499 | $ 9,136 |
Current portion of notes payable and other debt | 6,828 | 4,018 |
Expected disbursements | 8,300 | |
Repayments of principal in12 months, amortization | 1,600 | |
Maturities due over the next two years | 11,000 | |
Current portion of debt | 8,327 | 13,154 |
Self-insured reserve | $ 6,683 | 6,924 |
Pending Litigation | ||
Liquidity and Profitability [Line Items] | ||
Number of claims | case | 42 | |
Senior debt—bond and mortgage indebtedness | ||
Liquidity and Profitability [Line Items] | ||
Current portion of notes payable and other debt | $ 2,500 | |
Short Term Vendor Notes | ||
Liquidity and Profitability [Line Items] | ||
Repayments of principal in12 months, amortization | 200 | |
Other Debt Instruments | ||
Liquidity and Profitability [Line Items] | ||
Repayments of principal in 12 months | 700 | |
Quail Creek Nursing Home | ||
Liquidity and Profitability [Line Items] | ||
Current portion of debt | 4,300 | |
Congressional Bank | Quail Creek Nursing Home | Senior debt—other mortgage indebtedness | ||
Liquidity and Profitability [Line Items] | ||
Total debt | $ 4,346 | $ 4,432 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Restricted Cash and Investments [Abstract] | ||
Cash collateral | $ 40 | $ 260 |
Replacement reserves | 278 | 811 |
Escrow deposits | 642 | 529 |
Total current portion | 960 | 1,600 |
Restricted investments for other debt obligations and certificates of deposit | 405 | 2,274 |
HUD and other replacement reserves | 2,175 | 1,590 |
Total noncurrent portion | 2,580 | 3,864 |
Total restricted cash and investments | $ 3,540 | $ 5,464 |
Property and Equipment (Details
Property and Equipment (Details) $ in Thousands | May 01, 2017bed | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Property, Plant and Equipment | |||
Property and equipment, gross | $ 105,085 | $ 100,984 | |
Less: accumulated depreciation and amortization | (22,644) | (21,816) | |
Property and equipment, net | 82,441 | 79,168 | |
Assets retired | 2,200 | ||
Buildings and improvements | |||
Property, Plant and Equipment | |||
Property and equipment, gross | $ 89,954 | 84,108 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 5 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 40 years | ||
Equipment and computer related | |||
Property, Plant and Equipment | |||
Property and equipment, gross | $ 10,883 | 12,286 | |
Equipment and computer related | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 2 years | ||
Equipment and computer related | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 10 years | ||
Land | |||
Property, Plant and Equipment | |||
Property and equipment, gross | $ 4,248 | 3,988 | |
Construction in process | |||
Property, Plant and Equipment | |||
Property and equipment, gross | $ 0 | $ 602 | |
Meadowood Retirement Village | |||
Property, Plant and Equipment | |||
Number of units in facilities acquired | bed | 106 | ||
Meadowood Retirement Village | Buildings and improvements | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 15 years | ||
Meadowood Retirement Village | Buildings and improvements | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 32 years |
Property and Equipment (Summary
Property and Equipment (Summary of Depreciation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 857 | $ 786 | $ 2,486 | $ 3,000 |
Amortization | 336 | 338 | 1,013 | 1,176 |
Total depreciation and amortization | $ 1,193 | $ 1,124 | $ 3,499 | $ 4,176 |
Intangible Assets and Goodwil43
Intangible Assets and Goodwill (Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Finite-lived Intangible Assets [Roll Forward] | |||||
Gross | $ 32,163 | ||||
Accumulated amortization | (7,610) | ||||
Net carrying amount | 24,553 | ||||
Amortization expense | $ (336) | $ (338) | (1,013) | $ (1,176) | |
Gross | 32,163 | 32,163 | |||
Accumulated amortization | (8,623) | (8,623) | |||
Net carrying amount | 23,540 | 23,540 | |||
Intangible assets - bed licenses | 2,471 | 2,471 | $ 2,471 | ||
CON (included in property and equipment) | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Gross | 22,811 | ||||
Accumulated amortization | (3,483) | ||||
Net carrying amount | 19,328 | ||||
Amortization expense | (169) | (171) | (512) | (676) | |
Gross | 22,811 | 22,811 | |||
Accumulated amortization | (3,995) | (3,995) | |||
Net carrying amount | 18,816 | 18,816 | |||
Lease Rights | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Gross | 6,881 | ||||
Accumulated amortization | (4,127) | ||||
Net carrying amount | 2,754 | ||||
Amortization expense | (167) | $ (167) | (501) | $ (500) | |
Gross | 6,881 | 6,881 | |||
Accumulated amortization | (4,628) | (4,628) | |||
Net carrying amount | 2,253 | 2,253 | |||
Bed Licenses - Separable | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Intangible assets - bed licenses | $ 2,471 | $ 2,471 | $ 2,471 |
Intangible Assets and Goodwil44
Intangible Assets and Goodwill (Schedule of Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization | $ 336 | $ 338 | $ 1,013 | $ 1,176 |
CON (included in property and equipment) | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization | 169 | 171 | 512 | 676 |
Lease Rights | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization | $ 167 | $ 167 | $ 501 | $ 500 |
Intangible Assets and Goodwil45
Intangible Assets and Goodwill (Expected Amortization Expense for all Definite Lived Intangibles) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Total expected amortization expense | $ 2,253 | $ 2,754 |
Bed Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
2,017 | 171 | |
2,018 | 683 | |
2,019 | 683 | |
2,020 | 683 | |
2,021 | 683 | |
Thereafter | 15,913 | |
Total expected amortization expense | 18,816 | |
Lease Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
2,017 | 166 | |
2,018 | 667 | |
2,019 | 667 | |
2,020 | 482 | |
2,021 | 203 | |
Thereafter | 68 | |
Total expected amortization expense | $ 2,253 |
Intangible Assets and Goodwil46
Intangible Assets and Goodwill (Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 2,945 | $ 2,945 |
Accumulated impairment losses | (840) | (840) |
Net carrying amount | $ 2,105 | $ 2,105 |
Leases (Operating Leases (Detai
Leases (Operating Leases (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($)facility | |
Leases [Abstract] | |
Number of skilled nursing facilities under non-cancelable operating leases | facility | 11 |
Future minimum lease payments | |
2,017 | $ 2,069 |
2,018 | 8,331 |
2,019 | 8,492 |
2,020 | 8,671 |
2,021 | 8,830 |
Thereafter | 46,456 |
Total | $ 82,849 |
Leases (Lease and Subleased Fac
Leases (Lease and Subleased Facilities to Third-Party Operators) (Details) | Apr. 06, 2017USD ($) | Mar. 08, 2017USD ($) | Feb. 05, 2016USD ($)subsidiary | Sep. 30, 2017USD ($)facility |
Operating Leased Assets [Line Items] | ||||
Number of skilled nursing facilities under non-cancelable operating leases | facility | 11 | |||
Number of sublease agreements executed | facility | 27 | |||
Number of sublease agreements executed, owned by company | facility | 14 | |||
Rent revenue, property under rectification | $ 1 | |||
Rent revenue, period for dollar one rent | 3 months | |||
Rent revenue, period for discounted rent | 5 months | |||
Rent revenue, discount, percentage (percentage) | 50.00% | |||
Escalation percentage through initial term, as a percent | 0.03 | |||
Number of facilities | facility | 30 | |||
Current debt | $ 8,300,000 | |||
Meadowood Retirement Village | ||||
Operating Leased Assets [Line Items] | ||||
Escalation percentage through initial term, as a percent | 0.02 | |||
Escalation percentage per renewal (percentage) | 0.025 | |||
Payments to acquire businesses | $ 5,500,000 | |||
Skyline Lease | Arkansas Leases and Facilities | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Operating Leased Assets [Line Items] | ||||
Number of sublease agreements executed | facility | 9 | |||
Number of wholly owned subsidiaries entered into loan agreement | subsidiary | 9 | |||
Agreement to sell, value | $ 55,000,000 | |||
Cash consideration | 52,000,000 | |||
Skyline Lease | Arkansas Leases and Facilities | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Notes Receivable | ||||
Operating Leased Assets [Line Items] | ||||
Agreement to sell, value | $ 3,000,000 | |||
Savannah Beach Facility | ||||
Operating Leased Assets [Line Items] | ||||
Annual rent per agreement | $ 300,000 | |||
Oceanside Facility | ||||
Operating Leased Assets [Line Items] | ||||
Annual rent per agreement | 400,000 | |||
Jefferson Facility | ||||
Operating Leased Assets [Line Items] | ||||
Annual rent per agreement | $ 600,000 | |||
Third Party Operators | ||||
Operating Leased Assets [Line Items] | ||||
Number of sublease agreements executed, owned by company | facility | 16 | |||
Variable Interest Entity, Not Primary Beneficiary | Peach Health Care | ||||
Operating Leased Assets [Line Items] | ||||
Number of facilities | facility | 3 | |||
Variable Interest Entity, Not Primary Beneficiary | Peach Health Care | Peach Health Sublessee | ||||
Operating Leased Assets [Line Items] | ||||
Current debt | $ 800,000 | |||
Variable Interest Entity, Not Primary Beneficiary | Line of Credit | Peach Working Capital Facility | Peach Health Care | Peach Health Sublessee | ||||
Operating Leased Assets [Line Items] | ||||
Current debt | 2,500,000 | |||
Variable Interest Entity, Not Primary Beneficiary | Line of Credit | Peach Health Credit Facility Amended | Peach Health Care | Peach Health Sublessee | ||||
Operating Leased Assets [Line Items] | ||||
Line of credit, maximum borrowing | $ 1,000,000 | |||
Fixed rates of interest (percentage) | 13.50% | |||
Escalation percentage per renewal (percentage) | 0.01 | |||
Term of note | 1 year | |||
Period of extension option | 6 months | |||
Loan receivable, fixed interest rate (percentage) | 13.50% | |||
Debt instrument, interest rate, increase (decrease), (percentage) | 1.00% | |||
Maximum period obligations under guaranty ceases | 4 years | |||
Period of amortization schedule | 18 months | |||
Long-term LOC | $ 900,000 |
Leases (Future rent receivable)
Leases (Future rent receivable) (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Leases [Abstract] | |
2,017 | $ 5,460 |
2,018 | 22,281 |
2,019 | 22,764 |
2,020 | 23,299 |
2,021 | 23,886 |
Thereafter | 136,813 |
Total | $ 234,503 |
Accrued Expenses and Other (Det
Accrued Expenses and Other (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued employee benefits and payroll-related | $ 387 | $ 442 |
Real estate and other taxes | 435 | 557 |
Self-insured reserve | 6,683 | 6,924 |
Accrued interest | 248 | 251 |
Other accrued expenses | 829 | 903 |
Total accrued expenses and other | $ 8,582 | $ 9,077 |
Notes Payable and Other Debt (S
Notes Payable and Other Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 76,049 | $ 82,357 |
Deferred financing costs, net | (2,050) | (2,196) |
Unamortized discount on bonds | (181) | (191) |
Total debt | 73,818 | 79,970 |
Less: current portion of debt | 8,327 | 13,154 |
Notes payable and other debt, net of current portion | 65,491 | 66,816 |
Senior debt—other mortgage indebtedness | ||
Debt Instrument [Line Items] | ||
Long-term debt | 9,572 | 5,639 |
Senior Debt Obligations | Senior debt—guaranteed by HUD | ||
Debt Instrument [Line Items] | ||
Long-term debt | 33,887 | 34,473 |
Senior Debt Obligations | Senior debt—guaranteed by USDA | ||
Debt Instrument [Line Items] | ||
Long-term debt | 20,477 | 22,518 |
Senior Debt Obligations | Senior debt—guaranteed by SBA | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,236 | 2,319 |
Bonds | Senior debt—bonds | ||
Debt Instrument [Line Items] | ||
Long-term debt | 7,055 | 7,145 |
Other debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,322 | 1,063 |
Convertible debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,500 | $ 9,200 |
Notes Payable and Other Debt (D
Notes Payable and Other Debt (Details of Long-term Debt) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2017 | May 01, 2017 | Dec. 31, 2016 | Dec. 08, 2016 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | |||||
Total debt | $ 73,818 | ||||
Long-term debt | $ 76,049 | $ 82,357 | |||
Quail Creek Nursing Home | Congressional Bank | |||||
Debt Instrument [Line Items] | |||||
Effective Interest rate (as a percent) | 5.75% | ||||
Quail Creek Nursing Home | Congressional Bank | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate (percentage) | 4.75% | ||||
Northwest | First Commercial | |||||
Debt Instrument [Line Items] | |||||
Effective Interest rate (as a percent) | 5.00% | ||||
Meadowood | Exchange Bank of Alabama | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate (percentage) | 4.50% | ||||
Senior debt—other mortgage indebtedness | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 9,572 | 5,639 | |||
Senior debt—other mortgage indebtedness | Quail Creek Nursing Home | Congressional Bank | |||||
Debt Instrument [Line Items] | |||||
Total debt | 4,346 | 4,432 | |||
Senior debt—other mortgage indebtedness | Northwest | First Commercial | |||||
Debt Instrument [Line Items] | |||||
Total debt | 1,143 | 1,207 | |||
Senior debt—other mortgage indebtedness | Meadowood | Exchange Bank of Alabama | |||||
Debt Instrument [Line Items] | |||||
Total debt | 4,083 | 0 | |||
Senior Debt Obligations | Senior debt—guaranteed by HUD | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 33,887 | 34,473 | |||
Senior Debt Obligations | Senior debt—guaranteed by HUD | The Pavilion Care Center | Red Mortgage | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 1,355 | 1,434 | |||
Fixed interest rate (percentage) | 4.16% | ||||
Senior Debt Obligations | Senior debt—guaranteed by HUD | Hearth and Care of Greenfield | Red Mortgage | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 2,143 | 2,191 | |||
Fixed interest rate (percentage) | 4.20% | ||||
Senior Debt Obligations | Senior debt—guaranteed by HUD | Woodland Manor | Midland State Bank | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 5,363 | 5,447 | |||
Fixed interest rate (percentage) | 3.75% | ||||
Senior Debt Obligations | Senior debt—guaranteed by HUD | Glenvue | Midland State Bank | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 8,327 | 8,457 | |||
Fixed interest rate (percentage) | 3.75% | ||||
Senior Debt Obligations | Senior debt—guaranteed by HUD | Autumn Breeze | KeyBank | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 7,238 | 7,352 | |||
Fixed interest rate (percentage) | 3.65% | ||||
Senior Debt Obligations | Senior debt—guaranteed by HUD | Georgetown | Midland State Bank | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 3,664 | 3,723 | |||
Fixed interest rate (percentage) | 2.98% | ||||
Senior Debt Obligations | Senior debt—guaranteed by HUD | Sumter Valley | KeyBank | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 5,797 | 5,869 | |||
Fixed interest rate (percentage) | 3.70% | ||||
Senior Debt Obligations | Senior debt—guaranteed by USDA | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 20,477 | 22,518 | |||
Senior Debt Obligations | Senior debt—guaranteed by USDA | Attalla | Metro City | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 6,218 | 7,189 | |||
Effective Interest rate (as a percent) | 5.50% | ||||
Senior Debt Obligations | Senior debt—guaranteed by USDA | Attalla | Metro City | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate (percentage) | 1.50% | ||||
Senior Debt Obligations | Senior debt—guaranteed by USDA | Coosa | Metro City | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 5,607 | 6,483 | |||
Effective Interest rate (as a percent) | 5.50% | ||||
Senior Debt Obligations | Senior debt—guaranteed by USDA | Coosa | Metro City | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate (percentage) | 1.50% | ||||
Senior Debt Obligations | Senior debt—guaranteed by USDA | Mountain Trace | Community B&T | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 4,292 | 4,384 | |||
Effective Interest rate (as a percent) | 5.75% | ||||
Senior Debt Obligations | Senior debt—guaranteed by USDA | Mountain Trace | Community B&T | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate (percentage) | 1.75% | ||||
Senior Debt Obligations | Senior debt—guaranteed by USDA | Southland | Bank of Atlanta | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 4,360 | 4,462 | |||
Effective Interest rate (as a percent) | 6.00% | ||||
Senior Debt Obligations | Senior debt—guaranteed by USDA | Southland | Bank of Atlanta | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate (percentage) | 1.50% | ||||
Senior Debt Obligations | Senior debt—guaranteed by SBA | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 2,236 | 2,319 | |||
Senior Debt Obligations | Senior debt—guaranteed by SBA | Southland | Bank of Atlanta | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 691 | 708 | |||
Effective Interest rate (as a percent) | 5.75% | ||||
Senior Debt Obligations | Senior debt—guaranteed by SBA | Southland | Bank of Atlanta | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate (percentage) | 2.25% | ||||
Senior Debt Obligations | Senior debt—guaranteed by SBA | College Park | CDC | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 1,545 | 1,611 | |||
Fixed interest rate (percentage) | 2.81% | ||||
Bonds | Bonds Series A | Eaglewood Care Center | City of Springfield, Ohio | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 6,610 | 6,610 | |||
Fixed interest rate (percentage) | 7.65% | ||||
Bonds | Bonds Series B | Eaglewood Care Center | City of Springfield, Ohio | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 445 | 535 | |||
Fixed interest rate (percentage) | 8.50% | ||||
Bonds | Senior debt—bonds | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 7,055 | 7,145 | |||
Secured Debt | Meadowood | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate (percentage) | 4.50% | ||||
Other debt | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 1,322 | 1,063 | |||
Other debt | KeyBank | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 495 | 496 | |||
Fixed interest rate (percentage) | 0.00% | ||||
Other debt | First Insurance Funding | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 81 | 20 | |||
Fixed interest rate (percentage) | 4.24% | ||||
Other debt | McBride | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 300 | 0 | |||
Fixed interest rate (percentage) | 4.00% | ||||
Other debt | Pharmacy Care of Arkansas | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 169 | 547 | |||
Fixed interest rate (percentage) | 2.00% | ||||
Other debt | South Carolina Department of Health & Human Services | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 277 | 0 | $ 400 | ||
Fixed interest rate (percentage) | 5.75% | ||||
Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 1,500 | 9,200 | |||
Convertible debt | Convertible Subordinated Promissory Notes Issued in July 2012 | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 1,500 | 1,500 | |||
Fixed interest rate (percentage) | 14.00% | ||||
Convertible debt | Convertible Debt Issued in 2015 | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 0 | $ 7,700 | |||
Fixed interest rate (percentage) | 10.00% | 10.00% |
Notes Payable and Other Debt (N
Notes Payable and Other Debt (Narrative) (Details) | Apr. 30, 2017USD ($) | Jan. 10, 2017USD ($) | Dec. 08, 2016USD ($) | Sep. 30, 2017USD ($)credit_instrumentfacility | Sep. 30, 2016USD ($) | Nov. 08, 2017 | Nov. 07, 2017 | May 01, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2013USD ($) |
Debt Instrument [Line Items] | ||||||||||
Total debt | $ 73,818,000 | |||||||||
Amount repaid in accordance with the terms of the notes | $ 7,700,000 | $ 0 | ||||||||
Number of credit related instruments | credit_instrument | 28 | |||||||||
Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs, percentage | 0.08% | |||||||||
Prepayment penalties percentage | 3.00% | |||||||||
Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs, percentage | 0.53% | |||||||||
Prepayment penalties percentage | 4.00% | |||||||||
Senior debt—guaranteed by USDA | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of skilled nursing facilities | facility | 4 | |||||||||
Annual renewal fee for guarantee percentage | 0.25% | |||||||||
Prepayment penalties declining percentage capped | 1.00% | |||||||||
Prepayment penalties declining percentage capped, period | 10 years | |||||||||
Prepayment penalties declining percentage capped thereafter | 0.00% | |||||||||
Senior debt—guaranteed by USDA | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of principal amount insured (percentage) | 70.00% | |||||||||
Senior debt—guaranteed by USDA | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of principal amount insured (percentage) | 80.00% | |||||||||
Senior debt—other mortgage indebtedness | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs, percentage | 1.03% | |||||||||
Convertible Subordinated Notes Due April 30, 2017 (Convertible Notes) | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion of stock, purchase price per principal amount | $ 1,000 | |||||||||
Amount repaid in accordance with the terms of the notes | $ 1,000,000 | |||||||||
Bonds | Senior Debt Bonds | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs, percentage | 0.26% | |||||||||
Secured Debt | Meadowood | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 4,100,000 | |||||||||
Fixed interest rate (percentage) | 4.50% | |||||||||
Other debt | South Carolina Department of Health & Human Services | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of skilled nursing facilities | facility | 2 | |||||||||
Fixed interest rate (percentage) | 5.75% | |||||||||
Total debt | $ 277,000 | $ 0 | $ 400,000 | |||||||
Term of note | 2 years | |||||||||
Convertible debt | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs, percentage | 0.25% | |||||||||
Convertible debt | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs, percentage | 1.92% | |||||||||
Convertible debt | Convertible Debt Issued in 2015 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fixed interest rate (percentage) | 10.00% | 10.00% | ||||||||
Total debt | $ 0 | 7,700,000 | ||||||||
Convertible debt | Convertible Subordinated Notes Due April 30, 2017 (Convertible Notes) | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amount repaid in accordance with the terms of the notes | $ 6,700,000 | |||||||||
Convertible debt | Convertible Subordinated Promissory Notes Issued in July 2012 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fixed interest rate (percentage) | 14.00% | |||||||||
Total debt | $ 1,500,000 | $ 1,500,000 | ||||||||
Subsequent Event | Convertible debt | Convertible Subordinated Promissory Notes Issued in July 2012 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fixed interest rate (percentage) | 14.00% | 10.00% | ||||||||
Interest rate in the event of default (percentage) | 18.00% | 14.00% |
Notes Payable and Other Debt 54
Notes Payable and Other Debt (Scheduled Maturities) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 8,328 | |
2,019 | 2,719 | |
2,020 | 2,955 | |
2,021 | 2,088 | |
2,022 | 5,552 | |
Thereafter | 54,407 | |
Subtotal | 76,049 | |
Less: unamortized discounts | (181) | $ (191) |
Less: deferred financing costs, net | (2,050) | $ (2,196) |
Total debt | $ 73,818 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) | May 01, 2017USD ($)bed | Mar. 08, 2017USD ($)bed | Sep. 30, 2017 |
Business Acquisition [Line Items] | |||
Escalation percentage through initial term, as a percent | 0.03 | ||
Meadowood | Secured Debt | |||
Business Acquisition [Line Items] | |||
Debt instrument, face amount | $ 4,100,000 | ||
Fixed interest rate (percentage) | 4.50% | ||
Meadowood Retirement Village | |||
Business Acquisition [Line Items] | |||
Payments to acquire businesses | $ 5,500,000 | ||
Term of lease (years) | 13 years | ||
Renewal option | 5 years | ||
Base rent per month | $ 37,500 | ||
Escalation percentage through initial term, as a percent | 0.02 | ||
Escalation percentage per renewal (percentage) | 0.025 | ||
Number of units in facilities acquired | bed | 106 | ||
Meadowood Retirement Village | Coosa | |||
Business Acquisition [Line Items] | |||
Number of units in facilities acquired | bed | 124 | ||
Period of base rent | 1 month |
Acquisitions (Schedule of Purch
Acquisitions (Schedule of Purchase Price Allocation of the Meadowood Facility) (Details) - USD ($) $ in Thousands | May 01, 2017 | Sep. 30, 2017 |
Buildings and improvements | Minimum | ||
Business Acquisition [Line Items] | ||
Equipment and computer related, Estimated Useful Lives (Years) | 5 years | |
Buildings and improvements | Maximum | ||
Business Acquisition [Line Items] | ||
Equipment and computer related, Estimated Useful Lives (Years) | 40 years | |
Meadowood Retirement Village | ||
Business Acquisition [Line Items] | ||
Buildings and improvements | $ 4,700 | |
Equipment and computer related | 400 | |
Land | 100 | |
Property and equipment | $ 5,200 | |
Intangible asset - CON, Estimated Useful Lives (Years) | 32 years | |
Intangible asset - CON | $ 300 | |
Purchase Price | $ 5,500 | |
Meadowood Retirement Village | Buildings and improvements | Minimum | ||
Business Acquisition [Line Items] | ||
Equipment and computer related, Estimated Useful Lives (Years) | 15 years | |
Meadowood Retirement Village | Buildings and improvements | Maximum | ||
Business Acquisition [Line Items] | ||
Equipment and computer related, Estimated Useful Lives (Years) | 32 years | |
Meadowood Retirement Village | Equipment and computer related | ||
Business Acquisition [Line Items] | ||
Equipment and computer related, Estimated Useful Lives (Years) | 10 years |
Discontinued Operations (Activi
Discontinued Operations (Activity of Discontinued Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net loss | $ (1,032) | $ (2,210) | $ (2,049) | $ (6,513) |
Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Cost of services | 1,026 | 2,200 | 2,032 | 6,478 |
Interest expense, net | 6 | 10 | 17 | 35 |
Net loss | $ (1,032) | $ (2,210) | $ (2,049) | $ (6,513) |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | |||||
Nov. 30, 2016share_repurchase_programshares | Nov. 30, 2015 | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Dec. 01, 2017$ / shares | Dec. 31, 2016shares | |
Class of Stock [Line Items] | |||||||||
Common stock repurchase program | $ | $ 186 | ||||||||
Preferred stock dividends | $ | $ 1,912 | $ 1,879 | $ 5,702 | $ 5,457 | |||||
Preferred stock, shares outstanding (in shares) | 2,812,000 | 2,812,000 | 2,812,000 | 2,762,000 | |||||
Preferred stock, shares issued (in shares) | 2,812,000 | 2,812,000 | 2,812,000 | 2,762,000 | |||||
November 2016 Repurchase Program | |||||||||
Class of Stock [Line Items] | |||||||||
Number of share repurchase programs | share_repurchase_program | 2 | ||||||||
Period of repurchase program | 12 months | ||||||||
Shares of Common Stock | November 2016 Repurchase Program | |||||||||
Class of Stock [Line Items] | |||||||||
Shares authorized to repurchase (in shares) | 1,000,000 | ||||||||
Stock repurchased during period (in shares) | 118,199 | ||||||||
Common stock repurchase program | $ | $ 200 | ||||||||
Shares repurchased (usd per share) | $ / shares | $ 1.54 | ||||||||
Shares of Common Stock | November 2015 Repurchase Program | |||||||||
Class of Stock [Line Items] | |||||||||
Shares authorized to repurchase (in shares) | 500,000 | 500,000 | |||||||
Period of repurchase program | 12 months | ||||||||
Stock repurchased during period (in shares) | 150,000 | ||||||||
Common stock repurchase program | $ | $ 300 | ||||||||
Shares repurchased (usd per share) | $ / shares | $ 2.05 | ||||||||
Series A Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Stock repurchased during period (in shares) | 0 | 0 | 0 | 0 | |||||
Cash paid for dividends (usd per share) | $ / shares | $ 0.68 | ||||||||
Preferred stock dividends | $ | $ 1,900 | $ 1,900 | $ 5,700 | $ 5,500 | |||||
Preferred stock, shares outstanding (in shares) | 2,811,535 | 2,811,535 | 2,811,535 | ||||||
Preferred stock, shares issued (in shares) | 2,811,535 | 2,811,535 | 2,811,535 | ||||||
Series A Preferred Stock | Forecast | |||||||||
Class of Stock [Line Items] | |||||||||
Redemption price per share (usd per share) | $ / shares | $ 25 | ||||||||
Series A Preferred Stock | At Market Issuance Sales Agreement, July 21, 2015 | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares sold | 106,796 | 336,905 | |||||||
Average sales price per share | $ / shares | $ 21.49 | $ 20.60 | |||||||
Net proceeds | $ | $ 2,200 | $ 6,800 | |||||||
Series A Preferred Stock | At Market Issuance Sales Agreement, May 27, 2017 | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares sold | 50,000 | 50,000 | |||||||
Net proceeds | $ | $ 1,000 | $ 1,000 | |||||||
Series A Preferred Stock | At Market Issuance Sales Agreement, May 27, 2017 | Average | |||||||||
Class of Stock [Line Items] | |||||||||
Average sales price per share | $ / shares | $ 21.80 | $ 21.80 | $ 21.80 | ||||||
Series A Preferred Stock | November 2016 Repurchase Program | |||||||||
Class of Stock [Line Items] | |||||||||
Shares authorized to repurchase (in shares) | 100,000 |
Stock Based Compensation (Recog
Stock Based Compensation (Recognized Stock-based Compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock based compensation | $ 127 | $ 170 | $ 281 | $ 890 |
Employee | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock based compensation | 66 | 180 | 104 | 819 |
Employee | Warrants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock based compensation | 19 | 62 | 23 | 213 |
Employee | Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock based compensation | 47 | 118 | 81 | 494 |
Employee | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock based compensation | 0 | 0 | 0 | 112 |
Nonemployee | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock based compensation | 61 | (10) | 177 | 71 |
Nonemployee | Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock based compensation | 48 | (23) | 140 | 34 |
Nonemployee | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock based compensation | $ 13 | $ 13 | $ 37 | $ 37 |
Stock Based Compensation (Narra
Stock Based Compensation (Narrative) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of securities remaining available for future issuance (shares) | shares | 594,179 |
Warrants | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 40 |
Period of recognition of compensation expense | 5 months 29 days |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 10 |
Period of recognition of compensation expense | 2 months 1 day |
Restricted stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 400 |
Period of recognition of compensation expense | 1 year 5 months 30 days |
2011 plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares of the company's stock that may be issued | shares | 2,027,393 |
Stock Based Compensation (Assum
Stock Based Compensation (Assumptions Used in Calculating the Fair Value of Common Stock Options and Warrants Granted) (Details) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Weighted average significant assumptions used to estimate the fair value | ||
Dividend yield (percentage) | 0.00% | 0.00% |
Expected volatility (percentage) | 0.00% | 41.00% |
Risk-free interest rate (percentage) | 0.00% | 1.43% |
Expected term (years) | 5 years |
Stock Based Compensation (Stock
Stock Based Compensation (Stock Option Activity) (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning balance (shares) | 355 | |
Granted (shares) | 0 | |
Forfeited (shares) | 0 | |
Expired (shares) | (110) | |
Ending balance (shares) | 245 | 355 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Beginning balance (usd per share) | $ 3.21 | |
Granted (usd per share) | 0 | |
Forfeited (usd per share) | 0 | |
Expired (usd per share) | 2.62 | |
Ending balance (usd per share) | $ 3.48 | $ 3.21 |
Additional disclosures | ||
Outstanding - weighted average remaining contract life | 5 years 9 months 1 day | 5 years 7 months |
Outstanding aggregate intrinsic value | $ 0 | |
Shares vested as of year end (shares) | 210 | |
Shares vested as of year end (usd per share) | $ 3.41 | |
Share vested, weighted average remaining contractual life | 5 years 6 months | |
Shares vested, aggregate intrinsic value | $ 0 |
Stock Based Compensation (Exerc
Stock Based Compensation (Exercise price range) (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options outstanding, (shares) | shares | 245 |
Stock options outstanding, weighted average remaining contractual term | 5 years 10 months 1 day |
Stock options outstanding, weighted average exercise price (usd per share) | $ 3.48 |
Options exercisable, vested and exercisable (shares) | shares | 210 |
Options exercisable, weighted average exercise price (usd per share) | $ 3.41 |
$1.31 - $3.99 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price, minimum (usd per share) | 1.31 |
Exercise price, maximum (usd per share) | $ 3.99 |
Stock options outstanding, (shares) | shares | 180 |
Stock options outstanding, weighted average remaining contractual term | 5 years 8 months 24 days |
Stock options outstanding, weighted average exercise price (usd per share) | $ 3.25 |
Options exercisable, vested and exercisable (shares) | shares | 145 |
Options exercisable, weighted average exercise price (usd per share) | $ 3.09 |
$4.00 - $4.30 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price, minimum (usd per share) | 4 |
Exercise price, maximum (usd per share) | $ 4.30 |
Stock options outstanding, (shares) | shares | 65 |
Stock options outstanding, weighted average remaining contractual term | 6 years 1 day |
Stock options outstanding, weighted average exercise price (usd per share) | $ 4.12 |
Options exercisable, vested and exercisable (shares) | shares | 65 |
Options exercisable, weighted average exercise price (usd per share) | $ 4.12 |
Stock Based Compensation (Warra
Stock Based Compensation (Warrants Activity) (Details) - Warrants - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Class of Warrant or Right Outstanding [Roll Forward] | ||
Outstanding at the beginning of the period (shares) | 1,887 | |
Granted (shares) | 0 | |
Forfeited (shares) | (100) | |
Expired (shares) | 0 | |
Outstanding at the end of the period (shares) | 1,787 | 1,887 |
Vested (shares) | 1,695 | |
Class of Warrant or Right Outstanding Weighted Average Exercise Price [Roll Forward] | ||
Outstanding at the beginning of the period (usd per share) | $ 3.58 | |
Granted (usd per share) | 0 | |
Forfeited (usd per share) | 4.49 | |
Expired (usd per share) | 0 | |
Outstanding at the end of the period (usd per share) | 3.53 | $ 3.58 |
Vested (usd per share) | $ 3.49 | |
Weighted average remaining contractual term | 3 years 1 month | 4 years 1 month |
Aggregate intrinsic value | $ 0 | $ 11 |
Weighted average remaining contract life, vested | 2 years 10 months 10 days | |
Aggregate intrinsic value, vested | $ 0 |
Stock Based Compensation (Optio
Stock Based Compensation (Options and Warrants Outstanding by Exercise Price) (Details) - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
$0 - $1.99 | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | $ 0 | |
$0 - $1.99 | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | 1.99 | |
$2.00 - $2.99 | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | 2 | |
$2.00 - $2.99 | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | 2.99 | |
$3.00 - $3.99 | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | 3 | |
$3.00 - $3.99 | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | 3.99 | |
$4.00 - $4.99 | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | 4 | |
$4.00 - $4.99 | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | 4.99 | |
$5.00 - $5.90 | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | 5 | |
$5.00 - $5.90 | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Price (usd per share) | $ 5.90 | |
Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding (shares) | 1,787 | 1,887 |
Weighted Average Exercise Price (usd per share) | $ 3.53 | $ 3.58 |
Warrants | Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding (shares) | 1,787 | |
Weighted Average Remaining Contractual Term (in years) | 3 years 1 month | |
Weighted Average Exercise Price (usd per share) | $ 3.53 | |
Vested and Exercisable (shares) | 1,695 | |
Weighted Average Exercise Price (usd per share) | $ 3.49 | |
Warrants | Employee | $0 - $1.99 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding (shares) | 218 | |
Weighted Average Remaining Contractual Term (in years) | 1 month 17 days | |
Weighted Average Exercise Price (usd per share) | $ 1.82 | |
Vested and Exercisable (shares) | 218 | |
Weighted Average Exercise Price (usd per share) | $ 1.82 | |
Warrants | Employee | $2.00 - $2.99 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding (shares) | 335 | |
Weighted Average Remaining Contractual Term (in years) | 9 months 9 days | |
Weighted Average Exercise Price (usd per share) | $ 2.58 | |
Vested and Exercisable (shares) | 335 | |
Weighted Average Exercise Price (usd per share) | $ 2.58 | |
Warrants | Employee | $3.00 - $3.99 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding (shares) | 500 | |
Weighted Average Remaining Contractual Term (in years) | 1 year 12 months 20 days | |
Weighted Average Exercise Price (usd per share) | $ 3.59 | |
Vested and Exercisable (shares) | 500 | |
Weighted Average Exercise Price (usd per share) | $ 3.59 | |
Warrants | Employee | $4.00 - $4.99 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding (shares) | 711 | |
Weighted Average Remaining Contractual Term (in years) | 5 years 9 months 3 days | |
Weighted Average Exercise Price (usd per share) | $ 4.38 | |
Vested and Exercisable (shares) | 619 | |
Weighted Average Exercise Price (usd per share) | $ 4.40 | |
Warrants | Employee | $5.00 - $5.90 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding (shares) | 23 | |
Weighted Average Remaining Contractual Term (in years) | 5 years 7 months 13 days | |
Weighted Average Exercise Price (usd per share) | $ 5.90 | |
Vested and Exercisable (shares) | 23 | |
Weighted Average Exercise Price (usd per share) | $ 5.90 |
Stock Based Compensation (Restr
Stock Based Compensation (Restricted Stock Activity) (Details) - Restricted stock shares in Thousands | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Shares | |
Unvested at the beginning of the period (shares) | shares | 404 |
Granted (shares) | shares | 23 |
Vested (shares) | shares | (78) |
Forfeited (shares) | shares | (70) |
Unvested at the end of the period (shares) | shares | 279 |
Weighted Average Grant Date Fair Value | |
Unvested at the beginning of the period (usd per share) | $ / shares | $ 2.84 |
Granted (usd per share) | $ / shares | 1.07 |
Vested (usd per share) | $ / shares | 3.21 |
Forfeited (usd per share) | $ / shares | 4.29 |
Unvested at the ending of the period (usd per share) | $ / shares | $ 2.22 |
Variable Interest Entities (Det
Variable Interest Entities (Details Textual) | Apr. 06, 2017USD ($) | Apr. 30, 2015USD ($)sublease | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Mar. 01, 2017USD ($) | Jul. 17, 2015USD ($) |
Variable interest entities | ||||||
Bad debt expense | $ 455,000 | $ 0 | ||||
Current debt | 8,300,000 | |||||
Variable Interest Entity, Not Primary Beneficiary | Aria Health Consulting LLC | ||||||
Variable interest entities | ||||||
Lease incentive, payable | $ 2,000,000 | |||||
Number of sublease agreements | sublease | 8 | |||||
Operating leases, monthly rental expense | $ 29,500 | |||||
Amount available for repayment | $ 800,000 | |||||
Bad debt expense | $ 200,000 | |||||
Variable Interest Entity, Not Primary Beneficiary | Aria Health Consulting LLC | Notes Receivable | ||||||
Variable interest entities | ||||||
Accounts and notes receivable | $ 1,000,000 | |||||
Variable Interest Entity, Not Primary Beneficiary | Peach Health Sublessee | Peach Health Care | ||||||
Variable interest entities | ||||||
Current debt | $ 800,000 | |||||
Variable Interest Entity, Not Primary Beneficiary | Peach Health Sublessee | Peach Health Care | Line of Credit | Peach Working Capital Facility | ||||||
Variable interest entities | ||||||
Current debt | 2,500,000 | |||||
Variable Interest Entity, Not Primary Beneficiary | Peach Health Sublessee | Peach Health Care | Line of Credit | Peach Health Credit Facility Amended | ||||||
Variable interest entities | ||||||
Line of credit, maximum borrowing | $ 1,000,000 | |||||
Fixed interest rate (percentage) | 13.50% | |||||
Term of note | 1 year | |||||
Period of extension option | 6 months | |||||
Loan receivable, fixed interest rate (percentage) | 13.50% | |||||
Debt instrument, interest rate, increase (decrease), (percentage) | 1.00% | |||||
Maximum period obligations under guaranty ceases | 4 years | |||||
Period of amortization schedule | 18 months | |||||
Long-term LOC | $ 900,000 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) $ in Thousands | 3 Months Ended | |||||
Sep. 30, 2017USD ($)case | Apr. 21, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 27, 2016USD ($) | May 31, 2016affiliate | Feb. 28, 2014USD ($) | |
Loss Contingencies [Line Items] | ||||||
Allowance for litigation | $ 6,683 | $ 6,924 | ||||
Ohio Attorney General Action | ||||||
Loss Contingencies [Line Items] | ||||||
Estimate of possible loss | $ 1,000 | |||||
Ohio Attorney General Action | Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Estimate of possible loss | $ 5,000 | |||||
Ohio Attorney General Action | Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Estimate of possible loss | $ 10,000 | |||||
Pending Litigation | ||||||
Loss Contingencies [Line Items] | ||||||
Number of claims | case | 42 | |||||
Pending Litigation | Pending actions covered by insurance | ||||||
Loss Contingencies [Line Items] | ||||||
Number of claims | case | 2 | |||||
Pending Litigation | Aria Bankruptcy Proceeding | ||||||
Loss Contingencies [Line Items] | ||||||
Number of affiliates | affiliate | 9 | |||||
Pending Litigation | Aria Bankruptcy Proceeding | HAH Note | ||||||
Loss Contingencies [Line Items] | ||||||
Amount moved for relief from automatic stay | $ 800 | |||||
Pending Litigation | Arkansas | ||||||
Loss Contingencies [Line Items] | ||||||
Number of claims | case | 28 | |||||
Cases dismissed | Arkansas | ||||||
Loss Contingencies [Line Items] | ||||||
Number of professional and general liability claims dismissed | case | 2 | |||||
Cases dismissed | Arkansas | Professional and General Liability Cases Dismissed without Prejudice | ||||||
Loss Contingencies [Line Items] | ||||||
Number of professional and general liability claims dismissed | case | 1 | |||||
Settled Litigation | Arkansas | Professional and General Liability Cases Dismissed without Prejudice | ||||||
Loss Contingencies [Line Items] | ||||||
Amount of judgment against AdCare | $ 800 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) | Sep. 26, 2017USD ($) | May 25, 2017USD ($) | Jan. 31, 2017USD ($) | Sep. 30, 2017USD ($)installment | Jan. 19, 2017 | Dec. 31, 2016USD ($) | Nov. 10, 2016 | Mar. 31, 2015USD ($) | Jun. 10, 2014 |
Related Party Transaction [Line Items] | |||||||||
Long-term debt | $ 76,049,000 | $ 82,357,000 | |||||||
Lead Independent Director | Park City Capital | Minimum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of ownership (percentage) | 5.00% | ||||||||
Beneficial Ownership | Doucet Asset Management, LLC | Minimum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of ownership (percentage) | 5.00% | ||||||||
Beneficial Ownership | Doucet Asset Management, LLC | Maximum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of ownership (percentage) | 5.00% | ||||||||
Beneficial Ownership | Brogdon Promissory Note | |||||||||
Related Party Transaction [Line Items] | |||||||||
Notes payable, related party | $ 268,663 | ||||||||
Beneficial Ownership | Brogdon Promissory Note | Minimum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of ownership (percentage) | 5.00% | ||||||||
Beneficial Ownership | Indemnification Claim | McKesson Corporation | |||||||||
Related Party Transaction [Line Items] | |||||||||
Amount of judgment against AdCare | $ 232,439 | ||||||||
Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Salaries, wages and officers' compensation | $ 60,000 | ||||||||
Number of monthly installments | installment | 24 | ||||||||
Consultancy services expense (per hour) | $ 200 | ||||||||
Unsecured Debt | Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Long-term debt | $ 300,000 | ||||||||
Fixed interest rate (percentage) | 4.00% | ||||||||
Debt instrument, periodic payment | $ 13,027.42 | ||||||||
Interest rate in the event of default (percentage) | 18.00% | ||||||||
Convertible Subordinated Promissory Notes Issued in March 2015 | Convertible Notes Payable | Lead Independent Director | Park City Capital | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt instrument, face amount | $ 1,000,000 | ||||||||
Amount repurchased | $ 1,000,000 | ||||||||
Convertible Subordinated Promissory Notes Issued in March 2015 | Convertible Notes Payable | Beneficial Ownership | Doucet Asset Management, LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Extinguishment of debt | $ 250,000 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) $ / shares in Units, $ in Thousands | Nov. 08, 2017USD ($)directorsshares | Sep. 29, 2017 | Nov. 07, 2017$ / shares | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Subsequent Event [Line Items] | |||||
Long-term debt | $ 76,049 | $ 82,357 | |||
Redeemable Preferred Stock | |||||
Subsequent Event [Line Items] | |||||
Preferred stock, fixed interest rate (percentage) | 10.875% | ||||
Redeemable Preferred Stock | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Preferred stock, fixed interest rate (percentage) | 12.875% | ||||
Number of additional directors to elect | directors | 2 | ||||
Percentage of shares required to hold to vote on additional directors (at least) | 25.00% | ||||
Convertible debt | |||||
Subsequent Event [Line Items] | |||||
Long-term debt | $ 1,500 | $ 9,200 | |||
Convertible debt | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Long-term debt | $ 1,500 | ||||
Convertible Subordinated Promissory Notes Issued in July 2012 | Convertible debt | |||||
Subsequent Event [Line Items] | |||||
Fixed interest rate (percentage) | 14.00% | ||||
Convertible Subordinated Promissory Notes Issued in July 2012 | Convertible debt | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Fixed interest rate (percentage) | 14.00% | 10.00% | |||
Interest rate in the event of default (percentage) | 18.00% | 14.00% | |||
If-converted shares | shares | 352,941 | ||||
Debt instrument, convertible, conversion price | $ / shares | $ 4.25 |