- - --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 10-QSB
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1994
For the Quarterly period ending March 31, 1996
/ / TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1994
For the Transition period from ____ to ____
Commission file number 0-27108
REGENT ASSISTED LIVING, INC.
(Exact name of registrant as specified in its charter)
OREGON 93-1171049
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2260 U.S. Bancorp Tower
111 SW Fifth Avenue
Portland, Oregon 97204
(Address of principal executive offices)
503-227-4000
(Registrant's telephone number, including area code)
Indicated by check mark whether Registrant (1) has filed all reports to be
filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes / X / No / /
Shares of Registrant's Common Stock, No par value,
outstanding at May 1, 1996 - 4,633,000
- - --------------------------------------------------------------------------------
<PAGE>
REGENT ASSISTED LIVING, INC.
FORM 10-QSB
MARCH 31, 1996
INDEX
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets of Regent Assisted Living, Inc.,
as of March 31, 1996 and December 31, 1995 . . . . . . . . . . . . . . . 3
Condensed Statements of Operations of Regent Assisted Living,
Inc., for the three months ended March 31, 1996 and Regent
Assisted Living Group for the three months ended March 31, 1995. . . . . 4
Condensed Statements of Cash Flows of Regent Assisted Living,
Inc., for the three months ended March 31, 1996 and Regent
Assisted Living Group for the three months ended March 31, 1995. . . . . 5
Notes to Condensed Financial Statements. . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis or Plan of Operation . . . 10
PAGE 2
<PAGE>
PART I
ITEM 1 - FINANCIAL INFORMATION
<TABLE>
REGENT ASSISTED LIVING, INC. (THE COMPANY)
CONDENSED BALANCE SHEETS
<CAPTION>
March 31,
December 31, 1996
1995 (Unaudited)
---------------- -------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $7,585,952 $7,421,574
Investments 1,952,542
Accounts receivable 115,736 96,821
Prepaid expenses 77,928 125,438
---------------- ----------------
Total current assets 9,732,158 7,643,833
Property and equipment, net 7,927,331 9,812,587
Restricted cash 76,364
Other assets 450,757 459,122
---------------- ----------------
Total assets $18,186,610 $17,915,542
================ ================
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $975,464 $746,950
Accrued interest 33,939 46,663
Current portion of long-term debt 76,284 69,867
---------------- ----------------
Total current liabilities 1,085,687 863,480
Long-term debt 6,023,716 6,005,732
Other liabilities 417,005 339,151
---------------- ----------------
Total liabilities 7,526,408 7,208,363
---------------- ----------------
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 5,000,000 shares authorized;
no shares issued and outstanding - - - - - -
Common stock, no par value, 25,000,000 shares authorized;
4,633,000 shares issued and outstanding 10,758,703 10,758,703
Accumulated deficit (98,501) (51,524)
---------------- ----------------
Total shareholders' equity 10,660,202 10,707,179
---------------- ----------------
Total liabilities and shareholders' equity $18,186,610 $17,915,542
================ ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED FINANCIAL STATEMENTS.
</TABLE>
PAGE 3
<PAGE>
REGENT ASSISTED LIVING, INC. (THE COMPANY)
AND REGENT ASSISTED LIVING GROUP (PREDECESSOR)
<TABLE>
CONDENSED STATEMENTS OF OPERATIONS
<CAPTION>
(Unaudited)
Predecessor The Company
---------------------------------------------
Three Months Ended Three Months Ended
March 31, 1995 March 31, 1996
---------------------------------------------
<S> <C> <C>
Revenues:
Rental and service $2,232,187 $3,228,130
Management fee 69,851 44,394
---------------- ----------------
Total revenues 2,302,038 3,272,524
---------------- ----------------
Operating expenses:
Residence operating expenses 1,434,599 1,968,689
General and administrative 107,455 472,613
Lease 689,312
Depreciation and amortization 173,305 58,714
---------------- ----------------
Total operating expenses 1,715,359 3,189,328
---------------- ----------------
Operating income 586,679 83,196
Interest income 4,429 116,862
Interest expense (425,581) (128,779)
Other income, net 4,490
---------------- ----------------
Income before income taxes 165,527 75,769
Provision for income taxes 28,792
---------------- ----------------
Net income $165,527 $46,977
================ ================
Per share net income $0.01
================
Pro forma data:
Income before income taxes 165,527
Pro forma provision for
income taxes 62,900
----------------
Pro forma net income $102,627
================
Pro forma per share net income $0.03
================
Weighted average common shares outstanding 3,000,000 4,633,000
================ ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED FINANCIAL STATEMENTS.
</TABLE>
PAGE 4
<PAGE>
REGENT ASSISTED LIVING, INC. (THE COMPANY)
AND REGENT ASSISTED LIVING GROUP (PREDECESSOR)
<TABLE>
CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
(Unaudited)
Predecessor The Company
---------------------------------------------
Three Months Ended Three Months Ended
March 31, 1995 March 31, 1996
---------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $165,527 $46,977
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization 173,305 58,714
Changes in other non-cash items:
Accounts receivable (3,515) 18,915
Prepaid expenses 23,255 (47,510)
Restricted cash 76,364
Other assets 8,584 (18,843)
Accounts payable and accrued expenses (29,643) (228,514)
Accrued interest (106,484) 12,724
Other liabilities (14,850) (77,854)
---------------- ----------------
Net cash provided by (used in) operating activities 216,179 (159,027)
---------------- ----------------
Cash flows from investing activities:
Maturity of investments 1,952,542
Purchases of property and equipment (158,506) (1,933,492)
---------------- ----------------
Net cash provided by (used in) investing activities (158,506) 19,050
---------------- ----------------
Cash flows from financing activities:
Loan fees (109,154)
Proceeds from issuance of long-term debt 10,150,000
Payments on long-term debt (8,499,729) (24,401)
Repayment of notes payable to an owner (539,244)
Capital distributions (1,153,952)
---------------- ----------------
Net cash used in financing activities (152,079) (24,401)
---------------- ----------------
Net decrease in cash (94,406) (164,378)
Cash and cash equivalents, beginning of period 566,028 7,585,952
---------------- ----------------
Cash and cash equivalents, end of period $471,622 $7,421,574
================ ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED FINANCIAL STATEMENTS.
</TABLE>
PAGE 5
<PAGE>
REGENT ASSISTED LIVING, INC. (The Company)
REGENT ASSISTED LIVING GROUP (Predecessor)
NOTES TO FINANCIAL STATEMENTS
1. Operations and Summary of Significant Accounting Policies:
The Company
Regent Assisted Living, Inc. ("the Company") is an owner, operator and
developer of private-pay assisted living communities. Assisted living
is part of a spectrum of long-term care services that provide a
combination of housing, personal services and health care designed to
respond to elderly individuals who require assistance with activities
of daily living in a manner that promotes maximum independence.
The Company was formed to acquire the assisted living property
management business of Bowen Property Management Co., which is wholly
owned by Walter C. Bowen, the Chairman of the Board, President, Chief
Executive Officer, and majority shareholder of the Company, and was
initially capitalized through the sale of 3,000,000 shares of common
stock for $2,000. On December 26, 1995, the Company sold 1,400,000
shares of common stock to the public at a price of $7.50 per share in
an initial public offering (the Offering). Concurrently, the Company
sold an additional 233,000 shares at a price of $7.50 per share to Mr.
Bowen. The Company realized net proceeds of $10,756,563 from these
transactions.
During 1995 the Company provided property management services to four
assisted living communities including Regency Park, Sterling Park,
Park Place, and Sunshine Villa. Regency Park, Sterling Park, and Park
Place are owned by entities controlled by Mr. Bowen. Effective
December 1, 1995, the Company acquired Sunshine Villa from an
unrelated party for approximately $7,700,000. Unaudited pro forma
results of operations for the three month period ended March 31, 1995
(as if the acquisition of Sunshine Villa, the Offering, and the
commencement of the leases of Regency Park and Sterling Park had
occurred as of January 1, 1995) are included in Note 4.
Effective January 1, 1996, the Company entered into agreements to
lease Regency Park and Sterling Park from Regency Park Apartments
Limited Partnership (Regency Partnership) and Bowen-Gionet Joint
Venture (BGJV), respectively, (see also Predecessor below and Note 4).
The Company also provides management and administrative services for
Bowen Property Management Co., Bowen Financial Services Corp., Bowen
Condominium Marketing, Inc., and Bowen Development Company
(collectively, the Bowen Companies), all of which are Oregon
corporations and are wholly owned by Mr. Bowen. These services are
provided pursuant to the terms of an Administrative Services Agreement
described in Note 3.
Page 6
<PAGE>
REGENT ASSISTED LIVING, INC. (The Company)
REGENT ASSISTED LIVING GROUP (Predecessor)
NOTES TO FINANCIAL STATEMENTS, Continued
1. Operations and Summary of Significant Accounting Policies, Continued:
The Predecessor
The Predecessor financial statements for the three months ended March
31, 1995, represent the combined results of operations and financial
position of the Predecessor. The Predecessor consists of the
affiliated entities described below which own assisted living
communities operated by the Company pursuant to lease agreements which
became effective January 1, 1996.
The Predecessor represents a combination of the business of the
Company (an S corporation prior to the Offering), Regency Partnership
and BGJV, which have 100 percent ownership in each of their respective
assisted living communities and common management and controlling
interests. Regency Partnership and BGJV are 100 percent owned by
Walter C. Bowen and his family. Prior to the Offering, the Company was
also 100 percent owned by Walter C. Bowen.
The assisted living communities operated by the Predecessor were as
follows:
<TABLE>
<CAPTION>
Commenced
Community Entity Legal Form Operations
--------- ------ ---------- ----------
<S> <C> <C> <C>
Regency Park Regency Partnership Limited Partnership 1987
Sterling Park BGJV General Partnership 1990
</TABLE>
Basis of Presentation
The condensed financial statements include the accounts of the Company
and the Predecessor. The combined financial statements of the
Predecessor include the assets, liabilities and operations associated
with the assisted living communities listed above, as well as the
Company. Since the communities have common ownership and management
interests, the assets and liabilities are reflected at historical
cost. All significant inter-company accounts and transactions have
been eliminated in combination.
The accompanying unaudited financial statements as of March 31, 1996
and for the three month periods ended March 31, 1996 and 1995 have
been prepared in conformity with generally accepted accounting
principles. The financial information as of December 31, 1995 is
derived from the Company's Form 10-KSB for the year ended December 31,
1995. Certain information or footnote
Page 7
<PAGE>
REGENT ASSISTED LIVING, INC. (The Company)
REGENT ASSISTED LIVING GROUP (Predecessor)
NOTES TO FINANCIAL STATEMENTS, Continued
1. Operations and Summary of Significant Accounting Policies, Continued:
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, the
accompanying financial statements include all adjustments necessary
(which are of a normal and recurring nature) for the fair presentation
of the results of the interim periods presented. The accompanying
financial statements should be read in conjunction with the Company's
audited financial statements for the year ended December 31, 1995
included in the Company's Form 10-KSB for the year ended December 31,
1995.
Operating results for the three months ended March 31, 1996, are not
necessarily indicative of the results that may be expected for the
entire fiscal year ending December 31, 1996, or any portion thereof.
2. Property and Equipment:
Property and equipment are stated at cost and consist of the
following:
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
------------ ----------
<S> <C> <C>
Land $ 1,100,000 $1,100,000
Buildings and improvements 6,321,169 6,340,242
Furniture and equipment 308,594 327,278
Construction in progress 210,665 2,106,400
------------ -----------
7,940,428 9,873,920
Less accumulated depreciation 13,097 61,333
------------ -----------
Total property and equipment, net $ 7,927,331 $ 9,812,587
============ ===========
</TABLE>
Land, buildings and certain furniture and equipment serve as
collateral for long-term debt.
Page 8
<PAGE>
REGENT ASSISTED LIVING, INC. (The Company)
REGENT ASSISTED LIVING GROUP (Predecessor)
NOTES TO FINANCIAL STATEMENTS, Continued
3. Administrative Services Agreement:
The Company has entered into an agreement with the Bowen Companies,
all of which are Oregon corporations controlled by Mr. Bowen, whereby
the Company will provide each of the Bowen Companies executive
assistance, accounting and financial management services, legal and
administrative assistance, insurance, management information services,
and other management services as required by the Bowen Companies.
Under the terms of the agreement, the Company will be reimbursed at
its cost on a monthly basis for all services provided.
4. Pro Forma Financial Information (Unaudited):
The following table sets forth the unaudited pro forma statements of
operations of the Company for the three months ended March 31, 1995,
as if the acquisition of Sunshine Villa and the Offering (including
approximately $187,500 of additional general and administrative
expenses that are anticipated to be incurred as a result of being a
public entity) had occurred as of January 1, 1995, and the agreements
to lease Regency Park and Sterling Park had been consummated at that
date:
<TABLE>
<CAPTION>
<S> <C>
Revenues
Rental and service $2,945,274
Management fee 35,213
----------
Total revenues 2,980,487
----------
Operating expenses:
Residence operating expenses 1,955,673
General and administrative 289,730
Lease 689,313
Depreciation and amortization 61,572
----------
Total operating expenses 2,996,288
----------
Operating loss (15,801)
Interest income 4,429
Interest expense (133,445)
----------
Net loss $ (144,817)
==========
Per share net loss $ (0.03)
==========
Weighted average common shares
outstanding 4,633,000
==========
</TABLE>
Page 9
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Overview
The Company
The Company reported net income of approximately $47,000, or $.01 per
share, on revenue of $3,272,524 for the three month period ended March 31,
1996. This was the first full quarter of operations since the Company's
$10.8 million initial public offering on December 26, 1995.
Effective December 1, 1995, the Company acquired Sunshine Villa, a 126 bed
assisted living community located in Santa Cruz, California. The Company
operates two other assisted living communities pursuant to long-term
leases: Regency Park, a 140 bed community in Portland, Oregon, and Sterling
Park, a 192 bed community in Redmond Washington, for total operations of
458 beds. The Company also manages Park Place, a 112 bed community in
Portland, Oregon from which the Company derives a management fee. As of May
13, 1996, the Company had started construction on a 128 bed community in
Boise, Idaho, and an additional eight communities were under development.
If all nine communities are developed, total operations of the Company will
increase by approximately 1,144 beds. Additionally, the Company had options
to purchase an additional four sites on which the Company was engaged in
preliminary development activities to develop communities with an aggregate
of 504 beds. All costs associated with the development of these communities
have been capitalized as "Construction in Process" as disclosed in Note 2
to the financial statements.
Operating results for the three month period ended March 31, 1996, are not
necessarily indicative of future financial performance as the Company
intends to expand its operating base of communities using the remaining
proceeds of the public offering.
Predecessor
The historical financial statements for the three month period ended March
31, 1995, represent the combined historical results of operations and
financial condition of the Predecessor. The Predecessor consists of a
combination of the business of the Company and the two entities that own
Regency Park and Sterling Park. The discussion of the results of operations
which follows is based upon the combined results of operations of the
Predecessor. For the purpose of preparing the historical financial
statements of the Predecessor, expenses have been allocated among the Bowen
Companies in a manner consistent with the Administrative Services
Agreement.
Certain pro forma data discussed below has been derived from Note 4 to the
financial statements of the Company for the three month period ended March
31, 1996, which presents unaudited pro forma results of operations for the
three month period ended March 31, 1995, as if the acquisition of Sunshine
Villa, the initial public offering, and the lease of Regency Park and
Sterling Park had occurred as of January 1, 1995.
Page 10
<PAGE>
Operations of Existing Communities
The following table sets forth, for the periods presented, the number of
communities and beds owned or leased and average occupancy percentages of
the Predecessor, the Company on a pro forma basis, and the Company:
<TABLE>
<CAPTION>
Three Month Period Ended March 31,
------------------------------------
Company The
Predecessor Pro Forma Company
1995 1995(1) 1996
---- ---- ----
<S> <C> <C> <C>
Communities owned or leased (end of period) 2 3 3
Number of Beds (end of period) 327 453 458
Average occupancy percentage 94.0% 93.8% 95.5%
<FN>
(1) Pro Forma 1995 includes Sunshine Villa, which was acquired effective
December 1, 1995.
</FN>
</TABLE>
Three Months Ended March 31, 1996 (The Company), Compared to Three Months
Ended March 31, 1995 (Predecessor)
Revenues. For the three month period ended March 31, 1996, revenues were
$3,272,524 compared to $2,302,038 in the three month period ended March 31,
1995. The Company operated three communities in the 1996 quarterly period
and managed a fourth community whereas it operated two communities and
managed two additional communities in the corresponding 1995 period. The
increase in revenue of $970,486, or 42 percent, is due primarily to the
addition of Sunshine Villa (pro forma revenues would have been $2,980,487
for the three month period ended March 31, 1995, if Sunshine Villa had been
acquired as of January 1, 1995) and to management's continuing focus on
more accurately assessing resident's needs. Revenue from the operation of
Sunshine Villa was $788,108 in the first quarter of 1996. In addition,
overall occupancy at all three of the Company's communities increased to an
average of 95.5 percent for the three month period ended March 31, 1996,
whereas on a pro forma basis the average occupancy for the same period in
1995 was 93.8 percent.
Residence Operating Expenses. Residence operating expenses were $1,968,689
for the three month period ended March 31, 1996, and $1,434,599 for the
same period in 1995. The increase of $534,090 is due primarily to the
addition of Sunshine Villa for 1996 (pro forma residence operating expenses
would have been $1,955,673 for the three month period ended March 31, 1995,
if Sunshine Villa had been acquired as of January 1, 1995). Residence
operating expenses totaled 60.2 percent and 62.3 percent of total revenues
for the three month periods ended March 31, 1996 and 1995, respectively.
General and Administrative Expenses. General and administrative expenses
were $472,613 for the three month period ended March 31, 1996, compared to
$107,455 for the Predecessor for the three month period ended March 31,
1995. The increase of $365,158 is due primarily to the increase in
development activities by the Company, including payroll and related costs
primarily resulting from staffing increases related to the implementation
of the Company's strategy for rapid growth and costs associated with being
a public company. General and administrative expenses, on a pro forma
basis, would have been $289,730 for the three month period ended March 31,
1995. General and administrative expenses were 14.4 percent and 4.7 percent
of total revenues for the three month periods ended March 31, 1996 and
1995, respectively.
Page 11
<PAGE>
Lease Expense. Lease expense for the Company's two leased communities was
$689,312 for the three month period ended March 31, 1996, and there was no
similar lease expense for the three month period ended March 31, 1995,
since Regency Park and Sterling Park were owned by entities included in the
Predecessor. The Company entered into long-term operating leases for the
Sterling Park and Regency Park communities effective January 1, 1996.
Depreciation and Amortization. Depreciation and amortization expense was
$58,714 for the three month period ended March 31, 1996, compared to
$173,305 for the three month period ended March 31, 1995. Depreciation for
the first quarter of 1996 relates primarily to Sunshine Villa while
depreciation for the same period of 1995 relates primarily to Regency Park
and Sterling Park, which are now being leased by the Company. Depreciation
and amortization would have been $61,572 on a pro forma basis for the three
month period ended March 31, 1995.
Interest Expense. Interest expense decreased in the three month period
ended March 31, 1996, to $128,779, from $425,581 for the three month period
ended March 31, 1995. Interest expense for the first quarter of 1996 is
related to financing incurred to acquire Sunshine Villa whereas interest
expense for the first quarter of 1995 is related to indebtedness secured by
the Regency Park and Sterling Park communities. Interest expense would have
been $133,445 on a pro forma basis for the three month period ended March
31, 1995.
Interest Income. Interest income increased in the three month period ended
March 31, 1996, to $116,862, from $4,429 for the same period in 1995. The
increase in interest income is due to the Company's investment of the net
proceeds from its initial public offering in high quality, short term
securities placed with institutions with high credit ratings.
Net Income. Net income decreased to $46,977 for the Company during the
three month period ended March 31, 1996, from $102,627 (after a pro forma
tax provision of $62,900) for the Predecessor for the same period in 1995.
The decrease in net income is the result primarily of an increase in
general and administrative expenses, as discussed above, and the excess of
the lease expense in the first quarter of 1996 for the Regency Park and
Sterling Park communities over the interest and depreciation expense
related to those communities in the same period in 1995, offset by an
increase in total revenues in excess of residence operating expenses.
On a pro forma basis, the net loss for the three month period ended March
31, 1995, would have been approximately $145,000 as compared to net income
of approximately $47,000 for the three month period ended March 31, 1996,
an increase of approximately $192,000. The increase is due primarily to an
increase in interest income, on a pro forma basis, of approximately
$112,000 and an increase in operating income, on a pro forma basis, of
approximately $99,000, offset by an increase in income taxes of
approximately $29,000.
Liquidity and Capital Resources
At March 31, 1996, the Company had approximately $6.8 million of working
capital compared to approximately $8.7 million at December 31, 1995, a
decrease of $1.9 million. Net cash used in operating activities totaled
approximately $159,000 for the three month period ended March 31, 1996. Net
cash provided in investing activities totaled $19,050 which was comprised
of approximately $1,952,000 provided from the maturity of investments
offset by approximately
Page 12
<PAGE>
$1,933,000 used for the purchase of land in Eugene, Oregon; Boise, Idaho;
and Folsom, California; to purchase options on five additional parcels of
land, and to conduct preliminary development activities related to these
eight parcels of land and four additional parcels of land, all of which are
located in Arizona, California, Idaho, Nevada, Texas, and Washington. The
aggregate purchase price for the Company's binding options to purchase the
additional five parcels of land was $2,663,000. The Company has paid
initial deposits relating to these sites and has also completed the
demographic analysis and other preliminary due diligence for purposes of
developing assisted living communities at these sites. The Company has also
entered into agreements pursuant to which it will own a fifty percent
equity interest in an assisted living community to be developed in Kenmore,
Washington and a five percent equity interest in an assisted living
community to be developed in Newport Beach, California. If constructed, the
Company will manage both communities.
Net cash used for financing activities totaled approximately $24,000 during
the three month period ended March 31, 1996, representing principal
payments on the indebtedness incurred to purchase Sunshine Villa.
The Company intends to utilize current working capital resources to develop
additional assisted living communities in 1996. The Company intends to
finance a substantial portion of the cost of developing each new community
through sale/leaseback transactions with REITs, as well as conventional
financing with commercial banks, pension funds, and other financial
institutions. In April, 1996, the Company entered into a letter of intent
with Health Care Property Investors, Inc. pursuant to which it agreed to
provide $15.3 million to the Company for the development and sale/leaseback
of two new assisted living communities. Furthermore, in April, 1996, U.S.
Bank delivered to the Company letters of interest pursuant to which it may
provide $12.2 million in construction financing for two other communities.
Each of these financing transactions is subject to a number of conditions,
including the negotiation and execution of definitive documents and the
satisfactory completion of due diligence on the related properties, and
there is no assurance that any of these financing transactions will be
completed on the terms proposed, or at all.
The Company anticipates capital expenditures for 1996 will include
additional land acquisition costs, architectural fees, and other
development costs related to at least 15 assisted living communities and
construction costs related to at least seven new assisted living
communities. The Company currently estimates that its plan to develop at
least 15 additional assisted living communities by the end of 1998,
including the communities described above that are under development, and
estimates that it will likely require additional financing prior to
construction of the last nine communities in addition to the financing
described in the preceding paragraph that is intended to be obtained in
connection with each new community. Such financing may take the form of
debt or equity, including a public or private debt or equity offering or
conventional bank financing. The amount of such additional financing will
be dependent upon the amount of security deposits required under, and other
terms of, the sale/leaseback financing arrangements the Company expects to
negotiate and the performance of the Company's newly developed communities
and existing properties. If the Company is unable to obtain additional
required financing, or if such financing is not available on acceptable
terms, the Company believes that its plan to develop 15 new communities by
the end of 1998 would likely be delayed or curtailed.
Page 13
<PAGE>
Forward-Looking Statements
The information set forth in this report in the sections entitled
"Overview" and "Liquidity and Capital Resources" includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933
and is subject to the safe harbor created by that section. The development
of additional assisted living communities will involve a number of risks
including, without limitation, the risk that the Company will be unable to
locate suitable sites, risks relating to the inability to obtain, or delays
in obtaining, necessary zoning, land use, building, occupancy and other
required governmental permits and authorizations, risks that financing may
not be available on satisfactory terms, environmental risks, risks that
construction costs may exceed original estimates, risks that construction
and lease-up may not be completed on schedule, risks that occupancy rates
at a newly completed community may not be achieved or be sustained at
expected levels, and risks relating to the competitive environment for
development. Additional factors that could cause results to differ
materially from those projected in the forward-looking statements include,
without limitation, the ability of the Company to raise additional
financing upon terms acceptable to the Company, increases in the costs
associated with new construction, competition, acceptance of the Company's
prototype community in new geographic markets, and the Company's ability to
locate, train, and retain qualified community managers and support staff.
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
REGENT ASSISTED LIVING, INC.
By: STEVEN L. GISH Date: May 13, 1996
------------------------------
Steven L. Gish
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED BALANCE SHEET OF REGENT ASSISTED LIVING, INC. AS OF MARCH 31,
1996, AND THE RELATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS IN
THE PERIOD ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
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10,758,703
0
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