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. 7)*
| 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 |
| April 4, 2017 |
| (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 8 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 976,168*
| |||
| 9 |
SOLE DISPOSITIVE POWER 0
| |||
| 10 |
SHARED DISPOSITIVE POWER 976,168*
| |||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
976,168* | |||
| 12 |
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
☐ | ||
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.9% |
|||
| 14 |
TYPE OF REPORTING PERSON
CO |
|||
____________
*Includes warrants to purchase 328,418 shares of Common Stock.
| CUSIP No. 000650W300 | 13D/A |
Page 3 of 8 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 8 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 1,078,418*
| |||
| 9 | SOLE DISPOSITIVE POWER 0 | |||
| 10 |
SHARED DISPOSITIVE POWER 1,078,418*
| |||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
1,078,418* | |||
| 12 |
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
☐ | ||
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.4% |
|||
| 14 |
TYPE OF REPORTING PERSON
IA |
|||
____________
*Includes warrants to purchase 328,418 shares of Common Stock.
| CUSIP No. 000650W300 | 13D/A |
Page 5 of 8 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 8 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 134,274* | ||
| 8 |
SHARED VOTING POWER 1,078,418**
| |||
| 9 | SOLE DISPOSITIVE POWER 134,274* | |||
| 10 | SHARED DISPOSITIVE POWER 1,078,418** | |||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
1,212,692** | |||
| 12 |
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
☐ | ||
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.1% |
|||
| 14 |
TYPE OF REPORTING PERSON
IN |
|||
____________
*Includes 12,077 shares of Common Stock held directly by Mr. Fox, 73,532 options to purchase shares of Common Stock and 48,665 restricted shares.
**Includes warrants to purchase 328,418 shares of Common Stock.
| CUSIP No. 000650W300 | 13D/A |
Page 7 of 8 Pages |
This Amendment No. 7 (this “Amendment No. 7”) amends the Schedule 13D originally filed with the Securities and Exchange Commission on April 4, 2013 (as amended, the “Schedule 13D” or this “Statement”), 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. 7, the Schedule 13D remains unchanged.
Item 4. Purpose of Transaction.
On April 4, 2017, Park City Capital, LLC issued the press release included as Exhibit 99.1 to this Statement. In the press release, Park City called on the Company’s Chairman and CEO William McBride to immediately resign from all positions with the Company due to his resume falsification committed against the Company. Based on third party research commissioned by Park City and another party, McBride does not have an MBA from UCLA. Additional findings are included as Exhibit 99.2 to this Statement. If McBride does not resign immediately, Park City believes the Company’s board of directors should terminate him.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the Reporting Persons have entered into an agreement with respect to the joint filing of this Amendment No. 7, which agreement is set forth on the signature page to this Statement.
Item 7. Material to Be Filed as Exhibits.
The following documents are exhibits to this Amendment No. 7:
99.1 Press Release.
99.2 Additional Findings Regarding William McBride.
| CUSIP No. 000650W300 | 13D/A |
Page 8 of 8 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: April 4, 2017
| 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
Park City Capital Calls on Adcare Health Systems, Inc.
CEO Bill McBride to Resign due to Resume Falsification
DALLAS, TX, April 4, 2017 – Park City Capital, LLC, the owner with its affiliates of approximately 6.1% of the stock of Adcare Health Systems, Inc. (NYSE MKT: ADK), calls on Adcare Chairman and CEO William McBride to immediately resign from all positions with Adcare due to his resume falsification committed against the company.
At the time of his hiring, McBride represented that he has an MBA from UCLA. Adcare has made the following public disclosures under McBride’s supervision:
| ▪ | On October 13, 2014, Adcare issued a press release announcing McBride’s appointment as CEO. The press release stated that “Bill is a graduate of the University of California Los Angeles (UCLA) with an undergraduate degree in Economics and a Master’s in Business Administration.” |
| ▪ | The biography of McBride on Adcare’s website (until it was revised on March 31) stated the following: “Mr. McBride is a graduate of the University of California Los Angeles (UCLA) with an undergraduate degree in Economics and a Master’s in Business Administration.” |
| ▪ | Adcare filed a Form 8-K with the SEC on October 17, 2014 that included as an exhibit the above press release stating that McBride has an MBA from UCLA. |
Based on third party research commissioned by Park City and another party, McBride does not have an MBA from UCLA. Our third party researcher contacted UCLA, which reported that it has no records of McBride earning an MBA at UCLA. Since McBride was confronted with this information by Park City, he has not denied or refuted the resume falsification.
As of today, SB Aircraft Management, a company founded and owned by McBride, reports on its website (http://www.sbaircraftmanagement.com/owners.html) in a biography for McBride that he “graduated from the UCLA Business School.” Additional references to McBride’s falsely claimed MBA from UCLA can be found throughout public sources on the Internet. It appears that McBride has a long history of falsely claiming that he has an MBA from UCLA.
Significantly, Adcare’s stock has declined approximately 74.0% under McBride’s tenure as CEO. The closing price of Adcare’s stock on October 10, 2014, the last trading day prior to McBride’s announcement as CEO, was $4.49. The closing price of Adcare’s stock on April 3, 2017 was $1.15.
Adcare failed to file its Annual Report on Form 10-K for its 2016 fiscal year with the SEC by the due date of March 31, 2017. In its Notification of Late Filing made yesterday, Adcare stated:
“On April 2, 2017, the Board established an independent committee of the Board…to conduct an internal investigation with respect to the circumstances surrounding the inaccurate representation of Mr. McBride’s educational credentials and related matters….The Company will not be able to file its Annual Report until the Special Committee completes the Internal Investigation and the Annual Report is finalized as appropriate. As a result of the delay in filing the Annual Report, the Company is not in compliance with covenants under certain of its debt agreements that require the delivery of the Company’s 2016 audited financial statements by March 31, 2017.”
Park City calls on Adcare to cease the delay that is causing harm to the company and take immediate action to remove McBride as the principal executive officer in charge of the company’s business operations and public disclosures. If McBride does not resign immediately, we believe the Adcare board should terminate him.
Park City urges shareholders of Adcare to express their views on this matter directly to the Adcare board. If you would like to speak with Michael J. Fox of Park City regarding this matter, we urge you to contact him at 214-855-0801.
Contact:
Michael J. Fox
Park City Capital, LLC
214-855-0801
Exhibit 99.2