SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED September 30, 1999
Senior Retirement Communities, Inc.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Louisiana 72-1394159
------------------------------ ---------------------------
(State or other jurisdiction of incorporation (IRS Employer Identification
or organization) Number)
507 Trenton Street, West Monroe, Louisiana 71291
- -----------------------------------------------------------------------------
(Address of principal executive offices)(Zip code)
Registrant's telephone number, including are code (318) 323-2115
Number of share outstanding of each of the registrant's class of common
shares and preferred shares, as of September 30, 1999
Common Shares 16,588,200 no par value:
Preferred shares 425,000 par value $1.00 per share:
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 twelve (12) months (or for such shorter
period that the registrant was required to file such report) and (2) has
subject to such filing requirements for the past ninety (90) days.
Yes X No
------- --------
<PAGE>
Senior Retirement Communities, Inc.
Form 10-QSB
TABLE OF CONTENTS
Part 1: Financial Information Page
Item 1. Financial Statements (Unaudited)
Balance Sheets as of September 30, 1999 (unaudited) .................. 6-7
Statements of Income for the three and nine months ended September 30,
1999 and 1998 (unaudited)............................................. 8-9
Statement of Retained Earnings for the three and nine months ended
September 30, 1999 and 1998 (unaudited).............................. 10
Statements of Cash Flows for the three months and nine months ended
September 30, 1999 and 1998 (unaudited)...............................11-12
Notes to Financial Statements.........................................13-16
Item 2. Management's Discussion and Analyses of Financial Conditions
and Results of Operations.............................................17-21
Part II: Other Information
Item 1. Legal Proceedings............................................ 22
Item 2. Changes in Securities........................................ 22
Item 3. Defaults Upon Senior Securities.............................. 22
Item 4. Submission of Matters to a Vote of Security Holders.......... 22
Item 5. Other Information............................................ 22
Item 6. Other Matters................................................ 22
Item 7. Exhibits and reports on Form 8-K ............................ 23
<PAGE>
SENIOR RETIREMENT COMMUNITIES, INC.
FINANCIAL STATEMENT
SEPTEMBER 30, 1999
<PAGE>
Senior Retirement Communities, Inc.
Financial Statement
September 30, 1999
Table of Contents
Page
FINANCIAL STATEMENTS:
Report 5
Balance Sheet 6
Statement of Income 8
Statement of Retained Earnings 10
Statement of Cash Flows 11
Notes to Financial Statements 13
<PAGE>
Senior Retirement Communities, Inc
To the Board of Directors and Shareholders
Senior Retirement Communities, Inc.
West Monroe, Louisiana
The accompanying balance sheet of Senior Retirement Communities, Inc.
as of September 30, 1999, and the related statement of income, retained
earnings and cash flows for the three and nine months ended September
30, 1999, and 1998, were prepared internally from the books and records
of Senior Retirement Communities, Inc. These financial statements were
not audited or reviewed.
/S/JOANNE CALDWELL-BAYLES
Joanne Caldwell-Bayles
President, Senior Retirement Communities, Inc.
November 11, 1999
507 Trenton Street West Monroe, LA 71291 - 318 323-2115 - FAX 318-3236281
<PAGE>
Senior Retirement Communities, Inc.
Balance Sheet
June 30, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 2,403
Escrow cash 614,614
Sinking fund cash 3,748
-------------
Total current assets 620,765
-------------
Property, plant and equipment
Buildings 8,778,828
Furniture and fixtures 114,157
Land 1,508,820
-------------
10,401,805
Less: Accumulated depreciation 143,602
-------------
Net property and equipment 10,258,203
-------------
$ 10,878,968
-------------
</TABLE>
See accompanying notes.
<PAGE>
Senior Retirement Communities, Inc.
Balance Sheets
September 30, 1999
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
Current liabilities:
Accounts payable and accrued expenses $ 52,420
-------------
Long-term debt:
Bonds payable 8,966,608
-------------
Other liabilities:
Due to stockholders and affiliates 844,631
-------------
Stockholders' Equity
Common stock, No par value, 90,000,000
shares authorized, 16,588,200 shares issued
and outstanding 1,658,820
Preferred stock, $ 1 par value, 20,000,000
shares authorized, 425,000 shares issued 425,000
and outstanding
Retained earnings (deficit) (1,068,511)
-------------
Total stockholders' equity 1,015,309
-------------
$ 10,878,968
-------------
</TABLE>
See accompanying notes.
<PAGE>
Senior Retirement Communities, Inc.
Statements of Income
<TABLE>
<CAPTION>
1999 1998
----------------------------- ----------------------------
For the three For the nine For the three For the nine
months ended months ended months ended months ended
September 30 September 30 September 30 September 30
<S> <C> <C> <C> <C>
Revenues $ 256,301 $ 433,395 $ 2,137 $ 2,137
--------- --------- --------- ---------
Expenses
Accounting 17,822 38,822 0 0
Activities 798 2,651 0 0
Advertising 13,548 34,680 2,238 2,394
Automobile 296 3,800 0 0
Bank Charges 137 472 90 125
Bond Agent Fees 48,272 58,902 0 0
Cable Expense 0 46 0 0
Carpet Cleaning 9 855 0 0
Casual labor 0 1,026 0 174
Construction 3,000 3,000 0 0
Consulting 1,000 26,000 0 0
Decorations 873 2,043 0 0
Depreciation 54,689 137,611 0 0
Dues & subscripts. 325 1,287 25 275
Employee incentives 2,185 3,450 0 1,268
Employee Screening 1,999 4,726 0 0
Employee training (1,200) 15 0 0
Equipment rental 1,914 2,864 0 0
Food Costs 24,107 44,364 0 0
Gloves 238 428 0 0
Housekeeping 1,989 3,926 0 0
Insurance 6,704 22,584 364 471
Interest 168,814 519,664 0 0
Kitchen supplies 862 968 0 0
Laundry 394 609 0 0
Lawn Care 3,966 7,379 0 0
Licenses & permits 1,370 2,034 0 0
Light Bulbs 98 112 0 0
Linens 19 31 0 0
Management Fees 19,797 35,991 0 0
Miscellaneous 170 981 161 161
Office 170 506 79 79
Office Supplies 861 4,044 0 0
Paper Goods 289 989 0 0
Payroll Expenses 183,847 333,923 0 0
Pest Control 1,076 2,031 0 0
Pet Supplies 185 579 0 0
Postage & Delivery 861 2,272 0 0
Printing 2,208 10,454 2,526 2,798
Professional fees 80 230 0 210
Promotion 3,070 5,787 0 0
Rental Bonus 2,500 3,200 0 0
</TABLE>
Continue income statement......
See accompanying notes
<PAGE>
Senior Retirement Communities, Inc.
Statements of Income
<TABLE>
<CAPTION>
1999 1998
----------------------------- ----------------------------
For the three For the nine For the three For the nine
months ended months ended months ended months ended
September 30 September 30 September 30 September 30
<S> <C> <C> <C> <C>
Repairs 3,488 8,278 0 0
Resident Gifts 93 426 0 0
Taxes (1) 1,536 0 2,656
Telephone 3,863 11,122 0 0
Training & Education 785 1,607 0 0
Travel & Entertain 1,904 7,231 660 835
Uniforms 1,236 1,503 0 0
Utilities 25,892 61,260 0 0
Van Expense 2,671 8,179 0 0
Waste Removal 1,030 2,464 0 0
Wellness 52 306 0 0
--------- --------- --------- ---------
Total Expenses 610,355 1,429,248 6,145 11,446
--------- --------- --------- ---------
Net Income (-Loss) $ (354,054) $ (995,853) $ (4,008) $ (9,309)
--------- --------- --------- ---------
</TABLE>
See accompanying notes
<PAGE>
Senior Retirement Communities, Inc.
<TABLE>
<CAPTION>
Statement of Retained Earnings ( Deficit )
1999 1998
----------------------------- ----------------------------
For the three For the nine For the three For the nine
months ended months ended months ended months ended
September 30 September 30 September 30 September 30
<S> <C> <C> <C> <C>
Beginning
retained
earnings $ (710,207) $ (59,908) $ (5,942) $ (641)
Net income (loss) (354,054) (995,853) (4,008) (9,309)
Preferred
dividends
paid (4,250) (12,750) (4,250) (4,250)
Ending
retained
earnings $(1,068,511) $(1,068,511) $ (14,200) $ (14,200)
(deficit)
</TABLE>
See accompanying notes.
<PAGE>
Senior Retirement Communities, Inc.
Statement of Cash Flows
For the months ended
<TABLE>
<CAPTION>
1999 1998
----------------------------- ----------------------------
For the three For the nine For the three For the nine
months ended months ended months ended months ended
September 30 September 30 September 30 September 30
<S> <C> <C> <C> <C>
Cash flows from
operating
activities:
Revenues
received $ 256,301 $ 433,395 $ 2,137 $ 2,137
Cash paid to
suppliers &
employees (539,650) (1,230,886) (6,145) (11,446)
--------- --------- --------- ---------
Net cash provided
(used) by
operations (283,349) (797,491) (4,008) (9,309)
--------- --------- --------- ---------
Cash flows from
investing
activities
Purchase of
equipment (1,536) (39,055) 0 0
Payments towards
construction (818) (1,739,595) (2,295,867 (3,807,957)
Purchase of land 0 0 0 (991,500)
Payments of
deposits 0 0 4,000 2,000
Payment of
deferred
charges 0 (154,750) 36,045 (285,737)
--------- --------- --------- ---------
Net cash provided
by (applied to)
Investing
activities (2,354) (1,933,400) (2,255,822) (5,083,194)
--------- --------- --------- ---------
Cash flows from
financing
activities
Payment of
construction
loans 0 (1,002,535) 301,904 2,270,641
Issuance of
bonds 34,750 2,629,280 3,127,750 3,127,750
Payment of
bonds (189,586) (429,336) 0 0
Payment of
Preferred
dividends (4,250) (12,750) (4,250) (4,250)
Loans from
stockholders
and affiliates (51,345) 420,414 (100,532) 70,590
Issuance of stock 160,000 410,000 0 725,000
--------- --------- --------- ---------
Net cash provided
by (applied to)
financing
activities (50,431) 2,015,073 3,324,872 6,189,731
--------- --------- --------- ---------
Net increase
(decrease) in cash (336,134) (715,818) 1,065,042 1,097,228
Cash at the
beginning of the
period 956,899 1,336,583 11,133 (21,053)
--------- --------- --------- ---------
Cash at the end
of the period 620,765 620,765 1,076,175 1,076,175
--------- --------- --------- ---------
</TABLE>
See accompanying notes
<PAGE>
Senior Retirement Communities, Inc.
Statement of Cash Flows
<TABLE>
<CAPTION>
1999 1998
----------------------------- ----------------------------
For the three For the nine For the three For the nine
months ended months ended months ended months ended
September 30 September 30 September 30 September 30
Reconciliation of net income to net cash provided by operations:
<S> <C> <C> <C> <C>
Net income (loss)
from operations $ (354,054) $ (995,853) $ (4,008) $ (9,309)
Adjustments to
reconcile net
income to cash
Provided by
operations
Depreciation 54,689 137,611 0 0
Amortization
deferred
charges 2,527 7,581 0 0
Decrease
(increase) in
prepaid
expenses 0 4,125 0 0
Increase in
accrued
expenses 3,489 49,045 0 0
--------- --------- --------- ---------
Net cash
provided (used)
by Operations $ (283,349) $ (797,491) $ (4,008) $ (9,309)
--------- --------- --------- ---------
</TABLE>
See accompanying notes.
<PAGE>
Senior Retirement Communities, Inc.
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Nature of Business
The Company is a Louisiana corporation established to develop assisted
living centers and dementia facilities for the housing and care of senior
citizens in Ruston, Bossier City and Shreveport, Louisiana.
Basis of Accounting
The Company uses the accrual basis of accounting and will utilize a
calendar
year for all reporting purposes.
Income Taxes
The company is treated as a corporation for federal income tax purposes.
Property, Buildings, Equipment, and Depreciation
Buildings and equipment are stated at cost and are to be depreciated
by the straight- line method over their estimated economic lives.
Buildings include capitalized construction period interest which will
be treated as a component cost of the building and depreciated over the
same economic life as the building.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affects certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Advertising
The Company follows the policy of charging the costs of advertising
to expense as incurred.
<PAGE>
Senior Retirement Communities, Inc.
Notes to Financial Statements
Note 1- Summary of Significant Accounting Policies- (continued)
Deferred Charges
Deferred charges represents the costs associated with obtaining long-
term financing for the care facilities of the Company. These costs are
to be amortized over the life of the bonds using the effective interest
rate method.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-QSB and Article
10 of Regulations S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In management's opinion,
all adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation of the unaudited interim financial
statements have been included. Operating results for interim periods
reflected are not necessarily indicative of the results that may be
expected for a full fiscal year. These financial statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's Form 10-KSB.
Certain reclassifications have been made to previously reported amounts
to conform with the current presentation.
Note 2 - Related Party Transactions
The Company entered into a construction contract in the amount of
$ 2,750,000 with one of the shareholders to construct the
Ruston facility. The contract called for the cash payments of
$ 2,500,000 during the building of the Facility as approved by the
contract engineer and the issuance of an additional 125,000 shares of
common stock at the completion of the project, such stock issuance to
represent the builder's profit in the project. On May 16, 1999, the
125,000 shares of Common Stock were issued pursuant to this contract and
the Facility was accepted as completed.
<PAGE>
Senior Retirement Communities, Inc.
Notes to Financial Statements
Note 2- Related Party Transactions - (continued)
The Company entered into a construction contract in the amount of
$ 1,225,000 with one of the shareholders to construct the Shreveport
facility. The contract called for the cash payments during the building
of the facility as approved by the contract engineer. The facility was
completed and opened in January 1999.
The Company entered into a construction contract in the amount of
$2,200,000 with one of the shareholders to construct the Bossier City
facility. The contract called for the cash payments during the building
of the facility as approved by the contract engineer. The facility was
completed in March of 1999.
Due to stockholders and affiliates consist of amounts advanced by
stockholders and other related entities. This amount accrues interest
at the current market rate.
Through September 30, 1999, the Company has incurred $ 608,969 of
interest expense, of which $89,305 has been treated as construction
period interest and included as part of the building construction in
progress on the balance sheet. The remainder of $ 519,664 has been
charged to operations.
Note 3 - Preferred Stock
The Preferred Stock issued accrues dividends at the rate of four percent
per year for each of the first two years, then six percent per year
for the next two years then at eight percent per year for the final two
years. The Preferred Stock is callable at the Company's option and shall
be redeemed at the end of the sixth year, if still outstanding. The
preferred shareholders have an option to purchase common stock at a
twenty percent discount at any time within eight years of the Preferred
stock issue dates, if the Company issues additional common stock through
a public offering.
Note 4 - Development Stage Operations
The Company has completed construction of the Ruston, Shreveport, and
Bossier City facilities. Ruston was completed effective December 1, 1998,
Shreveport was completed January 22, 1999 and Bossier City was completed
March 10, 1999.
<PAGE>
Senior Retirement Communities, Inc
Notes to Financial Statements
Note 5 - Bonds Payable
On June 23, 1998, the Company's issue of $ 9,000,000 of bonds became
effective. These bonds are to become the permanent financing for the
projects reflected in this financial statement. As of September 30,
1999, the bond sales are complete. As of September 30, 1999, the status
of these bonds is as follows:
<TABLE>
<CAPTION>
Amount Amount
Location Authorized Issued
<S> <C> <C>
Ruston $ 3,685,000 $ 3,677,000
Bossier City 3,470,000 3,470,000
Shreveport 1,845,000 1,845,000
---------- ----------
Totals $ 9,000,000 $ 8,992,000
---------- ----------
</TABLE>
These bonds have varying interest rates from 7.5 percent per annum to
11 percent per annum. The maturity of these bonds is from one to twenty
years.
Bonds payable on the balance sheet reflects the accrued interest due
and is reflected net after the deferred charges incurred is issuing and
selling the bonds.
Note 6 - Other Matters
Before the end of this year, the Company anticipates selling shares
of its common stock under Regulation D, Rule 506 (a) in order to provide
funds to be used for the day-to-day operations of the Company, to payback
certain loans to the Company from affiliates of the Company, to pay
accounting, audit and legal costs, provide working capital or other
purposes of the Company and to redeem the Preferred Stock of the Company.
<PAGE>
MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
This commentary should be read in conjunction with the following documents
for a full understanding of Senior Retirement Communities, Inc. financial
condition and the status of the Company which reflects little or no operations;
the entire Prospectus dated June 23, 1998; 10KSB for the period ending
December 31, 1998; and the unaudited financial statement presented herein
along with all of the footnotes thereto as well as Method of Operation
which provides additional information.
As a result of the Company engaging in the rent-up stage of operations
as of the end of the third quarter, readers should be aware of the success
and/or failures within the assisted Living Industry.
The Ruston Facility: The Ruston Project is located on 6 acres of land
in Lincoln Parrish next to the eastern portion of Ruston, Louisiana, North
of US Highway 80 and south of Interstate 20. Selection of the site of
the Ruston Project is based upon a location that is within an affluent
residential neighborhood with limited assisted living and retirement living
services. The Ruston Project includes a forty-three unit assisted living
facility, a twenty-seven person day care facility, and six dementia. Each
assisted living units will contain four hundred three square feet each
with common area amenities including a full service kitchen, dining area,
activity area, office and reception area, bathrooms and storage areas.
Each of the dementia units contain two hundred forty-five square feet
each with common area amenities, including special dinning room facilities,
activity area and outdoor enclosed area. As of November 1, 1999 there
were twenty-four residents in assisted living, two dementia resident and
two day care residents.
The Company has title insurance on these six acres of land insuring good
and marketable title to the Ruston Project, the Company has fire and extended
coverage insurance to insure against loss by fire, windstorm, explosion
and various other losses. The Company maintains general liability and
worker's comprehensive insurance on the Ruston Project. In the Company's
opinion, the Ruston Project is adequately covered by insurance. The Parish
of Lincoln has no zoning ordinances. Therefore, the Ruston Project has
no zoning ordinances with which to comply.
The Bossier City Facility: The Bossier City Project is located on six
acres of land on the south side of Brandon Avenue just east of Industrial
Drive in Bossier City, Louisiana. Selection of the site of the Bossier
City Project is based upon a location that is within an affluent residential
neighborhood with limited assisted living, retirement living and memory
disorder units. The Bossier City Project, consist of thirty-six assisted
living units, twenty-four person day care facility and twenty-four mental
disorder units with common area amenities including a full service kitchen,
dining area, activities area, office/reception area, bathrooms and storage
areas. The building will contain a total of 42,829 square feet of heated
area. The assisted living units each contain approximately four hundred
eighty-five square feet and feature a bedroom, living room, kitchenette
and full bath with shower. The mental disorder units will each contain
two hundred eighty-three square feet of living area and feature a half
<PAGE>
bath with a toilet and lavatory and bedroom area. As of November 1, 1999,
there were eleven residents in assisted living, three dementia resident
and four day care residents.
The Company has title insurance on these six acres of land insuring
good and marketable title to the property The Company maintains fire and
extended coverage insurance to insure against loss by fire, windstorm,
explosion and various other losses in an amount equal to the outstanding
debt. The Company maintains general liability and worker's comprehensive
insurance on the Bossier City Project. In the Company's opinion, the
Bossier Project is adequately covered by insurance. The Bossier City
Project conforms to the zoning ordinances of Bossier City, Louisiana.
The Shreveport Facility: The Shreveport Project is located on
approximately three acres of land on Lot 4, Orleans Square Subdivision,
located on East Kings Highway in Shreveport, Louisiana. Selection of the
site of the Shreveport Project is based upon a location that is within an
affluent residential neighborhood with limited memory disorder units. The
Shreveport Project has 24 memory disorder and contain 11,410 square feet of
heated area. Each of these units will contain 283 square feet of living area
and feature a half bath with a toilet and lavatory and bedroom area.
As of November 1, 1999 there were ten residents in dementia resident and
twelve day care residents.
The construction of the facilities were financed through the sale of
Co-First Mortgage bonds as set forth in the prospectus dated June 23,
1998, with construction loans provided by Church Loans and Investments
Trust. All construction loans have been paid in full. As a result, the
Bondholders no longer share the First Mortgage on the Facilities with
the construction lender.
The Company also owns approximately twenty-nine acres of land. Twenty
acres are located in Ruston, two acres in Shreveport, three acres in West
Monroe and four acres in Minden, Louisiana, for future construction.
The Company's management has increased it attention on the day care market
in each Facility. The Shreveport Facility is leading the way in this market
with eleven-day care residents. The Company will continue to expand marketing
in this area of senior care.
On June 17, 1999 by unanimous consent of the shareholders of the corporation
amended the Articles of Incorporation as follows:
ARTICLE III is hereby amended to read in its entirety as follows:
ARTICLE III STOCK
The total authorized stock of this corporation shall be NINETY MILLION
(90,000,000) shares of Common Stock having no par value, with each share
having equal voting power and TWENTY MILLION (20,000,000) shares of Preferred
Stock having no par value. The entire voting power of the Corporation
shall be vested in Common Stock. Each holder of said Common Stock shall
be entitled to one vote for each share of Common Stock, held.
The total number of shares of the corporation may be increased or decreased
by the Board of Directors, by complying with the provisions of the Constitution
and Laws of the State of Louisiana. The Amendments were filed and became
effective July 13, 1999.
<PAGE>
At the meeting on June 17, 1999, the shareholders of the corporation
amended the By-Law of the corporation to increase the maximum number of
directors to seven. The Stockholders then elected seven directors (See
Part II, Item 6, Other Matters for list of directors). The Stockholders
issued to existing shareholders, nineteen additional shares for each share
of common stock held as of June 17, 1999.
The Company continues to finance the expansion and development by a
combination of private placement of Common stock and Preferred stock.
As a result of the Company's continuing financing of the Company by issuing
stock, the Company is in the process of preparing a Private Placement
Memorandum under Regulation D, Rule 506 (a) to sell 5,000,000 shares of
common stock at one ($1.00) dollar per share to those persons that are
Accredited investors as defined in Regulation D, Rule 501(a) promulgated
by the Securities and Exchange Commission under the Securities Act of
1933, as Amended.
In March 1998, the company purchased approximately 6 acres of land for
$525,000 paying $100,000 in cash and then issuing 425,000 shares of $1.00
par value Preferred stock. The property is the location of the Bossier
City, Louisiana, facility. The Preferred stock is paying dividends at
a rate of 4% for the first two years, 6% for the second two years, and
8% for the final two years. The Preferred stock shall be redeemed in
full at the end of the fifth year for the total sum including accrued
dividends. It is recallable at anytime at the option of the company.
The holders of the Preferred stock shall also have the right to purchase
common stock at a 20% discount if and when the company issues additional
common stock in the form of a public offering if done so within 8 years
of date issued for preferred stock.
Change in Employees
Prior to the opening of the Ruston ALF, the Company had no operations.
Employees consisted of the President, Joanne M. Caldwell-Bayles and two
other employees. As of September 30, 1999, the company had fifty-five
employees. As occupancy increases, additional employees will be required.
The number required will be determined by the increase in occupancy of
each facility.
Results of Operations
The Company's first ALF opened for business on October 16, 1998, in Ruston,
Louisiana. The Facility has been well received by the community. There
have been insufficient rentals to form an opinion of the future success
with any certainty. The operating loss for the third quarter of 1999,
was $359,802, which includes start-up costs of approximately $200,000.00
for the Shreveport and Bossier City ALF. The Shreveport and Bossier City
facilities were opened for business in the first quarter of 1999, at which
point all of the facilities were open and operating.
<PAGE>
Major changes in Financial Conditions
The major changes in financial condition between June 30, 1999 and September
30, 1999, are as follows: Current assets consisted primarily of cash in
the amount of $620,765. Cash is restricted as follows: $3,748 to fund
bond reserve accounts and $614,614 is restricted to pay Operating Fund
Payments. Property and equipment decreased from $10,310,538 as of June
30, 1999, to $10,258,203 as of September 30, 1999. The decrease is the
result of depreciation for the three locations. Total current liabilities
increased from $38,931 as of June 30, 1999 to $ 52,420 as of September 30,
1999. Long-term debt decreased from $9,118,917 as of June 30, 1999, to
$8,966,608 as of September 30, 1999, due to bond payments. Liabilities due
stockholders and affiliates decreased from $895,976 as of June 30, 1999, to
$844,631 as of September 30, 1999. Total Stockholders Equity decreased from
$1,213,613 as of June 30, 1999 to $1,015,309, due to the operating loss for
the third quarter.
Liquidity and Financial Position
The Company receives significant operating funds from its affiliate,
The Forsythe Group, Inc., through short-term loans. The ability of The
Forsythe Group to continue to make available loans is necessary for the
continuing success of the company. If future conditions would create
problems in Forsythe's ability to advance funds to the Company, the Company's
future success would be in doubt.
The Company is in the process of preparing a Private Placement Memorandum
under Regulation D, Rule 506 (a) to sell 5,000,000 shares of common stock
at one ($1.00) dollar per share to those persons that are Accredited
investors as defined in Regulation D, Rule 501(a) promulgated by the Securities
and Exchange Commission under the Securities Act of 1933, as Amended.
If the Company is successful in raising funds by the Private Placement
under Regulation D 506 (a) it would reduce the dependency on Forsythe.
Year 2000
The Company relies on computer hardware, software, and related technology,
together with data, in the operation of its business. In addition, the
Company is dependent on the same type of technology and data generated
by financial institutions; the Federal Government including the Social
Security Administration; State of Louisiana; Investment Bankers; Trustees
for the bondholder; Interim lenders; and Utility companies. The Company
has initiated an enterprise wide program to prepare for the year 2000.
The Company has created a year 2000 program office reporting to the Chief
Executive Officer to coordinate and oversee the company's year 2000 program.
All of the Company's computer systems have been cleared to meet the year
2000 requirements by contacting the manufacturer of the equipment and
receiving written notice of compliance.
The computer software necessary for the accounting function has also
been cleared for the year 2000 requirements in writing from the developer
of the accounting software.
<PAGE>
The Company has discussed the year 2000 with all of the above set forth
companies and agencies and has been assured either in writing or verbally
that each anticipates compliance for the year 2000. As a result of the
Company's own operations already being in compliance with the year 2000,
it is dependent upon outside forces to also be in compliance. It is
impossible for the Company to be sure that all governmental agencies,
utilities, financial institutions, and others with whom it does business,
will also be in compliance. The failure of some or all of the above stated
agencies being in compliance with the year 2000 would be catastrophic, and
the survival of the Company would be in doubt.
Because of the uncertainty of the problems faced with the year 2000 the
Company has adopted an action plan to protect the seniors living with
the Communities. The major item to be included is as follows;
1. Place in storage at each community a five-day supply of food items,
including canned meats and vegetables, water, and other non-perishable
items necessary for providing meals.
2. Prepare, with the assistance of residents, a five-day supply of clothing
that will not have to be cleaned in order to aid in healthy living.
3. Encourage Physicians to obtain an adequate supply of necessary medical
needs of residents.
4. Encourage residents and their families to meet the financial needs
for each resident by having some cash on hand at the end of the year.
The cash to be reserved for residences should not be held at the
residents' quarters.
5. Work with local officials in preparing a safety plan of operation
in event of failure of medical, public safety, utilities and other
services.
6. Adequate fuel to operate vehicles, heating devices and other services.
7. Such other assistance that may come to our attention as the Company
continues to monitor the year 2000 problems.
Forward- Looking Statements
Statements that are not historical facts, including statements about
(I) operating profits or losses as those discussed in results of operations;
(II) completion dates of facilities; and (III) fixed asset expenditures
are forward-looking statements that involve risks and uncertainties.
The Company wishes to caution the reader that factors below, along with
the factors set forth in the Company's June 23, 1998, prospectus and in
the Company's other documents filed with the SEC, have affected and could
affect the Company's actual results causing results to differ materially
from those in any forward-looking statement. These factors include: the
acceptance of the Assisted Living Concept by each of the communities in
which they are located, increased competition in each of the communities,
economic outlook whether the economy improves or slips into recession,
technological changes in dealing with seniors, change in government regulation,
the success of strategic decisions to improve financial performance, the
ability of the Company to contain costs and the continued increase in
the market acceptance of ALF's.
<PAGE>
Part II - Other Information
Item 1. Legal proceedings
None
Item 2. Change in Securities
On May 16, 1999, the Company issued 125,000 shares of its common stock
as the final amount due pursuant to the construction contract on the Ruston
facility.
On June 17, 1999, the Company adopted a resolution to amend its corporate
charter to increase its authorized common stock to 90,000,000 shares
at no par value and its authorized preferred stock to 20,000,000 shares.
Also on that date, the Company adopted a resolution to issue 19 additional
shares of its common stock for each share outstanding to its common
stockholders of record as of that date.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6: Other Matters
The names of the directors and executive officers of the Company, their
respective ages and their positions and office with the Company are as
follows:
<TABLE>
<CAPTION>
Name Age Positions and Offices Held
<S> <C> <C>
Joanne M. Caldwell-Bayles 39 Chairperson of the Board,
Chief Executive Officer,
President and Director
Sherry Kenney Davis 42 Vice President, Director of
Operations
Sunshine Gantt 24 Corporate Secretary, Human
Resource Director
Raymond L. Nelson 63 Vice-President - Director
Jean Gaffney-Nelson 61 Assistant Secretary - Director
Charles H. Pritchard 44 Chief Financial Officer -
Director
Suzette L. Brewster 51 Vice-President - Facility
Design and Director
</TABLE>
Item 7. Exhibits and reports on Form 8-K
None
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Senior Retirement Communities, Inc. (Registrant)
/S/JOANNE M. CALDWELL-BAYLES
Date: November 12, 1999 By: Joanne M. Caldwell-Bayles
President, Finance and Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
==============================================================================
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE UNAUDITED FINANCIAL STATEMENT OF SENIOR RETIREMENT COMMUNITIES, INC.
DATED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
INFORMATION SET FORTH IN THIS SCHEDULE DOES NOT CONTAIN ALL OF THE INFORMATION
NECESSARY AND SHOULD BE READ IN CONJUNCTION WITH THE COMPLETE UNAUDITED
FINANCIAL STATEMENT DATED SEPTEMBER 30, 1999 INCLUDING FOOTNOTES.
===============================================================================
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 620,765
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 620,765
<PP&E> 10,401,805
<DEPRECIATION> 143,602
<TOTAL-ASSETS> 10,878,968
<CURRENT-LIABILITIES> 52,420
<BONDS> 8,966,608
425,000
0
<COMMON> 1,658,820
<OTHER-SE> 1,015,309
<TOTAL-LIABILITY-AND-EQUITY> 10,878,968
<SALES> 0
<TOTAL-REVENUES> 256,301
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 539,650
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 222,668
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (354,054)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
