Issuer:

AdCare Health Systems, Inc.

Security:

10.875% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”)

Number of Shares Offered:

450,000 shares

Sole Book-Running Manager:

MLV & Co. LLC

Co-Managers:

GVC Capital LLC, Ladenburg Thalmann & Co. Inc. and C. K. Cooper & Company

Best Efforts:

The underwriters are selling the shares of Series A Preferred Stock on a “best efforts” basis and are not required to purchase any shares of the Series A Preferred Stock for their own account, but will use their best efforts to sell the securities offered by the Preliminary Prospectus Supplement and the accompanying prospectus.

Expected Ticker/Exchange:

“ADK.PRA”/NYSE MKT

Public Offering Price:

$23.00 per share

Underwriting Discount and Commissions:

$1.61 per share; $724,500 total

Net Proceeds to the Company, before expenses:

$9,625,500 after deducting the underwriting discount

Liquidation Preference:

$25.00 per share

Dividend Rate:

10.875% of the $25.00 liquidation preference per share per annum (equivalent to $2.7187 per share per annum)

Penalty Dividend Rate:

12.875% of the $25.00 liquidation preference per share per annum (equivalent to $3.2187 per share per annum)

Dividend Payment Dates:

On or about the last calendar day of each of March, June, September and December, commencing December 31, 2012

Trade Date:

November 6, 2012

Expected Settlement Date:

November 14, 2012 (T + 5)

Optional Redemption:

We may not redeem the Series A Preferred Stock prior to December 1, 2017, except we are required to redeem the Series A Preferred Stock following a Change of Control (as defined in the Preliminary Prospectus Supplement). On and after December 1, 2017, we may redeem the Series A Preferred Stock for cash at our option, from time to time, in whole or in part, at a redemption rate of $25.00 per share, plus accrued and unpaid dividends (whether or not earned or declared) to the redemption date. See “Description of the Series A Preferred Stock—Redemption—General” in the Preliminary Prospectus Supplement.

Special Redemption Upon Change of Control:

Following a Change of Control of us by a person or entity, we (or the acquiring entity) will be required to redeem the Series A Preferred Stock, in whole but not in part, within 120 days after the date on which the Change of Control has occurred for cash, at the price of $25.00 per share, plus accrued and unpaid dividends (whether or not earned or declared) to the redemption date. See “Description of the Series A Preferred Stock—Redemption—Special Redemption Upon Change of Control” in the Preliminary Prospectus Supplement.

Maturity:

The Series A Preferred Stock has no stated maturity and will not be subject to any sinking fund or mandatory redemption, except following a Change of Control. Accordingly, absent a Change of Control, the shares of Series A Preferred Stock will remain outstanding indefinitely unless we decide to redeem them.

Conversion Rights:

The Series A Preferred Stock is not, pursuant to its terms, convertible into or exchangeable for any other securities or property.

CUSIP/ISIN:

00650W 409 / US00650W4096