First River Advisory L.L.C. is an independent financial advisory firm which, since its formation in 1995, has fashioned innovative and cost-effective capital formation and balance sheet management solutions for health care organizations. Shelley Aronson, the President of First River Advisory, possesses over 23 year's experience as an investment banker and financial advisor, specializing in health care transactions.

First River Advisory provides a broad array of financial and strategic planning services to health care and related organizations. Most frequently, health care organizations consider engaging a financial advisor or investment banker only when there is an obvious need for a major capital improvement project that needs to be financed. Indeed, most of First River Advisory's engagements are in this context. First River Advisory has found that there are numerous, often overlooked balance sheet shortcomings that can be resolved by a savvy Financial Advisor. A growing segment of First River Advisory's practice is the improvement of hospitals balance sheets, even when there are no project financing objectives.

Like other firms which are members of the National Association of Independent Public Finance Advisors (NAIPFA), First River Advisory strongly believes that the best advice is independent advice. First River Advisory is always squarely on the side of its clients. Because First River Advisory has no "products" to sell, its advice can be thorough and unbiased. Time and time again, news articles appear in the financial press that highlight the conflicts which arise when advisors are also purveyors of products. An article appearing on the Bloomberg Municipal Bond Market News website on December 18, 2007, questioned the role of of Lehman Brothers as both the advisor and seller of securities to the Florida State Board of Administration's pooled investment fund. The State's Chief Financial Officer expressed dismay that the investment fund's executive director was relying on Lehman Brothers' advice while that same firm had sold to the fund a significant amount of securities which had become distressed.

Recent Accomplishments

The unprecedented turmoil in the auction rate securities (ARS) market and among bond insurers demanded quick and imaginative responses. Two of First River Advisory's clients were affected, beginning in mid-August. Interest rates on Oaklawn Hospital's ARS had tracked relevant indices closely since their issuance in March 2006. Suddenly, the interest rate established at the August 14 auction increased sharply. First River Advisory and Oaklawn's management swung into action immediately, and determined within a week that the best course of action would be to "wrap" the bond insurance policy with a one-year bank letter of credit (LOC) and convert the ARS to variable rate demand bonds (VRDBs). At its August 24 meeting, Oaklawn's governing board endorsed this plan. Implementation began immediately thereafter with the release of a request for LOC proposals. Speed was essential, as the interest rates on the ARS determined at subsequent auctions increased even further, causing Oaklawn to experience excess interest expense of over $22,000 per week. The LOC wrap and VRDB conversion was completed on October 24, just ten weeks after the pivotal August 14 auction.

Ottumwa (IA) Regional Health Center (ORHC) experienced a similar, albeit delayed and less severe, increase in the interest rates on its ARS. ORHC also experienced a sharp increase in weekly interest rates on its Series 2006 VRDBs once their long initial period concluded on October 1. First River Advisory applied the experience gained in assisting Oaklawn to address the more complex issues facing ORHC. First River Advisory navigated ORHC through a series of complications and timing issues to conclude the LOC wraps and VRDB conversions on November 29 and 30.

The Oaklawn LOC wrap and VRDB conversion was the first solution of this type to have been completed, as recognized in an article appearing in The Bond Buyer in its October 23 edition. As a result of this favorable press, First River Advisory was contacted by the Chief Financial Officer of Flagler Hospital, located in St. Augustine, Florida. Flagler had found itself in a similar predicament with respect to nearly $34 million of ARS. First River Advisory was engaged to take charge of the LOC wrap and VRDB conversion process in early November. A favorable LOC commitment was obtained, the financing team was mustered and the first drafts of documents were prepared within two weeks of the commencement of First River Advisory's work. The transaction was concluded on December 20. Were it not for First River Advisory's know-how and diligence, Flagler would have likely experienced another three weeks of excessively high interest rates due to the holiday period, with the additional cost accruing at the rate of over $15,000 weekly.

Forward Calendar and Upcoming Events

First River Advisory has once again been engaged by Northstar Health System (NHS) to arrange financing for a major facilities improvement project. NHS operates a critical access hospital in Iron River and an ambulatory care center in Crystal Falls, both on Michigan's Upper Peninsula. An application for a Certificate of Need was filed in early December, and is expected to be approved in the spring of 2008. The financing is expected to be concluded shortly thereafter. The financing plan has not yet been determined.

First River Advisory has been appointed by Albright Care Services as its Financial Advisor in connection with the financing of various new, expanded and renovated facilities over the next several years. Albright operates multi-level long-term care and senior living facilities at campuses in Lewisburg and York, Pennsylvania, and Living Independently for Elders (LIFE) programs in Lancaster and Williamsport, Pennsylvania. Neither the financing plan nor the timing of specific project developments have been determined yet.