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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 2
(Mark One)
[X] Amendment to Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended December 31, 1999
OR
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to
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COMMISSION FILE NUMBER 1-11999
ALTERRA HEALTHCARE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 39-1771281
(State of Incorporation) (I.R.S. Employer Identification No.)
10000 INNOVATION DRIVE
MILWAUKEE, WI 53226
(Address of Principal Executive Offices) (Zip Code)
(414) 918-5000
(Registrant's Telephone Number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<S> <C>
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
Common Stock, Par Value $.01 Per Share American Stock Exchange
5.25% Convertible Subordinated Debenture Due 2002 American Stock Exchange
Series A Junior Preferred Stock Purchase Rights American Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required 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 the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant was $94,056,168 as of March 24, 2000. The number of outstanding
shares of the Registrant's Common Stock was 22,100,032 shares as of March 24,
2000.
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EXPLANATORY NOTE
This Report on Form 10-K/A amends and restates in its entirety the
following Item of the Annual Report on Form 10-K of Alterra Healthcare
Corporation (the "Company") for the fiscal year ended December 31, 1999 (the
"1999 Form 10-K").
Item 13 of the 1999 Form 10-K has been amended to provide additional
information.
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ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company provides payroll processing and financial statement
preparation services to six dementia care residences in Wisconsin for a
partnership that is 50% owned and controlled by Mr. Lasky, the Company's
President and Chief Executive Officer. Pursuant to this arrangement, the Company
charges an annual fee of $10,000. Accrued fees owing to the Company by this
partnership for previously provided management services were $715,000 and
$581,000 at December 31, 1999 and 1998, respectively.
The Company leases an assisted living residence (in Tacoma, Washington)
from the 2010 Union L.P., of which Richard W. Boehlke, a director of the
Company, is the 99% general partner. Lease payments by the Company to this
partnership aggregated $673,122 in 1999.
The Company has retained a construction management/development firm
active in the Pennsylvania, New Jersey and Delaware markets to assist the
company in developing new residences in these markets. Anthony R. Geonnotti,
Jr., a Senior Vice president of the Company, owns approximately 5% of this firm
and Mr. Geonnotti's wife owns approximately 30% of this firm. Development and
construction expenditures, including construction management fees paid by the
Company to this firm during 1999 were $26,288,439.
In December 1999, the Company entered into a bridge loan arrangement
with an affiliated group (the "Bridge Lender") in connection with the Company's
repurchase of 19 Alterra residences then leased from a health care REIT (the
"REIT Residences"). Pursuant to this arrangement, the Company borrowed $14.0
million (the "Tranche A Loan") for working capital purposes and $30.0 million
(Tranche B Loan") as bridge financing for its initial purchase of seven REIT
Residences in December 1999. The Tranche A Loan has a term of up to 12 months
and bore interest at an initial annual rate of 8% for the first three months, 9%
for the next three months and increasing thereafter by 0.5% per month. The
Tranche A Loan is secured by mortgages on certain land and a stock pledge of a
subsidiary corporation (the "Holding Subsidiary") formed to serve as the holding
company for the subsidiary formed to acquire the REIT Residences. The Tranche B
Loan had a term of up to six months, bore interest at an annual rate of 10% for
the first three months and at a rate escalating by 0.5% per month thereafter.
The Tranche B Loan was secured by mortgages on the seven REIT Residences
acquired with the proceeds from the Tranche B Loan.
In February 2000, the Company acquired the remaining 12 REIT
Residences. In connection therewith, the Company obtained $60.0 million of
mortgage financing from one of its bank lenders, and utilized $30.0 million of
the proceeds to purchase the 12 REIT Residences and $30.0 million to repay the
Tranche B Loan.
In connection with this bridge loan arrangement, the Bridge Lender was
paid commitment and loan fees aggregating $820,000, acquired a $1.0 million
redeemable, convertible preferred stock interest in the Holding Subsidiary and
was given the right to co-invest in certain future Alterra equity transactions
by converting its Tranche A Loan receivable into an equity investment in
Alterra. The Holding Subsidiary preferred stock acquired by the Bridge Lender
accrues dividends at 8% per annum, is convertible at any time after December 31,
2000 into common shares of the Holding Subsidiary representing approximately 35%
of the outstanding common stock of the Holding Subsidiary and may be redeemed by
Holding Subsidiary at any time for an amount equal to the fair market value of
the Subsidiary Preferred at that time provided that such fair market value shall
in no event exceed the sum of (i) its stated value of $1.0 million (ii) the
accrued and unpaid dividends thereon and (iii) a redemption premium of $1.5
million if redeemed on or before March 31, 2000, increasing by $300,000 per
month thereafter.
In February 2000 the Company borrowed an additional $20.0 million from
the Bridge Lender by amending and increasing the amount borrowed under its
Tranche A Loan. Upon amending the Tranche A Loan, the interest rate on this loan
increased to 10% per annum. As additional security for the Tranche A Loan, the
Company granted the bridge lender mortgages on six residences. Of the $20.0
million additional advance on the Tranche A Bridge Loan, $4.1 million was placed
in escrow to facilitate the funding of the remaining construction costs with
respect to the mortgaged residences. A facility fee of $800,000 was paid to the
Bridge Lender upon the closing of the amended Tranche A Bridge Loan.
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Jerry L. Tubergen, a member of the Board of Directors of the Company,
and certain of his affiliates, hold equity interests in the Bridge Lender.
The Company believes that each of the foregoing transactions was on
terms substantially similar to those that it could have obtained from
unaffiliated third parties. In the case of related party transactions, it is the
Company's policy to enter into such agreements on terms, which in the opinion of
the Company, are substantially similar to those that could otherwise be obtained
from unrelated third parties, and that all such transactions be approved by a
majority of the disinterested members of the Board.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
ALTERRA HEALTHCARE CORPORATION.
By: /s/ Mark W. Ohlendorf
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Mark W. Ohlendorf
Senior Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary
Dated June 12, 2000
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