<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 31, 1996
Commission file number 0-26980
ARV ASSISTED LIVING, INC.
CALIFORNIA 33-016098
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
33-95712
(COMMISSION FILE NO.)
245 FISCHER AVENUE, D-1 92626
COSTA MESA, CA (ZIP CODE)
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 751-7400
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The Registrant submits this Form 8-K/A in order to supply the financial
statements and schedules required pursuant to Rule 3-14 of Regulation S-X and
to provide the audited Historical Summary of Gross Income and Direct Operating
Expenses of the Cardinal Retirement Village of Bedford not previously available
when the Registrant filed its 8-K/A on April 15, 1996. This information should
be read in conjunction with the Registrant's Form 8-K filed with the Commission
on February 15, 1996 and Form 8-K/A filed with the Commission on April 15, 1996
and incorporated herein by reference.
(a) Financial Statements of Real Estate Operations Acquired
(1) "Historical Summary of Gross Income and Direct Operating
Expenses of Cardinal Retirement Village of Bedford for the
year ended December 31, 1995."
(2) A statement showing the estimated taxable operating results
for the Retirement Village of Bedford based on its most recent
12-month period.
(3) "Unaudited Proforma Combined Balance Sheet of ARV Assisted
Living, Inc. As of December 31, 1995 and the Unaudited Pro
Forma Combined Statement of Operations for the year ended
March 31, 1995 and the Unaudited Pro Forma Combined Statement
of Operations for the nine months ended December 31, 1995 and
the related notes thereon."
1
<PAGE> 3
CARDINAL RETIREMENT VILLAGE
OF BEDFORD
Historical Summary of Gross Income
and Direct Operating Expenses
December 31, 1995
(With Independent Auditors' Report Thereon)
2
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
ARV Assisted Living, Inc.:
We have audited the accompanying historical summary of gross income and direct
operating expenses of Cardinal Retirement Village of Bedford for the year ended
December 31, 1995. This financial statement is the responsibility of Cardinal
Retirement Village of Bedford's management. Our responsibility is to express
an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the historical summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in that financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying historical summary of gross income and direct operating
expenses was prepared for inclusion in the Form 8-K/A of ARV Assisted Living,
Inc. and excludes certain material revenue and expenses, described in note 2,
that would not be comparable to those resulting from the proposed future
operations of the property.
In our opinion, the historical summary of gross income and direct operating
expenses referred to above presents fairly, in all material respects, the
revenue and expenses, as described in note 2, of Cardinal Retirement Village of
Bedford for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
/s/ KMPG PEAT MARWICK LLP
Lexington, Kentucky
April 12, 1996
3
<PAGE> 5
CARDINAL RETIREMENT VILLAGE OF BEDFORD
Historical Summary of Gross Income and Direct Operating Expenses
For the year ended December 31, 1995
<TABLE>
<S> <C>
Gross income:
Independent living income $1,924,877
Other resident services 122,203
----------
Total income 2,047,080
----------
Direct operating expenses:
Administrative expense 336,518
Cafeteria expense 369,000
Assisted living expense 94,029
Plant and operations 91,696
Property taxes 110,098
Utilities 202,024
Activities expense 32,269
Housekeeping expense 90,364
----------
Total direct operating expenses 1,325,998
----------
Income in excess of direct operating expenses $ 721,082
==========
</TABLE>
See accompanying notes to historical summary.
4
<PAGE> 6
CARDINAL RETIREMENT VILLAGE OF BEDFORD
Notes to Historical Summary of Gross Income and Direct Operating Expenses
For the year ended December 31, 1995
(1) ORGANIZATION
Cardinal Retirement Village of Bedford is a 227-unit assisted living
facility for senior citizens located in Cleveland, Ohio, which was
acquired by ARV Assisted Living, Inc. in February 1996.
(2) BASIS OF PRESENTATION
The Historical Summary presents only specified gross income and direct
operating expenses of Cardinal Retirement Village of Bedford for the
year ended December 31, 1995. The Historical Summary has been
prepared on the accrual basis of accounting.
INCOME
Cardinal Retirement Village's revenues are generated from rental
agreements with tenants on a month-to-month basis. Only revenue from
the rental agreements and other resident services are included in
total income. All other revenue has been excluded from the Historical
Summary, which are not comparable to the proposed operations of
Cardinal Retirement Village of Bedford.
EXPENSES
Expenses include costs associated with the rental operations and the
general administration of the facility, which are comparable to the
proposed future operations of Cardinal Retirement Village of Bedford.
Certain expenses, including interest, accounting, management fees,
depreciation, amortization and legal fees, have been excluded from the
Historical Summary.
5
<PAGE> 7
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Combined Financial Statements give effect to
the acquisitions of the Retirement Village of Bedford ("Bedford") and Bella
Vita, the leasing of Buena Vista Knolls, and the acquisition or lease of other
properties and partnership interests acquired since January 1, 1995. As is
more fully described in the Notes to Unaudited Pro Forma Combined Financial
Statements, the pro forma balance sheet data and statement of operations data
for the acquired and leased properties and the pro forma adjustments with
respect thereto, have been combined to facilitate the presentation. The
Unaudited Pro Forma Combined Financial Statements are based on the assumptions
and adjustments described in the accompanying notes and should be read in
conjunction therewith and in conjunction with the historical financial
statements of ARV Assisted Living, Inc. and subsidiaries ("ARVAL" or the
"Company") and the notes thereto included in the Company's report on Form 10-Q
as of and for the nine month period ended December 31, 1995 and the Company's
consolidated financial statements as of and for the year ended March 31, 1995.
The Unaudited Pro Forma Combined Financial Statements do not purport to
present the financial position or the results of operations of ARVAL had the
transaction assumed therein occurred on the dates indicated, nor are they
necessarily indicative of the results of operations which may be achieved in
the future.
6
<PAGE> 8
ARV ASSISTED LIVING, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
December 31, 1995
<TABLE>
<CAPTION>
Acquired or
Historical Leased Pro Forma
ARVAL Facilities Adjustments
------------ ------------- -------------
<S> <C> <C> <C>
ASSETS
Cash $ 34,085,000 $ (14,732,000) $ --
Management fees receivable from third parties 5,000 -- --
Fees receivable from affiliates 307,000 -- --
Amounts due from affiliates 575,000 -- --
Deferred project costs 1,884,000 -- --
Investments in real estate 3,513,000 -- --
Escrow deposits 2,175,000 --
Other assets 1,139,000 80,000 --
------------ ------------- ------------
Total current assets 43,683,000 (14,652,000) --
Restricted cash 3,869,000 --
Property, furniture and equipment 10,771,000 21,926,000
Notes receivable from affiliates 1,736,000 -- (1,174,000)(k)
Deferred cost of conv. debt offering -- --
Deferred tax asset 1,644,000 -- --
Other non-current assets 4,679,000 703,000 --
------------ ------------- ------------
Total non-current assets 22,699,000 22,629,000 (1,174,000)
------------ ------------- ------------
Total assets $ 66,382,000 $ 7,977,000 $ (1,174,000)
============ ============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 2,298,000 $ 193,000 --
Deferred revenue, current portion 46,000 -- --
Owner's equity contributions payable 260,000 -- --
Notes payable, current portion 1,654,000 1,358,000 (1,174,000)(k)
Notes payable and other amounts due to affiliates 89,000 33,000 --
------------ ------------- ------------
Total current liabilities 4,347,000 1,584,000 (1,174,000)
Deferred revenue 1,891,000 -- --
Convertible notes payable -- --
Notes payable, less current portion 17,150,000 6,393,000
Losses in excess of investment in partnership 1,000 -- --
------------ ------------- ------------
Total non-current liabilities 19,042,000 6,393,000 --
Total liabilities 23,389,000 7,977,000 (1,174,000)
Minority interest in joint venture 840,000 -- --
Series A preferred stock 4,585,000 -- --
Shareholders' equity:
Common stock 45,420,000 --
Less receivable from ESOP -- -- --
Accumulated deficit (7,852,000) --
------------ ------------- ------------
Total shareholders' equity (deficit) 37,568,000 -- --
------------ ------------- ------------
Total liabilities and shareholders' equity $ 66,382,000 $ 7,977,000 $ (1,174,000)
============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Pro Forma Pro Forma
ARVAL Adjustments Combined
------------ ------------- -------------
<S> <C> <C> <C>
ASSETS
Cash $ 19,353,000 $ (4,000,000)(i) $ 6,503,000
(8,850,000)(j)
Management fees receivable from third parties 5,000 -- 5,000
Fees receivable from affiliates 307,000 -- 307,000
Amounts due from affiliates 575,000 -- 575,000
Deferred project costs 1,884,000 -- 1,884,000
Investments in real estate 3,513,000 -- 3,513,000
Escrow deposits 2,175,000 -- 2,175,000
Other assets 1,219,000 17,000 (j) 1,236,000
------------ ------------- ------------
Total current assets 29,031,000 (12,833,000) 16,198,000
Restricted cash 3,869,000 3,869,000
Property, furniture and equipment 32,697,000 10,300,000 (i) 51,898,000
8,901,000 (j)
Notes receivable from affiliates 562,000 -- 562,000
Deferred cost of conv. debt offering -- -- --
Deferred tax asset 1,644,000 -- 1,644,000
Other non-current assets 5,382,000 -- 5,382,000
------------ ------------- ------------
Total non-current assets 44,154,000 19,201,000 63,355,000
------------ ------------- ------------
Total assets $ 73,185,000 $ 6,368,000 $ 79,553,000
============ ============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 2,491,000 68,000 (j) $ 2,559,000
Deferred revenue, current portion 46,000 -- 46,000
Owner's equity contributions payable 260,000 -- 260,000
Notes payable, current portion 1,838,000 -- 1,838,000
Notes payable and other amounts due to affiliates 122,000 -- 122,000
------------ ------------- ------------
Total current liabilities 4,757,000 68,000 4,825,000
Deferred revenue 1,891,000 -- 1,891,000
Convertible notes payable -- -- --
Notes payable, less current portion 23,543,000 6,300,000 (i) 29,843,000
Losses in excess of investment in partnership 1,000 -- 1,000
------------ ------------- ------------
Total non-current liabilities 25,435,000 6,300,000 31,735,000
Total liabilities 30,192,000 6,368,000 36,560,000
Minority interest in joint venture 840,000 -- 840,000
Series A preferred stock 4,585,000 (4,585,000)(h) --
Shareholders' equity:
Common stock 45,420,000 4,585,000 (h) 50,005,000
Less receivable from ESOP -- -- --
Accumulated deficit (7,852,000) -- (7,852,000)
------------ ------------- ------------
Total shareholders' equity (deficit) 37,568,000 4,585,000 42,153,000
------------ ------------- ------------
Total liabilities and shareholders' equity $ 73,185,000 $ 6,368,000 $ 79,553,000
============ ============= ============
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
7
<PAGE> 9
ARV ASSISTED LIVING, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
Year Ended March 31, 1995
<TABLE>
<CAPTION>
Acquired or
Historical Leased Pro Forma Pro Forma Bella Vita
ARVAL Facilities Adjustments ARVAL Acquisition
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues
Assisted living facility revenues $ 4,838,000 $ 35,520,000 (a) $ - $ 40,358,000 $ 2,472,000 (a)
Management fees from affiliate 3,463,000 - (1,318,000) (b) 2,145,000 -
Management fees from other - - - -
Development and construction fees 702,000 - - 702,000 -
Other income 476,000 - - 476,000 -
------------ ------------ ------------ ------------ ------------
Total revenue $ 9,479,000 $ 35,520,000 $ (1,318,000) $ 43,681,000 $ 2,472,000
Expenses
Assisted living facility operating expenses $ 3,201,000 $ 24,133,000 (c) $ - $ 27,334,000 $ 1,471,000 (c)
Assisted living facility issued expenses 814,000 9,215,000 (d) - 10,029,000 -
ESOP contribution - - - -
General and administrative 8,264,000 - 80,000 (b) 8,344,000 -
Depreciation and amortization 320,000 702,000 (e) - 1,022,000 308,000 (e)
Bad debts 1,465,000 - - 1,465,000 -
Interest, net 143,000 949,000 (f) 717,000 (f) 1,809,000 -
------------ ------------ ------------ ------------ ------------
Total expenses $ 14,207,000 $ 34,999,000 $ 797,000 $ 50,003,000 $ 1,779,000
------------ ------------ ------------ ------------ ------------
Income (loss) before income tax
expense (benefit) $ (4,728,000) $ 521,000 $ (2,115,000) $ (6,322,000) $ 693,000
Income tax expense (benefit) (1,729,000) 177,000 (g) (719,000) (g) (2,271,000) 236,000 (g)
------------ ------------ ------------ ------------ ------------
Net loss $ (2,999,000) $ 344,000 $ (1,396,000) $ (4,051,000) $ 457,000
============ ============ ============ ============ ============
Preferred dividends paid $ 398,000 $ (398,000) (h) $ -
------------ ------------ ------------
Net loss available for common shares $ (3,397,000) $ (998,000) $ (4,051,000)
============ ============ ============
Net loss per common share $ (0.69) $ (0.73)
============ ============
Weighted average common shares outstanding 4,903,000 658,000 (h) 5,561,000
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Bedford Buena Vista Knolls Pro Forma Pro Forma
Acquisition Sale Leaseback Adjustments Combined
------------ ------------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues
Assisted living facility revenues $ 1,683,000 (a) $ 1,371,000 (a) $ - $ 45,884,000
Management fees from affiliate - - - 2,145,000
Management fees from other - - - -
Development and construction fees - - - 702,000
Other income - - - 476,000
------------ ------------ ------------ ------------
Total revenue $ 1,683,000 $ 1,371,000 $ - $ 49,207,000
Expenses
Assisted living facility operating expenses $ 1,128,000 (c) $ 1,068,000 (c) $ - $ 31,001,000
Assisted living facility issued expenses - 379,000 (d) - 10,408,000
ESOP contribution - - - -
General and administrative - - - 8,344,000
Depreciation and amortization 239,000 (e) - - 1,569,000
Bad debts - - - 1,465,000
Interest, net - - 591,000 (f) 2,400,000
------------ ------------ ------------ ------------
Total expenses $ 1,367,000 $ 1,447,000 $ 591,000 $ 55,187,000
------------ ------------ ------------ ------------
Income (loss) before income tax
expense (benefit) $ 316,000 $ (76,000) $ (591,000) $ (5,930,000)
Income tax expense (benefit) 107,000 (g) (26,000) (g) (201,000) (g) (2,155,000)
------------ ------------ ------------ ------------
Net loss $ 209,000 $ (50,000) $ (390,000) $ (3,825,000)
============ ============ ============ ============
Preferred dividends paid $ -
------------
Net loss available for common shares $ (3,825,000)
============
Net loss per common share $ (0.69)
============
Weighted average common shares outstanding 5,561,000
============
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
8
<PAGE> 10
ARV ASSISTED LIVING, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
Nine Months Ended December 31, 1995
<TABLE>
<CAPTION>
Acquired or
Historical Leased Pro Forma Pro Forma Bella Vita
ARVAL Facilities Adjustments ARVAL Acquisition
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue:
Assisted living facility revenues $ 14,803,000 $19,517,000(a) $ -- $34,340,000 $1,942,000(a)
Management fees from affiliates 2,202,000 -- (583,000)(b) 1,619,000 --
Management fees from other -- -- -- --
Development and construction fees 834,000 -- -- 834,000 --
Other income 1,824,000 -- -- 1,824,000 --
------------ ----------- ----------- ----------- ----------
Total revenue $ 19,663,000 $19,517,000 $ (583,000) $38,597,000 $1,942,000
Expenses:
Assisted living facility operating expenses $ 9,595,000 $13,833,000(c) $ -- $23,428,000 $1,155,000(c)
Assisted living facility lease expenses 4,179,000 3,471,000(d) -- 7,650,000 --
ESOP contribution -- -- -- -- --
General and administrative 5,745,000 -- 42,000(e) 5,787,000 --
Depreciation and amortization 566,000 555,000(e) -- 1,121,000 231,000(e)
Bad debts 377,000 -- -- 377,000 --
Interest, net 196,000 606,000(f) 403,000(f) 1,205,000 --
------------ ----------- ----------- ----------- ----------
Total expenses $ 20,658,000 $18,465,000 $ 445,000 $39,568,000 $1,386,000
Income (loss) before income tax ------------ ----------- ----------- ----------- ----------
(expense) benefit $ (995,000) $ 1,052,000 $(1,028,000) $ (971,000) $ 556,000
Income tax expense (benefit) 273,000 357,000(g) (350,000)(g) 280,000 190,000(g)
------------ ----------- ----------- ----------- ----------
Net loss $(1,268,000) $ 695,000 $ (678,000) $(1,251,000) $ 366,000
============ =========== =========== =========== ==========
Preferred dividends paid $ 300,000 $ (300,000)(k) $ --
------------ ----------- -----------
Net loss available for common shares $ (1,568,000) $ (378,000) $(1,251,000)
============ =========== ===========
Net loss per common share $ (0.28) $ (0.20)
============ ===========
Weighted average common shares outstanding 5,638,000 $ 658,000(k) $ 6,296,000
============ =========== ===========
<CAPTION>
Buena Vista
Bedford Knolls Pro Forma Pro Forma
Acquisition Sale Leaseback Adjustments Combined
------------ -------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Assisted living facility revenues $1,524,000(a) $1,209,000(a) $ -- $38,995,000
Management fees from affiliates -- -- -- 1,619,000
Management fees from other -- -- --
Development and construction fees -- -- -- 834,000
Other income -- -- -- 1,824,000
---------- ---------- ----------- -----------
Total revenue $1,524,000 $1,209,000 $ -- $43,272,000
Expenses:
Assisted living facility operating expenses $ 887,000(c) $ 803,000(c) $ -- $26,273,000
Assisted living facility lease expenses -- 284,000(d) -- 7,934,000
ESOP contribution -- -- -- --
General and administrative -- -- -- 5,787,000
Depreciation and amortization 180,000(e) -- -- 1,532,000
Bad debts -- -- -- 377,000
Interest, net -- -- 420,000(f) 1,625,000
---------- ---------- ----------- -----------
Total expenses $1,067,000 $1,087,000 $ 420,000 $43,528,000
Income (loss) before income tax ---------- ---------- ----------- -----------
(expense) benefit $ 457,000 $ 122,000 $ (420,000) $ (256,000)
Income tax expense (benefit) 155,000(g) 42,000(g) (143,000)(g) 524,000
---------- ---------- ----------- -----------
Net loss $ 302,000 $ 80,000 $ (277,000) $ (780,000)
========== ========== =========== ===========
Preferred dividends paid $ --
-----------
Net loss available for common shares $ (780,000)
===========
Net loss per common share $ (0.12)
===========
Weighted average common shares outstanding $ 6,296,000
===========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
9
<PAGE> 11
ARV ASSISTED LIVING, INC. AND
SUBSIDIARIES NOTES TO UNAUDITED PRO
FORMA COMBINED FINANCIAL STATEMENTS
(1) As of March 11, 1996, the Company has acquired 22 assisted living
facilities since January 1, 1995, through direct purchases for its own
account, long-term operating lease, or purchases of controlling
partnership interests. The Company issued approximately $15 million
of 10% Convertible Subordinated Notes in July 1995 and raised
approximately $43 million (net proceeds) through the sale of its
common stock in an initial public offering in October 1995 to finance
its acquisitions. As of February 7, 1996, the Company exercised its
right to redeem all outstanding shares of Series A preferred stock on
May 9, 1996. Preferred shareholders have the option of converting
their Series A preferred stock into common stock at any time prior to
April 29, 1996. The unaudited pro forma combined financial statements
assume all shares of Series A preferred stock will be converted into
common stock.
(2) On January 31, 1996, the Company completed the acquisition of the
Retirement Village of Bedford, a 217 unit assisted living facility
located in the city of Bedford, Ohio, for $8.9 million. On February 8,
1996, the Company entered into a long-term operating lease with
Nationwide Health Properties for Buena Vista Knolls, a 91 unit
assisted living facility located in the city of Vista, San Diego
County, California. On April 1, 1996, the Company also completed the
acquisition of Bella Vita, a 120 unit assisted living facility located
in Venice, Florida, for $10.3 million. Approximately $6.3 million of
the purchase price was financed by the Company's assumption of an
existing first mortgage loan.
(3) The Unaudited Pro Forma Combined Balance Sheet at December 31, 1995
presents the historical balance sheet of the Company as of December
31, 1995, the pro forma balance sheet of the Company as if the
acquisitions described in note (1) above, except for the acquisition
of the Retirement Village of Bedford and Bella Vita and the leasing of
Buena Vista Knolls, had been completed as of December 31, 1995, and
the pro forma balance sheet of the Company after giving effect to
acquisition of the Retirement Village of Bedford and Bella Vita and
the leasing of Buena Vista Knolls as if those events had also occurred
on December 31, 1995.
(4) The Unaudited Pro Forma Combined Statement of Operations for the year
ended March 31, 1995 and the nine months ended December 31, 1995
present the historical operations of the Company, the pro forma
operations of the Company as if the acquisitions and financing
transactions described in note (1) above, except for the acquisitions
and lease described in note (2), had occurred at the beginning of each
period, and the pro forma combined operations of the Company as if the
acquisitions and lease had occurred at the beginning of each period.
(5) Pro forma adjustments are as follows:
(a) To reflect the assisted living facility revenue of the
acquired facilities
(b) To reflect the decrease in property management and partnership
administration fees received from assisted living facilities
formerly managed and currently owned or leased by the Company
(c) To reflect the increase in assisted living facility operating
expenses
(d) To reflect the increase in assisted living facility lease
expense
(e) To reflect the increase in depreciation expense
(f) To reflect the increase in interest expense for the interest
incurred on debt assumed, the interest related to the issuance
of the 10% Convertible Subordinated Notes, offset by interest
income on the unused portion of the financings at an assumed
rate of 5%
(g) To reflect the pro forma change in income tax expense
(benefit)
(h) To reflect the pro forma change in preferred stock and common
stock and the decrease in preferred dividends due to the
assumed conversion of Series A preferred stock into common
stock increasing the weighted average shares outstanding by
658,000 shares
(i) To reflect the acquisition of Bella Vita
(j) To reflect the acquisition of the Retirement Village of
Bedford
(k) To eliminate the note receivable and note payable between
entities.
10
<PAGE> 12
ARV Assisted Living, Inc.
Purchase of the Retirement Village of Bedford
Pro Forma Estimates of Cash Flow and Federal Taxable Income
For the Year Ended December 31, 1995
The following unaudited pro forma estimates present the cash flow and the
Federal Taxable Income of the Retirement Village of Bedford for the year ended
December 31, 1995 as if the Retirement Village of Bedford had been acquired on
January 1, 1995. The pro forma does not purport to represent operations of ARV
as a whole nor does it purport to represent actual or expected operations of
the Company for any period in the future. These estimates were prepared on the
basis described in the accompanying notes, which should be read in conjunction
herewith.
<TABLE>
<S> <C>
Estimate of Cash Flow:
Historical Operating Income 721,082
Less:
Property Taxes (60,000)
---------
Pro Forma Estimate of Cash Flow $ 661,082
=========
Estimate of Federal Taxable Income:
Pro Forma Estimate of Cash Flow $661,082
Less: Estimated Depreciation and
Amortization Expense (Federal Income Tax Basis) (201,000)
---------
Pro Forma Estimate of Federal Taxable Income $ 461,082
=========
</TABLE>
11
<PAGE> 13
CARDINAL RETIREMENT VILLAGE OF BEDFORD
Notes to Pro Forma Estimate of Cash Flow and Federal Taxable Income
For the Year Ended December 31,1995
(1) Historical Operating Income
Historical operating income is based upon the excess of operating
revenues over certain expenses of the Cardinal Retirement Village of
Bedford (the "Facility") for the year ended December 31, 1995.
(2) Property Taxes
Property taxes are estimated based upon reassessment of the Property
at its purchase price.
12
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ARV Assisted Living, Inc.
By: /s/ Patrick M. Donovan
---------------------------
Patrick M. Donovan
Vice President Finance
(Duly authorized officer)
Date: August 19, 1996
13
