10-Q 1 allqsep.txt ALL STATE PROPERTIES LP 10Q 9/30/00 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 SEPTEMBER 30, 2000 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 September 30, 2000 Limited Partnership Units 3,118,303 Units ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) * * * * * * * * * * * * * * FINANCIAL STATEMENTS AND SCHEDULES THREE MONTHS ENDED SEPTEMBER 30, 2000 Page 1 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) I N D E X ITEM DESCRIPTION NUMBER PART I Index 1 Accountant's Review Report 2 Financial Information: Condensed Balance Sheets - September 30, 2000 and June 30, 2000 3 Condensed Statements of Operations - Three Months ended September 30, 2000 and 1999 4 Condensed Statements of Cash Flows - Three Months ended September 30, 2000 and 1999 5-6 Financial Data Schedule 7 Notes to Condensed Financial Statements - September 30, 2000 and 1999 8-9 Management's Discussion and Analysis of the Financial Condition and Results of Operations - September 30, 2000 10-11 Condensed Financial Information for City Planned Communities and Unicom Partnership, Ltd., 50% and 49-1/2% owned Real Estate Partnerships, respectively - September 30, 2000, 1999 and June 30, 2000 12-13 Exhibit - Computation of Loss per Partner- ship Unit - three months ended September 30, 2000 and 1999 14 PART II Other Information 15-16 Signatures 17 Page 2 FREEMAN BUCZYNER & GERO 1 SE THIRD AVENUE SUITE 2120 MIAMI, FLORIDA 33131 305-375-0766 ACCOUNTANT'S REVIEW REPORT To the Partners All-State Properties, L.P. Lauderhill, Florida We have reviewed the accompanying balance sheet of All-State Properties L.P. as of September 30, 2000 and the related statements of operations and cash flows for the quarter then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of All-State Properties L.P. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. The financial statements for the year ended June 30, 2000, were audited by us and we expressed an unqualified opinion on them in our report dated October 9, 2000, but we have not performed any auditing procedures since that date. December 15, 2000 Page 3 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) CONDENSED BALANCE SHEETS SEPTEMBER 30, 2000 AND JUNE 30, 2000 SEPTEMBER JUNE 30TH 30TH Assets 2 0 0 0 2 0 0 0 Cash $ 1,302,009 $ 5,316 Other assets 1,210 1,210 Total Assets $ 1,303,219 $ 6,526 Liabilities and Partners' Capital (Deficit) Liabilities: Notes payable - related party $ - $ 225,116 Notes payable - 612,077 Accounts payable and other liabilities 12,335 43,319 4% convertible subordinated debentures due 1989 16,087 2,628,518 Partnership distributions payable 252,496 252,496 $ 280,918 $ 3,761,526 Deficiency in real estate joint venture $ 4,253,362 $ 1,033,229 Partners' Deficit $ (2,999,615) $ (4,558,180) Notes receivable - officers/partners (231,446) (230,049) $ 1,022,301 $ (3,755,000) Total Liabilities and Partners' Capital (Deficit) $ 1,303,219 $ 6,526 See accompanying notes and accountant's report. Page 4 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 2 0 0 0 1 9 9 9 REVENUES: Profit (Loss) from real estate partnership $ 2,100,407 $ - Other 9,008 1,687 $ 2,109,415 $ 1,687 COST AND EXPENSES: Selling, general and administrative $ 21,145 $ 10,678 Interest 35,053 32,794 $ 56,198 $ 43,472 Net Income (Loss) $ 2,053,217 $ (41,785) INCOME (LOSS) PER PARTNERSHIP UNIT OUTSTANDING 0.658 (0.015) CASH DISTRIBUTIONS PER UNIT NONE NONE See accompanying notes and accountant's report. Page 5 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 2 0 0 0 1 9 9 9 CASH FLOW FROM OPERATING ACTIVITIES: Interest income - collected $ 7,611 $ 214 Cash from sale of real estate - - Cash received principally from rental activities - - Cash paid for selling, general and administrative expenses (52,129) (9,967) Interest paid (1,203,568) - Net Cash Provided (Consumed) by Operating Activities $ (1,248,086) $ (9,753) CASH FLOW FROM FINANCING ACTIVITIES: Cash from borrowing (Repayment) $ (2,281,109) $ 9,707 CASH FLOW FROM INVESTING ACTIVITIES PARTNERSHIP AND PARTNERS - NET $ 4,825,888 - NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 1,296,693 $ (46) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 5,316 20,425 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,302,009 $ 20,379 RECONCILIATION OF NET INCOME(LOSS) TO NET CASH PROVIDED(CONSUMED)BY OPERATING ACTIVITIES: Net Income (Loss) $ 2,053,217 $ (41,785) See accompanying notes to accountant's report. Page 6 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 2 0 0 0 1 9 9 9 ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)TO NET CASH PROVIDED(CONSUMED) BY OPERATING ACTIVITIES: (Income) Loss of real estate part- nerships $ (2,100,407) $ - Changes in Assets and Liabilities: Increase in accrued interest payable (1,168,515) 32,795 Increase in accrued interest receivable (1,397) (1,473) (Decrease) increase in accounts payable (30,984) 710 Decrease (increase) in other assets - - Total adjustments $ (3,301,303) $ 32,032 NET CASH PROVIDED (CONSUMED) BY OPERATING ACTIVITIES $ (1,248,086) $ (9,753) See accompanying notes to accountant's report. Page 7 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) FINANCIAL DATA SCHEDULE THREE MONTHS ENDED SEPTEMBER 30, 2000 EXHIBIT 27 Cash $ 1,302,009 Receivables 1,210 Total Assets 1,303,219 Notes Payable - Accounts payable 12,335 Convertible Subordinated Debentures 16,087 Partnership distribution payable 252,496 Deficiency in real estate joint venture 4,253,362 Partners' Deficit (2,999,615) Notes receivable - officers/partners (231,446) Total Liabilities and Partners' Deficit 1,303,219 Total Revenues 2,109,415 Total Cost and Expenses 56,198 Net Income (loss) 2,053,217 Income Per Partnership Unit 0.658 See accompanying notes to accountant's report. Page 8 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 1. 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. In June 1999, control of the condominium association was turned over to the unit owners by Wimbledon Development Ltd., the developer. All required funds for reserves and deferred maintenance were delivered to the new condominium board. Wimbledon Development Ltd., its general partner and the Registrant, its limited partner, were issued releases with respect to all matters pertaining to the condominium. (See Item 1, Legal Proceedings) 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. Page 9 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 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 substantial limited partnership interest in Unicom. Accordingly, the beneficial owners of Unicom are substantially the same of 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. 4. On August 16, 2000, Unicom sold the adult rental retirement facility, including the real property and certain tangible and intangible assets, for a purchase price of $47,159,295. After giving effect to the deposit of $4,500,000 previously accounted for, the existing mortgage in the amount of $26,720,254 and various adjustments, Unicom Partnership Ltd. received net proceeds of $16,379,732. Unicom distributed $15,500,000 to its partners and All-State Properties, L.P.'s share was approximately $4,700,000, which was used to pay the Company's outstanding debentures and accrued interest in the amount of $2,638,324 and liabilities in the amount of $769,038. Page 10 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS SEPTEMBER 30, 2000 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 three months ended September 30, 2000. 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 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. Page 11 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS SEPTEMBER 30, 2000 FINANCIAL CONDITION (Continued) In addition, CPC assigned 9.00% of any of its cash that becomes available for distribution to certain individual 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 three months ended September 30, 2000 include the Company's share of the profit from the sale by Unicom of its assets as described in Form 8-K dated August 16, 2000 and Form 10-K filed December 12, 2000 incorporated by reference. Page 12 CONDENSED FINANCIAL INFORMATION FOR REAL ESTATE PARTNERSHIPS CITY PLANNED COMMUNITIES & TUNICOM LLC F/K/A UNICOM PARTNERSHIP, LTD. CONDENSED COMBINED BALANCE SHEETS SEPTEMBER 30, 2000 AND JUNE 30, 2000
SEPTEMBER JUNE 30, 2000 30, 2000 ASSETS: Property and equipment - net of depreciation $ 413,984 $25,487,405 Cash 1,807,541 1,665,025 Cash-restricted - 781,050 Real estate held for sale (cost) 9,666 9,666 Deferred and prepaid expenses 34,103 1,368,536 Other assets - 497,968 Notes receivable - related party 168,823 310,190 Total $ 2,434,117 $ 30,119,840 LIABILITIES AND PARTNERS' CAPITAL: Mortgage payable, including accrued interest $ - $ 26,844,048 Accounts payable and other liabilities 794,111 1,902,569 Notes payable - related parties - 35,944 Unamortized interest mortgage modification - 2,212,612 Other deposits - 4,500,000 Note payable 85,638 85,637 Partners' capital (deficit) 1,554,368 (5,460,970) Total $ 2,434,117 $ 30,119,840
See notes to financial statements. Page 13 CONDENSED FINANCIAL INFORMATION FOR REAL ESTATE PARTNERSHIPS CITY PLANNED COMMUNITIES & TUNICOM LLC F/K/A UNICOM PARTNERSHIP, LTD. CONDENSED COMBINED PROFIT AND LOSS INFORMATION THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
2 0 0 0 1 9 9 9 REVENUES: Net Sale of Assets $ 20,663,902 $ - Lease income - 1,834,928 Interest and other 27,827 5,923 Forgiveness of interest 2,226,737 Total income $ 22,918,466 $ 1,840,851 EXPENSES: General and administrative $ 1,073,736 $ 332,901 Interest 272,309 581,348 Depreciation and amortization - 261,723 Taxes and insurance 62,169 300,922 Total expenses $ 1,408,214 NET INCOME $ 21,510,252 $ 363,957
See notes to financial statements. Page 14 ALL-STATE PROPERTIES L.P. (A LIMITED PARTNERSHIP) EXHIBIT - COMPUTATION OF INCOME (LOSS) PER PARTNERSHIP UNIT THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 2 0 0 0 1 9 9 9 Partnership units outstanding 3,118,303 3,118,303 Net Income (Loss) $ 2,053,217 $ (41,785) Net Income (Loss) Per Partnership Unit $ 0.6584 $ (0.015) See notes to financial statements. Page 15 ALL-STATE PROPERTIES L.P. PART II - OTHER INFORMATION ITEM 1 - Legal Proceedings The limited partnership in which the Company is the limited partner has been named as a defendant in a lawsuit seeking all damages allowable under the Florida Wrongful Death Act. On or about April 17, 1998, one of the decedents was operating a motor vehicle in the parking lot of a condominium developed in 1988 by the defendant limited partnership when she drove said vehicle into a canal abutting but not part of the condominium property. The other decedent was a passenger in said vehicle. Counsel selected by the insurance company representing the limited partnership filed a motion to dismiss the limited partnership. Plaintiffs have appealed the order dismissing the limited partnership in this litigation, and the insurance carrier has retained counsel to handle the appeal. Although the insurance company continues to provide a legal defense to the action on appeal, it has reserved its rights to contest coverage under the policy issued to the limited partnership, and has filed a petition for declaratory relief. The limited partnership has retained counsel to represent it in connection with the declaratory action, and all parties to such action have agreed to stay the declaratory action pending outcome of the appeal. The Company does not believe the limited partnership or it has any liability in connection with the above. ITEM 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. Page 16 ALL-STATE PROPERTIES L.P. PART II - OTHER INFORMATION (CONTINUED) 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 October 8, 1999, incorporated by reference. (c) Exhibit - Form 8-K filed August 16, 2000. Page 17 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: December 7, 2000