FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED DECEMBER 31, 1998 COMMISSION FILE NUMBER 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.) 5500 NW 69th Avenue, Lauderhill, FL 33319 (Address of principal executive offices) (Zip Code) Mailing address: P.O. Box 5524, Fort Lauderdale, FL 33310-5524 Registrant's telephone number, including area code (954) 572-2113 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 Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO Indicate the number of limited partnership units outstanding as of the latest practicable date. Class Outstanding at December 31, 1998 Limited Partnership Units 3,118,303 Units ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) * * * * * * * * * * * * * * FINANCIAL STATEMENTS AND SCHEDULES SIX MONTHS ENDED DECEMBER 31, 1998 Page 1 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) I N D E X ITEM DESCRIPTION NUMBER PART I Index 1 Financial Information: Condensed Balance Sheets - December 31, 1998 and June 30, 1998 2 Condensed Statements of Operations - Three Months and Six Months ended December 31, 1998 and 1997 3 Condensed Statements of Cash Flows - Six Months ended December 31, 1998 and 1997 4 Financial Data Schedule 5 Notes to Condensed Financial Statements - December 31, 1998 and 1997 6 Management's Discussion and Analysis of the Financial Condition and Results of Operations - December 31, 1998 7-8 Condensed Financial Information for City Planned Communities and Unicom Partnership, Ltd., 50% and 49-1/2% owned Real Estate Partnerships, respectively - December 31, 1998, 1997 and June 30, 1998 9-10 Exhibit - Computation of Income (Loss) per partnership Unit - six months ended December 31, 1998 and 1997 11 PART II Other Information 12 Signatures 13 Page 2 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) CONDENSED BALANCE SHEETS DECEMBER 31, 1998 AND JUNE 30, 1998 (UNAUDITED) DECEMBER JUNE 31, 1998 30, 1998 Assets Cash $ 1,921 $ 4,037 Other assets 1,292 2,956 Total Assets $ 3,213 $ 6,993 Liabilities and Partners' Capital (Deficit) Liabilities: Notes payable - related party $ 181,251 $ 166,749 Notes payable 449,537 430,600 Accounts payable and other liabilities 66,384 33,413 4% convertible subordinated debentures due 1989 2,530,891 2,498,349 Partnership distributions payable 252,496 252,496 $ 3,480,559 $ 3,381,607 Deficiency in real estate joint venture $ 1,006,181 $ 992,266 Partners' Deficit $ (4,261,862) $ (4,148,035) Notes receivable - officers/partners $ (221,665) $ (218,845) $ (4,483,527) $ (4,366,880) Total Liabilities and Partners' Capital (Deficit) $ 3,213 $ 6,993 See notes to financial statements. Page 3 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF OPERATIONS THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997 (UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, 1 9 9 8 1 9 9 7 1 9 9 8 1 9 9 7 REVENUES: Sale of real estate $ - $ - $ - $ - Less cost of sale - - - - Gross Profit $ - $ - $ - $ - Partnership loss $ (8,015) $ (11,700) $ (13,915)$ (35,300) Other income 1,964 2,293 3,898 5,260 $ (6,051) $ (9,407)$ (10,017) $ (30,040) Total Net Revenues (Expenses) $ (6,051) $ (9,407) $ (10,017) $ (30,040) COST AND EXPENSES: Selling, general and administrative $ 40,037 $ 16,696 $ 46,095 $ 31,055 Interest 28,858 25,680 57,715 50,051 $ 68,895 $ 42,376 $ 103,810 $ 81,106 NET LOSS $ (74,946) $ (51,783)$ (113,827) $(111,146) NET (LOSS) INCOME PER PARTNERSHIP UNIT (0.03) (0.02) (0.04) (0.04) CASH DISTRIBUTIONS PER UNIT NONE NONE NONE NONE See notes to financial statements. Page 4 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997 (UNAUDITED) 1 9 9 8 1 9 9 7 CASH FLOW FROM ORATING ACTIVITIES: Cash received from other activities $ 1,370 $ 47,734 Cash paid for selling, general and adminstrative expenses (11,460) (20,114) Interest paid - (68,620) Net Cash Provided (Used) by Operating Activities $ (10,090) $ (41,000) CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from notes receivable - related party $ 7,974 $ 33,256 Net Cash Provided (Used) by Financing Activities $ 7,974 $ 33,256 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS $ (2,116) $ (7,744) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 4,037 13,432 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,921 $ 5,688 RECONCILIATION OF NET (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Net (loss) $ (113,827) $ (111,146) CHANGES IN ASSETS AND LIABILITIES: (Increase) decrease in accounts receivable and other assets $ 1,664 $ (47) Increase in accrued interest receivable (2,820) (2,797) Decrease in equity in partnerships 13,915 35,300 Increase in accounts payable and accrued expenses 32,971 10,988 Increase in 4% convertible debentures interest 32,542 32,542 Increase (decrease)in notes payable 18,937 (57,344) Increase in note payable - CPC 14,502 51,504 Total Adjustments $ 111,711 $ 70,146 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ (2,116) $ (41,000) See notes to financial statements. Page 5 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) FINANCIAL DATA SCHEDULE SIX MONTHS ENDED DECEMBER 31, 1998 AND THREE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) DECEMBER SEPTEMBER 31, 1998 30, 1998 EXHIBIT 27 Cash $ 1,921 $ 6,056 Receivables 1,292 1,524 Total Assets 3,213 7,580 Notes Payable 630,788 618,755 Convertible Subordinated Debentures 2,530,891 2,514,620 Partners' Deficit (4,261,862) (4,109,154) Total Liabilities and Partners' Deficit 3,213 7,580 Net Sales of Real Estate - - Total Revenues (10,017) (3,966) Total Cost and Expenses 103,810 34,915 Net Income (Loss) (113,827) (38,881) Loss Per Partnership Unit (0.04) (0.01) See notes to financial statements. Page 6 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997 (UNAUDITED) 1. The financial statement information for the six months ended December 31, 1998 and 1997 is unaudited. However, the information contained therein reflects all adjustments which are, in the opinion of management, necessary to present a fair statement of the results of the interim period. On November 3, 1986, Wimbledon Development Ltd. (a limited partnership) was formed to construct and sell condominium units on land acquired from All-State Properties L.P. (hereafter "the Company"). The Company has a 99% limited partnership interest in Wimbledon Development Ltd. and the remaining ownership is being held by a corporation controlled by the president of the Company. The Corporation is the general partner of the partnership and is responsible for the management of Wimbledon Development Ltd. The Company includes in its accounts the assets, liabilities, revenues and expenses of Wimbledon Development Ltd. All significant intercompany accounts and transactions have been eliminated. 2. On September 20, 1984 the stockholders of All-State Properties Inc. ("All-State") approved a plan of liquidation. Pursuant to the plan, All-State distributed its interest in City Planned Communities ("CPC") and its other assets to a limited partnership, All-State Properties L.P., in exchange for units of limited partnership interest which were then distributed to the stockholders. The liquidation of All-State Properties Inc. and the related transfer of assets and liabilities to the new limited partnership was accounted for under the pooling of interest method. Under this method all assets and liabilities were transferred to the newly formed limited partnership at historical costs. Prior to the transfer, All-State acquired 1,240,700 shares of its common stock from its largest stockholder. The acquisition of these shares resulted in a charge to stockholders' equity of $5,250,000 which caused the newly-formed limited partnership to commence operations with a negative partners' capital account. This negative partners' capital will be eliminated as income is recognized from CPC. 3. Unicom Partnership, Ltd. ("Unicom") (a limited partnership) was formed in October 1986 to acquire land from "CPC" for the purpose of constructing and operating a 324 unit adult rental retirement project. All-State and entities under common control with other partners of "CPC" have a 99% limited partnership interest in Unicom. Accordingly, the beneficial owners of Unicom are substantially the same as those of "CPC". Therefore, the financial statements for CPC and Unicom are presented on a combined basis to offer a complete representation of the related entities. Page 7 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 1998 FINANCIAL CONDITION Registrant's source of working capital consists of cash received from borrowings and loans received from Unicom Partnership Ltd. No cash was available for distribution during the six months ended December 31, 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 3.58% to certain individuals who made cash advances to Unicom on behalf of the Company 45.75% 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 2.62% 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. Page 8 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 1998 FINANCIAL CONDITION (Continued) 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 for the six months ended December 31, 1998 were equal to the period ended December 31, 1997. Page 9 CONDENSED FINANCIAL INFORMATION FOR REAL ESTATE PARTNERSHIPS CITY PLANNED COMMUNITIES & UNICOM PARTNERSHIP, LTD. CONDENSED COMBINED BALANCE SHEETS DECEMBER 31, 1998 AND JUNE 30, 1998 (UNAUDITED) DECEMBER JUNE 31, 1998 30, 1998 ASSETS: Property and equipment - net of depreciation $ 26,575,867 $ 26,936,190 Cash 1,499,342 1,128,620 Cash-restricted 712,836 686,127 Real estate held for sale (cost) 9,666 9,666 Deferred and prepaid expenses 1,243,932 1,588,229 Other assets 474,619 599,750 Notes receivable - related party 315,369 - Total $ 30,831,631 $ 30,948,582 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT): Mortgage payable, including accrued interest $27,189,183 $27,097,304 Accounts payable and other liabilities 1,768,926 1,788,170 Notes payable - related parties 833,281 849,987 Unamortized interest mortgage modification 2,315,785 2,355,572 Option deposits 4,500,000 4,500,000 Note payable 60,874 40,812 Partners' capital (deficit) (5,836,418) (5,683,263) Total $ 30,831,631 $ 30,948,582 See notes to financial statements. Page 10 CONDENSED FINANCIAL INFORMATION FOR REAL ESTATE PARTNERSHIPS CITY PLANNED COMMUNITIES & UNICOM PARTNERSHIP, LTD. CONDENSED COMBINED PROFIT AND LOSS INFORMATION THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997 (UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, 1 9 9 8 1 9 9 7 1 9 9 8 1 9 9 7 REVENUES: Rental $ - $ - $ - $ - Interest and other 4,773 4,648 9,610 8,595 Lease income 1,217,469 946,628 2,358,278 2,148,495 Total $ 1,222,242 $ 951,276 $ 2,367,888 $ 2,157,090 EXPENSES: General and administra- tive $ 221,763 $ 156,688 $ 394,826 $ 537,032 Interest 501,810 770,030 1,092,048 1,395,152 Depreciation and amortization 253,722 176,365 507,445 412,730 Taxes and insurance 226,218 141,331 345,259 240,533 $ 1,203,513 $1,244,414 $ 2,339,578 $ 2,585,447 NET PROFIT (LOSS) $ 18,729 $ (293,138)$ 28,310 $ (428,357) See notes to financial statements. Page 11 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) EXHIBIT - COMPUTATION OF INCOME (LOSS) PER PARTNERSHIP UNIT SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997 (UNAUDITED) 1 9 9 8 1 9 9 7 Partnership units outstanding 3,118,303 3,118,303 Net Income (Loss) $ (113,827) $ (111,146) Net Income (Loss) Per Partnership Unit $ (0.04) $ (0.04) See notes to financial statements. Page 12 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) PART II - OTHER INFORMATION ITEM 1 - Legal Proceedings Registrant is not involved in any legal proceedings that would have a material effect on the financial condition of Registrant. ITEM 2 - Changes in Securities There were no changes in the right of limited partners during the quarter covered by this report. ITEM 3 - Defaults Upon Senior Securities There were no defaults by Registrant on its senior securities during the quarter covered by this report. ITEM 4 - Submission of Matters to Vote of Security Holders No matters were submitted during the quarter covered by this report to a vote of limited partners. ITEM 5 - Other Information None ITEM 6 - Exhibits and Reports on Form 8-K (a) Exhibit - Computation of earnings per partnership unit. (b) Exhibit - Form 8-K filed September 24, 1997, incorporated by reference. Page 13 SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, 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 ROSENTHAL General Partner Dated: FEBRUARY 19, 1999