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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 31, 1997
REGISTRATION NO. 33-80295
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO REGISTRATION STATEMENT ON FORM S-1 ON
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ASSISTED LIVING CONCEPTS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 93-1148702
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
9955 S.E. WASHINGTON
SUITE 201
PORTLAND, OREGON 97216
(503) 252-6233
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
STEPHEN GORDON
CHIEF FINANCIAL OFFICER
9955 S.E. WASHINGTON
SUITE 201
PORTLAND, OREGON 97216
(503) 252-6233
(Name, address, including zip code, telephone number, including area code,
of agent for service)
Copies to:
Gary Olson, Esq.
Latham & Watkins
633 West Fifth Street - Suite 4000
Los Angeles, California 90071
(213) 485-1234
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Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective, depending on market
conditions.
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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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 Securities and Exchange Commission, acting
pursuant to said section 8(a), may determine.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
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PROSPECTUS SUBJECT TO COMPLETION, DATED MARCH 31, 1997
$9,559,000
7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2005
(INTEREST PAYABLE JANUARY 31 AND JULY 31)
637,266 SHARES
COMMON STOCK, PAR VALUE $.01 PER SHARE
ASSISTED LIVING CONCEPTS, INC.
This Prospectus relates to $9,559,000 aggregate principal amount of 7%
Convertible Subordinated Debentures due 2005 (the "Debentures") of Assisted
Living Concepts, Inc., a Nevada Corporation (the "Company"), issued in a private
placement on August 15, 1995 (the "Debenture Offering") and the 637,266 shares
of common stock, par value $.01 per share (the "Common Stock"), of the Company
which are issuable upon conversion of the Debentures (the "Conversion Shares").
The Debentures or the shares of Common Stock issued upon conversion of the
Debentures may be offered from time to time for the account of holders of
Debentures named herein (the "Selling Debentureholders"). See "Plan of
Distribution." The Company will not receive any proceeds from this Offering.
The aggregate principal amount of Debentures that may be offered by the
Selling Debentureholders pursuant to this Prospectus is $9,559,000. Information
concerning such Selling Debentureholders may change from time to time and will
be set forth in Supplements to this Prospectus. Accordingly, the aggregate
principal amount of Debentures offered hereby may decrease. As of the date of
this Prospectus, the aggregate principal amount of Debentures outstanding is
$13,915,000.
The Debentures are convertible into Common Stock at any time at or prior to
maturity, unless previously redeemed, at a conversion price of $15.00 per share,
subject to adjustment under certain circumstances. The Debentures have been
eligible for trading in the Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") Market since issuance, but were not traded
publicly prior to June 27, 1996, when the Debentures were registered under the
Securities Act of 1933, as amended (the "Securities Act"). Since June 27, 1996
the Debentures have traded in the over-the-counter market. The Debentures are
listed on the American Stock Exchange ("AMEX") and the Conversion Shares have
been approved for listing on AMEX, subject to notice of issuance. The Common
Stock is traded on AMEX under the symbol "ALF." On March 27, 1997, the last
reported sale price of the Common Stock, as reported by AMEX, was $21.00 per
share.
The Debentures are redeemable, in whole or in part, at the option of the
Company, for cash, at any time on or after July 31, 1998 on at least 30 days'
notice at a redemption price equal to 100% of the principal amount thereof plus
accrued interest. See "Description of the Debentures."
The Debentures are unsecured obligations of the Company and are
subordinated in right of payment to all existing and future Senior Indebtedness
(as defined below) of the Company. The Indenture does not restrict the
incurrence of Senior Indebtedness or other Indebtedness by the Company or any
subsidiary. At February 28, 1997 the Company had $64,439,000 Senior
Indebtedness.
See "Risk Factors" commencing on page 3 of this Prospectus for a discussion
of certain factors relevant to an investment in the Debentures and the Common
Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Debentures and Conversion Shares may be offered for sale by the Selling
Debentureholders from time to time in transactions effected on AMEX (or through
the facilities of any national securities exchange or U.S. inter-dealer
quotation system of a registered national securities association on which the
Debentures or Conversion Shares are then listed, admitted to unlisted trading
privileges or included for quotation), in privately negotiated transactions, or
in a combination of such methods of sale. Such methods of sale may be conducted
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Debentureholders
may effect such transactions directly, or indirectly through underwriters,
broker-dealers or agents acting on their behalf, and in connection with such
sales, such broker-dealers or agents may receive compensation in the form of
commissions, concessions, allowances or discounts from the Selling
Debentureholders and/or the purchasers of the Debentures and Conversion Shares
for whom they may act as agent or to whom they sell Debentures or Conversion
Shares as principal or both (which commissions, concessions, allowances or
discounts might be in excess of customary amounts thereof). See "Plan of
Distribution."
The Selling Debentureholders and any broker-dealers, agents or underwriters
that participate with the Selling Debentureholders in the distribution of the
Debentures or shares of Common Stock may be deemed to be "underwriters" within
the meaning of the Securities Act, in which event any commissions received by
such broker-dealers, agents or underwriters and any profit on the resale of the
Debentures or shares of Common Stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
The Date of this Prospectus is , 1997
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AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities of the Commission located at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at the New York Regional
Office of the Commission, Seven World Trade Center, Suite 1300, New York, New
York 10048, and at the Chicago Regional Office of the Commission, Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such reports and other information may also be inspected at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York 10006. The
Commission also maintains a World Wide Web Site that contains reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the Commission, at
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the registration of the Debentures and
Conversion Shares offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits thereto,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. Statements contained in this Prospectus or in any
document incorporated by reference herein as to the contents of any contract or
other documents referred to herein or therein are not necessarily complete and,
in each instance, reference is made to the copy of such documents filed as an
exhibit to the Registration Statement or such other documents, which may be
obtained from the Commission as indicated above upon payment of the fees
prescribed by the Commission. Each such statement is qualified in its entirety
by such reference.
FORWARD LOOKING STATEMENTS
The forward looking statements and comments contained in this Prospectus
concerning, among other things, the prospects for the Company to grow and
operate profitably, are necessarily subject to risks and uncertainties, some of
which are significant in scope and nature. Actual results will be dependent upon
many factors the outcome of which cannot be predicted as of the date of this
Prospectus. The Company believes that it has summarized the most significant of
such factors of which it is aware under the caption "Risk Factors." Accordingly,
prospective investors should carefully consider such Risk Factors, which are
provided commencing on Page 3 of this Prospectus in addition to the other
information provided herein.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission, are incorporated herein by reference: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 and (ii) the
description of the Company's Capital Stock contained in the Company's
Registration Statement on Form 8-A dated November 17, 1994. In addition, each
document filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to
termination of the offering of Debentures and Conversion Shares shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date such document is filed with the Commission.
Any statement contained herein, or any document, all or a portion of which
is incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of the Registration Statement
and this Prospectus to the extent that a statement contained herein, or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein, or in any subsequently filed document that also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute part of the Registration
Statement or this Prospectus. All information appearing in this Prospectus is
qualified in its entirety by the information and financial statements (including
notes thereto) appearing in the documents incorporated herein by reference. This
Prospectus incorporates documents by reference which are not presented herein or
delivered herewith. These documents (other than exhibits to such documents which
are not specifically incorporated by reference into such documents) are
available without charge, upon written or oral request by any person to whom
this Prospectus has been delivered, from Stephen Gordon, Chief Financial
Officer, 9955 S.E. Washington, Suite 201, Portland, Oregon 97216.
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RISK FACTORS
In addition to the other information contained in this Prospectus,
prospective investors should consider carefully the following factors before
purchasing any of the Debentures or Conversion Shares offered hereby.
Limited Operating History; Anticipated Operating Losses
The Company has a limited operating history. The Company realized net
income of $149,000 for the year ended December 31, 1996, a loss of $575,000 for
the fiscal year ended December 31, 1995 and a loss of $64,000 for the one month
ended December 31, 1994. There can be no assurance losses will not be incurred
in the future. The Company anticipates that each residence will have an
operating loss (prior to depreciation, rent or interest, if any) of $10,000
during the first three to four months of operation. To the extent the Company
sells a residence and leases it back or otherwise finances it within four months
of the commencement of operations, the aggregate loss may increase by up to an
additional $40,000. The Company currently plans to open 50 to 60 residences in
1997, of which eight had received certificates of occupancy by February 28,
1997. The Company estimates that the aggregate losses to be incurred during 1997
due to the opening of new buildings will range from $.5 million to $2.4 million.
The success of the Company's future operations is directly tied to the expansion
of its operational base. There can be no assurance that the Company will not
experience unforeseen expenses, difficulties, complications and delays in
connection with the expansion of its operational base which could have a
material adverse effect on the Company's financial condition and results of
operations.
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No Assurance as to Ability to Develop or Acquire Additional Assisted Living
Residences
The Company's prospects for growth are directly affected by its ability to
develop and, to a lesser extent, acquire additional assisted living residences.
While the Company currently plans to open 50 to 60 residences per year in each
of 1997 and 1998, there can be no assurance that such residences will be
completed during this time frame, or, that they will be successful once
completed. The success of the Company's growth strategy will also depend upon,
among other factors, the Company's ability to obtain government licenses and
approvals, the Company's ability to obtain financing and the competitive
environment for development and acquisitions. The nature of such licenses and
approvals and the timing and likelihood of obtaining them vary widely from state
to state, depending upon the residence, or its operation, and the type of
services to be provided. The successful development of additional assisted
living facilities will involve a number of risks, including the possibility that
the Company may be unable to locate suitable sites at acceptable prices or may
be unable to obtain, or may experience delays in obtaining, necessary zoning,
land use, building, occupancy, and other required governmental permits and
authorizations. The Company is dependent upon these permits and authorizations
to construct and operate its residences and any delay or inability to obtain
such permits could adversely affect the results of operations. The Company may
also incur construction costs that exceed original estimates, may not complete
construction projects on schedule and may experience competition in the search
for suitable development sites. The Company relies on third-party general
contractors to construct its new assisted living facilities. There can be no
assurance that the Company will not experience difficulties in working with
general contractors and subcontractors, which could result in increased
construction costs and delays. Further, facility development is subject to a
number of contingencies over which the Company will have little control and that
may adversely affect project cost and completion time, including shortages of,
or the inability to obtain, labor or materials, the inability of the general
contractor or subcontractors to perform under their contracts, strikes, adverse
weather conditions and change in applicable laws or regulations or in the method
of applying such laws and regulations. Accordingly, if the Company is unable to
achieve its development plans, its business, financial condition and results of
operations could be adversely affected. There can be no assurance that the
Company will be successful in developing or acquiring any particular residence,
that the Company's rapid expansion will not adversely affect its operations or
that any residences developed or acquired by the Company will be successful. The
various risks associated with the Company's development or acquisition of
assisted living residences and uncertainties regarding the profitability of such
operations could have a material adverse effect on the Company's financial
condition or results of operations.
Need for Additional Financing to Fund Future Development and Acquisitions
To achieve its growth objectives, the Company will need to obtain
sufficient financial resources to fund its development, construction and
acquisition activities. The estimated cost to complete and fund start-up losses
for the new facilities that will be developed by December 31, 1998 is between
$280 million and $336 million; accordingly, the Company's future growth will
depend on its ability to obtain additional financing on acceptable terms. The
Company will, from time to time, seek additional funding through public and/or
private financing sources, including equity and/or debt financing. If additional
funds are raised by issuing equity securities, the Company's stockholders may
experience dilution. There can be no assurance that adequate funding will be
available as needed or on terms acceptable to the Company. A lack of available
funds may require the Company to delay or eliminate all or some of its
development projects and acquisition plans.
The Company's aggregate annual fixed debt and lease payment obligations
currently total approximately $11.9 million. These fixed payment obligations
will significantly increase as the Company pursues its development plan. Failure
to meet these obligations may result in the Company being in default of its
financing agreements and, as a consequence, the Company may lose its ability to
operate any individual residence or other residences which may be cross-
defaulted. There can be no assurance that the Company will generate sufficient
cash flow to meet its current or future obligations. The Company has not
historically covered its fixed charges with earnings. In addition, the
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Company anticipates that future development of residences 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 unfavorable or unacceptable
to the Company.
Geographic Concentration; Dependence on State Medicaid Waiver Programs
As of February 28, 1997, approximately 46.8% of the Company's properties
are located in the State of Texas and approximately 24.1% are located in the
State of Oregon; therefore, the Company is dependent on the economies of Texas
and Oregon and, to a certain extent, on the continued funding of state Medicaid
waiver programs. The Company has operated residences in Oregon since December
1994. In addition, the Company began operating residences in Texas and
Washington in July 1995 and December 1995, respectively. During the years ended
1996 and 1995, direct payments received from state Medicaid agencies accounted
for approximately 13.8% and 21.4% respectively of the Company's revenue while
the tenant-paid portion of Medicaid residents accounted for approximately 8% and
10% of the Company's revenue during these periods. The Company expects that
state Medicaid reimbursement programs will constitute a significant source of
revenue for the Company. The Company intends to continue developing and
operating assisted living residences in other states. Adverse changes in
general economic factors affecting these states' respective health care
industries or in these states' laws and regulatory environment, including
Medicaid reimbursement rates, could have a material adverse effect on the
Company's financial condition and results of operations.
Absence of Public Market for the Debentures
The Debentures have been eligible for trading in the PORTAL Market since
issuance, but were not traded publicly prior to June 27, 1996, when the
Debentures were registered under the Securities Act. Since June 27, 1996 the
Debentures have traded in the over-the-counter market. The Debentures are
listed on AMEX, but there can be no assurance that an active or liquid trading
market will develop or be sustained for the Debentures.
Possible Volatility of Stock Price
The market price of the Common Stock into which the Debentures are
convertible 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, new statutes or regulations or
changes in the interpretation of existing statutes or regulations affecting the
health care industry generally or assisted living residence businesses 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. These market fluctuations also may
adversely affect the market price of the Common Stock.
Subordination of Debentures; No Restriction on the Incurrence of Additional
Indebtedness
The Debentures are unsecured obligations of the Company and are
subordinated in right of payment to all existing and future Senior Indebtedness
(as defined) of the Company, and are structurally subordinated to indebtedness
of any subsidiary. The Indenture does not restrict the incurrence of Senior
Indebtedness or other Indebtedness by the Company or any subsidiary. In the
event of bankruptcy, liquidation or reorganization of the Company, the assets of
the Company will be available to make payments on the Debentures only after all
Senior Indebtedness of the Company has been paid in full, and there may not be
sufficient assets remaining to pay amounts due on the Debentures. At February
28, 1997 the Company had approximately $64,439,000 in Senior Indebtedness, and
there was no indebtedness of any subsidiary. See "Description of Debentures
- -- Subordination of Debentures."
Dependence on Senior Management and Skilled Personnel
The Company depends, and will continue to depend, upon the services of Dr.
Wilson, its Chief Executive Officer and President, Connie Baldwin, its Director
of Operations and Stephen Gordon, its Chief Administrative Officer and Chief
Financial Officer. The Company has entered into an employment agreement with Dr.
Wilson and has obtained a $500,000 key employee insurance policy covering her
life. The Company is also dependent upon its ability to attract and retain
management personnel who will be responsible for the day-to-day operations of
each
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residence. The loss of the services of any or all of such officers or the
Company's inability to attract additional management personnel in the future
could have a material adverse effect on the Company's financial condition or
results of operations.
Dependence on Reimbursement by Third-Party Payors
A portion of the Company's revenues will be dependent upon reimbursement
from third-party payors, including state Medicaid programs and private insurers.
For the years ended December 31, 1996, 1995 and the one month ended December 31,
1994, the Company received, as a percentage of total revenue, under Medicaid
programs 14%, 21% and 29%, respectively. Furthermore, there can be no assurance
that the Company's proportionate percentage of revenue received from Medicaid
programs will not increase. The revenues and profitability of the Company will
be affected by the continuing efforts of governmental and private third-party
payors to contain or reduce the costs of health care by attempting to lower
reimbursement rates, increasing case management review of services and
negotiating reduced contract pricing. In an attempt to reduce the federal and
certain state budget deficits, there have been, and management expects that
there will continue to be, a number of proposals to limit Medicaid reimbursement
in general. Adoption of any such proposals at either the federal or the state
level could have a material adverse effect on the Company's business, financial
condition, results of operations and prospects.
Government Regulation
Health care is an area of extensive and frequent regulatory change. Changes
in the laws or new interpretations of existing laws can have a significant
effect on methods of doing business, costs of doing business and amounts of
reimbursement from governmental and other payors. The Company is and will
continue to 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 in which it operates or intends to operate. As a provider
of services under the Medicaid program in the United States, the Company is
subject to Medicaid fraud and abuse law, violations of which may result in civil
and criminal penalties and exclusions from participation in the Medicaid
program. The Company at all times attempts to comply with all applicable fraud
and abuse laws; however, there can be no assurance that administrative or
judicial interpretation of existing laws or regulations will not have a material
adverse effect on the Company's operations or financial condition.
The success of the Company will be dependent in part upon its ability to
satisfy the applicable regulations and requirements and to procure and maintain
required licenses. The Company's operations could also be adversely affected by,
among other things, regulatory developments such as mandatory increases in the
scope and quality of care to be afforded residents and revisions in licensing
and certification standards. Currently, no federal rules explicitly define or
regulate assisted living. In addition, federal and state laws currently exist
restricting health care providers from referring patients to affiliated
entities. The Company believes that its operations do not presently violate
these referral laws. However, there can be no assurance that federal, state or
local laws or regulatory procedures which might adversely affect the Company's
business, financial condition, results of operations or prospects will not be
expanded or imposed.
Staffing and Labor Costs
The Company will compete with other providers of long-term care with
respect to attracting and retaining qualified personnel. The Company will also
be dependent upon the available labor pool of suitable wage employees. A
shortage of nurses and/or trained personnel may require the Company to enhance
its wage and benefits package in order to compete. 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 revenues.
Competition
The long-term care industry is highly competitive and the Company expects
that the assisted living business, in particular, will become more competitive
in the future. The Company will be competing with numerous other companies
providing similar long-term care alternatives, such as home health agencies,
life care at home, community-based service programs, retirement communities and
convalescent centers. The Company expects that as assisted living receives
increased attention and the number of states which include assisted living in
their Medicaid waiver programs increases, competition will grow from new market
entrants, including publicly and privately held companies focusing primarily on
assisted living. Nursing facilities that provide long-term care services are
also a source of competition to the Company. Moreover, in the implementation of
the Company's expansion program, the Company expects to face competition for
development and acquisitions of assisted living residences. Some of the
Company's present and potential competitors are significantly larger and have,
or may obtain, greater financial
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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 residents or expand its business and could
have a material adverse effect on the Company's financial condition, results of
operations and prospects.
Difficulties of Managing Rapid Growth
The Company expects that the number of residences which it owns, leases or
otherwise operates will increase substantially as it pursues its growth
strategy. This rapid growth will place significant demands on the Company's
management resources. The Company's ability to manage its growth effectively
will require it to continue to expand its operational, financial and management
information systems and to continue to attract, train, motivate, manage and
retain key employees. If the Company is unable to manage its growth effectively,
its business, financial condition and results of operations could be adversely
affected.
Liability and Insurance
The provision of 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 involve large claims and significant
defense costs. The Company currently maintains liability insurance intended to
cover such claims and the Company believes that its insurance is in keeping with
industry standards. There can be no assurance, however, that claims in excess of
the Company's insurance coverage or claims not covered by the Company's
insurance coverage (e.g., claims for punitive damages) will not arise. A
successful claim against the Company not covered by, or in excess of, the
Company's insurance coverage 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 residents or expand its
business and would require management to devote time to matters unrelated to the
operation of the Company's business. In addition, the Company's insurance
policies must be renewed annually. There can be no assurance that the Company
will be able to obtain liability insurance coverage in the future or that, if
such coverage is available, it will be available on acceptable terms.
Environmental Risks
Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
held liable for the cost of removal or remediation of certain hazardous or toxic
substances, including, without limitation, asbestos-containing materials, that
could be located on, in or under such property. Such laws and regulations often
impose liability whether or not the owner or operator knew of, or was
responsible for, the presence of the hazardous or toxic substances. The costs of
any required remediation or removal of these substances could be substantial and
the liability of an owner or operator as to any property is generally not
limited under such laws and regulations and could exceed the property's value
and the aggregate assets of the owner or operator. The presence of these
substances or failure to remediate such substances properly may also adversely
affect the owner's ability to sell or rent the property, or to borrow using the
property as collateral. Under these laws and regulations, an owner, operator or
an entity that arranges for the disposal of hazardous or toxic substances, such
as asbestos-containing materials, at a disposal site may also be liable for the
costs of any required remediation or removal of the hazardous or toxic
substances at the disposal site. In connection with the ownership or operation
of its properties, the Company could be liable for these costs, as well as
certain other costs, including governmental fines and injuries to persons or
properties. As a result, the presence, with or without the Company's knowledge,
of hazardous or toxic substances at any property held or operated by the
Company, or acquired or operated by the Company in the future, could have an
adverse effect on the Company's business, financial condition and results of
operations. Environmental audits performed on the Company's properties have not
revealed any significant environmental liability that management believes would
have a material adverse effect on the Company's business, financial condition or
results of operations. No assurance can be given that existing environmental
audits with respect to any of the Company's properties reveal all environmental
liabilities.
Dividend Policy
The Company has never declared or paid any dividends on its Common Stock.
The Company expects to retain any earnings to finance the operations and
expansion of the Company's business. Certain Trust Deed Notes, payable to the
State of Oregon Housing and Community Service Department restrict the payment of
cash dividends in certain circumstances and it is anticipated that the terms of
future debt financings may do so as well. Therefore, the payment of any cash
dividends on the Common Stock is unlikely in the foreseeable future.
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THE COMPANY
Assisted Living Concepts, Inc. (the "Company") develops, owns, leases and
operates assisted living residences, an increasingly popular form of housing for
senior citizens who, although generally ambulatory, need help with the
activities of daily living. In addition to housing, the Company provides
personal care and support services, and makes available routine nursing services
(as permitted by applicable government regulations) designed to meet the needs
of its residents. The Company believes that this combination of housing,
personal care and support services provides a cost-efficient alternative and
provides an independent lifestyle for individuals who do not require the broader
array of medical services that nursing facilities are required by law to
provide.
The Company was founded in July 1994 by Dr. Keren B. Wilson, the Company's
Chief Executive Officer and President, to develop, own, lease and operate
assisted living residences. The Company completed its initial public offering in
November 1994 and immediately began operating five assisted living residences
containing an aggregate of 137 units. As of December 31, 1996, the Company
licensed or had certificates of occupancy for sixty-seven assisted living
residences containing an aggregate of 2,382 units. As of February 28, 1997, the
Company had certificates of occupancy for seventy-nine assisted living
residences containing an aggregate of 2,845 units.
Currently, all the Company's residences are located in small communities in
Oregon, Washington, Texas, Idaho and New Jersey. Of the seventy-eight residences
that had certificates of occupancy as of February 28, 1997, 45 residences (1,653
units) were owned and 33 residences (1,153 units) were leased. The Company is
currently developing and, to a lesser extent, seeking to acquire additional
assisted living residences in small communities in Oregon, Washington, Texas,
Idaho, New Jersey, Ohio and other states with regulatory and reimbursement
climates that the Company believes are favorable. As of February 28, 1997, the
Company had purchased land or commenced construction on twenty-one residences
(approximately 820 units). In addition, the Company has entered into land
purchase option agreements for the development of thirty-one residences. The
Company generally does not acquire sites for development until it has completed
its feasibility analysis and appropriate zoning has been obtained. Capital
expenditures for 1996, which relate primarily to the development of new
residences, were $122 million.
The Company is a Nevada corporation and its principal executive offices are
located at 9955 S.E. Washington, Suite 201, Portland, Oregon 97216, telephone
number (503) 252-6233.
8
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below is the ratio of earnings to fixed charges for the Company
and its predecessor for the periods indicated:
<TABLE>
<CAPTION>
Predecessor The Company
----------- -----------
Eleven
Years ended months ended Month ended Years ended
December 31, November 30, December 31, December 31,
----------- ----------- ----------- -----------
1992 1993 1994 1994(1) 1995(1) 1996
---- ---- ---- ------ ------ ----
<S> <C> <C> <C> <C> <C>
1.08 1.74 1.71 -- -- .07
</TABLE>
(1) For the one month period ended December 31, 1994 and the year ended
December 31, 1995, fixed charges exceeded earnings by $64,000 and
$1,152,000, respectively.
USE OF PROCEEDS
The proceeds from the sale of the Debentures and shares of Common Stock
offered hereby are solely for the account of the Selling Debentureholders.
Accordingly, the Company will receive none of the proceeds from sales thereof.
SELLING DEBENTUREHOLDERS
The Debentures being offered hereby were acquired by the Selling
Debentureholders in connection with a private placement of the Debentures by the
Company on August 15, 1995 pursuant to Rule 144A and Regulation D under the
Securities Act or in permitted resale transactions from the initial purchasers
of the Debentures (the "Initial Purchasers") or holders acquiring such
Debentures from prior holders thereof in further permitted resale transactions.
The following table sets forth information concerning the principal amount of
Debentures beneficially owned by each Selling Debentureholder which may be
offered from time to time pursuant to this Prospectus. Other than as a result of
the ownership of Debentures or Common Stock, none of the Selling
Debentureholders has had any material relationship with the Company within the
past three years, except as noted herein. The table has been prepared based upon
information furnished to the Company by the Trustee for the Debentures, by
Depository Trust Company and by or on behalf of the Selling Debentureholders.
<TABLE>
<CAPTION>
Principal Principal
Amount of Amount of
Debentures Debentures Percent of
Beneficially That May Outstanding
Name Owned be Sold Debentures
---- ----- ------- ----------
<S> <C> <C> <C>
Chase Manhattan trustee for IBM Corp.
Retirement Plan Trust Dtd 12-18-45
Convertible Account............................ $1,289,000 $1,298,000 9.26%
High Income Fund, Inc............................ 1,000,000 1,000,000 7.19
High Income Fund II, Inc......................... 1,000,000 1,000,000 7.19
Heritage Series Trust - Small Cap Stock Fund..... 750,000 750,000 5.39
Bankers Trust trustee for Chrysler Corp.
Emp#1 Pension Plan Dtd 4-1-89
converts....................................... 645,000 645,000 4.64
Comdisco Foundation.............................. 500,000 500,000 3.59
Bankers Trust trustee for Chrysler Corp.
Emp#1 Pension Plan Trust Dtd 4-1-89............ 460,000 460,000 3.31
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Principal Principal
Amount of Amount of
Debentures Debentures Percent of
Beneficially That May Outstanding
Name Owned be Sold Debentures
---- ----- ------- ----------
<S> <C> <C> <C>
Chase Manhattan trustee for IBM Corp.
Ret. Plan Trust Dtd 12-18-45................. 460,000 460,000 3.31
State Street Bank Cust. for G.E. Pension
Trust........................................ 460,000 460,000 3.31
City of Milford, Conn. Pension and
Retirement Fund.............................. 285,000 285,000 2.05
TCW/DW Income and Growth Fund.................. 280,000 280,000 2.01
TCW Galileo Convertible Securities
Fund, Inc.................................... 260,000 260,000 1.87
TCW Convertible Securities Fund, Inc........... 260,000 260,000 1.87
Vista Small Cap Equity Fund.................... 250,000 250,000 1.80
Michael D. Mintz Trust......................... 200,000 200,000 1.44
William N. Pontikes............................ 200,000 200,000 1.44
Vista Balanced Fund............................ 150,000 150,000 1.08
Awad & Associates L.P.......................... 100,000 100,000 *
John F. Kosik.................................. 100,000 100,000 *
Nanette E. Scofield............................ 100,000 100,000 *
Pontikes Family Trust, William M.
Pontikes TTEE................................ 100,000 100,000 *
Vista Equity Income Fund....................... 100,000 100,000 *
Barbara Slater................................. 50,000 50,000 *
Brian Donnally & Catherine Donnally............ 50,000 50,000 *
Elizabeth Scofield............................. 50,000 50,000 *
Martin Walsh................................... 50,000 50,000 *
Nanette & Elizabeth Scofield TTEES
FBO Anthony Scofield......................... 50,000 50,000 *
Neurological Specialists Employees'
Profit Sharing Trust......................... 50,000 50,000 *
Neurological Specialists Employees'
Pension Trust................................ 50,000 50,000 *
Stanley Nemer as Trustee of RF Capital
Trust........................................ 50,000 50,000 *
Stanley Nemer as Trustee of Rose
Fingerhut Lifetime Trust..................... 50,000 50,000 *
The Edward Stewart Revocable Trust............. 50,000 50,000 *
Thermo Securities Corp......................... 50,000 50,000 *
Jessica Farkas................................. 50,000 50,000 *
Lois/USA Inc. Profit Sharing Plan.............. 10,000 10,000 *
---------- ---------- -----
$9,559,000 $9,559,000 68.70%
========== ========== =====
</TABLE>
* less than 1%
10
<PAGE>
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds from this offering. The
Company has been advised by the Selling Debentureholders that the Selling
Debentureholders may sell all or a portion of the Debentures and shares of
Common Stock offered hereby from time to time on AMEX (or through the facilities
of any national securities exchange or U.S. automated interdealer quotation
system of a registered national securities association, on which any of the
Debentures or Conversion Shares are then listed, admitted to unlisted trading
privileges or included for quotation) on terms to be determined at the times of
such sales. The Selling Debentureholders may also make private sales directly or
through a broker or brokers. Alternatively, any of the Selling Debentureholders
may from time to time offer the Debentures or shares of Common Stock through
underwriters, including any of the initial purchasers of the Debentures,
dealers or agents, who may receive compensation in the form of underwriting
discounts, commissions or concessions from the Selling Debentureholders and the
purchasers of the Debentures or shares of Common Stock for whom they may act as
agent. To the extent required, the aggregate principal amount of Debentures and
number of shares of Common Stock to be sold, the names of the Selling
Debentureholders, the purchase price, the name of any such agent, dealer or
underwriter and any applicable commissions with respect to a particular offer
will be set forth in an accompanying Prospectus Supplement. The aggregate
proceeds to the Selling Debentureholders from the sale of the Debentures and
Common Stock offered by the Selling Debentureholders hereby will be the purchase
price of such Debentures and shares of Common Stock less any commissions. There
is no assurance that the Selling Debentureholders will sell any or all of the
Debentures or shares of Common Stock offered hereby.
The Debentures and the shares of Common Stock issued upon conversion of the
Debentures may be sold from time to time in one or more transactions at fixed
offering prices, which may be changed, or at varying prices determined at the
time of sale or at negotiated prices. Such prices will be determined by the
holders of such securities or by agreement between such holders and underwriters
or dealers who may receive fees or commissions in connection therewith.
The Debentures are listed on AMEX. However, there can be no assurance that
an active market for the Debentures will develop.
In order to comply with the securities laws of certain states, if
applicable, the Debentures and Conversion Shares will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the Debentures and Conversion Shares may not be sold
unless they have been registered or qualified for sale in the applicable state
or an exemption from the registration or qualification requirement is available
and is complied with.
The Selling Debentureholders and any broker-dealers, agents or underwriters
that participate with the Selling Debentureholders in the distribution of the
Debentures or Conversion Shares may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any commissions received by such
broker-dealers, agents or underwriters and any profit on the resale of the
Debentures or shares of Common Stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
The Debentures were originally sold on August 15, 1995 in a private
placement at a purchase price of 100% of their principal amount. The Company
agreed to indemnify and hold the initial purchasers and certain subsequent
holders of the Debentures harmless against certain liabilities under the
Securities Act that could arise in connection with the sale of the Debentures by
the Initial Purchasers or such subsequent holders.
The Company will pay all expenses incident to the offering and sale of the
Debentures and Common Stock to the public other than underwriting discounts and
selling commissions and fees. See "Selling Debentureholders."
11
<PAGE>
DESCRIPTION OF DEBENTURES
The Debentures were issued under an Indenture dated as of August 15, 1995
(the "Indenture") between the Company and Harris Trust and Savings Bank, as the
trustee under the Indenture (the "Trustee"). The terms of the Debentures include
those stated in the Indenture and those made a part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended. As of the date of this
Prospectus, the aggregate principal amount of Debentures outstanding is
$13,915,000.
The following is a summary of certain provisions of the Indenture and does
not purport to be complete and is qualified in its entirety by reference to the
detailed provisions of the Indenture, including the definitions of certain terms
therein to which reference is hereby made, for a complete statement of such
provisions. Wherever particular provisions or sections of the Indenture or terms
defined therein are referred to herein, such provisions or definitions are
incorporated herein by reference.
General
The Debentures are unsecured general obligations of the Company, subject to
the rights of holders of Senior Indebtedness of the Company, and will mature on
July 31, 2005. The Debentures are limited to $20,000,000 aggregate principal
amount and bear interest semiannually on January 31 and July 31 of each year
commencing January 31, 1996 at the rate per annum of 7.0%. The Company will pay
interest on the Debentures to the persons who are registered holders of
Debentures at the close of business on the January 15 or July 15 preceding the
interest payment date. Principal (and premium, if any) and interest will be
payable, the Debentures will be convertible and exchangeable, and transfers
thereof will be registerable, at the office or agency of the Company maintained
for such purposes, initially at the offices of the Trustee. The Company may pay
principal and interest by check and may mail an interest check to a holder's
registered address. Holders must surrender Debentures to a Paying Agent to
collect principal payments.
The Trustee currently acts as Paying Agent, Registrar and Conversion Agent.
The Company may change any Paying Agent, Registrar, Conversion Agent or co-
registrar upon prior written notice to the Trustee and may act in any such
capacity itself.
Delivery and Form of Debentures
Those Debentures initially sold to qualified institutional buyers (as
defined in Rule 144A under the Securities Act) were issued in global form (the
"Rule 144A Global Debentures") and were deposited on August 15, 1995 with the
Depository Trust Company (the "Depository") and registered in the name of Cede &
Co., as nominee of the Depository. Those Debentures that were initially sold to
institutional accredited investors (the "Accredited Investor Debentures") were
initially issued in fully registered form. The Debentures resold pursuant to
this Prospectus will be issued in global form (the "New Global Debentures") and
will be deposited on behalf of the Depository and registered in the name of Cede
& Co. Beneficial interests in the Rule 144A Global Debentures and the New
Global Debentures may be exchanged for definitive securities in accordance with
the terms of the Indenture.
A holder may transfer or exchange Debentures in accordance with the
Indenture. No service charge will be made for any registration of transfer,
exchange or conversion of Debentures, except for any tax or other governmental
charges that may be imposed in connection therewith. The Registrar need not
transfer or exchange any Debentures selected for redemption. Also, in the event
of a partial redemption, it need not transfer or exchange any Debentures for a
period of 15 days before selecting Debentures to be redeemed. The Indenture does
not contain any provision requiring the Company to repurchase the Debentures at
the option of the holders thereof in the event of a leveraged buyout,
recapitalization or similar restructuring of the Company, even though the
Company's creditworthiness and the market value of the Debentures may decline
significantly as a result of such transaction. The Indenture does not protect
holders of the Debentures against any decline in credit quality, whether
resulting from any such transaction or from any other cause. The registered
holder of a Debenture may be treated as its owner for all purposes.
12
<PAGE>
Conversion Rights
The holders of the Debentures are entitled at any time prior to maturity,
subject to prior redemption, to convert the Debentures or portions thereof
(which are $1,000 or multiples thereof) into shares of Common Stock at the
conversion price set forth in the Debenture (subject to adjustments as described
below). No payment or adjustment will be made for accrued interest on a
converted Debenture. If any Debenture not called for redemption is converted
between a record date for the payment of interest and the next succeeding
interest payment date, such Debenture must be accompanied by funds equal to the
interest payable to the registered holder on such interest payment date on the
principal amount so converted. The Company will not issue fractional interest in
shares of Common Stock upon conversion of the Debentures and, instead will
deliver a check for the fractional share based upon the market value of the
Common Stock on the last trading day prior to the conversion date. If the
Debentures are called for redemption, conversion rights will expire at the close
of business on the redemption date, unless the Company defaults in payment due
upon such redemption.
The conversion price is subject to adjustments, as set forth in the
Indenture, in certain events, including the payment of dividends or
distributions on the Company's Common Stock in shares of capital stock;
subdivisions or combinations of the Common Stock into a greater or smaller
number of Shares; reclassification of the Shares resulting in an issuance of any
shares of the Company's capital stock; distribution of rights or warrants to all
holders of Common Stock entitling them for a period of 60 days to purchase
Common Stock at less than the then current price at that time; and the
distribution to all holders of Common Stock of assets, excluding certain cash
dividends and distributions, or debt securities or any rights or warrants to
purchase securities of the Company; provided, however, that no adjustment will
be required if holders of the Debentures received notice of and are allowed to
participate in such transactions. No adjustment will be required for rights to
purchase Common Stock pursuant to a Company plan for reinvestment of dividends
or interest, or for a change in the par value of the Common Stock. To the extent
that Debentures become convertible into cash, no adjustment will be required
thereafter as to cash. No adjustment in the conversion price need be made unless
such adjustment would require a change of at least 1% in the conversion price;
however, any adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent adjustment. The Company
may voluntarily reduce the conversion price for a period of time.
If the Company pays dividends on the Common Stock in shares of capital
stock or subdivides or combines the Common Stock or issues by reclassification
of its Common Stock any shares of its capital stock or merges with, or transfers
or leases substantially all of its assets to, another corporation or trust, the
holders of the Debentures then outstanding will be entitled thereafter to
convert such Debentures into the kind and amount of shares of capital stock,
other securities, cash or other assets which they would have owned immediately
after such event had such Debentures been converted before the effective date of
the transaction.
Any Debentures called for redemption, unless surrendered for conversion on
or before the close of business on the redemption date, are subject to being
purchased from the holder of such Debentures at the redemption price by one or
more investment bankers or other purchasers who may agree with the Company to
purchase such Debentures and convert them into Common Stock of the Company.
In the event of a taxable distribution to holders of Common Stock which
results in an adjustment of the conversion price, the holders of the Debentures
may, in certain circumstances, be deemed to have received a distribution subject
to United States federal income tax as a dividend.
Subordination of Debentures
The indebtedness evidenced by the Debentures is subordinated and junior in
right of payment to the extent set forth in the Indenture to the prior payment
in full of amounts then due on all Senior Indebtedness (as defined), and is
structurally subordinated to indebtedness of any subsidiary. No payment shall be
made by the Company on account of principal of (or premium, if any) or interest
on the Debentures or on account of the purchase or other acquisition of
Debentures, if there shall have occurred and be continuing a default with
respect to any Senior Indebtedness permitting the holders to accelerate the
maturity thereof, or with respect to the payment of any Senior Indebtedness and
such default shall be the subject of a judicial proceeding or the Company shall
have received notice of such default from certain authorized persons, unless and
until such default or event of default shall have been cured or waived or shall
have ceased to exist. By reason of these provisions, in the event of default on
any Senior Indebtedness, whether now outstanding or hereafter issued, payments
of principal of (and premium, if any) and
13
<PAGE>
interest on the Debentures may not be permitted to be made until such Senior
Indebtedness is paid in full, or the event of default on such Senior
Indebtedness is cured or waived.
Upon any acceleration of the principal of the Debentures or any
distribution of assets of the Company upon any receivership, dissolution,
winding-up, liquidation, reorganization or similar proceedings of the Company,
whether voluntary or involuntary, or in bankruptcy or insolvency, all amounts
due or to become due upon all Senior Indebtedness must be paid in full before
the holders of the Debentures or the Trustee are entitled to receive or retain
any assets so distributed in respect of the Debentures. By reason of this
provision, in the event of insolvency, holders of the Debentures may recover
less, ratably, than holders of Senior Indebtedness.
"Senior Indebtedness" is defined to mean the principal, premium, if any,
unpaid interest on and all other amounts payable under or in respect of
Indebtedness (as defined) of the Company for money borrowed. There is no limit
on the amount of Senior Indebtedness that the Company may incur. At February 28,
1997 the Company had approximately $64,439,000 in Senior Indebtedness, and there
was no indebtedness of any subsidiary.
Optional Redemption
The Debentures are subject to redemption, as a whole or in part, at any
time or from time to time commencing July 31, 1998 at the option of the Company
on at least 30 days' and not more than 60 days' prior notice by mail at a
redemption price equal to 100% of the principal amount thereof plus interest
accrued to the date of redemption.
Modification of the Indenture
Under the Indenture, with certain exceptions, the rights and obligations of
the Company with respect to the Debentures and the rights of Holders of the
Debentures may only be modified by the Company and the Trustee with the written
consent of the Holders of 66-2/3% in principal amount of the outstanding
Debentures. However, without the consent of each Holder of any Debenture
affected, an amendment, waiver or supplement may not (a) reduce the amount of
Debentures whose holders must consent to an amendment; (b) reduce the rate or
change the time of payment of interest on any Debenture; (c) reduce the
principal of or change the fixed maturity of any Debenture; (d) make any
Debenture payable in money other than that stated in the Debenture; (e) change
the provisions of the Indenture regarding the right of a majority of the
Debentureholders to waive defaults under the Indenture or impair the right of
any Debentureholder to institute suit for the enforcement of any payment of
principal and interest on the Debentures on and after their respective due
dates; or (f) make any change that adversely affects the right to convert any
Debenture.
Events of Default, Notice and Waiver
The following is a summary of certain provisions of the Indenture relating
to events of default, notice and waiver.
The following are Events of Default under the Indenture with respect to the
Debentures: (i) default in the payment of interest on the Debentures when due
and payable which continues for 30 days; (ii) default in the payment of
principal of (and premium, if any) on the Debentures when due and payable, at
maturity, upon redemption or otherwise; (iii) failure to perform any other
covenant of the Company contained in the Indenture or the Debentures which
continues for 60 days after notice as provided in the Indenture; (iv)
acceleration of any indebtedness for money borrowed (including obligations under
leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles but not including any indebtedness or
obligation for which recourse is limited to property purchased) in an aggregate
principal amount in excess of $1,000,000, whether existing on the date of the
execution of the Indenture or thereafter created, if such acceleration is not
annulled within 30 days after written notice to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in principal amount
of outstanding Debentures; and (v) certain events of bankruptcy, insolvency or
reorganization relating to the Company.
If an Event of Default occurs and is continuing with respect to the
Debentures, either the Trustee or the Holders of at least 25% in principal
amount of the Debentures may declare all of the Debentures to be due and payable
immediately.
14
<PAGE>
The Company will not (i) declare or pay any dividends or make any
distribution to holders of its capital stock or (ii) purchase, redeem or
otherwise acquire or retire for value any of its Common Stock, or any warrants,
rights or options, to purchase or acquire any shares of its Common Stock (other
than the Debentures or any other convertible indebtedness of the Company that is
neither secured nor subordinated to the Debentures), if at the time any of the
aforementioned Events of Default has occurred and is continuing or would exist
immediately after giving effect to such action.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Debentures. Subject to certain limitations, holders of a
majority in principal amount of the Debentures may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Debentureholders
notice of any default (except a default in payment of principal or interest) if
it determines that withholding notice is in their interests. The Company is
required to file with the Trustee annually an officers' statement as to the
absence of defaults in fulfilling any of its obligations under the Indenture.
No consent of Debentureholders is required for the Company to consolidate
with or merge into or transfer or transfer substantially all of its assets to
another corporation or trust which assumes the obligations of the Company under
the Indenture and Debentures or for any reorganization within the meaning of
Section 368(a)(1)(B) of the Internal Revenue Code; nor is any such consent of
Debentureholders required for any amendment of the Indenture or the Debentures
by the Company and the Trustee to cure any ambiguity, defect or inconsistency,
or to provide for uncertificated Debentures in addition to certified Debentures,
or to make any change that does not adversely affect the right of any
Debentureholder.
The Debentures may not be sold or otherwise transferred except in
accordance with the provisions set forth in the Purchase Agreement and the
Indenture.
Consolidation, Merger, Sale or Conveyance
The Indenture provides that the Company may not merge or consolidate with,
or sell or convey all, or substantially all, of its assets to another person
unless such person is a company or a trust; such person assumes by supplemental
indenture all the obligations of the Company under the Debentures and the
Indenture; and immediately after the transaction no default or Event of Default
shall exist.
Marketability
The Debentures have no established trading market. The Debentures are
listed on AMEX, but there can be no assurance that an active or liquid trading
market will develop or be sustained for the Debentures.
Governing Law
The Indenture and the Debentures are governed by and construed in
accordance with the laws of the State of New York.
Registration Rights Agreement
The Company has agreed to use its best efforts, subject to the receipt of
necessary information from the Purchasers, to prepare and file with the
Commission a Registration Statement, of which this Prospectus is a part, with
respect to the resale of the Debentures and the Conversion Shares from time to
time in the over-the-counter market, in privately negotiated transactions or on
AMEX, as the case may be. The Company has also agreed to prepare and file such
amendments and supplements to the Registration Statement as may be necessary to
keep the Registration Statement effective until all the Debentures and the
Conversion Shares have been sold thereby or until the Debentures and the
Conversion Shares are no longer, by reason of Rule 144(k) of the Commission or
any other rule of similar effect, required to be registered for the sale thereof
by the Purchasers.
15
<PAGE>
LEGAL MATTERS
Certain legal matters relating to the validity of the Debentures and the
shares of Common Stock offered hereby will be passed upon for the Company by
Latham & Watkins, Los Angeles, California and New York, New York and by Schreck,
Jones, Bernhard, Woloson & Godfrey, Las Vegas, Nevada.
EXPERTS
The financial statements of Assisted Living Concepts Group (the predecessor
of the Company) for the eleven months ended November 30, 1994 and of the Company
for the one month ended December 31, 1994, incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31, 1996
of the Company have been so incorporated by reference in reliance on the report
of Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
The financial statements of the Company as of December 31, 1996 and 1995
and for the years then ended 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.
16
<PAGE>
================================================================================
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus and, if given or made, such information or representations in
connection with this offering must not be relied upon as having been authorized
by the Company or by any Selling Debentureholder. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby by anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to any person to whom it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create an implication
that the information contained herein is correct as of any time subsequent to
the date of this Prospectus.
<TABLE>
<CAPTION>
----------------------
TABLE OF CONTENTS
Page
<S> <C>
Available Information............................... 2
Incorporation of Certain Documents by Reference..... 2
Risk Factors........................................ 3
The Company......................................... 8
Ratio of Earnings to Fixed Charges.................. 9
Use of Proceeds..................................... 9
Selling Debentureholders............................ 9
Plan of Distribution................................ 11
Description of Debentures........................... 12
Legal Matters....................................... 16
Experts............................................. 16
</TABLE>
================================================================================
$9,559,000
7% Convertible Subordinated
Debentures Due 2005
637,266 SHARES
Common Stock
ASSISTED LIVING
CONCEPTS, INC.
___________________
PROSPECTUS
___________________
, 1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered hereunder. Except
for the SEC registration fee, all amounts are estimates.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee.............................. $6,890
AMEX Filing Fee................................... 15,000
Printing and Engraving Expenses................... 25,000
Legal Fees and Expenses........................... 50,000
Accounting Fees and Expenses...................... 35,000
Registrar and Transfer Agent Fees and Expenses.... 7,000
Miscellaneous Expenses............................ 6,110
Total 145,000
</TABLE>
All of the costs identified above will be paid by the Company.
Item 15. Indemnification of Directors and Officers.
The Company's Articles of Incorporation provide that a director or officer
of the Company shall not be personally liable to the Company or its stockholders
for damages for any breach of fiduciary duty as a director or officer, except
for liability for (i) acts or omissions which involve intentional misconduct,
fraud or a knowing violation of law, or (ii) the payment of distributions in
violation of Nevada Revised Statutes 78.300. In addition, Nevada Revised
Statutes 78.751 and Article III, Section 13 of the Company's Bylaws, under
certain circumstances, provide for the indemnification of the Company's
officers, directors, employees, and agents against liabilities which they may
incur in such capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but that description is
qualified in its entirety by reference to Article III, Section 13 of the
Company's Bylaws.
In general, any officer, director, employee or agent shall be indemnified
against expenses including attorneys' fees, fines, settlements, or judgments
which were actually and reasonably incurred in connection with a legal
proceeding, other than one brought by or on behalf of the Company, to which he
was a party as a result of such relationship, if he acted in good faith, and in
the manner he believed to be in or not opposed to the Company's best interest
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. If the action or suit is brought by or on
behalf of the Company, the person to be indemnified must have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
Company's best interest. No indemnification will be made in respect of any
claim, issue or matter as to which such person shall have been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the Company or for amounts paid in settlement to the Company,
unless and only to the extent that the court in which the action or suit was
brought or other court of competent jurisdiction, determines upon application
that in view of all the
II-1
<PAGE>
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Any indemnification under the previous paragraphs, unless ordered by a
court or advanced as provided in the succeeding paragraph, must be made by the
Company only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made (i) by the stockholders, (ii) by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to the act, suit or proceeding, (iii) if a majority vote of
a quorum of directors who were not parties to the act, suit or proceeding so
orders, by independent legal counsel in a written opinion or (iv) if a quorum
consisting of directors who were not parties to the act, suit or proceeding
cannot be obtained, by independent legal counsel in a written opinion. To the
extent that a director, officer, employee or agent of the Company has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in the previous paragraph, or in defense of any claim,
issue or matter therein, he must be indemnified by the Company against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense.
Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding must be paid by the Company as they are
incurred and in advance of the final disposition of the action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the Company
as authorized by the By-Laws. Such expenses incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the Board of
Directors deems appropriate.
The indemnification and advancement of expenses authorized in or ordered by
a court as provided in the foregoing paragraphs does not exclude any other
rights to which a person seeking indemnification or advancement of expenses may
be entitled under the Articles of Incorporation or any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, for either an action in
his official capacity or an action in another capacity while holding his office,
except that indemnification, unless ordered by a court as described in the third
preceding paragraph or for advancement of expenses made as described in the next
preceding paragraph, may not be made to or on behalf of any director or officer
if a final adjudication establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and was material
to the cause of action. If a claim for indemnification or payment of expenses
under Article III, Section 13 of the By-Laws is not paid in full within ninety
(90) days after a written claim therefor has been received by the Company, the
claimant may file suit to recover the unpaid amount of such claim, if successful
in whole or in part, shall be entitled to be paid the expense of prosecuting
such claim. In any such action, the Company shall have the burden of proving
that the claimant was not entitled to the requested indemnification or payment
of expenses under applicable law.
The Board of Directors may authorize, by a vote of a majority of a quorum
of the Board of Directors, the Company to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under the provisions of Article III, Section 13 of the By-Laws. The
Board of Directors may authorize the Company to enter into a contract with any
person who is or was a director, officer, employee or agent of the Company or is
or was serving at the request of the Company as a director, officer, employee or
agent of another partnership, joint venture, trust or other enterprise providing
for indemnification rights equivalent to or, if the Board of Directors so
determines, greater than those provided for in Article III, Section 13 of the
By-Laws.
The Company has also purchased insurance for its directors and officers for
certain losses arising from claims or charges made against them in their
capacities as directors and officers of the Company.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------------------------
<C> <S>
2.1 Merger Agreement between the Company and CCL Sub, Inc.
(Incorporated by reference to the same titled exhibit to
the Company's Registration Statement on Form S-1, File No.
33-83938).
2.2 Agreement and Plan of Corporate Separation and
Reorganization between Concepts in Community Living, Inc.
and Keren Wilson (Incorporated by reference to the same
titled exhibit to the Company's Registration Statement on
Form S-1, File No. 33-83938).
2.3 Assignment, Bill of Sale, License, and Assumption
Agreement between Concepts in Community Living, Inc. and
CCL Sub, Inc. (Incorporated by reference to the same
titled exhibit to the Company's Registration Statement on
Form S-1, File No. 33-83938).
2.4 Purchase Agreement between the Company and Lincoln City
Limited Partnership (Incorporated by reference to the same
titled exhibit to the Company's Registration Statement on
Form S-1, File No. 33-83938).
2.5 Letter Purchase Agreement between the Company and Madras
Senior Residence, LRW Partners, Keren Brown Wilson and Mr.
Joseph Hughes (Incorporated by reference to the same
titled exhibit to the Company's Registration Statement on
Form S-1, File No. 33-83938).
3.1 Articles of Incorporation of the Company (Incorporated by
reference to the same titled exhibit to the Company's
Registration Statement on Form S-1, File No. 33-83938).
3.2 Bylaws of the Company (Incorporated by reference to the
same titled exhibit to the Company's Registration
Statement on Form S-1, File No. 33-83938).
4.1 Indenture, dated as of August 15, 1995, between the
Company and Harris Trust and Savings Bank, as Trustee, in
respect of the Company's 7.0% Convertible Subordinated
Debentures due 2005 (Incorporated by reference to the same
titled exhibit to the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1995, File No. 1-
13498).
4.2 Form of 7.0% Convertible Subordinated Debentures due 2005
(Incorporated by reference to the same titled exhibit to
the Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1995, File No. 1-83938).
4.3 Registration Rights Agreement, dated as of August 2, 1995,
between the Company and the initial purchasers of its 7.0%
Convertible Subordinated Debentures due 2005 (Incorporated
by reference to the same titled exhibit to the Company's
Quarterly Report on Form 10-Q for the period ended
September 30, 1995, File No. 1-83938).
5.1 Opinion of Latham & Watkins (previously filed).
5.2 Opinion of Schreck, Jones, Bernhard, Woloson & Godfrey
(previously filed).
10.1 Stock Option Plan of the Company (Incorporated by
reference to the same titled exhibit to the Company's
Registration Statement on Form S-1, File No. 33-83938).
10.2 Employment Agreement between the Company and Keren B.
Wilson (Incorporated by reference to the same titled
exhibit to the Company's Registration Statement on Form
S-1, File No. 33-83938).
</TABLE> II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------------------------
<C> <S>
10.3 Amendment to 1994 Stock Option Plan (Incorporated by
reference to the same titled exhibit to the Company's
Registration Statement on Form S-8, File No. 333-2352).
12.1 Computation of Ratio of Earnings to Fixed Charges
(Incorporated by reference to the same titled exhibit to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1996).
23.1 Consent of Latham & Watkins (included in Exhibit 5.1).
23.2 Consent of Schreck, Jones, Bernhard, Woloson & Godfrey
(included in Exhibit 5.2).
23.3 Consent of Price Waterhouse LLP.
23.4 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney (previously filed).
25.1 Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of the Trustee (previously
filed).
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) 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 provisions described under Item 15
above, 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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(b) 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, represent 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 registration statement is on Form S-3, Form S-8 or Form F-3, and 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 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 such 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.
II-4
<PAGE>
(c) 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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to 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.
(d) 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.
II-5
<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, as of the 31st day of
March, 1997.
ASSISTED LIVING CONCEPTS, INC.
By: /s/Keren B. Wilson
-----------------------------
Keren B. Wilson
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and as of the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Keren B. Wilson Director, President and March 31, 1997
- ----------------------------- Chief Executive Officer
Keren B. Wilson (Principal Executive Officer)
/s/ Stephen Gordon Chief Administrative Officer March 31, 1997
- ----------------------------- and Chief Financial
Stephen Gordon Officer (Principal Financial
and Accounting Officer)
/s/ Rhonda S. Marsh Controller March 31, 1997
- -----------------------------
Rhonda S. Marsh
* Chairman of the March 31, 1997
- ----------------------------- Board of Directors
William McBride III
* Director March 31, 1997
- -----------------------------
Andre C. Dimitriadis
* Director March 31, 1997
- -----------------------------
Richard C. Ladd
* Director March 31, 1997
- -----------------------------
Bradley C. Razook
</TABLE>
*By: /s/ Keren B. Wilson
----------------------------
Keren B. Wilson
Attorney-in-Fact
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
2.1 Merger Agreement between the Company and CCL Sub, Inc.
(Incorporated by reference to the same titled exhibit to
the Company's Registration Statement on Form S-1, File
No. 33-83938).
2.2 Agreement and Plan of Corporate Separation and
Reorganization between Concepts in Community Living, Inc.
and Keren Wilson (Incorporated by reference to the same
titled exhibit to the Company's Registration Statement on
Form S-1, File No. 33-83938).
2.3 Assignment, Bill of Sale, License, and Assumption
Agreement between Concepts in Community Living, Inc. and
CCL Sub, Inc. (Incorporated by reference to the same
titled exhibit to the Company's Registration Statement on
Form S-1, File No. 33-83938).
2.4 Purchase Agreement between the Company and Lincoln City
Limited Partnership (Incorporated by reference to the
same titled exhibit to the Company's Registration
Statement on Form S-1, File No. 33-83938).
2.5 Letter Purchase Agreement between the Company and Madras
Senior Residence, LRW Partners, Keren Brown Wilson and
Mr. Joseph Hughes (Incorporated by reference to the same
titled exhibit to the Company's Registration Statement on
Form S-1, File No. 33-83938).
3.1 Articles of Incorporation of the Company (Incorporated by
reference to the same titled exhibit to the Company's
Registration Statement on Form S-1, File No. 33-83938).
3.2 Bylaws of the Company (Incorporated by reference to the
same titled exhibit to the Company's Registration
Statement on Form S-1, File No. 33-83938).
4.1 Indenture, dated as of August 15, 1995, between the
Company and Harris Trust and Savings Bank, as Trustee, in
respect of the Company's 7.0% Convertible Subordinated
Debentures due 2005 (Incorporated by reference to the
same titled exhibit to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1995, File
No. 1-83938).
4.2 Form of 7.0% Convertible Subordinated Debentures due 2005
(Incorporated by reference to the same titled exhibit to
the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1995, File No. 1-83938).
4.3 Registration Rights Agreement, dated as of August 2,
1995, between the Company and the initial purchasers of
its 7.0% Convertible Subordinated Debentures due 2005
(Incorporated by reference to the same titled exhibit to
the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1995, File No. 1-83938).
5.1 Opinion of Latham & Watkins (previously filed).
5.2 Opinion of Schreck, Jones, Bernhard, Woloson & Godfrey
(previously filed).
10.1 Stock Option Plan of the Company (Incorporated by
reference to the same titled exhibit to the Company's
Registration Statement on Form S-1, File No. 33-83938).
10.2 Employment Agreement between the Company and Keren B.
Wilson (Incorporated by reference to the same titled
exhibit to the Company's Registration Statement on Form
S-1, File No. 33-83938).
10.3 Amendment to 1994 Stock Option Plan (Incorporated by
reference to the same titled
</TABLE>
1
<PAGE>
<TABLE>
<C> <S>
exhibit to the Company's Registration Statement on Form
S-8, File No. 333-2352).
12.1 Computation of Ratio of Earnings to Fixed Charges
(Incorporated by reference to the same titled exhibit to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1996).
23.1 Consent of Latham & Watkins (included in Exhibit 5.1).
23.2 Consent of Schreck, Jones, Bernhard, Woloson & Godfrey
(included in Exhibit 5.2).
23.3 Consent of Price Waterhouse LLP.
23.4 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney (previously filed).
25.1 Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of the Trustee
(previously filed).
</TABLE>
2
<PAGE>
EXHIBIT 23.3
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our reports
dated March 17, 1995 which appear on pages 30 and 31 of Assisted Living
Concepts, Inc.'s Annual Report on Form 10-K for the period ended December 31,
1996 relating to the financial statements of Assisted Living Concepts Group
(which is composed of Assisted Living Facilities, Inc., a subchapter S
Corporation, Madras Elder Care (dba Aspen Court), a general partnership, and
Lincoln City Partners, a general partnership) for eleven months ended November
30, 1994 and of Assisted Living Concepts, Inc. for the one month period ended
December 31, 1994. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Portland, Oregon
March 25, 1997
<PAGE>
Exhibit 23.4
Consent of Certified Public Accountants
The Board of Directors and Shareholders
Assisted Living Concepts, Inc.
We consent to the use of our report incorporated herein by reference and the
reference to our firm under heading "Experts" in the Prospectus.
/s/ KPMG Peat Marwick LLP
March 31, 1997
