Arcadia Sells Florida, Colorado Locations for $7.7 Million

SOUTHFIELD, Mich.–Arcadia Resources announced on Thursday it
has sold its DME locations in Florida and Colorado to Aerocare
Holdings in two separate transactions totaling $7.7 million.

In connection with the sales, Arcadia will retain the accounts
receivable for services provided at these sites before Aug. 16,
totaling approximately $7 million. After using part of the proceeds
to reduce debt and other obligations by $4.3 million, Arcadia will
have approximately $10 million to support its ongoing operations,
the company said.

Arcadia’s remaining DME operations include 22 locations that
generate approximately $24 million in gross revenues, according to
the company. Earlier this year, Arcadia–which had made more than
20 DME acquisitions and opened stores inside Sears and
Wal-Mart–announced it would sell other portions of its DME
business for $16.5 million. In July, the company restructured
operations.

The company also said CMS had confirmed a correction of the
issuance date for one of its supplier numbers and, as a result,
expected to receive Medicare reimbursement for equipment and
services previously thought to be uncollectible.

“We expect this will provide between $700,000 and $800,000 in
additional EBITDA and cash flow for the company and will help us
move towards our stated commitment of being EBITDA and cash flow
positive beginning in October 2007, our fiscal 2008 third quarter,”
said CEO Marvin Richardson.