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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-Q
---------------
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO ___________
COMMISSION FILE NUMBER: 0-26980
ARV ASSISTED LIVING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0160968
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
245 FISCHER AVENUE, D-1
COSTA MESA, CA 92626
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 751-7400
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
The number of outstanding shares of the Registrant's Common Stock, no par value,
as of May 12, 2001 was 17,459,689.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ARV ASSISTED LIVING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
ASSETS
MARCH 31, DECEMBER 31,
2001 2000
--------- ------------
Current assets:
Cash and cash equivalents .............................. $ 17,342 $ 16,817
Accounts receivable and amounts due from affiliates .... 722 829
Prepaids and other current assets ...................... 5,833 5,547
Properties held for sale, net .......................... 3,295 3,545
--------- ---------
Total current assets ........................... 27,192 26,738
Property, furniture and equipment, net ................... 100,067 100,461
Goodwill, net ............................................ 18,793 18,939
Operating lease security deposits ........................ 9,779 9,778
Other non-current assets ................................. 9,947 10,024
--------- ---------
$ 165,778 $ 165,940
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ....................................... $ 890 $ 2,645
Accrued liabilities .................................... 10,950 11,956
Notes payable, current portion ......................... 4,921 1,071
Accrued interest payable ............................... 986 599
--------- ---------
Total current liabilities ...................... 17,747 16,271
Notes payable, less current portion ...................... 95,816 99,130
Lease liabilities ........................................ 1,813 1,752
Other non-current liabilities ............................ 750 789
--------- ---------
116,126 117,942
--------- ---------
Minority interest in majority owned entities ............. 1,119 1,130
Shareholders' equity:
Series A Preferred stock, convertible and redeemable;
2,000 shares authorized, none issued or outstanding at
March 31, 2001 and December 31, 2000 ................. -- --
Preferred stock, no par value. 8,000 shares authorized,
none issued and outstanding .......................... -- --
Common stock, $0.01 par value. Authorized 100,000
shares; 17,460 shares issued and outstanding at March
31, 2001 and December 31, 2000, respectively ......... 175 175
Additional paid in capital ............................. 145,337 145,337
Accumulated deficit .................................... (96,979) (98,644)
--------- ---------
Total shareholders' equity ..................... 48,533 46,868
--------- ---------
Commitments and contingencies:
$ 165,778 $ 165,940
========= =========
See accompanying notes to unaudited condensed consolidated financial statements.
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ARV ASSISTED LIVING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
MARCH 31,
---------------------------
2001 2000 NOTE(1)
-------- ------------
Revenue:
Assisted living community revenue:
Rental revenue .......................................... $ 28,668 $ 28,289
Assisted living and other services ...................... 5,905 6,389
Skilled nursing facility revenue ........................ 551 --
Management fees from others and affiliates .............. 319 215
-------- --------
Total revenue ............................ 35,443 34,893
-------- --------
Operating expenses:
Assisted living community operating expense ............... 21,647 22,686
Skilled nursing facility expenses ......................... 571 --
Assisted living community lease expense ................... 7,708 8,388
General and administrative ................................ 2,669 2,863
Depreciation and amortization ............................. 2,012 2,109
-------- --------
Total operating expenses ................ 34,607 36,046
-------- --------
Income (loss) from operations ............................... 836 (1,153)
Other income (expense):
Interest income ........................................... 434 314
Other income, net ......................................... 35 4
Gain on sale of assets .................................... 2,887 --
Interest expense .......................................... (2,318) (2,212)
-------- --------
Total other income (expense) ............ 1,038 (1,894)
-------- --------
Income (loss) from continuing operations before income tax
expense, minority interest in income of majority owned
entities and extraordinary item ........................... 1,874 (3,047)
Income tax expense .......................................... 23 8
-------- --------
Income (loss) from continuing operations before minority
interest in income of majority owned entities and
extraordinary item ........................................ 1,851 (3,055)
Minority interest in (income) loss of majority owned entities (130) 67
-------- --------
Income (loss) from continuing operations before
extraordinary item ........................................ 1,721 (2,988)
Extraordinary gain (loss) from early extinguishment of debt,
net of income tax ......................................... (56) 5,413
-------- --------
Net income ......................................... $ 1,665 $ 2,425
======== ========
Basic and diluted income (loss) per common share:
Loss from continuing operations before extraordinary item . $ 0.10 $ (0.18)
Extraordinary gain from early extinguishment of debt, net
of income tax ............................................ -- 0.32
-------- --------
Net income ......................................... $ 0.10 $ 0.14
======== ========
Weighted average common shares outstanding .................. 17,460 17,048
======== ========
See accompanying notes to unaudited condensed consolidated financial statements.
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ARV ASSISTED LIVING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(UNAUDITED)
(IN THOUSANDS)
THREE MONTHS ENDED
MARCH 31,
-------------------------
2001 2000
-------- --------
Net cash provided by (used in) operating activities: ........ $ 1,500 $ (505)
Cash flows provided by (used in) investing activities:
Proceeds from the sale of partnership interests,
net of cost ............................................. 2,887 713
Additions to property, furniture and equipment ............ (1,206) (863)
(Increase) decrease in property held for sale ............. 153 (78)
Increase in leased property security deposits ............. (1) (5)
-------- --------
Net cash provided by investing activities 1,833 (233)
-------- --------
Cash flows used in financing activities:
Borrowings under refinancing for owned communities ........ 10,227 --
Repayments of notes payable ............................... (9,731) (271)
Payment of partnership obligations......................... (2,887)
Repayments of subordinated debt ........................... -- (984)
Distributions from majority owned entities ................ (73) (149)
Mortgage insurance ........................................ (200) --
Loan fees ................................................. (144) (11)
-------- --------
Net cash used in financing activities (2,808) (1,415)
-------- --------
Net (decrease) increase in cash and cash equivalents 525 (2,153)
Cash and cash equivalents at beginning of period ............ 16,817 14,570
-------- --------
Cash and cash equivalents at end of period .................. $ 17,342 $ 12,417
======== ========
Supplemental schedule of cash flow information:
Cash paid during the period for:
Interest .................................................. $ 1,931 $ 1,640
======== ========
Income taxes .............................................. $ 23 $ 8
======== ========
Supplemental schedule of non-cash investing activities:
Conversion of subordinated notes to common stock .......... $ -- $ 1,232
======== ========
See accompanying notes to unaudited condensed consolidated financial statements.
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ARV ASSISTED LIVING, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001 and 2000
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
We prepared the accompanying condensed consolidated financial statements of ARV
Assisted Living, Inc. and subsidiaries ("the Company" or "ARV") following the
requirements of the Securities and Exchange Commission ("SEC") for interim
reporting. As permitted under those rules, certain footnotes or other financial
information that are normally required by generally accepted accounting
principles ("GAAP") can be condensed or omitted. We have reclassified certain
prior year data to conform to the 2001 presentation.
The financial statements include all normal and recurring adjustments that we
consider necessary for the fair presentation of our financial position and
operating results. These are condensed financial statements. To obtain a more
detailed understanding of our results, you should also read the financial
statements and notes in our Form 10-K for 2000, which is on file with the SEC.
The results of operations can vary during each quarter of the year. Therefore,
the results and trends in these interim financial statements may not be the same
as those for the full year.
PRINCIPLES OF CONSOLIDATION
The condensed consolidated financial statements include the accounts of the
Company and our subsidiaries. Subsidiaries, which include limited partnerships
in which we have controlling interests, have been consolidated into the
financial statements. All significant intercompany balances and transactions
have been eliminated in consolidation.
CARRYING VALUE OF REAL ESTATE
Property, furniture and equipment are stated at cost less accumulated
depreciation which is charged to expense on a straight-line basis over the
estimated useful lives of the assets as follows:
Buildings and improvements .................. 27.5 to 35 years
Leasehold property and improvements ......... Lease term
Furniture, fixtures and equipment ........... 3 to 7 years
We review our long-lived assets for impairment when events or changes in
circumstances indicate that the carrying amount of the assets may not be
recoverable. In reviewing recoverability, we estimate the future cash flows
expected to result from using the assets and eventually disposing of them. If
the sum of the expected future cash flows (undiscounted and without interest
charges) is less than the carrying amount of the asset, an impairment loss is
recognized based upon the asset's fair value.
USE OF ESTIMATES
In preparing the financial statements conforming with GAAP, we have made
estimates and assumptions that affect the following:
o reported amounts of assets and liabilities at the date of the financial
statements;
o disclosure of contingent assets and liabilities at the date of the
financial statements; and
o reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CASH AND EQUIVALENTS
For purposes of reporting cash flows, we consider all highly liquid investments
purchased with an original maturity of three months or less to be cash
equivalents.
EARNINGS (LOSS) PER SHARE
Basic earnings per share ("EPS") excludes all dilution and is based upon the
weighted average number of common shares outstanding during the period. Diluted
EPS reflects the potential dilution that would occur if securities or other
contracts to issue common stock were exercised, or converted into common stock.
The effect of potentially dilutive securities was not included for any of the
periods presented as the effect was antidilutive. Potentially dilutive
securities include convertible notes and stock options, which convert to
17,736,056 and 26,081,865 shares of common stock for the three-month periods
ended March 31, 2001 and 2000, respectively.
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ACCOUNTING FOR LONG-LIVED ASSETS
We review our long-lived assets, including goodwill, for impairment when events
or changes in circumstances indicate that the carrying amount of the assets may
not be recoverable. In reviewing recoverability, we estimate the future cash
flows expected to result from using the assets and eventually disposing of them.
Cash flows are reviewed at the community level which is the lowest level of
identifiable cash flows. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the asset, an impairment loss is recognized based upon the asset's fair value.
For long-lived assets held for sale fair value is reduced for costs to sell.
REVENUE RECOGNITION
We recognize rental, assisted living services and skilled nursing facility
revenue from owned and leased communities on a monthly basis as earned. We
receive fees for property management and partnership administration services
from managed communities and recognize such fees as earned.
ASSISTED LIVING COMMUNITY SALE-LEASEBACK TRANSACTIONS
Certain communities were sold subject to leaseback provisions under operating
leases. Gains where recorded were deferred and amortized into income over the
lives of the leases.
RESTATEMENT
In the fourth quarter 2000 we determined that costs related to the early
extinguishment of debt in prior quarters had not been written off. Accordingly,
the results previously reported for the quarter ended March 31, 2000 decreased
net income by $200,000.
(2) NOTES PAYABLE
Notes payable consist of the following at March 31, 2001 and December 31,
2000 (in thousands):
MARCH 31, DECEMBER 31,
2001 2000
-------- -----------
Convertible subordinated notes due April 1, 2006 with
interest at 6.75%. The notes require semi-annual payments of
interest and are convertible to common stock at $18.57 per
share. The notes may be called by us at declining premiums
starting at 110% of the principal amount...................... $ 15,253 $ 15,253
Notes payable, bearing interest at fixed rates between 8.53%
and 9.5%, payable in monthly installments of principal and
interest totaling $39.4 thousand collateralized by property,
maturities ranging from November 2000 through January 2002.... 4,159 13,752
Notes payable, bearing interest at floating rates of 30 day
LIBOR (4.44% at March 31, 2001) plus points between 2.25 and
2.50 payable in monthly installments of interest only
collateralized by Owned ALCs, maturities ranging from August
2002 through October 2002..................................... 18,893 18,972
Notes payable, bearing interest at rates of 8.00% and 8.53%,
payable in monthly installments of principal and interest
totaling $373.4 thousand collateralized by property,
maturities ranging from July 2010 to January 2036............. 51,101 40,932
Notes payable to shareholder bearing interest beginning
April 2001 at 30-day Treasury rate with principal due
and payable April 2002........................................ 1,331 1,292
Notes payable to shareholder bearing interest at 30 day
LIBOR (4.44 at March 31, 2001) plus 10% payable in monthly
installments of interest only, unsecured, maturing April
2002 ......................................................... 10,000 10,000
-------- --------
100,737 100,201
Less amounts payable in the next year......................... 4,921 1,071
-------- --------
$ 95,816 $ 99,130
======== ========
The future annual principal payments of the notes payable at March 31, 2001
are as follows (in thousands):
Twelve month period ending March 31, 2002......................... $ 4,921
Twelve month period ending March 31, 2003......................... 20,221
Twelve month period ending March 31, 2004......................... 10,429
Twelve month period ending March 31, 2005......................... 465
Twelve month period ending March 31, 2006......................... 505
Thereafter........................................................ 64,196
--------
$100,737
========
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In the quarter ended March 31, 2001, certain notes payable were refinanced and
the prior debt extinguished, resulting in an extraordinary loss due to the
remaining costs which were written off at the time of the refinancing.
(3) LIQUIDITY
We believe that our existing liquidity, ability to sell assisted living
communities and land sites which do not meet our financial objectives or
geographic clustering strategy, and ability to refinance certain assisted living
communities will provide adequate resources to meet our current operating and
investing needs and support our current growth plans for the next 12 months. We
will be required from time to time to incur additional indebtedness or issue
additional debt or equity securities to finance our growth strategy, including
the acquisition and development of assisted living communities as well as other
capital expenditures and to provide additional funds to meet increased working
capital requirements.
(4) COMMITMENTS AND CONTINGENT LIABILITIES
Commitments
We have guaranteed the indebtedness at March 31, 2001, of certain unconsolidated
affiliated partnerships for $19.6 million.
With respect to loans totaling $19.6 million we are the general partner of
certain limited partnerships that serve as the sole members of the three
borrowing entities formed as limited liability companies. Although a member of a
limited liability company is not personally liable for any contract or other
obligation of that entity, we delivered limited guaranties in connection with
the loans. Due to the limited guaranties, we assumed liability for repayment of
the loan indebtedness as a result of fraudulent or intentional misconduct
regarding the mortgaged properties, an unconsented transfer of a mortgaged
property, a change of control by borrower, or violation of hazardous materials
covenants. Also, we guaranteed the borrower's obligation to rebalance the loans
upon breach of debt service coverage obligations.
In our opinion, no claims may be currently asserted under any of the
aforementioned guarantees based on the terms of the respective agreements, other
than those already accrued.
CONTINGENCIES
We have entered into two long-term leases of ALCs, the acquisition and
construction of which have been or are being financed by tax exempt multi-unit
housing revenue bonds. In order to meet the lease obligations and to allow the
landlord to continue to qualify for favorable tax treatment of the interest
payable on the bonds, the ALCs must comply with certain federal income tax
requirements. These requirements principally pertain to the maximum income level
of a specified portion of the residents. Should we elect to execute additional
leases for ALCs to be constructed with bond financing, we anticipate that the
same and possibly additional restrictions will be imposed. Failure to satisfy
these requirements will constitute an event of default under the leases, thereby
permitting the landlord to accelerate their termination. Failure to obtain
low-income residents in the sequence and time required could materially affect
the lease-up schedule and, therefore, cash flow from such ALCs.
LITIGATION
We are from time to time subject to lawsuits and other matters in the normal
course of business. While we cannot predict the results with certainty, we do
not believe that any liability from any such lawsuits or other matters will have
a material effect on our financial position, results of operations, or
liquidity.
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(5) RELATED PARTY TRANSACTIONS
On April 24, 2000, the company entered into a Term Loan Agreement with LFSRI II
Assisted Living LLC ("LFSRI"), an affiliate of Prometheus. As of May 7, 2001,
Prometheus beneficially owned approximately 47.8% of the company's outstanding
Common Stock. Pursuant to the Term Loan Agreement, the company may borrow up to
$10,000,000 from LFSRI with a maturity date of April 24, 2002, which, subject to
certain conditions, may be extended by one year if no default has occurred. The
outstanding amount under the loan bears interest at the annual rate equal to the
LIBOR rate for each interest period plus a 10% margin. At March 31, 2001, there
was $10,000,000 outstanding. In connection with the Term Loan Agreement, the
company issued to LFSRI a warrant to purchase up to 750,000 shares of the
company's Common Stock at a price of $3.00 per share, subject to various
adjustments exercisable until April 24, 2005. The company also amended its
stockholder rights agreement to prevent shares that Prometheus may be deemed to
beneficially own by reason of LFSRI's rights under the warrant from causing
Prometheus to become an "Acquiring Person" and thus causing a triggering event
under the rights agreement.
(6) SALE OF ASSETS
In January 2001, the Company sold its partnership interest in five tax credit
apartment partnerships to an unrelated third party. The company signed
guarantees required the company to meet certain federal income tax requirements.
These requirements principally pertain to the maximum income level of a
specified portion of the residents. Consequently, the company is still liable
for compliance of the community with these requirements for the period of time
we operated the facilities. We also guaranteed the indebtedness of the
communities for the lender which guarantees were released as part of the sale.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
FACTORS AFFECTING FUTURE RESULTS AND FORWARD-LOOKING STATEMENTS
This 10-Q report contains forward-looking statements, including statements
regarding, among other items:
o our business strategy;
o our liquidity requirements and ability to obtain financing;
o the impact of future acquisitions and developments;
o the level of future capital expenditures;
o the impact of inflation and changing prices; and
o the outcome of certain litigation matters.
These forward-looking statements are based on our expectations and are subject
to a number of risks and uncertainties, some of which are beyond our control.
These risks and uncertainties include, but are not limited to:
o access to capital necessary for acquisitions and development;
o our ability to manage growth;
o the successful integration of ALCs into our portfolio;
o governmental regulations;
o competition; and
o other risks associated with the assisted living industry.
Although we believe we have the resources required to achieve our objectives,
actual results could differ materially from those anticipated by these
forward-looking statements. There can be no assurances that events anticipated
by these forward-looking statements will in fact transpire as expected.
OVERVIEW
ARV Assisted Living, Inc. ("ARV" or the "Company"), a Delaware corporation
formed in 1998, is one of the largest operators of licensed assisted living
communities ("ALCs") in the United States. We are a fully integrated provider of
assisted living accommodations and services that operates, acquires and develops
ALCs. We have been involved in the senior housing business for more than 20
years. Our operating objective is to provide high quality, personalized assisted
living services to senior residents in a cost-effective manner, while
maintaining residents' independence, dignity and quality of life. Our ALCs offer
a combination of housing, personalized support services and health care in a
non-institutional setting. They are designed to respond to the individual needs
of elderly residents who require assistance with certain activities of daily
living, but who do not require the intensive nursing care provided in a skilled
nursing facility.
As of March 31, 2001, we operated a total of 55 ALCs containing 6,721 units, 15
of which are owned by us, 33 that are leased by us and 7 that are managed by us.
Owned ALCs ("Owned ALCs") are owned by us directly, or by affiliated limited
partnerships or limited liability companies for which we serve as managing
general partner or member and community manager and in which we have a majority
ownership interest ("Affiliated Partnerships"). Leased ALCs ("Leased ALCs") are
operated by us under long-term operating leases for our own account or for
Affiliated Partnerships in which we have a majority ownership interest. Managed
ALCs are operated by us on behalf of an affiliated partnership (in which we do
not have a majority ownership), joint ventures or an unrelated third-party. We
believe that this blend of ownership, leasehold and management interest in our
ALCs allows us to fund our operations in a balanced, efficient manner.
Since commencing operation of ALCs for our own account in April 1994, we have
focused our growth efforts on the acquisition and development of additional ALCs
and expansion of services to our residents while they reside in our communities.
As of March 31, 2001, a substantial portion of our business and operations were
conducted in California, where 37 of the 55 ALCs we operate are located. We
intend to continue to make California the primary focus of our geographic
clustering strategy. We are focusing greater attention on enhancing the
profitability of our existing core operations and on leasing up new developments
at an increased rate. In addition, we plan to divest ALCs that do not expand or
enhance one of our geographic clusters or do not meet our financial objectives.
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Newly opened ALCs are expected to incur operating losses until sufficient
occupancy levels and operating efficiencies are achieved. Based upon historical
experience, we believe that a typical community will achieve its targeted
occupancy levels 18 - 24 months from the commencement of operations.
Accordingly, we require substantial amounts of liquidity to maintain the
operations of newly opened ALCs. If sufficient occupancy levels are not achieved
within reasonable periods, our results of operations, financial position and
liquidity could be materially and adversely impacted.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2001 COMPARED WITH THREE MONTHS ENDED MARCH 31,
2000
The following table sets forth a comparison of the three months ended March 31,
2001 (the "2001 Quarter") and the three months ended March 31, 2000 (the "2000
Quarter").
Operating Results Before Extraordinary Item
For the Three Months Ended March 31, 2001 and 2000
(Unaudited)
(In millions)
FOR THE THREE MONTHS
ENDED MARCH 31,
-------------------- INCREASE/
(DOLLARS IN MILLIONS) 2001 2000 (DECREASE)
------ ------ ----------
Revenue:
Assisted living community revenue .................. $ 34.6 $ 34.7 (0.3)%
Skilled nursing facility revenue ................... 0.5 -- 100.0%
Management fees from affiliates and others ......... 0.3 0.2 48.4%
------ ------ ------
Total revenue .............................. 35.4 34.9 1.6%
------ ------ ------
Operating expenses:
Assisted living community operating expense ........ 21.6 22.7 (4.6)%
Skilled nursing facility expenses .................. 0.6 -- 100.0%
Assisted living community lease expense ............ 7.7 8.4 (8.1)%
General and administrative ......................... 2.7 2.9 (6.8)%
Depreciation and amortization ...................... 2.0 2.1 (4.6)%
------ ------ ------
Total operating expenses ................... 34.6 36.1 (4.0)%
------ ------ ------
Income (loss) from operations ........................ 0.8 (1.2) 172.5%
Other income (expense):
Interest income .................................... 0.4 0.3 38.2%
Gain on sale of assets ............................. 2.9 -- 100.0%
Interest expense ................................... (2.3) (2.2) 4.8%
------ ------ ------
Total other income (expense) ............... 1.0 (1.9) 154.8%
------ ------ ------
Income (loss) from operations before minority
interest in income of majority owned entities, and
extraordinary item ................................. 1.8 (3.1) 161.5%
Minority interest in income of majority owned entities (0.1) 0.1 (294.0)%
------ ------ ------
Income (loss) before extraordinary item .... $ 1.7 $ (3.0) 157.6%
====== ====== ======
Assisted living revenue decreased $0.1 million to $34.6 million for the three
months ended March 31, 2001 from $34.7 million for the three months ended March
30, 2000 This decrease was primarily due to:
o the reduction of the number of ALCs which we own or lease from 51 during
the 2000 Quarter to 48 during the 2001 Quarter; offset by
o an increase in average occupancy for ALCs which we own or lease to 88.5%
for the 2001 Quarter from 84.8% for the 2000 Quarter; and
o an increase in average rate per occupied unit for ALCs which we owned or
leased in both periods to $2,199 for the 2001 Quarter as compared to
$2,140 for the 2000 Quarter.
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Skilled nursing facility revenue of $0.5 million is included in our revenues for
the period ending March 31, 2001 as we began operating a skilled nursing
facility in April 2000, which had previously been managed by an unrelated third
party.
Management fees from affiliates and others increased $0.1 million to $0.3
million for the three months ended March 31, 2001 from $0.2 million for the
three months ended March 30, 2000. This increase was primarily due to the
opening of three new communities in the second and third quarters of 2000.
Assisted living community operating expenses decreased $1.1 million from $22.7
million for the quarter ending March 31, 2000 to $21.6 million for the quarter
ending March 31, 2001. This decrease was primarily due to the following:
o the reduction of the number of ALCs which we own or lease from 51 during
the 2000 Quarter to 48 during the 2001 Quarter; offset by
o an increase in worker's compensation and group insurance expenses; and
o an increase in utility expenses.
Skilled nursing expenses of $0.6 million were included in the quarter ending
March 31, 2001 as we began operating a skilled nursing facility in April 2000,
which had previously been managed by an unrelated third party.
Assisted living community lease expenses decreased $0.7 million to $7.7 million
for the three months ended March 31, 2001 from $8.4 million for the three months
ended March 31, 2000. The decrease was primarily due to the reduction in the
number of facilities leased for the three months ended March 31, 2001.
General and administrative expenses decreased $0.2 million to $2.7 million for
the three months ended March 31, 2001 from $2.9 million for the three months
ended March 31, 2000. This decrease was primarily due to management's efforts to
reduce costs at our corporate offices.
Depreciation and amortization expenses decreased $0.1 million to $2.0 million
for the three months ended March 31, 2001 from $2.1 million for the three months
ended March 31, 2000. This decrease was primarily due to the sale of communities
offset by depreciation on additional capital purchases.
Interest income increased by $0.1 million from $0.3 million for the quarter
ending March 31, 2000 to $0.4 million for the quarter ending March 31, 2001.
This increase was primarily due to the higher average cash balances we carried
during the 2001 Quarter as compared to the 2000 Quarter.
Gain on sale of assets of $2.9 million in the quarter ending March 31, 2001 was
the result of the sale of our interest in five tax credit apartment partnerships
that we had previously anticipated selling at a loss.
Interest expense increased by $0.1 million from $2.2 million for the quarter
ending March 31, 2000 to $2.3 million for the quarter ending March 31, 2001.
This increase was primarily due to increased borrowings.
Minority interest increased $0.2 million due to the income earned in the 2001
Quarter as compared to a loss incurred in the 2000 Quarter by our majority owned
partnerships.
LIQUIDITY AND CAPITAL RESOURCES
Our unrestricted cash balances increased $0.5 million from 16.8 million at
December 31, 2000 to $17.3 million at March 31, 2001. The increase was primarily
due to cash provided by operating activities, offset by cash used primarily for
purchases of property, furniture and equipment.
Working capital decreased $1.1 million from $10.5 million at December 31, 2000
to $9.4 million at March 31, 2001. The decrease was primarily due to the
reclassification of certain loans due in January of 2002 from long term
liabilities to short term liabilities. We are currently in the process of
refinancing these loans to extend their maturity dates.
11
12
During the quarter ending March 31, 2001 cash provided by operating activities
was $1.5 million compared to cash used in operating activities of $0.5 million
during the quarter ending March 31, 2000.
The cash provided by operating activities during the quarter ending March
31, 2001 was a result of:
net income of $1.7 million; adjusted for non-cash items of:
o $2.0 million of depreciation and amortization expense; and
o $0.6 million increase in net liabilities
o $0.1 million from minority interest income; offset by
o $2.9 million gain from the sale of tax credit partnerships
During the quarter ending March 31, 2001 cash used in investing activities was
$1.8 million compared to $0.2 million during the quarter ending March 31, 2000.
The cash used by investing activities during the 2001 quarter was a result
of:
o $2.9 million proceeds from the sale of tax credit apartment
partnerships; and
o $0.1 million decrease in the value of property held for sale; offset by
o $1.2 million expended for the purchase of property, furniture and
equipment.
During the quarter ending March 31, 2001 cash used in financing activities was
$2.8 million as compared to $1.4 million for the quarter ending March 31, 2000.
The used in financing activities during 2001 quarter was a result of:
o $9.7 million of repayments of notes payable;
o $2.9 million in payment of partnership obligations;
o $0.2 million of mortgage insurance;
o $0.1 million of loan fees; and
o $0.1 million of distributions paid to our minority partners in certain
majority owned entities; offset by
o $10.2 million of borrowing under notes payable; and
The various debt and lease agreements contain restrictive covenants requiring us
to maintain certain financial ratios, including current ratio, working capital,
minimum net worth, and debt service coverage, among others. At March 31, 2001,
we were in compliance with the covenants of the various debt and lease
agreements.
We believe that our existing liquidity, ability to sell ALCs and land sites
which do not meet our financial objectives or geographic strategy, and ability
to refinance certain Owned ALCs and investments will provide adequate resources
to meet our current operating and investing needs and support our current growth
plans for the next 12 months. We will be required from time to time to incur
additional indebtedness or issue additional debt or equity securities to finance
our growth strategy, including the acquisition of ALCs, as well as other capital
expenditures and to provide additional funds to meet increased working capital
requirement.
12
13
IMPACT OF INFLATION AND CHANGING PRICES
Operating revenue from ALCs we operate is our primary source of revenue. These
ALCs are affected by rental rates that are highly dependent upon market
conditions and the competitive environments where the communities are located.
Employee compensation is the principal cost element of property operations.
Although there can be no assurance we will be able to continue to do so, we have
historically been able to offset the effects of inflation on salaries and other
operating expenses by increasing rental and assisted living rates.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks related to fluctuations in interest rates on our
notes payable. Currently, we do not utilize interest rate swaps. The purpose of
the following analysis is to provide a framework to understand our sensitivity
to hypothetical changes in interest rates as of March 31, 2001. You should be
aware that many of the statements contained in this section are forward looking
and should be read in conjunction with our disclosures under the heading
"Forward-Looking Statements."
For fixed rate debt, changes in interest rates generally affect the fair market
value of the debt instrument, but not our earnings or cash flows. Conversely,
for variable rate debt, changes in interest rates generally do not impact the
fair value of the debt instrument, but do affect our future earnings and cash
flows. We do not have an obligation to prepay fixed rate debt prior to maturity,
and as a result, interest rate risk and changes in fair value should not have a
significant impact on the fixed rate debt until we refinance such debt. Holding
the variable rate debt balance constant, each one-percentage point increase in
interest rates would result in an increase in variable rate interest incurred
for the coming year of approximately $300,000.
The table below details the principal amount and the average interest rates of
notes payable in each category based upon the expected maturity dates. The fair
value estimates for notes payable are based upon future discounted cash flows of
similar type notes or quoted market prices for similar loans. The carrying value
of our variable rate debt approximates fair value due to the frequency of
re-pricing of this debt. Our fixed rate debt consists of convertible
subordinated notes payable and mortgage payables. The fixed rate debt bears
interest at rates that approximate current market value except for the
convertible subordinated debt, which bears interest at 6.75%.
EXPECTED MATURITY DATE - MARCH 31,
--------------------------------------------------- FAIR
2002 2003 2004 2005 2006 THEREAFTER TOTAL VALUE
-------- -------- ------- ------ ------ ---------- ------- -------
(DOLLARS IN THOUSANDS)
Fixed rate debt $4,523 $ 395 $ 429 $ 465 $ 505 $64,196 $70,513 $70,513
Average interest rate 7.82% 7.77% 7.77% 7.77% 7.76% 7.76%
Variable rate debt $ 398 $19,826 $10,000 $ -- $ -- $ -- $30,224 $30,224
Average interest rate 9.20% 10.52% 14.40% -- -- --
We do not believe that the future market rate risks related to the above
securities will have a material adverse impact on our financial position,
results of operations or liquidity.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We are from time to time subject to lawsuits and other matters in the normal
course of business. While we cannot predict the results with certainty, we do
not believe that any liability from any such lawsuits or other matters will have
a material effect on our financial position, results of operations, or
liquidity.
ITEM 2. CHANGES IN SECURITIES
None.
13
14
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY-HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
2 Agreement and Plan of Merger by and between ARV Assisted Living,
Inc. and ARV Delaware, Inc., incorporated by reference to the
Company's Proxy Statement for the 1997 Meeting of Shareholders of
ARV Assisted Living, Inc., filed with the Securities and Exchange
Commission on Schedule 14A on December 31, 1997.
3.1 Certificate of Incorporation of ARV Delaware, Inc., incorporated by
reference to the Company's Proxy Statement for the 1997 Meeting of
Shareholders of ARV Assisted Living, Inc., filed with the Securities
and Exchange Commission on Schedule 14A on December 31, 1997.
3.2 By-laws of ARV Delaware, Inc., incorporated by reference to the
Company's Proxy Statement for the 1997 Meeting of Shareholders of
ARV Assisted Living Inc., filed with the Securities and Exchange
Commission on Schedule 14A on December 31, 1997.
4 Rights Agreement, dated May 14, 1998, between ARV Assisted Living
Inc., and ChaseMellon Shareholder Services LLC which includes the
form of Certificate of Determination of the Series D Junior
Participating Preferred Stock of ARV Assisted Living, Inc. as
Exhibit A, the form of Right Certificate as Exhibit B, and the
Summary of Rights to Purchase Preferred Shares as Exhibit C,
incorporated by reference.
4.2 First Amendment to the Right Agreement, dated October 21, 1998, by
and between ARV Assisted Living Inc., and ChaseMellon Shareholder
Services LLC, incorporated by reference to our 8-K filed October 21,
1998.
10.1 Purchase and Sale Agreement by and between 270 Center Associates,
Limited Partnership and ARV Assisted Living, Inc. dated as of
February 12, 1998, incorporated by reference to Exhibit 10.1 to the
Company's 8-K filed with the Securities and Exchange Commission on
May 11, 1998.
10.2 Amendment to Purchase and Sale Agreement by and between 270 Center
Associated, Limited Partnership and ARV Assisted Living, Inc. dated
as of March 2, 1998, incorporated by reference to Exhibit 10.2 to
the Company's 8-K filed with the Securities and Exchange Commission
on May 11, 1998.
10.3 Second Amendment to Purchase and Sale Agreement by and between 270
Center Associated, Limited Partnership and ARV Assisted Living, Inc.
dated as of April 10, 1998, incorporated by reference to Exhibit
10.3 to the Company's 8-K filed with the Securities and Exchange
Commission on May 11, 1998.
10.4 Purchase and Sale Agreement by and between TH Group, Inc. and ARV
Assisted Living, Inc. dated as of February 12, 1998, incorporated by
reference to Exhibit 10.4 to the Company's 8-K filed with the
Securities and Exchange Commission on May 11, 1998.
10.5 Amendment to Purchase and Sale Agreement by and between TH Group,
Inc. and ARV Assisted Living, Inc. dated as of March 2, 1998,
incorporated by reference to Exhibit 10.5 to the Company's 8-K filed
with the Securities and Exchange Commission on May 11, 1998.
10.6 Second Amendment to Purchase and Sale Agreement by and between TH
Group, Inc. and ARV Assisted Living, Inc. dated as of April 10,
1998, incorporated by reference to Exhibit 10.6 to the Company's 8-K
filed with the Securities and Exchange Commission on May 11, 1998.
14
15
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
10.7 Purchase and Sale Agreement by and between The Hillsdale Group, LP
and ARV Assisted Living, Inc. dated as of February 12, 1998,
incorporated by reference to Exhibit 10.7 to the Company's 8-K filed
with the Securities and Exchange Commission on May 11, 1998.
10.8 Amendment to Purchase and Sale Agreement by and between The
Hillsdale Group, LP and ARV Assisted Living, Inc. dated as of March
2, 1998, incorporated by reference to Exhibit 10.8 to the Company's
8-K filed with the Securities and Exchange Commission on May 11,
1998.
10.9 Second Amendment to Purchase and Sale Agreement by and between The
Hillsdale Group, LP and ARV Assisted Living, Inc. dated as of April
6, 1998, incorporated by reference to Exhibit 10.9 to the Company's
8-K filed with the Securities and Exchange Commission on May 11,
1998.
10.10 Executive Employment Agreement, dated December 5, 1997, by and
between ARV Assisted Living, Inc. and Howard G. Phanstiel
incorporated by reference to the Company's 10-K filed with the
Securities and Exchange Commission on March 31, 1997.
10.11 Amendment to Executive Employment Agreement, effective December 5,
1997, by and between ARV Assisted Living, Inc. and Howard G.
Phanstiel incorporated by reference to the Company's 10-K filed with
the Securities and Exchange Commission on March 31, 1997.
10.12 Executive Employment Agreement, as amended, dated June 1, 1998, by
and between ARV Assisted Living, Inc. and Douglas M. Pasquale
incorporated by reference to the Company's 10-Q for June 30, 1998.
10.13 Employment Agreement, as amended, dated June 15, 1998, by and
between ARV Assisted Living, Inc. and Patricia J. Gifford, MD
incorporated by reference to the Company's 10-Q for June 30, 1998.
10.20 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns III, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.1 on August 10, 1999.
10.21 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns III, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.2 on August 10, 1999. (1)
10.22 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns II, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.3 on August 10, 1999. (1)
10.23 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns II, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.4 on August 10, 1999. (1)
10.24 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns II, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.5 on August 10, 1999. (1)
10.25 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns II, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.6 on August 10, 1999. (1)
10.26 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns II, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.7 on August 10, 1999. (1)
10.27 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns II, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.8 on August 10, 1999.(1)
10.28 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns II, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.9 on August 10, 1999. (1)
10.29 Loan Agreement by and between Banc One Capital Funding Corporation
and Retirement Inns II, LLC dated June 27, 1998 incorporated by
reference to the Company's 10Q filed with the Securities and
Exchange Commission as exhibit 10.10 on August 10, 1999. (1)
15
16
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
10.30 Loan Agreement by and between Banc One Capital Funding Corporation
and Acacia Villa, LLC dated June 27, 1998 incorporated by reference
to the Company's 10Q filed with the Securities and Exchange
Commission as exhibit 10.11 on August 10, 1999. (1)
10.31 Letter Agreement as to the Loans in the aggregate amount of
$39,703,100 from Banc One Capital Funding Corporation to Retirements
Inns II LLC dated June 27, 1998 incorporated by reference to the
Company's 10Q filed with the Securities and Exchange Commission as
exhibit 10.12 on August 10, 1999.
10.32 Letter Agreement as to the Loans in the aggregate amount of
$2,116,100 from Banc One Capital Funding Corporation to Acacia Villa
LLC dated June 27, 1998 incorporated by reference to the Company's
10Q filed with the Securities and Exchange Commission as exhibit
10.13 on August 10, 1999.
10.33 Letter Agreement as to the Loans in the aggregate amount of
$13,382,200 from Banc One Capital Funding Corporation to Retirements
Inns III LLC dated June 27, 1998 incorporated by reference to the
Company's 10Q filed with the Securities and Exchange Commission as
exhibit 10.14 on August 10, 1999.
10.34 Note and Agreement as to Retirement Inns II, LLC dated June 27, 1998
incorporated by reference to the Company's 10Q filed with the
Securities and Exchange Commission as exhibit 10.15 on August 10,
1999.
10.35 Note and Agreement as to Retirement Inns III, LLC dated June 27,
1998 incorporated by reference to the Company's 10Q filed with the
Securities and Exchange Commission as exhibit 10.16 on August 10,
1999.
10.36 Note and Agreement as to Acacia Villa, LLC dated June 27, 1998
incorporated by reference to the Company's 10Q filed with the
Securities and Exchange Commission as exhibit 10.17 on August 10,
1999.
10.37 Term Loan Agreement between ARV Assisted Living, Inc. and LFSRI II
Assisted Living, LLC, incorporated by reference to our 10Q filed
with the Securities and Exchange Commission as exhibit 10.1 on May
15, 2000.
10.38 Warrant issued to LFSRI II Assisted Living, LLC to Purchase Common
Stock of ARV Assisted Living, Inc, incorporated by reference to our
10Q filed with the Securities and Exchange Commission as exhibit
10.2 on May 15, 2000.
10.39 Second Amendment to Rights Agreement, by and between ARV Assisted
Living, Inc, and Chase Mellon Shareholder Services, LLC,
incorporated by reference to our 10Q filed with the Securities and
Exchange Commission as exhibit 10.3 on May 15, 2000.
10.40 Term Note between ARV Assisted Living, Inc. and LFSRI II Assisted
Living LLC, incorporated by reference to our 10Q filed with the
Securities and Exchange Commission as exhibit 10.4 on May 15, 2000.
10.41 Waiver, incorporated by reference to our 10Q filed with the
Securities and Exchange Commission as exhibit 10.5 on May 15, 2000.
10.42 LLC Articles of Incorporation incorporated by reference to our 10Q
filed with the Securities and Exchange Commission as exhibit 10.1 on
August 10, 2000.
10.43 Multifamily Note incorporated by reference to our 10Q filed with the
Securities and Exchange Commission as exhibit 10.2 on August 10,
2000.
10.44 Agreement of Assignment of ARV Investment Group, Inc. (a wholly
owned subsidiary of ARV Assisted Living, Inc.) partnership interest
in Franklin Commons, L.P. dated January 16, 2001, incorporated by
reference to our 10K filed with the Securities and Exchange
Commission as exhibit 10.44 on April 2, 2001.
10.45 Assignment of interest in the receivable obligation owed by Franklin
Commons, L.P. to Pacific Demographics Corporations, a wholly owned
subsidiary of ARV Assisted Living, Inc. dated January 16, 2001,
incorporated by reference to our 10K filed with the Securities and
Exchange Commission as exhibit 10.45 on April 2, 2001.
16
17
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
10.46 Assignment of interest in management fees owed by Franklin Commons,
L.P. to ARV Assisted Living, Inc. dated on January 16, 2001,
incorporated by reference to our 10K filed with the Securities and
Exchange Commission as exhibit 10.46 on April 2, 2001.
10.47 First Amendment to Operating Deficit Guaranty Agreement by and
between ARV Assisted Living, Inc., Gary Davidson, John Booty and
David Collins, and Franklin Commons, L.P, incorporated by reference
to our 10K filed with the Securities and Exchange Commission as
exhibit 10.47 on April 2, 2001.
10.48 First Amendment to Tax Credit Reduction and Recapture Guaranty
Agreement by and between ARV Assisted Living, Inc., Gary Davidson,
John Booty and David Collins, and Franklin Commons, L.P,
incorporated by reference to our 10K filed with the Securities and
Exchange Commission as exhibit 10.48 on April 2, 2001.
10.49 Purchase Agreement by and between ARV Investment Group, Inc. (wholly
owned subsidiary of ARV Assisted Living, Inc.) and Eenhoorn
Development, LLC for the sale of partnership interest in Franklin,
Grand Rapids, Rosewood, San Marcos and Lansing, incorporated by
reference to our 10K filed with the Securities and Exchange
Commission as exhibit 10.49 on April 2, 2001.
10.50 Amendment to Purchase Agreement dated October 4, 2000 by and between
ARV Investment Group, Inc. (wholly owned subsidiary of ARV Assisted
Living, Inc.) and Eenhoorn Development, LLC, incorporated by
reference to our 10K filed with the Securities and Exchange
Commission as exhibit 10.50 on April 2, 2001.
10.51 Agreement of Assignment of ARV Investment Group, Inc. (a wholly
owned subsidiary of ARV Assisted Living, Inc.) partnership interest
in Grand Rapids Housing Partners, L.P. dated January 16, 2001,
incorporated by reference to our 10K filed with the Securities and
Exchange Commission as exhibit 10.51 on April 2, 2001.
10.52 Assignment of interest in the receivable obligation owed by Grand
Rapids Housing Partners, L.P. to ARV Assisted Living, Inc. dated
January 16, 2001, incorporated by reference to our 10K filed with
the Securities and Exchange Commission as exhibit 10.52 on April 2,
2001.
10.53 Assignment of interest in management fees owed by Grand Rapids
Housing Partners,, L.P. to ARV Assisted Living, Inc. dated on
January 16, 2001, incorporated by reference to our 10K filed with
the Securities and Exchange Commission as exhibit 10.53 on April 2,
2001.
10.54 First Amendment to Operating Deficit Guaranty Agreement by and
between ARV Assisted Living, Inc., Gary Davidson, John Booty and
David Collins, and Grand Rapids Housing Partners, L.P, incorporated
by reference to our 10K filed with the Securities and Exchange
Commission as exhibit 10.54 on April 2, 2001.
10.55 First Amendment to Tax Credit Reduction and Recapture Guaranty
Agreement by and between ARV Assisted Living, Inc., Gary Davidson,
John Booty and David Collins, and Grand Rapids Housing Partners,
L.P, incorporated by reference to our 10K filed with the Securities
and Exchange Commission as exhibit 10.55 on April 2, 2001.
10.58 Agreement of Assignment of ARV Investment Group, Inc. (a wholly
owned subsidiary of ARV Assisted Living, Inc.) partnership interest
Lansing Housing Partners, L.P. dated January 16, 2001, incorporated
by reference to our 10K filed with the Securities and Exchange
Commission as exhibit 10.58 on April 2, 2001.
10.59 Assignment of interest in the receivable obligation owed by Lansing
Housing Partners, L.P. to ARV Assisted Living, Inc. dated January
16, 2001, incorporated by reference to our 10K filed with the
Securities and Exchange Commission as exhibit 10.59 on April 2,
2001.
10.60 Assignment of interest in management fees owed by Lansing Housing
Partners,, L.P. to ARV Assisted Living, Inc. dated on January 16,
2001, incorporated by reference to our 10K filed with the Securities
and Exchange Commission as exhibit 10.60 on April 2, 2001.
10.61 First Amendment to Operating Deficit Guaranty Agreement by and
between ARV Assisted Living, Inc., Gary Davidson, John Booty and
David Collins, and Lansing Housing Partners, L.P, incorporated by
reference to our 10K filed with the Securities and Exchange
Commission as exhibit 10.61 on April 2, 2001.
17
18
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
10.62 First Amendment to Tax Credit Reduction and Recapture Guaranty
Agreement by and between ARV Assisted Living, Inc., Gary Davidson,
John Booty and David Collins, and Lansing Housing Partners, L.P,
incorporated by reference to our 10K filed with the Securities and
Exchange Commission as exhibit 10.62 on April 2, 2001.
10.65 Agreement of Assignment of ARV Investment Group, Inc. (a wholly
owned subsidiary of ARV Assisted Living, Inc.) partnership interest
Rosewood Villas, L.P. dated January 16, 2001, incorporated by
reference to our 10K filed with the Securities and Exchange
Commission as exhibit 10.65 on April 2, 2001.
10.66 Assignment of interest in the receivable obligation owed by Rosewood
Villas, L.P. to ARV Assisted Living, Inc. dated January 16, 2001,
incorporated by reference to our 10K filed with the Securities and
Exchange Commission as exhibit 10.66 on April 2, 2001.
10.67 Assignment of interest in management fees owed by Rosewood Villas,
L.P. to ARV Assisted Living, Inc. dated on January 16, 2001,
incorporated by reference to our 10K filed with the Securities and
Exchange Commission as exhibit 10.67 on April 2, 2001.
10.68 First Amendment to Operating Deficit Guaranty Agreement by and
between ARV Assisted Living, Inc., Gary Davidson, John Booty and
David Collins, and Rosewood Villas, L.P, incorporated by reference
to our 10K filed with the Securities and Exchange Commission as
exhibit 10.68 on April 2, 2001.
10.69 First Amendment to Tax Credit Reduction and Recapture Guaranty
Agreement by and between ARV Assisted Living, Inc., Gary Davidson,
John Booty and David Collins, and Rosewood Villas, L.P, incorporated
by reference to our 10K filed with the Securities and Exchange
Commission as exhibit 10.69 on April 2, 2001.
10.72 Agreement of Assignment of ARV Investment Group, Inc. (a wholly
owned subsidiary of ARV Assisted Living, Inc.) partnership interest
San Marcos, L.P. dated January 16, 2001, incorporated by reference
to our 10K filed with the Securities and Exchange Commission as
exhibit 10.72 on April 2, 2001.
10.73 Assignment of interest in the receivable obligation owed by San
Marcos, L.P. to ARV Assisted Living, Inc. dated January 16, 2001,
incorporated by reference to our 10K filed with the Securities and
Exchange Commission as exhibit 10.73 on April 2, 2001.
10.74 Assignment of interest in management fees owed by San Marcos, L.P.
to ARV Assisted Living, Inc. dated on January 16, 2001, incorporated
by reference to our 10K filed with the Securities and Exchange
Commission as exhibit 10.74 on April 2, 2001.
10.75 Deed of Trust Note of ARV Burlingame, L.P. to Red Mortgage Capital,
Inc. , incorporated by reference to our 10K filed with the
Securities and Exchange Commission as exhibit 10.75 on April 2,
2001.
10.76 Allonge #1 to Deed of Trust Note of ARV Burlingame, L.P. to Red
Mortgage Capital, Inc. , incorporated by reference to our 10K filed
with the Securities and Exchange Commission as exhibit 10.76 on
April 2, 2001.
10.77 Deed of Trust between ARV Burlingame, L.P. and Fidelity National
Title Insurance, incorporated by reference to our 10K filed with the
Securities and Exchange Commission as exhibit 10.77 on April 2,
2001.
10.78 Regulatory Agreement for U.S. Department of Housing Multifamily
Housing Projects between ARV Burlingame, L.P. and Secretary of
Housing and Urban Development, incorporated by reference to our 10K
filed with the Securities and Exchange Commission as exhibit 10.78
on April 2, 2001.
10.79 Regulatory Agreement Nursing Homes Projects between ARV Burlingame,
L.P. and Federal Housing Commissioner, incorporated by reference to
our 10K filed with the Securities and Exchange Commission as exhibit
10.79 on April 2, 2001.
10.80 Deed of Trust Note of ARV Campbell, L.P. to Red Mortgage Capital,
Inc. , incorporated by reference to our 10K filed with the
Securities and Exchange Commission as exhibit 10.80 on April 2,
2001.
18
19
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
10.81 Allonge #1 to Deed of Trust Note of ARV Campbell, L.P. to Red
Mortgage Capital, Inc. , incorporated by reference to our 10K filed
with the Securities and Exchange Commission as exhibit 10.81 on
April 2, 2001.
10.82 Deed of Trust between ARV Campbell, L.P. and Fidelity National Title
Insurance, incorporated by reference to our 10K filed with the
Securities and Exchange Commission as exhibit 10.82 on April 2,
2001.
10.83 Regulatory Agreement for U.S. Department of Housing Multifamily
Housing Projects between ARV Campbell, L.P. and Secretary of Housing
and Urban Development, incorporated by reference to our 10K filed
with the Securities and Exchange Commission as exhibit 10.83 on
April 2, 2001.
10.84 Regulatory Agreement Nursing Homes Projects between ARV Campbell,
L.P. and Federal Housing Commissioner, incorporated by reference to
our 10K filed with the Securities and Exchange Commission as exhibit
10.84 on April 2, 2001.
10.85 Deed of Trust Note of ARV Sunnyvale, L.P. to Red Mortgage Capital,
Inc. , incorporated by reference to our 10K filed with the
Securities and Exchange Commission as exhibit 10.85 on April 2,
2001.
10.86 Allonge #1 to Deed of Trust Note of ARV Sunnyvale, L.P. to Red
Mortgage Capital, Inc. , incorporated by reference to our 10K filed
with the Securities and Exchange Commission as exhibit 10.86 on
April 2, 2001.
10.87 Deed of Trust between ARV Sunnyvale, L.P. and Fidelity National
Title Insurance, incorporated by reference to our 10K filed with the
Securities and Exchange Commission as exhibit 10.87 on April 2,
2001.
10.88 Regulatory Agreement for U.S. Department of Housing Multifamily
Housing Projects between ARV Sunnyvale, L.P. and Secretary of
Housing and Urban Development, incorporated by reference to our 10K
filed with the Securities and Exchange Commission as exhibit 10.88
on April 2, 2001.
10.89 Regulatory Agreement Nursing Homes Projects between ARV Sunnyvale,
L.P. and Federal Housing Commissioner, incorporated by reference to
our 10K filed with the Securities and Exchange Commission as exhibit
10.89 on April 2, 2001.
10.90 Deed of Trust Note of ARV Valley View, L.P. to Red Mortgage Capital,
Inc., incorporated by reference to our 10K filed with the Securities
and Exchange Commission as exhibit 10.90 on April 2, 2001.
10.91 Deed of Trust between ARV Valley View, L.P. and Fidelity National
Title Insurance, incorporated by reference to our 10K filed with the
Securities and Exchange Commission as exhibit 10.91 on April 2,
2001.
10.92 Regulatory Agreement for U.S. Department of Housing Multifamily
Housing Projects between ARV Valley View, L.P. and Secretary of
Housing and Urban Development, incorporated by reference to our 10K
filed with the Securities and Exchange Commission as exhibit 10.92
on April 2, 2001.
10.93 Regulatory Agreement Nursing Homes Projects between ARV Valley View,
L.P. and Federal Housing Commissioner, incorporated by reference to
our 10K filed with the Securities and Exchange Commission as exhibit
10.93 on April 2, 2001.
10.94 Deed of Trust Note of ARV Daly City, L.P. to Red Mortgage Capital,
Inc.
10.95 Allonge #1 to Deed of Trust Note of ARV Daly City, L.P. to Red
Mortgage Capital, Inc.
10.96 Deed of Trust between ARV Daly City, L.P. and Fidelity National
Title Insurance.
10.97 Regulatory Agreement for U.S. Department of Housing Multifamily
Housing Projects between ARV Daly City, L.P. and Secretary of
Housing and Urban Development.
10.98 Regulatory Agreement Nursing Homes Projects between ARV Daly City,
L.P. and Federal Housing Commissioner.
10.99 Deed of Trust Note of ARV Fremont, L.P. to Red Mortgage Capital, Inc
10.100 Allonge #1 to Deed of Trust Note of ARV Fremont, L.P. to Red
Mortgage Capital, Inc. .
10.101 Deed of Trust between ARV Fremont, L.P. and Fidelity National Title
Insurance.
10.102 Regulatory Agreement for U.S. Department of Housing Multifamily
Housing Projects between ARV Fremont, L.P. and Secretary of Housing
and Urban Development.
19
20
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
10.103 Agreement Nursing Homes Projects between ARV Fremont, L.P. and
Federal Housing Commissioner.
99.1 Complaint in ARV Assisted Living, Inc. v. Lazard Freres Real Estate
Investors LLC, et al., case no. 787788, incorporated by reference to
the Company's 8-K filed with the Securities and Exchange Commission
on May 26, 1998.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter ended March 31, 2001.
20
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, as amended, 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/ DOUGLAS M. PASQUALE
---------------------------
Douglas M. Pasquale
Chief Executive Officer
Date: May 15, 2001
Pursuant to the requirements of the Securities Act of 1934, as amended, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ DOUGLAS M. PASQUALE Chief Executive Officer May 15, 2001
-------------------------------- (Principal Executive Officer)
Douglas M. Pasquale
/s/ ABDO H. KHOURY President and Chief Financial Officer May 15, 2001
-------------------------------- (Principal Financial & Accounting Officer)
Abdo H. Khoury
21
22
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
10.94 Deed of Trust Note of ARV Daly City, L.P. to Red Mortgage Capital,
Inc.
10.95 Allonge #1 to Deed of Trust Note of ARV Daly City, L.P. to Red
Mortgage Capital, Inc.
10.96 Deed of Trust between ARV Daly City, L.P. and Fidelity National
Title Insurance.
10.97 Regulatory Agreement for U.S. Department of Housing Multifamily
Housing Projects between ARV Daly City, L.P. and Secretary of
Housing and Urban Development.
10.98 Regulatory Agreement Nursing Homes Projects between ARV Daly City,
L.P. and Federal Housing Commissioner.
10.99 Deed of Trust Note of ARV Fremont, L.P. to Red Mortgage Capital, Inc
10.100 Allonge #1 to Deed of Trust Note of ARV Fremont, L.P. to Red
Mortgage Capital, Inc. .
10.101 Deed of Trust between ARV Fremont, L.P. and Fidelity National Title
Insurance.
10.102 Regulatory Agreement for U.S. Department of Housing Multifamily
Housing Projects between ARV Fremont, L.P. and Secretary of Housing
and Urban Development.
10.103 Agreement Nursing Homes Projects between ARV Fremont, L.P. and
Federal Housing Commissioner.