ALL STATE PROPERTIES LP - 10-K Annual Report

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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, 2000 0-12895

ALL-STATE PROPERTIES L.P.
(Exact name of Registrant as specified in its charter)

Delaware 59-2399204
(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No.)

Mailing address: P.O. Box 5524
Fort Lauderdale, FL 33310-5524

5500 N.W. 69th Avenue, Lauderhill, Florida 33319
(Address of principal executive offices) (Zip Code)

Registrant's Telephone number, including area code (954)
572-2113

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:

Title 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 36.12% owned Florida limited
partnership, Unicom Partnership Ltd.(Unicom),Registrant was
engaged in the operation of an adult rental apartment
project on 78.2 acres of land. (See Item 1(b)(1)(i)(a) and
Note 2 to financial statements.)

(ii) Through a real estate joint venture, City
Planned Communities (CPC), owned 50% by the Company and 50%
by Newnel Partnership 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 sold a condominium development. See Item
1(b)(1)(i)(b).

(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 36.12% limited partnership interest in Unicom. (See Note 2
to financial statements)

I-2

The monthly rentals range from $2,800 per month
for the one-bedroom units to $3,100 per month for the two-
bedroom units, and include food service, maid service and
electricity. The facility is 98-percent leased and occupied.

The property is self-managed. A management fee
of 4% of total income is paid to the partners assuming the
managerial responsibility. The management arrangement was
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 bears interest at the rate of
eight (8%) percent per annum, which includes a 0.25%
servicing fee. In addition, Unicom pays 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.

I-3

On June 25, 1997, Unicom signed a Letter of
Intent with CareMatrix Corporation (AMEX) which Letter
became effective July 18, 1997. Prior to that date Unicom,
through its partners representing a majority interest in the
partnership (the Company abstaining) voted to approve the
transaction. The documents memorializing the transaction
were executed on August 13, 1997 with an effective date of
July 1, 1997, but dependent upon the completion of due
diligence and the payment of $4,500,000 to Unicom. On
September 24, 1997, CareMatrix made the required payment and
the initial phase of the transaction was completed. Unicom
used the proceeds for transaction costs ($325,000),
partnership obligations ($1,400,000), and distributed
$2,650,000 to certain partners to partially repay funds they
invested in Unicom.

The $4,500,000 payment made by CareMatrix to
Unicom represents an option payment, in consideration for
which CareMatrix was granted the option to purchase the
facility in three years on June 30, 2000. The purchase price
is 8.75 times the net operating income before depreciation
for the year ended June 30, 2000, plus the then outstanding
mortgage balance and other adjustments, less the $4,500,000
option payment.

In the interim, CareMatrix leased the facility,
retaining the sums of $518,700-the first year; $775,000-the
second year; and $875,000-the third year out of cash flow
each year, after payment of amounts due in connection with
the facility's mortgage insured by the U.S. Department of
Housing and Urban Development ("HUD").

I-4

The present management team, will continue to
manage the facility until June 30, 2002 at the HUD-approved
rate of 4% of collections. The management team has been
approved by HUD under the name, SRR Management Corp.

Prior to the closing, the Optionee assigned its
option to acquire Forest Trace. On August 16, 2000, the
transaction was consummated and closed with F.C. Forest
Trace L.L.C., the present owner. The purchase price was
$47,159,295, including the outstanding principal balance
plus accrued interest on the existing mortgage in the amount
of $26,720,254,which was satisfied at closing. After giving
effect to various adjustments, prorations and credits,
including the deposit of $4,500,000 previously accounted
for, the seller received net proceeds of $16,379,732. After
payment of a brokerage commission in the amount of $232,190
and bonuses in the amount of $200,000 to key employees of
Forest Trace, none of whom were employees of the Company,
$15,000,000 was distributed to partners. The remaining
balance of $947,542 is being held subject to true-up on
November 15, 2000 of net operating income from the facility
for the four months ending October 31, 2000. The Company's
share of the $15,000,000 distribution was $4,665,012. (See
Item 7). Of the amount distributed to the Company, $769,038
was used to pay liabilities and $2,638,324 was used to pay
the Company's outstanding debentures together with accrued
interest thereon. The balance in the amount of $1,257,650
has been retained by the Company, and together with its
share of the $947,542 being held, will determine the amount
of any distribution to the unit owners, subject to any
unforeseen results from litigation discussed in Item 3,
Legal Proceedings.

In a related transaction, the partners of Unicom
formed a new limited partnership called Newall Assisted
Living Ltd. ("Newall"), which entered into a joint venture
as a 50% partner with a company related to CareMatrix. The
new entity, Newall-Chancellor 69th Avenue Associates, was
formed to build a 120-unit assisted living facility on 4.2
acres of land to be purchased from Unicom at a price to be
agreed upon. Chancellor agreed to provide all the necessary
financing to erect and open the assisted living facility.

The CareMatrix entity has defaulted under its
obligations to Newall Chancellor 69th Avenue Associates (the
"joint venture"). Newall Assisted Living Ltd., one of the
two partners in the joint venture and the entity in which
the Company is a partner, is pursuing its rights under the
applicable Agreement while at the same time attempting to
find a different partner with which to develop and operate
the assisted living facility.

I-5

(i) (b) 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.
Two buildings on two acres of land were completed and all
sixteen (16) units sold. The remaining four acres were sold.

In June 1999, control of the condominium
association was turned over to the unit owners by Wimbledon
Development Ltd., the developer. All required funds for
reserves and deferred maintenance were delivered to the new
condominium board. Wimbledon Development Ltd., its general
partner and the Registrant, its limited partner, were issued
releases with respect to all matters pertaining to the
condominium. (See Item 3, Legal Proceedings)

(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.

(vi) Registrant's only present source of
working capital is the cash distributions made to it by
Unicom. Cash distributions from Unicom 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 market is not
dependent upon a single or a few customers, but instead
relies on a wide customer base. The Unicom units are
expected to be rented to upper income retirees.

I-6

(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.

(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 the 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, 2000 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 $1,001,406
at June 30, 2000. 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. On August 23, 2000, the Debentures and
accrued interest thereon were paid. (See Notes 5 and 13)

I-7

ITEM 3. LEGAL PROCEEDINGS

A limited partnership in which the Company is
the limited partner has been named as a defendant in a
lawsuit seeking all damages allowable under the Florida
Wrongful Death Act. On or about April 17, 1998, one of the
decedents was operating a motor vehicle in the parking lot
of a condominium developed in 1988 by the defendant limited
partnership when she drove said vehicle into a canal
abutting but not part of the condominium property. The other
decedent was a passenger in said vehicle. Counsel selected
by the insurance company representing the limited
partnership filed a motion to dismiss the limited
partnership. Plaintiffs have appealed the order dismissing
the limited partnership in this litigation, and the
insurance carrier has retained counsel to handle the appeal.

Although the insurance company continues to
provide a legal defense to the action on appeal, it has
reserved its rights to contest coverage under the policy
issued to the limited partnership, and has filed a petition
for declaratory relief. The limited partnership has retained
counsel to represent it in connection with the declaratory
action, and all parties to such action have agreed to stay
the declaratory action pending outcome of the appeal.

The Company does not believe the limited
partnership or it has any liability in connection with the
above.

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-8

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, 2000. The Company has no knowledge of
other transactions. Therefore, no bid and asked prices could
be ascertained.

(b) As of June 30 2000, there were 1,202 holders
of record of 2,839,961 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 June 30, 2000, 1,548 of the 2,750
record holders of limited partnership interests holding
278,104 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-

ALL-STATE PROPERTIES L.P
(A LIMITED PARTNERSHIP) (NOTE 1A)
SELECTED FINANCIAL DATA
AS OF AND FOR THE YEARS ENDED JUNE 30

SELECTED CASH FLOW AND
AND OPERATING STATEMENT
DATA 2 0 0 0 1 9 9 9 1 9 9 8 1 9 9 7 1 9 9 6

REVENUE:
Equity in net earnings
(loss) of real estate
partnerships $ 683 $ (23,295) $ (34,380) $ (82,532) $ (76,228)$
Other income 6,082 7,364 49,763 328,171 99,341

Total $ 6,765 $ (15,931) $ 15,383 $ 245,639 $ 23,113
Income (loss) before
Extraordinary Items $ (174,197) $ (235,948) $ (151,977) $ (141,963) $ (330,087)

Net Income (Loss) $ (174,197) $ (235,948).$ (151,977) $ (141,963) $ (330,087)
Per Share/Unit -
fully diluted:
Net income (loss) be-
fore Extraordinary Items $ (.05) $ (.08) $ (.05) $ (.05) $ (.10)

Net Income (Loss) $ (.05) $ (.08) $ (.05) $ (.05) $ (.10)

SELECTED BALANCE SHEET DATA
Total Assets $ 6,526 $ 21,635 $ 6,993 $ 28,806 $ 222,911

Notes, mortgages and con-
struction loans $ 612,077 $ 573,225 $ 430,600 $ 427,117 $ 452,595
4% convertible debentures,
due 1989 including
accrued interest $2,628,518 $2,563,433 $ 2,498,349 $2,433,265 $ 2,368,181

Total $ 3,240,595 $3,136,658 $ 2,928,949 $ 2,860,382 $ 2,820,776

Cash Dividends Declared
Per Share/Unit $ NONE $ NONE $ NONE $ NONE $ NONE

See notes to financial statements.
II-2

CITY PLANNED COMMUNITIES, (A PARTNERSHIP) AND UNICOM
PARTNERSHIP LTD.
(A LIMITED PARTNERSHIP)
SELECTED FINANCIAL DATA
AS OF AND FOR THE YEARS ENDED JUNE 30

SELECTED INCOME STATEMENT DATA
2 0 0 0 1 9 9 9 1 9 9 8 1 9 9 7 1 9 9 6

Sales and rental
of real estate $ $ - $ - $ 10,449,562 $ 10,186,182
Lease Income 5,744,412 5,352,291 4,755,196 - -
Interest and other
income 13,832 18,818 114,134 90,035 74,341

Total Revenues $ 5,758,244 $ 5,371,109 $ 4,869,330 $ 10,539,597 $ 10,260,523

Net Income(Loss)
Before Extra-
ordinary Items $ 419,267 $ 307,173 $ 140,884 $ 450,995 $ 224,775

Net Income(Loss) $ 419,267 $ 307,173 $ 140,884 $ 450,995 $ 224,775

SELECTED BALANCE
SHEET DATA

Total Assets $ 30,119,840 $ 30,597,154 $ 30,948,582 $ 31,006,067 $ 31,866,913

Partners' Cash
Distributions $ 848,936 $ 1,572,000 $ 5,001,156 $ 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.
II-3

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- ALL-STATE PROPERTIES L.P.

YEAR ENDED JUNE 30, 2000 COMPARED TO YEAR ENDED
JUNE 30, 1999

FINANCIAL CONDITION

Registrant's source of working capital consists of cash
received from borrowings and loans received from Unicom.

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 became available for distribution up to $13,351,210
would be distributed to the Company and Newnel Partnership
for the benefit of CPC. After $13,351,210 was disbursed,
remaining cash would be distributed 26.76% to the
aforementioned individuals and the remainder as follows:

1.34% to F. Trace, Inc., the former general partner of
Unicom
49.33% to Newnel Partnership
3.60% to certain individuals who made cash advances to
Unicom on behalf of the company
45.73% to the Company

100.00%

Subsequently, of the holders of the 26.76%, individuals
receiving 23.27% were admitted as limited partners of
Unicom, with the 3.49% remaining as non-partner
distributees. Restating the above to reflect the admission
of the aforesaid individuals as limited partners, the cash
flow available for distribution after the payment of the
$13,351,210 will be distributed as follows:

3.49% to the non-partner distributees

As to the partners:

1.00% to F. Trace, Inc., the former general partner of
Unicom
23.27% to the newly admitted limited partners
36.12% to Newnel Partnership
36.12% to the Company (including 3.60% given to certain
individuals who made cash advances to Unicom on
behalf of the Company)

100.00%

The amount of the distribution to be received by the
Company is the same under both of the above calculations.

II-4

In addition, CPC assigned 9.00% 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 10.23% 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 150% for the year ended
June 30, 2000 as compared to 1999 as a result of the income
from partnership.

Costs and Expenses The total costs and expenses for
the year ended June 30, 2000 decreased by 20%.

Net Loss Net loss was decreased by 26%.

See Notes 12 and 13 to the financial statements relative
to lease and option to purchase agreement entered into by
Unicom Partnership Ltd.

II-5

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- - ALL-STATE PROPERTIES L.P.

YEAR ENDED JUNE 30, 1999 COMPARED TO YEAR ENDED
JUNE 30, 1998

FINANCIAL CONDITION

Registrant's source of working capital consists of cash
received from borrowings and loans received from Unicom.

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 became available for distribution up to $13,351,210
would be distributed to the Company and Newnel Partnership
for the benefit of CPC. After $13,351,210 was disbursed,
remaining cash would be distributed 26.76% to the
aforementioned individuals and the remainder as follows:

1.34% to F. Trace, Inc., the former general partner
of Unicom
49.33% to Newnel Partnership
3.60% to certain individuals who made cash advances
to Unicom on behalf of the Company
45.73% to the Company

100.00%

Subsequently, of the holders of the 26.76%, individuals
receiving 23.27% were admitted as limited partners of
Unicom, with the 3.49% remaining as non-partner
distributees. Restating the above to reflect the admission
of the aforesaid individuals as limited partners, the cash
flow available for distribution after the payment of the
$13,351,210 will be distributed as follows:

3.49% to the non-partner distributees

As to the partners:

1.00% to F. Trace, Inc., the former general partner of
Unicom
23.27% to the newly admitted limited partners
36.12% to Newnel Partnership
36.12% to the Company (including 3.60% given to certain
individuals who made cash advances to Unicom on
behalf of the Company)

100.00%

The amount of the distribution to be received by the
Company is the same under both of the above calculations.
II-6

In addition, CPC assigned 9.00% 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 10.23% of distributions received by it
from CPC, after deducting the amounts necessary to repay the
funds advanced by them.

RESULTS OF OPERATIONS

REVENUES Revenues decreased by 200% for the year ended
June 30, 1999 as compared to 1998 as a result of the sale of
land and condominium units in 1998.

COSTS AND EXPENSES The total costs and expenses for the
year ended June 30, 1999 increased by 33% due to the
turnover of the Wimbledon Condo to the unit owners (Item
1(b)(i)(I)(b))

Net Loss Net loss was increased by 55%.

See Notes 12 and 13 to the financial statements relative
to a lease and option agreement entered into by Unicom
Partnership Ltd.

II-7

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- CITY PLANNED COMMUNITIES AND UNICOM
PARTNERSHIP LTD.

YEAR ENDED JUNE 30, 2000 COMPARED TO YEAR ENDED
JUNE 30, 1999

The net income for the year ended June 30, 2000 as
compared to 1999 was the same.

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 up to $13,351,210
would be distributed to the Company and Newnel Partnership
for the benefit of CPC. After $13,351,210 was disbursed,
remaining cash would be distributed 26.76% to the
aforementioned individuals and the remainder as follows:

1.34% to F. Trace, Inc., the former general partner of
Unicom
49.33% to Newnel Partnership
3.60% to certain individuals who made cash advances
to Unicom on behalf of the Company
45.73% to the Company

100.00%

Subsequently, of the holders of the 26.76%, individuals
receiving 23.27% were admitted as limited partners of
Unicom, with the 3.49% remaining as non-partner
distributees. Restating the above to reflect the admission
of the aforesaid individuals as limited partners, the cash
flow available for distribution after the payment of the
$13,351,210 will be distributed as follows:

3.49% to the non-partner distributees

As to the partners:

1.00% to F. Trace, Inc., the former general partner of
Unicom
23.27% to the newly admitted limited partners
36.12% to Newnel Partnership
36.12% to the Company (including 3.60% given to certain
individuals who made cash advances to Unicom on
behalf of the Company)

100.00%

II-8

The amount of the distribution to be received by the
Company is the same under both of the above calculations.

In addition, CPC assigned 9.00% 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 10.23% of distributions received by it
from CPC, after deducting the amounts necessary to repay the
funds advanced by them.

Revenues increased by 8% for the fiscal year ended June 30,
2000 as compared to the fiscal year ended June 30, 1999.

Expenses increased by 20% for the fiscal year ended June 30,
2000 compared to June 30, 1999.

Net Income increased by 3% for the final year ended June 30,
2000 compared to June 30, 1999.

II-9

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- CITY PLANNED COMMUNITIES AND UNICOM
PARTNERSHIP LTD.

YEAR ENDED JUNE 30, 1999 COMPARED TO YEAR ENDED
JUNE 30, 1998

The net income for the year ended June 30, 1999 as
compared to 1998 was the same.

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 became available for distribution up to $13,351,210
would be distributed to the Company and Newnel Partnership
for the benefit of CPC. After $13,351,210 was disbursed,
remaining cash would be distributed 26.76% to the
aforementioned individuals and the remainder as follows:

1.34% to F. Trace, Inc., the former general partner of
Unicom
49.33% to Newnel Partnership
3.60% to certain individuals who made cash advances
to Unicom on behalf of the Company
45.73% to the Company

100.00%

Subsequently, of the holders of the 26.76%, individuals
receiving 23.27% were admitted as limited partners of
Unicom, with the 3.49% remaining as non-partner
distributees. Restating the above to reflect the admission
of the aforesaid individuals as limited partners, the cash
flow available for distribution after the payment of the
$13,351,210 will be distributed as follows:

3.49% to the non-partner distributees

As to the partners:

1.00% to F. Trace, Inc., the former general partner of
Unicom
23.27% to the newly admitted limited partners
36.12% to Newnel Partnership
36.12% to the Company (including 3.60% given to certain
individuals who made cash advances to Unicom on
behalf of the Company)

100.00%

II-10

The amount of the distribution to be received by the
Company is the same under both of the above calculations.

In addition, CPC assigned 9.00% 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 10.23% of distributions received by it
from CPC, after deducting the amounts necessary to repay the
funds advanced by them.

Expenses increase by 10% for the fiscal year ended June 30,
1999 compared to the fiscal year ended June 30, 1998.

Net Income decreased by 3%.

II-11

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP)(NOTE 1A)
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

I N D E X

PAGE

Independent Auditor's Report II-13

FINANCIAL STATEMENTS:

Balance Sheets II-14

Statements of Operations II-15

Statements of Changes in Partners' Capital
(Deficit) II-16

Statements of Cash Flows II-17/18

Notes to Financial Statements II-19/29

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-12

FREEMAN, BUCZYNER & GERO
ONE SOUTHEAST THIRD AVENUE
SUITE 2120
MIAMI, FLORIDA 33131
305-375-0766

INDEPENDENT AUDITOR'S REPORT

To the Partners
All-State Properties, L.P.
Lauderhill, Florida

We have audited the accompanying balance sheets of All-State
Properties L.P. as of June 30, 2000, 1999 and 1998 and the
related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements
are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as, evaluating the overall financial
statement presentation. We believe that our audit provides
a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of All-State Properties L.P. at June 30, 2000, 1999
and 1998 and the results of its operations and its cash
flows for the years then ended in conformity with generally
accepted accounting principles.

October 9, 2000

II-13

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
BALANCE SHEETS
JUNE 30, 2000 AND 1999
(AUDITED)
A S S E T S
JUNE 30
2 0 0 0 1 9 9 9 1 9 9 8
Cash $ 5,316 $ 20,425 $ 4,037

Other Assets $ 1,210 $ 1,210 2,956

Total Asset $ 6,526 $ 21,635 $ 6,993

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES:
Notes payable (Notes 4 $ 612,077 $ 573,225 $ 430,600
and 8) 4% convertible
subordinated debentures
(Notes 5 and 8) 2,628,518 2,563,433 2,498,349
Partnership distributions
payable (Note 9) 252,496 252,496 252,496
Notes payable - related
party (Note 2) 225,116 194,805 166,750
Accounts payable and
other liabilities
(Note 7) 43,319 30,474 33,412

$ 3,761,526 $ 3,614,433 $ 3,381,607
DEFICIENCY IN PARTNERSHIPS:
Undistributed earnings
(loss) of partnerships
(Notes 1C, 1D, 2 and 4) $ 1,033,229 $ 1,015,561 $992,266

COMMITMENTS AND CONTINGENCIES
(Notes 2,11 and 12) $ - $ - $ -

PARTNERS' CAPITAL (DEFICIT):
Partners' capital (deficit)
(3,772,419 units authorized,
3,118,065 units outstanding)
(Notes 4, 6 and 9) $(4,558,180 ) $(4,383,983 ) $ (4,148,035)
Notes receivable-officers/
partners including
accrued interest of
$90,191 in 2000 1 and
$84,518 in 1999 (Note 3) (230,049) (224,376) 218,845

$ (4,788,229) $ (4,608,359)$ (4,366,880)
TOTAL LIABILITIES AND PARTNERS'
CAPITAL (DEFICIT) $ 6,526 $ 21,635 $ 6,993

See notes to financial statements.
II-14

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

2 0 0 0 1 9 9 9 1 9 9 8
REVENUES (Note 10):

Income (loss) from real
estate partnership
(Note 2) $ 683 $ (23,295) $ (34,380)
Interest and dividend
income (Note 3) 6,082 7,364 9,448
Other - - 26,815
Sale of land and
condominium units - - 13,500

$ 6,765 $ (15,931) $ 15,383

COST AND EXPENSES:

Selling, general and
administrative
expenses(Note 1E) 46,270 $ 99,937 $ 31,441
Interest (Notes 1E,
4 and 5) 134,692 120,080 119,529
Cost of land and
condominiums sold - - 16,390

Total 180,962 $ 220,017 $ 167,360

NET LOSS (174,197) $ (235,948) $ (151,977)

NET INCOME OR (LOSS)
PER PARTNERSHIP UNIT
(Note 1F) $ (0.05) $ (0.08) $ (0.05)

CASH DISTRIBUTIONS PER
UNIT $ NONE $ NONE $ NONE

See notes to financial statements.
II-15

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTES TOTAL
RECEIVABLE PARTNERS
NUMBER GENERAL LIMITED OFFICERS/ CAPITAL
OF UNITS PARTNER PARTNERS PARTNERS (DEFICIT)

BALANCE - June 30, 1997 3,118,065 $ 2 $ (3,996,060) $ (213,273) $ (4,209,331)

Net loss - - (151,977) - (151,977)
Net increase in notes receivable-
partners - - - (5,572) (5,572)

BALANCE - June 30, 1998 3,118,065 $ 2 $ (4,148,037) $ (218,845) $ (4,366,880)

Net loss - - (235,948) - (235,948)
Net increase in notes receivable-
partners - - - (5,531) (5,531)

BALANCE - June 30, 1999 3,118,065 $ 2 $ (4,383,985) $ (224,376) $ (4,608,359)

Net loss - - (174,197) - (174,197)
Net increase in notes receivable-
partners - - - (5,673) (5,673)

BALANCE - June 30, 2000 3,118,065 $ 2 $ (4,558,182) $ (230,049) $ (4,788,229)

See notes to financial statements.
II-16

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

YEARS ENDED JUNE 30,
2 0 0 0 1 9 9 9 1 9 9 8
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
(Note 1G)

Cash Flows from Operating
Activities:

Cash received principally
from rental activities
and sale of condominiums $ - $ - $ 9,051
Interest and dividends
and other income received 1,079 1,833 48,828
Cash paid for selling,
general and administrative
expenses (33,425) (101,130) (61,349)
Interest paid (42,710) (12,457) (94,051)

Net Cash (Used)
Provided by Operating
Activities $ (75,056) $ (111,754) $ (97,521)

Cash Flows from Financing
Activities:

Proceeds(Payment) from
notes payable - net 24,359 $ 113,044 $ 45,461
Proceeds (payments) on
note-related party - net 17,237 15,098 42,665

Net Cash Provided
(Used) by Financing
Activities $ 41,596 $ 128,142 $ 88,126

Cash Flows from Investing
Activities:

Distribution from partner-
ship 18,351 - -

Net Cash Provided (Used)
by Investing Activities 18,351 - -

See notes to financial statements.
II-17 (1 of 2)

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

2 0 0 0 1 9 9 9 1 9 9 8

NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ (15,109) $ 16,388 $ (9,395)

CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 20,425 4,037 13,432

CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 5,316 $ 20,425 $ 4,037

See notes to financial statements
II-17 (2 of 2)

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

YEARS ENDED JUNE 30,
2 0 0 0 1 9 9 9 1 9 9 8
Reconciliation of net (loss)
to net cash (used) provided
by operating activities:

Net (Loss) $ (174,197) $ (235,948) $ (151,977)

Adjustments to reconcile net
(loss) to net cash (used)
provided by operating
activities:
Cost of real estate sold $ - $ - $ 12,000
(Profit) Loss from real estate
partnership (683) 23,295 34,380

Changes in assets and liabilities:
Increase (Decrease) in
accrued interest -
notes payable 14,493 29,581 (41,978)
Increase in accrued interest
- related party notes (net) 13,074 12,958 57,324
(Increase) in notes receiv-
able - partners (5,673) (5,531) (5,572)
Decrease (increase) in other
assets - 1,746 418
Increase in 4% convertible
subordinated debenture accrued
interest 65,084 65,084 65,084
(Decrease) increase in
accounts payable and other
liabilities 12,846 (2,939) (67,200)

Total Adjustments $ 99,141 $ 124,194 $ 54,456

NET CASH (USED) PROVIDED BY
OPERATING ACTIVITIES $ (75,056) $ (111,754) $ (97,521)

See notes to financial statements.
II-18

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
AUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Organization and Operations

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). 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.

The Partnership'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:

Through a 36.12% owned Florida limited partnership,
Unicom Partnership Ltd. (Unicom), The Partnership is
engaged in the operation of a 324-unit adult rental
apartment project on 78.2 acres of land.

Through a 50% owned real estate joint venture, City
Planned Communities (CPC), The Partnership was
engaged in the development and sale of commercial and
residential land.

Through a 99% owned Florida limited partnership,
Wimbledon Development Ltd. (Wimbledon), The
Partnership sold a condominium development.

B. Operations and Income Recognition

The Company was primarily engaged, in South Florida, in
the development and sale of land through a 50% owned
real estate partnership, City Planned Communities which
is substantially inactive as of June 30, 2000, except
for various intercompany loans and advances (Note 2).

II-19

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
AUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

B. Operations and Income Recognition (Continued)

It also was involved in the construction and sale of
residential condominiums through a 99% owned limited
partnership interest in Wimbledon Development Ltd. As
of June 30, 2000, all the land and condominiums owned
by Wimbledon have been sold (Note 1A). In addition, the
Company has a 36.12% limited partnership interest in
Unicom Partnership Ltd. (Note 2), which has constructed
and operates an adult apartment rental community.

C. 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.

D. 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.

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, 2000, 1999
and 1998, total interest incurred of $134,692, $120,080
and $119,529 respectively were charged to current
operations.

II-20

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
AUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

E. 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. No effect is given to the convertible
debentures that are dilutive and have been repaid
subsequent to June 30, 2000. (See Note 5).

F. 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.

G. Use of Estimates

The preparation of financial statements in conformity
with generally accepted accounting principles may
require management to make estimates and assumptions
that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those
estimates.

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% (subsequently adjusted to 36.12%)
(Note 2) limited partnership interest in a limited
partnership, Unicom Partnership Ltd (Note 12). The
beneficial owners of Unicom Partnership Ltd. were
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 costs and the
operating deficit. In June, 1995, the partners of CPC
agreed to contribute $13,351,210 in notes, loans and
accrued interest to Unicom's capital.

II-21

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
AUDITED

NOTE 2 - EQUITY (DEFICIENCY) IN PARTNERSHIPS AND NOTE
RECEIVABLE (Continued)

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
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.

The Company's share of Unicom's income (loss) was $150,945
in 2000, $(127,779) in 1999 and $(104,772) in 1998.

The details of the related party obligations between City
Planned Communities and the Company are as follows:

JUNE 30,
2 0 0 0 1 9 9 9 1 9 9 8
Note receivable from City
Planned Communities -
Unsecured demand loan,
interest at 8.5% per
annum including accrued
interest $ - $ 17,906 $ 33,592

Note payable to City
Planned Communities -
unsecured demand loan,
interest at 8.5% per
annum, including
accrued interest (225,116) (212,711) (200,342)

NET $ (225,116) $ (194,805)$ (166,750)

II-22

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 2 - EQUITY (DEFICIENCY) IN PARTNERSHIPS AND NOTE
RECEIVABLE (Continued)

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 UNICOM
PLANNED PARTNERSHIP
COMMUNITIES LTD.
(NOTE 10) (NOTE 12) COMBINED

2000 $ (1,033,229) $ -0- $ (1,033,229)

2000 (100.0%) -0- (100.0%)

1999 $ (1,015,561) $ -0- $ (1,015,561)

1999 (100.0%) -0- (100.0%)

1998 $ (992,266) $ -0- $ (992,266)

1998 (100.0%) -0- (100.0%)

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 up to $13,351,210 will be distributed to the
Company and Newnel Partnership for the benefit of CPC.
After $13,351,210 is disbursed, remaining cash will be
distributed 26.76% to the aforementioned individuals and
the remainder as follows:

1.34% to F. Trace, Inc., the former general partner
of Unicom
49.33% to Newnel Partnership
3.60% to certain individuals who made cash advances
to Unicom on behalf of the Company.
45.73% to the Company

100.00%

II-23

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 2 - EQUITY (DEFICIENCY) IN PARTNERSHIPS AND NOTE
RECEIVABLE (Continued)

Subsequently, of the holders of the 26.76%, individuals
receiving 23.27% were admitted as limited partners of
Unicom, with the 3.49% remaining as non-partner
distributees. Restating the above to reflect the admission
of the aforesaid individuals as limited partners, the cash
flow available for distribution after the payment of the
$13,351,210 will be distributed as follows:

3.49% to the non-partner distributees

As to the partners:

1.00% to F. Trace, Inc., the former general partner
of Unicom
23.27% to the newly admitted limited partners
36.12% to Newnel Partnership
36.12% to the Company (including 3.60% given to
certain individuals who made cash advances
to Unicom on behalf of the Company)

100.00%

The amount of the distribution to be received by the
Company is the same under both of the above calculations.

In addition, CPC assigned 9.00% of any of its cash that
becomes available for distribution to certain individuals
for funds advanced by them to CPC.

The Company also assigned 10.23% 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 notes receivable in the amount of $230,049, including
accrued interest, mature July 2001 and accrue interest at
4% per annum.

II-24

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 3 - NOTES RECEIVABLE - PARTNERS (Continued)

The notes are non-recourse; however, the Company has 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. The notes have been fully reserved in
prior years and are reflected as part of the Partners'
deficit.

2 0 0 0 1 9 9 9 1 9 9 8
NOTE 4 - NOTES PAYABLE

Notes payable at June 30
consist of the following:

Notes payable - individual (in-
cluding accrued interest of
$10,852, $7,124 and $3,127 re-
spectively) due December 31,
2000. Interest at 10% per annum.
The Company assigned a 1% par-
ticipation in profits and cash
flow from Unicom or City
Planned Communities in order to
obtain this loan. (Notes 2 and
10). $ 48,026 $ 44,298 $ 40,301

Note payable - individuals (in-
cluding accrued interest of
$92,764, $81,999 and $56,415 re-
spectively) due on demand, inter-
est from 8.5% to 15% per annum,
unsecured. The Company assigned
7.5% of its potential distribu-
tions from City Planned Communi-
ties to the individuals in order
to obtain this loan and other
funds advanced on the Company's
behalf. (See Note 2). 564,052 528,927 390,299

II-25

ALL STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 4 - NOTES PAYABLE (Continued)
2 0 0 0 1 9 9 9 1 9 9 8

$ 612,078 $ 573,225 $ 430,600

The notes and accrued interest totaling $612,077 will mature
during the year ending June 30, 2001.

NOTE 5 - 4% CONVERTIBLE SUBORDINATED DEBENTURES

The 4% convertible subordinated debentures at June 30,
consist of the following:

2 0 0 0 1 9 9 9 1 9 9 8

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) 1,001,406 936,321 871,237

$ 2,628,518 $ 2,563,433 $ 2,498,349

Subsequent to June 30, 2000, the debentures and accrued
interest were repaid from the proceeds received from Unicom
Partnership Ltd's sale of its adult rental project. (See Note
13).

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, 2000,
1999 and 1998 aggregated ($170,000), ($236,000) and
($160,000), respectively, which approximates income (losses)
of ($0.05), ($0.08) and income of ($0.05) per unit, based on
3,118,065 outstanding partnership units.

II-26

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 7 - ACCOUNTS PAYABLE AND OTHER LIABILITIES:

Account payable and other
liabilities at June 30
consist of the following:

2 0 0 0 1 9 9 9 1 9 9 8

Fees 16,485 8,705 9,581
Other 26,833 21,769 23,831

$ 43,318 $ 30,474 $ 33,412

NOTE 8 - ACCRUED INTEREST

Accrued interest con-
sists of the following:
2 0 0 0 1 9 9 9 1 9 9 8
Interest payable included
in notes payable (Note 4) $ 103,616 $ 89,123 $ 56,415
Interest included in 4%
convertible subordinated
debentures (Notes 5
and 10) 1,001,406 936,321 871,237

$ 1,105,022 $1,025,444 $ 927,652

NOTE 9 - PARTNERS' CAPITAL (DEFICIT)

As of June 30, 2000, there are 1,548 shareholders holding
278,104 shares of the predecessor corporation that have not
converted their stock certificates into limited partnership
units. The limited partnership, from inception through June
30, 2000, has declared accumulated distributions of $.85
per each unit of partnership 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 units
owners during years ended June 30, 2000, 1999 and 1998.

NOTE 10 - RESTRUCTURED FINANCING

In October of 1993, the Company was liable on a bank
interest and principal totaling $270,974 on two outstanding
obligations (See Note 4). A limited partner of the Company
purchased

II-27

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 10 - RESTRUCTURED FINANCING (Continued)

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 and modified as of August 1, 1997 converting
all unpaid interest to principal and all principal will
accrue interest at 10% per annum. This new note and accrued
interest is due December 31, 2000.

NOTE 11 - LEGAL PROCEEDINGS

A limited partnership in which the Company is the
limited partner has been named as a defendant in a lawsuit
seeking all damages allowable under the Florida Wrongful
Death Act. On or about April 17, 1998, one of the
decedents was operating a motor vehicle in the parking lot
of a condominium developed in 1988 by the defendant
limited partnership when she drove said vehicle into a
canal abutting but not part of the condominium property.
The other decedent was a passenger in said vehicle.
Counsel selected by the insurance company representing the
limited partnership filed a motion to dismiss the limited
partnership. Plaintiffs have appealed the order dismissing
the limited partnership in this litigation, and the
insurance carrier has retained counsel to handle the
appeal.

Although the insurance company continues to
provide a legal defense to the action on appeal, it has
reserved its rights to contest coverage under the policy
issued to the limited partnership, and has filed a
petition for declaratory relief. The limited partnership
has retained counsel to represent it in connection with
the declaratory action, and all parties to such action
have agreed to stay the declaratory action pending outcome
of the appeal.

The Company does not believe the limited
partnership or it has any liability in connection with the
above.

II-28

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 12 - UNICOM PARTNERSHIP LTD - LEASE AGREEMENT

Effective July 1, 1997, Unicom entered into an agreement
with an intended purchaser who leased the facility for a
three-year period after which time the purchaser can
purchase the property or cancel the option and forfeit
their deposit. The agreement called for the tenant to pay
Unicom a base rent equal to the monthly principal and
interest on the outstanding HUD financing plus the amounts
necessary for payment of the various escrows related to the
HUD financing. The tenant retained $821,712, $1,175,000,
and $1,275,000, respectively, during the three year period,
and Unicom was paid all other remaining revenue from the
facility.

NOTE 13 - UNICOM PARTNERSHIP LTD - SUBSEQUENT EVENT

On March 10, 2000, the tenant in the above mentioned lease
agreement assigned its interest, rights and option to
purchase the property to an unrelated company. In Jun 2000,
a new purchase agreement for the sale of the Project's
facility was executed. On August 16, 2000, the facility,
including the real property and certain tangible and
intangible assets were sold for a purchase price of
$47,159,295. After giving effect to the deposit of
$4,500,000 previously accounted for, the existing mortgage
in the amount of $26,720,254 and various adjustments,
Unicom Partnership Ltd. received net proceeds of
$16,379,732. Unicom distributed $15,000,00 to its partners
and All-State Properties, L.P.'s share was approximately
$4,700,000, which was used to pay the Company's outstanding
debentures and accrued interest in the amount of $2,638,324
and liabilities in the amount of $769,038. The Company will
determine the amount of any distributions to the unit
owners.

II-29

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED COMPILED FINANCIAL STATEMENTS
JUNE 30, 2000
AUDITED

C O N T E N T S

PAGE

Independent Auditor's Report II-31

Combined Financial Statements:

Balance Sheets II-32

Statements of Operations II-33

Statements of Partners' Capital (Deficit) II-34

Statements of Cash Flows II-35/37

Notes to Financial Statements II-38/43

Supplemental Information:

Explanation of eliminations to combining
financial statements II-44

Combining Balance Sheets II-45/48

Combining Statements of Operations II-49/51

Combining Statements of Partners' Capital
(Deficit) II-52

Combining Statements of Cash Flows II-53/61

Selected Financial Data II-3

II-30

FREEMAN, BUCZYNER & GERO
ONE SOUTHEAST THIRD AVENUE
SUITE 2120
MIAMI, FLORIDA 33131
305-375-0766

INDEPENDENT AUDITOR'S REPORT

To The Partners
City Planned Communities and
Unicom Partnership Ltd.
Lauderhill, Florida

We have audited the accompanying combined balance sheets of City
Planned Communities and Unicom Partnership Ltd. as of June 30, 2000
and 1999 and the related statements of operations, partners' capital
and cash flows for each of the three years in the period ended June
30, 2000. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as, evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of
City Planned Communities and Unicom Partnership Ltd. as of June 30,
2000 and 1999, and the results of its operations and its cash flows
for each of the three years in the period ended June 30, 2000, in
conformity with generally accepted accounting principles.

October 9, 2000

II-31

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED BALANCE SHEETS
JUNE 30, 2000 AND 1999
AUDITED

A S S E T S
2 0 0 0 1 9 9 9
Property and equipment, at cost
(Notes 1B, 5 and 6C):
Building, including land of
$1,085,579 $ 33,474,770 $ 33,471,775
Furniture and equipment 1,711,396 1,547,231
China, glassware, silverware and
utensils 41,713 41,713
$ 35,227,879 $ 35,060,719
Less accumulated depreciation
and amortization (9,740,474) (8,763,941)

$ 25,487,405 $ 26,296,778

Cash 1,665,025 1,526,882
Cash - restricted for tenants'
security deposits 781,050 734,986
Note receivable - related parties 310,190 -
Real estate for sale - at cost
(Note 5) - land 9,666 9,666
Deferred management fees -
related party (Notes 1A and 4) 631,543 631,543
Funds held in escrow 584,283 583,292
Prepaid expenses 152,710 242,329
Other assets 497,968 571,678

TOTAL ASSETS $ 30,119,840 $ 30,597,154

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES:

Mortgage loan payable, including
$177,775 and $179,329 of accrued
interest, respectively (Note 5) $ 26,844,048 $ 26,985,002
Notes payable - others 85,637 27,413
Notes payable - related parties,
including $5,944 and
$24,221 of accrued interest,
respectively (Note 2) 35,944 380,627
Accounts payable and accrued
expenses (Note 3) 1,170,367 1,314,573
Tenant security deposits 732,202 716,646
Deferred interest (Note 5) 2,212,612 2,276,756
Option deposit (Note 6C) 4,500,000 4,500,000

$ 35,580,810 $ 36,201,017

See notes to combined financial statements.
II-32 (1 of 2)

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED BALANCE SHEETS
JUNE 30, 2000 AND 1999
AUDITED

LIABILITIES (CONTINUED):

COMMITMENTS AND CONTINGENCIES
(Notes 4, 6, and 7) - -
PARTNERS' CAPITAL (DEFICIT)
(Notes 4 & 6B) (5,460,970) (5,603,863)

TOTAL LIABILITIES AND PARTNERS'
CAPITAL (DEFICIT) $ 30,119,840 $ 30,597,154

See notes to combined financial statements.
II-32 (2 of 2)

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
AUDITED

2 0 0 0 1 9 9 9 1 9 9 8

REVENUES:

Interest and other
income $ 13,832 $ 18,818 114,134
Lease income (Note
6C) 5,744,412 5,352,291 $ 4,755,196

$ 5,758,244 $ 5,371,109 $ 4,869,330

EXPENSES:

General and adminis-
trative (Note 4) $ 1,396,899 $ 1,217,305 $ 594,477

Taxes and insurance 624,761 507,265 496,024

$ 2,021,660 $ 1,724,570 $ 1,090,501

NET INCOME BEFORE DEPRE-
CIATION, AMORTIZATION
AND INTEREST: $ 3,736,584 $ 3,646,539 $ 3,778,829

OTHER EXPENSES:

Interest (Note 1C) $ 2,259,354 $ 2,306,611 $ 2,624,412
Depreciation and
amortization 1,057,963 1,032,755 1,013,533

$ 3,317,317 $ 3,339,366 $ 3,637,945

NET INCOME $ 419,267 $ 307,173 $ 140,884

See notes to combined financial statements.
II-33

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

2 0 0 0 1 9 9 9 1 9 9 8

PARTNERS' CAPITAL
(DEFICIT)- Beginning $ (5,603,863) $(5,683,263) $ (3,816,143)

Distributions
(Notes 4 & 6B) (848,936) (1,572,000) (5,001,156)

Contributions
(Notes 4 & 6B) 572,562 1,344,227 2,993,152
Net income 419,267 307,173 140,884

PARTNERS' CAPITAL
(DEFICIT) - Ending $ (5,460,970) $ (5,603,863) $ (5,683,263)

See notes to combined financial statements.
II-34

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

2 0 0 0 1 9 9 9 1 9 9 8
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS

Cash Flows from Operating
Activities:
Interest received $ 1,428 $ 18,818 $ -
Cash paid - interest (2,319,213) (2,299,245) (4,078,848)
Cash paid - suppliers,
employees and admini-
strative expenses (2,024,381) (1,504,950) (731,094)
Lease income 5,677,155 5,352,291 4,676,201

Net Cash (Used) Pro-
vided by Operat-
ing Activities $ 1,334,989 $ 1,566,914 $ (133,741)

Cash Flows from Investing
Activities:
Capital expenditures -
net $ (160,480) $ (311,913)$ (133,920)
Tenant security de-
posits (30,508) 36,997 -
Partners' distribu-
tions - net (276,374) $ (227,775)$ (2,008,004)
Option deposit - - 4,500,000

Net Cash Provided
(Used) by Invest-
ing Activities $ (467,362) $ (502,691)$ 2,358,076

Cash Flows from Financ-
ing Activities:
Cash received (paid)
- related party $ (554,617)$ (454,621)$ (1,569,604)
Cash received (paid)
notes & mortgages (174,867) (211,340) (399,333)
Other - - (31,941)

Net Cash (Used) Pro-
vided by Financing
Activities $ (729,484)$ (665,961) $(2,000,878)

See notes to combined financial statements.
II-35

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

2 0 0 0 1 9 9 9 1 9 9 8
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS $ 138,143 $ 398,262 $ 223,457
CASH AND CASH EQUIVA-
LENTS-BEGINNING OF
YEAR 1,526,882 1,128,620 905,163
CASH AND CASH EQUIVA-
LENTS-END OF YEAR $ 1,665,025 $ 1,526,882 $ 1,128,620

See notes to combined financial statements.
II-36

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

2 0 0 0 1 9 9 9 1 9 9 8

Reconciliation of net
profit to net cash
provided (used)by
operating activities:

Net income $ 419,267 $ 307,173 $ 140,884

Adjustments to reconcile
net profit (loss) to net
cash provided (used) by
operating activities:

Depreciation and
amortization $ 1,057,963 $ 951,325 $ 924,192
Increase (decrease)
in accrued interest
payable (59,858) (7,916) (1,674,363)
(Increase) decrease in
prepaid expense 1,509 94,444 (162,326)
Decrease (increase) in
other assets and ac-
counts receivable 60,314 64,693 (397,472)
(Decrease) increase in
accounts payable and
accrued expenses (144,206) 157,195 1,035,344

Total Adjustments $ 915,722 $ 1,259,741 $ (274,625)
NET CASH (USED) PROVIDED
BY OPERATING ACTIVI-
IES $ 1,334,989 $ 1,566,914 $ (133,741)

See notes to combined to financial statements.
II-37

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

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 was engaged
in the business of land sales in Broward County,
Florida (the Partnership is relatively inactive).
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
in Broward County, Florida, which is being operated
as an adult apartment rental complex (AARC).
Effective July, 1997, Unicom has leased its
property. (See Note 6C)

3. Basis for Combination

All-State Properties L.P. and entities under common
control with the partners of NLI Partners, Ltd. have
a 93% 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 the 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

II-38

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

A. Organization, Operations and Principles of Combination
(Continued)

3. Basis for Combination (Continued)

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.

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. Bank Repurchase Agreements totaling
$1,584,666 as of June 30, 2000 were included in
cash.

5. Use of Estimates

The preparation of financial statements in
conformity with generally accepted accounting
principles may require management to make estimates
and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could
differ from those estimates.

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.

II-39

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)

B. Property and Equipment (Continued)

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, 2000, 1999 and 1998,
total interest incurred was $2,259,354, $2,306,611 and
$2,624,412,respectively was charged to operations.

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.

NOTE 2 - NOTES PAYABLE - RELATED PARTIES

Funds advanced by various partners,
evidenced by unsecured demand notes,
bearing interest at prime rate.

2 0 0 0 1 9 9 9

Total principal $ 30,000 $ 356,406
Accrued interest 5,944 24,221

$ 35,944 $ 380,627

II-40 (1 of 2)

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 3 - ACCOUNTS PAYABLE AND ACCRUED
EXPENSES

Accounts payable and accrued
expenses at June 30, 2000 and
1999 consist of the following:

2 0 0 0 1 9 9 9

Accounts payable $ 968,367 $ 1,112,217
Real estate taxes 202,000 202,356
$ 1,170,367 $ 1,314,573

II-40 (2 of 2)

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 4 - TRANSACTIONS WITH RELATED PARTIES

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 rendered. (See Note 6A)

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 interest was
reduced by $64,144 as a result of the deferred interest
amortization. The approximate principal payments for the
next five years ending June 30, are as follows:

2001 252,438
2002 273,390
2003 296,081
2004 320,656
2005 347,270

As of June 30, 2000 and 1999 the outstanding indebtedness consisted
of:
2 0 0 0 1 9 9 9

Principal $ 26,666,273 $ 26,805,673
Interest 177,775 179,329

$ 26,844,048 $ 26,985,002

NOTE 6 - COMMITMENTS AND CONTINGENCIES

A. Management Contract (See Note 4)

On July 1, 1997, the tenant of the facility appointed a
management company that is owned by a partner of the
Partnership. The management company is paid a fee equal to
4% of the monthly revenue. The management agreement
expires June 30, 2002.
II-41

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)

B. Distributions

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 up to
$13,351,210 will be distributed to the Company and Newnel
Partnership for the benefit of CPC. After $13,351,210 is
disbursed, remaining cash will be distributed 26.76% to
the aforementioned individuals and the remainder as
follows:

1.34% to F. Trace, Inc., the former general
partner of Unicom
49.33% to Newnel Partnership
3.60% to certain individuals who made cash
advances to Unicom on behalf of
the Company
45.73% to the Company

100.00%

Subsequently, of the holders of the 26.76%, individuals
receiving 23.27% were admitted as limited partners of
Unicom, with the 3.49% remaining as non-partner
distributees. Restating the above to reflect the admission
of the aforesaid individuals as limited partners, the cash
flow available for distribution after the payment of the
$13,351,210 will be distributed as follows:

3.49% to the non-partner distributees

As to the partners:
1.00% to F. Trace, Inc. the former general
partner of Unicom
23.27% to the newly admitted limited partners
36.12% to Newnel Partnership
36.12% to the Company (including 3.60% given
to certain individuals who made cash
advances to Unicom on behalf of the
the Company)

100.00%

II-42

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 2000, 1999 AND 1998
AUDITED

NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)

B. Distributions (Continued)

The amount of the distribution to be received by the
Company is the same under both of the above calculations.

In addition, CPC assigned 9.00% of any of its cash
that becomes available for distribution to certain
individuals for funds advanced by them to CPC.

C. Lease Agreement

Effective July 1, 1997, the Partnership entered into an
agreement with an intended purchaser who leased the
facility for a three-year period after which time the
purchaser can purchase the property or cancel the option
and forfeit their deposit. The agreement calls for the
tenant to pay the Partnership a base rent equal to the
monthly principal and interest on the outstanding HUD
financing plus the amounts necessary for payment of the
various escrows related to the HUD financing. The tenant
will retain $812,712, $1,175,000 and $1,275,000,
respectively, during the three year period, and the
Partnership will be paid all other remaining revenue from
the facility providing the profit during any year exceeds a
certain threshold.

On March 10, 2000 the intended purchaser assigned its
interest, rights and option to purchase the property to an
unrelated Company. The Company purchased the property on
August 16, 2000.

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-43

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
EXPLANATION OF ELIMINATIONS TO COMBINING FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
AUDITED

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 cost 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-44

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING BALANCE SHEETS
JUNE 30, 2000
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP BALANCE
COMMUNITIES LTD. ELIMINATIONS SHEET

ASSETS

Property and equip-
ment, at cost:
Building, includ-
ing land of
$4,235,832 $ - $ 36,632,488 $ (3,157,718)(a) $ 33,474,770
Furniture and
equipment - 1,711,396 - 1,711,396
China, glassware,
silverware and
utensils - 41,713 - 41,713

$ - $ 38,385,597 $ (3,157,718) $ 35,227,879
Less accumulated
depreciation and
amortization - (9,740,474) - (9,740,474)

$ - $ 28,645,123 $ (3,157,718) $ 25,487,405

Cash 306 1,664,719 - 1,665,025
Cash - restricted
for tenants'
security deposits - 781,050 - 781,050
Notes receivable -
related party 225,116 85,074 - 310,190
Real estate for sale
- at cost - land 9,666 - - 9,666
Deferred management
fees - related
party 631,543 - - 631,543
Funds held in
escrow - 584,283 - 584,283
Prepaid expenses - 152,710 - 152,710
Other assets 6,886 491,082 - 497,968

TOTAL ASSETS $ 873,517 $ 32,404,041 $(3,157,718) $ 30,119,840

See notes to combined financial statements.
II-45

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING BALANCE SHEETS (CONTINUED)
JUNE 30, 2000
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP BALANCE
COMMUNITIES LTD. ELIMINATIONS SHEET

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

LIABILITIES:

Mortgage loan
payable $ - $ 26,844,048 $ - $ 26,844,048
Notes payable -
others - 85,637 - 85,637
Notes payable -
related parties - 35,944 - 35,944
Accounts payable
and accrued
expenses 35,410 1,134,957 - 1,170,367
Tenant security
deposits - 732,202 - 732,202
Deferred profit 3,157,718 - (3,157,718) -
Deferred interest - 2,212,612 - 2,212,612
Option deposit - 4,500,000 - 4,500,000

$ 3,193,128 $ 35,545,400 $(3,157,718) $ 35,580,810

COMMITMENTS AND
CONTINGENCIES - - - -

PARTNERS' CAPITAL
(DEFICIT) (2,319,611) (3,141,359) - (5,460,970)

TOTAL LIABILITIES
AND PARTNERS'
CAPITAL (DEFICIT) $ 873,517 $ 32,404,041 $ (3,157,718) $ 30,119,840

See notes to combined financial statements.
II-46

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING BALANCE SHEETS
JUNE 30, 1999
AUDITED

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 $ - $ 36,629,493 $ (3,157,718)(a)$ 33,471,775
Furniture and
equipment - 1,547,231 - 1,547,231
China, glassware,
silverware and
utensils - 41,713 - 41,713

$ - $ 38,218,437 $ (3,157,718) $ 35,060,719
Less accumulated
depreciation and
amortization - (8,763,941) - (8,763,941)

$ - $ 29,454,496 $ (3,157,718) $26,296,778

Cash 306 1,526,576 - 1,526,882
Cash - restricted
for tenants'
security deposits - 734,986 - 734,986
Real estate for
sale - at cost -
land 9,666 - - 9,666
Deferred management
fees - related
party 631,543 - - 631,543
Funds held in
escrow - 583,292 - 583,292
Prepaid expenses - 242,329 - 242,329
Other assets 6,886 564,792 - 571,678

TOTAL ASSETS $ 648,401 $ 33,106,471 $ (3,157,718) $ 30,597,154

See notes to combined financial statements.
II-47

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING BALANCE SHEETS (CONTINUED)
JUNE 30, 1999
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP BALANCE
COMMUNITIES LTD. ELIMINATIONS SHEET

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

LIABILITIES:

Mortgage loan
payable $ - $ 26,985,002 $ - $ 26,985,002
Notes payable
- others - 27,413 - 27,413
Notes payable -
related parties 347,083 33,544 - 380,627
Accounts payable
and accrued
expenses 37,140 1,277,433 - 1,314,573
Tenant security
deposits - 716,646 - 716,646
Deferred profit 3,157,718 - (3,157,718) -
Deferred interest - 2,276,756 - 2,276,756
Option deposit - 4,500,000 - 4,500,000

$ 3,541,941 $ 35,816,794 $ (3,157,718) $ 36,201,017

COMMITMENTS AND
CONTINGENCIES - - - -

PARTNERS' CAPITAL
(DEFICIT) (2,893,540) (2,710,323) - (5,603,863)

TOTAL LIABILITIES
AND PARTNERS'
CAPITAL (DEFICIT) $ 648,401 $ 33,106,471 $ (3,157,718) $ 30,597,154

See notes to combined financial statements.
II-48

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF OPERATIONS
JUNE 30, 2000
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP STATEMENT OF
COMMUNITIES LTD. ELIMINATIONS OPERATIONS

REVENUES:

Interest and
other income $ 12,404 $ 1,428 $ - $ 13,832
Lease income - 5,744,412 - 5,744,412

$ 12,404 $ 5,745,840 $ - $ 5,758,244
EXPENSES:

General and
administrative $ (1,730) $ 1,398,629 $ - $ 1,396,899
Taxes and
insurance - 624,761 - 624,761

$ (1,730) $ 2,023,390 $ - $ 2,021,660

NET INCOME BEFORE
DEPRECIATION,
AMORTIZATION AND
INTEREST $ 14,134 $ 3,722,450 $ - $ 3,736,584

OTHER EXPENSES:

Interest $ 12,767 $ 2,246,587 $ - $ 2,259,354
Depreciation and
amortization - 1,057,963 - 1,057,963

$ 12,767 $ 3,304,550 $ - $ 3,317,317

NET(LOSS)INCOME $ 1,367 $ 417,900 $ - $ 419,267

See notes to combined financial statements.
II-49

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF OPERATIONS
JUNE 30, 1999
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP STATEMENT OF
COMMUNITIES LTD. ELIMINATIONS OPERATIONS

REVENUES:

Interest and
other income 12,371 6,447 - 18,818
Lease income - 5,352,291 - 5,352,291

$ 12,371 $ 5,358,738 $ - $ 5,371,109

EXPENSES:

General and
administrative 1,980 1,215,325 - 1,217,305
Taxes and
insurance 288 506,977 - 507,265

$ 2,268 $ 1,722,302 $ - $ 1,724,570

NET INCOME BEFORE
DEPRECIATION,
AMORTIZATION AND
INTEREST $ 10,103 $3,636,436 $ - $ 3,646,539

OTHER EXPENSES:

Interest $ 56,693 $2,249,918 $ - $ 2,306,611
Depreciation and
amortization - 1,032,755 - 1,032,755

$ 56,693 $ 3,282,673 $ - $ 3,339,366

NET INCOME (LOSS) $ (46,590) $ 353,763 $ - $ 307,173

See notes to combined financial statements.
II-50

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF OPERATIONS
JUNE 30, 1998
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP STATEMENT OF
COMMUNITIES LTD. ELIMINATIONS OPERATIONS

REVENUES:

Rental income $ - $ - $ - $ -
Interest and
other income 52,340 61,794 - 114,134
Lease income - 4,755,196 - 4,755,196

$ 52,340 $ 4,816,990 $ - $ 4,869,330

EXPENSES:

Dietary and resi-
dent services $ - $ - $ - $ -
General and admini-
strative 1,027 593,450 - 594,477
Marketing and adver-
tising - - -
Maintenance and
utilities - - - -
Taxes and in-
surance - 496,024 - 496,024

$ 1,027 $ 1,089,474 $ - $ 1,090,501

NET INCOME BEFORE
DEPRECIATION,
AMORTIZATION AND
INTEREST $ 51,313 $ 3,727,516 $ - $ 3,778,829

OTHER EXPENSES:

Interest $ 120,071 $ 2,504,341 $ - $ 2,624,412
Depreciation and
amortization - 1,013,533 - 1,013,533

$ 120,071 $ 3,517,874 $ - $ 3,637,945

NET INCOME (LOSS) $ (68,758) $ 209,642 $ - $ 140,884

See notes to combined financial statements.
II-51

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED JUNE 30, 2000, 1999 AND 1998
AUDITED

COMBINED
STATEMENT
CITY UNICOM OF PARTNERS'
PLANNED PARTNERSHIP CAPITAL
COMMUNITIES LTD. ELIMINATIONS (DEFICIT)

PARTNERS'
CAPITAL
(DEFICIT) -
June 30,
1997 $ (6,318,572) $ 2,502,429 $ - $ (3,816,143)
Net income
(loss) -
1998 (68,758) 209,642 - $ 140,884
Distribution - (5,001,156) - (5,001,156)
Contribution 2,993,152 - - 2,993,152
PARTNERS'
CAPITAL
(DEFICIT) -
June 30,
1998 $ (3,394,178) $ (2,289,085) $ - $ (5,683,263)
Net Income
(loss) -
1999 (46,590) 353,763 - 307,173
Distribution - (1,572,000) - (1,572,000)
Contribution 547,228 796,999 - 1,344,227
PARTNERS'
CAPITAL
(DEFICIT) -
June 30,
1999 $ (2,893,540) $ (2,710,323) $ - $ (5,603,863)
Net Income
(Loss)2000 1,367 417,900 - 419,267
Distribution - (848,936) - (848,936)
Contribution 572,562 - - 572,562
PARTNERS'
CAPITAL
(DEFICIT)-
June 30,
2000 $ (2,319,611) $ (3,141,359) $ - $ (5,460,970)

See notes to combined financial statements.
II-52

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS
YEAR ENDED JUNE 30, 2000
AUDITED

COMBINED
CITY UNICOM STATEMENT
PLANNED PARTNERSHIP OF
COMMUNITES LTD. ELIMINATIONS CASH FLOWS

INCREASE (DECREASE) IN
CASH AND CASH EQUIVA-
LENTS

Cash Flows from Opera-
ing Activities:
Interest received $ - $ 1,428 $ - $ 1,428
Cash paid - interest (100,619) (2,218,594) - (2,319,213)
Cash paid - suppliers,
employees and admini-
strative expenses - (2,024,381) - (2,024,381)
Lease income - 5,677,155 - 5,677,155

Net Cash (Used) Pro-
vided by Operating
Activities $ (100,619) $ 1,435,608 $ - $ 1,334,989

Cash Flows from Invest-
ing Activities:
Capital expenditures -
net $ - $ (160,480) $ - $ (160,480)
Escrow funding - - - -
Tenant security
deposits - net - (30,508) - (30,508)
Partner contribution
(distribution) (Net) 572,562 (848,936) - (276,374)

Net Cash (Used)
Provided by
Investing
Activities $ 572,562 $ (1,039,924) $ - $ (467,362)

Cash Flows from Financ-
ing Activities:
Cash received (paid)
- related party $ (471,943) $ (82,674) $ - $ (554,617)
Cash (paid) received
- - notes and mort-
gages - (174,867) - $ (174,867)

Net Cash Provided
(Used) by Financ-
ing Activities $ (471,943) $ (257,541) $ - $ (729,484)

See notes to combined financial statements.
II-53

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS (CONTINUED)
YEAR ENDED JUNE 30, 2000
AUDITED

COMBINED
CITY UNICOM STATEMENT
PLANNED PARTNERSHIP OF
COMMUNITIES LTD. ELIMINATIONS CASH
FLOWS

NET (DECREASE) INCREASE
IN CASH AND CASH
EQUIVALENTS $ - $ 138,143 $ - $ 138,143
CASH AND CASH EQUIVA-
LENTS BEGINNING OF
YEAR 306 1,526,576 - 1,526,882
CASH AND CASH EQUIVA-
LENTS END OF YEAR $ 306 $ 1,664,719 $ - $1,665,025

See notes to combined financial statements.
II-54

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS (CONTINUED)
YEAR ENDED JUNE 30, 2000
AUDITED

COMBINED
CITY UNICOM STATEMENT
PLANNED PARTNERSHIP OF
COMMUNITIES LTD. ELIMINATIONS CASH FLOWS

Reconciliation of net
profit (loss) to net
cash provided (used)
by operating activi-
ties:

Net income (loss) $ 1,367 $ 417,900 $ - $ 419,267

Adjustments to recon-
cile net income (loss)
to net cash provided
(used) by operating
activities:

Depreciation and
amortization $ - $ 1,057,963 $ - $ 1,057,963
(Decrease) in
interest payable (87,851) 27,993 - (59,858)
(Increase) in
prepaid expenses - 1,509 - 1,509
(Increase) in
other assets
and accounts
receivable (12,405) 72,719 - 60,314
Increase (decrease)
in accounts payable
and accrued
expenses (1,730) (142,476) - (144,206)

Total Adjust-
ments $ (101,986) $ 1,017,708 $ - $ 915,722

NET CASH PROVIDED
(USED) BY OPERATING
ACTIVITIES $ (100,619) $ 1,435,608 $ - $ 1,334,989

See notes to combined financial statements.
II-55

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS
YEAR ENDED JUNE 30, 1999
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP STATEMENT OF
COMMUNITIES LTD. ELIMINATONS CASH FLOWS

INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS

Cash Flows from
Operating Activi-
ties:
Interest received 12,371 6,447 - 18,818
Cash paid - interest (72,708) (2,226,537) - (2,299,245)
Cash paid - suppliers,
employees and admini-
strative expenses (2,268) (1,502,682) - (1,504,950)
Lease income - 5,352,291 - 5,352,291
Net Cash (Used)
Provided by Opera-
ting Activities $ (62,605) $ 1,629,519 $ - $ 1,566,914

Cash Flows from Invest-
ing Activities:
Capital expendi-
tures - net $ - $ (311,913) $ - $ (311,913)
Escrow funding - - - -
Tenant security de-
posits - net - 36,997 - 36,997
Partner contribution
(distribution) (Net) 547,226 (775,001) -
(227,775)

Net Cash (Used) Provided
by Investing Acti-
vities $ 547,226 $ (1,049,917) $ - $ (502,691)

Cash Flows from Fi-
nancing Activities:
Cash received
(paid) - related
party $ (484,621) $ 30,000 $ - $ (454,621)
Cash (paid)
received -
notes and
mortgages - (211,340) - (211,340)

Net Cash Provided
(Used) by Financ-
ing Activities $ (484,621) $ (181,340) $ - $ (665,961)

See notes to combined financial statements.
II-56

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS (CONTINUED)
YEAR ENDED JUNE 30, 1999
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP STATEMENT OF
COMMUNITIES LTD. ELIMINATONS CASH FLOWS

NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS $ - $ 398,262 $ - $ 398,262
CASH AND CASH EQUIVA-
LENTS BEGINNING OF
YEAR 306 1,128,314 - 1,128,620
CASH AND CASH EQUIVA-
LENTS END OF YEAR $ 306 $ 1,526,576 $ - $ 1,526,882

See notes to combined financial statements.
II-57

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS (CONTINUED)
YEAR ENDED JUNE 30, 1999
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP STATEMENT OF
COMMUNITIES LTD. ELIMINATONS CASH FLOWS

Reconciliation of net
profit (loss) to net
cash provided (used)
by operating activities:

Net income (loss) $ (46,590) $ 353,763 $ - $ 307,173

Adjustments to recon-
cile net income (loss)
to net cash provided
used) by operating
activities:

Depreciation and
amortization $ - $ 951,325 $ - $ 951,325
(Decrease) in
interest payable (18,283) 10,367 - (7,916)
(Increase) in pre-
paid expenses - 94,444 - 94,444
(Increase) in other
assets and accounts
receivable - 64,693 - 64,693
Increase in accounts
payable and accrued
expenses 2,268 154,927 - 157,195

Total Adjustments $ (16,015) $ 1,275,756 $ - $ 1,259,741

NET CASH PROVIDED (USED)
BY OPERATING ACTIVI-
TIES $ (62,605) $ 1,629,519 $ - $ 1,566,914

See notes to combined financial statements.
II-58

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS
YEAR ENDED JUNE 30, 1998
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP ELIMI- STATEMENT OF
COMMUNITIES LTD. NATIONS CASH FLOWS

INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS

Cash Flows from Operating
Activities:
Cash paid - interest (1,418,655) (2,660,193) - (4,078,848)
Cash paid - suppliers,
employees and admini-
strative expenses (5,043) (726,051) - (731,094)
Lease income - 4,676,201 - 4,676,201
Net Cash (Used)
Provided by Oper-
ating Activities $ (1,423,698)$ 1,289,957 $ - $ (133,741)

Cash Flows from Invest-
ing Activities:
Capital expenditures-
net $ - $ (133,920) $ - $ (133,920)
Escrow funding - - - -
Tenant security
deposits - net - - - -
Partner contribution
(distribution) $ 2,993,152 $ (5,001,156) $ - $ (2,008,004)
Option deposit - 4,500,000 - 4,500,000

Net Cash Used by
Investing Acti-
vities $ 2,993,152 $ (635,076) $ - $ 2,358,076

Cash Flows from Financ-
ing Activities:
Cash received (paid)
- related party $ (1,569,604) $ - $ - $ (1,569,604)
Cash (paid) received -
notes and mortgages - (399,333) - (399,333)
Other - (31,941) - (31,941)

Net Cash Provided
(Used) by Financ-
ing Activities $ (1,569,604) $ (431,274) $ - $ (2,000,878)

See notes to combined financial statements.
II-59

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS
YEAR ENDED JUNE 30, 1998
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP ELIMI- STATEMENT OF
COMMUNITIES LTD. NATIONS CASH FLOWS

NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS $ (150) $ 223,607 $ - $ 223,457
CASH AND CASH EQUIVA-
LENTS BEGINNING OF
YEAR 456 904,707 - 905,163
CASH AND CASH EQUIVA-
LENTS END OF YEAR $ 306 $ 1,128,314 $ - $ 1,128,620

See notes to combined financial statements.
II-60

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS (CONTINUED)
YEAR ENDED JUNE 30, 1998
AUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP STATEMENT OF
COMMUNITIES LTD. ELIMINATIONS CASH FLOWS

Reconciliation
of net profit
(loss) to net
cash provided
(used) by
operating acti-
vities:

Net income
(loss) $ (68,758) $ 209,642 $ - $ 140,884

Adjustments to
reconcile net
income (loss)
to net cash prov-
ided (used) by
operating activ-
ities:

Depreciation and
amortization $ - $ 924,192 $ - $ 924,192
(Decrease) in
interest pay-
able (1,674,363) - - (1,674,363)
(Increase) in pre-
paid expenses - (162,326) - (162,326)
(Increase) in
other assets and
accounts receiv-
able - (397,472) - (397,472)
Increase in acounts
payable and accrued
expenses 319,423 715,921 - 1,035,344

Total Adjust-
ments $ (1,354,940) $ 1,080,315 $ - $ (274,625)

NET CASH PROVIDED
(USED) BY OPERA-
TING ACTIVITIES $ (1,423,698) $ 1,289,957 $ - $ (133,741)

See notes to combined financial statements.
II-61

ITEM 8. SUPPLEMENTARY DATA

(a) Selected quarterly financial disclosure date.

Not required.

(b) Information on the effects of changing prices.

Not applicable.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable

II-62

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 71 General Partner;
President and Chief
Executive Officer of
predecessor All-State
Properties, Inc. since
1971

Managing Partner of
Unicom Partnership Ltd.
since 1989

President of SRR Consulting
Corp. and President of SRR
Management Corp. since July,
1997

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, 2000

NAME OF INDIVIDUAL OR REGISTRANT'S SHARE
NUMBER OF PERSONS CAPACITIES OF CASH
IN GROUP IN WHICH SERVED COMPENSATION

Stanley R. Rosenthal General Partner $ -0-

All officers as a group (1 person) $ -0-

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 $90,000 per year.

III-1

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth as of June 30, 2000
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 J.W. Sopher
Partnership 425 E. 61 Street
Units New York, N.Y. 165,000 (1) 5.3%

Limited Stanley R. Rosenthal
Partnership c/o All-State
Units 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

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 up to
$13,351,210 will be distributed to the Company and Newnel Partnership
for the benefit of CPC. After $13,351,210 is disbursed, remaining cash
will be distributed 26.76% to the aforementioned individuals and the
remainder as follows:

1.34% to F. Trace, Inc., the former general partner of Unicom
49.33% to Newnel Partnership
3.60% to certain individuals who made cash advances on
behalf of the Company
45.73% to the Company

100.00%

Subsequently, of the holders of the 26.76%, individuals
receiving 23.27% were admitted as limited partners of Unicom, with the
3.49% remaining as non-partner distributees. Restating the above to
reflect the admission of the aforesaid individuals as limited
partners, the cash flow available for distribution after the payment
of the $13,351,210 will be distributed as follows:

3.49% to the non-partner distributees

As to the partners:
1.00% to F. Trace, Inc., the former general partner of Unicom
23.27% to the newly admitted limited partners
36.12% to Newnel Partnership
36.12% to the Company (including 3.60% given to certain indivi-
duals who made cash advances to Unicom on behalf of the
Company

100.00%

The amount of the distribution to be received by the Company
is the same under both of the above calculations.

In addition, CPC assigned 9.00% 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 10.23% 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, 2000 and 1999 II-14

Statements of Operations for the years ended
June 30, 2000, 1999 and 1998 II-15

Statements of Changes in Partners' Capital
(Deficit) for the years ended June 30, 2000,
1999 and 1998 II-16

Statements of Cash Flows for the years ended
June 30, 2000, 1999 and 1998 II-17/18

Notes to Financial Statements for the years
ended June 30, 2000, 1999 and 1998 II-19/29

Combined Financial Statements of City Planned
Communities (a partnership) and Unicom
Partnership Ltd. (a limited partnership) for
the years ended June 30, 2000, 1999 and 1998 II-32/61

2. Financial Statement Schedules

Included in Part IV of this report:

Schedule X - Supplementary Income
Statement Information
at June 30, 2000, 1999
and 1998 (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 Partner- to Form 10-K for the
ship Agreement dated year ended June 30, 1987
September 23, 1986

d. Loan Agreement Incorporated by reference
between Unicom Partner- to Form 10-K for the year
ship Ltd. and Puller ended June 30, 1987
Mortgage Associates,
Inc. dated 4/23/87 -
$27,749,100

e. Management Contract Incorporated by reference
between Unicom Partner- to Form 10-K for the year
ship Ltd. and Basic ended June 30, 1987
American 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 Incorporated by reference
between CPC and MFM Group to Form 10-K for the year
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 Management Incorporated by reference
Contract between Unicom and to Form 10-K for the year
Senior Lifestyle Corporation ended June 30, 1992
dated as of Jan. 1, 1992

k. Management Agreement Incorporated by reference
between Unicom and Stanley to Form 10-K for the year
R. Rosenthal, Managing ended June 30, 1995
Partner of Owner dated
August 1, 1995

l. Employment Agreement Incorporated by reference
between Unicom and Stanley to Form 10-K for the year
R. Rosenthal, effective ended June 30, 1995
August 1, 1995

m. Lease and option to pur- Incorporated by reference
chase agreements between to Form 8-K dated October
Unicom and CareMatrix 10, 1997
Corporation effective
as of July 1, 1997

n. Disposition of assets in Incorporated by reference
accordance with Option to Form 8-K dated August
Agreement on August 16, 2000 16, 2000

(11) Exhibits indicating computa- IV-6
tion of earnings per unit for
the years ended June 30, 1998,
1997 and 1996.

IV-3

(22) Subsidiaries of the Registrant:

State of
Incorporation
Name or Organization Ownership

Wimbledon Develop- Florida 99%
ment 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, 2000, 1999 AND 1998
AUDITED

2 0 0 0 1 9 9 9 1 9 9 8

Maintenance and repairs $ - $ - $ 708

Depreciation and amortiza-
tion of intangible assets - - -

Taxes, other than payroll
and income taxes - - 375

Advertising cost - - -

$ - $ - $ 1,083

IV-5

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
EXHIBITS INDICATING THE COMPUTATION OF EARNINGS PER UNIT
YEARS ENDED JUNE 30, 2000, 1999 AND 1998

2 0 0 0 1 9 9 9 1 9 9 8
Computation of pri-
mary earnings per
unit:

Units issued 3,118,303 3,118,303 3,118,303

Add: Unit equivalent
(incremental units):

Debentures conv-
ertible at $1.00 - - -
Debentures conv-
ertible 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 $ (174,197) $ (235,948) $ (151,977)

Computation of Fully
diluted loss per
unit Before Extra-
ordinary Items $ (0.05) $ (0.08) $ (0.05)

Net Loss After
Extraordinary
Items $ (174,197) $ (235,948) $ (151,977)

Computation of Fully
diluted loss per unit
after Extraordinary
Items $ (0.05) $ (0.08) $ (0.08)

(A) Weighted average number of units outstanding

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: November 17, 2000

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 November 17, 2000
STANLEY R. ROSENTHAL (Chief Executive Officer) DATE

IV-7