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Arcadia adds Goldsmith to board, seeks $11M in offering

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Arcadia Resources Inc. has appointed former Indianapolis Mayor Steve Goldsmith to its board of directors, the locally based health care company announced Monday morning.

Goldsmith, who served as mayor from 1992 to 2000, is a professor in the American Government Program at Harvard University's Kennedy School of Government. He also is the chairman of the Corporation for National and Community Service, a major grant maker that supports national and community services programs.

Goldsmith will replace Tres Lund, a major Arcadia shareholder who resigned from the board after serving on it since 2007. 

In addition Monday morning, Arcadia said it plans to sell nearly 16 million shares of stock in a registered direct offering that will raise $11.1 million.

Arcadia, which operates health care staffing businesses and a pharmaceutical management service, has commitments to sell the shares to institutional investors, which it did not name in its announcement. The company needed more cash, as its reserves had dwindled to $517,000 at the end of the second quarter, down from $2.4 million a year earlier.

The investors will pay 70 cents for each unit, which consists of one share of common stock as well as a warrant to purchase 0.45 shares as early as six months from now. The warrants are exercisable at a price of 95 cents per share.

Arcadia’s stock price closed Friday at 75 cents per share. The value of the stock has tripled in the last year as Arcadia’s losses have narrowed. However, the company’s share price has fallen 35 percent from its high set in mid-September.

The new shares offered, which totaled 15,857,141, represent 9.8 percent of Arcadia’s total shares outstanding.

And the company could sell even more shares. According to a prospectus Arcadia filed Friday with the U.S. Securities & Exchange Commission, it may “from time to time” sell new shares up to a limit of 20 million.

 

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