--------------------------------------------------------------------------------
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20459

                                   FORM 10-QSB

               X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
              ---
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly period ending June 30, 1998

              --- TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the Transition period from ____ to ____

                         Commission file number 0-27108

                          REGENT ASSISTED LIVING, INC.
             (Exact name of registrant as specified in its charter)

                  OREGON                                93-1171049
         (State or other jurisdiction of                (IRS Employer
         incorporation or organization)              Identification No.)

                                   Suite 1000
                               121 SW Morrison St.
                             Portland, Oregon 97204
                    (Address of principle executive offices)

                                  503-227-4000
              (Registrant's telephone number, including area code)

Indicated by check mark whether Registrant (1) has filed all reports 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 Registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.

                                   Yes  X   No
                                       ---     ---

               Shares of Registrant's Common Stock, No par value,
                    outstanding at August 1, 1997 - 4,633,000

--------------------------------------------------------------------------------

<PAGE>
                          REGENT ASSISTED LIVING, INC.

                                   FORM 10-QSB

                                  June 30, 1998


                                      INDEX
                                      -----


 
                                                                            Page
                                                                            ----

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 1998
and December 31, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . .     3

Condensed Consolidated Statements of Operations for the three months
and six months ended June 30, 1998 and 1997 . . . . . . . . . . . . . . .     4

Condensed Consolidated Statements of Cash Flows for the six months
ended June 30, 1998 and 1997 . . . . . . . . . . . . . . .. . . . . . . .     5

Notes to Condensed Consolidated Financial Statements  . . . . . . . . . .     6

Item 2.  Management's Discussion and Analysis or Plan of Operation  . . .     9

PART II- OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders. . . . . . .    16

Item 5.  Other Information  . . . . . . . . . . . . . . . . . . . . . . .    16

Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . .    16

Page 2
<PAGE>
<TABLE>
<CAPTION>
                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

                          REGENT ASSISTED LIVING, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                          June 30,
                                                                              1998                      December 31,
                                                                       (Unaudited)                              1997
                                                                  -----------------                -----------------

<S>                                                               <C>                              <C>       
ASSETS

Current assets:
     Cash and cash equivalents                                    $      4,304,137                 $      1,865,576
     Accounts receivable                                                   268,730                          128,110
     Prepaid expenses                                                      440,701                          249,708
     Construction advances receivable                                      393,812                          123,670
                                                                  -----------------                ----------------
         Total current assets                                            5,407,380                        2,367,064

Property and equipment,  net                                            52,796,287                       69,820,324
Investment in joint venture                                                518,403                          401,460
Restricted cash                                                          2,353,543                        2,361,993
Other assets                                                             1,760,657                          752,932
                                                                  ----------------                 ----------------
         Total assets                                             $     62,836,270                 $     75,703,773
                                                                  ================                 ================


LIABILITIES

Current liabilities:
     Current portion of long-term debt                            $        259,461                 $        218,881
     Short-term borrowings                                                       -                        4,500,000
     Construction accounts payable                                       1,578,746                          583,043
     Accounts payable and other accrued expenses                           946,450                          685,136
     Accrued payroll                                                       810,455                          502,568
     Accrued interest                                                      124,668                          179,963
                                                                  -----------------                ----------------

         Total current liabilities                                       3,719,780                        6,669,591

Long-term debt                                                          35,313,246                       51,450,545
Convertible subordinated notes                                           7,000,000                                -
Deferred development fees, net                                           5,052,429                          898,802
Other liabilities                                                        1,064,443                          517,578
                                                                  ----------------                 ----------------
         Total liabilities                                              52,149,898                       59,536,516
                                                                  ----------------                 ----------------
Minority Interest                                                                -                          250,000
                                                                  ----------------                 ----------------
SHAREHOLDERS' EQUITY

Preferred stock, no par value, 5,000,000 shares authorized;
     1,666,667 shares issued and outstanding                             9,349,841                        9,349,841
Common stock, no par value, 25,000,000 shares authorized;
     4,633,000 shares issued and outstanding                            10,808,703                       10,808,703
Accumulated deficit                                                     (9,472,172)                      (4,241,287)
                                                                  -----------------                ----------------
         Total shareholders' equity                                     10,686,372                       15,917,257
                                                                  ----------------                 ----------------
         Total liabilities and shareholders' equity               $     62,836,270                 $     75,703,773
                                                                  ================                 ================

The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>

Page 3
<PAGE>
<TABLE>
<CAPTION>

                          REGENT ASSISTED LIVING, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                             (Unaudited)                               (Unaudited)
                                               Three Months Ended    Three Months Ended    Six Months Ended    Six Months Ended
                                                  June 30, 1998        June 30, 1997        June 30, 1998         June 30, 1997
                                               ------------------    ------------------    ----------------    ----------------
<S>                                            <C>                   <C>                   <C>                       <C>       
Revenues:
     Rental and service                        $        6,641,931    $        3,203,750    $     10,858,511    $      6,540,097
     Management fee                                        30,624                44,199             102,249              88,121
                                               ------------------    ------------------    ----------------    ----------------
         Total revenues                                 6,672,555             3,247,949          10,960,760           6,628,218
                                               ------------------    ------------------    ----------------    ----------------

Operating expenses:
     Residence operating expenses                       5,576,480             2,197,624           9,766,616           4,333,901
     General and administrative                           987,111               650,647           1,954,732           1,362,851
     Lease expense                                      2,020,181               782,151           3,434,899           1,488,351
     Depreciation and amortization                        241,469                78,063             355,552             146,848
                                               ------------------    ------------------    ----------------    ----------------
         Total operating expenses                       8,825,241             3,708,485          15,511,799           7,331,951
                                               ------------------    ------------------    ----------------    ----------------

         Operating income (loss)                       (2,152,686)             (460,536)         (4,551,039)           (703,733)

Interest income                                            79,933                73,812             155,922             222,591
Interest expense, net                                    (430,597)                    -            (495,012)           (101,228)
Equity interest in joint venture                          (31,971)                    -             (33,057)                  -
Other income, net                                              11                12,341              (7,699)             17,604
                                               ------------------    ------------------    ----------------    ----------------
         Income (loss) before income taxes             (2,535,310)             (374,383)         (4,930,885)           (564,766)

Income tax benefit                                              -                     -                   -              24,500
                                               ------------------    ------------------    ----------------    ----------------
         Net income (loss)                     $       (2,535,310)   $         (374,383)   $     (4,930,885)   $       (540,266)
                                               ==================    ==================    ================    ================


Basic earnings (loss) per common share         $            (0.58)   $            (0.11)   $          (1.13)   $          (0.18)
                                               ==================    ==================    ================    ================


Diluted earnings (loss) per common share       $            (0.58)   $           (0.11)    $          (1.13)   $          (0.18)
                                               ==================    ==================    ================    ================

Weighted average common shares outstanding:
     Basic                                              4,633,000             4,633,000           4,633,000           4,633,000
                                               ==================    ==================    ================    ================
     Diluted                                            4,633,000             4,633,000           4,633,000           4,633,000
                                               ==================    ==================    ================    ================


The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>

Page 4
<PAGE>
<TABLE>
<CAPTION>
                          REGENT ASSISTED LIVING, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                                    (Unaudited)
                                                                                   Six Months Ended          Six Months Ended
                                                                                      June 30, 1998             June 30, 1997
                                                                                   ----------------          ----------------
<S>                                                                                <C>                       <C>              
Cash flows from operating activities:
  Net income (loss)                                                                $     (4,930,885)         $       (540,266)
  Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
      Depreciation and amortization                                                         355,552                   146,848
      Amortization of deferred gains and development fees                                  (144,821)                        -
      Equity interest in joint venture                                                       33,057                         -
      Changes in other assets and liabilities:
        Accounts receivable                                                                (140,620)                   37,876
        Prepaid expenses                                                                   (209,392)                 (109,014)
        Deferred income taxes                                                                     -                    33,100
        Other assets                                                                       (544,365)                   56,643
        Accounts payable and other accrued expenses                                         513,906                  (131,880)
        Other liabilities                                                                   546,865                   (59,527)
                                                                                   ----------------          ----------------
          Net cash used in operating activities                                          (4,520,703)                 (566,220)
                                                                                   ----------------          ----------------

Cash flows from investing activities:
  Maturity of investments, net                                                                    -                 2,939,448
  Purchases of property and equipment                                                   (22,232,918)              (15,826,609)
  Increase in construction related accounts payable                                         995,703                 3,374,930
  Investment in joint venture                                                              (150,000)                  (46,691)
  Deposits to replacement reserve account, net                                              (22,254)                  (32,400)
                                                                                   ----------------          ----------------
          Net cash used in investing activities                                         (21,409,469)               (9,591,322)
                                                                                   ----------------          ----------------

Cash flows from financing activities:
  Repayment of short-term borrowings                                                     (4,500,000)                        -
  Proceeds from issuance of long-term debt                                               15,079,724                 7,280,719
  Payments on long-term debt                                                            (31,426,443)                  (74,728)
  Construction advances                                                                    (270,142)                1,327,478
  Prepayments and deposits for financing arrangements, net                                 (456,381)                 (177,000)
  Restricted cash for financing arrangements, net                                            30,704                  (615,835)
  Deferred fee from financing arrangements                                                  190,000                         -
  Proceeds from financing arrangements                                                   43,021,271                         -
  Proceeds from issuance of convertible subordinated notes                                7,000,000                         -
  Preferred stock issuance costs                                                                  -                  (600,159)
  Preferred stock dividends                                                                (300,000)                 (326,230)
                                                                                   ----------------          ----------------
          Net cash provided by financing activities                                      28,368,733                 6,814,245
                                                                                   ----------------          ----------------

          Net increase (decrease) in cash and cash equivalents                            2,438,561                (3,343,297)

Cash and cash equivalents, beginning of period                                            1,865,576                 8,650,817
                                                                                   ----------------          ----------------
Cash and cash equivalents, end of period                                           %      4,304,137          $      5,307,520
                                                                                   ================          ================

Supplemental disclosure of cash flow information:
  Cash paid for interest                                                           $      2,474,074          $        473,914
                                                                                   ================          ================

Supplemental disclosure of non-cash investing and financing activities:
  Long-term debt incurred to acquire minority interest                             $        250,000                         -
                                                                                   ================          ================


The accompanying notes are an integral part of these condensed consolidated
financial statements.

</TABLE>

Page 5

<PAGE>
                          REGENT ASSISTED LIVING, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   Operations and Summary of Significant Accounting Policies:


     The Company

     Regent Assisted Living, Inc. ("the Company") is an owner, operator, and
     developer of private-pay assisted living communities including stand-alone
     Alzheimer's communities. Assisted living is part of a spectrum of long-term
     care services that provide a combination of housing, personal services and
     health care designed to respond to elderly individuals who require
     assistance with activities of daily living in a manner that promotes
     maximum independence.

     The results of operations for the six months ended June 30, 1998, reflect
     the operations of thirteen new assisted living communities, one of which
     was managed for a portion of the period; five stabilized assisted living
     communities, one of which was managed for a portion of the period; fees
     from the management of three communities (two which were converted to
     leases); and pre-opening costs related to two additional newly developed
     communities that had not yet commenced rental activities during the period.
     The results of operations for the six months ended June 30, 1997, reflect
     the operations of one new and three stabilized assisted living communities,
     fees from the management of two communities, and pre-opening costs related
     to two additional newly developed communities that had not yet commenced
     rental activities during the period.

     As of August 7, 1998, the Company had also commenced operations at its new
     assisted living communities in Laramie, Wyoming, and Henderson, Nevada;
     begun providing management services for a 150-bed assisted living community
     in Salinas, California; completed construction of its new community in
     Kenmore, Washington; and had an additional 22 assisted living communities
     (including five Alzheimer's communities) in various stages of construction
     and development.


     Basis of Presentation

     The condensed consolidated financial statements include the accounts of the
     Company and its majority owned subsidiary. All significant inter-company
     accounts and transactions have been eliminated in consolidation.

Page 6

<PAGE>
                          REGENT ASSISTED LIVING, INC.
                         NOTES TO CONDENSED CONSOLIDATED
                         FINANCIAL STATEMENTS, Continued


1.   Operations and Summary of Significant Accounting Policies, Continued:

     The accompanying unaudited condensed consolidated financial statements as
     of June 30, 1998, and for the three month and six month periods ended June
     30, 1998 and 1997, have been prepared in conformity with generally accepted
     accounting principles. The financial information as of December 31, 1997,
     is derived from the Company's Form 10-KSB for the year ended December 31,
     1997. Certain information or footnote disclosures normally included in
     financial statements prepared in accordance with generally accepted
     accounting principles have been condensed or omitted pursuant to the rules
     and regulations of the Securities and Exchange Commission. In the opinion
     of management, the accompanying financial statements include all
     adjustments necessary (which are of a normal and recurring nature) for the
     fair presentation of the results of the interim periods presented. The
     accompanying financial statements should be read in conjunction with the
     Company's audited consolidated financial statements for the year ended
     December 31, 1997, included in the Company's Form 10-KSB for the year ended
     December 31, 1997.

     Operating results for the three month and six month periods ended June 30,
     1998, are not necessarily indicative of the results that may be expected
     for the remainder of the fiscal year ending December 31, 1998.


2.   Property and Equipment:

     Property and equipment are stated at cost and consist of the following:


<TABLE>
<CAPTION>

                                                June 30,            December 31,
                                                1998                1997
                                                ------------        ------------


<S>                                             <C>                 <C>         
     Land                                       $  2,225,000        $  1,730,810
     Buildings and improvements                   21,634,180          12,713,346
     Furniture and equipment                       2,410,693           1,512,868
     Construction in progress                     27,421,929          54,429,412
                                                ------------        ------------

                                                  53,691,802          70,386,443

     Less accumulated depreciation
        and amortization                             895,515             566,119
                                                ------------        ------------

        Total property and equipment, net       $ 52,796,287        $ 69,820,324
                                                ============        ============

</TABLE>

     Land, buildings and certain furniture and equipment serve as collateral for
     long-term debt.

Page 7

<PAGE>
                          REGENT ASSISTED LIVING, INC.
                         NOTES TO CONDENSED CONSOLIDATED
                         FINANCIAL STATEMENTS, Continued


3.   Administrative Services Agreement:

     Pursuant to the terms of an Administrative Services Agreement, the Company
     provides executive assistance, accounting and financial management
     services, legal and administrative assistance, insurance, management
     information services, and other management services as required by Bowen
     Property Management Co., Bowen Financial Services Corp., Bowen Development
     Company and Bowen Condominium Marketing, Inc., all of which are Oregon
     corporations and are wholly owned or controlled by Mr. Bowen, the Company's
     Chairman, President, and Chief Executive Officer. Under the terms of the
     agreement, the Company will be reimbursed at its cost on a monthly basis
     for all services provided.


4.   Earnings (Loss) Per Common Share:

     Basic earnings per share (EPS) and diluted EPS are computed using the
     methods prescribed by Statement of Financial Accounting Standard No. 128,
     Earnings Per Share (SFAS 128). Basic EPS is calculated using income (loss)
     attributable to common shares (after deducting preferred dividends) divided
     by the weighted average number of common shares outstanding for the period.
     Diluted EPS is calculated using income (loss) attributable to common shares
     (after deducting preferred dividends and considering the effects of
     dilutive common equivalent shares) divided by the weighted average number
     of common shares and dilutive common shares outstanding for the period.
     Basic and Diluted earnings (loss) per common share includes a deduction of
     preferred stock dividends declared, which totaled $150,000 and $300,000 for
     the three month and six month periods ended June 30, 1998 and 1997,
     respectively


5.   Accounting Pronouncements:

     On April 3, 1998, the AICPA Accounting Standards Executive Committee issued
     Statement of Position 98-5, Reporting on the Costs of Start-up Activities
     (SOP 98-5). This statement requires that the costs of start-up activities,
     including organization costs, be expensed as incurred. SOP 98-5 is
     effective for financial statements for fiscal years beginning after
     December 15, 1998. Consistent with its past accounting practices, the
     Company expenses all start up costs and thus the adoption of this statement
     will have no impact on the Company's reported results.

Page 8

<PAGE>
ITEM 2.  Management's Discussion and Analysis or Plan of Operation.


Overview

The Company

The Company reported a net loss of $2,535,310, or $0.58 per diluted share, on
revenues of $6,672,555 for the three months ended June 30, 1998. For the six
months ended June 30, 1998, the Company reported a net loss of $4,930,885, or
$1.13 per diluted share, on revenues of $10,960,760.

     Current Communities. The table below sets forth certain information
regarding the Company's communities at June 30, 1998.


<TABLE>
<CAPTION>
                                             Operations
Community                    Location        Commenced    Units(1)   Beds(2)   Interest
---------                    --------        ----------   --------   -------   --------

<S>                          <C>               <C>          <C>        <C>     <C>
Oregon
     Park Place              Portland          1986         112        112     Lease(3)
     Regency Park            Portland          1987         122        142     Lease
     Sheldon Park            Eugene            1998         108        124     Lease
Washington
     Sterling Park           Redmond           1990         162        192     Lease
California
     Laurel Springs          Bakersfield       1998         113        130     Own
     Orchard Park            Clovis            1998         112        128     Lease
     Summerfield House       Vacaville         1998         109        126     Own
     Sun Oak                 Citrus Heights    1997          40         50     Manage
     Sunnyside Court         Fremont           1998          40         80     Lease
     Sunshine Villa          Santa Cruz        1990         106        126     Lease
     The Palms               Roseville         1998          93        108     Lease
     Willow Creek            Folsom            1997         104        119     Lease
Idaho
     West Wind               Boise             1997          48         52     Lease
     Willow Park             Boise             1997         117        134     Lease
New Mexico
     Sandia Springs          Rio Rancho        1998         109        126     Lease
Texas
     Hamilton House          San Antonio       1997         116        136     Lease
Arizona
     Canyon Crest            Tucson            1998         117        137     Lease
Wyoming
     Aspen Wind              Cheyenne          1998          77         77     Lease
     Meadow Wind             Casper            1998          53         53     Lease

     Totals                                               1,858      2,152
                                                          =====      =====

(1)  A "unit" is a studio or a one or two bedroom apartment.

</TABLE>

Page 9

<PAGE>
(2)  "Beds" reflects the actual number of beds used by the Company for census
     purposes, which in no event is a number greater than the maximum number of
     licensed beds permitted under the community's license.

(3)  The Company completed a lease-acquisition of Park Place during the second
     quarter of 1998. The Company had managed the Community prior to this
     transaction.

As of August 7, 1998, the Company had also commenced operations of communities
in the following locations:

<TABLE>
<CAPTION>

     Location               No. of Units      No. of Beds            Interest
     --------               ------------      -----------            --------

<S>                             <C>               <C>                <C>     
Henderson, Nevada               115               133                Owned
Laramie, Wyoming                 53                53                Leased
Salinas, California             150               150                Managed

</TABLE>


As of August 7, 1998, the Company had completed construction of a new 85-unit,
98-bed community in Kenmore, Washington. The Company will manage this community
and is in the process of obtaining an operating license. A limited liability
company in which the Company owns a 50 percent interest owns this community.

Also, as of August 7, 1998, the Company had commenced construction on the
following new communities:

<TABLE>
<CAPTION>
                            Projected       Expected Quarter    
     Location               No. of Beds          Opening             Interest
     --------               -----------     ----------------         --------

<S>                            <C>               <C>                 <C>
Austin, Texas                  137               3rd-98              Owned
Scottsdale, Arizona             48               4th-98              Leased
Modesto, California             48               1st-99              Owned
Clackamas, Oregon               48               2nd-99              Owned
Corvallis, Oregon               48               2nd-99              Owned
Kent, Washington                48               2nd-99              Owned
Scottsdale, Arizona            115               2nd-99              Owned
Mesa, Arizona                  132               3rd-99              Owned

</TABLE>

The Company is engaged in various stages of development on 14 additional new
communities. If these 14 communities are completed, then, together with the
communities currently under construction, total operations of the Company will
increase by approximately 2,000 beds to a total of approximately 4,600 beds. The
Company continues to pursue its primary strategy of developing new communities
and is therefore engaged in negotiations to acquire several additional sites and
is pursuing joint venture opportunities with parties who control parcels of land
in strategic markets. All costs associated with the development of these
communities have been capitalized as "Construction in Progress" as disclosed in
Note 2 to the condensed consolidated financial statements.

Operating results for the three month and six month periods ended June 30, 1998,
are not necessarily indicative of future financial performance as the Company
intends to expand its operating base of communities.

Page 10

<PAGE>
Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997

Revenues. For the three month period ended June 30, 1998, revenues were
$6,672,555 compared to $3,247,949 in the three month period ended June 30, 1997.
The Company operated eighteen communities, one of which was managed for a
portion of the period, and managed one additional community in the second
quarter of 1998. The Company operated four communities and managed two in the
second quarter of 1997. The increase in revenue of $3,424,606, or 105.4 percent,
includes $3,309,235 of revenue from newly opened and acquired communities and an
increase in revenue of $128,945 at the Company's three stabilized communities.
Overall average occupancy at the three stabilized communities increased to 93.7
percent for the three month period ended June 30, 1998, whereas occupancy was
93.2 percent for the same period in 1997.

Residence Operating Expenses. Residence operating expenses were $5,576,480 for
the three month period ended June 30, 1998, and $2,197,624 for the same period
in 1997, an increase of $3,378,856. The current period includes $2,965,437 of
start-up and pre-opening costs related to fifteen of the Company's newly
developed communities and $485,199 of residence operating expenses related to
the acquisition of two stabilized communities, whereas the 1997 period included
$214,827 of start-up and pre-opening costs related to three newly developed
communities. Residence operating expenses for all stabilized communities totaled
64.0 percent and 62.4 percent of rental and service revenues for the three month
periods ended June 30, 1998 and 1997, respectively.

General and Administrative Expenses. General and administrative expenses were
$987,111 for the three month period ended June 30, 1998, compared to $650,647
for the three month period ended June 30, 1997. The increase of $336,464 is due
primarily to an increase in development activities and operations, including
payroll, travel, and other overhead related costs related to the implementation
of the Company's strategy for rapid growth.

Lease Expense. Lease expense for the Company's leased communities was $2,020,181
for the three month period ended June 30, 1998, and was $782,151 for the same
period in 1997. The increase of $1,238,030 relates primarily to the opening of
nine newly developed communities and the acquisition of five communities since
the end of the second quarter of 1997.

Depreciation and Amortization. Depreciation and amortization expense was
$241,469 for the three month period ended June 30, 1998, compared to $78,063 for
the three month period ended June 30, 1997. The increase of $163,406 relates
primarily to the capitalization of buildings, furniture and equipment for two
newly developed communities, the purchase of vans for newly developed
communities and the purchase of furniture and equipment for the Company's
headquarters, all in connection with the implementation of the Company's growth
plan.

Interest Income. Interest income increased slightly in the three month period
ended June 30, 1998, to $79,933, from $73,812 for the same period in 1997.
Interest income resulted from the investment of cash and cash equivalents in
high quality, short term securities placed with institutions with high credit
ratings.

Interest Expense. Interest expense was $430,597 for the three month period ended
June 30, 1998. The Company reported no interest expense for the three months
ended June 30, 1997. The Company capitalized $723,736 and $258,771 of interest
charges incurred during the three months ended June 30, 1998 and 1997,
respectively. The capitalized interest offsets substantially higher interest
costs incurred by the Company in the current period arising from increased
borrowing for construction purposes and interest related to the convertible
subordinated notes.

Page 11

<PAGE>
Net Income (Loss). Net operating results decreased to a loss of $2,535,310
during the three month period ended June 30, 1998, from a loss of $374,383 for
the same period in 1997. The decrease in net results is primarily due to an
increase in general and administrative expenses (as discussed above), an
increase in lease expense (as discussed above), an increase in interest expense
(as discussed above), an increase in depreciation expense (as discussed above),
offset by an increase in residence operating profits (rental and service revenue
less residence operating expenses) of $59,325.


Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997

Revenues. For the six month period ended June 30, 1998, revenues increased by
$4,332,542, or 65.4%, to $10,960,760, compared to $6,628,218 in the six month
period ended June 30, 1997. The increase in revenue is related primarily to
newly developed and acquired communities. Overall average occupancy at the three
stabilized communities increased slightly to 93.7 percent for the six month
period ended June 30, 1998 from 93.2 percent for the same period in 1997.

Residence Operating Expenses. Residence operating expenses were $9,766,616 for
the six month period ended June 30, 1998, and $4,333,901 for the same period in
1997. The increase of $5,432,715 is due primarily to $4,941,034 of start-up and
pre-opening costs related to fifteen of the Company's new communities and
$642,824 related to the acquisition of two stabilized communities, whereas the
1997 period included $245,128 of start-up and pre-opening costs related to three
newly developed communities. Residence operating expenses for all stabilized
communities totaled 64.4 percent and 62.8 percent of rental and service revenues
for the six month periods ended June 30, 1998 and 1997, respectively.

General and Administrative Expenses. General and administrative expenses were
$1,954,732 for the six month period ended June 30, 1998, compared to $1,362,851
for the six month period ended June 30, 1997. The increase of $591,881 is due
primarily to an increase in development activities and operations related to the
implementation of the Company's strategy for rapid growth.

Lease Expense. Lease expense for the Company's leased communities was $3,434,899
for the six month period ended June 30, 1998, and was $1,488,351 for the same
period in 1997. The increase of $1,946,548 relates primarily to the newly
developed and acquired communities.

Depreciation and Amortization. Depreciation and amortization expense was
$355,552 for the six month period ended June 30, 1998, compared to $146,848 for
the six month period ended June 30, 1997. The increase of $208,704 primarily
relates to the capitalization of buildings, furniture and equipment for two
newly developed communities, the purchase of vans for the Company's newly
developed communities and the purchase of furniture and equipment for the
Company's headquarters, all in connection with the implementation of the
Company's growth plan.

Interest Income. Interest income decreased in the six month period ended June
30, 1998, to $155,922, from $222,591 for the same period in 1997, a decrease of
$66,669.

Interest Expense. Interest expense increased in the six month period ended June
30, 1998, to $495,012 from $101,228 for the six month period ended June 30,
1997. The Company capitalized $1,815,925 and $372,192 of interest charges
incurred during the six months ended June 30, 1998 and 1997, respectively.

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<PAGE>
Net Income (Loss). Net operating results decreased to a loss of $4,930,885
during the six month period ended June 30, 1998, from a loss of $540,266 for the
same period in 1997. The decrease in net results is primarily due to an increase
in general and administrative expenses (as discussed above), an increase in
lease expense (as discussed above), an increase in depreciation expense (as
discussed above), an increase in interest expense (as discussed above), and a
decrease in residence operating profits (rental and service revenue less
residence operating expenses) of $1,114,301.


Liquidity and Capital Resources

At June 30, 1998, the Company had approximately $1.7 million of working capital
compared to a working capital deficit of approximately $4.3 million at December
31, 1997, an increase of $6.0 million of which $7.0 million resulted from the
utilization of proceeds from the issuance by the Company of convertible
subordinated notes, as described below, to repay short-term borrowings, offset
primarily by expenditures related to development activities.

Net cash used in operating activities totaled $4,520,703 for the six month
period ended June 30, 1998, which resulted primarily from a net loss, adjusted
for depreciation and amortization, of $4,575,333.

Net cash used in investing activities totaled $21,409,469 for the six month
period ended June 30, 1998, substantially all of which was used for land
acquisition, development and construction costs. At June 30, 1998, the aggregate
purchase price for the Company's options related to nine parcels of land was
approximately $7.3 million. The Company has paid initial deposits relating to
these sites and is in the process of completing the demographic analysis and
other preliminary due diligence necessary to develop assisted living communities
at these sites.

Net cash provided by financing activities totaled $28,368,733 during the six
month period ended June 30, 1998, consisting of construction and equipment
financing proceeds totaling $15,079,724, net proceeds from six financing
transactions totaled $43,021,271, proceeds from issuance of convertible
subordinated notes of $7,000,000, offset by repayment of short-term borrowings
of $4,500,000, repayment of long-term debt of $31,426,443, prepayments and
deposits for financing arrangements of $456,381, and payment of preferred stock
dividends of $300,000.

During the remainder of 1998, the Company intends to utilize current working
capital resources to develop and construct assisted living communities. The
Company intends to finance a substantial portion of the cost of developing each
new community through additional sale/leaseback transactions with real estate
investment trusts ("REIT"), joint venture arrangements, as well as conventional
financing with commercial banks and other financial institutions.

The Company has two current construction loans and an agreement with a REIT to
provide construction funding for the Austin and two Scottsdale communities
currently under construction. The Company has received a letter of intent from a
commercial bank to provide construction financing for the Kent, Clackamas,
Modesto, and Corvallis communities and the Company is currently discussing with
several commercial banks the terms of potential loans with which the Company
will construct new communities currently under development. Each of the pending
financing transactions is subject to a number of conditions, including the
negotiation and execution of definitive documents and the satisfactory
completion of due diligence on the

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<PAGE>
related properties, and there is no assurance that any of these financing
transactions will be completed on the terms proposed, or at all.

On March 30, 1998, the Company completed a private placement pursuant to which
parties purchased an aggregate of $4.5 million of convertible subordinated notes
of the Company and agreed to purchase up to an additional aggregate amount of $6
million of convertible subordinated notes. As of August 7, 1998, a total of $7.0
million of convertible subordinated notes have been issued under this facility.
The notes bear interest at 7.5 percent per annum and are convertible into the
Company's common stock at an effective price of $7.50 per share. Interest on the
notes is payable quarterly and all principal and unpaid interest on the notes is
due March 31, 2008. The Company intends to utilize the proceeds to finance the
Company's continued rapid expansion of internally developed communities, to
repay short-term borrowings, and for general working capital purposes. The
Company currently may issue up to an additional $3.5 million of notes under the
terms of this facility.

The Company anticipates capital expenditures for the remainder of 1998 will
include additional land acquisition costs, architectural fees, and other
development costs related to at least 13 assisted living communities and
construction costs related to at least 15 new assisted living communities. The
Company's growth plan for the remainder of 1998 anticipates the completion of
construction of its internally developed Regent community in Austin, Texas and
one new Regent Court community in Scottsdale, Arizona. The Company has obtained
all financing necessary to complete its development plan for 1998.

The Company currently anticipates completing construction on nine new Regent
communities and five new Regent Court communities in 1999. The total cost to
develop and construct the 14 communities planned for 1999, including the
estimated initial operating deficits, will likely be between $80-90 million. A
portion of these costs will be incurred during 1998. The Company anticipates
that it will be able to obtain the financing, upon acceptable terms, necessary
to complete the 14 communities planned for 1999 although it has not obtained any
commitments for such financing other than a letter of intent to provide
financing for four Regent Court communities. Provided that the Company can
obtain financing upon acceptable terms, the Company estimates that it has the
necessary equity capital to complete construction and to fund the initial
operating deficits of the 14 communities planned for 1999.

The Company may enter into additional arrangements with one or more unrelated
parties regarding the joint development and ownership of one or more of the
Company's communities currently under construction or development in order to
further leverage the Company's growth. Furthermore, the Company may utilize
various forms of financing that would permit a community to be sold to or
initially be developed by a third party who would incur the initial operating
deficits and permit the Company to manage the community for a customary fee. The
Company, under such financing methods, would likely have the option to either
purchase the community or enter into a long-term lease at such time as the
Company deems appropriate. The Company has not obtained any commitments for this
form of financing.

If the Company were unable to obtain additional required financing, or if such
financing is not available on acceptable terms, the Company expects that its
plan to develop an additional nine Regent Communities and five Regent Court
communities by the end of 1999 would likely be delayed or curtailed.
Furthermore, if the Company expands its growth plan, development activities do
not result in the construction of a community on the site, the Company
experiences a decline in the operations of its current communities or the
Company does not achieve and sustain anticipated occupancy levels at its new
communities, then the Company may require

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<PAGE>
additional financing to complete its growth plan.


Forward-Looking Statements

The information set forth in this report in the sections entitled "Overview" and
"Liquidity and Capital Resources" regarding the Company's acquisition of sites
for development, the Company's development, construction, financing and opening
of new assisted living communities, and the Company's plans to develop,
construct and operate new Regent Court communities constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
is subject to the safe harbor created by that section. The development of
additional assisted living communities will involve a number of risks including,
without limitation, the risk that the Company will be unable to locate suitable
sites, risks relating to the inability to obtain, or delays in obtaining,
necessary zoning, land use, building, occupancy and other required governmental
permits and authorizations, risks that financing may not be available on
satisfactory terms, environmental risks, risks that construction costs may
exceed original estimates, risks that construction and lease-up may not be
completed on schedule, and risks relating to the competitive environment for
development. The foregoing risks could cause the Company to significantly delay
or curtail its planned growth and could cause one or more of the Company's new
communities to not be profitable. Additional factors that could cause results to
differ materially from those projected in the forward-looking statements
include, without limitation, the ability of the Company to raise additional
financing upon terms acceptable to the Company, increases in the costs
associated with new construction, competition, and acceptance of the Company's
prototype community in new geographic markets. The Company's growth strategy is
subject to the risk that occupancy rates at newly-developed communities may not
be achieved or sustained at expected levels, in which case, the Company will
experience greater than anticipated operating losses in connection with the
opening of new communities and the Company's need for additional financing to
meet its growth plans will likely increase. Furthermore, the Company's growth
will place increasing pressure on the Company's management controls and require
the Company to locate, train, assimilate, and retain additional community
managers and support staff. There is no assurance that the Company will be able
to manage this growth successfully.

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<PAGE>
PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders.

The Company held its 1998 annual meeting of shareholders at 10:30 a.m., PDT, on
June 2, 1998, on the 31st Floor of the U.S. Bancorp Tower, 111 S.W. Fifth
Avenue, Portland, Oregon.

The only matter submitted to a vote of the shareholders was the election of
three directors. Proxies were solicited pursuant to Regulation 14A of the
Exchange Act.

The following persons were elected by the following vote as directors for the
stated terms:

<TABLE>
<CAPTION>
                                         FOR                     ABSTAIN
                                         ---                     -------

Class II Term Expiring in 2001
------------------------------

<S>                                   <C>                          <C>
Peter J. Brix                         6,028,185                    675
Stephen A. Gregg                      6,028,185                    675
Martha L. Robinson                    6,028,185                    675

</TABLE>

Item 5.  Other Information

In accordance with amendments adopted on May 21, 1998 to Rule 14a-4 under the
Securities Exchange Act of 1934, if notice of a shareholder proposal to be
raised at the annual meeting of shareholders is received at the principal
executive offices of the Company after March 15, 1999 (45 days prior to the
month and date in 1999 corresponding to the date on which the Company mailed its
proxy materials for the 1998 annual meeting), proxy voting on that proposal when
and if raised at the 1999 annual meeting will be subject to the discretionary
voting authority of the designated proxy holders. Any shareholder proposal to be
considered for inclusion in proxy materials for the Company' 1999 annual
meeting must be received at the principal executive offices of the Company no
later than December 2, 1998.

Item 6.  Exhibits and Reports on Form 8-K.

         Exhibits:

         27       Financial Data Schedule

         Reports on Form 8-K

         None



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<PAGE>
                                    SIGNATURE

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

REGENT ASSISTED LIVING, INC.



By:  STEVEN L. GISH
     ------------------------------------               Date:  August 13, 1998
     Steven L. Gish
     Chief Financial Officer

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<PAGE>
                                  EXHIBIT INDEX


EXHIBIT NO.   EXHIBIT DESCRIPTION
-----------   -------------------

   27.        Financial Data Schedule