AdCare Health Systems faces potential delisting from the NYSE MKT stock exchange because it reported a stockholders’ deficit of $23.8 million as of Dec. 31 and net losses for the past five fiscal years, the company shared in an April 22 filing with the Securities and Exchange Commission.
The self-managed healthcare real estate investment company said it expects to submit a plan to the exchange by May 18 detailing the actions it has taken or will take to get back into compliance with the exchange’s continued listing standards by Oct. 18, 2017. In the meantime, AdCare said its common and preferred stock continue to be listed, although their status could change if the company does not submit a plan by May 18 or if the company submits a plan but does not show progress in meeting its goals.
In an April 19 press release, the company, which invests primarily in senior living and long-term care properties, said it had engaged financial advisory firm Stifel to help the board of directors review strategic alternatives for the company. AdCare had declassified its board of directors following a Dec. 10 annual meeting of shareholders.
“AdCare is at a pivotal time in its development, and we believe Stifel, with its investment banking expertise in real estate, especially in healthcare real estate, will be of great help in exploring strategic alternatives for our company,” AdCare Chairman and CEO Bill McBride said in a statement.
The company said it has not decided to pursue any specific strategic transaction or any other strategic alternative, nor has it set a timetable for completion of the review process.
Also in the press release, AdCare announced an April 1 master lease of the company’s nine Arkansas facilities to affiliates of Skyline Healthcare LLC, a move that McBride said will increase rental revenue from the properties and improve the operational and credit profile of the company’s overall portfolio. The action comes after a 2014 announcement that the company planned divest its senior living properties and become a holding company.
McBride also announced the receipt of a financing commitment of about $3.7 million from the U.S. Department of Housing and Urban Development to refinance debt associated with a South Carolina property. The company expects to close on that transaction in the first half of this year, he said.