Offering raises funds for company to acquire skilled nursing facility
By Devika Patel
Knoxville, Tenn., Oct. 6 - AdCare Health Systems, Inc. sold secured promissory notes in a private placement on Sept. 30, according to an 8-K filed Wednesday with the Securities and Exchange Commission.
The $15.2 million of variable-rate notes will mature on Sept. 30, 2035. They accrue interest at a variable rate of Prime plus 150 basis points, with a floor of 5.5%. The notes have a prepayment penalty of 10% for any prepayment prior to Sept. 30, 2011 which is reduced by 1% each year until Sept. 30, 2019, when it stays fixed at 1%.
The company also arranged a placement of $3.5 million in 10% promissory notes along with 350,000 warrants. It has raised $3.15 million thus far.
The warrants are exercisable at $4.25 until Oct. 1, 2013. The strike price represents a 23.19% premium to the Sept. 29 closing share price of $3.45.
The 10% notes mature on Jan. 1, 2011, which may be extended to April 1, 2011. If extended, the interest rate will increase to 18% per year retroactive to Sept. 30, 2010.
Cantone Research, Inc. was the agent for the $3.5 million placement.
Proceeds were used to acquire the operations and selected assets of Coosa Valley Health Care, a 124 bed skilled nursing facility located in Gadsden, Ala., for $8.7 million.
Springfield, Ohio-based AdCare is a developer, owner and manager of retirement communities.
| Issuer: | AdCare Health Systems, Inc.
|
| Issue: | Secured promissory notes
|
| Amount: | $18.7 million
|
| Stock symbol: | Amex: ADK
|
| Stock price: | $3.45 at close Sept. 30
|
| Market capitalization: | $27.01 million
|
|
|
| Variable notes
|
| Amount: | $15.2 million
|
| Maturity: | Sept. 30, 2035
|
| Coupon: | Prime plus 150
|
| Price: | Par
|
| Warrants: | No
|
| Settlement date: | Sept. 30
|
|
|
| 10% notes
|
| Amount: | $3.5 million
|
| Maturity: | Jan. 1, 2011
|
| Coupon: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Warrants: | 350,000
|
| Warrant expiration: | Oct. 1, 2013
|
| Warrant strike price: | $4.25
|
| Agent: | Cantone Research, Inc.
|
| Pricing date: | Sept. 30
|
| Settlement date: | Sept. 30 (for $3.15 million)
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
