Exhibit 99.2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D/A
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
ADCARE HEALTH SYSTEMS, INC.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
000650W300
(CUSIP Number)
Michael J. Fox
Park City Capital, LLC
200 Crescent Court, Suite 1575
Dallas, Texas 75201
(214) 855-0800
With a Copy to:
Derek D. Bork
Thompson Hine LLP
3900 Key Center
127 Public Square
Cleveland, Ohio 44114
(216) 566-5500
(Name, Address and Telephone Number of
Person
Authorized to Receive Notices and Communications)
February 20, 2015
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
| CUSIP No. 000650W300 | 13D/A | Page 2 of 9 Pages
|
| 1 | NAME OF REPORTING PERSON
PARK CITY CAPITAL OFFSHORE MASTER, LTD. |
|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
¨ (b) ¨ |
| 3 | SEC USE ONLY
|
|
| 4 | SOURCE OF FUNDS
WC |
|
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨ |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 | SOLE VOTING POWER
|
0 |
| 8 | SHARED VOTING POWER
|
1,198,390* | |
| 9 | SOLE DISPOSITIVE POWER
|
0 | |
| 10 | SHARED DISPOSITIVE POWER
|
1,198,390* |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
1,198,390* | |
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨ |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%** |
|
| 14 | TYPE OF REPORTING PERSON
CO |
|
*Includes (1) 10% Subordinated Convertible Notes due April 30, 2015 convertible at the option of the holder into 222,222 shares of Common Stock and (2) warrants to purchase 328,418 shares of Common Stock.
**Based on 19,220,903 shares of Common Stock issued and outstanding as of January 2, 2015, as reported in the Company’s registration statement on Form S-3, filed with the SEC on January 13, 2015.
| CUSIP No. 000650W300 | 13D/A | Page 3 of 9 Pages
|
| 1 | NAME OF REPORTING PERSON
PARK CITY SPECIAL OPPORTUNITY FUND, LP |
|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
¨ (b) ¨ |
| 3 | SEC USE ONLY
|
|
| 4 | SOURCE OF FUNDS
WC |
|
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨ |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 | SOLE VOTING POWER
|
0 |
| 8 | SHARED VOTING POWER
|
102,250 | |
| 9 | SOLE DISPOSITIVE POWER
|
0 | |
| 10 | SHARED DISPOSITIVE POWER
|
102,250 |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
102,250 | |
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨ |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 1% |
|
| 14 | TYPE OF REPORTING PERSON
PN |
|
| CUSIP No. 000650W300 | 13D/A | Page 4 of 9 Pages
|
| 1 | NAME OF REPORTING PERSON
PARK CITY CAPITAL, LLC |
|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
¨ (b) ¨ |
| 3 | SEC USE ONLY
|
|
| 4 | SOURCE OF FUNDS
OO |
|
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨ |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
Texas |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 | SOLE VOTING POWER
|
0 |
| 8 | SHARED VOTING POWER
|
1,300,640* | |
| 9 | SOLE DISPOSITIVE POWER
|
0 | |
| 10 | SHARED DISPOSITIVE POWER
|
1,300,640* |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
1,300,640* | |
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨ |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.8%** |
|
| 14 | TYPE OF REPORTING PERSON
IA |
|
*Includes (1) 10% Subordinated Convertible Notes due April 30, 2015 convertible at the option of the holder into 222,222 shares of Common Stock and (2) warrants to purchase 328,418 shares of Common Stock.
**Based on 19,220,903 shares of Common Stock issued and outstanding as of January 2, 2015, as reported in the Company’s registration statement on Form S-3, filed with the SEC on January 13, 2015.
| CUSIP No. 000650W300 | 13D/A | Page 5 of 9 Pages
|
| 1 | NAME OF REPORTING PERSON
PCC SOF GP, LLC |
|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
¨ (b) ¨ |
| 3 | SEC USE ONLY
|
|
| 4 | SOURCE OF FUNDS
OO |
|
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨ |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
Texas |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 | SOLE VOTING POWER
|
0 |
| 8 | SHARED VOTING POWER
|
102,250 | |
| 9 | SOLE DISPOSITIVE POWER
|
0 | |
| 10 | SHARED DISPOSITIVE POWER
|
102,250 |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
102,250 | |
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨ |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 1% |
|
| 14 | TYPE OF REPORTING PERSON
OO |
|
| CUSIP No. 000650W300 | 13D/A | Page 6 of 9 Pages
|
| 1 | NAME OF REPORTING PERSON
|
|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
¨ (b) ¨ |
| 3 | SEC USE ONLY
|
|
| 4 | SOURCE OF FUNDS
PF; OO |
|
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨ |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
|
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 | SOLE VOTING
|
73,532* |
| 8 | SHARED VOTING POWER
|
1,300,640** | |
| 9 | SOLE DISPOSITIVE POWER
|
73,532* | |
| 10 | SHARED DISPOSITIVE POWER
|
1,300,640** |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
1,374,172 | |
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨ |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.1%*** |
|
| 14 | TYPE OF REPORTING PERSON
IN |
|
*Represents stock options held by Mr. Fox.
**Includes (1) 10% Subordinated Convertible Notes due April 30, 2015 convertible at the option of the holder into 222,222 shares of Common Stock and (2) warrants to purchase 328,418 shares of Common Stock.
*** Based on 19,220,903 shares of Common Stock issued and outstanding as of January 2, 2015, as reported in the Company’s registration statement on Form S-3, filed with the SEC on January 13, 2015.
| CUSIP No. 000650W300 | 13D/A | Page 7 of 9 Pages
|
This Amendment No. 5 (this “Amendment No. 5”) amends and supplements the Schedule 13D originally filed with the Securities and Exchange Commission (the “SEC”) on April 4, 2013, as amended to date (the “Schedule 13D”), with respect to the Common Stock, no par value (the “Common Stock”), of AdCare Health Systems, Inc., a Georgia corporation (the “Company”). Except as amended and supplemented by this Amendment No. 5 (as so amended and supplemented, this “Statement”), the Schedule 13D remains unchanged.
Item 3. Source and Amount of Funds or Other Consideration.
The Master Fund purchased warrants exercisable for up to 109,472 shares of Common Stock (the “1B Warrants”) in a private transaction on February 20, 2015. The Warrants were fully vested on the date of purchase and are exercisable for the purchase of 109,472 shares of Common Stock at an exercise price of $1.93 per share. The source of funds used in purchasing the 1B Warrants was working capital of the Master Fund. The total aggregate cost for purchasing the 1B Warrants was $281,343.04.
On December 17, 2014, the Company issued to Mr. Fox, as a director of the Company, stock options to purchase 51,865 shares of Common Stock, at an exercise price of $3.90 per share, pursuant to the Company’s 2011 Stock Option Plan and in respect of 2015 compensation. The stock options are exercisable in three installments on each anniversary of the grant date for the next three years and expire on December 17, 2024.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Persons beneficially own in the aggregate 1,374,172 shares of Common Stock, which represents approximately 7.1% of the Company’s outstanding shares of Common Stock. The Master Fund, the Special Opportunity Fund, and Mr. Fox (with respect to his stock options) directly hold the number and percentage of shares of Common Stock disclosed as beneficially owned by them in the applicable table set forth on the cover page to this Statement.
The percentage ownership of shares of Common Stock set forth in this Statement is based on the 19,220,903 shares of Common Stock issued and outstanding as of January 2, 2015, as reported in the Company’s registration statement on Form S-3, filed with the SEC on January 13, 2015.
(b) The Master Fund beneficially owns, and has the shared power to direct the voting and disposition of, the shares of Common Stock disclosed as beneficially owned by the Master Fund in the applicable table set forth on the cover page to this Statement.
The Special Opportunity Fund beneficially owns, and has the shared power to direct the voting and disposition of, the shares of Common Stock disclosed as beneficially owned by the Special Opportunity Fund in the applicable table set forth on the cover page to this Statement.
As adviser to the Master Fund and the Special Opportunity Fund, Park City Adviser may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the respective Funds’ shares of Common Stock. Park City Adviser expressly disclaims beneficial ownership of those Funds’ shares of Common Stock, except to the extent of its pecuniary interest therein.
As general partner of the Special Opportunity Fund, the Special Opportunity Fund GP may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Special Opportunity Fund’s shares of Common Stock. The Special Opportunity Fund GP disclaims beneficial ownership of the Special Opportunity Fund’s shares of Common Stock, except to the extent of its pecuniary interest therein.
| CUSIP No. 000650W300 | 13D/A | Page 8 of 9 Pages
|
As the managing member of Park City Adviser, which is the investment manager of the Master Fund and the Special Opportunity Fund, and as the managing member of the Special Opportunity Fund GP, which is the general partner of the Special Opportunity Fund, Mr. Fox may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Master Fund’s shares of Common Stock and the Special Opportunity Fund’s shares of Common Stock. Mr. Fox disclaims beneficial ownership of those Funds’ shares of Common Stock, except to the extent of his pecuniary interest therein. Mr. Fox also directly holds stock options to purchase certain shares of Common Stock, as set forth in the applicable table included on the cover page to this Statement.
(c) The purchase of the 1B Warrants by the Master Fund on February 20, 2015 is described in Item 3 of this Statement.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
Discussion in Items 3 and 7 of this Statement is hereby incorporated herein by reference.
Item 7. Material to Be Filed as Exhibits.
The following documents are filed as exhibits to this Amendment No. 5:
| 99.1 | Purchase Agreement, dated as of February 20, 2015, by and between Park City Capital Offshore Master, Ltd. and David A. Tenwick. |
| 99.2 | Amended and Restated Warrant to purchase 109,472 shares of the Company’s Common Stock (Warrant No. 1B). |
| CUSIP No. 000650W300 | 13D/A | Page 9 of 9 Pages
|
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this Statement is true, complete and correct.
In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of this Statement on Schedule 13D with respect to the Common Stock of the Company.
Dated: February 23, 2015
| PARK CITY CAPITAL OFFSHORE MASTER, LTD. |
PARK CITY CAPITAL, LLC | |||
| By: | /s/ Michael J. Fox | By: | /s/ Michael J. Fox | |
| Michael J. Fox, | Michael J. Fox, | |||
| Director | Manager | |||
| PCC SOF GP LLC | MICHAEL J. FOX | |||
| By: | /s/ Michael J. Fox | By: | /s/ Michael J. Fox | |
| Michael J. Fox, | Michael J. Fox | |||
| Managing Member | ||||
| PARK CITY CAPITAL SPECIAL OPPORTUNITY FUND, LP |
||||
| By: | PCC SOF GP LLC, its general partner | |||
| By: | /s/ Michael J. Fox | |||
| Michael J. Fox, | ||||
| Managing Member | ||||
Exhibit 99.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of February 20, 2015 by and between Park City Capital Offshore Master, Ltd., a Cayman Islands exempted company (“Purchaser”), and David A. Tenwick, an individual (“Seller”). Purchaser and Seller are sometimes referred to herein collectively as the “Parties.”
WHEREAS, as the date hereof, Seller holds an Amended and Restated Warrant to purchase 109,472 shares of common stock, no par value (“Common Stock”), of Adcare Health Systems, Inc., a Georgia corporation (the “Company”), at an exercise price of $1.93 per share, originally issued November 30, 2009, replacement warrant issued May 15, 2014, which is Warrant No. 1B (Reissued) (the “1B Warrant”);
WHEREAS, Purchaser desires to purchase the 1B Warrant from Seller pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, the Parties hereby agree as follows:
1. Sale. Seller hereby sells, assigns, transfers, conveys and delivers to Purchaser, and Purchaser hereby purchases from Seller, the 1B Warrant, free and clear of all liens, mortgages, pledges, security interests, claims, encumbrances, restrictions, charges and third party rights of any kind.
2. Purchase Price. Purchaser shall pay to Seller in cash $2.57 per share for each share of Common Stock purchasable under the 1B Warrant, or an aggregate of $281,343.04. The aggregate purchase price payable under this Agreement for the 1B Warrant is $281,343.04.
3. Closing. Promptly after the execution of this Agreement, Seller shall execute and deliver to the Company a Notice of Assignment under the 1B Warrant and effectuating the transfer set forth in Section 1. Promptly after the Company has prepared a new Warrant certificate or certificates in the name of Purchaser representing all of the shares of Common Stock purchasable under the 1B Warrant (the “New Warrant Certificates”) and provided notice to Purchaser that the transfer under Section 1 will be honored by the Company and that the New Warrant Certificates are being held in escrow by the Company subject only to Seller’s confirmation of receipt of the purchase price hereunder, Purchaser shall pay the aggregate purchase price by wire transfer to the account designated by Seller. Immediately after Seller has received the purchase price, Seller shall instruct the Company to release the New Warrant Certificates to Purchaser. Seller shall not be relieved of his obligations hereunder until the New Warrant Certificates have been received by Purchaser.
4. Warranties of Seller. Seller hereby represents and warrants to Purchaser that:
a. Authority. Seller has all requisite power and authority to execute and deliver this Agreement, to consummate the transactions contemplated hereby and to perform his obligations pursuant to this Agreement and the documents executed in connection herewith.
b. Ownership of Warrant. Seller is the owner of all right, title and interest (legal and beneficial) in and to the 1B Warrant and has good, valid and marketable title to the 1B Warrant, in each case free and clear of all liens, mortgages, pledges, security interests, claims, encumbrances, restrictions, charges and third party rights of any kind, whether voluntary or involuntary. Seller has the right to transfer the 1B Warrant as provided under Section 1.
c. Terms of Warrant. As of the date hereof, the 1B Warrant is fully vested and exercisable for the purchase of 109,472 shares of Common Stock of the Company at a purchase price of $1.93 per share. There have been no amendments to the 1B Warrant other than those reflected in the May 15, 2014 reissuance.
| 1 |
5. Warranties of Purchaser. Purchaser hereby represents and warrants to Seller that:
a. Authority. Purchaser has all requisite power and authority to execute and deliver this Agreement, to consummate the transactions contemplated hereby and to perform its obligations pursuant to this Agreement and the documents executed in connection herewith.
6. Transfer Effectiveness. The transfer of the 1B Warrant shall be effective as of the date of this Agreement. Seller disclaims any rights under the 1B Warrant transferred hereunder accruing as of or after the date hereof.
7. Entire Agreement; Amendment and Termination. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof. All prior agreements among the Parties concerning the subject matter hereof, whether written or oral, are merged herein and shall be of no force or effect. This Agreement cannot be altered, modified or discharged orally but only by an agreement in writing among the Parties.
8. Benefit. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their legal representatives, successors and assigns.
9. Further Assurances. The Parties hereby agree to execute and deliver such further documents and instruments and do such further acts as may be required to carry out the intent and purposes of this Agreement.
10. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Georgia, notwithstanding any conflict of law provision to the contrary.
11. Counterparts; Electronic Execution. This Agreement may be executed in two counterparts, each of which shall be deemed an original and each of which shall, taken together, be considered one and the same agreement. Executions that are faxed or received via electronic mail shall be deemed originals.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth above.
| SELLER: | PURCHASER: | ||
| Park City Capital Offshore Master, Ltd. | |||
| /s/ David A. Tenwick | By: | /s/ Michael Fox | |
| David A. Tenwick | Name: | Michael Fox | |
| Title: | Director | ||
| 2 |
Exhibit 99.2