SPRINGFIELD, Ohio, Dec. 9 /PRNewswire-FirstCall/ -- AdCare Health Systems, Inc. (NYSE AMEX: ADK), an Ohio based long term care, home care and management company, today reported that it completed a private placement of its securities.
The private placement raised $2.5 million in cash to fund the Company's growth initiatives, which include potential acquisitions of assisted living facilities and nursing homes as well as new management contracts.
"We are pleased that our shareholders voted to support the private placement and other issues at the special meeting of shareholders held a few days ago," said David A. Tenwick, Chairman of AdCare. "This is another important milestone in our strategy to continue and complement our organic growth with growth through acquisitions in a highly fragmented industry. AdCare has developed a strong reputation for operational efficiency and high quality living environments, and with the additional capital from the private placement, we plan to leverage these strengths to achieve our growth objectives."
The private placement was managed by Bathgate Capital Partners LLC, a full-service investment banking firm headquartered in the Denver suburb of Greenwood Village, Colorado. The placement consisted of Units priced at $2.00, with each unit consisting of one share of common stock and one five-year warrant to purchase an additional share of common stock at $2.50 per share. Bathgate Capital Partners placed a total of 1,400,000 Units, which raised $2.5 million in cash after commissions and expenses for the Company.
AdCare recently reported revenue of $19.9 million for the nine-month period ended September 30, 2009, up 9.4% from, revenue of $18.2 million in the same period a year ago. Net income increased to $443,000, a $1.2 million positive swing over the net loss of $745,000 in the year ago period. EPS was $0.12 versus a loss of $0.21 for the same period a year ago.
In addition to approving the private placement at the special meeting of shareholders held on December 7, 2009, the shareholders approved conforming the terms of AdCare's public warrants that were issued in the Company's initial public offering with the terms of the new warrants that will be issued in the private placement. The warrant holders' meeting to vote on the matter is December 16, 2009; however, the completion of the private placement was not contingent upon approval by the warrant holders.
The shareholders also approved certain changes to the terms of the remaining warrants previously granted to officers and directors, approved the issuance of warrants to the senior management group and extended the exercise date of warrants previously issued to Gary Wade, the President of AdCare, to expire on the same date as his employment contract.
About AdCare Health Systems, Inc.
AdCare Health Systems, Inc. (NYSE AMEX: ADK) develops, owns and manages assisted living facilities, nursing homes and retirement communities and provides home health care services. Prior to becoming a publicly traded company in November of 2006, AdCare operated as a private company for 18 years. AdCare's 900 employees provide management, development and accounting/financial services to 20 long term care facilities, nine of which are assisted living facilities, ten skilled nursing centers and one independent senior living community. The Company has ownership interests in eight of those facilities. In the ever expanding marketplace of long term care, AdCare's mission is to provide quality healthcare services to the elderly.
Safe Harbor Statement
Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of federal law. Such forward-looking statements reflect management's beliefs and assumptions and are based on information currently available to management. The forward-looking statements involve known and unknown risks, results, performance or achievements of the Company to differ materially from those expressed or implied in such statements. Such factors are identified in the public filings made by the Company with the Securities and Exchange Commission and include the Company's ability to secure lines of credit and/or an acquisition credit facility, find suitable acquisition properties at favorable terms, changes in the health care industry because of political and economic influences, changes in regulations governing the industry, changes in reimbursement levels including those under the Medicare and Medicaid programs and changes in the competitive marketplace. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.
SOURCE AdCare Health Systems, Inc.