-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GniGshlbArdtjnzk4xnqKPWG0GR/ry62WCRtblajidc37cZoJP3/W1w3iiYaBpK9 CdniCJIpvVeriS18+3Kr+A== 0000745543-96-000009.txt : 19970102 0000745543-96-000009.hdr.sgml : 19970102 ACCESSION NUMBER: 0000745543-96-000009 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19961231 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALL STATE PROPERTIES LP CENTRAL INDEX KEY: 0000745543 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 592399204 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12895 FILM NUMBER: 96688830 BUSINESS ADDRESS: STREET 1: 1674 NW 56TH AVE CITY: FT LAUDERDALE STATE: FL ZIP: 33313 BUSINESS PHONE: 3057356300 MAIL ADDRESS: STREET 1: PO BOX 5524 CITY: FORT LAUDERDALE STATE: FL ZIP: 33310-5524 10-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended Commission File No. June 30, 1996 0-12895_______________ ALL-STATE PROPERTIES L.P.___________________________ (Exact name of Registrant as specified in its charter) Delaware 59-2399204___________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Mailing address: P.O. Box 5524 Fort Lauderdale, FL 33310-5524 1674 N.W. 56th Avenue, Lauderhill, Florida 33313__________ (Address of principal executive offices) (Zip Code) Registrant's telephone number, with area code: (954) 735-6300 Securities registered pursuant to Section 12(b) of the Act: Title of Class Name of each exchange on which registered____ None Not applicable Securities registered pursuant to Section 12 (g) of the Act: Tile of Class_____________ Limited partnership units. Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (D) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO The aggregate market value of the limited partnership units held by non- affiliates of Registrant is not ascertainable. (See Page II-1) PART I _____ ITEM 1. BUSINESS_______ ________ (a) General Development of Business ____________________________ All-State Properties L.P. (a limited partnership) (the "Partnership") was organized under the Revised Uniform Limited Partnership Act of Delaware on April 27, 1984 to conduct the business formerly carried on by a predecessor corporation, All-State Properties Inc. (the "Corporation"). The terms "Company" and "Registrant" refer to the Partnership or the Corporation or both of them as the context requires. Pursuant to a Plan of Liquidation adopted by shareholders of the Corporation on September 30, 1984, the Corporation transferred substantially all of its assets to the Partnership, and the Corporation distributed such limited partnership interests to its shareholders. Registrant's principal business has been land development and the construction and sale of residential housing in Broward County, Florida. However, it has substantially completed its land development activities and the sale of residential housing. Its present activities are: (i) Through a 49.5% owned Florida limited partnership, Unicom Partnership Ltd. ("Unicom"), Registrant is engaged in the operation of an adult rental apartment project on 78.2 acres of land. (See Note 2 to financial statements.) (ii) Through a 50% owned real estate joint venture, City Planned Communities ("CPC"), Registrant was engaged in the development and sale of commercial and residential land. (See Note 2 to financial statements.) (iii) Through a 99% owned Florida limited partnership, Wimbledon Development Ltd. ("Wimbledon"), Registrant is attempting to sell a condominium development. See Item 1(b)(1)(i)(c). (b) (1) NARRATIVE DESCRIPTION OF BUSINESS ______________________ (i) (a) Adult Rental Apartment Project _________ In April, 1987, CPC sold approximately 78 acres of land to Unicom for the purpose of constructing a 324-unit adult apartment rental project on the land. Registrant holds a 49.5% limited partnership interest in Unicom. (See Note 2.) The beneficial owners of Unicom are substantially the same as the holders of CPC partnership interests. The general partner of Unicom was Sadkin Associates, Inc., an affiliate of the late Herbert Sadkin, who died in February, 1989. Following Mr. Sadkin's death, the limited partners requested that Unicom retain Mr. Stanley Rosenthal, the General Partner of Registrant, as manager. Currently, all of Mr. Rosenthal's total compensation is considered compensation as manager of Unicom. (See Items 11 and 13.) I-2 The project is adjacent to the Inverrary and Woodlands Country Club communities in Broward County, Florida, which are upper-income retirement developments. The project consists of 80 one-bedroom, one-bath apartments of approximately 800 square feet and 244 two-bedroom, two-bath apartments of approximately 1,025 square feet. It includes a 29-acre lake and has dining and clubhouse facilities containing an auditorium, a swimming pool, various craft centers, a health club, game and club rooms, and a beauty and barber shop. The project is designed to meet the special needs of the elderly and includes features designed to appeal to upper-income retirees. Primary emphasis is placed on security with a well-designed entrance-exit monitoring system, emergency alarm systems in apartments, a security gate entrance and security fence as well as lever door handles and handrails along halls and stairs, and includes fire alarm systems and smoke detectors. Amenities include built-in washers and dryers and balconies or terraces. The monthly rentals range from $2,400 per month for the one- bedroom units to $2,800 per month for the two-bedroom units, and include food service, maid service and electricity. The facility is 98-percent leased and occupied. As of July 1, 1989, amended June, 1990 and January, 1992, Unicom entered into a management agreement with Senior Lifestyle Corporation, an Illinois corporation ("Senior Lifestyle"). The agreement as amended provided for a term which expired in December 1997. Senior Lifestyle received compensation for management services consisting of 6.5% of the residential, commercial and miscellaneous income, but not less than $100,000 or greater than $525,000 per year. The partnership terminated the management agreement as of July 31, 1995. The property is self-managed. A management fee of 4% of total income was paid to the partners assuming the managerial responsibility, of which $8,333 per month was paid to Senior Lifestyle Management Corporation for continuing services. The new management arrangement has been approved by HUD. (See Item 11.) On July 28, 1995, Unicom Partnership Ltd. ("Unicom"), successfully concluded a reassignment and reinstatement of its mortgage note in the amount of $27,638,955.87 from the Department of Housing and Urban Development ("HUD") to the Government National Mortgage Association ("GNMA"). The reinstated, reinsured mortgage will mature on January 1, 2029. It will bear interest at the rate of eight (8%) percent per annum, which includes a 0.25% servicing fee. In addition, Unicom will pay one-half of one percent per annum mortgage insurance premium. Unicom had accrued unpaid interest and other liabilities related to the mortgage in a total amount of $3,896,730. The total adjusted accrued interest and closing costs paid at the closing equaled $1,502,183. This resulted in a saving of $2,394,547, which saving will be amortized over the remaining life of the mortgage. The saving resulted from the difference between the accrual at the original note rate and the borrowing rate charged by HUD. In order to accomplish the closing, the company borrowed $1,547,125. Of this amount, $500,000 was borrowed commercially (personally guaranteed by Mr. Rosenthal), to be repaid in one (1) year out of surplus cash earned by the company at an interest rate of two (2%) percent over I-3 prime (the loan was repaid in July, 1996); $1,047,125 was borrowed from certain partners and other investors, to be repaid after the above bank loan is repaid, also from surplus funds at three (3%) percent over prime. In addition, because of the disproportionate contribution by certain partners in relationship to the other partners and because of new investors, the group was awarded a 3.41% interest in distributions from Unicom. All-State Properties L.P. did not participate in the investment, and as a result, its interest in distributions will be further diluted by 1.85% to 30.64%. (i) (b) CPC Operations ______________ Foreclosure Proceedings _______________________ - - As of October 26, 1992, the Company owed $2,511,551 of principal plus accrued interest of $655,036 to a bank. Collateral for the loan was substantially all the land owned by CPC. The bank obtained a final judgment of foreclosure, and a sale of the property took place on October 26, 1992. The Company recognized an extraordinary gain of $3,166,587, or $1.01 per unit in the fiscal year of foreclosure. CPC recognized a loss of $99,125 (the carrying value of the land taken by foreclosure, $333,101, less the real estate tax liability of $233,976). This directly affected the Company by $49,562 due to its 50% interest in CPC. (i) (c) Condominium Units _________________ In November, 1986, Registrant formed Wimbledon Development Ltd., a Florida Limited partnership, for the purpose of constructing up to 48 units on six acres of land remaining from a condominium project known as Wimbledon constructed by Registrant during the period 1971-1978. The condominium project could be comprised of six two-story buildings of eight units each. All the units are two-bedroom, two-bath units of 1,000 square feet and are selling for $37,500. Two such buildings on two acres of land were completed and twelve units have been sold. One unit is currently used for a sales office and model. Currently, two (2) units are under contract for sale. Mortgages totaling $270,974 on the two buildings were in default and were purchased for and reduced to $125,000. (See Note 10.) Wimbledon owed $135,000 in recreational assessments to the operating association. By agreement, the delinquency would be paid out of proceeds from the sale of the remaining four acres of land, together with 50% of any profit realized. The property was sold on September 17, 1996, and the obligation was satisfied by a payment of $137,035 to the association. (See Note 7.) (ii) Registrant has no plans for any new products. (iii) Registrant purchased building materials which are available from many sources. (iv) Registrant holds no patents, trademarks, etc. (v) No part of Registrant's business is subject to significant seasonal variation. 1-4 (vi) Registrant's only present source of working capital is the cash distributions made to it by CPC. Any cash distributions from Unicom and Wimbledon which may be received in the future will be available for working capital and distribution to investors and limited partners. (See Note 2.) (vii) The apartment rental and condominium sale markets are not dependent upon a single or a few customers, but instead rely on a wide customer base. The Unicom units are expected to be rented to upper income retirees. The Wimbledon units are expected to be sold to singles and to young married couples. (viii) No portion of Registrant's business involved government contracts. (ix) The adult rental apartment market in South Florida is highly competitive. Martinez & Associates, consultants retained by Unicom and specializing in housing for the elderly, identified nine facilities in the Fort Lauderdale area as being competitive with the Unicom complex. However, the Unicom project offers larger units and makes available more two-bedroom units than its competitors. The condominium sales market is very competitive in Broward County. (x) Registrant incurs no research and development expenses. (xi) In the development and sale of their properties, Registrant, Unicom and Wimbledon are required to comply with applicable zoning and environmental regulations. It is believed that compliance with environmental regulations will have no material effect upon capital expenditures, earnings or competitive position of Registrant in future periods. (xii) Registrant (including Wimbledon) employs two part-time people. Unicom employs 87 people full time and 43 people part time, engaged in the operation of the retirement facility. (d) Unicom has no foreign operations or export sales. ITEM 2. PROPERTIES_______ __________ At June 30, 1990 Unicom held 78 acres on which it completed the construction of a 324 unit adult rental apartment project. See item 1(b)(1)(i)(a). The Company has outstanding 4% subordinated convertible debentures that became due September 30, 1989 (the "Debentures") in the aggregate principal amount of $1,627,112. Accrued interest thereon aggregated $741,069 at June 30, 1996. The payment of the interest and principal on the Debentures is subordinate to payment of certain senior debt which remains outstanding. Consequently, the Registrant has been prohibited from paying the Debentures since maturity. Nonetheless, the Registrant believes that its assets are sufficient eventually to satisfy the senior indebtedness and pay the principal of and accumulated interest on the Debentures. 1-5 At June 30, 1996, Registrant, through Wimbledon Development Ltd., owned four acres of land adjacent to its completed Wimbledon townhouse project in the City of Lauderhill, Broward County. This land is held for residential development. A contract was entered into on April 27, 1995 to sell the property for a sales price of $175,000. The closing took place on September 17, 1996. (see Item 1.(b)(1)(i)(c). ITEM 3. LEGAL PROCEEDINGS______ _________________ Foreclosure Proceedings _______________________ - - As of June 30, 1992, the Company owed $2,511,551 of principal plus accrued interest of $655,036 to a bank. Collateral for the loan was substantially all the land owned by CPC. The bank obtained a final judgment of foreclosure and a sale of the property took place on October 26, 1992. (See Item 1(b)(1)(i)(b).) ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS_______ ________ No matters were submitted to a vote of security holders of Registrant during the fourth quarter of the fiscal year covered by this report. I-6 PART II ____ ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY______ HOLDER MATTERS ______________ (a) In June, 1988, Registrant advised its unit holders that in order to avoid classification as a "publicly traded limited partnership" under the Internal Revenue Code, it would facilitate the transfer of units privately commencing July 1, 1988. There were no trades made through the Registrant's matching service for the years ended June 30, 1993 through June 30, 1996. The Company has no knowledge of other transactions. Therefore, no bid and asked prices could be ascertained. (b) As of September 30, 1996, there were 1,322 holders of record of 2,826,404 limited partnership interests, excluding individual participants in security nominee or street names. Pursuant to the Plan of Liquidation and Dissolution of All-State Properties, Inc. and the Limited Partnership Agreement of All- State Properties L.P. upon the dissolution of the Corporation, stockholders automatically received one unit of partnership interest for each share of stock held and became record holders of limited partnership units. However, until the stockholders submitted their stock certificates for exchange and had taken other necessary steps, they would not become limited partners. As of September 30, 1996, 1,582 of the 2,904 record holders of limited partnership interests holding 291,661 units had not submitted their stock certificates for exchange. (c) (d) The Company never paid cash dividends on its common stock while it was a corporation. The Partnership declared cash distributions cumulatively totaling $0.85 per unit through August 31, 1989. II-1 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) (NOTE 1A) AS OF AND FOR THE YEARS ENDED JUNE 30 UNAUDITED
SELECTED CASH FLOW AND OPERATING________________________________ STATEMENT DATA 1 9 9 6 1 9 9 5 1 9 9 4 1 9 9 3 1 9 9 2 REVENUE:________ Equity in net earnings (loss) of real estate partnerships $ (76,228) $ (127,122) $ (121,015) $ (319,307) $(1,090,943) Other income 99,341 36,396 27,970 22,705 90,801 Total $ 23,113 $ (90,726) $ (93,045) $ (296,602) $(1,000,142) =========== =========== =========== =========== =========== Income (Loss) before Extraordinary Items $ (330,087) $ (294,903) $ (487,973) $ (689,463) $(1,920,794) =========== =========== =========== =========== =========== Net Income (Loss) $ (330,087) $ (294,903) $ (341,999) $ 2,477,124 $(1,920,794) =========== =========== =========== =========== =========== Per Share/unit - fully diluted: Net income (loss) before Extraordinary Items $ (.10) $ (.09) $ (.15) $ (.22) $ (.61) =========== =========== =========== =========== =========== Net Income (Loss) $ (.10) $ (.09) $ (.11) $ .79 $ (.61) =========== =========== =========== =========== =========== SELECTED BALANCE SHEET DATA___________________________ Total assets $ 222,911 $ 375,421 $ 371,503 $ 565,653 $ 624,738 =========== =========== =========== =========== =========== Notes, mortgages and construction loans $ 452,595 $ 450,041 $ 346,038 $ 378,445 $ 2,857,261 4% convertible debentures, due 1989, including accrued interest 2,368,181 2,303,097 2,238,013 2,172,929 2,107,844 Total $ 2,820,776 $ 2,753,138 $ 2,584,051 $ 2,551,374 $ 4,965,105 =========== =========== =========== =========== =========== Cash Dividends Declared Per Share/Unit $ NONE $ NONE $ NONE $ NONE $ NONE =========== =========== =========== =========== ===========
See notes to financial statements. CITY PLANNED COMMUNITIES, (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. _________________________ (A LIMITED PARTNERSHIP) SELECTED FINANCIAL DATA AS OF AND FOR THE YEAR ENDED JUNE 30 UNAUDITED
SELECTED INCOME STATEMENT DATA 1 9 9 6 1 9 9 5 1 9 9 4 1 9 9 3 1 9 9 2___ Sales and rental of real estate $ 10,186,182 $ 9,874,474 $ 9,475,261 $ 8,635,012 $ 6,541,912 Interest and other income 74,341 75,179 42,820 26,803 46,666 Total Revenues $ 10,260,523 $ 9,949,653 $ 9,518,081 $ 8,661,815 $ 6,588,578 ============ ============ ============ ============ ============ Net Income Loss Before Extraordinary Item $ 224,775 $ (589,551)$ (597,908)$ (1,453,356)$(3,127,335) ============ ============ ============ ============ ============ Net Income (Loss) $ 224,775 $ (589,551)$ (597,908)$ (1,552,481)$(3,127,335) ============ ============ ============ ============ ============ SELECTED BALANCE SHEET DATA___________________________ Total assets $ 31,866,913 $ 31,567,368 $ 32,550,887 $ 32,578,489 $33,323,101 ============ ============ ============ ============ =========== Partners' Cash Distributions $ NONE $ NONE $ NONE $ NONE $ NONE ============ ============ ============ ============ ============ NOTE: Information shown is from the combined financial statements of City Planned Communities and Unicom Partnership Ltd.
See notes to combined financial statement. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE_______ ________________ FINANCIAL CONDITION AND RESULTS OF OPERATIONS ______________ - ALL-STATE PROPERTIES L.P. ___________________________ YEAR ENDED JUNE 30, 1996 COMPARED TO YEAR ENDED ____________ JUNE 30, 1995 _____________ FINANCIAL CONDITION___________________ Registrant's source of working capital consists of cash received from borrowings and loans received from its 50% joint venture, CPC. No cash was available for distribution during the year ended June 30, 1996. As of June 30, 1996, in consideration of cash advances made and services rendered by certain individuals to Unicom, Unicom agreed to distribute 26.76% (including 5% to the general partner of the Company) of any of its cash that becomes available for distribution, to those individuals. The balance of cash that becomes available from each distribution will be used to repay CPC. After CPC has been repaid in full and the aforementioned individuals have received their share of each distribution, remaining cash will then be distributed as follows: 1.00% to the general partner 49.50% to the other partner in Unicom 7.50% to certain individuals who made cash advances on behalf of the Company 42.00% to the Company _______ 100.00% _______ In addition, CPC assigned 7.842% of any of its cash that becomes available for distribution to certain individuals for funds advanced by them to CPC. Certain individuals advanced funds to the Company. In consideration of those advances, the Company assigned to those individuals 12.68% of distributions received by it from CPC, after deducting the amounts necessary to repay the funds advanced by them. RESULTS OF OPERATIONS_____________________ Revenues ________ Revenues increased by 140% for the year ended June 30, 1996 as compared to 1995 from the operation of the Unicom retirement center and the sale of condominium units. Costs and Expenses __________________ The total costs and expenses for the year ended June 30, 1996 increased by 75% as compared to 1995 due to the cost of condominium units sold and the writedown of the value of the remaining units. Net Loss Net loss was increased by 12%. ________ II-4 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE_______ ________________ FINANCIAL CONDITION AND RESULTS OF OPERATIONS ______________ - ALL-STATE PROPERTIES L.P. ___________________________ YEAR ENDED JUNE 30, 1995 COMPARED TO YEAR ENDED ____________ JUNE 30, 1994 _____________ FINANCIAL CONDITION___________________ Registrant's source of working capital consists of cash received from borrowings and loans received from its 50% joint venture, CPC. No cash was available for distribution during the year ended June 30, 1995. As of June 30, 1995, in consideration of cash advances made and services rendered by certain individuals to Unicom, Unicom agreed to distribute 23.35% (including 5% to the general partner of the Company) of any of its cash that becomes available for distribution, to those individuals. The balance of cash that becomes available from each distribution will be used to repay CPC. After CPC has been repaid in full and the aforementioned individuals have received their share of each distribution, remaining cash will then be distributed as follows: 1.00% to the general partner 49.50% to the other partner in Unicom 7.49% to certain individuals who made cash advances on behalf of the Company 42.01% to the Company _______ 100.00% _______ In addition, CPC assigned 7.842% of any of its cash that becomes available for distribution to certain individuals for funds advanced by them to CPC. Certain individuals advanced funds to the Company. In consideration of those advances, the Company assigned to those individuals 12.68% of distributions received by it from CPC, after deducting the amounts necessary to repay the funds advanced by them. RESULTS OF OPERATIONS_____________________ Revenues ________ Revenue losses decreased by 3% for the year ended June 30, 1995 as compared to 1994 due to the equity in reduced losses generated in real estate partnerships from the operation of the Unicom retirement center. Costs and Expenses __________________ The total costs and expenses for the year ended June 30, 1995 decreased by 48% as compared to 1994. Selling, general and administrative expenses decreased by the $200,000 reduction in the value of the real estate held taken in 1994. Net Loss ________ Net loss was reduced by 14%. II-5 ITEM 7. MANAGEMENT DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND ______ RESULTS OF OPERATIONS - CITY PLANNED COMMUNITIES AND UNICOM PARTNERSHIP LTD. ________________ YEAR ENDED JUNE 30, 1996 COMPARED TO YEAR ENDED JUNE 30, 1995 The net income for the year ended June 30, 1996 as compared to 1995 increased by 140% as a result of an increase in the net income from the retirement community and a reduction in interest accrual by virtue of a change in the loan rate. As of June 30, 1996, in consideration of cash advances made and services rendered by certain individuals to Unicom, Unicom agreed to distribute 26.76% (including 5% to the general partner of the Company) of any of its cash that becomes available for distribution, to those individuals. The balance of cash that becomes available from each distribution will be used to repay CPC. After CPC has been repaid in full and the aforementioned individuals have received their share of each distribution, remaining cash will then be distributed as follows: 1.00% to the general partner 49.50% to the other partner in Unicom 7.50% to certain individuals who made cash advances on behalf of the Company 42.00% to the Company _______ 100.00% _______ In addition, CPC assigned 7.842% of any of its cash that becomes available for distribution to certain individuals for funds advanced by them to CPC. On July 28, 1995, the mortgage payable in the amount of $27,638,956 was reinstated and modified. The rate of interest was reduced to 8%, including servicing. As a result of the modification, $2,498,809 in accrued interest was forgiven. (See Note 5 to financial statements.) II-6 ITEM 7. MANAGEMENT DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND_______ RESULTS OF OPERATIONS - CITY PLANNED COMMUNITIES AND UNICOM PARTNERSHIP LTD. ________________ YEAR ENDED JUNE 30, 1995 COMPARED TO YEAR ENDED JUNE 30, 1994 The net loss before extraordinary item decreased by 1% for the year ended June 30, 1995 as compared to 1994. As of June 30, 1995, in consideration of cash advances made and services rendered by certain individuals to Unicom, Unicom agreed to distribute 23.35% (including 5% to the general partner of the Company) of any of its cash that becomes available for distribution, to those individuals. The balance of cash that becomes available from each distribution will be used to repay CPC. After CPC has been repaid in full and the aforementioned individuals have received their share of each distribution, remaining cash will then be distributed as follows: 1.00% to the general partner 49.50% to the other partner in Unicom 7.49% to certain individuals who made cash advances on behalf of the Company 42.01% to the Company _______ 100.00% _______ In addition, CPC assigned 7.842% of any of its cash that becomes available for distribution to certain individuals for funds advanced by them to CPC. II-7 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA__________________________ ALL-STATE PROPERTIES L.P. P O BOX 5524 FORT LAUDERDALE, FL 33310-5524 Telephone (954) 735-6300 Fax (954) 749-5664 The accompanying balance sheets of All-State Properties L.P. (a limited partnership) (Note 1A) as of June 30, 1996 and the related statements of operations, changes in partners' capital (deficit) and cash flow for the year then ended and the schedule and exhibit listed in the index have been compiled in accordance with standards established by the American Institute of Certified Public Accountants. The accompanying financial statements have not been audited by independent public accountants, and no accountant has expressed an opinion thereon. They have been prepared by the Registrant assuming that All-State Properties L.P. (a limited partnership) (Note 1A) will continue as a going concern. As explained in Note 11 to the financial statements, at June 30, 1996, conditions exist which indicate that the partnership is unable to generate sufficient cash flow to meet its obligations. Management's plans in regard to these matters are also described in Note 11. The financial statements do not include any adjustments or reclassifications that might result from the outcome of these uncertainties. No auditing procedures have been performed since September, 1989. The Registrant's cash flow is insufficient for the Registrant to compensate accountants for past or present services. The Registrant intends to obtain audited financial statements for the 1990- 96 periods as soon as it is in a financial position to compensate an accountant for such services. Very truly yours, ALL-STATE PROPERTIES L.P. By: _______ STANLEY R. ROSENTHAL General Partner II-8 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) (NOTE 1A) YEARS ENDED JUNE 30, 1996, 1995 AND 1994 UNAUDITED I N D E X PAGE Partnership's Letter II-8 FINANCIAL STATEMENTS: Balance Sheets II-10 Statements of Operations II-11 Statements of Changes in Partners' Capital (Deficit) II-12 Statements of Cash Flows II-13/14 Notes to Financial Statements II-15/23 SUPPLEMENTAL INFORMATION: Exhibits indicating the Computation of Earnings per Unit IV-6 Schedule X - Supplemental Income Statement Information Charged to Cost and Expenses IV-5 Selected Financial Data II-2 II-9 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) (NOTE 1A) BALANCE SHEETS JUNE 30, 1996 AND 1995 UNAUDITED A S S E T S JUNE 30 1 9 9 6 1 9 9 5 Cash $ 1,717 $ 14,797 Receivables: Trade and other $ 1,720 $ 4,639 Real estate held for sale and development at lower of cost or market value (Notes 1D, 1E and 4): Land and land improvements $ 99,551 $ 162,579 Condominium homes completed and under construction 117,485 185,454 $ 217,036 $ 348,033 Other Assets $ 2,438 $ 7,952 ------------ ------------ TOTAL ASSETS $ 222,911 $ 375,421 ============ ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) LIABILITIES:___________ Notes payable (Notes 4 and 8) $ 452,595 $ 450,041 4% convertible subordinated debentures (Notes 5, 8 and 11) 2,368,181 2,303,097 Partnership distributions payable (Note 9) 252,496 252,496 Notes payable - related party (Note 2) 60,765 16,400 Accounts payable and other liabilities (Note 7) 275,294 265,354 $ 3,409,331 $ 3,287,388 DEFICIENCY IN PARTNERSHIPS:__________________________ Undistributed earnings (loss) of partner- ships (Notes 1C, 1D, 2, 4 and 11) $ 875,354 $ 814,126 COMMITMENTS AND CONTINGENCIES (Notes 2 and_____________________________ 11) $ - $ - PARTNERS' CAPITAL (DEFICIT):___________________________ Partners' capital (deficit) (3,772,419 units authorized, 3,118,303 units out- standing) (Notes 4, 6 and 9) $ (3,854,095) $ (3,524,008) Notes receivable - officers/partners (including accrued interest of $67,822 in 1996 and $62,227 in 1995 (Note 3) (207,679) (202,085) $ (4,061,774) $ (3,726,093) TOTAL LIABILITIES AND PARTNERS' CAPITAL ________________________ (DEFICIT) $ 222,911 $ 375,421 ______ ============ ============ See notes to financial statements. II-10 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ STATEMENTS OF OPERATIONS _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ 1 9 9 6 1 9 9 5 1 9 9 4 REVENUES (Note 1D):________ Loss from real estate partner- ship (Note 2) $ (76,228) $ (127,122) $ (121,015) Interest and dividend income (Note 3) 11,991 11,969 11,970 Other 14,850 24,427 16,000 Sale of condominium units 72,500 - - $ 23,113 $ (90,726) $ (93,045) COST AND EXPENSES:_________________ Selling, general and admini- strative expenses (Note 1E) $ 148,828 $ 101,696 $ 293,424 Interest (Notes 1E, 4 and 5) 112,246 102,481 101,504 Cost of condominium sold 92,126 - - Total $ 353,200 $ 204,177 $ 394,928 NET LOSS BEFORE EXTRAORDINARY_____________________________ ITEM $ (330,087) $ (294,903) $ (487,973) ____ EXTRAORDINARY ITEM:__________________ Gain on debt restructuring (Note 10) - - 145,974 NET LOSS $ (330,087) $ (294,903) $ (341,999)_____ =========== =========== =========== NET INCOME OR (LOSS) PER________________________ PARTNERSHIP UNIT, AFTER _______________________ EXTRAORDINARY ITEM (Note 1F) $ (0.10) $ (0.09) $ (0.11) ____ =========== =========== =========== CASH DISTRIBUTIONS PER UNIT NONE NONE NONE ________ ==== ==== ==== See notes to financial statements. II-11 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) (NOTE 1A) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) YEARS ENDED JUNE 30, 1996, 1995 AND 1994 ________________________________________ UNAUDITED _________
NOTES TOTAL RECEIVABLE PARTNERS NUMBER GENERAL LIMITED OFFICERS/ CAPITAL OF UNITS PARTNER PARTNERS PARTNERS (DEFICIT) ___________ ___________ ___________ ___________ ___________ BALANCE - June 30, 1993 3,118,303 $ 2 $(2,887,106) $ (190,896) $(3,078,002)_______ Net loss - - (341,999) - (341,999) Net increase in notes receivable- partners - - - (5,594) (5,594) ___________ ___________ ___________ ___________ ___________ BALANCE - June 30, 1994 3,118,303 $ 2 $(3,229,105) $ (196,490) $(3,425,595)_______ Net loss - - (294,903) - (294,903) Net increase in notes receivable- partners - - - (5,595) (5,595) ___________ ___________ ___________ ___________ ___________ BALANCE - June 30, 1995 3,118,303 $ 2 $(3,524,008) $ (202,085) $(3,726,093)_______ Net loss - - (330,087) - (330,087) Net increase in notes receivable- partners - - - (5,594) (5,594) ___________ ___________ ___________ ___________ ___________ BALANCE - June 30, 1996 3,118,303 $ 2 $(3,854,095) $ (207,679) $(4,061,774)_______ =========== =========== =========== =========== ===========
See notes to financial statements. ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ STATEMENTS OF CASH FLOWS _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 ____ UNAUDITED YEARS ENDED JUNE 30, 1 9 9 6 1 9 9 5 1 9 9 4 NET INCREASE (DECREASE) IN CASH_______________________________ AND CASH EQUIVALENTS (Note 1H) ____________________ Cash Flows from Operating Activities: Cash received principally from rental activities and sale of condominiums $ 90,269 $ 24,426 $ 19,325 Interest and dividends received 4 - 6,376 Cash paid for selling, general and administrative expenses (70,109) (72,542) (65,155) Interest paid - - (6,502) Net Cash (Used) Provided by Operating Activities $ 20,164 $ (48,116) $ (45,956) Cash Flows from Financing Activities: (Payment) Proceeds from notes payable $ (57,895) $ 86,323 $ - Proceeds (payments) on note - related party - net 24,651 (24,201) 45,432 Net Cash Provided (used) by Financing Activities $ (33,244) $ 62,122 $ 45,432 NET INCREASE (DECREASE) IN CASH_______________________________ AND CASH EQUIVALENTS $ (13,080) $ 14,006 $ (524) _____ CASH AND CASH EQUIVALENTS AT____________________________ BEGINNING OF YEAR 14,797 791 1,315 _______ CASH AND CASH EQUIVALENTS AT____________________________ END OF YEAR $ 1,717 $ 14,797 $ 791 _______ =========== =========== =========== See notes to financial statements. II-13 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ STATEMENTS OF CASH FLOWS (CONTINUED) _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ___ YEARS ENDED JUNE 30, 1 9 9 6 1 9 9 5 1 9 9 4 Reconciliation of net (loss) to net cash (used) provided by operating activities: Net (Loss) $ (330,087) $ (294,903) $ (341,999) Adjustments to reconcile net (loss) to net cash (used) provided by operating activities: Cost of condominiums sold $ 82,997 $ - $ - Depreciation and amortization - 805 232 Loss from real estate partnership 76,228 127,122 121,015 Gain on debt restructuring (1) - - 145,974) Write down of land to net realizable value (2 and 3) 48,000 - 200,000 Changes in assets and liabilities: Increase in notes payable 60,449 - - Increase in accrued interest - related party notes 4,714 3,976 7,898 (Increase) in notes receivable - partners (5,594) (5,595) (5,594) Decrease (increase) in trade and other receivables - (84) (1,100) Decrease in deferred assets 2,919 - 552 Decrease (increase) in other assets 5,514 - (14,633) Increase in 4% convertible subordinated debenture in- cluding accrued interest 65,084 65,084 65,084 Increase in accounts payable and other liabilities 9,940 55,479 68,563 Total Adjustments $ 350,251 $ 246,787 $ 296,043 NET CASH (USED) PROVIDED BY___________________________ OPERATING ACTIVITIES $ 20,164 $ (48,116) $ (45,956) ______ =========== =========== =========== SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:_______________________ (1) The Partnership recognized a gain from its restructuring of certain debt in 1994 (See Note 10). (2) The Partnership recognized a loss on a write down of certain land to net realizable value in 1994. (3) The Partnership recognized a loss on the write down of condominiums held for sale, to net realizable value in 1996. See notes to financial statements. II-14 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ NOTES TO FINANCIAL STATEMENTS ____ YEARS ENDED JUNE 30, 1996, 1995, AND 1994 ____ UNAUDITED ___ NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES______ ___________________ A. Basis of Presentation _____________________ On November 3, 1986, Wimbledon Development Ltd. (a limited partnership) was formed to construct and sell condominium units on land acquired from All-State Properties L.P. (hereafter "the Company"). The Company has a 99% limited partnership interest in Wimbledon Development Ltd. and the remaining ownership is being held by a corporation controlled by the president of the Company. The Corporation is the general partner of the partnership and is responsible for the management of Wimbledon Development Ltd. The Company includes in its accounts the assets, liabilities, revenues and expenses of Wimbledon Development Ltd. All significant intercompany accounts and transactions have been eliminated. B. Organization ____________ All-State Properties L.P. (a limited partnership) is the successor to All-State Properties Inc. and Subsidiaries. On September 20, 1984, the shareholders of All-State Properties Inc. approved a Plan of Liquidation pursuant to which the shareholders were issued limited partnership units in the Partnership in exchange for their stock of the Corporation. C. Equity in Partnerships ______________________ The investments in unconsolidated real estate partnerships are carried at cost plus the Company's equity (deficiency) in the partnerships' undistributed earnings (deficit) (Note 2). D. Operations and Income Recognition ______________________ The Company was primarily engaged in the development and sale of land through a 50% owned real estate partnership, City Planned Communities (Note 2), the construction and sale of residential condominiums through a 99% owned limited partnership interest in Wimbledon Development Ltd. (Note 1A) and a 49.5% limited partnership interest in Unicom Partnership Ltd. (Note 2), which has constructed and operates an adult apartment rental community. II-15 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ NOTES TO FINANCIAL STATEMENTS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ___ NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)______ _______ D. Operations and Income Recognition (Continued) ________ Condominiums ____________ Revenues from the sale of condominiums are recorded at the time of closing. Construction costs, as outlined in FASB No. 67, Accounting for Cost and Initial Rental Operations of Real Estate Projects _______________, are allocated to individual units based on relative sales value of each unit. E. Real Estate Held for Sale and Development ____________ Real estate held for sale and development is carried at the lower of cost or net realizable value. Costs of acquiring and developing land are accumulated and allocated on a per unit basis. During the period of development and construction, certain overhead, selling and carrying costs were capitalized to the extent that these capitalized costs did not increase the carrying value in excess of net realizable value. The following details the adjustments to the valuation accounts to reflect condominiums held for sale at their net realizable value based on projected sales prices: CHARGES CREDIT TO TO RESERVE COST OF SALES June 30, 1996 $ 48,000 $ 39,602 =========== ============= June 30, 1995 $ -0- $ -0- =========== ============= June 30, 1994 $ 200,000 $ -0- =========== ============= In accordance with FASB No. 34, Capitalization of Interest Cost ____, interest costs on qualifying assets under construction are capitalized until the assets are ready for their intended use. Thereafter, such expenses are a period cost. During the years ended June 30, 1996, 1995 and 1994, total interest incurred of $112,246, $102,481 and $101,504, respectively, were charged to current operations. F. Income (Loss) Per Partnership Unit ___________________ Income (loss) per partnership unit is computed by dividing the net income (loss) by the weighted average number of units outstanding. Effect is given to the convertible debentures that are dilutive. II-16 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ NOTES TO FINANCIAL STATEMENTS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ___ NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)______ _______ G. Property and Equipment ______________________ Property and equipment are recorded at cost and are depreciated over their estimated useful lives of 3 to 7 years. Assets acquired after 1986 are depreciated using the modified accelerated cost recovery method. The difference between accelerated and straight-line methods is not deemed to be material. The accelerated method is used for income tax purposes. H. Cash and Cash Equivalents _________________________ For the purposes of the statements of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents. NOTE 2 - EQUITY (DEFICIENCY) IN PARTNERSHIPS AND NOTE RECEIVABLE______ ______ The Company owns a 50% interest in City Planned Communities (a general partnership) ("CPC"). In September 1986, the Company acquired a 49.5% limited partnership interest in a limited partnership, Unicom Partnership Ltd. The beneficial owners of Unicom Partnership Ltd. are substantially the same as the beneficial owners of City Planned Communities. Unicom Partnership Ltd. acquired land from City Planned Communities and has constructed an adult apartment rental community. CPC advanced approximately $12,700,000 to Unicom. The funds have been used by Unicom to fund project cost and the operating deficit. In June, 1995, the partners of CPC agreed to contribute $13,352,210 in notes, loans and accrued interest to Unicom's capital. The Company discontinued applying the equity method to its investment in Unicom Partnership Ltd. (Unicom) in 1988 when the investment account was reduced to zero. The Company's cumulative share of Unicom's unrecognized losses from 1988 are $6,264,344. The Company will resume applying the equity method only after its share of the net income equals the share of net losses not recognized during the period the equity method was suspended. The unrecognized income or losses are not included in the Company's partners' deficiency. During the current year the Company's share of Unicom's income was $186,730. II-17 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ NOTES TO FINANCIAL STATEMENTS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ___ NOTE 2 - EQUITY (DEFICIENCY) IN PARTNERSHIPS AND NOTE RECEIVABLE______ ______ (Continued) As of June 30, 1996 and 1995, the details of the related party obligations between City Planned Communities and the Company are as follows: JUNE 30, 1 9 9 6 1 9 9 5 Note receivable from City Planned Communities - unsecured demand loan, interest at 8.5% per annum, including accrued interest $ 114,835 $ 123,443 Note payable to City Planned Communi- ties - unsecured demand loan, interest at 8.5% per annum, including accrued interest (175,600) (139,843) NET $ (60,765) $ (16,400) =========== ========= The Company's equity (deficiency) in the partnership and the percentage of the equity (deficit) in the partnerships to the total assets of the Company as of June 30, is as follows: CITY PLANNED UNICOM COMMUNITIES PARTNERSHIP (NOTE 10) LTD. COMBINED 1996 $ (875,354) $ -0- $(875,354) =========== =========== ========= 1996 (100.0%) -0- (100.0%) ====== === ====== 1995 $ (814,126) $ -0- $(814,126) =========== =========== ========= 1995 (100.0%) -0- (100.0%) ====== === ====== As of June 30, 1996, in consideration of cash advances made and services rendered by certain individuals to Unicom, Unicom agreed to distribute 26.76% (including 5% to the general partner of the Company) of any of its cash that becomes available for distribution, to those individuals. The balance of any cash that becomes available for distribution will be used to repay CPC. Once CPC has been repaid in full, and the aforementioned individuals have received their share of each distribution, remaining II-18 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ NOTES TO FINANCIAL STATEMENTS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 2 - EQUITY (DEFICIENCY) IN PARTNERSHIPS AND NOTE RECEIVABLE______ ______ (Continued) cash will be distributed as follows: 1.00% to the general partner 49.50% to the other partner in Unicom 7.50% to certain individuals who made cash advances to Unicom on behalf of the Company 42.00% to the Company _______ 100.00% ======= In addition, CPC assigned 7.842% of any of its cash that becomes available for distribution to certain individuals for funds advanced by them to CPC. The Company also assigned 12.68% of its share of distributions from CPC to individuals in consideration of funds advanced by them to the Company. NOTE 3 - NOTES RECEIVABLE - PARTNERS______ ___________________________ The former treasurer and the general partner of the Company, who were officers of the predecessor corporation, originated on April 19, 1984 the notes receivable when they exercised their options to acquire 130,000 shares of common stock, which were subsequently exchanged for limited partnership units. The Company received cash and notes receivable from the transaction. The balances of notes receivable consists of the following as of June 30, 1996. PRINCIPAL INCLUDING ACCRUED INTEREST MATURITY DATE INTEREST $ 207,679 July, 1997 4% per annum To secure their obligation to pay the notes and accrued interest, the Company was granted a lien on and a security interest in the units. Cash distributions which were previously applied as mandatory prepayments at 50% were increased to 100% and are to be applied first to accrued interest, and then as a reduction of principal until paid in full. II-19 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ NOTES TO FINANCIAL STATEMENTS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ 1 9 9 6 1 9 9 5 NOTE 4 - NOTES PAYABLE______ _____________ Notes payable at June 30 consist of the following: Notes payable - individual (including accrued interest of $(36,512 and $25,110 respectively) due August 1, 1997. Interest at 10% per annum, secured by land and condominiums. The Company assigned a 1% participation in profits and cash flow from Unicom or City Planned Communities in order to obtain this loan. (Note 2). $ 129,810 $ 175,110 Note payable = individuals (including accrued interest of $71,902 and $56,738 respectively) - due on demand, interest at 8.5% per annum, unsecured. The Company assigned 7.5% of its potential distributions from City Planned Communities to the individuals in order to obtain this loan and other funds advanced on the Company's behalf. (See Note 2). 288,903 274,931 Note payable - (including accrued interest of $10,682) due December 31, 1997 with interest calculated at 8% per annum from October 1, 1990. 33,882 - ___________ ___________ $ 452,595 $ 450,041 =========== =========== Amortization of principal until maturity will be as follows as of June 30, 1996: June 30, 1997 $ 288,903 June 30, 1998 163,692 $ 452,595 ========= II-20 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ NOTES TO FINANCIAL STATEMENTS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 5 - 4% CONVERTIBLE SUBORDINATED DEBENTURES______ _______________________ The 4% convertible subordinated debentures at June 30, consist of the following: 1 9 9 6 1 9 9 5 1 9 9 4 Convertible at $3 per unit $ 1,625,301 $ 1,625,301 $ 1,625,301 Convertible at $1 per unit 1,811 1,811 1,811 Accrued interest (Note 8) 741,069 675,985 610,901 $ 2,368,181 $ 2,303,097 $ 2,238,013 =========== =========== =========== NOTE 6 - INCOME TAXES______ ____________ The partnership is not subject to income taxes. Instead, the partners are required to include in their income tax return their share of the Company's income or loss, as adjusted to reflect the effects of certain transactions which are accorded different accounting treatment for federal income tax purposes. The partnership's approximate income (losses) for tax reporting purposes for the years ended June 30, 1996, 1995 and 1994 aggregated $575,000, ($295,000) and $319,000, respectively, which approximates income (losses) of $0.18, ($0.09) and income of $0.10 per unit, based on 3,118,303 outstanding partnership units. NOTE 7 - ACCOUNTS PAYABLE AND OTHER LIABILITIES______ _______________________ Account payable and other liabilities at June 30, consist of the following: 1 9 9 6 1 9 9 5 1 9 9 4 Taxes, primarily real estate $ 23,975 $ 28,021 $ 29,928 Professional fees 94,954 112,312 109,059 Other 156,365 125,021 97,935 $ 275,294 $ 265,354 $ 236,922 =========== =========== =========== Included above is approximately $135,000 in recreational assessments owed to the operating association. By agreement, the delinquency would be paid out of proceeds from the sale of the remaining four acres of land, together with 50% of any profit realized. The property was sold on September 17, 1996, and the obligation was satisfied by a payment of $137,035 to the association. II-21 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ NOTES TO FINANCIAL STATEMENTS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 8 - ACCRUED INTEREST ______ ________________ Accrued interest consists of the following: 1 9 9 6 1 9 9 5 Interest payable included in notes payable (Note 4) $ 119,096 $ 81,848 Interest included in 4% convertible subordinated debentures (Notes 5 and 10) 741,069 675,985 $ 860,165 $ 757,833 =========== =========== NOTE 9 - PARTNERS' CAPITAL (DEFICIT)_______ ___________________________ As of June 30, 1996, there are 1,582 shareholders holding 291,661 shares of the predecessor corporation that have not converted their stock certificates into limited partnership units. The limited partnership, from inception through June 30, 1996, has declared accumulated distributions of $.85 per each unit of partnership interest outstanding. The partnership distributions payable represent the Company's liability if the stock certificates are converted into partnership units. The Company did not make cash distributions to its unit owners during years ended June 30, 1996, 1995 and 1994. NOTE 10 - RESTRUCTURED FINANCING_______ ______________________ In October of 1993, the Company owed a bank interest and principal totaling $270,974 on two outstanding obligations (See Note 4). A limited partner of the Company purchased the obligation from the bank for $125,000 and advanced another $25,000 to the Company. The Company and the individual entered into a modification of the original mortgage and also assigned to the individual a 1% participation in profits and cash flows from Unicom or City Planned Communities. The obligation originally maturing on August 1, 1995 was extended to August 1, 1997. II-22 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ NOTES TO FINANCIAL STATEMENTS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 11 - BUSINESS UNCERTAINTIES_______ ______________________ The Company has $2,368,181 of convertible subordinated debentures including accrued interest which matured on September 30, 1989 (Note 5). The Company's primary source of cash flow has been from its 50% owned real estate partnership, City Planned Communities (Note 2). The availability of future cash flow from City Planned Communities is dependent on the ability of Unicom to repay its obligations to the partners of CPC from its cash flow or from future sale proceeds. The Company also has a 49.5% limited partnership interest in Unicom (Note 2). However, the investment in Unicom has not generated cash flow to the Company, to date. II-23 CITY PLANNED COMMUNITIES_______________________________________________________ 5500 NORTHWEST 69TH AVENUE * LAUDERHILL, FLORIDA * 33319_______________________ (954) 572-1800 BROWARD * TELECOPIER (954) 749-5664_____________________________ The accompanying combined balance sheets of City Planned Communities (a partnership) ("CPC") and Unicom Partnership Ltd. (a limited partnership) ("Unicom") as of June 30, 1996 and the related combined statements of operations, changes in partners' capital (deficit) and cash flows for the years then ended, and the supplemental information listed in the index, have been compiled by these partnerships in accordance with standards established by the American Institute of Certified Public Accountants. The accompanying financial statements have not been audited by independent public accountants, and no accountant has expressed an opinion thereon. They have been prepared assuming that CPC and Unicom will continue as a going concern. As discussed in Note 5, Unicom successfully completed a reassignment and reinstatement of its mortgage on July 28, 1995. The financial statements of Unicom have been audited. No auditing procedures have been performed since September, 1989 for CPC. As explained in the accompanying statements in respect of the financial statements of All-State Properties L.P., the undersigned entities intend to obtain audited financial statements for the 1990-1996 periods as soon as they are in a financial position to compensate an accountant for such services. Very truly yours, CITY PLANNED COMMUNITIES UNICOM PARTNERSHIP LTD. By: ____________ STANLEY R. ROSENTHAL Managing Partner II-24 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ____ COMBINED COMPILED FINANCIAL STATEMENTS _____ JUNE 30, 1996 ____ UNAUDITED ____ C O N T E N T S ____ PAGE ____ Partnerships' letter II-24 Combined Financial Statements: Balance Sheets II-26 Statements of Operations 11-27 Statements of Partners' Capital (Deficit) 11-28 Statements of Cash Flows 11-29/30 Notes to Financial Statements II-31/36 Supplemental Information: Explanation of eliminations to combining Financial Statements 11-37 Combining Balance Sheets II-38/41 Combining Statements of Operations II-42/44 Combining Statements of Partners' Capital (Deficit) 11-45 Combining Statements of Cash Flows II-46/51 Selected Financial Data II-3 II-25 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ____ COMBINED BALANCE SHEETS ____ JUNE 30, 1996 AND 1995 _____ UNAUDITED ____ A S S E T S ____ 1 9 9 6 1 9 9 5 Property and equipment, at cost (Notes 1B and 5): Building, including land of $966,170 $ 33,306,025 $ 33,240,474 Furniture and equipment 1,159,582 1,015,565 China, glassware, silverware and utensils 41,713 41,713 $ 34,507,320 $ 34,297,752 Less accumulated depreciation and amortization (5,942,918) (5,048,352) $ 28,564,402 $ 29,249,400 Cash 1,064,575 645,770 Cash - restricted for tenants' security deposits 592,798 588,249 Real estate for sale - at cost (Note 5) - land 9,666 14,499 Deferred management fees - related party (Notes 1A and 4) 631,543 631,543 Funds held in escrow 520,666 249,290 Prepaid expenses 184,981 132,230 Other assets 298,282 56,387 TOTAL ASSETS $ 31,866,913 $ 31,567,368______ ============ ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ______ LIABILITIES:___________ Mortgage loan payable, including $183,312 and $3,819,033 of accrued interest, respectively (Note 5) $ 27,680,139 $ 31,457,989 Notes payable - others 695,780 - Notes payable - non-interest bearing 208,555 258,555 Notes payable - related parties, including $1,218,819 and $908,547 of accrued interest, respectively (Note 2) 4,758,247 3,434,407 Accounts payable and accrued expenses (Note 3) 609,540 1,001,736 Tenant security deposits 577,250 562,257 Due to management company (Note 6A) - 43,750 Other liabilities - 149,726 Deferred interest (Note 5) 2,453,679 - Total Liabilities $ 36,983,190 $ 36,908,420 COMMITMENTS AND CONTINGENCIES (Notes 4, _____________________________ 6 and 7) - - PARTNERS' CAPITAL (DEFICIT) (Note 4) (5,116,277) (5,341,052)_____ TOTAL LIABILITIES AND PARTNERS' CAPITAL ________________________ (DEFICIT) $ 31,866,913 $ 31,567,368 _____ ============ ============ See notes to combined financial statements. II-26 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ____ COMBINED STATEMENTS OF OPERATIONS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ 1 9 9 6 1 9 9 5 1 9 9 4 REVENUES:________ Sale of land $ 54,166 $ - $ - Rental income 10,132,016 9,874,474 9,475,261 Interest income 74,341 75,179 42,820 $ 10,260,523 $ 9,949,653 $ 9,518,081 EXPENSES:________ Cost of land sold $ 8,128 $ - $ - Dietary and resident services 3,049,995 2,950,311 2,811,560 General and administrative (Note 4A) 1,069,538 1,271,180 1,128,805 Marketing and advertising 239,951 216,810 273,540 Maintenance and utilities 1,355,630 1,430,717 1,296,926 Taxes and insurance 820,846 757,632 695,551 $ 6,544,088 $ 6,626,650 $ 6,206,382 NET INCOME BEFORE DEPRECIATION,_______________________________ AMORTIZATION AND INTEREST: $ 3,716,435 $ 3,323,003 $ 3,311,699 _____ OTHER EXPENSES:______________ Interest (Note 1C) $ 2,576,181 $ 2,991,650 $ 2,984,067 Depreciation and amortization 915,479 920,904 925,540 $ 3,491,660 $ 3,912,554 $ 3,909,607 NET INCOME (LOSS) $ 224,775 $ (589,551) $ (597,908)_____ ============ ============ ============ See notes to combined financial statements. II-27 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) _____ COMBINED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ 1 9 9 6 1 9 9 5 1 9 9 4 PARTNERS' CAPITAL (DEFICIT) -___________________________ Beginning $ (5,341,052) $ (4,751,501) $ (4,153,593) Distributions (Note 4) - (13,352,210) - Contributions (Note 4) - 13,352,210 - Net income (loss) 224,775 (589,551) (597,908) PARTNERS' CAPITAL (DEFICIT) -___________________________ Ending $ (5,116,277) $ (5,341,052) $ (4,751,501) ============ ============ ============ See notes to combined financial statements. II-28 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ______ COMBINED STATEMENTS OF CASH FLOWS ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ 1 9 9 6 1 9 9 5 1 9 9 4 INCREASE (DECREASE) IN CASH___________________________ AND CASH EQUIVALENTS____________________ Cash Flows from Operating_________________________ Activities: __________ Cash from customers/tenants $ 10,032,700 $ 9,941,179 $ 9,502,667 Interest received 74,341 64,828 42,820 Cash paid - interest (3,422,967) (3,592,924) (2,588,942) Cash paid - suppliers, em- ployees and administrative expenses (6,780,382) (6,628,886) (6,302,289) Net Cash Provided (Used) by Operating Activities $ (96,308) $ (215,803) $ 654,256 Cash Flows from Investing_________________________ Activities: __________ Capital expenditures - net $ (226,241) $ (180,278) $ (219,572) Escrow funding (288,762) (44,983) (59,307) Tenant security deposits 10,444 (5,521) 4,377 Other (39,392) - - Net Cash Used by Investing Activities $ (543,951) $ (230,782) $ (274,502) Cash Flows from Financing_________________________ Activities: __________ Cash received - related party $ 1,028,568 $ 42,153 $ 56,008 Cash received - notes 245,890 121,027 59,504 other (215,394) 15,771 (8,969) Net Cash Provided by Financing Activities $ 1,059,064 $ 178,951 $ 106,543 NET INCREASE (DECREASE) IN CASH_______________________________ AND CASH EQUIVALENTS $ 418,805 $ (267,634) $ 486,297 _____ CASH AND CASH EQUIVALENTS -___________________________ BEGINNING OF YEAR 645,770 913,404 427,107 _____ CASH AND CASH EQUIVALENTS -___________________________ END OF YEAR $ 1,064,575 $ 645,770 $ 913,404 _____ ============ ============ ============ See notes to combined financial statements. II-29 CITY PLANNED COMMUNITIES (A PARTNERSHIP) ___ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ____ COMBINED STATEMENTS OF CASH FLOWS (CONTINUED) ____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ 1 9 9 6 1 9 9 5 1 9 9 4 Reconciliation of net profit (loss) to net cash provided (used) by operating activities: Net income (loss) $ 224,775 $ (589,551) $ (597,908) Adjustments to reconcile net profit (loss) to net cash provided (used) by operating activities: Depreciation and amortiza- tion $ 915,479 $ 920,904 $ 925,540 Increase in accrued interest payable (849,648) (601,275) 398,346 Decrease in real estate held for sale 4,833 - - (Increase) decrease in prepaid expense (48,989) 26,299 (57,873) Decrease (increase) in other assets and accounts receivable 4,889 9,713 (4,476) (Decrease) increase in accounts payable and accrued expenses (347,647) (45,181) (9,373) Increase in other liabilities - 63,288 - Total Adjustments $ (321,083) $ 373,748 $ 1,252,164 NET CASH PROVIDED (USED) BY___________________________ OPERATING ACTIVITIES $ (96,308) $ (215,803) $ 654,256 _____ ============ ============ ============ (A) SCHEDULE OF NON-CASH INVESTING ______________________________ AND FINANCING ACTIVITIES: ________________________ (A) In June of 1995 the partners of City Planned Communities contributed their $13,352,210 notes, loans and accrued interest to the capital of Unicom. (See Note 4) See combined notes to financial statements. II-30 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ____ NOTES TO COMBINED FINANCIAL STATEMENTS _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES______ ___________________ A. Organization, Operations and Principles of Combination 1. City Planned Communities (Hereafter CPC) The Partnership was formed in 1968 and is engaged in the business of land sales in Broward County, Florida. The two fifty percent partners of CPC are All-State Properties L.P. (a limited partnership) and NLI Partners, Ltd. (a limited partnership). 2. Unicom Partnership Ltd. (Hereafter Unicom) ___ The limited partnership was formed on October 27, 1986 to acquire land from CPC for the purpose of constructing and operating a 324 unit rental project which is being operated as an adult apartment rental complex (AARC). 3. Basis for Combination _____________________ All-State Properties L.P. and entities under common control with the partners of NLI Partners, Ltd. have a 99% limited partnership interest in Unicom. Accordingly, the beneficial owners of Unicom are substantially the same as those of CPC. Therefore, the financial statements of CPC and Unicom are being presented on a combined basis to offer a more complete presentation of the related entities. All intercompany transactions have been eliminated in combination. In 1987, Unicom purchased 78 acres of land from CPC. Due to related ownership and control of the two entities and in accordance with prescribed accounting standards (Note 1D), the gross profit of approximately $3,158,000 from this sale, computed as follows, has been deferred: Selling price $ 4,000,000 Cost of land and land development (822,000) Closing costs (20,000) $ 3,158,000 ============ Pursuant to the Management Agreement with the deceased Managing Partner, the management fee related to this transaction was paid to the deceased Manager. The expense will be recognized when the profit is recognized. II-31 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ____ NOTES TO COMBINED FINANCIAL STATEMENTS _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)______ _______ A. Organization, Operations and Principles of Combination (Continued) 4. Cash and Cash Equivalents ____________________ For purposes of the statements of cash flows, the Company considers all unrestricted cash with maturities of three months or less to be cash equivalents. B. Property and Equipment ______________________ 1. Building is depreciated using the straight-line method over an estimated useful life of 40 years for financial statement purposes, whereas the modified accelerated cost recovery system ("MACRS") method over 27-1/2 years is used for tax presentation. Since the company is a partnership, income or losses are reported by the partners. Accordingly, no tax effect results from the temporary differences. 2. Furniture and equipment are depreciated using MACRS for both tax and financial statement presentation. Differences between this method and other accelerated depreciation methods are not material. 3. China, glassware, silverware and utensils are represented by a base inventory. Additional acquisitions are expensed when purchased. The base inventory will only change if material variances occur. C. Interest ________ In accordance with FASB Nos. 34 and 67, Capitalization of Interest Cost and Accounting for Costs and Initial Rental Operation of Real Estate Projects, interest and real estate taxes on qualifying assets under construction were capitalized until such time as the property was ready for its intended use. Thereafter, such expenses are period costs. During the years ended June 30, 1996, 1995 and 1994, total interest incurred was $2,576,181, $2,991,650 and $2,984,067, respectively was charged to operations. (See Note 5). D. Income Tax Reporting ____________________ For income tax purposes, CPC reports on the cash basis of accounting while Unicom reports on the accrual basis. Both utilize the accrual basis of accounting for financial reporting purposes. No provision is made in the financial statements for income taxes since such taxes are the responsibility of the partners and not the partnerships. II-32 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP) _____ NOTES TO COMBINED FINANCIAL STATEMENTS _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 2 - NOTES PAYABLE - RELATED PARTIES______ ______________________________ Funds advanced by various partners, evidenced by unsecured demand notes, bearing interest at 3% over prime rate. 1 9 9 6 1 9 9 5 Total principal $ 3,539,428 $ 2,525,860 Accrued interest 1,218,819 908,547 $ 4,758,247 $ 3,434,407 ============ ============ NOTE 3 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES______ ________________________ Accounts payable and accrued expenses at June 30, 1996 and 1995 consist of the following: 1 9 9 6 1 9 9 5 Accounts payable $ 438,104 $ 824,211 Real estate taxes 188,822 177,525 $ 626,926 $ 1,001,736 ============ ============ NOTE 4 - TRANSACTIONS WITH RELATED PARTIES______ ____________________________ A. Management Agreements _____________ In a prior year, Unicom entered into an agreement with an individual who is the general partner of All-State Properties L.P., to oversee the day-to-day operations of the AARC. In the prior year Unicom assigned a 5% interest of all available cash flows to the individual for services previously rendered. (See Note 6). B. Notes Receivable - Unicom _________________________ Unicom had issued six letters of credit totaling approximately $9,700,000 as a prerequisite to obtaining HUD construction financing. In March 1989, $3,650,000 of the letters of credit were canceled and like amount in cash was loaned to Unicom by CPC. Unicom then advanced the funds to its lender to be used for additional project costs. CPC advanced approximately an additional $9,000,000 to Unicom for project costs, and all letters of credit were canceled. The advances by CPC to Unicom are evidenced by unsecured demand notes with various interest rates of 9%, prime plus 2% and 15% per annum. On II-33 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP) _____ NOTES TO COMBINED FINANCIAL STATEMENTS _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 4 - TRANSACTIONS WITH RELATED PARTIES (Continued)______ ________________ B. Notes Receivable - Unicom (Continued) ________________ November 4, 1991 the note holders agreed to amend the notes and eliminate interest after March 1, 1990. Accordingly, no interest has been accrued as of June 30, 1995. Notes with a face value of approximately $5,291,000 bearing interest at 9% have been valued based on the expected cash flow (principal plus interest payments), discounted to their present value. The discount rate of 12% is used, based upon market conditions. During the current year the discount has not been amortized to reflect an increase in the estimated time before the notes will be repaid. An allowance was established representing the funds advanced by CPC to Unicom to fund the operating deficit incurred by Unicom before depreciation and amortization. In prior years, an allowance totaling $7,981,511 has been provided. No allowance has been recorded in the current year as Unicom has reached a break even point before depreciation and amortization. In June of 1995 the partners of City Planned Communities distributed the notes and accrued interest to its partners net of the discount and allowance. C. Notes Payable/Capital - Unicom _______________________ In June, 1995, the partners of City Planned Communities, a partnership related through common ownership, agreed to contribute their $13,352,210 notes, loans, and accrued interest receivables to Unicom's capital. NOTE 5 - MORTGAGE LOAN PAYABLE______ _____________________ The mortgage balance of $27,638,956 was modified on July 28, 1995. The rate of interest was reduced to 8%, including servicing, while the maturity date remained unchanged at January 1, 2029. The mortgage is insured by the Department of Housing and Urban Development (HUD) and is payable in monthly installments of $198,051. As a result of the mortgage modification $2,498,809 in accrued interest was forgiven. This amount is recorded as a deferred interest adjustment and is being amortized over the remaining term of the mortgage. During the current fiscal year II-34 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP) _____ NOTES TO COMBINED FINANCIAL STATEMENTS _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 5 - MORTGAGE LOAN PAYABLE (Continued)______ _____________________ interest expense was reduced by $45,130 as a result of the deferred interest amortization. Principal payments for the next five years ending June 30, are as follows: 1977 $ 183,502 1998 198,733 1999 215,228 2000 233,091 2001 252,438 As of June 30, 1996 and 1995 the outstanding indebtedness consisted of: 1 9 9 6 1 9 9 5 1 9 9 4 Principal $ 27,496,827 $ 27,638,956 $ 27,638,956 Interest 183,312 3,819,033 4,617,817 $ 27,680,139 $ 31,457,989 $ 32,256,773 ============ ============ ============ NOTE 6 - COMMITMENTS AND CONTINGENCIES______ _____________________________ A. Management Contract ___________________ The Partnership terminated its existing management contract effective July 31, 1995. The property will be managed as "owner/managers." The new management fee has been reduced from 6.5% (subject to maximum) to 4% of the total income collected, which is being paid to the partners responsible for the management of the facility. (See Note 4). B. Litigation __________ The Internal Revenue Service has filed a lawsuit for less than $200,000 to set aside a previous settlement for withholding taxes. In legal counsel's opinion the suit is without substance and will be vigorously defended. C. Distributions _____________ As of June 30, 1996, in consideration of cash advances made and services rendered by certain individuals to Unicom, Unicom agreed to distribute 26.76% (including 5% to the general partner of the Company) of any of its cash that becomes available for distribution, to those individuals. The balance of cash that becomes available from each distribution will be used to repay CPC. After CPC has been repaid in full and the II-35 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ____ NOTES TO COMBINED FINANCIAL STATEMENTS _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)______ ____________________ C. Distributions (Continued) _____________ aforementioned individuals have received their share of each distribution, remaining cash will then be distributed as follows: 1.00% to the general partner 49.50% to the other partners in Unicom 7.50% to certain individuals who made cash advances on behalf of the Company 42.00% to the Company _______ 100.00% ======= In addition, CPC assigned 7.842% of any of its cash that becomes available for distribution to certain individuals for funds advanced by them to CPC. NOTE 7 - PENSION PLAN______ ____________ During year ended June 30, 1995, Unicom Partnership implemented a 401-K pension plan. Employees are eligible to participate in the plan if they have been employed by the Partnership for one year, work at least 20 hours per week, work a total of at least 1000 hours per year and are at least 21 years of age. The employer does not make a matching contribution. II-36 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ____ EXPLANATION OF ELIMINATIONS TO COMBINING FINANCIAL STATEMENTS ____ JUNE 30, 1996 AND 1995 _____ UNAUDITED ____ The combining financial statements for City Planned Communities (CPC) and Unicom Partnership Ltd., (Unicom) are presented as supplemental information to the combined financial statements. All significant transactions between CPC and Unicom have been eliminated. Descriptions of the eliminations are as follows: (a) Cost of land purchased by Unicom from CPC in 1987 has been adjusted to reflect the carrying value of property, computed as follows: Land cost $ 250,578 Land development cost 571,704 Closing cost 20,000 Carrying value of property $ 842,282 Selling price (4,000,000) Adjustment to land and construction in progress and deferred profit $ (3,157,718) ============ (b) As of June 30, 1994, Unicom borrowed approximately $12,700,000 from CPC for construction costs overruns on the AARC and has issued demand notes to evidence the loans. Note activity is detailed below: JUNE 30, 1994 Net cash loaned from CPC to Unicom $ 12,703,031 Net accrued interest on notes 648,079 $ 13,351,110 ============ Allowance for loss - note receivable June 30, 1990 $ (2,505,000) June 30, 1991 (3,616,000) June 30, 1992 (1,815,511) Unamortized discount (1,012,900) $ (8,949,411) $ 4,401,699 ============ Interest on the notes was eliminated effective April 1 1990. In June of 1995 CPC distributed to its partners the notes and interest receivable due from Unicom (net of allowances and discounts). The partners agreed to contribute these obligations to the capital of Unicom. See notes to combined financial statements. II-37 CITY PLANNED COMMUNITIES (A PARTNERSHIP) _____ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ____ COMBINING BALANCE SHEETS _____ JUNE 30, 1996 ____ UNAUDITED
CITY UNICOM COMBINED PLANNED PARTNERSHIP BALANCE COMMUNITIES LTD. ELIMINATIONS SHEET ASSETS______ Property and equip- ment, at cost: Building, includ- ing land of $4,123,888 $ - $ 36,463,743 $ (3,157,718)(a) $ 33,306,025 Furniture and equipment - 1,159,582 - 1,159,582 China, glassware, silverware and utensils - 41,713 - 41,713 $ - $ 37,665,038 $ (3,157,718) $ 34,507,320 Less accumu- lated depre- ciation and amortization - (5,942,918) - (5,942,918) $ - $ 31,722,120 $ (3,157,718) $ 28,564,402 Cash 433 1,064,142 - 1,064,575 Cash - restricted for tenants' security de- posits - 592,798 - 592,798 Real estate for sale - at cost - land 9,666 - - 9,666 Deferred manage- ment fees - related party 631,543 - - 631,543 Funds held in escrow - 520,666 - 520,666 Prepaid expenses - 184,981 - 184,981 Other assets 6,886 291,396 - 298,282 TOTAL ASSETS $ 648,528 $ 34,376,103 $ (3,157,718) $ 31,866,913 ============ ============ ============ ============
See notes to combined financial statements. II-38 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING BALANCE SHEETS (CONTINUED) JUNE 30, 1996 UNAUDITED
CITY UNICOM COMBINED PLANNED PARTNERSHIP BALANCE COMMUNITIES LTD. ELIMINATIONS SHEET LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)____________________________________ LIABILITIES:___________ Mortgage loan payable $ - $ 27,680,139 $ - $ 27,680,139 Notes payable - others - 695,780 - 695,780 Notes payable - non interest bearing - 208,555 - 208,555 Notes payable - related parties 3,598,900 1,159,347 - 4,758,247 Accounts payable and accrued ex- penses 75,419 534,121 - 609,540 Tenant security deposits - 577,250 - 577,250 Deferred profit 3,157,718 - (3,157,718)(a) - Deferred interest - 2,453,679 - 2,453,679 $ 6,832,037 $ 33,308,871 $ (3,157,718) $ 36,983,190 COMMITMENTS AND_______________ CONTINGENCIES - - - - __ PARTNERS' CAPITAL_________________ (DEFICIT) (6,183,509) 1,067,232 - (5,116,277) TOTAL LIABILITIES_________________ AND PARTNERS' _____________ CAPITAL (DEFICIT) $ 648,528 $ 34,376,103 $ (3,157,718) $ 31,866,913 ============ ============ ============ ============
See notes to combined financial statements. II-39 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING BALANCE SHEETS JUNE 30, 1995 UNAUDITED
CITY UNICOM COMBINED PLANNED PARTNERSHIP BALANCE COMMUNITIES LTD. ELIMINATIONS SHEET ASSETS______ Property and equip- ment, at cost: Building, includ- ing land of $4,123,888 $ - $ 36,398,192 $ (3,157,718)(a) $ 33,240,474 Furniture and equipment - 1,015,565 - 1,015,565 China, glassware, silverware and utensils - 41,713 - 41,713 $ - $ 37,455,470 $ (3,157,718) $ 34,297,752 Less accumulated depreciation and amortiza- tion - (5,048,352) - (5,048,352) $ - $ 32,407,118 $ (3,157,718) $ 29,249,400 Cash 1,606 644,164 - 645,770 Cash - restricted for tenants' se- curity deposits - 588,249 - 588,249 Real estate for sale - at cost - land 14,499 - - 14,499 Deferred management fees - related party 631,543 - - 631,543 Funds held in escrow - 249,290 - 249,290 Prepaid expenses - 132,230 - 132,230 Other assets 22,986 33,401 - 56,387 TOTAL ASSETS $ 670,634 $ 34,054,452 $ (3,157,718) $ 31,567,368_ ============ ============ ============ ============
See notes to combined financial statements. II-40 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING BALANCE SHEETS (CONTINUED) JUNE 30, 1995 UNAUDITED
CITY UNICOM COMBINED PLANNED PARTNERSHIP BALANCE COMMUNITIES LTD. ELIMINATIONS SHEET LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)____________________________________ LIABILITIES:___________ Mortgage loan payable $ - $ 31,457,989 $ - $ 31,457,989 Notes payable - non-interest bearing - 258,555 - 258,555 Note payable - related parties 3,434,407 - - 3,434,407 Accounts payable and accrued expenses 109,562 892,174 - 1,001,736 Tenant security deposits - 562,257 - 562,257 Due to management company - 43,750 - 43,750 Other liabilities - 149,726 - 149,726 Deferred profits 3,157,718 - (3,157,718)(a) - $ 6,701,687 $ 33,364,451 $ (3,157,718) $ 36,908,420 COMMITMENTS AND_______________ CONTINGENCIES - - - - __ PARTNERS' CAPITAL_________________ (DEFICIT) (6,031,053) 690,001 - (5,341,052) TOTAL LIABILITIES_________________ AND PARTNERS' _____________ CAPITAL (DEFICIT) $ 670,634 $ 34,054,452 $ (3,157,718) $ 31,567,368 ============ ============ ============ ============
See notes to combined financial statements. II-41 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING STATEMENTS OF OPERATIONS YEAR ENDED JUNE 30, 1996 UNAUDITED
UNICOM COMBINED CITY PLANNED PARTNERSHIP STATEMENT OF COMMUNITIES LTD. ELIMINATIONS OPERATIONS REVENUES:________ Sale of land $ 54,166 $ - $ - $ 54,166 Rental income - 10,132,016 - 10,132,016 Interest income 11,107 63,234 - 74,341 $ 65,273 $ 10,195,250 $ - $ 10,260,523 EXPENSES:________ Cost of land sold $ 8,128 $ - $ - $ 8,128 Dietary and resi- dent services - 3,049,995 - 3,049,995 General and admini- strative 10,700 1,058,838 - 1,069,538 Marketing and adverti- sing - 239,951 - 239,951 Maintenance and utilities - 1,355,630 - 1,355,630 Taxes and insurance 851 819,995 - 820,846 $ 19,679 $ 6,524,409 $ - $ 6,544,088 NET INCOME BEFORE_________________ DEPRECIATION, AMORTIZA- _______________________ TION AND INTEREST $ 45,594 $ 3,670,841 $ - $ 3,716,435 OTHER EXPENSES:______________ Interest $ 198,050 $ 2,378,131 $ - $ 2,576,181 Depreciation and amortization - 915,479 - 915,479 $ 198,050 $ 3,293,610 $ - $ 3,491,660 NET INCOME (LOSS) $ (152,456) $ 377,231 $ - $ 224,775_ ============ ============ ============ ============
See notes to combined financial statements. II-42 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING STATEMENTS OF OPERATIONS YEAR ENDED JUNE 30, 1995 UNAUDITED
UNICOM COMBINED CITY PLANNED PARTNERSHIP STATEMENT OF COMMUNITIES LTD. ELIMINATIONS OPERATIONS REVENUES:________ Rental income $ - $ 9,874,474 $ - $ 9,874,474 Interest income 10,351 64,828 - 75,179 $ 10,351 $ 9,939,302 $ - $ 9,949,653 EXPENSES:________ Dietary and resident services $ - $ 2,950,311 $ - $ 2,950,311 General and admini- strative 65,725 1,205,455 - 1,271,180 Marketing and adverti- sing - 216,810 - 216,810 Maintenance and utilities - 1,430,717 - 1,430,717 Taxes and insurance 1,360 756,272 - 757,632 $ 67,085 $ 6,559,565 $ - $ 6,626,650 NET INCOME (LOSS) BEFORE________________________ DEPRECIATION, AMORTIZA- _______________________ TION AND INTEREST $ (56,734) $ 3,379,737 $ - $ 3,323,003 OTHER EXPENSES:______________ Interest $ 197,510 $ 2,794,140 $ - $ 2,991,650 Depreciation and amortization - 920,904 - 920,904 $ 197,510 $ 3,715,044 $ - $ 3,912,554 NET LOSS $ (254,244) $ (335,307) $ - $ (589,551) ============ ============ ============ ============
See notes to combined financial statements. II-43 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING STATEMENTS OF OPERATIONS YEAR ENDED JUNE 30, 1994 UNAUDITED
CITY UNICOM COMBINED PLANNED PARTNERSHIP STATEMENT OF COMMUNITIES LTD. ELIMINATIONS OPERATIONS REVENUES:________ Rental income $ - $ 9,475,261 $ - $ 9,475,261 Interest income 8,656 34,164 - 42,820 $ 8,656 $ 9,509,425 $ - $ 9,518,081 EXPENSES:________ Dietary and resi- dent services $ - $ 2,811,560 $ - $ 2,811,560 General and admini- strative 55,033 1,073,772 - 1,128,805 Marketing and adverti- sing - 273,540 - 273,540 Maintenance and utilities - 1,296,926 - 1,296,926 Taxes and insurance 1,116 694,435 - 695,551 $ 56,149 $ 6,150,233 $ - $ 6,206,382 NET (LOSS) INCOME BEFORE________________________ DEPRECIATION, AMORTIZA- _______________________ TION AND INTEREST $ (47,493) $ 3,359,192 $ - $ 3,311,699 OTHER EXPENSES:______________ Interest $ 193,608 $ 2,790,459 $ - $ 2,984,067 Depreciation and amortization 928 924,612 - 925,540 $ 194,536 $ 3,715,071 $ - $ 3,909,607 NET (LOSS) $ (242,029) $ (355,879) $ - $ (597,908) ============ ============ ============ ============
See notes to combined financial statements. II-44 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) YEARS ENDED JUNE 30, 1996, 1995 AND 1994 UNAUDITED
COMBINED STATEMENT UNICOM OF PARTNERS' CITY PLANNED PARTNERSHIP CAPITAL COMMUNITIES LTD. ELIMINATIONS (DEFICIT) PARTNERS' CAPITAL_________________ (DEFICIT) - June _________ 30, 1993 $ (1,131,981) $(11,971,023) $ 8,949,411 $ (4,153,593) Net loss - 1994 (242,029) (355,879) - (597,908) PARTNERS' CAPITAL _________________ (DEFICIT) - June _________ 30, 1994 $ (1,374,010) $(12,326,902) $ 8,949,411 $ (4,751,501) Distribution (4,402,799) - (8,949,411) (13,352,210) Contribution - 13,352,210 - 13,352,210 Net loss - 1995 (254,244) (335,307) - (589,551) PARTNERS' CAPITAL_________________ (DEFICIT) - June 30, 1995 $ (6,031,053) $ 690,001 $ - $ (5,341,052) Net Income (loss) - 1996 (152,456) 377,231 - 224,775 PARTNERS' CAPITAL_________________ (DEFICIT) - June 30, 1996 $ (6,183,509) $ 1,067,232 $ - $ (5,116,277) ============ ============ ============ ============
See notes to combined financial statements. II-45 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING STATEMENTS OF CASH FLOWS YEAR ENDED JUNE 30, 1996 UNAUDITED
CITY UNICOM COMBINED PLANNED PARTNERSHIP STATEMENT OF COMMUNITIES LTD. ELIMINATIONS CASH FLOWS ____________ ____________ ____________ ____________ INCREASE (DECREASE) IN______________________ CASH AND CASH EQUIVALENTS _________________________ Cash flows from Operating_________________________ Activities: ______________ Cash from customers/ tenants/sales $ 54,166 $ 9,978,534 $ - $ 10,032,700 Interest received 11,107 63,234 - 74,341 Cash paid - interest - (3,422,967) - (3,422,967) Cash paid - suppliers, employees and adminis- trative expenses (47,889) (6,732,493) - (6,780,382) ____________ ____________ ____________ ____________ Net Cash (Used) Provid- ed by Operating Activi- ties $ 17,384 $ (113,692) $ - $ (96,308) ____________ ____________ ____________ ____________ Cash Flows from Invest-_______________________ ing Activities: ______________ Capital expendi- tures - net $ - $ (226,241) $ - $ (226,241) Escrow funding - (288,762) - (288,762) Tenant security de- posits - net - 10,444 - 10,444 Other - (39,392) - (39,392) ____________ ____________ ____________ ____________ Net Cash Used by Investing Activities $ - $ (543,951) $ - $ (543,951) ____________ ____________ ____________ ____________ Cash Flows from Financ-______________________ ing Activities: ______________ Cash received (paid) - related party $ (18,557) $ 1,047,125 $ - $ 1,028,568 Cash (paid) received - notes and mortgages - 245,890 - 245,890 Other - (215,394) - (215,394) ____________ ____________ ____________ ____________ Net Cash Provided (Used) by Financ- ing Activities $ (18,557) $ 1,077,621 $ - $ 1,059,064 ____________ ____________ ____________ ____________ NET INCREASE (DECREASE) IN__________________________ CASH AND CASH EQUIVALENTS $ (1,173) $ 419,978 $ - $ 418,805 _________________________ CASH AND CASH EQUIVALENTS_________________________ BEGINNING OF YEAR 1,606 644,164 - 645,770 _________________ ____________ ____________ ____________ ____________ CASH AND CASH EQUIVALENTS_________________________ END OF YEAR $ 433 $ 1,064,142 $ - $ 1,064,575 ___________
============ ============ ============ ============ See notes to combined financial statements. II-46 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING STATEMENTS OF CASH FLOWS (CONTINUED) YEAR ENDED JUNE 30, 1996 UNAUDITED
CITY UNICOM COMBINED PLANNED PARTNERSHIP STATEMENT OF COMMUNITIES LTD. ELIMINATIONS CASH FLOWS ____________ ____________ ____________ ____________ Reconciliation of net profit (loss) to net cash provided (used) by operating activities: Net income (loss) $ (152,456) $ 377,231 $ - $ 224,775 ____________ ____________ ____________ ____________ Adjustments to reconcile net profit (loss) to cash provided (used) by operating activities: Depreciation and amortiza- tion $ - $ 915,479 $ - $ 915,479 Increase (Decrease) in interest payable 183,050 (1,032,698) - (849,648) Decrease in real estate held for sale 4,833 - - 4,833 (Increase) in prepaid expenses - (48,989) - (48,989) (Increase) Decrease in other assets and accounts receivable 16,100 (11,211) - 4,889 Decrease in accounts payable and accrued expenses (34,143) (313,504) - (347,647) ____________ ____________ ____________ ____________ Total Adjustments $ 169,840 $ (490,923) $ - $ (321,083) ____________ ____________ ____________ ____________ NET CASH PROVIDED (USED) ________________________ BY OPERATING ACTIVITIES $ 17,384 $ (113,692) $ - $ (96,308) _______________________ ============ ============ ============ ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: In June of 1995 the partners of City Planned Communities contributed their $13,352,210 notes, loans and accrued interest to the capital of Unicom. See notes to combined financial statements. II-47 CITY PLANNED COMMUNITIES (A PARTNERSHIP) AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) COMBINING STATEMENTS OF CASH FLOWS YEAR ENDED JUNE 30, 1995 UNAUDITED
CITY UNICOM COMBINED PLANNED PARTNERSHIP STATEMENT OF COMMUNITIES LTD. ELIMINATIONS CASH FLOWS ____________ ____________ ____________ ____________ INCREASE (DECREASE) IN CASH___________________________ AND CASH EQUIVALENTS ____________________ Cash Flows from Operating_________________________ Activities: __________ Cash from customers/ tenants $ - $ 9,941,179 $ - $ 9,941,179 Interest received - 64,828 - 64,828 Cash paid - interest - (3,592,924) - (3,592,924) Cash paid - suppliers, employees and adminis- trative expenses (44,527) (6,584,359) - (6,628,886) ____________ ____________ ____________ ____________ Net Cash Used by Operating Activities $ (44,527) $ (171,276) $ - $ (215,803) ____________ ____________ ____________ ____________ Cash Flows from Investing_________________________ Activities: __________ Capital expenditures - net $ - $ (180,278) $ - $ (180,278) Escrow funding - (44,983) - (44,983) Tenant security de- posits - net - (5,521) - (5,521) ____________ ____________ ____________ ____________ Net Cash Used by Investing Activities $ - $ (230,782) $ - $ (230,782) ____________ ____________ ____________ ____________ Cash Flows from Financing_________________________ Activities: __________ Cash received - related party $ 42,153 $ - $ - $ 42,153 Cash (paid) received - notes (1,100) 122,127 - 121,027 Other deposits - 15,771 - 15,771 ____________ ____________ ____________ ____________ Net Cash Provided by Financing Activities $ 41,053 $ 137,898 $ - $ 178,951 ____________ ____________ ____________ ____________ NET DECREASE IN CASH AND________________________ CASH EQUIVALENTS $ (3,474) $ (264,160) $ - $ (267,634) ________________ CASH AND CASH EQUIVALENTS_________________________ BEGINNING OF YEAR 5,080 908,324 - 913,404 _________________ ____________ ____________ ____________ ____________ CASH AND CASH EQUIVALENTS_________________________ END OF YEAR $ 1,606 $ 644,164 $ - $ 645,770 ___________ ============ ============ ============ =============
See notes to combined financial statements. II-48 CITY PLANNED COMMUNITIES (A PARTNERSHIP) ________________________________________ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ___________________________________________________ COMBINING STATEMENTS OF CASH FLOWS (CONTINUED) ______________________________________________ YEAR ENDED JUNE 30, 1995 ________________________ UNAUDITED _________
CITY UNICOM COMBINED PLANNED PARTNERSHIP STATEMENT OF COMMUNITIES LTD. ELIMINATIONS CASH FLOWS ____________ ____________ ____________ _____________ Reconciliation of net loss to net cash used by operating activities: Net loss $ (254,244) $ (335,307) $ - $ (589,551) ____________ ____________ ____________ ____________ Adjustments to reconcile net loss to cash used by operating activities: Depreciation and amortization $ - $ 920,904 $ - $ 920,904 Increase (Decrease) in interest payable 197,509 (798,784) - (601,275) Decrease in prepaid expenses - 26,299 _ 26,299 (Increase) Decrease in other assets and accounts receivable (10,351) 20,064 - 9,713 (Decrease) Increase in accounts payable and accrued expenses 22,559 (67,740) - (45,181) Increase in other liabilities - 63,288 - 63,288 ____________ ____________ ____________ ____________ Total Adjustments $ 209,717 $ 164,031 $ - $ 373,748 ____________ ____________ ____________ ____________ NET CASH USED BY OPERATING__________________________ ACTIVITIES $ (44,527) $ (171,276) $ - $ (215,803) __________ ============ ============ ============ ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: In June of 1995 the partners of City Planned Communities contributed their $13,352,210 notes, loans and accrued interest to the capital of Unicom. See notes to combined financial statements. II-49 CITY PLANNED COMMUNITIES (A PARTNERSHIP) ________________________________________ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ___________________________________________________ COMBINING STATEMENTS OF CASH FLOWS __________________________________ YEAR ENDED JUNE 30, 1994 ________________________ UNAUDITED _________
CITY UNICOM COMBINED PLANNED PARTNERSHIP STATEMENT OF COMMUNITIES LTD. ELIMINATIONS CASH FLOWS ____________ ____________ ____________ ____________ INCREASE (DECREASE) IN CASH___________________________ AND CASH EQUIVALENTS ____________________ Cash Flows from Operating_________________________ Activities: __________ Cash from customers/ tenants $ - $ 9,502,667 $ - $ 9,502,667 Interest received 8,656 34,164 - 42,820 Cash paid - interest (27,118) (2,561,824) - (2,588,942) Cash paid - suppliers, employees and adminis- trative expenses (49,453) (6,252,836) - (6,302,289) ____________ ____________ ____________ ____________ Net Cash Provided (Used) by Operating Activities $ (67,915) $ 722,171 $ - $ 654,256 ____________ ____________ ____________ ____________ Cash Flows from Investing_________________________ Activities: __________ Capital expenditures - net $ - $ (219,572) $ - $ (219,572) Escrow funding - (59,307) - (59,307) Tenant security de- posits - net - 4,377 - 4,377 ____________ ____________ ____________ ____________ Net Cash Used by Investing Activities $ - $ (274,502) $ - $ (274,502) ____________ ____________ ____________ ____________ Cash Flows from Financing_________________________ Activities: __________ Cash received - related party $ 56,008 $ - $ - $ 56,008 Cash received - notes 5,001 54,503 - 59,504 Other withdrawals - (8,969) - (8,969) ____________ ____________ ____________ ____________ Net Cash Provided by Financing Activities $ 61,009 $ 45,534 $ - $ 106,543 ____________ ____________ ____________ ____________ NET INCREASE (DECREASE) IN__________________________ CASH AND CASH EQUIVALENTS $ (6,906) $ 493,203 $ - $ 486,297 _________________________ CASH AND CASH EQUIVALENTS_________________________ BEGINNING OF YEAR 11,986 415,121 - 427,107 _________________ ____________ ____________ ____________ ____________ CASH AND CASH EQUIVALENTS_________________________ END OF YEAR $ 5,080 $ 908,324 $ - $ 913,404 ___________ ============ ============ ============ =============
See notes to combined financial statements. II-50 CITY PLANNED COMMUNITIES (A PARTNERSHIP) ________________________________________ AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP) ___________________________________________________ COMBINING STATEMENTS OF CASH FLOWS (CONTINUED) ______________________________________________ YEAR ENDED JUNE 30, 1994 ________________________ UNAUDITED _________
CITY UNICOM COMBINED PLANNED PARTNERSHIP STATEMENT OF COMMUNITIES LTD. ELIMINATIONS CASH FLOWS ____________ ____________ ____________ ____________ Reconciliation of net loss to net cash provided (used) by operating activities: Net loss $ (242,029) $ (355,879) $ - $ (597,908) ____________ ____________ ____________ ____________ Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amorti- zation $ 928 $ 924,612 $ - $ 925,540 Increase in accrued interest payable 166,490 231,856 - 398,346 (Increase) in prepaid expenses - (57,873) - (57,873) (Increase) in other assets and accounts receivable - (4,476) - (4,476) (Decrease) Increase in accounts payable and accrued expenses 6,696 (16,069) - (9,373) ____________ ____________ ____________ ____________ Total Adjustments $ 174,114 $ 1,078,050 $ - $ 1,252,164 ____________ ____________ ____________ ____________ NET CASH PROVIDED (USED)________________________ BY OPERATING ACTIVITIES $ (67,915) $ 722,171 $ - $ 654,256 _______________________ ============ ============ ============ ============
See notes to combined financial statements. II-51 ITEM 8. SUPPLEMENTARY DATA______ __________________ (a) Selected quarterly financial disclosure data. Not required. (b) Information on the effects of changing prices. Not applicable. ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE______ _______ Not applicable. II-52 PART III _____ ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT________ _____________ The following information is provided with respect to each general partner and officer of Registrant. BUSINESS EXPERIENCE DURING NAME AGE PAST FIVE YEARS ____ Stanley R. Rosenthal 67 General Partner; President and Chief Executive Officer of predecessor All-State Properties, Inc. since 1971 Managing Partner of Unicom Partnership Ltd. since 1989 ITEM 11. EXECUTIVE COMPENSATION________ ______________________ The following table sets forth aggregate cash compensation paid or accrued by the Registrant to the General Partner during the twelve months ended June 30, 1996. NAME OF INDIVIDUAL OR REGISTRANT'S SHARE________ NUMBER OF PERSONS CAPACITIES OF CASH _____________ IN GROUP IN WHICH SERVED COMPENSATION ______ Stanley R. Rosenthal General Partner $10,000 (1) _______ All officers as a group (1 person) $10,000 (1) Paid by CPC Effective August 1, 1995 with HUD approval, Unicom Partnership Ltd. began to self manage its retirement community. (See Item 1(b)(1)(i)(a)). A management fee of 4% of total income is being paid to the partners assuming managerial responsibility. The General Partner of the Registrant (Stanley R. Rosenthal) has been functioning as Managing Partner of Unicom and is retaining that responsibility, as well as management of the facility. Registrant's share of Mr. Rosenthal's portion of the management fee is approximately $62,000 per year. III-1 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT_______ The following table sets forth as of June 30, 1996 information concerning: (i) all the persons who are known to the Registrant to be the beneficial owners of more than 5% of the units of limited partnership interest; and (ii) the beneficial ownership of limited partnership units by the General Partner. AMOUNT BENEFICIALLY PERCENTAGE TITLE OF CLASS NAME & ADDRESS OWNED OF CLASS_______ Limited Estate of Partnership Herbert Sadkin Units 200 Bonaventure Blvd. Ft. Lauderdale, FL 382,768 10.9% " J.W. Sopher 425 E. 61 Street New York, NY 165,000 (1) 5.3% " Stanley R. Rosenthal c/o All-State Properties L.P. P.O. Box 5524 Ft. Lauderdale, FL 156,474 5.0% (1) Included 48,000 units owned directly and 117,000 units owned beneficially (67,000 units owned by a pension trust and 50,000 units owned by a corporation in which Mr. Sopher holds a 50% interest and in which Mr. Sopher holds shared voting and dispositive powers). III-2 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS________ _____________ As of June 30, 1996, in consideration of cash advances made and services rendered by certain individuals to Unicom, Unicom agreed to distribute 26.76% (including 5% to the general partner of the Company) of any of its cash that becomes available for distribution, to those individuals. The balance of cash that becomes available from each distribution will be used to repay CPC. After CPC has been repaid in full and the aforementioned individuals have received their share of each distribution, remaining cash will then be distributed as follows: 1.00% to the general partner 49.50% to the other partner in Unicom 7.50% to certain individuals who made cash advances on behalf of the Company 42.00% to the Company _______ 100.00% _______ In addition, CPC assigned 7.842% of any of its cash that becomes available for distribution to certain individuals for funds advanced by them to CPC. Certain individuals advanced funds to the Company. In consideration of those advances, the Company assigned to those individuals 12.68% of distributions received by it from CPC, after deducting the amounts necessary to repay the funds advanced by them. III-3 PART IV ____ ITEM 14. EXHIBITS FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K_______ PAGE (a) 1. Financial Statements included in Part II of this report: FINANCIAL STATEMENTS: ____________________ Registrant: Balance Sheets as of June 30, 1996 and 1995 II-10 Statements of Operations for the years ended June 30, 1996, 1995 and 1994 II-11 Statements of Changes in Partners' Capital (Deficit) for the years ended June 30, 1996, 1995 and 1994 II-12 Statements of Cash Flows for the years ended June 30, 1996, 1995 and 1994 II-13/14 Notes to Financial Statements for the years ended June 30, 1996, 1995 and 1994 II-15/23 Combined Financial Statements of City Planned Communities (a partnership) and Unicom Partnership Ltd. (a limited partnership) for the years ended June 30, 1996, 1995 and 1994 II-26/51 2. Financial Statement Schedules Included in Part IV of this report: Schedule X - Supplementary Income Statement Information at June 30, 1996, 1995 and 1994 (Registrant) IV-5 All other schedules are omitted, as the required information is not applicable or the information is presented in the financial statements or related notes. IV-1 (b) (1) REPORTS ON FORM 8-K ___________________ PAGE NO. OR INCORPORATION (c) EXHIBITS BY REFERENCE _ (3) Limited Partnership Incorporated by reference Agreement, All-State to the Registration Properties L.P. Statement of Registrant No. 2-90988 (4) (ii) Instruments Defining Rights of Security Holders, included Debentures: 4% Convertible Sub- Incorporated by reference ordinated Debenture, to Form 10-K for the year due 1989 ended June 30, 1985 (10) (iii) (A) Material Contracts: a. Stock Purchase Incorporated by reference Agreement dated to the Registration April 18, 1984 Statement of Registrant between All-State No. 2-90988 Properties, Inc. and Security Management Corp. b. Loan Agreement Incorporated by reference between All-State to Form 10-K for the Properties, L.P. and year ended June 30, 1987 City Nat'l Bank of Florida dated April 20, 1987 - $2,400,000 c. Unicom Partnership Incorporated by reference Ltd. Limited Part- to Form 10-K for the nership Agreement year ended June 30, 1987 dated September 23, 1986 d. Loan Agreement Incorporated by reference between Unicom to Form 10-K for the year Partnership Ltd. ended June 30, 1987 and Puller Mortgage Associates, Inc. dated 4/23/87 - $27,749,100 e. Management Contract Incorporated by reference between Unicom Partnership to Form 10-K for the Ltd. and Basic American year ended June 30, 1987 Medical Inc. dated Sept. 29, 1986 IV-2 f. Contract of Sale Incorporated by reference between CPC and to Form 8-K dated Centex Real Estate July 7, 1989 Corporation dated May 2, 1989. g. Management Contract Incorporated by reference between Unicom Partner- to Form 10-K for the year ship Ltd. and Senior ended June 30, 1989 Lifestyle Corporation dated 7/1/89 h. Settlement Agreement Incorporation by reference between CPC and MFM to Form 10-K for the year Group dated March 28, 1990 ended June 30, 1990 i. Settlement Agreement Incorporated by reference between Unicom and MFM to Form 10-K for the year Group dated March 28, 1990 ended June 30, 1990 j. Amendment to Incorporated by reference Management Contract on Form 10-K for the year between Unicom and ended June 30, 1992 Senior Lifestyle Corporation dated as of Jan. 1, 1992 k. Management Agreement Incorporated by reference between Unicom and on Form 10-K for the year Stanley R. Rosenthal, ended June 30, 1995 Managing Partner of Owner dated Aug. 1, 1995 l. Employment Agreement Incorporated by reference between Unicom and on Form 10-K for the year Stanley R. Rosenthal, ended June 30, 1995 effective Aug. 1, 1995 (11) Exhibits indicating computa- IV-6 tion of earnings per unit for the years ended June 30, 1996, 1995 and 1994 IV-3 (22) Subsidiaries of the Registrant: State of Incorporation Name or Organization Ownership ____ Wimbledon Development Florida 99% Ltd. (d) NONE Signature Page IV-7 IV-4 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ SCHEDULE X - SUPPLEMENTAL INCOME STATEMENT INFORMATION ___ CHARGED TO COST AND EXPENSES _____ JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ 1 9 9 6 1 9 9 5 1 9 9 4 Maintenance and repairs $ 8,406 $ 4,448 $ 5,663 Depreciation and amortization of intangible assets - 805 232 Taxes, other than payroll and income taxes 11,522 12,317 13,706 Advertising cost - - - $ 19,928 $ 17,570 $ 19,601 ========= ========= ========= See notes to financial statements. IV-5 ALL-STATE PROPERTIES L.P. ____ (A LIMITED PARTNERSHIP) (NOTE 1A) ____ EXHIBITS INDICATING THE COMPUTATION OF EARNINGS PER UNIT _____ YEARS ENDED JUNE 30, 1996, 1995 AND 1994 _____ UNAUDITED ____ 1 9 9 6 1 9 9 5 1 9 9 4 Computation of primary earnings per unit: Units issued 3,118,303 3,118,303 3,118,303 Add: Unit equivalent (incremental units): Debentures convertible at $1.00 - - - Debentures convertible at $3.00 31,952 31,952 31,952 3,150,255(A) 3,150,255(A) 3,150,255(A) ========= ========= ========= Net Loss Before Extraordinary Items $(330,087) $(294,903) $(487,973) ========= ========= ========= Computation of fully diluted loss per unit Before Extraordinary Items $ (0.10) $ (0.09)(B) $ (0.15)(B) ========= ========= ========= Net Loss After Extraordinary Items $(330,087) $(294,903) $(341,999) ========= ========= ========= Computation of fully diluted loss per unit after Extraordinary Items $ (0.10)(B) $ (0.09)(B) $ (0.11)(B) ========= ========= ========= (A) Weighted average number of units outstanding (B) Computation based on the modified treasury stock method as the number of units obtainable upon exercise of outstanding options in the aggregate exceeds 20% of the units outstanding at the end of the period. See notes to financial statements. IV-6 SIGNATURES _____ Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALL-STATE PROPERTIES L.P. By: STANLEY R. ROSENTHAL General Partner Date: October 29, 1996 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacity and on the date indicated. ________________________ General Partner October 29, 1996 STANLEY R. ROSENTHAL (Chief Executive Officer) Date -----END PRIVACY-ENHANCED MESSAGE-----