Ownership Submission
FORM 5
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
Form 3 Holdings Reported
Form 4 Transactions Reported
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person *
Radcliffe Philip S
 2. Issuer Name and Ticker or Trading Symbol
ADCARE HEALTH SYSTEMS INC [ADK] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
__X__ Director _____ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
(Last)
(First)
(Middle)

106 BURNHAM		 3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year)
12/31/2009
(Street)


WILLIAMSBURG, VA 23188		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Reporting
(check applicable line)

_X_ Form Filed by One Reporting Person
___ Form Filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Amount (A) or (D) Price
Common Stock 12/07/2009   A4 4,450 A $ (1) 17,287 D  
Common Stock 12/31/2009   L 712 A $ (2) 17,287 D  
Common Stock             17,287 D  

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
(A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Warrants   12/07/2009   J4   4,450 11/16/2012 11/16/2017 Common Stock
4,450
(1) 18,800
D
 
Warrants $ 2.5 (4)           11/07/2006 12/08/2014 Common Stock
1,000
  18,800
D
 
Warrants               (5) 11/16/2017 Common Stock
17,800
  18,800
D
 
Options $ 2.5           08/24/2005 08/27/2010 Common Stock
400
  8,200
D
 
Options $ 2.5           08/27/2006 08/27/2011 Common Stock
400
  8,200
D
 
Options $ 2.5           08/27/2007 08/27/2012 Common Stock
400
  8,200
D
 
Options $ 1.5           05/09/2007 05/09/2012 Common Stock
1,400
  8,200
D
 
Options $ 1.5           05/09/2008 05/09/2013 Common Stock
1,400
  8,200
D
 
Options $ 1.5           05/09/2009 05/09/2014 Common Stock
1,400
  8,200
D
 
Options $ 1.5           05/09/2010 05/09/2015 Common Stock
1,400
  8,200
D
 
Options $ 1.5           05/09/2011 05/09/2016 Common Stock
1,400
  8,200
D
 

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
Radcliffe Philip S
106 BURNHAM
WILLIAMSBURG, VA 23188		   X      

Signatures

Carol Groeber by power of attorney 02/17/2010
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) On August 15, 2008 the shareholders approved an incentive plan which granted warrants to certain officers and directors. The warrants vested over a five year period. On December 7, 2009 the shareholders approved an amendment to the incentve plan to eliminate 218,461 unvested warrants. The amendment further called for 218461 shares of the Company's common stock with a one year restriction on transfer to be issued.
(2) Shares were purchased throuhout 2009 at various prices by particiaption in the AdCare Health System Employee Stock Purchase Program.
(3) The exerccise price of the warrants was based upon the average closing price of the Company's common stock on NYSE-Amex during January 2011 but was not less than $3.00 per share.
(4) On December 21, 2009 the warrant holders voted to amend the warrant agreement to decrease the exercise price from $5.40 to $2.50 and to extend the expiratin date to 12/8/2014 the fifth anniversary date of the Company's private offering.
(5) The exerccise price of the warrants vested in 2008 was $1.21 per share, those vested in 2009 was $2.25, those vested in 2010 was $3.00 and those vesting in 2011 is $4.00 per share.

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