On
May 25, 2023, the Company commenced an offer to exchange (the “Exchange Offer”) any and all of its outstanding 10.875%
Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Stock”) for newly issued shares of the Company’s
12.5% Series B Cumulative Redeemable Preferred Shares (the “Series B Preferred Stock”).
In
exchange for each share of Series A Preferred Stock properly tendered (and not validly withdrawn) prior to 11:59 p.m., New York City
time, on June 27, 2023 (such time and date, as the same may be extended, the “Expiration Date”) and accepted by the
Company, participating holders of Series A Preferred Stock will receive one share of Series B Preferred Stock.
The
Exchange Offer will expire on the Expiration Date, unless extended or earlier terminated by the Company.
Important
Cautions Regarding Forward-Looking Statements
This
Current Report on Form 8-K includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E
of the Exchange Act. Words such as “expects,” “intends,” “believes,” “anticipates,” “plans,”
“likely,” “will,” “seeks,” “estimates” and variations of such words and similar expressions
are intended to identify such forward-looking statements. Statements in this Current Report on Form 8-K regarding the terms and timing
of the Exchange Offer are forward-looking statements.
Forward-looking
statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties
that could cause actual results to differ materially from those projected or contemplated by our forward-looking statements due to various
factors, including, among others: our dependence on the operating success of our operators; the significant amount of, and our ability
to service, our indebtedness; covenants in our debt agreements that may restrict our ability to make investments, incur additional indebtedness
and refinance indebtedness on favorable terms; the availability and cost of capital; our ability to raise capital through equity and
debt financings or through the sale of assets; increases in market interest rates and inflation; our ability to meet the continued listing
requirements of the NYSE American LLC and to maintain the listing of our securities thereon; the effect of increasing healthcare regulation
and enforcement on our operators and the dependence of our operators on reimbursement from governmental and other third-party payors;
the relatively illiquid nature of real estate investments; the impact of litigation and rising insurance costs on the business of our
operators; the impact on us of litigation relating to our prior operation of our healthcare properties; the effect of our operators declaring
bankruptcy, becoming insolvent or failing to pay rent as due; the ability of any of our operators in bankruptcy to reject unexpired lease
obligations and to impede our ability to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security
deposits for the debtor’s obligations; our ability to find replacement operators and the impact of unforeseen costs in acquiring
new properties; epidemics or pandemics, including the COVID-19 pandemic, and the related impact on our tenants, operators and healthcare
facilities; and other factors discussed from time to time in our news releases, public statements and documents filed by us with the
Securities and Exchange Commission (the “SEC”) from time to time, including our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. These forward-looking statements and such risks, uncertainties and other factors
speak only as of the date of this Current Report on Form 8-K, and we expressly disclaim any obligation or undertaking to update or revise
any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto or any other change in
events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by applicable law.
No
Offer or Solicitation
This
Current Report on Form 8-K is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy
or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Additional
Information about the Exchange Offer and Where to Find It
In
connection with the proposed Exchange Offer (the “proposed transaction”), RHE filed with the SEC a registration statement
on Form S-4 on February 14, 2023 (as amended on April 28, 2023, May 18, 2023 and May 22, 2023) that includes a proxy statement and that
also constitutes a prospectus. The registration statement was declared effective by the SEC on May 25, 2023 at 9:00 a.m., Eastern Time.
RHE filed the definitive proxy statement/prospectus in connection with the proposed transaction with the SEC. RHE commenced mailing the
definitive proxy statement/prospectus to shareholders on or about May 25, 2023. RHE also filed with the SEC a joint statement on Schedule
TO/13E-3 (as supplemented or amended, the “Schedule TO/13E-3”) for the proposed transaction. RHE intends to file other
relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the definitive proxy statement/prospectus
or registration statement or any other document that RHE may file with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT, THE SCHEDULE TO/13E-3, THE DEFINITIVE PROXY STATEMENT/PROSPECTUS, AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE
FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN
OR WILL CONTAIN IMPORTANT INFORMATION ABOUT RHE AND THE PROPOSED TRANSACTION. Investors and security holders are able to obtain free
copies of the registration statement, the Schedule TO/13E-3, the definitive proxy statement/prospectus and all other documents containing
important information about RHE and the proposed transaction, once such documents are filed with the SEC, including the definitive proxy
statement/prospectus, through the website maintained by the SEC at www.sec.gov. The proxy statement/prospectus included in the
registration statement and additional copies of the proxy statement/prospectus will be available for free from RHE.
Participants
in the Solicitation
RHE
and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the
proposed transaction. Information about the directors and executive officers of RHE, including a description of their direct or indirect
interests, by security holdings or otherwise, is set forth in RHE’s proxy statement for its 2022 Annual Meeting of Shareholders,
which was filed with the SEC on December 30, 2022, and RHE’s Annual Report on Form 10-K for the fiscal year ended December 31,
2022, which was filed with the SEC on April 14, 2023. Investors may obtain additional information regarding the interests of those persons
and other persons who may be deemed participants in the proposed transaction by reading the definitive proxy statement/prospectus and
other relevant materials to be filed with the SEC regarding the proposed transaction when such materials become available. Investors
should read the definitive proxy statement/prospectus carefully before making any voting or investment decisions. You may obtain free
copies of these documents from RHE using the sources indicated above.
