As filed with the Securities and Exchange Commission on June 1, 1998
Registration No. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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REGENT ASSISTED LIVING, INC.
(Exact name of registrant as specified in its charter)
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Oregon 8051 93-1171049
(State or other (Primary Standard (I.R.S. Employer
jurisdiction Industrial Identification
of incorporation) Classification Code Number) Number)
121 SW MORRISON STREET, SUITE 1000, PORTLAND, OREGON 97204
(503) 227-4000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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DAVID R. GIBSON
Vice President for Corporate Affairs
REGENT ASSISTED LIVING, INC.
121 SW Morrison Street, Suite 1000
Portland, Oregon 97204
(503) 227-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Todd A. Bauman
Jason M. Brauser
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2300
Portland, Oregon 97204
(503) 224-3380
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Approximate date of commencement of proposed sale to the public: as soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _____
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
=====================================================================================================================
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price per aggregate offering Amount of
securities to be registered registered share (1) price (1) registration fee
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<S> <C> <C> <C> <C>
Common Stock 1,400,000 $6.9375 $9,712,500 $2,866
- ---------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933. The calculation
of the registration fee is based on the average of the high and low price
for the Common Stock on May 28, 1998 as reported on the Nasdaq National
Market.
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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PROSPECTUS
REGENT ASSISTED LIVING, INC.
1,400,000 Shares of Common Stock
The shares of common stock (the "Common Stock") of Regent Assisted Living,
Inc. ("Regent" or the "Company") offered hereby (the "Shares") may be sold by
certain shareholders of the Company (the "Selling Shareholders"). The Company
will not receive any of the proceeds from the offering.
The Common Stock is traded on the Nasdaq National Market under the symbol
"RGNT." On May 29, 1998, the last sale price for the Common Stock as reported on
the Nasdaq National Market was $7.125 per share.
The Shares may be offered or sold from time to time by the Selling
Shareholders at market prices then prevailing, in negotiated transactions or
otherwise. Brokers or dealers will receive commissions or discounts from the
Selling Shareholders in amounts to be negotiated immediately prior to the sale.
See "Plan of Distribution."
See "Risk Factors" on page 4 for a discussion of certain risks related to
an investment in the Shares.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus. This Prospectus does not constitute an offering in any
jurisdiction in which such offering may not lawfully be made.
---------------
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the respective dates as to which information
has been given herein.
---------------
The date of this Prospectus is ____________, 1998.
<PAGE>
THE COMPANY
The Company is an Oregon corporation headquartered in Portland, Oregon. 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 address of the Company's principal executive offices is 121 SW Morrison
Street, Suite 1000, Portland, Oregon 97204. The Company's telephone number is
(503) 227-4000.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the Securities
and Exchange Commission (the "Commission") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), are incorporated in this
Prospectus by reference:
(a) The Company's Annual Report on Form 10-KSB, as amended, for the
year ended December 31, 1997;
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual Report
referred to in (a) above; and
(c) The description of the Company's Common Stock contained in the
Company's registration statement filed under Section 12 of the Exchange
Act, including any amendment or report updating such description.
All reports and other documents subsequently filed by the Company pursuant
to sections 13(a), 13(c), 14, and 15(d) of the Exchange Act prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of the filing of such reports and
documents.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports and other information with the
Commission. The Company has also filed with the Commission a Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Shares offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Shares offered hereby, reference is made to such Registration Statement,
exhibits and schedules. Statements contained in this Prospectus as to the
contents of any document are not necessarily complete, and in each instance
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reference is made to the copy of such document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. A copy of the Registration Statement and the reports and other
information filed pursuant to the Exchange Act may be inspected and copied at
the offices of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and at regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of all or any part of the Registration Statement and the
reports and other information filed pursuant to the Exchange Act may be obtained
from the Public Reference Section of the Commission, Washington, D.C. 20549 upon
the payment of the fees prescribed by the Commission. The Commission maintains
an Internet Web Site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding the Company that have
been filed electronically.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, including any beneficial
owner of Shares, on the written or oral request of any such person, a copy of
any or all of the documents incorporated by reference, other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
therein. Requests shall be directed to Regent Assisted Living, Inc., 121 SW
Morrison Street, Suite 1000, Portland, Oregon 97204, Attention: David R. Gibson
(telephone number (503) 227-4000). The information relating to the Company
contained in this Prospectus does not purport to be comprehensive and should be
read together with the information contained in the documents incorporated by
reference herein.
FORWARD-LOOKING STATEMENTS
The Company believes the information set forth in or incorporated by
reference into this Prospectus regarding the Company's acquisition of sites for
development, the Company's development, construction and opening of new assisted
living communities, the operation and performance of the Company's new assisted
living communities, the Company's plans to develop, construct and operate new
Regent Court communities, the ability of the Company's newly developed
communities to compete for residents and other information identified as
forward-looking statements, constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act and is subject to the safe harbor
created by that section. Certain factors that could cause results to differ
materially from those projected in the forward-looking statements are set forth
in "Risk Factors" and in the Company's Annual Report on Form 10-KSB, as amended,
for the year ended December 31, 1997, and the reports and other documents filed
by the Company pursuant to the Exchange Act.
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RISK FACTORS
In addition to the other information contained or incorporated by reference
in this Prospectus, the following factors should be considered carefully in
evaluating the Company and its business before purchasing any of the Shares
offered hereby.
Development and Construction Risks
The Company's growth strategy is dependent, in part, on its ability to
develop and construct a significant number of additional communities. As of
March 31, 1998, the Company had five communities under construction and 14
communities under development. Development projects generally are subject to
various risks, including delays in obtaining, or the failure to obtain, required
zoning approvals, health care licenses and other permits, and construction
delays, that may result in longer development periods and construction cost
overruns and, accordingly, higher than anticipated start-up losses. In
particular, if the Company is unable to open a community on time, it will be
unable to realize any revenue during the period that the opening is delayed, and
it will incur substantial operating expenses related to that community during
the same period, such as the cost of hiring a manager and marketing director
which is typically done well in advance of the originally planned opening date.
Project management is subject to a number of contingencies over which the
Company will have little or no control and which might adversely affect project
costs and completion time. Such contingencies include shortages of, or the
inability to obtain, labor or materials, the inability or the failure of the
general contractor or subcontractors to perform under their contracts on a
timely basis, strikes, adverse weather conditions and changes in applicable laws
or regulations or in the method of applying such laws and regulations. As a
result of these various factors, the Company has experienced construction delays
and there can be no assurance that the Company will not experience future
delays, that it will be successful in developing and constructing currently
planned or additional residences, that it will not incur substantial fixed costs
without obtaining any offsetting revenue or that any developed community will be
economically successful. If the Company's planned development and construction
activities are delayed, the Company's business, operating results and financial
condition could be adversely affected.
Substantial Debt and Operating Lease Payment and Obligations
The Company had lease expense of $3.5 million and $1.4 million for the year
ended December 31, 1997, and the three months ended March 31, 1998,
respectively, and the Company's total indebtedness as of March 31, 1998 was
$53.3 million. Total cash paid on interest was $1.8 million for the year ended
December 31, 1997, and $1.1 million for the three months ended March 31, 1998.
The Company also is required to pay a quarterly cumulative dividend to the
holders of $10 million of its Preferred Stock at the rate of six percent per
annum. Certain of the Company's leases also provide for annual increases in
lease payments that are tied to increases in the community's gross revenue or
increases in the consumer price index. Debt and annual operating lease payment
obligations will continue to increase significantly as the Company pursues its
growth
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strategy. In addition, the Company anticipates that future development of
communities may be financed with construction loans and, therefore, there is a
risk that, upon completion of construction, permanent financing for newly
developed residences may not be available or may be available only on terms that
are less favorable than terms currently available to the Company.
The Company has not had sufficient earnings on a historical basis to cover
operating expenses. Earnings of the Company were insufficient to cover operating
expenses by approximately $3.5 million for the year ended December 31, 1997, and
by approximately $2.3 million for the three months ended March 31, 1998. The
Company is dependent upon its ability to lease-up its newly opened communities
in order to cover its operating expenses. There can be no assurance that the
Company will be able to lease-up its communities to generate sufficient cash
flow to meet its future obligations. Any payment default or other default with
respect to such obligations could cause the lender to foreclose upon the
communities securing the indebtedness or, in the case of an operating lease, to
terminate the lease, with a consequent loss of income and asset value to the
Company. Moreover, because of cross-default and cross-collateralization
provisions in certain mortgages and debt instruments of the Company and in most
of its leases, a default by the Company on one of its payment obligations could
result in acceleration of other obligations and adversely affect a significant
number of its other residences. See "--Need for Additional Financing; Risk of
Rising Interest Rates."
History of Operating Losses
The Company has experienced significant operating losses and net losses
since inception, primarily as a result of its development activities,
pre-opening marketing and initial operating losses during community lease-up as
well as the incurrence of certain expenses to establish corporate infrastructure
to support future planned growth. For the year ended December 31, 1997, the
Company incurred an operating loss of $4.1 million and net loss of $3.9 million,
and for the three months ended March 31, 1998, the Company incurred an operating
loss of $2.4 million and a net loss of $2.4 million.
Newly opened Regent communities typically operate at a loss during the
first eight to 10 months of operation and the Company expects newly opened
Regent Court communities will typically operate at a loss during the first five
to six months of operation, primarily due to the incurrence of certain fixed and
variable expenses in advance of the achievement of targeted rental revenues from
the lease-up of such communities. In addition, the development and construction
of assisted living communities requires the commitment of substantial capital
over a typical 18-month development/construction period and until the
construction indebtedness is retired, the consequence of which may be an adverse
impact on the Company's liquidity. As of March 31, 1998, the Company had five
communities under construction and an additional 14 communities under
development. In the case of acquired communities, resident turnover and
increased marketing expenditures which may be required to reposition such
communities, together with the possible disruption of operations resulting from
the implementation of renovations, may adversely impact the financial
performance of such
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communities for a period of time after their acquisition. In addition, occupancy
levels and the rates which the Company may be able to charge for its services
may be adversely affected in competitive market circumstances which would
negatively impact the operating results of affected residences. Accordingly,
there can be no assurance that the Company will not experience unforeseen
expenses, difficulties, complications and delays which could result in greater
than anticipated operating losses or otherwise materially adversely affect the
Company's financial condition and results of operations. See "--Development and
Construction Risks" and "--Competition."
Need for Additional Financing; Risk of Rising Interest Rates
To achieve its growth strategy, the Company will need to obtain sufficient
financing to fund its continued development, construction and acquisition
activities. Accordingly, the Company's future growth will depend on its ability
to obtain additional financing on acceptable terms. The Company's management
believes financing available pursuant to its current arrangements, and pursuant
to other sources of financing, will be sufficient to fund its development and
acquisition programs through the remainder of 1998 but not beyond. To fund
additional growth, the Company likely will from time to time seek additional
funding through public or private offerings of its securities, including equity
or debt securities. If additional funds are raised by issuing equity securities,
the Company's shareholders may experience dilution. In addition, the Company
will require significant financial resources to meet its operating and working
capital needs. There can be no assurance that any newly constructed communities
will achieve a stabilized occupancy rate and attain a resident mix that meet the
Company's expectations or generate sufficient positive cash flow to cover
operating and financing costs associated with such communities. There can be no
assurance that the Company will be successful in securing additional financing
or that adequate funding will be available and, if available, will be on terms
that are acceptable to the Company. A lack of funds may require the Company to
delay or eliminate all or some of its development projects and acquisition
plans. In addition, the Company may require additional financing to enable it to
acquire additional residences, to respond to changing economic conditions, to
expand the Company's development program or to account for changes in
assumptions related to its development program. The Company will also need
additional financing to replace debt which is currently in the form of
construction loans. For example, as of December 31, 1997, the Company had
construction loans totalling approximately $70 million, all of which will need
to be refinanced within 1 to 3 years from the completion of the related
projects.
Approximately $32.4 million, or 70 percent of the Company's total
indebtedness as of March 31, 1998, was subject to floating interest rates. The
Company typically obtains construction financing that is subject to floating
interest rates and will likely continue to do so. In addition, future fixed rate
indebtedness and lease obligations will be based on interest rates prevailing at
the time such arrangements are obtained. Therefore, increases in prevailing
interest rates could increase the Company's interest or lease payment and
obligations and could have an adverse effect on the Company's business,
financial condition and results of operations.
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Ability to Continue Growth; Ability to Manage Rapid Expansion
The Company has pursued, and expects to continue to pursue, an aggressive
expansion strategy focused on developing, constructing and acquiring assisted
living communities. The Company is currently managing significant construction
and development activity. Accordingly, the Company's prospects are directly
affected by its ability to develop, construct and, to a lesser extent, acquire
additional communities. The Company's ability to continue to grow will depend in
large part on its ability to identify suitable and affordable development and
acquisition opportunities and successfully pursue such opportunities, identify
and obtain necessary financing commitments, and effectively operate its assisted
living communities. There can be no assurance, however, that the Company will be
successful in developing, constructing or acquiring any additional communities,
maintaining its current growth rate, or operating any developed or acquired
community.
The Company's rapid expansion places significant demands on the Company's
management and operating personnel. The Company's ability to manage its recent
and future growth effectively will require it to continue to improve its
operational, financial and management information systems and to continue to
attract, retain, train, motivate and manage key employees. If the Company is
unable to manage its growth effectively, its business, operating results and
financial condition will be adversely affected.
Competition
The long-term care industry is highly competitive and, given the relatively
low barriers to entry and continuing health care cost containment pressures, the
Company expects that the assisted living segment of such industry will become
increasingly competitive in the future. The Company competes with other
companies providing assisted living services as well as numerous other companies
providing similar services and care alternatives, such as home health care
agencies, congregate care facilities, retirement communities and skilled nursing
facilities. While the Company believes there is a need for additional assisted
living residences in the markets where the Company is constructing and
developing communities, the Company expects that, as assisted living communities
receive increased market awareness and the number of states which include
assisted living services in their Medicaid programs increases, competition will
increase from new market entrants. No assurance can be given that increased
competition will not adversely affect the Company's ability to attract or retain
residents or maintain its existing rate structures. Moreover, in implementing
its growth strategy, the Company expects to face competition for development and
acquisition opportunities from local developers and regional and national
assisted living companies. Some of the Company's present and potential
competitors have, or may have access to, greater financial resources than those
of the Company. Consequently, there can be no assurance that the Company will
not encounter increased competition in the future which could limit its ability
to attract and retain residents, to maintain or increase resident fees or to
expand its business and could have a material adverse effect on the Company's
financial condition, results of operations and prospects.
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Management of the Company is not able to predict the effect that the health
care industry trend towards managed care will have on the assisted living
marketplace. Managed care, an arrangement whereby service and care providers
agree to sell specifically defined services to one or more public or private
payors (frequently not the end user or resident) subject to a predefined system
in an effort to achieve more efficiency with respect to utilization and cost, is
not currently a significant factor in the assisted living marketplace. However,
managed care plans sponsored by insurance companies or HMOs may in the future be
a factor in the assisted living marketplace. There can be no assurance that the
Company will not encounter increased competition or be subject to other
competitive pressures that could affect its business, results of operation or
financial condition as a result of managed care.
Government Regulation
Health care is an area of extensive and frequent regulatory change. The
assisted living industry is relatively new, and, accordingly, the manner and
extent to which it is regulated at the Federal and state levels is evolving.
Changes in the laws or new interpretations of existing laws may have a
significant impact on the Company's methods and costs of doing business. The
Company is, and will be, subject to varying degrees of regulation and licensing
by health or social service agencies and other regulatory authorities in the
various states and localities where it operates or intends to operate.
The Company and its activities are subject to zoning and other state and
local government laws and regulations. Zoning variances or use permits are often
required for construction. Severely restrictive regulations could impair the
ability of the Company to open additional residences at desired locations or
could result in costly delays.
The Company's success will depend in part upon its ability to satisfy
applicable regulations and requirements and to procure and maintain required
licenses in rapidly changing regulatory environments. Any failure to satisfy
applicable regulations or to procure or maintain a required license could have a
material adverse effect on the Company's financial condition, results of
operations and prospects. The Company's operations could also be adversely
affected by, among other things, regulatory developments such as revisions in
building code requirements for assisted living residences, mandatory increases
in the scope and quality of care to be offered to residents and revisions in
licensing and certification standards. There can be no assurance that Federal,
state or local laws or regulations will not be imposed or expanded based on
evolving regulatory interpretations or based on new statutory or regulatory
provisions which adversely impact the Company's business, financial condition,
results of operations and prospects.
Residence Management, Staffing and Labor Costs
The Company competes with other providers of long-term care with respect to
attracting and retaining qualified and skilled personnel. The Company will be
dependent upon its ability to attract and retain management personnel
responsible for the day-to-day
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operations of each of the Company's residences. Any inability of the Company to
attract or retain qualified residence management personnel could have a material
adverse effect on the Company's financial condition or results of operations. In
addition, a possible shortage of nurses or trained personnel may require the
Company to enhance its wages and benefits package in order to compete in the
hiring and retention of such personnel. The Company will also be dependent upon
the available labor pool of semi-skilled and unskilled employees in each of the
markets in which it operates. No assurance can be given that the Company's labor
costs will not increase or that, if they do increase, they can be matched by
corresponding increases in rates charged to residents. Any significant failure
by the Company to attract and retain qualified management and staff personnel,
to control its labor costs or to pass on any increased labor costs to residents
through rate increases would have a material adverse effect on the Company's
business, operating results and financial condition.
Risks Associated with Acquisitions
The Company has acquired communities in the past and intends to continue to
seek acquisition opportunities in the future. However, no assurances can be
given that the Company will be successful in identifying any future acquisition
opportunities or completing any identified acquisitions. The acquisition of
communities involves a number of risks. Existing communities available for
acquisition frequently serve or target different market segments than those
presently served by the Company. It may be necessary in such cases to reposition
and renovate acquired residences or turn over the existing resident population
to achieve a resident acuity and income profile which is consistent with the
Company's current operations. In addition, the Company may also determine that
staff and operating management personnel changes are necessary to integrate
successfully such communities into the Company's existing operations. No
assurances can be made that management will be successful in repositioning any
acquired communities or in affecting any necessary operational or structural
changes and improvements on a timely basis.
Liability and Insurance
The provision of personal and health care services entails an inherent risk
of liability. In recent years, participants in the long-term care industry have
become subject to an increasing number of lawsuits alleging malpractice or
related legal theories, many of which involved large claims and resulted in the
incurrence of significant defense costs. In addition, compared to more
institutional long-term care facilities, assisted living communities (especially
dementia care communities) of the type operated by the Company offer residents a
greater degree of independence in their daily lives. This increased level of
independence, however, may subject the residents and the Company to certain
risks that would be reduced in more institutionalized settings. The Company
currently maintains liability insurance intended to cover such claims which it
believes is adequate based on the nature of the risks, historical experience and
industry standards. There can be no assurance, however, that claims in excess of
such insurance or claims not covered by insurance, such as claims for punitive
damages, will not arise. A successful claim against
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the Company not covered by, or in excess of, its insurance could have a material
adverse effect upon the Company's financial condition and results of operations.
Claims against the Company, regardless of their merit or eventual outcome, may
also have a material adverse effect upon the Company's ability to attract or
retain residents or expand its business and may require management to devote
substantial time to matters unrelated to day-to-day operations. In addition,
insurance policies must be renewed annually. There can be no assurance that the
Company will be able to obtain liability insurance in the future or that, if
such insurance is available, it will be available on acceptable economic terms.
Dependence on Attracting Seniors with Sufficient Resources to Pay
The Company currently relies, and for the foreseeable future the Company
expects to rely, primarily on the ability of its residents to pay for services
from their own and their families' financial resources. Generally, only elderly
adults with income or assets adequate to cover the monthly cost of rent
multiplied by the period of residence, can afford the fees for such residences.
The Company estimates that the average fee paid by a resident during the average
two year period of residency ranges from $57,600 to $72,000. Inflation or other
circumstances which adversely affect the ability of residents and potential
residents to pay for assisted living services could have an adverse effect on
the Company. In the event that the Company encounters difficulty in attracting
seniors with adequate resources to pay for the Company's services, the Company's
financial condition, results of operations and prospects would be adversely
affected.
Environmental Liability Risks Associated with Real Property
Under various Federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up hazardous or toxic substances or petroleum
products released at such property, and may be held liable to a governmental
entity or to third parties for property damage and for investigation and clean
up costs incurred by such parties in connection with the contamination. Such
laws typically impose clean up responsibility and liability without regard to
whether the owner knew of or caused the presence of contaminants, and liability
under such laws has been interpreted to be joint and several unless the harm is
divisible and there is a reasonable basis for allocation of responsibility. The
costs of investigation, remediation or removal of such substances may be
substantial, and the presence of such substances, or the failure to remediate
properly such property, may adversely affect the owner's ability to sell or
lease such property or to borrow using such property as collateral. In addition,
some environmental laws create a lien on the contaminated site in favor of the
government for damages and costs it incurs in connection with the contamination.
Persons who arrange for the disposal or treatment of hazardous or toxic
substances also may be liable for the costs of removal or remediation of such
substances at the disposal or treatment facility, whether or not such facility
is owned or operated by such person. Finally, the owner of a site may be subject
to common law claims by third parties based on damages and costs resulting from
environmental contamination emanating from a site.
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The Company has conducted environmental assessments of all of its operating
communities and those sites currently under construction. These assessments have
not revealed, and the Company is not otherwise aware of, any environmental
liability that it believes would have a material adverse effect on the Company's
business, assets or results of operations. There can be no assurance, however,
that environmental assessments would detect all environmental contamination
which may give rise to material environmental liabilities. The Company believes
that its respective communities are in compliance in all material respects with
all applicable environmental laws. The Company has not been notified by any
governmental authority, or is not otherwise aware, of any material
non-compliance, liability or claim relating to hazardous or toxic substances or
petroleum products in connection with any of the residences it currently
operates.
Shared Management
Certain executive officers of the Company fulfill similar executive
functions for other companies controlled by Walter C. Bowen (the "Bowen
Companies"). Mr. Bowen, Chairman of the Board, President and Chief Executive
Officer, Steven L. Gish, Chief Financial Officer, and David R. Gibson, Vice
President for Corporate Affairs, spend a portion of their time on the business
affairs of the Bowen Companies. The responsibilities of Company management to
the Bowen Companies may create potential conflicts. In addition, certain of the
Bowen Companies maintain business relationships with the Company which may also
create conflicts of interest.
Benefits to Related Parties
Mr. Bowen is a general partner of and holds a 99 percent equity interest in
each of the partnerships that lease Sterling Park and Regency Park to the
Company. In addition, Mr. Bowen has guaranteed a portion of the indebtedness of
each of these partnerships. As a result, Mr. Bowen is deemed to receive the
portion of the rental payments under the Company's leases for those communities
remaining after service of the debt to which the properties are subject, and may
also be deemed to benefit from those rental payments as a guarantor of each
partnership's debt. The Company's aggregate minimum annual rental payments under
those leases is approximately $2.8 million.
Conflicts of Interest and Relationships with Affiliates
The Company leases Sterling Park and Regency Park from partnerships
controlled by Mr. Bowen. Accordingly, Mr. Bowen may be deemed to have had a
conflict of interest regarding the terms of those leases, and may in the future
have a conflict of interest as to the interpretation and enforcement of those
terms.
Eric W. Jacobsen, the Company's Chief Operating Officer, holds partnership
interests in partnerships that are unaffiliated with the Company and that own an
assisted living facility in Hermiston, Oregon and two congregate care facilities
in Escondido, California and Odessa, Texas. These facilities may compete for
residents with any
11
<PAGE>
assisted living communities in the same vicinity that may be developed or
operated by the Company in the future.
Bowen Development Company, a real estate construction company of which Mr.
Bowen is the sole shareholder ("Bowen Development"), has served as the general
contractor for construction of several of the Company's communities and may
serve as the general contractor for construction of one or more of the Company's
new communities. The terms of each such arrangement will be no less favorable to
the Company than could be obtained from unaffiliated parties in an arm's-length
transaction and will be approved by the Conflicts Committee of the Board of
Directors which consists of four independent directors.
Dependence on Executive Management
The Company depends, and will continue to depend, upon the services of Mr.
Bowen, its Chairman of the Board, President and Chief Executive Officer, Mr.
Jacobsen, the Company's Chief Operating Officer, Mr. Gish, the Company's Chief
Financial Officer, and Mr. Ekberg, the Company's Executive Vice President. The
Company has entered into employment agreements with these executives. The loss
of the services of any such officers could have a material adverse effect on the
Company's financial condition, results of operations and prospects.
Mr. Bowen has personally guaranteed a substantial portion of the Company's
debt. Under certain of these debt instruments, the Company would be in default
upon the loss of Mr. Bowen. The Company is also party to certain lease
agreements which require that Mr. Bowen will own not less than 25 percent of the
Company's outstanding stock and that he will continue to control the management
of the Company. Because of cross-default and cross-collateralization provisions
in certain mortgages and debt instruments of the Company and in most of its
leases, the loss of Mr. Bowen would have a material adverse effect on the
Company's financial condition, results of operations and prospects.
Control by Existing Shareholder
Mr. Bowen, the Chairman of the Board of Directors, President and Chief
Executive Officer of the Company, owns approximately 68.5 percent of the
outstanding Common Stock of the Company. In matters submitted to the
shareholders for approval, however, Mr. Bowen controls 52.6 percent of the votes
entitled to be cast due to the voting rights of Series A Preferred Stock. Mr.
Bowen is able to control all matters requiring approval by the shareholders of
the Company, including the election of directors, and will be able to prevent a
business combination involving the Company that is favored by the other
shareholders. Mr. Bowen's control is limited in certain respects pursuant to the
terms of a Stockholders Agreement dated December 16, 1996, between the Company,
Prudential Private Equity Investors III, L.P. ("PPEI") and Mr. Bowen. Pursuant
to the Stockholders Agreement, Mr. Bowen has agreed to vote his shares in favor
of the election of two representatives designated by PPEI to the Company's Board
of Directors. Additionally, Mr. Bowen may not, without the prior written consent
of the
12
<PAGE>
holders of at least 66 2/3% of the outstanding Preferred Stock, vote in favor
of, among other things, any (i) merger or consolidation, (ii) liquidation,
dissolution, recapitalization or reorganization, (iii) amendment to the
Company's Articles of Incorporation or Bylaws that would increase the authorized
number of shares of Preferred Stock or impair the rights of the holders of
Preferred Stock, or (iv) amendment to any stock option plan or employee stock
ownership plan.
Anti-Takeover Effect of Certain Provisions of the Company's
Restated Articles of Incorporation and Restated Bylaws and Oregon Law
Certain provisions of the Company's Restated Articles of Incorporation
("Restated Articles"), Restated Bylaws ("Restated Bylaws") and the Oregon
Control Share and Business Combination Acts will effectively make it more
difficult for a third party to acquire control of the Company through either a
tender offer or a proxy contest for the election of directors. The Company's
Restated Articles and Restated Bylaws contain provisions which (i) classify the
Board of Directors into three classes, with one class being elected each year,
(ii) provide that directors may be removed by shareholders only for cause and
only upon the vote of 75 percent of the votes then entitled to be cast for the
election of directors, and (iii) permit the Board to establish the rights,
preferences and privileges of, and to issue, preferred stock without shareholder
approval. The Company currently has no plans to issue any additional shares of
its preferred stock. In addition, the Oregon Control Share Act and the Business
Combination Act limit the ability of parties who acquire a significant amount of
voting stock to exercise control over the Company. These provisions may have the
effect of lengthening the time required for a person to acquire control of the
Company through a proxy contest or the election of a majority of the Board of
Directors and may deter efforts to obtain control of the Company.
Shares Eligible for Future Sale
Sales of substantial amounts of Common Stock in the public market or the
perception that such sales could occur could adversely affect the market price
of the Common Stock and the Company's ability to raise capital in the future in
the equity markets. The Company has outstanding 4,633,000 shares of Common
Stock. Of these shares, 1,400,000 shares are freely tradeable without
restriction or limitation under the Securities Act, except for any shares held
by "affiliates," as that term is defined under the rules and regulations under
the Securities Act, of the Company. The 31,700 shares of unrestricted stock
owned by Mr. Bowen are subject to certain of the resale limitations of Rule 144
under the Securities Act. The remaining 3,143,000 outstanding shares of Common
Stock, currently held by Mr. Bowen, are "restricted securities" within the
meaning of Rule 144. Under Rule 144, "restricted shares" generally are shares
acquired from the issuer or an affiliate of the issuer other than in a public
offering. Under Rule 144, restricted shares that have been held for at least one
year as well as any shares of Common Stock held by affiliates of the Company
will be eligible for sale subject to volume and other restrictions. If at least
two years have elapsed since the acquisition of restricted shares, a holder of
such restricted shares that has not been an affiliate of the
13
<PAGE>
Company for the preceding three months will in general be entitled to sell such
shares in the public market without restriction under the Securities Act.
Mr. Bowen has granted to certain officers of the Company and one other
individual options to purchase up to 170,000 of his shares of Common Stock,
which options are fully exercisable (the "Bowen Options"). In addition, the
Company has granted options to purchase up to 385,500 shares of Common Stock to
employees and 370,500 shares of Common Stock to certain of its officers and
directors under the Company's 1995 Stock Incentive Plan, as amended. Shares
subject to options held by employees may, upon exercise, be freely sold into the
market pursuant to an effective registration statement on Form S-8. All other
such shares, including shares acquired upon the exercise of the Bowen Options,
may be sold subject to the limitations of Rule 144 applicable to shares held by
affiliates.
Prudential Private Equity Investors III, L.P. ("PPEI") beneficially owns
shares of preferred stock of the Company that may be converted into 1,400,493
shares of Common Stock at any time and shares of preferred stock that may be
converted into 417,689 shares of Common Stock only upon certain conversion
events. Upon acquisition, such shares would be restricted shares held for more
than one year, and subject to the limitations of Rule 144 applicable to
restricted shares. PPEI also has a warrant to purchase 200,000 shares of the
Company's Common Stock at $5.50 a share, upon the occurrence of certain defined
events. PPEI is an affiliate of the Company and the shares of Common Stock that
may be acquired by it as described above would be "restricted shares" for
purposes of Rule 144. Needham & Company, Inc. ("Needham") and Black & Company,
Inc. ("Black & Co.") and certain of its affiliates each hold currently
exercisable warrants to purchase 70,000 shares of the Company's Common Stock.
Such shares would "restricted shares" under Rule 144, subject to the holding
period and other requirements under that rule. LTC Healthcare, Inc. ("LTC") and
certain of its affiliates beneficially own, or have the right to purchase, up to
$10.5 million principal amount of 7.5 % Convertible Notes due 2008. These Notes
may be converted into 1,400,000 shares of the Company's Common Stock. LTC is an
affiliate of the Company and all of the shares that may be acquired by it or its
affiliates would be "restricted shares" under Rule 144. In addition, PPEI, LTC,
Needham and Black & Co. have the right to require the Company to register under
the Securities Act their shares of Common Stock obtained upon conversion of
their preferred stock or exercise of their warrants, as applicable. Such
registration would permit such holders to resell their shares in the public
markets without restrictions under the Securities Act.
Dividend Policy
The Company retains earnings to finance its operations and expand its
business. Therefore, the payment of any cash dividends on the Common Stock is
unlikely in the foreseeable future.
14
<PAGE>
Possible Volatility of Stock Price
The market price of the Common Stock could be subject to significant
fluctuations in response to various factors and events, including the liquidity
of the market for the Common Stock, variations in the Company's operating
results, and new statutes or regulations or changes in the interpretation of
existing statutes or regulations affecting the health care industry generally or
the assisted living business in particular. In addition, the stock market in
recent years has experienced broad price and volume fluctuations that often have
been unrelated to the operating performance of particular companies. Those
market fluctuations also may adversely affect the market price of the Common
Stock.
SELLING SHAREHOLDERS
The following table sets forth certain information provided to the Company
by the Selling Shareholders.
Shares Shares
beneficially owned as of offered by this
Selling Shareholders May 26, 1998 Prospectus
- -------------------- ------------------------ ---------------
LTC Healthcare, Inc. 866,667 1,333,334
Andre C. Dimitriadis 21,333 21,333
James J. Pieczynski 21,333 21,333
Christopher T. Ishikawa 12,000 12,000
Pamela J. Privett 12,000 12,000
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholder, or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made in the over-the-counter market or otherwise at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Shares may be sold by one or more of the following
methods: (a) block trades in which the broker or dealer so engaged will attempt
to sell the Shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction; (b) purchases by a broker or dealer
as principal, in a market maker capacity or otherwise, and resale by such broker
or dealer for its account pursuant to this Prospectus; and (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
In effecting sales, brokers or dealers engaged by the Selling Shareholders may
arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from the Selling Shareholders in amounts to be
negotiated immediately prior to the sale. The Selling Shareholders, such brokers
or dealers, and any other participating brokers or dealers may
15
<PAGE>
be deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. In addition, any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than pursuant to this Prospectus.
Upon the Company being notified by any of the Selling Shareholders that any
material arrangement has been entered into with a broker or dealer for the sale
of Shares other purchase by a broker or dealer as principal, other than a
purchase as a market maker in an ordinary trading transaction, a supplemented
prospectus will be filed, if required, pursuant to Rule 424 under the Securities
Act, disclosing (i) the name of such Selling Shareholder(s) and of the
participating brokers or dealers, (ii) the number of Shares involved, (iii) the
price at which such Shares will be sold, (iv) the commission paid or discounts
or concessions allowed to such brokers or dealers, where applicable, (v) that
such brokers or dealers did not conduct any investigation to verify the
information set out or incorporated by reference in this Prospectus, and (vi)
other facts material to the transaction.
EXPERTS
The consolidated financial statements of Regent Assisted Living, Inc. as of
December 31, 1997 and for the year then ended as reported in the Company's 1997
Annual Report on Form 10-KSB have been incorporated by reference herein and in
the registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements as of December 31, 1996 and for the
year ended December 31, 1996 included in this Prospectus by reference to the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1997 have
been so included in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby will be passed
upon for the Company by Stoel Rives LLP, Portland, Oregon.
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by the
Company in connection with the offer and sale of the Securities being
registered. All costs and expenses will be paid by the Company.
Registration fee......................................... $ 2,866
Accounting fees and expenses............................. 6,500*
Legal fees and expenses.................................. 5,000*
Miscellaneous............................................ -
--------
Total.............................................. $ 14,366
========
--------------
* Estimated
Item 15. Indemnification of Officers and Directors
Article IV (the "Article") of the Company's Restated Articles of
Incorporation requires the Company to indemnify directors to the fullest extent
not prohibited by law. The right to and amount of indemnification will be
ultimately subject to determination by a court that indemnification in the
circumstances presented is consistent with public policy considerations and
other provisions of the law. It is likely, however, that the Article would
require indemnification at least to the extent that indemnification is
authorized by the Oregon Business Corporation Act (the "Act"). The effect of the
Act is summarized as follows:
(a) The Act permits a corporation to grant a right of indemnification
in respect of any pending, threatened or completed action, suit or
proceeding (the "proceeding"), other than an action by or in the right of
the corporation, against expenses (including attorneys' fees), judgments,
penalties, fines and amounts paid in settlement actually and reasonably
incurred, provided the person concerned acted in good faith and in a manner
the person reasonably believed to be in or at least not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful. Indemnification is not permitted in connection with a proceeding
in which a person is adjudged liable on the basis that personal benefit was
improperly received, unless indemnification is permitted by a court upon a
finding that the person is fairly and reasonably entitled to
indemnification in view of all of the relevant circumstances. The
termination of a proceeding by judgment, order, settlement or conviction or
upon plea of nolo contendere or its equivalent is not, of itself,
determinative that the person did not meet the prescribed standard of
conduct.
II-1
<PAGE>
(b) The Act permits a corporation to grant a right of indemnification
in respect of any proceeding by or in the right of the corporation against
the reasonable expenses (including attorneys' fees) incurred if the person
concerned acted in good faith and in a manner the person reasonably
believed to be in or at least not opposed to the best interests of the
corporation, except that no indemnification may be granted if such person
is adjudged to be liable to the corporation unless permitted by a court.
(c) The corporation may not indemnify a person in respect of a
proceeding described in (a) or (b) above unless it is determined in the
specific case that indemnification is permissible because the person has
met the prescribed standard of conduct by any one of the following: (i) the
Board of Directors, by a majority vote of a quorum consisting of directors
not at the time parties to the proceeding, (ii) if a quorum of directors
not parties to the proceeding cannot be obtained, by a majority vote of a
committee of two or more directors not at the time parties to the
proceeding, (iii) by special legal counsel selected by the Board of
Directors or such committee thereof, as described in (i) and (ii) above, or
(iv) by the shareholders. Indemnification can also be ordered by a court if
the court determines that indemnification is fair in view of all of the
relevant circumstances. Notwithstanding the foregoing, every person who has
been wholly successful, on the merits or otherwise, in defense of a
proceeding described in (a) or (b) above is entitled to be indemnified as a
matter of right against reasonable expenses incurred in connection with the
proceeding.
(d) The corporation may pay for or reimburse the reasonable expenses
incurred in defending a proceeding in advance of the final disposition
thereof if the director or officer receiving the advance furnishes (i) a
written affirmation of his or her good faith belief that he or she has met
the prescribed standard of conduct and (ii) a written undertaking to repay
the advance in the event indemnification is not authorized.
The rights of indemnification described above are not exclusive of any
other rights of indemnification to which officers or directors may be entitled
under any statute, agreement, vote of shareholders, action of directors or
otherwise. The Company has entered into agreements with each of its directors
providing for indemnity and advancement of expenses to the fullest extent not
prohibited by Oregon law.
Item 16. Exhibits
(a) Exhibits
5 Opinion of Stoel Rives LLP.
23.1 Consent of KPMG Peat Marwick LLP (see page II-7).
23.2 Consent of Coopers & Lybrand L.L.P. (see page II-8).
II-2
<PAGE>
23.3 Consent of Stoel Rives LLP (included in Exhibit 5).
24 Powers of Attorney (see page II-5).
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each new post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
(c) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Oregon, on May 29, 1998.
REGENT ASSISTED LIVING, INC.
By WALTER C. BOWEN
--------------------------------------
Walter C. Bowen
President, Chief Executive Officer and
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the following
capacities on May 29, 1998.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Walter C. Bowen, Steven L. Gish and David
R. Gibson, or any of them, his true and lawful attorneys-in-fact and agents,
each with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any amendments
(whether pre-effective or post-effective) to this Registration Statement and any
registration statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same
with all exhibits thereto and other documents in connection therewith with the
Securities and Exchange Commission, granting unto each of said attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents, or their
substitute or substitutes, may do or cause to be done by virtue hereof.
Signature Title
--------- -----
WALTER C. BOWEN President, Chief Executive Officer,
- ---------------------------------- Chairman of the Board and Director
Walter C. Bowen (Principal Executive Officer)
II-5
<PAGE>
STEVEN L. GISH Chief Financial Officer, Treasurer,
- ---------------------------------- Assistant Secretary and Director
Steven L. Gish (Principal Financial and Accounting
Officer)
PETER L. BRIX Director
- ----------------------------------
Peter L. Brix
STEPHEN A. GREGG Director
- ----------------------------------
Stephen A. Gregg
DANA J. O'BRIEN Director
- ----------------------------------
Dana J. O'Brien
MARVIN S. HAUSMAN, M.D. Director
- ----------------------------------
Marvin S. Hausman, M.D.
GARY R. MAFFEI Director
- ----------------------------------
Gary R. Maffei
MARTHA L. ROBINSON Director
- ----------------------------------
Martha L. Robinson
II-6
<PAGE>
EXHIBIT 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors
Regent Assisted Living, Inc.:
We consent to incorporation by reference in the Registration Statement on
Form S-3 to register 1,400,000 shares of common stock of Regent Assisted Living,
Inc. of our report dated February 13, 1998, except as to note 11, which is as of
March 27, 1998, relating to the consolidated balance sheet of Regent Assisted
Living, Inc. and subsidiaries as of December 31, 1997, and the related
consolidated statements of operations, shareholders' equity and cash flows for
the year then ended, which report appears in the December 31, 1997 Annual Report
on Form 10-KSB of Regent Assisted Living, Inc.
KPMG PEAT MARWICK LLP
Portland, Oregon
May 29, 1998
II-7
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of our report dated March 21, 1997, which appears on page F-2 of the
Annual Report on Form 10-KSB of Regent Assisted Living, Inc. for the year ended
December 31, 1997. We also consent to the reference to our firm under the
caption "Experts."
COOPERS & LYBRAND L.L.P.
Portland, Oregon
May 29, 1998
II-8
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EXHIBIT INDEX
Exhibit Description
- ------- -----------
5 Opinion of Stoel Rives LLP.
23.1 Consent of KPMG Peat Marwick LLP (see page II-7).
23.2 Consent of Coopers & Lybrand L.L.P. (see page II-8).
23.3 Consent of Stoel Rives LLP (included in Exhibit 5).
24 Powers of Attorney (see page II-5).
EXHIBIT 5
June 1, 1998
Board of Directors
Regent Assisted Living, Inc.
121 SW Morrison Street, Suite 1000
Portland, OR 97204
We have acted as counsel for Regent Assisted Living, Inc. (the "Company")
in connection with the filing of a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended, covering
the sale of up to 1,400,000 shares of Common Stock (the "Shares") of the Company
by the holders thereof (the "Selling Shareholders"). We have reviewed the
corporate actions of the Company in connection with this matter and have
examined those documents, corporate records, and other instruments we deemed
necessary for the purposes of this opinion.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing under
the laws of the State of Oregon; and
2. The Shares have been duly authorized by the Company and, when issued in
accordance with the resolutions adopted by the Board of Directors of the Company
and the terms of the Convertible Notes Purchase Agreements dated March 31, 1998
between the Company and each of the Selling Shareholders, will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this option as an exhibit to the
Registration Statement.
Very truly yours,
STOEL RIVES LLP
