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As filed with the Securities and Exchange Commission on November 10, 2015

Registration No. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

AAC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Nevada   8093   35-2496142

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

115 East Park Drive, Second Floor

Brentwood, TN 37027

(615) 732-1231

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)

 

 

Michael T. Cartwright

Chief Executive Officer and Chairman of the Board

AAC Holdings, Inc.

115 East Park Drive, Second Floor

Brentwood, TN 37027

(615) 732-1231

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

Howard H. Lamar III, Esq.

Jay H. Knight, Esq.

Bass, Berry & Sims PLC

150 3rd Avenue S., Suite 2800

Nashville, TN 37201

(615) 742-6200

 

 

Approximate date of commencement of proposed sale to the public: From time to time on or after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one)

 

Large Accelerated filer   ¨    Accelerated filer   ¨
Non-accelerated filer   x  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

 

 

CALCULATION OF REGISTRATION FEE

 

 

 

Title of Each Class of

Securities to be Registered

  Amount to be
Registered(1)
  Proposed Maximum
Offering Price Per
Share(2)
 

Proposed

Maximum

Aggregate

Offering Price(2)

 

Amount of

Registration Fee

Common Stock, par value $0.001 per share

  833,333(3)   $24.14   $20,116,658.62   $2,025.75

 

 

(1) All of the securities being offered are offered by the selling stockholders named in this registration statement. Pursuant to Rule 416 under the Securities Act of 1933, as amended, this registration statement includes an indeterminate number of additional shares that may be offered and sold to prevent dilution resulting from stock splits, stock dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(c) under the Securities Act of 1933, as amended, based on the average high and low sales prices of our common stock on the New York Stock Exchange on November 9, 2015.
(3) Represents shares of our common stock that may be issued upon conversion of the 2.5% Subordinated Convertible Notes issued in the registrant’s October 2015 private placement.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

 

 

 


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED NOVEMBER 10, 2015

PROSPECTUS

833,333 Shares

 

LOGO

AAC Holdings, Inc.

Common Stock

 

 

The selling stockholders named herein may offer and sell from time to time up to 833,333 shares of our common stock covered by this prospectus. The selling stockholders will receive all of the proceeds from any sales of the shares offered hereby. We will not receive any of the proceeds, but we will incur expenses in connection with the offering.

Our registration of the shares of common stock covered by this prospectus does not mean that the selling stockholders will offer or sell any of the shares. The selling stockholders may sell the shares of common stock covered by this prospectus from time to time on the New York Stock Exchange or any exchange on which we may be listed in the future at the prevailing market price or in any other manner specified under “Plan of Distribution” beginning on page 7 of this prospectus.

We are an “emerging growth company” as that term is defined in the Jumpstart Our Business Startups Act of 2012 and, as such, are subject to reduced public company reporting requirements.

Our common stock is listed on the New York Stock Exchange under the symbol “AAC”. The last reported sale price of our common stock on the New York Stock Exchange on November 9, 2015 was $23.51 per share.

 

 

Investing in our common stock involves risks. You should refer to the risk factors in our periodic reports and other information that we file with the Securities and Exchange Commission incorporated by reference in this prospectus and carefully consider that information before buying our securities. See “Risk Factors” beginning on page 5 of this prospectus.

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

The date of this prospectus is                     , 2015


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TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS

     i   

WHERE YOU CAN FIND MORE INFORMATION

     1   

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

     1   

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     2   

OUR COMPANY

     4   

RISK FACTORS

     5   

USE OF PROCEEDS

     5   

SELLING STOCKHOLDERS

     5   

PLAN OF DISTRIBUTION

     7   

DESCRIPTION OF CAPITAL STOCK

     9   

LEGAL MATTERS

     12   

EXPERTS

     12   

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     13   

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form S–3 that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf registration process, the selling stockholders may sell the securities described in this prospectus in one or more offerings. This prospectus does not contain all of the information included in the registration statement. The registration statement filed with the SEC includes exhibits that provide more details about the matters discussed in this prospectus. You should carefully read this prospectus, the related exhibits filed with the SEC, together with the additional information described below under the headings “Where You Can Find More Information” and “Incorporation of Certain Information by Reference.”

You should rely only on the information contained or incorporated by reference in this prospectus. We have not, and the selling stockholders have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The selling stockholders are not making offers to sell or seeking offers to buy any of the securities covered by this prospectus in any state where the offer is not permitted. You should assume that the information appearing in this prospectus and any other document incorporated by reference is accurate only as of the date on the front cover of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates.

Under no circumstances should the delivery to you of this prospectus or any offer or sale made pursuant to this prospectus create any implication that the information contained in this prospectus is correct as of any time after the date of this prospectus.

Unless the context otherwise requires or as otherwise expressly stated, references in this prospectus to the “Company,” “we,” “us” and “our” and similar terms refer to AAC Holdings, Inc. together with its consolidated subsidiaries.

 

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WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a “shelf” registration statement on Form S-3, including exhibits, schedules and amendments filed with the registration statement, of which this prospectus is a part, under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of common stock that may be offered by this prospectus. This prospectus is a part of that registration statement, but does not contain all of the information in the registration statement. We have omitted parts of the registration statement in accordance with the rules and regulations of the SEC. For further information with respect to our company and the shares of common stock that may be offered by this prospectus, reference is made to the registration statement, including the exhibits and schedules to the registration statement. Statements contained in this prospectus as to the contents of any contract or other document referred to in this prospectus are not necessarily complete and, where that contract or other document has been filed as an exhibit to the registration statement, each statement in this prospectus is qualified in all respects by the exhibit to which the reference relates.

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, in accordance therewith, we file annual, quarterly and current reports, proxy statements and other information with the SEC. The registration statement of which this prospectus forms a part, including the exhibits and schedules to the registration statement, and the reports, statements or other information we file with the SEC, may be examined and copied at the Public Reference Room of the SEC at 100 F Street, N.E., Washington, DC 20549. Information about the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. Our SEC filings, including the registration statement, are also available to you on the SEC’s website (http://www.sec.gov), which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. In addition, our securities are listed on the New York Stock Exchange (“NYSE”) and all material filed by us with the NYSE can be inspected at the offices of the NYSE at 20 Broad Street, New York, New York 10005.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

We incorporate information into this prospectus by reference, which means that we disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, except to the extent superseded by information contained herein or by information contained in documents filed with or furnished to the SEC after the date of this prospectus. This prospectus incorporates by reference the documents set forth below that have been previously filed with the SEC:

 

    Our Annual Report on Form 10-K for the year ended December 31, 2014, filed on March 11, 2015, including portions of our Proxy Statement for the 2015 Annual Meeting of Stockholders to the extent specifically incorporated by reference therein;

 

    Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015, filed on May 5, 2015, August 3, 2015 and November 10, 2015, respectively;

 

    Our Current Reports on Form 8-K filed on January 9, 2015, January 12, 2015, February 3, 2015, February 24, 2015, May 13, 2015, June 1, 2015, June 19, 2015, July 8, 2015 (as amended on September 18, 2015), July 31, 2015, August 12, 2015 (as amended on October 23, 2015), August 26, 2015 and October 7, 2015; and

 

    The description of the Company’s Common Stock set forth in the Company’s Registration Statement on Form 8-A (File No. 001-36643) filed pursuant to Section 12(b) of the Exchange Act on September 25, 2014, including any amendment or report filed for the purpose of updating such description.

We also incorporate by reference into this prospectus additional documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the initial registration statement

 

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and prior to effectiveness of the registration statement and from the date of this prospectus until all securities have been sold to which this prospectus relates or the offering is otherwise terminated; provided, however, that we are not incorporating any information deemed “furnished” or not deemed to be “filed,” including information furnished under either Item 2.02 or Item 7.01 of any current report on Form 8-K. These documents may include, among others, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements.

Any statement contained in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

To obtain a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless an exhibit has been specifically incorporated by reference into those documents) please contact us in writing or by telephone at:

AAC Holdings, Inc.

115 East Park Drive, Second Floor

Brentwood, Tennessee 37027

(615) 732-1231

Attention: Corporate Secretary

Our SEC filings also are available on our Internet website at http://www.americanaddictioncenters.org. The information on or accessible through our website is not incorporated into, and you must not consider the information to be, a part of this prospectus. We have included our website address as an inactive textual reference and do not intend it to be an active link to our website.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this prospectus and the documents incorporated by reference into this prospectus constitute forward-looking statements within the meaning of the federal securities laws, and we intend such statements to be covered by the safe harbor provisions contained therein. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. Likewise, our pro forma financial statements are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “may,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these words. You can also identify forward-looking statements by discussions of strategy, plans or intentions. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include, without limitation:

 

    our inability to operate certain key treatment facilities, our corporate office or our laboratory facility;

 

    our reliance on our sales and marketing program to continuously attract and enroll clients in our network of facilities;

 

    our dependence on payments by third-party payors with whom we are considered an “out-of-network” provider;

 

    the impact of an increase in uninsured and underinsured clients or the deterioration in the collectability of the accounts of such clients;

 

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    a reduction in reimbursement rates by certain third-party payors for inpatient and outpatient services and point of care and definitive lab testing;

 

    our failure to successfully achieve growth through acquisitions and de novo expansions;

 

    our acquisition strategy, which exposes us to a variety of operational, integration and financial risks;

 

    our failure to achieve anticipated financial results from contemplated acquisitions;

 

    the possibility that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of contemplated acquisitions;

 

    the impact of governmental regulations on our operations and potential governmental investigations and claims or lawsuits or other claims brought against us by others;

 

    a disruption in our business related to the July 2015 indictment of certain of our subsidiaries and current and former employees;

 

    the impact of competition and its potential effect on census volume and the availability or cost of attracting and retaining talented medical support staff;

 

    our failure to obtain necessary outside financing on favorable terms or at all;

 

    our ability to meet our debt obligations and the impact of the restrictive covenants in our applicable loan documents;

 

    our inability to agree on conversion and other terms for the balance of available convertible debt or obtain consent from our senior lenders to exceed the current limit of permissible unsecured subordinated debt;

 

    our dependence on key management personnel;

 

    our failure to comply with applicable regulatory authorities, licensure and permits to operate our facilities and lab;

 

    the impact of legislative and regulatory initiatives relating to privacy and security of client health information and standards for electronic transactions;

 

    the impact of recent healthcare reform;

 

    the impact of state efforts to regulate the construction or expansion of healthcare facilities on our ability to operate and expand our operations;

 

    our ability to continue to comply with the regulations applicable to publicly traded companies;

 

    the impact of market volatility and a limited amount or discontinuation of security analyst coverage on the market price of our common stock;

 

    general economic conditions; and

 

    the other risks described under the heading “Risk Factors.”

The factors identified above should not be construed as an exhaustive list of factors that could affect our future results and should be read in conjunction with the other cautionary statements that are included in this prospectus. Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future about which we cannot be certain.

As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus and the documents incorporated by reference into this prospectus will prove to be accurate. Furthermore, if our

 

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forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We do not undertake to update any of the forward-looking statements after the date of this prospectus except to the extent required by applicable securities laws.

OUR COMPANY

We believe we are a leading provider of inpatient substance abuse treatment services for individuals with drug and alcohol addiction. As of November 10, 2015, we operated ten residential substance abuse treatment facilities located throughout the United States, focused on delivering effective clinical care and treatment solutions across 915 beds, which included 482 licensed detoxification beds. We also operate ten standalone outpatient centers and an overeating behavioral disorder treatment center, FitRx.

We believe we are also one of the largest internet marketers in the addiction treatment industry with respect to website visits and leads generated. Following our recent acquisition of Referral Solutions Group, LLC (“RSG”) on July 2, 2015, combined with our previously existing internet assets, we now operate a broad portfolio of internet assets that services millions of website visits each month. RSG, through its wholly owned subsidiary Recovery Brands, LLC (“Recovery Brands”), a leading publisher of “authority” websites such as Rehabs.com and Recovery.org, serves families and individuals struggling with addiction and seeking treatment options through comprehensive online directories, treatment provider reviews, forums and professional communities. Recovery Brands also provides online marketing solutions to other treatment providers such as enhanced facility profiles, audience targeting, lead generation and tools for digital reputation management.

AAC Holdings, Inc. is a Nevada corporation. Our principal executive offices are located at 115 East Park Drive, Second Floor, Brentwood, Tennessee 37027, and our telephone number is (615) 732-1231. Our website address is www.americanaddictioncenters.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. Investors should not rely on any such information in deciding whether to purchase our common stock. We have included our website address in this prospectus solely as an inactive textual reference.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we have elected to take advantage of certain exemptions from various public company reporting requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage of these exemptions until we are no longer an “emerging growth company.”

 

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RISK FACTORS

Our business is subject to uncertainties and risks. You should carefully consider and evaluate all of the information included and incorporated by reference in this prospectus, including the risk factors incorporated by reference from our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as updated by our Quarterly Reports on Form 10-Q and other filings we make with the SEC, each of which is incorporated by reference into this prospectus. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of these risks actually occur, our business, financial condition and results of operations would suffer. In that case, the trading price of our common stock would likely decline and you might lose all or part of your investment in the securities offered by the selling stockholders.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of our common stock by the selling stockholders.

SELLING STOCKHOLDERS

This prospectus relates to the possible resale of up to 833,333 shares of our common stock issuable upon the conversion of the 2.5% subordinated convertible notes in the original principal amount of $25,000,000 (the “Convertible Notes”) held by the selling stockholders set forth in the table below.

The following table presents information regarding the selling stockholders, and the shares of common stock that they may offer and sell from time to time under this prospectus. This table is prepared based on information supplied to us by the selling stockholders. As used in this prospectus, the term “selling stockholders” includes any donees, pledges, transferees or other successors in interest selling shares received after the date of this prospectus from a selling stockholder as a gift, pledge, or other non-sale related transfer. The number of shares in the column “Number of Shares Being Offered” represents all of the shares that the selling stockholders may offer under this prospectus. The selling stockholders may sell some, all or none of their respective shares of common stock. We do not know how long the selling stockholders will hold their respective shares before selling them, and we currently have no agreements, arrangements or understandings with the selling stockholders regarding the sale of any of the shares.

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Securities Exchange Act of 1934, as amended. The percentages of shares of common stock beneficially owned after the offering shown in the table below are based on an aggregate of 22,407,311 shares of our common stock outstanding on November 9, 2015.

 

Selling Stockholder(1)

   Shares
Beneficially
Owned Prior to
the Offering
       Number
of Shares
Being
Offered(2)
     Shares
Beneficially
Owned After
the Offering
     Percentage  

Deerfield Private Design Fund III, L.P.

     416,667(2)(5)           416,667         —           —     

Deerfield International Master Fund, L.P.

     1,129,398(3)(5)           233,333         896,065         3.86

Deerfield Partners, L.P.

     887,386(4)(5)           183,333         704,053         3.03

 

(1) James E. Flynn, with an address at 780 Third Avenue, 37 Floor, New York, New York 10017, has voting and disposition power over the shares of common stock held by the selling stockholders.
(2) Represents shares of common stock issuable upon conversion of the Convertible Notes.
(3) Comprised of 896,065 shares of common stock and 233,333 shares of common stock issuable upon conversion of the Convertible Notes.

 

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(4) Comprised of 704,053 shares of common stock and 183,333 shares of common stock issuable upon conversion of the Convertible Notes.
(5) The provisions of the Convertible Notes restrict their conversion to the extent that, upon such conversion, the number of shares of common stock then beneficially owned by the holder and its affiliates and any person or entities with which such holder would constitute a Section 13(d) “group” would exceed 9.98% of the total number of shares of common stock then outstanding (the “Ownership Cap”). Accordingly, notwithstanding the number of shares indicated in the table as being beneficially owned, Deerfield Private Design Fund III, L.P., Deerfield International Master Fund, L.P. and Deerfield Partners, L.P. (collectively, the “Deerfield Funds”) disclaim beneficial ownership of the shares of common stock underlying such Convertible Notes to the extent beneficial ownership of such shares would cause the Deerfield Funds, in the aggregate, to exceed the Ownership Cap.

Material Relationships

Facility Agreement

On October 2, 2015, the Company entered into a Facility Agreement with the Deerfield Funds providing for the sale by the Company to the Deerfield Funds of (i) $25.0 million of 2.5% subordinated convertible notes and (ii) up to $25.0 million of 12.0% senior subordinated notes upon the terms and conditions set forth in the Facility Agreement, together with an incremental facility of up to an additional $50.0 million of subordinated convertible debt (subject to certain conditions). On the date of the Facility Agreement, the Company issued $25.0 million of Convertible Notes to the Deerfield Funds, which Convertible Notes mature on the sixth anniversary of the initial funding date and are convertible into shares of the Company’s common stock, par value $0.001 per share, at a conversion rate of $30.00 per share. The Deerfield Funds are affiliated and, as of November 9, 2015, beneficially owned an aggregate of 2,433,451 shares of common stock, including 833,333 shares issuable upon conversion of the Convertible Notes. As a result of the Ownership Cap contained in the Convertible Notes, the foregoing shares represented 9.98% of our common stock on November 9, 2015.

Registration Rights Agreement

In connection with the Facility Agreement, on October 2, 2015, the Company and the Deerfield Funds entered into a Registration Rights Agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company has agreed to prepare and file with the SEC a registration statement to effect a registration of the common stock issued or issuable upon conversion of or pursuant to the Convertible Notes (the “Registrable Securities”), covering the resale of the Registrable Securities through an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act. The registration statement of which this prospectus forms a part is being filed to satisfy that filing requirement. Pursuant to the Registration Rights Agreement, the Company agreed to pay registration-related fees and expenses. The Company also agreed to indemnify the Deerfield Funds for certain losses in connection with such registrations.

 

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PLAN OF DISTRIBUTION

We are registering 833,333 shares of our common stock for possible sale by the selling stockholders.

The selling stockholders and any permitted transferees or assignees thereof may offer and sell all or a portion of the shares covered by this prospectus from time to time, in one or more or any combination of the following transactions:

 

    on the New York Stock Exchange, in the over the counter market or on any other national securities exchange on which our shares are listed or traded;

 

    in privately negotiated transactions;

 

    in underwritten transactions;

 

    in a block trade in which a broker dealer will attempt to sell the offered shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

 

    through collared hedging transactions, whether through an options exchange or otherwise;

 

    through purchases by a broker dealer as principal and resale by the broker dealer for its account pursuant to this prospectus; and

 

    through any other method permitted by applicable law.

The selling stockholders may sell the shares at prices then prevailing or related to the then current market price or at negotiated prices. The offering price of the shares from time to time will be determined by the selling stockholders and, at the time of the determination, may be higher or lower than the market price of our common stock on the New York Stock Exchange or any other exchange or market.

The shares may be offered to the public, from time to time, through broker-dealers acting as agent or principal, including through underwriting syndicates represented by one or more managing underwriters or directly by one or more of such firms in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the shares of common stock will be subject to the conditions set forth in the applicable underwriting agreement. Any public offering price and any discounts or concessions allowed or reallowed or paid by underwriters or dealers to other dealers may be changed from time to time.

In connection with an underwritten offering, underwriters or agents may receive compensation in the form of discounts, concessions or commissions from the selling stockholders or from purchasers of the offered shares for whom they may act as agents. In addition, underwriters may sell the shares to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. The selling stockholders and any underwriters, dealers or agents participating in a distribution of the shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any profit on the sale of the shares by the selling stockholders and any commissions received by broker dealers may be deemed to be underwriting commissions under the Securities Act.

We and the selling stockholders each may agree to indemnify an underwriter, broker dealer or agent against certain liabilities related to the selling of the common stock, including liabilities arising under the Securities Act. Pursuant to the Registration Rights Agreement, we have agreed to indemnify the selling stockholders against certain liabilities related to the registration and/or sale of the common stock, including liabilities arising under the Securities Act. In addition, pursuant to the Registration Rights Agreement, we have agreed to pay the costs, expenses and fees of registering the shares of common stock; however, the selling stockholders will pay any underwriting discounts or commissions relating to the sale of the shares of common stock in any underwritten offering.

 

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To our knowledge, there are currently no plans, arrangements or understanding between the selling stockholders and any underwriter, broker-dealer or agent regarding the sale of shares by the selling stockholders. Upon our notification by the selling stockholders that any material arrangement has been entered into with an underwriter or broker dealer for the sale of shares through a block trade, special offering, exchange distribution, secondary distribution or a purchase by an underwriter or broker dealer, we will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the Securities Act, disclosing certain material information, including:

 

    the name(s) of the selling stockholder(s);

 

    the number of shares being offered;

 

    the terms of the offering;

 

    the names of the participating underwriters, broker dealers or agents;

 

    any discounts, commissions or other compensation paid to underwriters or broker dealers and any discounts, commissions or concessions allowed or reallowed or paid by any underwriters to dealers;

 

    the public offering price; and

 

    other material terms of the offering.

The selling stockholders are subject to the applicable provisions of the Exchange Act, and the rules and regulations under the Exchange Act, including Regulation M. This regulation may limit the timing of purchases and sales of any of the shares of common stock offered in this prospectus by the selling stockholders. The anti-manipulation rules under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of the shares to engage in market making activities for the particular securities being distributed for a period of up to five business days before the distribution. The restrictions may affect the marketability of the shares and the ability of any person or entity to engage in market making activities for the shares.

To facilitate the offering of shares covered by this prospectus, certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of the shares of common stock. This may include over-allotments or short sales of the securities, which involve the sale by persons participating in the offering of more securities than the selling stockholders sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.

In the ordinary course of their business activities, any underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the Company.

To the extent required, this prospectus may be amended and/or supplemented from time to time to describe a specific plan of distribution.

Instead of selling the shares of common stock under this prospectus, the selling stockholders may sell the shares of common stock in compliance with the provisions of Rule 144 under the Securities Act, if available, or pursuant to other available exemptions from the registration requirements of the Securities Act.

 

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DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 70,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share.

As of November 9, 2015, we had 22,407,311 shares of our common stock issued and outstanding. We have no preferred stock outstanding. Based on the number of shares of common stock outstanding as of November 9, 2015, following the issuance of 833,333 shares of common stock upon the conversion of all of the Convertible Notes, there will be 23,240,644 shares of common stock outstanding.

The following description of our capital stock and provisions of our articles of incorporation and bylaws are summaries and are qualified by reference to the articles of incorporation and the bylaws, copies of which have been filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part.

Governing Law and Organization Documents

Stockholders’ rights and related matters are governed by the laws of the State of Nevada, our articles of incorporation and our bylaws. Our articles of incorporation may not be amended without the approval of our Board of Directors and the affirmative vote of at least a majority of the voting power of our then outstanding capital stock. Our bylaws may only be amended by the affirmative vote of holders of a majority of the voting power of all shares of capital stock outstanding and entitled to vote generally in the election of directors and the affirmative vote of a majority of our directors then holding office.

Common Stock

Voting Rights. Each holder of common stock is entitled to one vote for each share of common stock on all matters submitted to a vote of the stockholders, including the election of directors. Our articles of incorporation and bylaws do not provide for cumulative voting rights. Because of this, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they should so choose.

Dividends. Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of common stock are entitled to receive dividends, if any, as may be declared from time to time by our Board of Directors out of legally available funds.

Liquidation. In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and obligations, subject to the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.

Rights and Preferences. Holders of common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that our Board of Directors may designate and issue in the future.

Preferred Stock

Our Board of Directors has the authority, without further action by the stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences, privileges and restrictions of the shares of each wholly unissued series, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference and

 

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sinking fund terms, and to increase or decrease the number of shares of any such series (but not below the number of shares of such series then outstanding).

Our Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock or otherwise adversely affect the rights of holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change of control and may adversely affect the market price of the common stock.

Nevada Anti-Takeover Law and Provisions of Our Articles of Incorporation and Bylaws

Our articles of incorporation and our bylaws contain certain provisions that could have the effect of delaying, deterring or preventing another party from acquiring control of us, and therefore could adversely affect the market price of our common stock. These provisions may also discourage coercive takeover practices and inadequate takeover bids, and are designed, in part, to encourage persons seeking to acquire control of us to negotiate first with our Board of Directors. We believe that the benefits of increased protection of our potential ability to negotiate more favorable terms with an unfriendly or unsolicited acquirer outweigh the disadvantages of potentially discouraging a proposal to acquire us.

Among other things, our articles of incorporation and bylaws:

 

    permit our Board of Directors to issue up to 5,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change of control);

 

    provide that the authorized number of directors may be changed only by resolution of our Board of Directors;

 

    provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

 

    provide that stockholders seeking to present proposals at a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholder’s notice;

 

    provide that our stockholders may not take action by written consent, but may only take action at annual or special meetings of our stockholders;

 

    do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election); and

 

    provide that special meetings of our stockholders may be called only by the Chairman of the Board of Directors, our Chief Executive Officer, the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors or the holders of a majority of the outstanding shares of voting stock.

The amendment of any of these provisions would require the approval of our Board of Directors and the affirmative vote of at least a majority of the voting power of our then outstanding capital stock for amendments to our articles of incorporation and the approval by holders of a majority of the voting power of all shares of capital stock outstanding and entitled to vote generally in the election of directors and the affirmative vote of a majority of our directors then holding office for amendments to our bylaws.

 

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The provisions of our articles of incorporation and bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they might also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions might also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests.

Listing on the New York Stock Exchange

Our common stock is listed on the NYSE under the symbol “AAC”.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.

 

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LEGAL MATTERS

The validity of the shares of common stock being offered by this prospectus will be passed upon for us by Ballard Spahr LLP, Las Vegas, Nevada.

EXPERTS

The financial statements of AAC Holdings, Inc. as of December 31, 2014 and 2013 and for each of the three years in the period ended December 31, 2014, incorporated by reference in this prospectus, have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The financial statements of Referral Solutions Group, LLC as of December 31, 2014 and 2013 and for the years then ended included in the Current Report on Form 8-K, as amended on September 18, 2015, of AAC Holdings, Inc., incorporated by reference in this prospectus, have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The financial statements of The Oxford Centre, Inc. as of December 31, 2014 and 2013 and for the years then ended included in the Current Report on Form 8-K, as amended on October 23, 2015, of AAC Holdings, Inc., incorporated by reference in this prospectus, have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On July 2, 2015, the Company, through American Addiction Centers, Inc., a Nevada corporation and wholly owned subsidiary of the Company (“AAC”), and Sober Media Group, LLC, a Delaware limited liability company and indirect wholly owned subsidiary of the Company (the “RSG Buyer”), completed its acquisition of Referral Solutions Group, LLC, a California limited liability company (“RSG”) (collectively, the “RSG Acquisition”), pursuant to the terms of a Securities Purchase Agreement dated July 2, 2015, by and among the Company, AAC, the RSG Buyer, the Sellers’ Representative, and the direct and indirect owners of RSG.

On August 10, 2015, the Company, through AAC and Oxford Treatment Center, LLC, a Delaware limited liability company and indirect wholly-owned subsidiary of the Company (the “Oxford Buyer”), completed the acquisition of substantially all of the assets of The Oxford Centre, Inc., a Mississippi corporation (“The Oxford Centre”), and BHR Oxford Real Estate, LLC, a Delaware limited liability company (“BHR”), acquired certain real property from River Road Management, LLC, a Mississippi limited liability company (“RRM”) (collectively, the “Oxford Centre Acquisition”), upon the terms and subject to the conditions of an Asset Purchase Agreement dated May 12, 2015, as amended, by and among AAC, Oxford Buyer, BHR, The Oxford Centre and RRM.

On October 2, 2015, the Company sold to the Deerfield Funds $25.0 million of 2.5% Convertible Notes.

Our unaudited balance sheet as of September 30, 2015, which reflects the completion of each of the RSG Acquisition and the Oxford Centre Acquisition, is incorporated herein by reference from our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2015.

On September 18, 2015, the Company filed with the SEC Amendment No. 1 to the Current Report on Form 8-K that included:

 

    Audited consolidated financial statements of Referral Solutions Group, LLC and subsidiaries as of and for the years ended December 31, 2013 and 2014 and the notes thereto;

 

    An unaudited pro forma condensed consolidated balance sheet as of June 30, 2015 that presented the financial position of the Company after giving pro forma effect to the RSG Acquisition, as if the acquisition had occurred on June 30, 2015; and

 

    Unaudited pro forma condensed consolidated statements of income for the year ended December 31, 2014 and the six months ended June 30, 2015 that presented the Company’s operating results after giving pro forma effect to the RSG Acquisition, as if the the acquisition had occurred on January 1, 2014.

In addition, on October 23, 2015, the Company filed with the SEC Amendment No. 1 to the Current Report on Form 8-K that included:

 

    Audited consolidated financial statements of The Oxford Centre, Inc. as of and for the years ended December 31, 2013 and 2014 and the notes thereto;

 

    An unaudited pro forma condensed consolidated balance sheet as of June 30, 2015 that presented the financial position of the Company after giving pro forma effect to the RSG Acquisition, and the Oxford Centre Acquisition as if the acquisitions had occurred on June 30, 2015; and

 

    Unaudited pro forma condensed consolidated statements of income for the year ended December 31, 2014 and the six months ended June 30, 2015 that presented the Company’s operating results after giving pro forma effect to the RSG Acquisition and the Oxford Centre Acquisition as if the acquisitions had occurred on January 1, 2014.

 

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The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2015 presents the financial position of the Company after giving pro forma effect to its sale to the Deerfield Funds of $25.0 million of Convertible Notes on October 2, 2015 as if the transaction had occurred on September 30, 2015. The RSG Acquisition and the Oxford Centre Acquisition are reflected in the historical balance sheet of the Company as of September 30, 2015, as these acquisitions were completed on July 2, 2015 and August 10, 2015, respectively.

The following unaudited pro forma condensed consolidated statements of income for the year ended December 31, 2014 and the nine months ended September 30, 2015 present the Company’s operating results after giving pro forma effect to (i) the RSG Acquisition, (ii) the Oxford Centre Acquisition and (iii) the sale to the Deerfield Funds of $25.0 million of Convertible Notes on October 2, 2015, as if the transactions had occurred on January 1, 2014.

These transactions are more fully described in Note 2 to the unaudited pro forma condensed consolidated financial statements. The pro forma adjustments are based on available information and upon assumptions that Company management believes are reasonable in order to reflect, on a pro forma basis, the impact of the RSG Acquisition, the Oxford Centre Acquisition and the sale to the Deerfield Funds of $25.0 million of Convertible Notes on the Company’s historical consolidated financial information. The pro forma adjustments give effect to events that are directly attributable to the transactions, factually supportable, and expected to have a continuing impact.

Included in the unaudited pro forma condensed consolidated financial statements is an allocation of the purchase price the Company paid for the RSG Acquisition and the Oxford Centre Acquisition based on preliminary estimates and assumptions. Those estimates and assumptions could change materially as the Company finalizes its assessment of the allocation and the fair values of the tangible and intangible assets acquired and liabilities assumed, some of which are dependent on the completion of valuations being performed by independent valuation specialists. The unaudited pro forma condensed consolidated financial statements do not reflect any future operating efficiencies, associated costs savings or any possible integration costs that may occur related to the RSG Acquisition or the Oxford Centre Acquisition.

The unaudited pro forma condensed consolidated financial statements are included for informational purposes only and should not be relied upon as being indicative of the Company’s financial condition or results of operations had the noted events occurred on the dates assumed nor as a projection of the Company’s results of operations or financial position for any future period or date. The preparation of the unaudited pro forma condensed consolidated statements requires the use of certain assumptions which may be materially different from the Company’s actual experience.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF

SEPTEMBER 30, 2015

 

     AAC
Holdings,
Inc.
     Pro Forma
Adjustments
    AAC
Holdings,
Inc. Pro
Forma as
Adjusted
 
     (in thousands)  

Assets

       

Current assets:

       

Cash and cash equivalents

   $ 10,764       $ 24,242 (a)    $ 35,006   

Accounts receivable, net of allowances

     58,080         —          58,080   

Deferred tax assets

     2,380         —          2,380   

Prepaid expenses and other current assets

     5,500         —          5,500   
  

 

 

    

 

 

   

 

 

 

Total current assets

     76,724         24,242        100,966   

Property and equipment, net

     97,027         —          97,027   

Goodwill

     103,132         —          103,132   

Intangible assets, net

     9,462         —          9,462   

Other assets

     4,566         —          4,566   
  

 

 

    

 

 

   

 

 

 

Total assets

   $ 290,911       $ 24,242      $ 315,153   
  

 

 

    

 

 

   

 

 

 

Liabilities and stockholders’ equity

       

Current liabilities:

       

Accounts payable and accrued liabilities

   $ 27,264       $ —        $ 27,264   

Current portion of long-term debt

     3,661         —          3,661   

Current portion of long-term debt—related party

     1,195         —          1,195   
  

 

 

    

 

 

   

 

 

 

Total current liabilities

     32,120         —          32,120   

Deferred tax liabilities

     1,942         —          1,942   

Long-term debt, net of current portion

     116,710         24,242 (b)      140,952   

Other long-term liabilities

     4,499         —          4,499   
  

 

 

    

 

 

   

 

 

 

Total liabilities

     155,271         24,242        179,513   

Commitments and contingencies

       

Total stockholders’ equity including noncontrolling interest

     135,640         —          135,640   
  

 

 

    

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 290,911       $ 24,242      $ 315,153   
  

 

 

    

 

 

   

 

 

 

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2014

 

    AAC
Holdings,
Inc.
    RSG(c)     RSG
Pro Forma
Adjustments
    The
Oxford
Centre
    The Oxford
Centre Pro
Forma
Adjustments
    Convertible
Notes Pro
Forma
Adjustments
    AAC
Holdings,
Inc. Pro
Forma as
Adjusted
 
    (in thousands, except share and per share amounts)  

Income Statement Data:

             

Revenues

  $ 132,968      $ 10,459      $ —        $ 12,163      $ —        $ —        $ 155,590   

Operating expenses:

             

Salaries, wages and benefits

    54,707        2,548        —          2,934        —          —          60,189   

Advertising and marketing

    15,683        3,671        —          —          —          —          19,354   

Professional fees

    8,075        —          —          —          —          —          8,075   

Client related services

    10,794        —          —          1,204        —          —          11,998   

Other operating expenses

    13,518        178        —          1,029        —          —          14,725   

Rentals and leases

    2,106        71        —          111        —          —          2,288   

Provision for doubtful accounts

    11,391        29        —          1,262        —          —          12,682   

Litigation settlement

    487        —          —          —          —          —          487   

Depreciation and amortization

    4,662        435        51 (d)      210        223 (g)      —          5,581   

Acquisition-related expenses

    845        —          —          —          —          —          845   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    122,268        6,932        51        6,750        223        —          136,224   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

    10,700        3,527        (51     5,413        (223     —          19,366   

Interest expense, net

    1,872        —          —          76        807 (h)      751 (k)      3,506   

Other income, net

    (93     (40     —          (2     —          —          (135
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax expense

    8,921        3,567        (51     5,339        (1,030     (751     15,995   

Income tax expense

    2,555        —          1,301 (e)      —          1,594 (i)      (278 )(l)      5,172   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    6,366        3,567        (1,352     5,339        (2,624     (473     10,823   

Less: net loss (income) attributable to noncontrolling interest

    1,182        —          —          (218     192 (j)      —          1,156   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to AAC Holdings, Inc. stockholders

    7,548        3,567        (1,352     5,121        (2,432     (473     11,979   

BHR Series A Preferred Unit dividend

    (693     —          —          —          —          —          (693
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income available to AAC Holdings, Inc. common stockholders

  $ 6,855      $ 3,567      $ (1,352   $ 5,121      $ (2,432   $ (473   $ 11,286   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

             

Basic

  $ 0.41                $ 0.66   
 

 

 

             

 

 

 

Diluted

  $ 0.41                $ 0.65   
 

 

 

             

 

 

 

Weighted-average shares outstanding:

             

Basic

    16,557,655          540,193 (f)          —          17,097,848   

Diluted

    16,619,180          540,193 (f)          833,333 (m)      17,992,706   

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

 

    AAC
Holdings,
Inc.
    RSG from
January 1,
2015 to
July 2,
2015
(acquisition
date)(n)
    RSG
Pro Forma
Adjustments
    The Oxford
Centre
from January 1,
2015 to August 10,
2015 (acquisition
date)
    The Oxford
Cente Pro
Forma
Adjustments
    Convertible
Notes Pro
Forma
Adjustments
    AAC
Holdings,
Inc. Pro
Forma as
Adjusted
 
    (in thousands, except share and per share amounts)  

Income Statement Data:

             

Revenues

  $ 153,979      $ 6,652      $ —        $ 8,553      $ —        $ —        $ 169,184   

Operating expenses:

             

Salaries, wages and benefits

    61,884        2,154        —          2,213        —          —          66,251   

Advertising and marketing

    15,527        2,126        —          —          —          —          17,653   

Professional fees

    6,713        362        —          —          —          —          7,075   

Client related services

    10,831        —          —          1,136        —          —          11,967   

Other operating expenses

    16,044        497        —          597        —          —          17,138   

Rentals and leases

    3,442        75        —          78        —          —          3,595   

Provision for doubtful accounts

    12,925        (6     —          632        —          —          13,551   

Litigation settlement

    2,379        —          —          —          —          —          2,379   

Depreciation and amortization

    4,937        240        4 (o)      173        89 (u)      —          5,443   

Acquisition-related expenses

    2,917        —          (146 )(p)      —          (46 )(v)      —          2,725   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    137,599        5,448        (142     4,829        43        —          147,777   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

    16,380        1,204        142        3,724        (43     —          21,407   

Interest expense, net

    2,426        117        (117 )(q)      44        491 (w)      564 (z)      3,525   

Other (income) expense, net

    (28     12        (12 )(r)      (27     —          —          (55
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax expense

    13,982        1,075        271        3,707        (534     (564     17,937   

Income tax expense

    5,003        —          512 (s)      —          1,206 (x)      (214 )(aa)      6,507   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    8,979        1,075        (241     3,707        (1,740     (350     11,430   

Less: net loss (income) attributable to noncontrolling interest

    1,747        —          —          (147     147 (y)      —          1,747   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to AAC Holdings, Inc. stockholders

    10,726        1,075        (241     3,560        (1,593     (350     13,177   

BHR Series A Preferred Unit dividends

    (147       —            —          —          (147

Redemption of BHR Series A Preferred Units

    (534     —          —          —          —          —          (534
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income available to AAC Holdings, Inc. common stockholders

  $ 10,045      $ 1,075      $ (241   $ 3,560      $ (1,593   $ (350   $ 12,496   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

             

Basic

  $ 0.47                $ 0.57   
 

 

 

             

 

 

 

Diluted

  $ 0.46                $ 0.56   
 

 

 

             

 

 

 

Weighted-average shares outstanding:

             

Basic

    21,471,063          360,129 (t)          —          21,831,192   

Diluted

    21,651,654          360,129 (t)          833,333 (bb)      22,845,116   

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

 

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NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

1. Basis of Presentation

The unaudited pro forma condensed consolidated financial statements present the Company’s financial position and results of operations as if the issuance of the Convertible Notes (more fully described in Note 2) occurred on September 30, 2015, for purposes of the unaudited pro forma balance sheet as of September 30, 2015, and as if the other transactions described in Note 2 occurred on January 1, 2014 for purposes of the unaudited pro forma statement of income for the year ended December 31, 2014 and the unaudited pro forma statement of income for the nine months ended September 30, 2015. The Company’s historical balance sheet as of September 30, 2015, which reflects the RSG Acquisition and the Oxford Centre Acquisition discussed in Note 2, was used as the basis for the unaudited pro forma balance sheet. For the year ended December 31, 2014, the historical operating results for the year ended December 31, 2014 of the Company, RSG and Oxford were used as the basis for the unaudited pro forma statement of income. For the nine months ended September 30, 2015, the Company’s historical operating results for the nine months ended September 30, 2015, RSG’s historical operating results for the period from January 1, 2015 to July 2, 2015 (the acquisition date) and The Oxford Centre’s historical operating results for the period from January 1, 2015 to August 10, 2015 (the acquisition date) were used as the basis for the unaudited pro forma statement of income.

The unaudited pro forma condensed consolidated financial statements also reflect the assumptions and adjustments described in Notes 3, 4 and 5.

2. Description of Transactions

On July 2, 2015, the Company completed the RSG Acquisition. RSG is a leading online publisher in the substance abuse treatment industry with a comprehensive portfolio of websites and marketing assets. The Company acquired RSG to strengthen its existing portfolio of internet marketing assets, which the Company expects will in turn drive client leads in the future. The Company ascribes significant value to the synergies and other benefits from the acquisition that do not meet the recognition criteria of acquired identifiable intangible assets. Accordingly, the value of these components is included within goodwill. The goodwill resulting from the RSG Acquisition is expected to be deductible for tax purposes.

The Company accounted for the RSG Acquisition using the acquisition method as required by FASB ASC Topic 805, Business Combinations (“FASB ASC 805”). The following table summarizes the consideration transferred to the former equity holders of RSG:

 

Cash

   $ 32,480   

540,193 common shares of AAC Holdings, Inc. (based on the July 2, 2015 stock price)

     24,174   
  

 

 

 
   $ 56,654   
  

 

 

 

The Company incurred acquisition-related costs related to the RSG Acquisition of approximately $0 and $146 that were charged to “Acquisition-related expenses” for year ended December 31, 2014 and the nine months ended September 30, 2015, respectively.

 

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The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:

 

Accounts receivable

   $ 580   

Prepaid expenses and other current assets

     81   

Property and equipment

     15   

Other assets

     37   

Intangible assets

     4,816   

Current liabilities

     (210
  

 

 

 

Total identifiable net assets

     5,319   

Goodwill

     51,335   
  

 

 

 
   $ 56,654   
  

 

 

 

Definite-lived intangible assets that were acquired and their respective useful lives, which will be amortized on a straight-line basis over their estimated useful life, are as follows:

 

     Useful
Life
     Amount  

Marketing intangibles

     10 years       $ 4,816   

The RSG Acquisition was completed on July 2, 2015. The Company has not finalized the purchase price allocation, which is pending further analysis of the net assets acquired, particularly with respect to valuations of intangible assets. Accordingly, the purchase price allocation described above could change materially as the Company finalizes its assessment of the allocation and the fair values of the tangible and intangible assets acquired and liabilities assumed, some of which are dependent on the finalization of valuations being performed by an independent valuation specialist. The purchase price allocation will be finalized during the measurement period which is no longer than one year from the acquisition date.

On August 10, 2015, the Company completed the Oxford Centre Acquisition. The Oxford Centre operates a 76-bed residential facility located on a 110-acre campus in Etta, Mississippi, which is 65 miles southwest of Memphis, Tennessee, and three outpatient treatment locations in Oxford, Tupelo and Olive Branch, Mississippi. The Company ascribes significant value to the synergies and other benefits from the Oxford Centre Acquisition that do not meet the recognition criteria of acquired identifiable intangible assets. Accordingly, the value of these components is included within goodwill. The goodwill resulting from the Oxford Centre Acquisition is deductible for tax purposes.

The Company accounted for the Oxford Centre Acquisition using the acquisition method as required by FASB ASC 805. Cash consideration of $35,000 was transferred to acquire The Oxford Centre.

The Company incurred acquisition-related costs related to the Oxford Centre Acquisition of approximately $0 and $46 that were charged to “Acquisition-related expenses” for year ended December 31, 2014 and the nine months ended September 30, 2015, respectively.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:

 

Accounts receivable

   $ 5,023   

Prepaid expenses and other current assets

     58   

Property and equipment

     6,196   

Intangible assets

     650   

Current liabilities

     (138
  

 

 

 

Total identifiable net assets

     11,789   

Goodwill

     23,211   
  

 

 

 
   $ 35,000   
  

 

 

 

 

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Definite-lived intangible assets that were acquired and their respective useful lives, which will be amortized on a straight-line basis over their estimated useful life, are as follows:

 

     Useful
Life
     Amount  

Trademarks and marketing intangibles

     10 years       $ 650   

The Oxford Centre Acquisition was completed on August 10, 2015. The Company has not finalized the purchase price allocation, which is pending further analysis of the net assets acquired, particularly with respect to valuations of real property and intangible assets. Accordingly, the purchase price allocation described above could change materially as the Company finalizes its assessment of the allocation and the fair values of the tangible and intangible assets acquired and liabilities assumed, some of which are dependent on the finalization of valuations being performed by an independent valuation specialist. The purchase price allocation will be finalized during the measurement period which is no longer than one year from the acquisition date.

On October 2, 2015, the Company issued $25.0 million of Convertible Notes to the Deerfield Funds, which Convertible Notes mature on the sixth anniversary of the initial funding date and are convertible into shares of the Company’s common stock, par value $0.001 per share, at a conversion rate of $30.00 per share.

3. Unaudited Pro Forma Condensed Consolidated Balance Sheet Adjustments

 

a)

    Reflects the net proceeds received by the Company as a result of the issuance of the Convertible Notes to the Deerfield Funds, net of issuance costs of $748.

b)

    Reflects the issuance of the Convertible Notes to the Deerfield Funds, net of issuance costs of $748.

4. Unaudited Pro Forma Condensed Consolidated Statement of Income Adjustments For the Year Ended December 31, 2014

 

c)

    The historical financial statements of RSG include reclassifications of certain balances in order to conform to the presentation of the Company.

d)

    Reflects the incremental depreciation and amortization for the property and equipment and identifiable intangible assets acquired in the RSG Acquisition in excess of depreciation and amortization already reflected in the historical results of RSG. See Note 2 for further details.

e)

    Reflects the estimated income tax expense (benefit) associated with the following (assuming a tax rate of 37.0% based on the Company’s statutory tax rate for the year ended December 31, 2014):

 

i) the $3,567 of net income of RSG (the historical results of RSG do not include a provision for income tax expense as RSG is a flow-through entity for tax purposes); and

   $ 1,320   

ii) the $51 of pre-tax loss from the pro forma adjustments.

     (19
  

 

 

 

Total

   $ 1,301   
  

 

 

 

 

f)

    Reflects the issuance of 540,193 shares of Company’s common stock to the former equity holders of RSG.

g)

    Reflects the incremental depreciation and amortization for the property and equipment and identifiable intangible assets acquired in the Oxford Centre Acquisition in excess of depreciation and amortization already reflected in the historical results of The Oxford Centre. See Note 2 for further details.

 

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h)

    Reflects the following adjustments to interest expense:

 

i) estimated interest expense on the $32,000 borrowing under the revolver portion of the Company’s senior credit facility (the “2015 Credit Facility”) at a 2.76% annual rate, the rate in effect under the 2015 Credit Facility at November 3, 2015; and

   $ 883   

ii) elimination from historical results of interest expense at The Oxford Centre related to debt that was not assumed in the Oxford Centre Acquisition.

     (76
  

 

 

 

Total

   $ 807   
  

 

 

 

 

i)     Reflects the estimated income tax expense (benefit) associated with the following (assuming a tax rate of 37.0% based on the Company’s statutory tax rate for the year ended December 31, 2014):

 

i) the $5,339 of net income of The Oxford Centre (the historical results of The Oxford Centre do not include a provision for income tax expense as The Oxford Centre is a flow-through entity for tax purposes); and

   $ 1,975   

ii) the $1,030 of pre-tax loss from the pro forma adjustments.

     (381
  

 

 

 

Total

   $ 1,594   
  

 

 

 

 

j)     Reflects the elimination of noncontrolling interest related to a consolidated variable interest entity that was acquired by the Company as a result of the Oxford Centre Acquisition.
k)     Reflects the estimated interest expense on the Convertible Notes, including amortization of issuance costs.
l)     Reflects the estimated income tax benefit associated with the estimated interest expense on the Convertible Notes (assuming a tax rate of 37.0% based on the Company’s statutory tax rate for the year ended December 31, 2014).
m)     Reflects the impact on dilutive earnings per share of the Convertible Notes using the if-converted method in accordance with ASC 260. The following table sets forth the pro forma calculation of diluted EPS:

 

Numerator:

  

Numerator for pro forma basic EPS—pro forma income available to AAC Holdings, Inc. common stockholders

   $ 11,286   

Effect of dilutive securities:

  

Pro forma interest and amortization of issuance costs, net of income taxes, on Convertible Notes

     473   
  

 

 

 

Numerator for pro forma diluted EPS—pro forma income available to AAC Holdings, Inc. common stockholders after assumed conversion

   $ 11,759   

Denominator:

  

Denominator for historical diluted EPS—weighted-average shares

     16,619,180   

Issuance of shares for RSG Acquisition

     540,193   

Effect of dilutive securities:

Convertible Notes

     833,333   
  

 

 

 

Denominator for pro forma diluted EPS—adjusted weighted-average shares and assumed conversion

     17,992,706   

Pro forma diluted EPS

   $ 0.65   

 

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5. Unaudited Pro Forma Condensed Consolidated Statement of Income Adjustments For the Nine Months Ended September 30, 2015

 

n)

    The historical financial statements of RSG include reclassifications of certain balances in order to conform to the presentation of the Company.

o)

    Reflects the incremental depreciation and amortization of property and equipment and identifiable intangible assets acquired in the RSG Acquisition in excess of depreciation and amortization already reflected in the historical results of RSG. See Note 2 for further details.

p)

    Reflects the elimination from the Company’s actual results acquisition-related expenses related to the RSG Acquisition.

q)

    Reflects the elimination from actual results of interest expense at RSG related to debt that was not assumed in the RSG Acquisition.

r)

    Reflects the elimination of the change in fair value of the RSG warrants (the RSG warrants were cancelled in connection with the RSG Acquisition).

s)

    Reflects the estimated income tax expense associated with the following (assuming a tax rate of 38.0% based on the Company’s statutory tax rate for the nine months ended September 30, 2015):

 

i) the $1,075 of net income of RSG (the historical results of RSG do not include a provision for income tax expense as RSG is a flow-through entity for tax purposes); and

   $ 409   

ii) The $271 of pre-tax income from the pro forma adjustments.

     103   
  

 

 

 

Total

   $ 512   
  

 

 

 

 

t)  

  Reflects the addition of 360,129 shares of the Company’s common stock to fully reflect the 540,193 shares of the Company’s common stock issued to the former equity holders of RSG as outstanding for the entire nine months ended September 30, 2015 (180,064 shares were included in the historical column of weighted average shares outstanding).
u)     Reflects the incremental depreciation and amortization for the property and equipment and identifiable intangible assets acquired in the Oxford Centre Acquisition in excess of depreciation and amortization already reflected in the historical results of The Oxford Centre. See Note 2 for further details.
v)     Reflects the elimination from the Company’s actual results acquisition-related expenses related to the Oxford Centre Acquisition.
w)  

  Reflects the following adjustments to interest expense:

 

i) estimated interest expense on the $32,000 borrowing under the revolver of the 2015 Credit Facility at a 2.76% annual rate, the rate in effect under the 2015 Credit Facility at November 3, 2015; and

   $ 535   

ii) elimination from historical results of interest expense at The Oxford Centre related to debt that was not assumed in the Oxford Centre Acquisition.

     (44
  

 

 

 

Total

   $ 491   
  

 

 

 

 

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x)

    Reflects the estimated income tax expense (benefit) associated with the following (assuming a tax rate of 38.0% based on the Company’s statutory tax rate for the nine months ended September 30, 2015):

 

i) the $3,707 of net income of The Oxford Centre (the historical results of The Oxford Centre do not include a provision for income tax expense as The Oxford Centre is a flow-through entity for tax purposes); and

   $ 1,409   

ii) the $534 of pre-tax loss from the pro forma adjustments.

     (203
  

 

 

 

Total

   $ 1,206   
  

 

 

 

 

y)

    Reflects the elimination of noncontrolling interest related to a consolidated variable interest entity that was acquired by the Company as a result of the Oxford Centre Acquisition.

z)

    Reflects the estimated interest expense on the Convertible Notes, including amortization of issuance costs.

aa)

    Reflects the estimated income tax benefit associated with the interest expense on the Convertible Notes (assuming a tax rate of 38.0% based on the Company’s statutory tax rate for the nine months ended September 30, 2015).

bb)

    Reflects the impact on dilutive earnings per share of the Convertible Notes using the if-converted method in accordance with ASC 260. The following table sets forth the pro forma calculation of diluted EPS:

 

Numerator:

  

Numerator for pro forma basic EPS—pro forma income available to AAC Holdings, Inc. common stockholders

   $ 12,496   

Effect of dilutive securities:

  

Pro forma interest and amortization of issuance costs, net of income taxes, on Convertible Notes

     350   
  

 

 

 

Numerator for pro forma diluted EPS—pro forma income available to AAC Holdings, Inc. common stockholders after assumed conversion

   $ 12,846   

 

Denominator:

  

Denominator for historical diluted EPS—weighted-average shares

     21,651,654   

Shares for RSG Acquisition not reflected in historical diluted EPS—weighted-average shares

     360,129   

Effect of dilutive securities:

  

Convertible Notes

     833,333   
  

 

 

 

Denominator for diluted EPS—adjusted weighted-average shares and assumed conversions

     22,845,116   

Pro forma diluted EPS

   $ 0.56   

 

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833,333 Shares

 

 

LOGO

AAC Holdings, Inc.

Common Stock

 

 

Prospectus

 

 

                         , 2015

 

 

 


Table of Contents

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 14. Other Expenses of Issuance and Distribution

The following table sets forth all costs and expenses, other than underwriting discounts and commissions, paid or payable by us in connection with the sale of the common stock being registered. The selling stockholders will not bear any portion of such expenses. All amounts shown other than the SEC registration fee are estimates.

 

     Amount Paid or to
be Paid
 

SEC registration fee

   $ 2,025.75   

Printing and engraving expenses

     12,000.00   

Legal fees and expenses

     40,000.00   

Accounting fees and expenses

     10,000.00   
  

 

 

 

Total

   $ 64,025.75   

 

Item 15. Indemnification of Directors and Officers

Nevada law provides that a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation (i.e., a “non-derivative proceeding”), by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit or proceeding if he or she:

 

    is not liable under Section 78.138 of the Nevada Revised Statutes for breach of his or her fiduciary duties to the corporation; or

 

    acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

In addition, a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor (i.e., a “derivative proceeding”) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by him or her in connection with the defense or settlement of the action or suit if he or she:

 

    is not liable under Section 78.138 of the Nevada Revised Statute for breach of his or her fiduciary duties to the corporation; or

 

    acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation.

Under Nevada law, indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

 

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To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any non-derivative proceeding or any derivative proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him or her against expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defense.

Further, Nevada law permits a Nevada corporation to purchase and maintain insurance or to make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise for any liability asserted against him or her and liability and expenses incurred by him or her in his or her capacity as a director, officer, employee or agent, or arising out of his or her status as such, whether or not the corporation has the authority to indemnify him or her against such liability and expenses.

Under our current articles of incorporation and bylaws, we are obligated to indemnify any director, officer, employee or agent of the company to the fullest extent permitted by Nevada law as described above.

In addition, indemnification is required to continue as to a person who has ceased to be a director or officer and inures to the benefit of his or her heirs, executors and administrators. However, subject to the exceptions detailed below, we may indemnify a person seeking indemnification in connection with a proceeding (or part thereof) initiated by the person seeking indemnification only if the proceeding (or part thereof) was authorized by our Board of Directors. We may indemnify any employee or agent of us to an extent greater than required by law only if and to the extent that our directors, in their discretion, may determine.

If we do not pay a claim for indemnification (following the final disposition of the proceeding with respect to which indemnification is sought, including any settlement of such action, suit or proceeding) or advancement of expenses under our bylaws in full within 30 days after a written claim has been received by us, the claimant may bring suit against us to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant also will be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by applicable law. We may defend against an action brought for this purpose that the claimant has not met the standards of conduct that make it permissible under Chapter 78 of the Nevada Revised Statutes for us to indemnify the claimant for the amount claimed, but the burden of proving such defense is on us. Neither our failure (including the failure of our Board of Directors, independent legal counsel or our stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Chapter 78 of the Nevada Revised Statutes, nor an actual determination by us (including our Board of Directors, independent legal counsel or our stockholders) that the claimant has not met such applicable standard of conduct is a defense to the action or creates a presumption that the claimant has not met the applicable standard of conduct.

 

Item 16. Exhibits

See Exhibit Index following the signature page to this Registration Statement.

 

Item 17. Undertakings

(a) The undersigned registrant hereby undertakes:

(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by section 10(a)(3) of the Securities Act;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate,

 

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represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

Provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the registration statement is on Form S-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) that, for the purpose of determining liability under the Securities Act to any purchaser:

(i) if the registrant is relying on Rule 430B,

(A) each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(B) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(ii) if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus

 

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that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Brentwood, State of Tennessee, on the 10th day of November, 2015.

 

AAC HOLDINGS, INC.
By:  

/s/ Michael T. Cartwright

  Michael T. Cartwright
  Chief Executive Officer and Chairman

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael T. Cartwright, Kirk R. Manz, and Kathryn Sevier Phillips, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to sign any registration statement for the same offering covered by the registration statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, his, hers or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

SIGNATURE    TITLE   DATE

/s/ Michael T. Carwright

Michael T. Cartwright

  

Chief Executive Officer and Chairman

(principal executive officer)

  November 10, 2015

/s/ Kirk R. Manz

Kirk R. Manz

  

Chief Financial Officer

(principal financial officer)

  November 10, 2015

/s/ Andrew W. McWilliams

Andrew W. McWilliams

  

Chief Accounting Officer

(principal accounting officer)

  November 10, 2015

/s/ Darrell S. Freeman, Sr.

Darrell S. Freeman, Sr.

  

Lead Independent Director

  November 10, 2015

/s/ Jerry D. Bostelman

Jerry D. Bostelman

  

Director

  November 10, 2015

/s/ Lucius E. Burch, III

Lucius E. Burch, III

  

Director

  November 10, 2015

/s/ David C. Kloeppel

David C. Kloeppel

  

Director

  November 10, 2015

/s/ Richard E. Ragsdale

Richard E. Ragsdale

  

Director

  November 10, 2015

 

II-5


Table of Contents

EXHIBIT INDEX

 

Exhibit
No.

  

Description

  2.1†    Securities Purchase Agreement, dated July 2, 2015, by and among AAC Holdings, Inc., American Addiction Centers, Inc., Sober Media Group, LLC, Sellers’ Representative and the direct and indirect owners of Referral Solutions Group, LLC (previously filed as Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36643), filed on July 8, 2015 and incorporated herein by reference).
  2.2†    Asset Purchase Agreement, dated May 8, 2015, by and among American Addiction Centers, Inc., Oxford Treatment Center, LLC, The Oxford Centre, Inc. and River Road Management, LLC (previously filed as Exhibit 2.1 to the Quarterly Report on Form 10-Q (File No. 001-36643), filed on August 3, 2015 and incorporated herein by reference).
  2.3    Amendment to the Asset Purchase Agreement, dated August 10, 2015, by and among American Addiction Centers, Inc., Oxford Treatment Center, LLC, BHR Oxford Real Estate, LLC, The Oxford Centre, Inc. and River Road Management, LLC (previously filed as Exhibit 2.2 to the Current Report on Form 8-K (File No. 001-36643), filed on August 12, 2015 and incorporated herein by reference).
  3.1    Articles of Incorporation of AAC Holdings, Inc. (previously filed as Exhibit 3.1 to the Registration Statement on Form S-1 (Registration No. 333-197383), filed on July 11, 2014 and incorporated herein by reference).
  3.2    Amended and Restated Bylaws of AAC Holdings, Inc. (previously filed as Exhibit 3.2 to the Registration Statement on Form S-1 (Registration No. 333-197383), filed on July 11, 2014 and incorporated herein by reference).
  4.1    Form of Certificate of Common Stock of AAC Holdings, Inc. (previously filed as Exhibit 4.1 to the Registration Statement on Form S-4 (Registration No. 333-197383), filed on August 15, 2014 and incorporated herein by reference).
  5.1    Opinion of Ballard Spahr LLP
10.1    Facility Agreement, dated as of October 2, 2015, by and among AAC Holdings, Inc., Deerfield Private Design Fund III, L.P., Deerfield Partners, L.P. and Deerfield International Master Fund, L.P. (previously filed as Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36643), filed on October 7, 2015 and incorporated herein by reference).
10.2    Form of Convertible Note (previously filed as Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-36643), filed on October 7, 2015 and incorporated herein by reference).
10.3    Registration Rights Agreement, dated as of October 2, 2015, by and among AAC Holdings, Inc., Deerfield Private Design Fund III, L.P., Deerfield Partners, L.P. and Deerfield International Master Fund, L.P. (previously filed as Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-36643), filed on October 7, 2015 and incorporated herein by reference).
23.1    Consent of BDO USA, LLP
23.2    Consent of BDO USA, LLP
23.3    Consent of BDO USA, LLP
23.4    Consent of Ballard Spahr LLP (included in Exhibit 5.1)
24.1    Power of Attorney (included on signature page)

 

Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. AAC Holdings, Inc. hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.

 

II-6



Exhibit 5.1

 

LOGO

November 10, 2015

AAC Holdings, Inc.

115 East Park Drive, Second Floor

Brentwood, TN 37027

 

  Re: Registration Statement on Form S-3

Ladies and Gentlemen:

We have acted as Nevada counsel to AAC Holdings, Inc., a Nevada corporation (the “Corporation”), in connection with the Corporation’s Registration Statement on Form S-3 (the “Registration Statement”) filed with the United States Securities and Exchange Commission (the “Commission”) on the date referenced above under the Securities Act of 1933, as amended (the “Securities Act”), relating to the registration and resale of up to 833,333 shares of the Corporation’s common stock, $0.001 par value per share (the “Shares”), issuable to Deerfield Private Design Fund III, L.P., Deerfield International Master Fund, L.P. and Deerfield Partners, L.P. (collectively, the “Selling Stockholders”) upon conversion of the 2.5% subordinated convertible notes in the original principal amount of $25,000,000.00 (the “Convertible Notes”) held by the Selling Stockholders, where the Shares may be sold by the Selling Stockholders from time to time on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.

We have examined the following documents: (a) the Articles of Incorporation of the Corporation, as filed with the Nevada Secretary of State on February 12, 2014 (the “Articles”); (b) the Amended and Restated Bylaws of the Corporation (the “Bylaws”); (c) resolutions adopted by the Corporation’s board of directors authorizing the filing of the Registration Statement with the Commission (the “Directors’ Resolutions”); (d) the Registration Statement and the exhibits thereto; (e) the prospectus contained within the Registration Statement; and (f) a certificate of certain duly authorized officers of the Corporation, dated as of the date hereof (the “Officers’ Certificate”), to the effect that, among other things, the Articles, the Bylaws and the Directors’ Resolutions are true, correct and complete and have not been rescinded or modified and are in full force and effect as of the date of the Officers’ Certificate, and certifying as to the manner of adoption or approval of the Directors’ Resolutions. We have also examined such corporate records and other agreements, documents and instruments, and such certificates or comparable documents of public officials and officers and representatives of

 

Atlanta | Baltimore | Bethesda | Denver | Las Vegas | Los Angeles | New Jersey | New York | Philadelphia | Phoenix | Salt Lake City |

San Diego | Washington, DC | Wilmington | www.ballardspahr.com


AAC Holdings, Inc.

November 10, 2015

 

the Corporation and have made such inquiries of such officers and representatives and have considered such matters of law as we have deemed appropriate as the basis for the opinion hereinafter set forth.

In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents.

On the basis of the foregoing, and subject to the qualifications, assumptions, and limitations set forth herein, we are of the opinion that the Shares have been duly authorized and, if and when issued upon conversion from time to time of the Convertible Notes in accordance with the terms thereof, will be validly issued, fully paid and non-assessable.

This opinion is limited to the present laws of the State of Nevada. We express no opinion as to the laws of any other jurisdiction and no opinion regarding the statutes, administrative decisions, rules and regulations or requirements of any county, municipality or subdivision or other local authority of any jurisdiction.

We do not undertake to advise you or anyone else of any changes in the opinions expressed herein resulting from changes in law, changes in fact or any other matters that hereafter might occur or be brought to our attention.

We hereby consent to the sole use of this opinion as an exhibit to the Registration Statement and to the use of our name therein under the heading “Legal Matters.” In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act and the rules and regulations promulgated thereunder.

Very truly yours,

/s/ Ballard Spahr LLP



Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

AAC Holdings, Inc.

Brentwood, Tennessee

We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement on Form S-3 of our report dated March 10, 2015, relating to the consolidated financial statements of AAC Holdings, Inc. and Subsidiaries appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

Nashville, Tennessee

November 10, 2015



Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

AAC Holdings, Inc.

Brentwood, Tennessee

We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement on Form S-3 of our report dated June 24, 2015, relating to the consolidated financial statements of Referral Solutions Group, LLC and Subsidiaries appearing in Amendment No. 1 to the Current Report on Form 8-K/A of AAC Holdings, Inc. dated September 17, 2015.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

Nashville, Tennessee

November 10, 2015



Exhibit 23.3

Consent of Independent Registered Public Accounting Firm

AAC Holdings, Inc.

Brentwood, Tennessee

We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement on Form S-3 of our report dated July 12, 2015, relating to the consolidated financial statements of The Oxford Centre, Inc. appearing in Amendment No. 1 to the Current Report on Form 8-K/A of AAC Holdings, Inc. dated October 23, 2015.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

Nashville, Tennessee

November 10, 2015

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