Page 8 of 12 – SEC Filing
EXPLANATORY NOTE
This Statement on Schedule 13D reflects, that as of September
8, 2017, the Reporting Persons are disclosing their beneficial ownership in
Diversicare Healthcare Services, Inc. (Diversicare or the Issuer) on
Schedule 13D instead of Schedule 13G. The Reporting Persons previously disclosed
their beneficial ownership in the Issuer inn Amendment No. 2 to Schedule 13G as
filed with the Securities and Exchange Commission (the SEC) on February 14,
2017.
ITEM 1. Security and Issuer.
The name of the issuer is Diversicare Healthcare Services, Inc.
(the Issuer). The principal executive office of the Issuer is located at 1621
Galleria Boulevard, Brentwood, TN 37027-2926.
ITEM 2. Identity and Background.
(a)-(c) and (f) The names of the persons jointly filing this
statement on Schedule 13D (the Reporting Persons) are: (1) Osmium Capital, LP,
a Delaware limited partnership (Fund I); (2) Osmium Capital II, LP, a Delaware
limited partnership (Fund II); (3) Osmium Spartan, LP, a Delaware limited
partnership (Fund III, and collectively with Fund I and Fund II, the Funds);
(4) Osmium Partners, LLC, a Delaware limited liability company (Osmium
Partners); and (5) John H. Lewis, a United States Citizen (Lewis). Osmium
Partners serves as the general partner of Fund I, Fund II and Fund III. Mr.
Lewis is the controlling member of Osmium Partners.
The principal business of each of Fund I, Fund II and Fund III
is that of a private investment vehicle engaged in investing and trading in a
wide variety of securities and financial instruments for its own account. The
principal business of Osmium Partners is providing investment management
services and serving as the general partner of Fund I, Fund II and Fund III. Mr.
Lewis principal occupation is serving as the Managing Member of Osmium
Partners.
(d)(e) During the last five years, none of the Reporting
Persons have been (a) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
ITEM 3. Source and Amount of Funds or Other Consideration
The source and amount of funds (excluding commissions) used by
the Funds in making their purchase of the shares of Common Stock owned by each
of them in the aggregate was $5,271,595.33 from working capital.
One or more of the Reporting Persons effect purchases of
securities through margin accounts which may extend margin credit to the
Reporting Persons as and when required to open or carry positions in the margin
accounts, subject to applicable federal margin regulations, stock exchange rules
and brokers credit policies. In such instances, the positions held in the
margin accounts are pledged as collateral security for the repayment of debit
balances in the accounts.
ITEM 4. Purpose of Transaction
The Reporting Persons purchased the Common Stock based on the
belief that such securities, when purchased, were undervalued and represented an
attractive investment opportunity. Although no Reporting Person has any specific
plan or proposal to acquire or dispose of the Common Stock, consistent with its
investment purpose, each Reporting Person at any time and from time to time may
acquire additional Common Stock or dispose of any or all of its Common Stock
depending upon an ongoing evaluation of the investment in the Common Stock,
prevailing market conditions, other investment opportunities, liquidity
requirements of the Reporting Persons, and/or other investment considerations.
The purpose of the acquisitions of the Common Stock was for investment, and the
acquisitions of the Common Stock were made in the ordinary course of business
and were not made for the purpose of acquiring control of the Issuer.
Consistent with their investment purpose, the Reporting Persons
have engaged in communications with the board of directors of the Issuer to urge
the board to substantially increase the current dividend payout as the Reporting
Persons believe that the Issuers Common Stock is significantly undervalued. In
connection with our communications with the board of directors of the Issuer we have issued a press release, dated as of
September 8, 2017, a copy of which is attached hereto as Exhibit 2 and is
incorporated herein by reference.
