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 June 30, 2000
Senior Retirement Communities, Inc.
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(Exact name of registrant as specified in its charter)
72-1394159
Louisiana
(State or other jurisdiction of incorporation (IRS Employer Identification
Number
or organization)
507 Trenton Street, West Monroe, Louisiana 71291
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(Address of principal executive offices)(Zip code)
Registrants telephone number, including are code (318) 323 2115
Number of share outstanding of each of the registrants class of common shares
and preferred shares, as of June 30, 2000
Common Shares 16,588,200 par value $.10 per share:
Preferred shares 425,000 par value $1.00 per share:
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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__________
Senior Retirement Communities, Inc.
Form 10-QSB TABLE OF CONTENTS
Part 1: Financial Information
Item 1. Financial Statements (Unaudited)
Balance Sheets as of June 30, 2000 (unaudited)
Statements of Income for the three and six months ended June 30, 2000
and 1999 (unaudited)
Statement of Retained Earnings for the three and six months ended
June 30, 2000 and 1999 (unaudited)
Statements of Cash Flows for the three months and six months ended
June 30, 2000 and 1999 (unaudited)
Notes to Financial Statements
Item 2. Managements Discussion and Analyses of Financial Conditions
and Results of Operations
Part II: Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Other Matters
\
Item 7. Exhibits and reports on Form 8-K
SENIOR RETIREMENT COMMUNITIES, INC.
FINANCIAL STATEMENT
JUNE 30, 2000
Senior Retirement Communities, Inc. Financial Statement June 30, 2000
Table of Contents
Page
FINANCIAL STATEMENTS:
Report 1
Balance Sheet 2
Statement of Income 4
Statement of Retained Earnings 5
Statement of Cash Flows 6
Notes to Financial Statements 8
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 June
30, 2000 and the related statement of income, retained earnings and cash flows
for the three and six months ended June 30, 2000 and 1999 were prepared
internally from the books and records of Senior Retirement Communities, Inc.
These financial statements were not audited or reviewed.
/S/ Joanne M. Caldwell-Bayles
Joanne Caldwell-Bayles
President, Senior Retirement Communities, Inc.
August 11, 2000
507 Trenton Street West Monroe, LA 71291 318 323-2115 - FAX 318-3236281
Senior Retirement Communities, Inc.
Balance Sheet
June 30, 2000
ASSETS
Current assets:
Cash $ 2,013
Escrow cash 136,347
Sinking fund cash 945
Prepaid expenses 11,333
Total current assets 150,638
Property, plant and equipment
Buildings 8,171,377
Furniture and fixtures 146,503
Land 1,508,820
9,826,700
Less: Accumulated depreciation 316,394
Net property and equipment 9,510,306
$ ____9,660,944
See accompanying notes.
Senior Retirement Communities, Inc.
Balance Sheets
June 30, 2000
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 45,169
Current maturities of bonds payable 555,000
Total current liabilities 600,168
Long-term debt:
Bonds payable 8,053,973
Other liabilities:
Due to stockholders and affiliates 971,646
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, 425,000
shares authorized, issued and outstanding 425,000
Retained earnings (deficit) (2,048,663)
Total stockholders equity 35,157
$ 9,660,944
See accompanying notes.
Senior Retirement Communities, Inc.
Statement of Income
For the three months and six months ended June 30, 2000,
and for the three months and six months ended June 30, 1999
Three months Six months Three months Six months
June 30, 2000 June 30, 2000 June 30, 1999 June 30,1999
Revenues $ 339,238 $ 652,772 $ 144,455 $ 177,094
Expenses
Accounting 12,000 21,000 9,000 21,000
Activities 1,164 2,212 968 1,853
Advertising 7,568 18,567 4,901 21,132
Automobile 22 106 2,791 3,504
Bank Charges 55 388 231 335
Bond Agent Fees 0 125 0 10,630
Cable Expense 0 0 46 46
Carpet Cleaning 135 160 758 846
Casual labor 202 688 1,026 1,026
Consulting 2,100 4,700 10,000 25,000
Decorations 236 585 550 1,170
Depreciation 54,690 109,380 54,690 82,922
Donations 0 0 0 0
Dues subscripts 263 960 592 962
Emp incentives 1,097 1,553 0 1,265
Emp Screening 851 1,715 684 2,727
Employee training 0 0 1,215 1,215
Equipment rental 1,876 4,489 712 950
Food Costs 25,131 52,820 14,010 20,257
Gloves 438 872 190 190
Housekeeping 1,652 3,137 322 1,937
Insurance 22,720 51,489 9,266 15,880
Interest 201,042 440,714 222,668 350,850
Kitchen supplies 173 307 106 106
Laundry 642 1,207 215 215
Lawn Care 4,266 7,799 3,413 3,413
Legal & acct. 0 0 0 0
Licenses & permits 472 951 400 664
Light Bulbs 65 164 14 14
Linens 53 66 12 12
Management Fees 23,485 45,045 14,070 16,194
Miscellaneous 295 370 43 811
Office 0 0 0 336
Office Supplies 2,528 3,221 2,090 3,183
Paper Goods 986 1,963 700 700
Payroll Expenses 158,483 335,596 95,912 150,076
Pest Control 663 1,645 955 955
Pet Supplies 84 284 394 394
Postage & Delivery 547 1,309 614 1,411
Printing 3,119 7,012 3,510 8,246
Professional fees 0 11,945 150 150
Promotion 1,493 2,947 1,227 2,717
Rental Bonus 400 800 700 700
Repairs 2,790 5,264 2,968 4,790
Resident Gifts 244 347 333 333
Taxes 0 39,573 31 1,537
Telephone 2,133 6,368 2,858 7,259
Training 258 278 822 822
Travel Ent 1,909 2,958 2,533 5,327
Uniforms 816 909 85 267
Utilities 35,266 59,811 20,085 35,368
Van Expense 5,264 10,523 2,709 5,508
Waste Removal 598 1,726 1,434 1,434
Wellness 72 188 254 254
Total Expenses 580,345 1,269,236 504,257 818,893
Net (-Loss) $ (241,107) $ (616,464) $(359,802) $(641,799)
Earnings per
share $ (.01) $ ( .03) $ ( .02) $ ( .03)
See accompanying notes
Senior Retirement Communities, Inc.
Statement of Retained Earnings (Deficit)
For the three months and six months ended June 30, 2000,
and for the three months and six months ended June 30, 1999
Three months Six months Three months Six months
June 30, 2000 June 30, 2000 June 30, 1999 June 30,1999
Beginning $ (1,807,556) $(1,432,908) $ (346,155) $ (59,908)
Net (loss) (241,107) (616,464) (359,802) (641,799)
Preferred
dividends paid 0 0 (4,250) (8,500)
Ending $ (2,048,663) $(2,048,663) $ (710,207) $ (710,207)
See accompanying notes.
Senior Retirement Communities, Inc.
Statement of Cash Flows
For the three months and six months ended June 30, 2000,
and for the three months and six months ended June 30, 1999
Three months Six months Three months Six months
June 30, 2000 June 30, 2000 June 30, 1999 June 30,1999
Cash flows from operating activities:
Revenues $ 345,238 $ 652,772 $ 144,455 $ 177,094
Cash paid (527,855) (1,163,182) (427,030) (691,236)
Net cash provided (used)
by operations (183,617) (510,410) (282,575) (514,142)
Cash flows from investing activities
Purchase
equipment (12,178) (16,817) (19,013) (37,519)
Payments towards
construction 0 0 (965,122) (1,738,777)
Payment of deferred
charges 0 0 0 (154,750)
Net cash provided by (applied to) Investing
activities ( 12 178) ( 16,817) (984,135) (1,931,046)
Cash flows from financing activities
Payment of construction
loans 0 0 0 (1,002,535)
Issuance of
bonds 0 0 1,126,976 2,594,530
Payment on bonds 0 (436,013) 0 (239,750)
Accrual of interest
on bonds 195,191 379,328 0 0
Payment of Preferred
dividends 0 0 (4,250) (8,500)
Loans from stockholders
and affiliates 2,937 99,571 307,335 471,759
Issuance of stock 0 0 250,000 250,000
Net cash provided by (applied to)financing
activities 198,128 42,886 1,680,061 2,065,504
Net increase (decrease)
in cash 2,333 (484,341) 413,351 (379,694)
Cash beginning 136,972 623,646 543,548 1,336,583
Cash end
of the period 139,305 139,305 956,899 956,899
See accompanying notes
Senior Retirement Communities, Inc.
Statement of Cash Flows
For the three months and six months ended June 30, 2000,
and for the three months and six months ended June 30, 1999
Three months Six months Three months Six months
June 30, 2000 June 30, 2000 June 30, 1999 June 30,1999
Reconciliation of net income to net cash provided by operations:
Net (loss) $ (241,107) $ (616,464) $ (359,802) $ (641,799)
Adjustments to reconcile net income to cash provided by operations
Depreciation 54,690 109,380 54,690 82,920
Amortization 5,054 10,108 5,054 5,054
Decrease (increase) in prepaid
expenses (5,897) (11,333) 0 4,125
Increase in accrued
expenses 3,643 (2,101) 17,483 35,556
Net cash provided (used) by
Operations $ (183,617) $ (510,410) $(282,575) $ (514,142)
See accompanying notes.
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.
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 managements 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 Companys Form
10-KSB.
Certain reclassifications have been made to previously reported amounts to
conform with the current presentation.
Note 2 Related Party Transactions
Due to stockholders and affiliates consist of amounts advanced by
stockholders and other related entities. This amount accrues interest at
the current market rate.
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 Companys 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 Bonds Payable
On June 23, 1998, the Companys issue of $ 9,000,000 of bonds became
effective. These bonds are the permanent financing for the projects
reflected in this financial statement.
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.
During the six months ended June 30, 2000, the Company incurred $ 440,714
of interest expense all of which has been charges to operations.
MANAGEMENTS 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, 1999; 10KSB for the period
ending December 31, 1999; 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 second quarter, readers should be aware of the success
and/or failures within the assisted Living Industry. Because the bonds are
being sold on a best efforts basis, particular attention should be paid to
the bond sale results as set forth in footnote 8 and 9 of the financial
statement.
The Ruston, Louisiana ALF containing 42 assisted living units and six
Alzheimers units. Additional Alzheimers units are being considered as
result of increase demand for Alzheimers facilities in the area. As of
Auguist 11, 2000 the property had 25 assisted living residents, two day
care and five Alzheimers residents. One facility is located in Bossier
City, with a 36 assisted living facility and a 24-unit Dementia facility
whis is being converted to a rehabilition units. The Rehab unit will be
operated by an independent contractor. The Company will recieve
approxemently $42,000,00 in monthly income from the rehab facility. The
Assisted living units had 21 assisted living resident and 8 daycare
residents.
The other site is located in Shreveport, Louisiana consisting of a 24
Dementia. The Shreveport facility opened for business on January 22, 2000.
As of Aigist 14, 2000 11 out of twenty-four units were occupied with full
time resident. In addition to the full time residences there were 4 day
care residences.
The construction of the facilities were financed through the sale of
Co-First Mortgage bonds as set forth in the prospectus dated June 23, 1999
with construction loans provided by Church Loans and Investment Trust. The
Company also owns approximately 26 acres of land located in Ruston (20
acres), Shreveport (2 acres), and Minden (4 acres), Louisiana for future
construction.
The Company continues to finance the expansion and development by a
combination of private placement of Common stock and Preferred stock as
well as the public offering of First Mortgage Bonds. In March 1999 the
company purchased approximately 6 acres of land for $525,000 paying
$100,000 in cash and the 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 August 12, 2000 the company had fifty eight
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 Companys first ALF opened for business on October 16, 1999 in Ruston,
Louisiana. The Facility has been well received by the community. The
facility continues to add new residents each week. It is anticipated it
will reach occupancy in excess of 90% before the end of the year. We belive
tha success of the Ruston facility is not assured.The operating loss for al
three facilities for the second quarter of 2000 was $359,802, which
includes start-up costs of approximately $200,000.00 for the Ruston ALF.
The Shreveport and Bossier City facilities were opened for business in the
first quarter of 2000 at which point all of the facilities were open and
operating.
Major changes in Financial Conditions
The major changes in financial condition between June 30, 2000 and March
31, 2000 is as follows: Current assets consisted primarily of cash in the
amount of $139,305. Cash is restricted as follows: $4,694 to fund bond
reserve accounts and the balance of $135,651 is restricted to pay Operating
Fund Payments. Property and equipment decreased from $9,552,818 as of March
31,2000 to $ 9,510,306 as of June 30, 2000. The decrease is the result of
depreciation on the operating facilities. Total current liabilities
decreased from $603,494 as of March 31, 2000 to $ 600,168 as of June 30,
2000. Long term debt increased from $7,856,728 as of March 31, 2000 to
$8,053,973 as of June 30, 2000 which was created by the accrual of the
interest due on the bonds payables. Liabilities due stockholders and
affiliates increased from $968,709 as of March 31, 2000 to $971,646 as of
June 30, 2000. Total Stockholders Equity decreased from $ 276,264 as of
March 31, 2000 to $ 35,157 as of June 30, 2000 due to the operating loss
for the second 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
Forsythes ability to advance funds to the Company, the Companys future
success would be in doubt.
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; (III) fixed asset expenditures; and (IV) the
successful sale of the balance of the bonds 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 Companys June 23, 1999
prospectus and in the Companys other documents filed with the SEC, have
affected and could affect the Companys 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 cost, and the continued increase in the market
acceptance of ALFs.
Part II Other Information
Item 1. Legal proceedings
None
Item 2. Change in Securities
None
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
None
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
Joanne M. Caldwell-Bayles
Date: August 11, 2000 By: Joanne M. Caldwell-Bayles
President, Finance and Treasurer
SUMMATION OF 10QSB
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENT OF SENIOR RETIREMENT COMMUNITIES, INC. UNAUDITED FINANICIAL
STATEMENT JUNE 30, 2000 AND UNAUDITED STATEMENT DATED JUNE 30, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
ASSETS
June 30, June 30,
2000 1999
TOTAL CURRENT ASSETS $ 150,638 $ 956,899
LAND , PROPERTY, PLANT,
EQUIPMENT 9,510,306 10,310,538
OTHER ASSETS 0 0
TOTAL ASSETS $ 9,660,944 $11,267,437
LIABILITY & STOCKHOLDERS EQUITY
CURRENT LIABILITIES $ 600,168 $ 38,931
OTHER LIABILITIES 971,646 895,976
LONG TERM DEBT 8,053,973 9,118,917
STOCKHOLDERS EQUITY 35,157 1,2133,613
TOTAL LIABILITIES &
STOCKHOLDERS EQUITY $ 9,660,944 $11,267,437
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 JUNE 30, 2000 AND THE UNADUTIED
FINANCIAL STATEMENTS FOR JUNE 30, 1999 INCLUDING FOOTNOTES.
