<PAGE>

                                                                    EXHIBIT 99
                             LTC HEALTHCARE, INC.

                                 RISK FACTORS

All statements, other than statements of historical facts, included in this
discussion of risk factors that address activities, events or developments that
LTC Healthcare, Inc. (the "Company") expects, believes or anticipates will or
may occur in the future, are forward looking statements.  Actual events or
results may differ materially from those discussed in the forward looking
statements.

RECENTLY FORMED ENTITY; LACK OF INDEPENDENT OPERATING HISTORY

The Company is a recently-formed entity with no prior operating history.  There
can be no assurance that the Company will not encounter financial, managerial or
other difficulties as a result of its lack of operating history or inability to
rely on the financial and other resources of LTC Properties, Inc. ("LTC").
Currently the Company has no external source of financing and the Company has
not received any commitment with respect to any funds needed in the future.  The
Company expects to be able to access capital markets or to seek other financing,
but there can be no assurance that it will be able to do so at all or in amounts
or on terms acceptable to the Company.

ANTICIPATED OPERATING LOSSES

Because the Company was recently formed and owns a significant amount of real
estate that is highly leveraged, it is anticipated that the Company will incur
operating losses. Due to the anticipated operating losses, the Company may not
be in a position to utilize tax benefits associated with net operating loss
carryforwards.

POSSIBLE CONFLICTS WITH LTC

The Company Board consists of Andre C. Dimitriadis, who is currently Chairman
and Chief Executive Officer of LTC and who serves in the same positions with the
Company, James J. Pieczynski, who is currently President and Chief Financial
Officer of LTC and who serves in the same positions with the Company, and Steven
Stuart and Bary G. Bailey, who are not affiliated with LTC.  The executive
officers of the Company include Mr. Dimitriadis, Mr. Pieczynski, Christopher T.
Ishikawa, who is currently Senior Vice President and Chief Investment Officer of
LTC and currently serves in the same positions with the Company and Pamela J.
Privett, who is currently Senior Vice President, General Counsel and Secretary
of LTC and currently serves in the same positions with the Company.  None of the
members of management of the Company is committed to spending a particular
amount of time on the Company's affairs, nor will any of them devote his or her
full time to the Company.  The Company anticipates that each of the members of
management of the Company will spend approximately 25% of his or her time on the
Company's affairs.  As such, pursuant to the administrative services agreement,
the Company will pay 25% of the aggregate amount of the wages, salaries and
bonuses of LTC's employees (which includes the members of management of the
Company) to LTC and LTC will pay the remaining 75% of such amount.

     The Company and LTC have entered into certain agreements providing for 
(i) the orderly separation of the Company and LTC, (ii) the sharing of 
certain facilities and services, and (iii) the allocation of certain tax and 
other liabilities.  Because the management of both the Company and


                                        1
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

     LTC is largely the same, conflicts may arise with respect to the 
operation and effect of these agreements and relationships which could have 
an adverse effect on the Company if not properly resolved.  More 
specifically, members of the Board and senior management of the Company and 
LTC may be presented with conflicts of interest with respect to certain 
matters affecting the Company and LTC, such as the determination of which 
company may take advantage of potential business opportunities, decisions 
concerning the business focus of each company (including decisions concerning 
the types of properties and geographic locations in which such companies make 
investments), potential competition between the business activities 
conducted, or sought to be conducted, by such companies (including 
competition for properties and tenants), possible corporate transactions 
(such as acquisitions), and other strategic decisions affecting the future of 
such companies.  Conflicts also may arise with respect to the restriction on 
the Company's right to engage in certain activities or make certain 
investments unless LTC was first offered the opportunity and declined to 
pursue such activities or investments (as described below).  In this regard, 
the Company and LTC have adopted policies and procedures to be followed by 
the Board of Directors of each company to address potential conflicts.  Such 
procedures include requiring the persons serving as directors of both 
companies to abstain from voting as directors with respect to matters that 
present a significant conflict of interest between the companies and require 
approval of the disinterested directors of both companies with respect to the 
intercompany agreement and the administrative services agreement.  The 
members of the Board of Directors of each company that do not have any 
potentially significant conflict of interest between the companies will 
determine whether a matter presents such a significant conflict.  The 
intercompany agreement prohibits the Company from developing a direct or 
indirect opportunity to invest in real estate through mortgage loans, 
facility lease transactions and other investments unless LTC was first 
offered the opportunity and declined to pursue such activities or 
investments. The intercompany agreement also prohibits the Company from 
prepaying or causing to be prepaid any of its mortgage loans provided by LTC 
which are securitized in REMIC transactions.

FAILURE OF LTC TO QUALIFY AS A REIT WOULD ALLOW LTC TO COMPETE WITH THE COMPANY

The intercompany agreement prohibits the Company from developing a direct or 
indirect opportunity to invest in real estate through mortgage loans, 
facility lease transactions and other investments unless LTC was first 
offered the opportunity and declined to pursue such activities and 
investments.  As a real estate investment trust ("REIT"), LTC is required to 
focus principally on investment in certain real estate assets and is 
prevented from owning certain assets and conducting certain activities that 
would be inconsistent with its status as a REIT.  If LTC in the future should 
fail to qualify as a REIT, it would thereafter have the ability to 
participate in a broader range of investments and activities that are 
presented to it by the Company under the intercompany agreement.  As a 
result, LTC's ability to engage in non-REIT activities could (i) 
significantly restrict the opportunities the Company may pursue, and/or (ii) 
allow LTC to compete with the Company for non-REIT investments.  Accordingly, 
if LTC should fail to qualify as a REIT, that failure could have a material 
adverse effect on the Company.

RELATED PARTY TRANSACTIONS

The Company and LTC entered into the intercompany agreement and the 
administrative services agreement on September 30, 1998.  Because LTC owned 
nonvoting common stock of the 


                                        2
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

Company (representing approximately 99% of the outstanding shares of Company 
Common Stock) at the time the agreements were entered into, such agreements 
were not negotiated at arms-length and may include terms which are not as 
favorable as would have been derived from arms-length negotiations.

In addition, although the intercompany agreement and administrative services 
agreement each have a stated term of 10 years, both of these agreements shall 
terminate sooner upon a change of control of LTC. A change of control of LTC 
shall occur upon the occurrence of any of the following:  (i) any person or 
related group of persons directly or indirectly acquires beneficial ownership 
of more than 50% of the voting power of LTC, (ii) there is a change in the 
composition of the LTC Board over a period of 36 consecutive months (or less) 
such that a majority of the LTC Board ceases to be comprised of individuals 
who either (A) have been board members continuously since the beginning of 
such period or (B) have been elected or nominated for election as board 
members during such period by at least a majority of the board members 
described in clause (A) who were still in office at the time such election or 
nomination was approved by the LTC Board; or (iii) there is a change in the 
composition of LTC's senior executive management such that both Andre C. 
Dimitriadis and James J. Pieczynski cease to be employed by LTC.  In 
addition, the Administrative Services Agreement may be terminated by either 
LTC or the Company upon 30 days' prior written notice to the other party.

RELIANCE ON MAJOR OPERATORS

Karrington Health, Inc., Sun Healthcare Group, Inc. (through its wholly owned 
subsidiary Sunrise Healthcare Corporation) and Integrated Health Services, 
Inc. are the Company's largest operators.  These operators, and the Company's 
other operators, manage long-term care facilities on each of the Company's 
properties. The financial position of the Company may be adversely affected 
by financial difficulties experienced by any of such operators, or any other 
major operator of the Company, including a bankruptcy, insolvency or general 
downturn in the business of any such operator, or in the event any such 
operator does not renew its leases as they expire.

CONCENTRATION OF COMPANY OPERATORS IN LONG-TERM CARE INDUSTRY

     The long-term care businesses of the major operators of the Company, and 
the healthcare industry generally, are subject to extensive federal, state 
and local regulation governing licensure and conduct of operations at 
existing facilities, certain capital expenditures, the quality of services 
provided, the manner in which such services are provided, financial and other 
arrangements between healthcare providers (including anti-kickback and 
self-referral arrangements) and reimbursement for services rendered.  The 
failure of any Company operator to comply with such laws, requirements and 
regulations could adversely affect its ability to operate the facility or 
facilities and could adversely affect such Company operator's ability to make 
payments to the Company, thereby adversely affecting the Company.

RELIANCE ON GOVERNMENT REIMBURSEMENT

A significant portion of the revenue of the Company's lessees is derived from 
governmentally-funded reimbursement programs, such as Medicare and Medicaid. 
These programs are highly 


                                        3
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

regulated and subject to frequent and substantial changes resulting from 
legislation, adoption of rules and regulations, and administrative and 
judicial interpretations of existing law.  In recent years, there have been 
fundamental changes in the Medicare program which have resulted in reduced 
levels of payment for a substantial portion of health care services. 
Moreover, health care facilities have experienced increasing pressures from 
private payers such as health maintenance organizations attempting to control 
health care costs, and reimbursement from private payers has in many cases 
effectively been reduced to levels approaching those of government payers. 
Governmental and popular concern regarding health care costs may result in 
significant reductions in payment to health care facilities, and there can be 
no assurance that future payment rates for either governmental or private 
health care plans will be sufficient to cover cost increases in providing 
services to patients.  In many instances, revenues from Medicaid programs are 
already insufficient to cover the actual costs incurred in providing care to 
those patients.   Any changes in reimbursement policies which reduce 
reimbursement to levels that are insufficient to cover the cost of providing 
patient care could adversely affect revenues of the Company's lessees and 
thereby adversely affect those lessees' abilities to make their lease 
payments to the Company.  Failure of the lessees to make their lease payments 
would have a direct and material adverse impact on the Company.

HEALTH CARE REFORM

The Balanced Budget Act of 1997 signed by President Clinton on August 5, 1997 
(the "Act"), enacted significant changes to the Medicare and Medicaid 
Programs designed to "modernize" payment and health care delivery systems 
while achieving substantial budgetary savings.

In seeking to limit Medicare reimbursement for long term care services, the 
Act mandated the establishment of a prospective payment system for skilled 
nursing facility services to replace the current cost-based reimbursement 
system.  The cost-based system reimburses skilled nursing facilities for 
reasonable direct and indirect allowable costs incurred in providing "routine 
services" (as defined by the Program) as well as capital costs and ancillary 
costs, subject to limits fixed for the particular geographic area served by 
the skilled nursing facility.  Under the prospective payment system, skilled 
nursing facilities will be paid a federal per diem rate for covered services. 
The per diem payment will cover routine service, ancillary, and 
capital-related costs.  The prospective payment system will be phased in over 
three cost reporting periods, starting with periods beginning on or after 
July 1, 1998.

Under provisions of the Act, states will be provided additional flexibility 
in managing their Medicaid programs while achieving in excess of $13 billion 
in federal budgetary savings over five years.  Among other things, the Act 
repealed the Boren Amendment payment standard, which had required states to 
pay "reasonable and adequate" payments to cover the costs of efficiently and 
economically operated hospitals, nursing facilities, and certain intermediate 
care facilities.

These health care reforms may reduce reimbursement to levels that are 
insufficient to cover the cost of providing patient care, which could 
adversely affect revenues of the Company's borrowers and lessees and thereby 
adversely affect those borrowers' and lessees' abilities to make their debt 
or lease payments to the Company.  Failure of the borrowers or lessees to 
make their debt or lease payments would have a direct and material adverse 
impact on the Company.


                                        4
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

FRAUD AND ABUSE ENFORCEMENT

In the past several years, due to rising health care costs, there has been an 
increased emphasis on detecting and eliminating fraud and abuse in the 
Medicare and Medicaid programs.  Payment of any remuneration to induce the 
referral of Medicare and Medicaid patients is generally prohibited by federal 
and state statutes.  Both federal and state self-referral statutes severely 
restrict the ability of physicians to refer patients to entities in which 
they have a financial interest.  The Act provided the federal government with 
expanded enforcement powers to combat waste, fraud and abuse in the delivery 
of health care services.  Further, pursuant to a government initiative called 
Operation Restore Trust, the Office of Inspector General and the Health Care 
Financing Administration have increased investigations and enforcement 
activity of fraud and abuse, specifically targeting nursing homes, home 
health providers and medical equipment suppliers.  Failure to comply with the 
foregoing fraud and abuse laws or government program integrity regulations 
may result in sanctions including the loss of licensure or eligibility to 
participate in reimbursement programs (including Medicare and Medicaid), 
asset forfeitures and civil and criminal penalties.

It is anticipated that the trend toward increased investigation and informant 
activity in the area of fraud and abuse, as well as self-referral, will 
continue in future years.  In the event that any borrower or lessee were to 
be found in violation of laws regarding fraud, abuse or self-referral, that 
borrower's or lessee's licensure or certification to participate in 
government reimbursement programs could be jeopardized, or that borrower or 
lessee could be subject to civil and criminal fines and penalties.  Either of 
these occurrences could have a material adverse affect on the Company by 
adversely affecting the borrower's or lessee's ability to make debt or lease 
payments to the Company.

DILUTION

The Company may from time to time raise additional capital from the issuance 
and sale of equity securities.  Any such issuances may significantly dilute 
the interests of the existing holders of Company securities, including the 
Company Common Stock.

DIFFICULTY OF LOCATING SUITABLE INVESTMENTS; COMPETITION

The Company was recently organized and has not, to date, began to seek 
investments.  Identifying, completing and acquiring real estate investments 
has from time to time been highly competitive, and involves a high degree of 
uncertainty.  The Company will be competing for investments with many public 
and private real estate investment vehicles, including financial institutions 
(such as mortgage banks, pension funds and REITs) and other institutional 
investors, as well as individuals.  There can be no assurance that the 
Company will be able to locate and complete investments which satisfy the 
Company's rate of return objective or realize upon their value or that it 
will be able to fully invest its available capital.

Many of those with whom the Company will compete for investments are far 
larger than the Company, may have greater financial resources than the 
Company and may have management personnel with more experience than the 
officers of the Company.


                                        5
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

ACQUISITION, DEVELOPMENT, CONSTRUCTION AND RENOVATION ACTIVITIES

ACQUIRED PROPERTIES MAY FAIL TO PERFORM AS EXPECTED AND CAPITAL EXPENDITURES 
MAY EXCEED ESTIMATES.  Acquisitions of any properties entail general 
investment risks associated with any real estate investment, including the 
risk that investments will fail to perform as expected, that estimates of the 
cost of improvements to bring an acquired property up to standards 
established for the intended market position may prove inaccurate and the 
occupancy rates and rents achieved may be less than anticipated.

UNCERTAINTY OF CASH FLOW FROM DEVELOPMENT, CONSTRUCTION AND RENOVATION 
ACTIVITIES.  Risks associated with the Company's development, construction 
and renovation activities include the risks that: the Company may abandon 
development opportunities after expending resources to determine feasibility; 
construction and renovation costs of a project may exceed original estimates; 
occupancy rates and rents at a newly completed property may not be sufficient 
to make the property profitable; and development, construction, renovation 
and lease-up may not be completed on schedule (including risks beyond the 
control of the Company, such as weather or labor conditions or material 
shortages) resulting in increased debt service expense and construction 
costs. Development, construction and renovation activities also are subject 
to risks relating to the inability to obtain, or delays in obtaining, all 
necessary zoning, land-use, building, occupancy and other required 
governmental permits and authorizations.  These risks could result in 
substantial unanticipated delays or expenses and, under certain 
circumstances, could prevent completion of development, construction and 
renovation activities once undertaken, any of which could adversely affect 
the financial condition and results of operations of the Company.  Properties 
under development or acquired for development may generate little or no cash 
flow from the date of acquisition through the date of completion of 
development and may experience operating deficits after the date of 
completion.  In addition, new development and renovation activities, 
regardless of whether or not they are ultimately successful, typically 
require a substantial portion of management's time and attention.

Any properties developed and renovated by the Company will be subject to the 
risks associated with the ownership and operation of real estate described 
elsewhere in this document.

OPERATING RISKS

POTENTIAL INCREASES IN OPERATING COSTS.  If the properties of the Company, 
the properties of those entities in which it invests or the properties of 
those entities to which it will lend (collectively, the "Properties") do not 
generate revenue sufficient to meet operating expenses, including debt 
service and capital expenditures, the financial condition and results of 
operations of the Company may be adversely affected.  The Properties are 
subject to operating risks common to the particular property type, any and 
all of which may adversely affect occupancy or rental rates.

DEPENDENCE ON RENTAL INCOME FROM REAL PROPERTY

The Company's cash flow, results of operations and value of its assets would 
be adversely affected if a significant number of operators of the Properties 
failed to meet their lease obligations.  The bankruptcy or insolvency of a 
major operator may have an adverse effect on a property.  At any time, an 
operator also may seek protection under the bankruptcy laws, which 


                                        6
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

could result in rejection and termination of such operator's lease and 
thereby cause a reduction in the cash flow of the property.  If an operator 
rejects its lease, the owner's claim for breach of the lease would (absent 
collateral securing the claim) be treated as a general unsecured claim.  
Generally, the amount of the claim would be capped at the amount owed for 
unpaid pre-petition lease payments unrelated to the rejection, plus the 
greater of one year's lease payments or 15.0% of the remaining lease payments 
payable under the lease (but not to exceed the amount of three years' lease 
payments).  No assurance can be given that the Properties will not experience 
significant operator defaults in the future.

POTENTIAL ADVERSE CONSEQUENCES OF DEBT FINANCING

USE OF LEVERAGE COULD ADVERSELY AFFECT THE COMPANY.   A majority of the 
Company's real estate equity investments utilize a leveraged capital 
structure, in which case third party lenders are entitled to cash flow 
generated by such investments prior to the Company receiving a return. As a 
result of such leverage, the Company is subject to the risks normally 
associated with debt financing, including the risk that cash flow from 
operations and investments will be insufficient to meet required payments of 
principal and interest, the risk that existing debt (which in most cases will 
not have been fully amortized at maturity) will not be able to be refinanced 
or that the terms of such refinancings will not be as favorable to the 
Company, and the risk that necessary capital expenditures for such purposes 
as renovations and other improvements will not be able to be financed on 
favorable terms or at all.  While such leverage may increase returns or the 
funds available for investment by the Company, it also will increase the risk 
of loss on a leveraged investment.  If the Company defaults on secured 
indebtedness, the lender may foreclose and the Company could lose its entire 
investment in the security for such loan.  Because the Company may engage in 
portfolio financings where several investments are cross-collateralized, 
multiple investments may be subject to the risk of loss.  As a result, the 
Company could lose its interests in performing investments in the event such 
investments are cross-collateralized with poorly performing or non-performing 
investments.  In addition, recourse debt, which the Company reserves the 
right to obtain, may subject other assets of the Company to risk of loss.

INABILITY TO REPAY OR REFINANCE INDEBTEDNESS AT MATURITY; FORECLOSURES.  The 
Company anticipates that only a portion of the principal of the Company's 
indebtedness outstanding from time to time will be repaid prior to maturity.  
However, the Company may not have sufficient funds to repay such indebtedness 
at maturity; it may therefore be necessary for the Company to refinance debt 
through additional debt financing or equity offerings.  If the Company is 
unable to refinance this indebtedness on acceptable terms, the Company may be 
forced to dispose of properties or other assets upon disadvantageous terms, 
which could result in losses to the Company and adversely affect the amount 
of cash available for further investment.

RISING INTEREST RATES COULD INCREASE THE COMPANY'S INTEREST EXPENSE.  The 
Company may incur indebtedness in the future that bears interest at a 
variable rate or may be required to refinance its debt at higher rates. 
Accordingly, increases in interest rates could increase the Company's 
interest expense and adversely affect the financial condition and results of 
operations of the Company.

RESTRICTIVE COVENANTS COULD ADVERSELY AFFECT THE COMPANY'S BORROWINGS.  
Various credit facilities or other debt obligations may require the Company 
to comply with a number of 


                                        7
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

financial and other covenants on an ongoing basis. Failure to comply with 
such covenants may limit the Company's ability to borrow funds or may cause 
default under its then-existing indebtedness.

NO LIMITATION ON DEBT.  The organizational documents of the Company do not 
contain any limitation on the amount of indebtedness the Company may incur.  
The Company also has the ability to use a more highly leveraged business 
strategy than typically used by REITs. As part of its business strategy, the 
Company intends to engage in the ownership of leveraged properties, and as 
such, the purchase of additional properties will cause the Company's debt to 
increase.  Accordingly, the Company could become highly leveraged, resulting 
in an increase in debt service that could increase the risk of default on the 
Company's indebtedness.

INABILITY TO REFINANCE INDEBTEDNESS.  The Company has approximately $29.4 
million of mortgage loans payable that were securitized by LTC in REMIC 
transactions.  The interest rates on the mortgage loans range from 8.0% to 
12.0%.  In connection with the administrative services agreement, the Company 
has agreed not to prepay or cause to be prepaid any of its mortgage loans 
provided by LTC which are securitized in REMIC transactions unless the 
property is sold to an unaffiliated third party.  Because of this agreement, 
the Company will not have the ability to refinance this mortgage debt and 
consequently will not be able to lower its interest costs in a low interest 
rate environment.

EQUITY INVESTMENTS IN AND WITH THIRD PARTIES

DEPENDENCE ON THIRD PARTIES.  The Company invests in health care companies 
and may invest in shares of REITs, health care companies or other entities 
that invest in real estate or health care assets, including debt instruments 
and equity interests.  In such cases, the Company will be relying on the 
assets, investments and management of the REIT or other entity in which it is 
investing.  Such entities and their properties will be subject to the other 
risks affecting the ownership and operation of real estate and investment in 
debt set forth in this document.

POTENTIAL LACK OF CONTROL OF MANAGEMENT.  The Company also co-invests with 
third parties and may continue to do so through partnerships, joint ventures 
or other entities, acquiring non-controlling interests in or sharing 
responsibility for managing the affairs of a property, partnership, joint 
venture or other entity and, therefore, will not be in a position to exercise 
sole decision-making authority regarding the property, partnership, joint 
venture or other entity.

POTENTIAL CONFLICTS AND INCREASED BANKRUPTCY, LIABILITY AND OTHER RISKS.  
Investments in partnerships, joint ventures or other entities may, under 
certain circumstances, involve risks not present were a third party not 
involved, including the possibility that the Company's partners or 
co-venturers might become bankrupt or otherwise fail to fund their share of 
required capital contributions, that such partners or co-venturers might at 
any time have economic or other business interests or goals which are 
inconsistent with the business interests or goals of the Company, and that 
such partners or co-venturers may be in a position to take action contrary to 
the instructions or the requests of the Company and contrary to the Company's 
policies or objectives.  Such investments also may have the potential risk of 
impasse on decisions, such as a sale, because neither the Company nor the 
partner or co-venturer would have full control over the partnership or joint 
venture. Consequently, actions by such partner or co-venturer might result in 


                                        8
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

subjecting properties owned by the partnership or joint venture to additional 
risk.  In addition, the Company may in certain circumstances be liable for 
the actions of its third-party partners or co-venturers.

ILLIQUIDITY OF REAL ESTATE INVESTMENTS

Equity and debt investments in real estate may be relatively illiquid.  Such 
illiquidity limits the ability of the Company to modify its portfolio in 
response to changes in economic or other conditions and may have a material 
adverse effect on the Company.  Illiquidity may result from the absence of an 
established market for the investments as well as legal or contractual 
restrictions on their resale by the Company.

DISADVANTAGES OF INVESTMENTS IN DEBT INSTRUMENTS

DEPENDENCE ON BORROWERS TO PRESERVE VALUE OF COLLATERAL; POSSIBILITY OF 
NONPAYMENT.  In general, debt instruments carry the risk that borrowers may 
not be able to make debt service payments or to pay principal when due, the 
risk that the value of any collateral may be less than the amounts owed, the 
risk that interest rates payable on the debt instruments may be lower than 
the Company's cost of funds, and the risk that the collateral may be 
mismanaged or otherwise decline in value during periods in which the Company 
is seeking to obtain control of the underlying real estate.  The Company is 
also dependent on the ability of the borrowers to operate successfully their 
properties.  Such borrowers and their properties will be subject to the other 
risks affecting the ownership and operation of real estate set forth in this 
document.  Some of the loans may be structured so that all or a substantial 
portion of the principal will not be paid until maturity, which increases the 
risk of default at that time.

UNRATED DEBT INSTRUMENTS.  It is anticipated that a substantial portion of 
the debt in which the Company invests will not be rated by any 
nationally-recognized rating agency. Generally, the value of unrated classes 
is more subject to fluctuation due to economic conditions than rated classes. 
The Company's acquisition of credit supported classes of securitizations 
(which generally are expected to be first loss classes) which are unrated at 
the time of acquisition and which have lower ratings may increase the risk of 
nonpayment or of a significant delay in payments on these classes.  Should 
rated assets be downgraded, it may adversely affect their value and the 
Company.  The Company's potential investments in such assets will likely be 
from unrelated third parties.

LIMITED REMEDIES UPON DEFAULT OF MORTGAGE LOANS

To the extent the Company invests in mortgage loans, such mortgage loans may 
or may not be recourse obligations of the borrower and generally will not be 
insured or guaranteed by governmental agencies or otherwise.  In the event of 
a default under such obligations, the Company may have to foreclose its 
mortgage or protect its interest by acquiring title to a property and 
thereafter making substantial improvements or repairs in order to maximize 
the property's investment potential.  Borrowers may contest enforcement of 
foreclosure or other remedies, seek bankruptcy protection against such 
enforcement and/or bring claims for lender liability in response to actions 
to enforce mortgage obligations.  Relatively high "loan-to-value" ratios and 


                                        9
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

declines in the value of the property may prevent the Company from realizing 
an amount equal to its mortgage loan upon foreclosure.

The Company may participate in loans originated by other financing 
institutions. As a participant, the Company may not have the sole authority 
to declare a default under the mortgage or to control the property or any 
foreclosure.

Any investments in junior mortgage loans which are subordinate to liens of 
senior mortgages would involve additional risks, including the lack of 
control over the collateral and any related foreclosure proceeding.  In the 
event of a default on a senior mortgage, the Company may make payments to 
prevent foreclosure on the senior mortgage without necessarily improving the 
Company's position with respect to the subject real property.  In such event, 
the Company would be entitled to share in the proceeds only after 
satisfaction of the amounts due to the holder of the senior mortgage.

DISADVANTAGES OF INVESTMENTS IN COMMERCIAL MORTGAGE-BACKED SECURITIES

INVESTMENTS IN COMMERCIAL MORTGAGE-BACKED SECURITIES SUBJECT TO REAL ESTATE 
RISKS APPLICABLE TO UNDERLYING PROPERTIES.  The Company may seek to invest in 
real estate-related debt instruments, which may include commercial 
mortgage-backed securities.  Many of the risks of investing in commercial 
mortgage-backed securities reflect the risks of investing directly in the 
real estate securing the underlying mortgage loans. This may be especially 
true in the case of commercial mortgage securities secured by, or evidencing 
an interest in, a single commercial mortgage loan or a relatively small or 
less diverse pool of commercial mortgage loans.

INVESTMENT IN COMMERCIAL MORTGAGE-BACKED SECURITIES SUBJECT TO RISKS 
ASSOCIATED WITH PREPAYMENT OF UNDERLYING MORTGAGES.  As with many interest 
bearing mortgage-backed instruments, prepayments of the underlying mortgages 
may expose the Company to the risk that an equivalent rate of return is not 
available in the current market and that new investment of equivalent risk 
will have lower rates of return.  Certain types of investments in commercial 
mortgage-backed securities may be interest-only securities which expose the 
holder to the risk that the underlying mortgages may prepay at a faster rate 
than anticipated at acquisition.  Faster than anticipated prepayments may 
cause the investment in interest-only commercial mortgage-backed securities 
to have a lower than anticipated rate of return and could result in a loss of 
the initial investment under extreme prepayment scenarios.

CREDIT SUPPORT FOR COMMERCIAL MORTGAGE-BACKED SECURITIES MAY PROVE 
INADEQUATE.  The risks of investing in commercial mortgage-backed securities 
include risks that the existing credit support will prove to be inadequate, 
either because of unanticipated levels of losses or, if such credit support 
is provided by a third party, because of difficulties experienced by such 
provider.  Delays or difficulties encountered in servicing commercial 
mortgage-backed securities may cause greater losses and, therefore, greater 
resort to credit support than was originally anticipated, and may cause a 
rating agency to downgrade a security.

SUBORDINATED SECURITIES MAY NOT BE REPAID UPON DEFAULT.  The Company may 
acquire subordinated tranches of commercial mortgage-backed securities 
issuances.  In general, subordinated tranches of commercial mortgage-backed 
securities are entitled to receive 


                                        10
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

repayment of principal only after all principal payments have been made on 
more senior tranches and also have subordinated rights as to receipt of 
interest distributions.  In addition, an active secondary market for such 
subordinated securities is not as well developed as the market for certain 
other mortgage-backed securities.  Accordingly, such subordinated commercial 
mortgage-backed securities may have limited marketability and there can be no 
assurance that a more efficient secondary market will develop.

LIMITATIONS ON REMEDIES UPON DEFAULT

Although the Company will have certain contractual remedies upon the default 
by borrowers under certain debt instruments, such as foreclosing on the 
underlying real estate or collecting rents generated therefrom, certain legal 
requirements (including the risks of lender liability) may limit the ability 
of the Company to effectively exercise such remedies.

The right of a mortgage lender to convert its loan position into an equity 
interest may be limited or prevented by certain common law or statutory 
provisions.

THIRD-PARTY BANKRUPTCY RISKS

Investments made in assets operating in workout modes or under Chapter 11 of 
the Bankruptcy Code could be subordinated or disallowed, and the Company 
could be liable to third parties in such circumstances.  Furthermore, 
distributions made to the Company in respect of such investments could be 
recovered if any such distribution is found to be a fraudulent conveyance or 
preferential payment. Bankruptcy laws, including the automatic stay imposed 
upon the filing of a bankruptcy petition, may delay the ability of the 
Company to realize on collateral for loan positions held by it or may 
adversely affect the priority of such loans through doctrines such as 
equitable subordination or may result in a restructure of the debt through 
principles such as the "cramdown" provisions of the bankruptcy laws.

COSTS OF COMPLIANCE WITH THE INVESTMENT COMPANY ACT

The Company is currently not registered as an investment company under the 
Investment Company Act of 1940, as amended (the "Investment Company Act"), 
since management believes that the Company either is not within the 
definition of "investment company" thereunder or, alternatively, is excluded 
from regulation under the Investment Company Act by one or more exemptions.  
In the future, the Company will seek to continue to conduct its operations so 
as to avoid registration under the Investment Company Act.  Therefore, the 
assets that the Company may acquire or sell may be limited by the provisions 
of the Investment Company Act.  If the Company were to become an investment 
company under the Investment Company Act and if it failed to qualify for an 
exemption thereunder, it would be unable to conduct its business as presently 
conducted which could have a material adverse effect on the Company and the 
market price for the Company Common Stock.

UNINSURED LOSSES

The Company requires its lessees to carry comprehensive liability, fire, 
extended coverage and rental loss insurance with respect to all of the 
properties that it owns, with policy specifications, 


                                        11
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

insured limits and deductibles customarily carried for similar properties.  
There are, however, certain types of losses (such as losses arising from acts 
of war or relating to pollution) that are not generally insured because they 
are either uninsurable or not economically insurable.  Should an uninsured 
loss or a loss in excess of insured limits occur, the Company could lose its 
capital invested in a property, as well as the anticipated future revenue 
from such property and would continue to be obligated on any mortgage 
indebtedness or other obligations related to the property.  Any such loss 
would adversely affect the financial condition and results of operations of 
the Company.

With respect to those properties in which the Company holds an interest 
through a mortgage, as well as those properties owned by entities to whom the 
Company makes unsecured loans, the borrowers will most likely be obligated to 
maintain insurance on such properties and to arrange for the Company to be 
covered as a named insured on such policies.  The face amount and scope of 
such insurance coverage may be less comprehensive than the Company would 
carry if it held the fee interest in such property.  Accordingly in such 
circumstances, or in the event that the borrowers fail to maintain required 
coverage, uninsured or underinsured losses may occur, which could have an 
adverse impact on the Company's cash flow or financial condition.

POTENTIAL ENVIRONMENTAL LIABILITY RELATED TO THE PROPERTIES

Under various Federal, state and local laws, ordinances and regulations, an 
owner or operator of real estate is liable for the costs of removal or 
remediation of certain hazardous or toxic substances on or in such property. 
These laws often impose such liability without regard to whether the owner or 
operator knew of, or was responsible for, the presence of such hazardous or 
toxic substances.  The cost of any required remediation and the owner's 
liability therefor as to any property is generally not limited under such 
enactments and could exceed the value of the property and/or the aggregate 
assets of the owner.  The presence of such substances, or the failure to 
properly remediate such substances, may adversely affect the owner's ability 
to sell or rent such property or to borrow using such property as collateral. 
Persons who arrange for the disposal or treatment of hazardous or toxic 
substances also may be liable for the costs of removal or remediation of such 
substances at a disposal or treatment facility, whether or not such facility 
is owned or operated by such persons.  Certain environmental laws govern the 
removal, encapsulation or disturbance of asbestos-containing materials 
("ACMs") when such materials are in poor condition, or in the event of 
renovation or demolition.  Such laws impose liability for release of ACMs 
into the air and third parties may seek recovery from owners or operators of 
real properties for personal injury associated with ACMs.  The operation and 
subsequent removal of certain underground storage tanks also are regulated by 
Federal and state laws. In connection with the ownership (direct or 
indirect), operation, management and development of real properties, the 
Company may be considered an owner or operator of such properties or as 
having arranged for the disposal or treatment of hazardous or toxic 
substances, and, therefore, potentially liable for removal or remediation 
costs, as well as certain other related costs, including governmental fines 
and injuries to persons and property.

HEDGING POLICIES/RISKS

In connection with the financing of certain real estate investments, the Company
may employ hedging techniques designed to protect the Company against adverse
movements in currency 


                                        12
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

and/or interest rates.  While such transactions may reduce certain risks, 
such transactions themselves may entail certain other risks. Thus, while the 
Company may benefit from the use of these hedging mechanisms generally, 
unanticipated changes in interest rates, securities prices, or currency 
exchange rates may result in a poorer overall performance for the Company 
than if it had not entered into such hedging transactions.

In connection with the financing of certain real estate investments, the 
Company may use derivative financial instruments primarily to reduce exposure 
to adverse fluctuations in interest rates and foreign exchange rates.  The 
Company does not intend to enter into derivative financial instruments for 
trading purposes.  Any derivative position maintained by the Company would be 
used to reduce risk by hedging an underlying economic exposure.  Because of 
the high correlation between the hedging instrument and the underlying 
exposure, fluctuations in the value of the instruments are generally offset 
by reciprocal changes in the value of the underlying exposure.  The Company 
intends to invest in derivatives having straightforward instruments with 
liquid markets.  In order to reduce counter-party credit or legal enforcement 
risk, all counter-parties will be major investment or commercial banks and 
all transactions will be executed with documentation consistent with accepted 
industry practice.

DIVIDEND POLICY

The future payment of dividends by the Company will depend on decisions that 
will be made by the Company Board from time to time based on the results of 
operations and financial condition of the Company and such other business 
considerations as the Company Board considers relevant.  The Company 
presently anticipates that it will retain all available funds for use in the 
operation and expansion of its business and does not anticipate paying any 
dividends in the foreseeable future.

In addition, the stock market has experienced extreme price and volume 
fluctuations which have affected the market price of many companies and which 
have at times been unrelated to the operating performance of the specific 
companies whose stock is traded.  Broad market fluctuations and general 
economic conditions may adversely affect the market price of the Company 
Common Stock.

CERTAIN ANTI-TAKEOVER FEATURES AFFECTING A CHANGE IN CONTROL OF THE COMPANY

Certain provisions of the Company Articles and the Company Bylaws could 
discourage potential acquisition proposals and could delay or prevent a 
change in control of the Company. Such provisions include Article II of the 
Company Articles which authorizes the Company Board to issue shares of 
preferred stock of the Company, in one or more series, and to establish the 
rights and preferences (including the convertibility of such shares of 
preferred stock into shares of Company Common Stock) of any series of 
preferred stock so issued.  The Company's stockholders have no right to take 
action by written consent and are, except as otherwise required by law, not 
permitted to call special meetings of stockholders.  Any amendment of the 
Company Bylaws by the stockholders or certain provisions of the Company 
Articles requires the affirmative vote of at least 66 2/3% of the shares of 
voting stock then outstanding.  In addition, the affirmative vote of at least 
66 2/3% of the shares of voting stock then outstanding is required for any 
merger, exchange or consolidation to which the Company is a party and which 
requires stockholder approval under Nevada statutory law 


                                        13
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

and any sale or other disposition by the Company of all or substantially all 
of its assets.  Such provisions could diminish the opportunities for a 
stockholder to participate in tender offers, including tender offers at a 
price above the then current market value of the Company Common Stock. Such 
provisions also may inhibit fluctuations in the market price of the Company 
Common Stock that could result from takeover attempts and could discourage an 
acquisition attempt or other transaction that some or a majority of 
stockholders might believe to be in their best interests.  Such provisions 
could further have the effect of making it more difficult for third parties 
to cause the replacement of the current management of the Company without the 
concurrence of the Company Board.

In addition, certain provisions of Nevada statutory law may make more 
difficult the acquisition of control of the Company without the approval of 
the Company Board.  Nevada's Combinations with Interested Stockholders 
statute (NRS Sections 78.411-78.444), which applies to Nevada corporations 
having at least 200 stockholders, prevents an "interested stockholder" and an 
applicable Nevada corporation from entering into a "combination" unless 
certain conditions are met.  A "combination" means any merger or 
consolidation with an "interested stockholder," or any sale, lease exchange, 
mortgage, pledge, transfer or other disposition, in one transaction or a 
series of transactions, with an "interested stockholder" having: (i) an 
aggregate market value equal to 5% or more of the aggregate market value of 
the assets of the corporation, (ii) an aggregate market value equal to 5% or 
more of the aggregate market value of all outstanding shares of the 
corporation, or (iii) 10% or more of the earning power or net income of the 
corporation.  An "interested stockholder" means a person who, together with 
affiliates and associates, beneficially owns (or within the prior three 
years, did beneficially own) 10% or more of the voting power of the 
corporation.  A corporation to which this statute applies may not engage in a 
"combination" within three years after the interested stockholder acquired 
its shares unless the combination or purchase is approved by the board of 
directors before the interested stockholder acquired such shares.  If this 
approval is not obtained, then, after the expiration of the three-year 
period, the business combination may be consummated with the approval of the 
board of directors or a majority of the voting power held by disinterested 
stockholders, or if the consideration to be paid by the interested 
stockholder is at least equal to the highest of: (i) the highest price per 
share paid by the interested stockholder within the three years immediately 
preceding the date of the announcement of the combination or in the 
transaction in which it became an interested stockholder, whichever is 
higher; (ii) the market value per share of common stock on the date of 
announcement of the combination and the date the interested stockholder 
acquired the shares, whichever is higher; or (iii) for holders of preferred 
stock, the highest liquidation value of the preferred stock, if it is higher.

Nevada's Acquisition of Controlling Interest statute (NRS Sections 
78.378-78.3793) applies only to Nevada corporations with at least 200 
stockholders, including at least 100 stockholders of record who are Nevada 
residents, and which conduct business directly or indirectly in Nevada.  As 
of the date of this Information Statement, the Company does not have 100 
stockholders of record who are residents of Nevada, although there can be no 
assurance that in the future the Acquisition of Controlling Interest statute 
will not apply to the Company.

The Acquisition of Controlling Interest statute prohibits an acquirer, under
certain circumstances, from voting its shares of a target corporation's stock
after crossing certain ownership threshold percentages, unless the acquirer
obtains approval of the target corporation's disinterested 


                                        14
<PAGE>

                                                                    EXHIBIT 99

                                LTC HEALTHCARE, INC.

                                    RISK FACTORS

                                    (CONTINUED)

stockholders.  The statute specifies three thresholds: one-fifth or more but 
less than one-third, one-third but less than a majority, and a majority or 
more, of the outstanding voting power.  Once an acquirer crosses one of the 
above thresholds, those shares in an offer or acquisition and acquired within 
90 days thereof become "Control Shares" and such Control Shares are deprived 
of the right to vote until disinterested stockholders restore the right.  The 
Acquisition of Controlling Interest statute also provides that in the event 
Control Shares are accorded full voting rights and the acquiring person has 
acquired a majority or more of all voting power, all other stockholders who 
do not vote in favor of authorizing voting rights to the Control Shares are 
entitled to demand payment for the fair value of their shares in accordance 
with statutory procedures established for dissenters' rights.

DEPENDENCE ON KEY PERSONNEL

The Company is dependent on the efforts of its executive officers and other 
key personnel.  While the Company believes that it could find replacements 
for these persons, the loss of their services could have a temporary adverse 
effect on the operations of the Company.  None of the Company's executive 
officers or other key personnel has an employment agreement with the Company. 
There can be no assurance that the Company will be able to retain these 
persons or to attract suitable replacements or additional personnel if 
required.  The Company has not obtained key-man insurance for any of its 
executive officers or other key personnel.


                                        15