AdCare Health Systems, Inc., a leading skilled nursing and assisted living provider, is exercising its option to call for redemption 100% of the outstanding warrants to purchase shares of common stock sold in its initial public offering in November 2006 and those sold in a private placement in December 2009. A call notice will be mailed on August 17, 2011 to all such warrant holders of record.
Registered holders of the warrants will have until September 19, 2011 (the last day of the call exercise period) to exercise each warrant for 1.05 shares of common stock at a price of $2.38 per share. Any warrants not exercised by the registered holders within the call exercise period will automatically expire at 5:00 p.m. Eastern time on the last day of the call exercise period, and AdCare will remit to the registered holders of such expired warrants the sum of ten cents ($.10) per underlying share of common stock, upon surrender of the warrant certificate representing such expired warrants. At 5:00 p.m. Eastern time on the last day of the call exercise period and thereafter, registered holders of expired warrants will have no rights or privileges with respect to such warrants, other than to receive the call amount.
The warrants sold in AdCare’s initial public offering and the warrants sold in AdCare’s 2009 private placement are currently exercisable for an aggregate of 2,116,608 shares of common stock. If all such currently outstanding warrants are exercised within the call exercise period, then AdCare will issue an aggregate of 2,116,608 shares of common stock and receive gross exercise proceeds of approximately $5,038,000. On the other hand, if all such warrants are redeemed by AdCare pursuant to the call notice, then AdCare will pay to the registered holders of such warrants an aggregate of approximately $212,000.
The warrants are eligible to be called for redemption by AdCare because during each day in the 10 consecutive trading day period commencing on July 18, 2011 and ending on July 29, 2011 the closing sale price of the common stock exceeded $6.00 per share and the average trading volume for this period was 59,050 shares. In addition, the common stock underlying the warrants is registered pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission.
AdCare’s publicly traded warrants currently trade on the NYSE Amex stock exchange under the trading symbol “ADK.WS.” As a result of the warrant call, these warrants will cease to be traded on the NYSE Amex effective September 19, 2011.
If you are a beneficial holder of the warrants subject to the call notice (i.e., your warrants are held in a brokerage firm), you are advised to contact your broker regarding how to exercise your warrants.
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