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, 1998 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 is
engaged in the operation of an adult rental apartment
project on 78.2 acres of land. (See Note 2 to financial
statements.)

(ii) Through a 50% owned real estate joint
venture, City Planned Communities (CPC), Registrant was
engaged in the development and sale of commercial and
residential land. (See Note 2 to financial statements.)

(iii) Through a 99% owned Florida limited
partnership, Wimbledon Development Ltd. (Wimbledon),
Registrant sold a condominium development. See Item
1(b)(1)(i)(c).

(b)(1) NARRATIVE DESCRIPTION OF BUSINESS

(i) (a) Adult Rental Apartment Project

In April, 1987, CPC sold approximately 78 acres
of land to Unicom for the purpose of constructing a 324-unit
adult apartment rental project on the land. Registrant holds
a 36.12% limited partnership interest in Unicom. (See Note
2.) The general partner of Unicom was Sadkin Associates,
Inc., an affiliate of the late Herbert Sadkin, who died in
February, 1989. Following Mr. Sadkin's death, the limited
partners requested that Unicom retain Mr. Stanley Rosenthal,
the General Partner of Registrant, as manager. Currently,
all of Mr. Rosenthal's total compensation is considered
compensation as manager of Unicom. (See Items 11 and 13.)

I-2

The project is adjacent to the Inverrary and
Woodlands Country Club communities in Broward County,
Florida, which are upper-income retirement developments. The
project consists of 80-one-bedroom, one-bath apartments of
approximately 800 square feet and 244 two-bedroom, two-bath
apartments of approximately 1,025 square feet. It includes a
29-acre lake and has dining and clubhouse facilities
containing an auditorium, a swimming pool, various craft
centers, a health club, game and club rooms, and a beauty
and barber shop.

The project is designed to meet the special
needs of the elderly and includes features designed to
appeal to upper-income retirees. Primary emphasis is placed
on security with a well-designed entrance-exit monitoring
system, emergency alarm systems in apartments, a security
gate entrance and security fence as well as lever door
handles and handrails along halls and stairs, and includes
fire alarm systems and smoke detectors. Amenities include
built-in washers and dryers and balconies or terraces.

The monthly rentals range from $2,600 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.

As of July 1, 1989, amended June, 1990 and
January, 1992, Unicom entered into a management agreement
with Senior Lifestyle Corporation, an Illinois corporation
(Senior Lifestyle). The agreement as amended provided for a
term which expired in December 1997. Senior Lifestyle
received compensation for management services consisting of
6.5% of the residential, commercial and miscellaneous
income, but not less than $100,000 or greater than $525,000
per year. The partnership terminated the management
agreement as of July 31, 1995. The property is self-managed.
A management fee of 4% of total income was paid to the
partners assuming the managerial responsibility, of which
$8,333 per month was paid to Senior Lifestyle Management
Corporation for one year. The new 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 will bear interest at the rate
of eight (8%) percent per annum, which includes a 0.25%
servicing fee. In addition, Unicom will pay one-half of one
percent per annum mortgage insurance premium.

Unicom had accrued unpaid interest and other
liabilities related to the mortgage in a total amount of
$3,896,730. The total adjusted accrued interest and closing
costs paid at the closing equaled $1,502,183. This resulted
in a saving of $2,394,547, which saving will be amortized
over the remaining life of the mortgage. The saving resulted
from the difference between the accrual at the original note
rate and the borrowing rate charged by HUD.
I-3

In order to accomplish the closing, the company borrowed
$1,547,125. Of this amount, $500,000 was borrowed
commercially (personally guaranteed by Mr. Rosenthal), to be
repaid in one (1) year out of surplus cash earned by the
company at an interest rate of two (2) percent over prime
(the loan was repaid in July, 1996); $1,047,125 was borrowed
from certain partners and other investors, to be repaid
after the above bank loan is repaid, also from surplus funds
at three (3%) percent over prime. In addition, because of
the disproportionate contribution by certain partners in
relationship to the other partners and because of new
investors, the group was awarded a 3.41% interest in
distributions from Unicom. All-State Properties L.P. did not
participate in the investment.

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
will be 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 is leasing 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"). The
balance of cash flow will be paid to Unicom as rent until
the net operating income equals $2,300,000 per year. Any
excess will then be divided equally between CareMatrix and
Unicom.

The present management team, will continue to
manage the facility for a period of five years at the HUD-
approved rate of 4% of collections. The management team has
been approved by HUD under the name, SRR Management Corp.

I-4

CareMatrix chose to prepay part of the management fee
every six months for the five-year term, into a trust to be
paid monthly to SRR Management Corp., as set forth in a
consulting agreement. CareMatrix in turn is retaining
$400,000 per year out of facility cash flow, as a
reimbursement.

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 it will purchase from Unicom at a price to be
agreed upon. Chancellor has agreed to provide all the
necessary financing to erect and open the assisted living
facility. SRR Management Corp. will manage the facility for
five years at a fee equal to the greater of $7,000 per month
or 3-1/2% of collections, to commence six months prior to
opening. The facility will be leased after completion to
CareMatrix of Lauderhill II, Inc. for an initial term of 15
years. As consideration for the lease, Newall will receive
50% of the net cash flow from the assisted living facility.
The joint venture has agreed to pay $40,000 plus 5% of the
development cost to CareMatrix, and $5,000 per month to the
general partner of the company for his services during the
approval period and construction. The above sums are to be
paid from construction loan draws.

Chancellor has agreed to purchase the facility
from the joint venture at the later of 27 months from
commencement of the lease or June 30, 2002, at 8.75 times
net operating income before depreciation for the twelve
months prior to the purchase, plus the then outstanding
mortgage balance.

The majority of the partners of Newall, the
Company abstaining, voted to award 5% of the venture to the
general partner of the company for his services and 2% to
others.

Three homeowners living near the proposed
assisted living facility site commenced an action against
Unicom and the City of Lauderhill, seeking to prevent
construction of the assisted living facility at that
location. The court granted summary judgment in favor of
Unicom and the City, dismissing the action. The homeowners
have appealed, and the appeal is pending. In the opinion of
counsel, Unicom and the City should prevail on appeal as
well.

(i) (b) CPC Operations

Foreclosure Proceedings - As of October 26,
1992, the Company owed $2,511,551 of principal plus accrued
interest of $655,036 to a bank. Collateral for the loan was
substantially all the land owned by CPC. The bank obtained a
final judgment of foreclosure, and a sale of the property
took place on October 26, 1992.

I-5

The Company recognized an extraordinary gain of
$3,166,587, or $1.01 per unit in the fiscal year of
foreclosure.

CPC recognized a loss of $99,125 (the carrying
value of the land taken by foreclosure, $333,101, less the
real estate tax liability of $233,976). This directly
affected the Company by $49,562 due to its 50% interest in
CPC.

(i) (c) Condominium Units

In November, 1986, Registrant formed Wimbledon
Development Ltd., a Florida Limited partnership, for the
purpose of constructing up to 48 units on six acres of land
remaining from a condominium project known as Wimbledon
constructed by Registrant during the period 1971-1978. The
condominium project could be comprised of six two-story
buildings of eight units each. Two such buildings on two
acres of land were completed and all sixteen (16) units have
been sold.

Mortgages totaling $270,974 on the two buildings
were in default and were purchased for and reduced to
$125,000. (See Note 10.) Wimbledon owed $135,000 in
recreational assessments to the operating association. By
agreement, the delinquency would be paid out of proceeds
from the sale of the remaining four acres of land, together
with 50% of any profit realized. The property was sold on
September 17, 1996, and the obligation was satisfied by a
payment of $137,035 to the association. (See Note 10.)

(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 CPC.
Any cash distributions from Unicom and Wimbledon which may
be received in the future will be available for working
capital and distribution to investors and limited partners.
(See Note 2.)

(vii) The apartment rental 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.

(viii) No portion of Registrant's business
involved government contracts.

I-6

(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, 1998 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 $871,237 at
June 30, 1998. The payment of the interest and principal on
the Debentures is subordinate to payment of certain senior
debt which remains outstanding. Consequently, the Registrant
has been prohibited from paying the Debentures since
maturity. Nonetheless, the Registrant believes that its
assets are sufficient eventually to satisfy the senior
indebtedness and pay the principal of and accumulated
interest on the Debentures.

ITEM 3. LEGAL PROCEEDINGS

Foreclosure Proceedings - As of June 30, 1992,
the Company owed $2,511,551 of principal plus accrued
interest of $655,036 to a bank. Collateral for the loan was
substantially all the land owned by CPC. The bank obtained a
final judgment of foreclosure and a sale of the property
took place on October 26, 1992. See Item 1(b)(1)(i)(b).

I-7

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, 1998. The Company has no knowledge of
other transactions. Therefore, no bid and asked prices could
be ascertained.

(b) As of September 30, 1998, there were 1,326
holders of record of 2,833,154 limited partnership
interests, excluding individual participants in security
nominee of street names.

Pursuant to the Plan of Liquidation and
Dissolution of All-State Properties, Inc. and the Limited
Partnership Agreement of All-State Properties L.P. upon the
dissolution of the Corporation, stockholders automatically
received one unit of partnership interest for each share of
stock held and became record holders of limited partnership
units. However, until the stockholders submitted their stock
certificates for exchange and had taken other necessary
steps, they would not become limited partners.

As of September 30, 1998, 1,567 of the 2,893
record holders of limited partnership interests holding
284,911 units had not submitted their stock certificates for
exchange.

(c)(d) The Company never paid cash dividends on its
common stock while it was a corporation. The Partnership
declared cash distributions cumulatively totaling $0.85 per
unit through August 31, 1989.

II-1

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

SELECTED CASH FLOW AND
AND OPERATING STATEMENT
DATA 1 9 9 8 1 9 9 7 1 9 9 6 1 9 9 5 1 9 9 4

REVENUE:
Equity in net earnings
(loss) of real estate
partnerships $ (34,380) $ (82,532) $ (76,228) $ (127,122)
$
(121,015)
Other income 49,763 328,171 99,341 36,396
27,97
0

Total $ 15,383 $ 245,639 $ 23,113 $ (90,726) $
(93,045)
Income (loss) before
Extraordinary Items $ (151,977) $ (141,963)$ (330,087) $ (294,9
03) $ (487,973)

Net Income (Loss) $ (151,977) $ (141,963)$ (330,087) $ (294,903)
$
(341,999)
Per Share/Unit -
fully diluted:
Net income (loss) be-
fore Extraordinary
Items $ (.05) $ (.05) $ (.10) $ (.09) $ (.15)

Net Income (Loss) $ (.05) $ (.05) $ (.10) $ (.09) $
(.11)

SELECTED BALANCE SHEET DATA
Total Assets $ 6,993 $ 28,806 $ 222,911 $ 375,421
$ 3
71,503

Notes, mortgages and con-
struction loans $ 430,600 $ 427,117 $ 452,595 $ 450,041
$ 3
46,038
4% convertible debentures,
due 1989 including
accrued interest 2,498,349 2,433,265 2,368,181 2,303,097

2,238,013

Total $ 2,928,949 $2,860,382 $ 2,820,776 $ 2,753,
138 $ 2,584,051

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
UNAUDITED

SELECTED INCOME STATEMENT DATA
1 9 9 8 1 9 9 7 1 9 9 6 1 9 9 5 1 9 9 4

Sales and rental
of real estate $ - $ 10,449,562 $ 10,186,182
$ 9,8
74,474 $ 9,475,261
Lease Income 4,755,196 - - - -
Interest and other
income 114,134 90,035 74,341 75,179
42,82
0

Total Revenues $ 4,869,330 $ 10,539,597 $ 10,260,523
$ 9,9
49,653 $ 9,518,081

Net Income(Loss)
Before Extra-
ordinary Item $ 140,884 $ 450,995 $ 224,775 $ (589,551)
$
(597,908)

Net Income(Loss) $ 140,884 $ 450,995 $ 224,775 $ (589,551)
$
(597,908)

SELECTED BALANCE
SHEET DATA

Total Assets $ 30,948,582 $ 31,006,067 $ 31,866,913 $
31,5
67,368 $ 32,550,887

Partners' Cash
Distributions $ NONE $ NONE $ NONE $ NONE $ NONE

NOTE: Information shown is from the combined financial statements of City
Planned
Communities and Unicom Partnership Ltd.

See notes to combined financial statement.
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, 1998 COMPARED TO YEAR ENDED
JUNE 30, 1997

FINANCIAL CONDITION

Registrant's source of working capital consists of cash
received from borrowings and loans received from its 50%
joint venture, CPC. No cash was available for distribution
during the year ended June 30, 1998.

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 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 decreased by 94% for the year ended
June 30, 1998 as compared to 1997 as a result of the sale of
land and condominium units in 1997.

Costs and Expenses The total costs and expenses for
the year ended June 30, 1998 decreased by 57%.

Net Loss Net loss was increased by 8%.

See Note 12 to the financial statements relative to a
recent lease and option 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, 1997 COMPARED TO YEAR ENDED
JUNE 30, 1996

FINANCIAL CONDITION

Registrant's source of working capital consists of cash
received from borrowings and loans received from its 50%
joint venture, CPC. No cash was available for distribution
during the year ended June 30, 1997.

As of June 30, 1997, 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 partners equally 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:

1.00% to the general partner of Unicom
49.50% to Newnel Partnership
3.50% to certain individuals who made cash advances
to Unicom on behalf of the Company
46.00% to the Company

100.00%

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 950% for the year ended
June 30, 1997 as compared to 1996 as a result of the sale of
land and condominium units.

COSTS AND EXPENSES The total costs and expenses for the
year ended June 30,1 996 increased by 10%.

Net Loss Net loss was decreased by 60%.

SUBSEQUENT EVENTS

See Note 12 to the financial statements relative to a
recent lease and option agreement entered into by Unicom
Partnership Ltd., a 49-1/2% owned subsidiary.

II-6

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, 1998 COMPARED TO YEAR ENDED
JUNE 30, 1997

The net income for the year ended June 30, 1998 as
compared to 1997 decreased by 69% as a result of the
payments to the lessee (see Note 8 to financial statement.)

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 Company

100.00%

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

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, 1997 COMPARED TO YEAR ENDED
JUNE 30, 1996

The net income for the year ended June 30, 1997 as
compared to 1996 increased by 100% as a result of an
increase in the net income from the retirement community.

As of June 30, 1997, 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 partners
equally 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:

1.00% to the general partner of Unicom
49.50% to Newnel Partnership
3.50% to certain individuals who made cash advances
to Unicom on behalf of the Company
46.00% to the Company

100.00%

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.

II-8

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ALL-STATE PROPERTIES L.P.
P O BOX 5524
Fort Lauderdale, FL 33310-5524

Telephone (954) 572-2113 Fax (954) 749-5664

The accompanying balance sheets of All-State Properties L.P.
(a limited partnership) (Note 1A) as of June 30, 1998 and
the related statements of operations, changes in partners'
capital (deficit) and cash flow for the year then ended and
the schedule and exhibit listed in the index have been
compiled in accordance with standards established by the
American Institute of Certified Public Accountants.

The accompanying financial statements have not been audited
by independent public accountants and no accountant has
expressed an opinion thereon. They have been prepared by the
Registrant assuming that All-State Properties L.P. (a
limited partnership) (Note 1A) will continue as a going
concern. As explained in Note 11 to the financial
statements, at June 30, 1998, conditions exist which
indicate that the partnership is unable to generate
sufficient cash flow to meet its obligations. The financial
statements do not include any adjustments or
reclassifications that might result from the outcome of
these uncertainties.

No auditing procedures have been performed since September,
1989. The Registrant's cash flow is insufficient for the
Registrant to compensate accountants for past or present
services.

The Registrant intends to obtain audited financial
statements for the 1990-1998 periods as soon as it is in a
financial position to compensate an accountant for such
services.

Very truly yours,

ALL-STATE PROPERTIES L.P.

By:
STANLEY R. ROSENTHAL
General Partner

II-9

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP)(NOTE 1A)
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

I N D E X

PAGE

Partnership's Letter II-9

FINANCIAL STATEMENTS:

Balance Sheets 11-11

Statements of Operations II-12

Statements of Changes in Partners' Capital
(Deficit) II-13

Statements of Cash Flows II-14/15

Notes to Financial Statements II-16/25

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-10

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
BALANCE SHEETS
JUNE 30, 1998 AND 1997
(UNAUDITED)
A S S E T S
JUNE 30
1 9 9 8 1 9 9 7
Cash $ 4,037 $ 13,432
Receivables:
Trade and other $ - $ -

Real estate held for sale and develop-
ment at lower of cost or market value
(Notes 1D, 1E and 4):
Land and land improvements $ - $ 12,000
Condominium homes completed and
under construction - -

$ - $ 12,000

Other Assets $ 2,956 $ 3,374

Total Assets $ 6,993 $ 28,806

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES:
Notes payable (Notes 4 and 8) $ 430,600 $ 427,117
4% convertible subordinated
debentures (Notes 5, 8 and 11) 2,498,349 2,433,265
Partnership distributions payable
(Note 9) 252,496 252,496
Notes payable - related party
(Note 2) 166,749 66,760
Accounts payable and other
liabilities (Note 7) 33,413 100,613

$ 3,381,607 $ 3,280,251
DEFICIENCY IN PARTNERSHIPS:
Undistributed earnings (loss) of
partnerships (Notes 1C, 1D,
2,4 and 11) $ 992,266 $ 957,886
COMMITMENTS AND CONTINGENCIES
(Notes 2 and 11) $ - $ -

PARTNERS' CAPITAL (DEFICIT):
Partners' capital (deficit)
(3,772,419 units authorized,
3,118,065 units outstanding)
(Notes 4, 6 and 9) $(4,148,035) $ (3,996,058)
Notes receivable-officers/partners
including accrued interest of
$78,988 in 1998 and $73,416 in
1997 (Note 3) (218,845) (213,273)

$ (4,366,880)$ (4,209,331)
TOTAL LIABILITIES AND PARTNERS'
CAPITAL (DEFICIT) $ 6,993 $ 28,806

See notes to financial statements.
II-11

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

1 9 9 8 1 9 9 7 1 9 9 6
REVENUES (Note 10):

Loss from real
estate partnership
(Note 2) $ (34,380) $ (82,532) $ (76,228)
Interest and dividend
income (Note 3) 9,448 11,971 11,991
Other 26,815 5,300 14,850
Sale of land and
condominium units 13,500 310,900 72,500

$ 15,383 $ 245,639 $ 23,113

COST AND EXPENSES:

Selling, general and
administrative
expenses(Note 1E) $ 31,441 $ 86,370 $ 148,828
Interest (Notes 1E,
4 and 5) 119,529 100,838 112,246
Cost of land and
condominiums sold 16,390 200,394 92,126

Total $ 167,360 $ 387,602 $ 353,200

NET LOSS $ (151,977) $ (141,963) $ (330,087)

NET INCOME OR (LOSS)
PER PARTNERSHIP UNIT
(Note 1F) $ (0.05) $ (0.05) $ (0.10)

CASH DISTRIBUTIONS PER
UNIT $ NONE $ NONE $ NONE

See notes to financial statements.
II-12

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

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

BALANCE - June 30, 1995 3,118,065 $ 2 $ (3,524,008) $ (202,0
85) $(3,726,093)

Net loss - - (330,087) - (330,087)
Net increase in notes receivable-
partners - - - (5,594) (5,594)

BALANCE - June 30, 1996 3,118,065 $ 2 $ (3,854,095) $ (207,6
79) $ (4,061,774)

Net loss - - (141,963) - (141,963)
Net increase in notes receivable-
partners - - - (5,594) (5,594)

BALANCE - June 30, 1997 3,118,065 $ 2 $ (3,996,058) $ (213,2
73) $ (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 $ (4,148,035) $ (218,8
45) $ (4,366,880)

See notes to financial statements.
II-13

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

YEARS ENDED JUNE 30,
1 9 9 8 1 9 9 7 1 9 9 6
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 $ 310,900 $ 90,269
Interest and dividends
and other income received 48,828 6,086 4
Cash paid for selling,
general and administrative
expenses (61,349) (256,409) (70,109)
Interest paid (94,051) (7,937) -

Net Cash (Used)
Provided by Operating
Activities $ (97,521) $ 52,640 $ 20,164

Cash Flows from Financing
Activities:

(Payment) Proceeds from
notes payable - net $ 45,461 $ (40,925) $ (57,895)
Proceeds (payments) on
note-related party - net 42,665 - 24,651

Net Cash Provided
(Used) by Financing
Activities $ 88,126 $ (40,925) $ (33,244)

NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ (9,395) $ 11,715 $ (13,080)

CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 13,432 1,717 14,797

CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 4,037 $ 13,432 $ 1,717

See notes to financial statements.
11-14

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

YEARS ENDED JUNE 30,
1 9 9 8 1 9 9 7 1 9 9 6
Reconciliation of net (loss)
to net cash (used) provided
by operating activities:

Net (Loss) $ (151,977) $ (141,963) $ (330,087)

Adjustments to reconcile net
(loss) to net cash (used)
provided by operating
activities:
Cost of real estate sold $ 12,000 $ 205,036 $ 82,997
Depreciation and
amortization - - -
Loss from real estate
partnership 34,380 82,532 76,228
Write down of land to net
realizable value (1) - - 48,000

Changes in assets and liabilities:
Increase (Decrease) in
accrued interest -
notes payable (41,978) 15,447 60,449
Increase in accrued interest
- related party notes (net) 57,324 5,995 4,714
(Increase) in notes receiv-
able - partners (5,572) (5,594) (5,594)
Decrease in trade and other
receivables - 1,720 -
Decrease in deferred assets - - 2,919
Decrease (increase) in other
assets 418 (936) 5,514
Increase in 4% convertible
subordinated debenture in-
cluding accrued interest 65,084 65,084 65,084
(Decrease) Increase in
accounts payable and other
liabilities (67,200) (174,681) 9,940

Total Adjustments $ 54,456 $ 194,603 $ 350,251

NET CASH (USED) PROVIDED BY
OPERATING ACTIVITIES $ (97,521) $ 52,640 $ 20,164

SCHEDULE OF NON-CASH INVESTING AND FINANCIAL ACTIVITIES:

(1) The Partnership recognized a loss on the write down of
condominiums held for sale, to net realizable value in
1996.

See notes to financial statements.
II-15

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997, AND 1996
UNAUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Presentation

On November 3, 1986, Wimbledon Development Ltd. (a
limited partnership) was formed to construct and
sell condominium units on land acquired from All-
State Properties L.P. (hereafter the Company). As
of June 30, 1998, all the land and condominiums
owned by Wimbledon have been sold. The Company has
a 99% limited partnership interest in Wimbledon
Development Ltd. and the remaining ownership is
being held by a corporation controlled by the
president of the Company. The Corporation is the
general partner of the partnership and is
responsible for the management of Wimbledon
Development Ltd. The Company includes in its
accounts the assets, liabilities, revenues and
expenses of Wimbledon Development Ltd. All
significant intercompany accounts and trans-
actions have been eliminated.

B. Organization

All-State Properties L.P. (a limited partnership)
is the successor to All-State Properties, Inc. and
Subsidiaries. On September 20, 1984, the
shareholders of All-State Properties, Inc.
approved a Plan of Liquidation pursuant to which
the shareholders were issued limited partnership
units in the Partnership in exchange for their
stock of the Corporation.

C. Equity in Partnerships

The investments in unconsolidated real estate
partnerships are carried at cost plus the
Company's equity (deficiency) in the partnerships'
undistributed e
earnings (deficit) (Note 2).

D. 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, 1998, except for various
intercompany loans and advances (Note 10). It also
was involved in the construction and sale of
residential condominium through a 99% owned
limited partnership interest in Wimbledon
Development Ltd. As of June 30, 1998, all the land
and condominiums owned by Wimbledon have been sold

II-16

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997, AND 1996
UNAUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

D. Operations and Income Recognition (Continued)

(Note 1A) and a 36.12% limited partnership
interest in Unicom Partnership Ltd. (Note 2),
which has constructed and operates an adult
apartment rental community.

Condominiums

Revenues from the sale of condominiums are
recorded at the time of closing. Construction
costs, as outlined in FASB No. 67, Accounting for
Cost and Initial Rental Operations of Real Estate
Projects, are allocated to individual units based
on relative sales value of each unit.

E. Real Estate Held for Sale and Development

Real estate held for sale and development is
carried at the lower of cost or net realizable
value. Costs of acquiring and developing land are
accumulated and allocated on a per unit basis.
During the period of development and construction,
certain overhead, selling and carrying costs were
capitalized to the extent that these capitalized
costs did not increase the carrying value in
excess of net realizable value.

The following details the adjustments to the
valuation accounts to reflect condominiums held
for sale at their net realizable value based on
projected sales prices.

CHARGES CREDIT TO
TO RESERVE COST OF SALES

June 30, 1998 $ - $ -

June 30, 1997 $ - $ -

June 30, 1996 $ 48,000 $ 39,602

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, 1998, 1997 and 1996, total interest
incurred of $119,529, $100,838 and $112,246,
respectively were charged to current operations.

II-17

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997, AND 1996
UNAUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

F. Income (Loss) Per Partnership Unit

Income (loss) per partnership unit is computed by
dividing the net income (loss) by the weighted
average number of units outstanding. Effect is
given to the convertible debentures that are
dilutive.

G. 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.

H. 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% 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 cost
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-18

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997, AND 1996
UNAUDITED

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.

During the current year the Company's share of
Unicom's income was $103,772.

As of June 30, 1998 and 1997, the details of the
related party obligations between City Planned
Communities and the Company are as follows:

JUNE 30,
1 9 9 8 1 9 9 7
Note receivable from City
Planned Communities -
Unsecured demand loan,
interest at 8.5% per
annum including accrued
interest $ 33,592 $ 121,210

Note payable to City
Planned Communities -
unsecured demand loan,
interest at 8.5% per
annum, including
accrued interest (200,341) (187,970)

NET $ (166,749) $ (66,760)

II-19

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

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

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

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

1997 $ (957,886) $ -0- $ (957,886)

1997 (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 Partner ship 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-20

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

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 assign 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 balances of notes receivable
consists of the following as of June 30, 1998.

II-21

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

NOTE 3 - NOTES RECEIVABLE - PARTNERS (Continued)

PRINCIPAL
INCLUDING
ACCRUED
INTEREST MATURITY DATE INTEREST

$ 218,845 July, 2000 4% per
Annum

To secure their obligation to pay the notes and
accrued interest, the Company was granted a lien on
and a security interest in the units. Cash
distributions which were previously applied as
mandatory prepayments at 50% were increased to 100%
and are to be applied first to accrued interest, and
then as a reduction of principal until paid in full.
The notes are non-recourse.

1 9 9 8 1 9 9 7
NOTE 4 - NOTES PAYABLE

Notes payable at June 30
consist of the following:

Notes payable - individual (in-
cluding accrued interest of
$3,127 and $35,397 respec-
tively) 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). $ 40,301 $ 37,770

Note payable - individuals (in-
cluding accrued interest of
$56,415 and $86,609 respec-
tively) due on demand, interest
from 8.5% to 15% per annum, un-
secured. 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). 390,299 353,609

II-22

ALL STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

NOTE 4 - NOTES PAYABLE (Continued)
1 9 9 8 1 9 9 7
Note payable - (including ac-
crued interest of $12,538, due
December 31, 1997 with inter-
est calculated at 8% per annum
from October 1, 1990. $ - $ 35,738

$ 430,600 $ 427,117

The approximate amortization of principal and accrued
interest until maturity will be as follows as of June
30, 1998:

June 30, 1999 $ 390,299
June 30, 2001 40,301

$ 430,600

NOTE 5 - 4% CONVERTIBLE SUBORDINATED DEBENTURES

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

1 9 9 8 1 9 9 7 1 9 9 6

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) 871,237 806,153 741,069

$ 2,498,349 $ 2,433,265 $ 2,368,181

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, 1998, 1997 and 1996
aggregated ($160,000), ($680,000) and ($575,000),
respectively, which approximates income (losses) of
($0.05), ($0.22) and income of ($0.18) per unit, based
on 3,118,065 outstanding partnership units.

II-23

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

NOTE 7 - ACCOUNTS PAYABLE AND OTHER LIABILITIES:

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

1 9 9 8 1 9 9 7 1 9 9 6
Taxes, primarily
real estate $ - $ 605 $ 23,975
Professional fees 9,585 77,012 94,954
Other 23,828 22,996 156,365

$ 33,413 $ 100,613 $ 275,294

NOTE 8 - ACCRUED INTEREST

Accrued interest consists of the
following:
1 9 9 8 1 9 9 7

Interest payable included in
notes payable (Note 4) $ 59,542 $ 134,544

Interest included in 4% con-
vertible subordinated deben-
tures (Notes 5 and 10) 871,237 806,153

$ 930,779 $ 940,697

NOTE 9 - PARTNERS' CAPITAL (DEFICIT)

As of June 30, 1998, there are 1,563 shareholders
holding 290,836 shares of the predecessor corporation
that have not converted their stock certificates into
limited partnership units. The limited partnership,
from inception through June 30, 1998, has declared
accumulated distributions of $.85 per each unit of
partnership interest outstanding. The partnership
distributions payable represent the Company's
liability if the stock certificates are converted into
partnership units.

The Company did not make cash distributions to its
unit owners during years ended June 30, 1998, 1997 and
1996.

NOTE 10 - RESTRUCTURED FINANCING

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

II-24

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

NOTE 10 - RESTRICTED FINANCING (Continued)

Company purchased the obligation from the bank for
$125,000 and advanced another $25,000 to the Company.
The Company and the individual entered into a
modification of the original mortgage and also
assigned to the individual a 1% participation in
profits and cash flows from Unicom or City Planned
Communities.

The obligation originally maturing on August 1, 1995
was extended to August 1, 1997 was 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, 2002.

NOTE 11 - BUSINESS UNCERTAINTIES

The Company has $2,498,349 of convertible subordinated
debentures including accrued interest which matured on
September 30, 1989 (Note 5).

The Company's primary source of cash flow has been
from its 50% owned real estate partnership, City
Planned Communities (Note 2). The current availability
of cash flow from City Planned Communities is not
deemed sufficient in order for the Company to meet its
currently maturing obligations and its working capital
requirement.

The Company also has a 36.12% limited partnership
interest in Unicom, A Limited Partnership (Notes 1D, 2
and 12). However, the investment in Unicom has not
generated cash flow sufficient to pay its subordinate
debentures.

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 calls
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 will retain $518,700, $775,000, and $875,000,
respectively, during the three year period, and Unicom
will be paid all other remaining revenue from the
facility providing the profit during any year exceeds
a certain threshold.

II-25

CITY PLANNED COMMUNITIES
5500 NORTHWEST 69TH AVENUE * LAUDERHILL, FLORIDA * 33319
(954) 572-2112 BROWARD * TELECOPIER (954) 749-5664

The accompanying combined balance sheets of City Planned
Communities (a partnership) (CPC) and Unicom Partnership Ltd. (a
limited partnership) (Unicom) as of June 30, 1998 and 1997 and
the related combined statements of operations, changes in
partners' capital (deficit) and cash flows for the years then
ended, and the supplemental information listed in the index,
have been compiled by these partnerships in accordance with
standards established by the American Institute of Certified
Public Accountants.

The accompanying financial statements have not been audited by
independent public accountants, and no accountant has expressed
an opinion thereon.

As discussed in Note 5, Unicom successfully completed a
reassignment and reinstatement of its mortgage on July 28, 1995.

As of July 1, 1997, Unicom entered into a lease and an option
to purchase agreement with CareMatrix Corporation. (See Note 6C
to Combined Financial Statements).

The financial statements of Unicom have been audited. No
auditing procedures have been performed since September, 1989
for CPC.

As explained in the accompanying statements in respect of the
financial statements of All-State Properties L.P., the
undersigned entities intend to obtain audited financial
statements for the 1990-1998 periods as soon as they are in a
financial position to compensate an accountant for such
services.

Very truly yours,

CITY PLANNED COMMUNITIES
UNICOM PARTNERSHIP LTD.

By:
STANLEY R. ROSENTHAL
Managing Partner

II-26

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED COMPILED FINANCIAL STATEMENTS
JUNE 30, 1998
UNAUDITED

C O N T E N T S

PAGE

Partnership's Letter II-26

Combined Financial Statements:

Balance Sheets II-28

Statements of Operations II-29

Statements of Partners' Capital (Deficit) II-30

Statements of Cash Flows II-31/33

Notes to Financial Statements II-34/39

Supplemental Information:

Explanation of eliminations to combining
financial statements II-40

Combining Balance Sheets II-41/44

Combining Statements of Operations II-45/47

Combining Statements of Partners' Capital
(Deficit) II-48

Combining Statements of Cash Flows II-49/58

Selected Financial Data II-3

II-27

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED BALANCE SHEETS
JUNE 30, 1998 AND 1997
UNAUDITED

A S S E T S
1 9 9 8 1 9 9 7
Property and equipment, at cost
(Notes 1B, 5 and 6C):
Building, including land of
$966,170 $ 33,397,340 $ 33,389,465
Furniture and equipment 1,309,753 1,183,708
China, glassware, silverware and
utensils 41,713 41,713
$ 34,748,806 $ 34,614,886
Less accumulated depreciation
and amortization (7,812,616) (6,888,424)
$ 26,936,190 $ 27,726,462
Cash 1,128,620 905,163
Cash - restricted for tenants'
security deposits 686,127 694,909
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 619,913 543,430
Prepaid expenses 336,773 174,447
Other assets 599,750 320,447

TOTAL ASSETS $ 30,948,582 $ 31,006,067

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES:
Mortgage loan payable, including
$0 and $183,312 of accrued
interest, respectively (Note 5) $ 27,097,304 $ 27,496,637
Notes payable - others 40,812 72,753
Notes payable - non-interest
bearing - -
Notes payable - related parties,
including $38,960 and
$1,295,115 of accrued interest,
respectively (Note 2) 849,987 3,756,454
Accounts payable and accrued
expenses (Note 3) 1,157,380 474,223
Tenant security deposits 630,790 624,885
Deferred interest (Note 5) 2,355,572 2,397,258
Option deposit (Note 6C) 4,500,000 -

$36,631,845 $ 34,822,210
COMMITMENTS AND CONTINGENCIES
(Notes 4, 6, and 7) - -
PARTNERS' CAPITAL (DEFICIT)
(Notes 4 & 6B) (5,683,263) (3,816,143)

TOTAL LIABILITIES AND PARTNERS'
CAPITAL (DEFICIT) $ 30,948,582 $ 31,006,067

See notes to combined financial statements.
II-28

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 1998, 1997, AND 1996
UNAUDITED

1 9 9 8 1 9 9 7 1 9 9 6
(Note 6C)
REVENUES:

Sale of land $ - $ - $ 54,166
Rental income - 10,449,562 10,132,016
Interest and other
income 114,134 90,035 74,341
Lease income (Note
6C) 4,755,196 - -

$ 4,869,330 $ 10,539,597 $ 10,260,523

EXPENSES:

Cost of land sold $ - $ - $ 8,128
Dietary and resident
services - 3,156,811 3,049,995
General and adminis-
trative (Note 4) 594,477 1,049,693 1,069,538
Marketing and adverti-
sing - 256,120 239,951
Maintenance and utili-
ties - 1,390,463 1,355,630
Taxes and insurance 496,024 792,746 820,846

$ 1,090,501 $ 6,645,833 $ 6,544,088

NET INCOME BEFORE DEPRE-
CIATION, AMORTIZATION
AND INTEREST: $ 3,778,829 $ 3,893,764 $ 3,716,435

OTHER EXPENSES:

Interest (Note 1C) $ 2,624,412 $ 2,490,833 $ 2,576,181
Depreciation and
amortization 1,013,533 951,936 915,479

$ 3,637,945 $ 3,442,769 $ 3,491,660

NET INCOME $ 140,884 $ 450,995 $ 224,775

See notes to combined financial statements.
II-29

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

1 9 9 8 1 9 9 7 1 9 9 6

PARTNERS' CAPITAL
(DEFICIT)- Beginning $ (3,816,143) $ (5,116,277) $ (5,341,052)

Distributions
(Notes 4 & 6B) (5,001,156) (1,219,000) -

Contributions
(Notes 4 & 6B) 2,993,152 2,068,139 -
Net income 140,884 450,995 224,775

PARTNERS' CAPITAL
(DEFICIT) - Ending $ (5,683,263) $ (3,816,143) $ (5,116,277)

See notes to combined financial statements.
II-30

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

1 9 9 8 1 9 9 7 1 9 9 6
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS

Cash Flows from Operating
Activities:
Cash from customers/
tenants $ - $ 10,421,519 $ 10,032,700
Interest received - 53,341 74,341
Cash paid - interest (4,078,848) (2,223,519) (3,422,967)
Cash paid - suppliers,
employees and admini-
strative expenses (731,094) (6,780,951) (6,780,382)
Lease income 4,676,201 - -

Net Cash (Used) Pro-
vided) by Operat-
ing Activities $ (133,741) $ 1,470,390 $ (96,308)

Cash Flows from Investing
Activities:
Capital expenditures -
net $ (133,920) $ (107,567)$ (226,241)
Escrow funding - (22,764) (288,762)
Tenant security de-
posits - (54,476) 10,444
Other - - (39,392)
Partners' distribu-
tions - net (2,008,004) $ (1,219,000)$ -
Option deposit 4,500,000 - -

Net Cash Provided
(Used) by Invest-
ing Activities $ 2,358,076 $ (1,403,807)$ (543,951)

Cash Flows from Financ-
ing Ativities:
Cash received (paid)
- related party $ (1,569,604) $ 2,416 $ 1,028,568
Cash received (paid)
notes & mortgages (399,333) (227,513) 245,890
Other (31,941) (898) (215,394)

Net Cash (Used) Pro-
vided by Financ-
ing Activities $ (2,000,878)$ (225,995)$ 1,059,064

See notes to combined financial statements.
II-31

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

1 9 9 8 1 9 9 7 1 9 9 6
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS $ 223,457 $ (159,412)$ 418,805
CASH AND CASH EQUIVA-
LENTS-BEGINNING OF
YEAR 905,163 1,064,575 645,770
CASH AND CASH EQUIVA-
LENTS-END OF YEAR $ 1,128,620 $ 905,163 $ 1,064,575

See notes to combined financial statements.
II-32

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

1 9 9 8 1 9 9 7 1 9 9 6

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

Net income $ 140,884 $ 450,995 $ 224,775

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

Depreciation and
amortization $ 924,192 $ 951,936 $ 915,479
Increase (decrease)
in accrued interest
payable (1,674,363) 129,783 (849,648)
Decrease in real
estate held for sale - - 4,833
(Increase) decrease in
prepaid expense (162,326) 11,415 (48,989)
Decrease (increase) in
other assets and ac-
counts receivable (397,472) (69,868) 4,889
(Decrease) increase in
accounts payable and
accrued expenses 1,035,344 (3,871) (347,647)

Total Adjustments $ (274,625) $ 1,019,395 $ (321,083)

NET CASH (USED) PROVIDED
BY OPERATING ACTIVI-
IES $ (133,741) $ 1,470,390 $ (96,308)

SCHEDULE OF NON-CASH
INVESTING AND FINANC-
ING ACTIVITIES:

(A) In June of 1995, the partners of City Planned Communities
contributed their $13,351,210 notes, loans and accrued
interest to the capital of Unicom.

(B) In December of 1996, $30,000 of notes due to partners of
City Planned Communities were contributed to the capital
of the Company.

See notes to combined to financial statements.
II-33

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Organization, Operations and Principles of
Combination

1. City Planned Communities (Hereafter CPC)

The Partnership was formed in 1968 and 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-34

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

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.

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.

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.

II-35

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

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, 1998, 1997 and 1996, total interest incurred
was $2,434,762, $2,490,833 and $2,576,181,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.

1 9 9 8 1 9 9 7

Total principal $ 811,027 $ 2,461,339
Accrued interest 38,960 1,295,115

$ 849,987 $3,756,454

NOTE 3 - ACCOUNTS PAYABLE AND ACCRUED
EXPENSES

Accounts payable and accrued
expenses at June 30, 1998 and
1997 consist of the following:

1 9 9 8 1 9 9 7

Accounts payable $ 623,301 $ 279,379
Real estate taxes 196,579 194,844

$ 819,880 $ 474,223

II-36

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

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 $41,686 as a result of the deferred interest
amortization. The approximate principal payments for
the next five years ending June 30, are as follows:

1999 $ 197,941
2000 233,091
2001 252,438
2002 273,390
2003 296,081

As of June 30, 1998 and 1997 the outstanding
indebtedness consisted of:
1 9 9 8 1 9 9 7

Principal $ 27,097,304 $ 27,313,325
Interest - 183,312

$27,097,304 $ 27,496,637

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-37

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP, LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

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-38

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 1998, 1997 AND 1996
UNAUDITED

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 $518,700, $775,000,
and $875,000, 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.

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-39

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
EXPLANATION OF ELIMINATIONS TO COMBINING FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
UNAUDITED

The combining financial statements for City Planned Communities
(CPC) and Unicom Partnership Ltd., (Unicom) are presented as
supplemental information to the combined financial statements.
All significant transactions between CPC and Unicom have been
eliminated. Descriptions of the eliminations are as follows:

(a) Cost of land purchased by Unicom from CPC in 1987 has been
adjusted to reflect the carrying value of property,
computed as follows:

Land cost $ 250,578
Land development cost 571,704
Closing cost 20,000

Carrying value of property $ 842,282
Selling price (4,000,000)

Adjustment to land and construction in
progress and deferred profit $ (3,157,718)

(b) As of June 30, 1994, Unicom borrowed approximately
$12,700,000 from CPC for construction costs overruns on
the AARC and has issued demand notes to evidence the
loans. Note activity is detailed below:

JUNE 30,
1994

Net cash loaned from CPC to Unicom $ 12,703,031
Net accrued interest on notes 648,079

$ 13,351,110

Allowance for loss - note receivable
June 30, 1990 $ (2,505,000)
June 30, 1991 (3,616,000)
June 30, 1992 (1,815,511)
Unamortized discount (1,012,900)

$ (8,949,411)

$ 4,401,699

Interest on the notes was eliminated effective April 1,
1990.

In June of 1995 CPC distributed to its partners the notes
and interest receivable due from Unicom (net of allowances
and discounts). The partners agreed to contribute these
obligations to the capital of Unicom.

See notes to combined financial statements.
II-40

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING BALANCE SHEETS
JUNE 30, 1998
UNAUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP BALANCE
COMMUNITIES LTD. ELIMINATIONS SHEET

ASSETS

Property and equip-
ment, at cost:
Building, includ-
ing land of
$4,123,888 $ - $ 36,555,058 $(3,157,718)(a) $ 33,397,340
Furniture and
equipment - 1,309,753 - 1,309,753
China, glassware,
silverware and
utensils - 41,713 - 41,713

$ - $ 37,906,524 $(3,157,718) $ 34,748,806
Less accumulated
depreciation and
amortization - (7,812,616) - (7,812
,616)

$ - $ 30,093,908 $ (3,157,718) $ 26,936,190

Cash 306 1,128,314 - 1,128,620
Cash - restricted
for tenants'
security deposits - 686,127 - 686,127
Real estate for sale
- at cost - land 9,666 - - 9,666
Deferred management
fees - related
party 631,543 - - 631,543
Funds held in
escrow - 619,913 - 619,913
Prepaid expenses - 336,773 - 336,773
Other assets 6,886 592,864 - 599,75
0

TOTAL ASSETS $ 648,401 $ 33,457,899 $ (3,157,718) $
30,9
48,582

See notes to combined financial statements.
II-41

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING BALANCE SHEETS (CONTINUED)
JUNE 30, 1998
UNAUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP BALANCE
COMMUNITIES LTD. ELIMINATIONS SHEET

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

LIABILITIES:

Mortgage loan
payable $ - $ 27,097,304 $ - $ 27,097,304
Notes payable -
others - 40,812 - 40,812
Notes payable -
related parties 849,987 - - 849,987
Accounts payable
and accrued
expenses 34,874 1,122,506 - 1,157,380
Tenant security
deposits - 630,790 - 630,790
Deferred profit 3,157,718 - (3,157,718)(a) -
Deferred interest - 2,355,572 - 2,355,572
Option deposit - 4,500,000 - 4,500,000

$ 4,042,579 $ 35,746,984 $(3,157,718) $ 36,631,845

COMMITMENTS AND
CONTINGENCIES - - - -

PARTNERS' CAPITAL
(DEFICIT) (3,394,178) (2,289,085) - (5,683,263)

TOTAL LIABILITIES
AND PARTNERS'
CAPITAL (DEFICIT) $ 648,401 $ 33,457,899 $ (3,157,718) $
30,9
48,582

See notes to combined financial statements.
II-42

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING BALANCE SHEETS
JUNE 30, 1997
UNAUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP BALANCE
COMMUNITIES LTD. ELIMINATIONS SHEET

ASSETS

Property and equip-
ment at cost:
Building, includ-
ing land of
$4,123,888 $ - $ 36,547,183 $ (3,157,718)(a)$ 33,389,465
Furniture and
equipment - 1,183,708 - 1,183,708
China, glassware,
silverware and
utensils - 41,713 - 41,713
$ - $ 37,772,604 $ (3,157,718) $ 34,614,886
Less accumulated
depreciation and
amortization - (6,888,424) - (6,888,424)

$ - $ 30,884,180 $ (3,157,718) $27,726,462

Cash 456 904,707 - 905,163
Cash - restricted
for tenants' se-
curity deposits - 694,909 - 694,909
Real estate for
sale - at cost -
land 9,666 - - 9,666
Deferred management
fees - related
party 631,543 - - 631,543
Funds held in
escrow - 543,430 - 543,430
Prepaid expenses - 174,447 - 174,447
Other assets 6,886 313,561 - 320,447

TOTAL ASSETS $ 648,551 $ 33,515,234 $ (3,157,718) $ 31,006
,067

See notes to combined financial statements.
II-43

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING BALANCE SHEETS (CONTINUED)
JUNE 30, 1997
UNAUDITED

CITY UNICOM COMBINED
PLANNED PARTNERSHIP BALANCE
COMMUNITIES LTD. ELIMINATIONS SHEET

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

LIABILITIES:

Mortgage loan
payable $ - $ 27,496,637 $ - $ 27,496,637
Notes payable
- others - 72,753 - 72,753
Notes payable -
related parties 3,756,454 - - 3,756,454
Accounts payable
and accrued
expenses 52,951 421,272 - 474,223
Tenant security
deposits - 624,885 - 624,885
Deferred profit 3,157,718 - (3,157,718)(a) -
Deferred interest - 2,397,258 - 2,397,258

$ 6,967,123 $ 31,012,805 $ (3,157,718) $ 34,822,210

COMMITMENTS AND
CONTINGENCIES - - - -

PARTNERS' CAPITAL
(DEFICIT) (6,318,572) 2,502,429 - (3,816
,143)
TOTAL LIABILITIES
AND PARTNERS'
CAPITAL (DEFICIT) $ 648,551 $ 33,515,234 $ (3,157,718) $
31,0
06,067

See notes to combined financial statements.
II-44

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

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 re-
sident ser-
vices $ - $ - $ - $ -
General and
administra-
tive 1,027 593,450 - 594,477
Marketing and ad-
vertising - - - -
Maintenance and
utilities - - - -
Taxes and
insurance - 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-45

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF OPERATIONS
JUNE 30, 1997
UNAUDITED

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

REVENUES:

Rental income $ - $ 10,449,562 $ - $ 10,449,562
Interest and
other income 36,694 53,341 - 90,035

$ 36,694 $ 10,502,903 $ - $ 10,539,597

EXPENSES:

Dietary and resi-
dent services $ - $ 3,156,811 $ - $ 3,156,811
General and admini-
strative 3,699 1,045,994 - 1,049,693
Marketing and adver-
tising - 256,120 - 256,120
Maintenance and
utilities - 1,390,463 - 1,390,463
Taxes and in-
surance 549 792,197 - 792,746

$ 4,248 $ 6,641,585 $ - $ 6,645,833

NET INCOME BEFORE
DEPRECIATION,
AMORTIZATION AND
INTEREST $ 32,446 $ 3,861,318 $ - $ 3,893,764

OTHER EXPENSES:

Interest $ 197,509 $ 2,293,324 $ - $ 2,490,833
Depreciation and
amortization - 951,936 - 951,936

$ 197,509 $ 3,245,260 $ - $ 3,442,769

NET INCOME (LOSS) $ (165,063) $ 616,058 $ - $ 450,995

See notes to combined financial statements.
II-46

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF OPERATIONS
JUNE 30, 1996
UNAUDITED

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

REVENUES:

Sale of land $ 54,166 $ - $ - $ 54,166
Rental income - 10,132,016 - 10,132,016
Interest income 11,107 63,234 - 74,341

$ 65,273 $ 10,195,250 $ - $ 10,260,523
EXPENSES:

Cost of land
sold $ 8,128 $ - $ - $ 8,128
Dietary and resi-
dent services - 3,049,995 - 3,049,995
General and admini-
strative 10,700 1,058,838 - 1,069,538
Marketing and adver-
tising - 239,951 - 239,951
Maintenance and
utilities - 1,355,630 - 1,355,630
Taxes and
insurance 851 819,995 - 820,846

$ 19,679 $ 6,524,409 $ - $ 6,544,088

NET INCOME BEFORE
DEPRECIATION,
AMORTIZATION AND
INTEREST $ 45,594 $ 3,670,841 $ - $ 3,716,435

OTHER EXPENSES:

Interest $ 198,050 $ 2,378,131 $ - $ 2,576,181
Depreciation and
amortization - 915,479 - 915,479

$ 198,050 $ 3,293,610 $ - $ 3,491,660

NET(LOSS)INCOME $ (152,456) $ 377,231 $ - $ 224,775

See notes to combined financial statements.
II-47

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
UNAUDITED

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

PARTNERS'
CAPITAL
(DEFICIT) -
June 30,
1995 $ (6,031,053) $ 690,001 $ - $ (5,341,052)

Net Income
(Loss)-
1996 (152,456) 377,231 - 224,775

PARTNERS'
CAPITAL
(DEFICIT) -
June 30,
1996 $ (6,183,509) $ 1,067,232 $ - $ (5,116,277)

Net income
(loss) -
1997 (165,063) 616,058 - $ 450,995

Distribution - (1,219,000) - (1,219,000)

Contribution 30,000 2,038,139 - 2,068,139

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)

See notes to combined financial statements.
II-48

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

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:
Cash from customers/
tenants/sales $ - $ - $ - $ -
Interest received - - - -
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) Pro-
vided by Operating
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)
Provided by
Investing
Activities $ 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 mort-
gages - (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-49

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

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

NET (DECREASE) INCREASE
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-50

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

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) $ (68,758) $ 209,642 $ - $ 140,884

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

Depreciation and
amortization $ - $ 924,192 $ - $ 924,192
(Decrease) in
interest payable (1,674,363) - - (1,674,363)
(Increase) in
prepaid expenses - (162,326) - (162,326)
(Increase) in
other assets
and accounts
receivable - (397,472) - (397,472)
Increase in ac-
counts 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 OPERATING
ACTIVITIES $ (1,423,698) % 1,289,957 $ - $ (133,741)

See notes to combined financial statements.
II-51

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

[CAPTION]

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING
ACTIVITIES:

(A) In June of 1995 the partners of City Planned Communities contributed
their $13,351,210 notes, loans and accrued interest to the capital of
Unicom.

(B) In December of 1996, $30,000 of notes due to partners of City Planned
Communities were contributed to the capital of the Company.

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, 1997
UNAUDITED

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 from customers/
tenants/sales $ - $ 10,421,519 $ - $ 10,421,519

Interest received - 53,341 - 53,341
Cash paid - interest - (2,223,519) -
(2,223,519)
Cash paid - suppliers,
employees and admini-
strative expenses (2,393) (6,778,558) - (6,780,951)
Net Cash (Used)
Provided by Oper-
ating Activities $ (2,393) $ 1,472,783 $ - $ 1,470,390

Cash Flows from Invest-
ing Activities:
Capital expenditures-
net $ - $ (107,567) $ - $ (107,567)
Escrow funding - (22,764) - (22,764)
Tenant security
deposits - net - (54,476) - (54,476)
Partner distribution - (1,219,000) - (1,219,000)

Investing Activi-
ties $ - $ (1,403,807) $ - $ (1,403,807)
Cash Flows from Financ-
ing Activities:
Cash received -
related party $ 2,416 $ - $ - $ 2,416
Cash paid - notes
and mortgages - (227,513) - (227,513)
Other - (898) - (898)
Net Cash Provided
(Used) by Financ-
ing Activities $ 2,416 $ (228,411) $ - $
(225,995)

NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS $ 23 $ (159,435) $ - $ (159,412)
CASH AND CASH EQUIVA-
LENTS BEDGINNING OF
YEAR 433 1,064,142 - 1,064,575
CASH AND CASH EQUIVA-
LENTS END OF YEAR $ 456 $ 904,707 $ - $ 905,163

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, 1997
UNAUDITED

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

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

Net income
(loss) $ (165,063) $ 616,058 $ - $ 450,995

Adjustments to
reconcile net
profits (loss)
to cash provided
(used) by opera-
ting activities:

Depreciation and
amortization $ - $ 951,936 $ - $ 951,936
Increase (de-
crease) in in-
terest payable 185,138 (55,355) - 129,783
Decrease in real
estate held
for sale - - - -
(Increase) in
prepaid expenses - 11,415 - 11,415
(Increase) De-
crease in other
assets and ac-
counts receiv-
able - (69,868) - (69,868)
(Decrease)increase
in acounts pay-
able and accrued
expenses (22,468) 18,597 - (3,871)

Total Adjust-
ments $ 162,670 $ 856,725 $ - $ 1,019,395

NET CASH PROVIDED
(USED) BY OPERA-
TING ACTIVITIES $ (2,393) $ 1,472,783 $ - $ 1,470,390

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, 1997
UNAUDITED

[CAPTION]

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING
ACTIVITIES:

(A) In June of 1995 the partners of City Planned Communities
contributed their $13,351,210 notes, loans and accrued interest to
the capital of Unicom.

(B) In December of 1996, $30,000 of notes due to partners of City
Planned Communities were contributed to the capital of the
Company.

See notes to combined financial statements.
II-5

CITY PLANNED COMMUNITIES (A PARTNERSHIP)
AND UNICOM PARTNERSHIP LTD. (A LIMITED PARTNERSHIP)
COMBINING STATEMENTS OF CASH FLOWS
YEAR ENDED JUNE 30, 1996
UNAUDITED

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

INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS

Cash Flows from
Operating Activi-
ties:
Cash from customers/
tenants/sales $ 54,166 $ 9,978,534 $ - $ 10,032,700
Interest received 11,107 63,234 - 74,341
Cash paid - interest - (3,422,967) - (3,422,967)
Cash paid - suppliers,
employees and admini-
strative expenses (47,889) (6,732,493) - (6,780
,382)

Net Cash (Used)
Provided by Opera-
ting Activities $ 17,384 $ (113,692) $ - $ (96,308)

Cash Flows from Invest-
ing Activities:
Capital expendi-
tures - net $ - $ (226,241) $ - $ (226,241)
Escrow funding - (288,762) - (288,762)
Tenant security de-
posits - net - 10,444 - 10,444
Other - (39,392) - (39,392)

Net Cash Used by
Investing Acti-
vities $ - $ (543,951) $ - $ (543,951)

Cash Flows from Fi-
nancing Activities:
Cash received
(paid) - related
party $ (18,557) $ 1,047,125 $ - $ 1,028,568
Cash received -
notes and
mortgages - 245,890 - 245,890
Other - (215,394) - (215,394)

Net Cash Provided
(Used) by Financ-
ing Activities $ (18,557) $ 1,077,621 $ - $ 1,059,064

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, 1996
UNAUDITED

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

NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS $ (1,173) $ 419,978 $ - $ 418,805
CASH AND CASH EQUIVA-
LENTS BEGINNING OF
YEAR 1,606 644,164 - 645,770
CASH AND CASH EQUIVA-
LENTS END OF YEAR $ 433 $ 1,064,142 $ - $ 1,064,575

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, 1996
UNAUDITED

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) $ (152,456) $ 377,231 $ - $ 224,775

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

Depreciation and
amortization $ - $ 915,479 $ - $ 915,479
Increase (decrease)
in interest pay-
able 183,050 (1,032,698) - (849,648)
Decrease in real
estate held for
sale 4,833 - - 4,833
(Increase) in pre-
paid expenses - (48,989) - (48,989)
(Increase) decrease
in other assets and
accounts receivable 16,100 (11,211) - 4,889
(Decrease)in accounts
payable and accrued
expenses (34,143) (313,504) - (347,647)

Total Adjustments $ 169,840 $ (490,923) $ - $ (321,083)

NET CASH PROVIDED (USED)
BY OPERATING ACTIVI-
TIES $ 17,384 $ (113,692) $ - $ (96,308)

[CAPTION]

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:

In June of 1995 the partners of City Planned Communities contributed their
$13,352,210 notes, loans and accrued interest to the capital of Unicom.

See notes to combined financial statements.
II-58

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-59

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 69 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, 1998

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 $75,000 per year.

III-1

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth as of June 30, 1998
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 $13,351,21 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
36.12to 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.

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, 1998 and 1997 II-10

Statements of Operations for the years ended
June 30, 1998, 1997 and 1996 II-11

Statements of Changes in Partners' Capital
(Deficit) for the years ended June 30, 1998,
1997 and 1996 II-12

Statements of Cash Flows for the years ended
June 30, 1998, 1997 and 1996 II-13/14

Notes to Financial Statements for the years
ended June 30, 1998, 1997 and 1996 II-15/24

Combined Financial Statements of City Planned
Communities (a partnership) and Unicom
Partnership Ltd. (a limited partnership) for
the years ended June 30, 1998, 1997 and 1996 II-26/56

2. Financial Statement Schedules

Included in Part IV of this report:

Schedule X - Supplementary Income
Statement Information
at June 30, 1998, 1997
and 1996 (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 on 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 on 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 on Form 10-K for the year
R. Rosenthal, effective ended June 30, 1995
August 1, 1995

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

(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)
SCHEDULES - SUPPLEMENTAL INCOME STATEMENT INFORMATION
CHARGED TO COST AND EXPENSES
JUNE 30, 1998, 1997 AND 1996
UNAUDITED

1 9 9 8 1 9 9 7 1 9 9 6

Maintenance and repairs $ 708 $ 9,570 $ 8,406

Depreciation and amortiza-
tion of intangible assets - - -

Taxes, other than payroll
and income taxes 375 1,192 11,522

Advertising cost - - -

$ 1,083 $ 10,762 $ 19,928

IV-5

ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP) (NOTE 1A)
EXHIBITS INDICATING THE COMPUTATION OF EARNINGS PER UNIT
YEARS ENDED JUNE 30, 1998, 1997 AND 1996

1 9 9 8 1 9 9 7 1 9 9 6
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 $ (151,977) $ (141,963) $ (330,087)

Computation of Fully
diluted loss per
unit Before Extra-
ordinary Items $ (0.05) $ (0.05)(B)$ (0.10)(B)

Net Loss After
Extraordinary
Items $ (151,977) $ (141,963) $ (330,087)

Computation of Fully
diluted loss per unit
after Extraordinary
Items $ (0.05)(B)$ (0.05)(B) $ (0.10)(B)

(A) Weighted average number of units outstanding

(B) Computation based on the modified treasury stock method as the
number of units obtainable upon exercise of outstanding options in
the aggregate exceeds 20% of the units outstanding at the end of
the period.

See notes to financial statements.
IV-6

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

ALL-STATE PROPERTIES L.P.

By:
STANLEY R. ROSENTHAL
General Partner

Date: October 20, 1998

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following person on
behalf of the Registrant and in the capacity and on the date
indicated.

General Partner October 20, 1998
STANLEY R. ROSENTHAL (Chief Executive Officer) DATE

IV-7