ADK Investor Summary

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AdCare Health Systems, Inc. (ADK) is an expanding national leader in the development, ownership, and management of assisted living facilities, nursing homes and retirement communities. The company’s 3,400 employees provide high-quality care for patients and residents residing in the 44 facilities that it operates with a total of approximately 3,900 beds/units in service.

As a result of better health management and treatments allowing people to live longer, the Census Bureau projects that the popu-lation aged 85 and over could grow from 5.7 million in 2008 to 19 million by 2050. AdCare has been successfully pursuing an aggressive M&A growth strategy to bolster its portfolio during a depressed economic climate to capitalize on the imminent demand for senior care over the coming decades.

The fragmented skilled nursing market presents significant consolidation and acquisition opportunities to well-established provid-ers like AdCare. With approximately 16,000 facilities currently in operation, no single provider has a market share of more than a few percent. Leveraging its seasoned senior management team’s substantial senior living, healthcare, and real estate industry experience, the company is focused on advancing its strategic business plan to operate a much larger enterprise.

Since inception, AdCare’s mission has been to provide the highest quality healthcare services to the elderly. With nine straight years of record revenue growth, the company has proven its ability to deliver high-quality care and strong operational efficiency. AdCare is well positioned to continue growing rapidly, both organically and via acquisitions, as industry trends and burgeoning opportuni-ties across the U.S. increase the demand for long-term care.

Key Investment Highlights

• Aggressive M&A Growth Strategy to Capitalize on Expanding $226 Billion Market

• Long-term Care Market Poised for Steady Expansion through 2050

• More than 25% of Outstanding Shares Owned by Management Team

• Well Established with Nine Straight Years of Record Revenue Growth

[email protected]

AdCare Health Systems, Inc.

5057 Troy RoadSpringfield, Ohio 45502

Phone: (937) 964-8974

CONTACT COMPANY CONTACT MISSIONIR

[email protected]

Mission Investor Relations

3645 Marketplace Blvd.Suite 130-280Atlanta, GA 30344Phone: (404) 941-8975

Fax: (937) 964-8961

Facility Types and Locations

Independent LivingAdCare’s independent campuses provide freedom in your retirement years to achieve personal goals.

• AdCare is based in Ohio, and since May 2010 has expanded operations to Alabama, Arkansas, Georgia, Missouri, North Carolina & Oklahoma

• Operating 44 facilities, with a total of ~3,900 beds/units in service

• Current closing on signed agreements for 23 additional facilities, with a total of ~2,886 beds/units in service:

• 15 SNFs across the Southeast • 5 SNFs in Oklahoma• 3 SNFs in Arkansas

Assisted LivingThrough our Hearth & Home® design, we created a place where your individual spirit is nourished.

Nursing HomesAdCare takes great pride in the superior care and services provided in our nursing homes.

AdCare manages a growing number of senior living facilities.

AdCare Facility LocationsSigned Agreement to Lease, Purchase, or ManageSNF= Skilled Nursing Facility ALF= Assisted Living Facility

Growth StrategyThe value of the long-term care industry, including nursing home care, home health-care, hospice care and assisted living, was $186 billion in 2005. Five years later, the value grew by more than 38% to $258 billion. According to research firm Kalorama Information, the market will grow at annual rates exceeding 6% from 2012 through 2015, resulting in revenues of $353.5 billion by 2015. Because of the extremely frag-mented nature of this industry, there is an abundance of consolidation opportunities.

In the fall of 2009, AdCare began an aggressive acquisition strategy focused on ac-quiring underperforming facilities from independent operators with the goal of in-creasing occupancy rates and gaining operational efficiencies. Since the beginning of this M&A campaign, 54 facilities have been put under contract. Targeting prospects in the Southeast, Southwest and Midwest U.S. and avoiding states with notably troubled economies, the company has grown from 14 facilities in 2009 to 44 facilities to date.

A second part of AdCare’s business strategy involves seeking out operational ef-ficiencies at the newly added facilities for topline and bottom line improvements. For example, the company has successfully improved AdCare’s Medicare census by 37.5% at acquired facilities since it began its M&A campaign. Through optimization procedures and application of operational best practices, the company has been able to offset recent cuts in Medicare reimbursements.

David A. TenwickChairman

With extensive experience in mergers, acquisitions and raising capital, David specializes in corporate lead-ership and building companies from the ground floor up. In 1991, he formed Passport Retirement, a long term care company, which acquired AdCare Health Systems, Inc., in 1995. David received his BBA and JD degrees from the University of Cincinnati.

Boyd P. GentryChief Executive Officer

Boyd is a seasoned healthcare executive who brings more than 25 years of experience to AdCare. He has extensive experience and knowledge in acquisition and divestiture pursuits as well as fi-nancing and capital markets activities. Boyd received his Bachelors of Arts in Economics from Knox College in Galesburg, Illinois, and earned his MBA in Finance and Accounting from Southern Meth-odist University in Dallas, Texas.

Chris BrogdonChief Acquisition Officer/Vice Chairman

Chris is a veteran industry executive with more than 20 years of experience in the nursing home, as-sisted living and retirement community industry. He has an exemplary record in building shareholder value through a combination of acquisitions and organic initiatives. Chris attended Georgia State University in Atlanta, Georgia.

David RubensteinChief Operating Officer

David delivers a wealth of operational efficiency experience, drawing on his mastery over the complex land-scape of long-term care, administrative support, P&L management, Medicare census development and re-lated strategic responsibilities obtained via more than 23 years of facility management serving CEO and other executive positions for companies covering hundreds of facilities. David received his Bachelor of Science in Accounting from the University of Rhode Island and is a teaching affiliate with the American Health Care As-sociation, Lincoln Healthcare Events and the Healthcare Financial Managers Association.

Martin D. BrewChief Financial Officer

Martin is an accomplished finance and healthcare industry executive who brings more than 29 years of experi-ence to AdCare. He adds a wealth of capital expertise, post-acquisition integration and financial management experience in the senior care industry. Martin received his Bachelor of Science in Business from Indiana Uni-versity, and is a member of the Georgia Society of Certified Public Accountants and the American Institute of Certified Public Accountants.