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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _)*
Adcare Health Systems Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
00650W300
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(CUSIP Number)
Chris Doucet, 2204 Lakeshore Drive, Suite 304,Birmingham, Alabama 35209
205-414-9788
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
Feburay 4, 2015
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(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 ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [X]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 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 persons
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 for the purpose of Section 18 of the Securities Exchange
Act of 1934 () 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).
Persons who respond to the collection of information contained in this form are
not required to respond unless the form displays a currently valid OMB control
number.
SEC 1746 (3-06)
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CUSIP No. 00650W300
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1 Name of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Doucet Capital,LLC, sole owner of Doucet Asset Management, LLC 03-0600886
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
HC
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5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)[ ]
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6 Citizen or Place of Organization
Delaware, US
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Number of 7 Sole Voting Power 0
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Shares
Beneficially 8 Shared Voting 1,433,659
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Owned by
Each 9 Sole Dispositive Power 0
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Reporting
Person With 10 Shared Dispositive Power 1,433,659
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,433,659
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12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
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13 Percent of Class Represented by Amount in Row (11)
8.2%
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14 Type of Reporting Person (See Instructions)
HC
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CUSIP No. 00650W300
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1 Name of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Doucet Asset Management, LLC 03-0600882
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
IA
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5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)[ ]
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6 Citizen or Place of Organization
Delaware, US
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Number of 7 Sole Voting Power 0
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Shares
Beneficially 8 Shared Voting 1,433,659
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Owned by
Each 9 Sole Dispositive Power 0
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Reporting
Person With 10 Shared Dispositive Power 1,433,659
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,433,659
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12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
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13 Percent of Class Represented by Amount in Row (11)
8.2%
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14 Type of Reporting Person (See Instructions)
IA
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CUSIP No. 00650W300
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1 Name of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Christopher L. Doucet, managing member of Doucet Capital, LLC and
CEO and control person of Doucet Asset Management
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
IN
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5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)[ ]
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6 Citizen or Place of Organization
US Citizen
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Number of 7 Sole Voting Power 0
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Shares
Beneficially 8 Shared Voting 1,433,659
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Owned by
Each 9 Sole Dispositive Power 0
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Reporting
Person With 10 Shared Dispositive Power 1,433,659
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,433,659
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12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
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13 Percent of Class Represented by Amount in Row (11)
8.2%
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14 Type of Reporting Person (See Instructions)
IN
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CUSIP No. 00650W300
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1 Name of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Suzette A. Doucet, CFO and control person of Doucet Asset Management, LLC
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
IN
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5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)[ ]
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6 Citizen or Place of Organization
US Citizen
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Number of 7 Sole Voting Power 0
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Shares
Beneficially 8 Shared Voting 1,433,659
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Owned by
Each 9 Sole Dispositive Power 0
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Reporting
Person With 10 Shared Dispositive Power 1,433,659
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,433,659
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12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
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13 Percent of Class Represented by Amount in Row (11)
8.2%
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14 Type of Reporting Person (See Instructions)
IN
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Item 1. Security and Issuer
The class of equity to which this statement relates is the common stock
$0.001 par value (the "Common Stock") of Adcare Health Systems. Inc.
(the "Company"), which has its principal executive offices at:
1145 Hembree Road
Roswell, GA 30076
Item 2. Identity and Background
Doucet Capital LLC, Doucet Asset Management LLC, Christopher L. Doucet,
and Suzette A. Doucet are the persons filing this statement. Doucet
Capital is a holding company which owns Doucet Asset Management LLC, a
SEC registered investment adviser firm that exercises discretionary
authority over client investments. Both firms are limited liability
companies organized under the laws of the state of Delaware. Christopher
L. Doucet is the managing member of Doucet Capital LLC and Chief Execu-
tive Officer of Doucet Asset Management. Suzette A. Doucet is a member
of Doucet Capital and the Chief Financial Officer of Doucet Asset Manage-
ment. As such, Mr. and Mrs. Doucet control the activities of Doucet
Capital and Doucet Asset Management. Both Mr. and Mrs. Doucet are US
citizens. The business address of each of the Reporting Persons is
2204 Lakeshore Drive, Suite 304, Birmingham, Alabama 35209.
During the last five years, neither of the Reporting Persons has been (a)
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (b) a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
As of February 4, 2015 Doucet Asset Management has acquired 1,433,659
shares of the Common Stock of the Company on the open market for
total consideration of $5,920,880.
The above amount of total consideration includes any commissions incurred
in the making of the investments. The source of these funds was the
investment capital of the discretionary clients of Doucet Asset Manage-
ment, which include Christopher and Suzette Doucet.
Item 4. Purpose of Transaction
All of the shares of Common Stock reported herein were acquired for
investment purposes, and were originally acquired without the purpose or
effect of changing or influencing control of the Company. The Reporting
Persons review on a continuing basis the investment in the Company. Based
on such review and depending on the price and availability of the
Company's securities, the Reporting Persons may acquire, or cause to be
acquired, additional securities of the Company, in the open market or
otherwise, dispose of, or cause to be disposed of, securities of the
Company, in the open market or otherwise, at any time, or formulate other
purposes, plans or proposals regarding the Company or any of its
securities, to the extent deemed advisable in light of general investment
and policies of the Reporting Persons, the Company s business, financial
condition and operating results, general market and industry conditions
or other factors.
Doucet Asset Management and would like to see management maximize
stockholder value, and has sent the following letter to the
Company's Board of Directors:
February 4, 2015
AdCare Health Systems Inc.
Board of Directors
3050 Peachtree Road NW
Suite 355
Atlanta, GA 30305
Dear AdCare Board:
My name is Chris Doucet and I am CEO and Managing Partner of Doucet
Asset Management. Doucet Asset Management has control of approximately
1,433,659 shares of AdCare Stock (NYSE ADK) through its holdings of the
common stock in our managed accounts and personal accounts as well as
through our holdings of convertible bonds in which the firm has discretion.
It is our belief that we are the largest investors in ADK.
We would like to begin by commending the Board on its decision to offer
Bill McBride the position of CEO of ADK last fall and convincing him to
accept it. We have been impressed with the job he has done thus far on
executing the strategic plan laid out by the Board this past summer,
stabilizing the existing business in rapid fashion, significantly
reducing expenses and refinancing short-term debt at extremely
attractive rates.
It is still our desire to see the Company sold as soon as possible.
Mergers and acquisition activity in the space is still robust and we
would like to see ADK have adequate leverage to command a premium
price in the marketplace. We fully understand what Bill must do so
stockholder value can ultimately be realized. We also understand that
there are diseconomies of scale in the REIT market and we are likely
to receive a higher price in an ultimate sale in the future if ADKs
portfolio is larger versus smaller, all other things being equal. As
a result of this aforementioned basic fact of the REIT market,
we would like to propose a simple plan-ADK should merge with Global
Healthcare REIT (OTC GBCS) at the appropriate prices.
There would be several benefits to this simple plan. Merging ADK
and GBCS at current prices would significantly benefit both companies.
Currently, both ADK and GBCS:
- share the same office space
- are in the same exact business
- compete with one another in the same market for the same properties
- are in similar geographies with similar clientele
- have portfolios which were both assembled by the same person
- have some of the same operators
- were done with similar economics
- have an identical investment thesis
- share many of the same investors
- trade roughly at the same discount to their implied intrinsic values
- are too small on their own to trade at large premiums to their
intrinsic values
- have duplicate boards and management teams
- pay duplicate public costs
The combined Company would:
- instantly grow to 50 properties
- save on duplicate board and management expenses
- save on duplicate public costs
- enjoy more attractive cost of capital
- be able to pay out a higher dividend stream as a combined
company versus on a standalone basis
- appear on more radar screens of Wall Street and potential
acquirers because of the increased size of the Company
- be able to maintain the use of ADK s $23 million tax loss
carry-forward
In short, having GBCS and ADK continue to exist as two separate
companies simply does not make sense and never did. Combining the
two companies would create a plethora of benefits to both shareholder
bases.
Once again, we commend the Board on making the decision to hire Bill.
He is doing the hard work to get this company cleaned up and doing this
heavy lifting in an expedient fashion. We appreciate the consideration
of my proposal as we believe it makes perfect sense for both Companies
to work together and not compete with each other and duplicate costs.
Regards,
Chris L. Doucet
CEO and Managing Partner
Doucet Asset Management
Doucet reserves the right from time to time to formulate plans and
proposals regarding the Company or any of its securities, and to
carry out any of the actions or transactions to protect the interests
of its clients. Doucet may in the future acquire additional Common
Stock or other securities of the Company in the open market, in
privately negotiated purchases or otherwise and may also, depending
on the current circumstances, dispose of all or a portion of the
Common Stock beneficially owned by them in one or more transactions.
Item 5. Interest in Securities of the Issuer
(a) As of the close of business on February 3, 2015 Doucet Capital,
Doucet Asset Management, Christopher L. Doucet, and Suzette A. Doucet
were the beneficial owners of 1,433,659 shares of Common Stock, which
constitute in the aggregate 8.2% of the outstanding shares of Common
Stock of the Company based on 17,505,444 shares of Common Stock
Outstanding pursuant to the Form 10-Q for the quarterly period ending
March 31, 2014 filed by the Company.
(b) Doucet Capital, Doucet Asset Management, Christopher L. Doucet, and
Suzette A. Doucet have shared power to vote, direct the vote of, dispose
of and direct the disposition of the Common Stock beneficially owned as
described in Item 5(a) above. Such power is shared among the Reporting
Persons.
(c) Transactions in the Common Stock by the Reporting Persons affected
in the last 60 days are as set forth in the table below. All such trades
were made in open market transactions.
(d) The Reporting Persons have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of,
the Common Stock beneficially owned by them.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
None.
Item 7. Material to be Filed as Exhibits
Exhibit 1. Joint Filing Agreement
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: February 4, 2015
DOUCET CAPITAL, LLC
/S/ Christopher L. Doucet
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Name: Christopher L. Doucet
Title: Managing Member
DOUCET ASSET MANAGEMENT, LLC
By: Doucet Capital, LLC,
its managing member
/S/ Christopher L. Doucet
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Name: Christopher L. Doucet
Title: Managing Member
CHRISTOPHER L. DOUCET
/S/ Christopher L. Doucet
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Christopher L. Doucet, individually
SUZETTE A. DOUCET
/S/ Suzette A. Doucet
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Suzette A. Doucet, individually
EXHIBIT 1
JOINT ACQUISITION STATEMENT
PURSUANT TO RULE 13d-1(k)
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13G, is filed on behalf of each of the undersigned and that all
subsequent amendments to this statement on Schedule 13D, shall be filed on
behalf of each of the undersigned without the necessity of filing additional
joint acquisition statements. The undersigned acknowledge that each shall be
responsible for the timely filing of such amendments, and for the completeness
and accuracy of the information concerning him or it contained therein, but
shall not be responsible for the completeness and accuracy of the information
concerning the others, except to the extent that he or it knows or has reason to
believe that such information is inaccurate.
Date: February 4, 2015
DOUCET CAPITAL, LLC
/S/ Christopher L. Doucet
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Name: Christopher L. Doucet
Title: Managing Member
DOUCET ASSET MANAGEMENT, LLC
By: Doucet Capital, LLC,
its managing member
/S/ Christopher L. Doucet
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Name: Christopher L. Doucet
Title: Managing Member
CHRISTOPHER L. DOUCET
/S/ Christopher L. Doucet
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Christopher L. Doucet
SUZETTE A. DOUCET
/S/ Suzette A. Doucet
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Suzette A. Doucet