UNITED STATES 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, 2007 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
4201 North Federal Highway, Suite B, Pompano Beach, Florida 33064-6048
(Address of principal executive offices) (Zip Code)
Registrant?s Telephone number, including area code (954) 941-2290
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class: Limited partnership units
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. YES NO X
Indicate by a check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. YES NO X
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
Indicate by checkmark if disclosure of delinquent filers pursuant to
Item 405 of Regulations S-K(229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant?s
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K.
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition
of ?accelerated filer and large accelerated filer? in Rule 12b-2 of
the Exchange Act. (Check one):
Large accelerated filer Accelerated filer Non-accelerated filer X
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act) YES X NO
The aggregate market value of the limited partnership units held by non-
affiliates of Registrant was $414,623, as of September 26, 2007, based
on the last sale price for a unit of limited partnership interests on
such date.
Indicate the number of limited partnership units outstanding, as of the
latest practicable date.
Class Outstanding at September 26, 2007
Limited Partnership Units 3,118,065 Units
DOCUMENTS INCORPORATED BY REFERENCE
None
ALL-STATE PROPERTIES L.P.
FORM 10-K ANNUAL REPORT
FOR THE YEAR ENDED JUNE 30, 2007
I N D E X
PART 1
PAGE
ITEM 1. Business I-4
ITEM 1A Risk Factors I-6
ITEM 1B Unresolved Staff Comments I-7
ITEM 2. Properties I-7
ITEM 3. Legal Proceedings I-7
ITEM 4. Submission of Matters to a Vote of Security
Holders I-7
PART II
ITEM 5. Market for Registrant?s Common Equity, Related
Stockholder Matters and Issuer Purchases of
Equity Securities II-1
ITEM 6. Selected Financial Data II-1
ITEM 7. Management?s Discussion and Analysis of The
Financial Condition and Results of Operations II-4
ITEM 7A Quantitative and Qualitative Disclosure
About Market Risk II-5
ITEM 8. Financial Statements and Supplementary Data II-6
ITEM 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure II-36
ITEM 9A Controls and Procedures II-36
ITEM 9B Other Information II-36
PART III
Item 10. Directors and Executive Officers and Corporate
Governance III-1
ITEM 11. Executive Compensation III-1
ITEM 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder
Matters III-2
ITEM 13. Certain Relationships and Related Transactions and
Director Independence III-2
ITEM 14. Principal Accountant Fees and Services III-3
I-2
ALL-STATE PROPERTIES L.P.
FORM 10-K ANNUAL REPORT
FOR THE YEAR ENDED JUNE 30, 2007
I N D E X
PART IV
ITEM 15. Exhibits And Financial Statement Schedules IV-1
Signatures IV-6
Certifications IV-7
I-3
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 its predecessor corporation, All-State
Properties, Inc. (the ?Corporation?); and together with the
Partnership, the ?Company?. In March 2007 Hubei Longdan (Delaware),
Inc. (?Longdan Delaware? and ?Subsidiary?) was organized under the
laws of the State of Delaware as a wholly-owned subsidiary of the
Company. Longdan Delaware has only nominal assets and no liabilities and
has conducted no activities except in connection with the transactions
contemplated by the Acquisition Agreement (See item 1(b)(ii)). The
Company together with Longdan Delaware referred to herein as the
?Registrant?. Pursuant to a Plan of Liquidation adopted by
shareholders of the Corporation on September 30, 1984, the Corporation
transferred substantially all of its assets to the Partnership, and the
Corporation distributed such limited partnership interests to its
shareholders. The Registrant was engaged since inception in land
development and the construction and sale of residential housing in
various parts of the eastern United States and in Argentina with its
most recent transactions being in Florida.
Since August 1999, the Company?s only business has been
the ownership of a member interest of approximately 35% in Tunicom LLC,
a Florida limited liability company (?Tunicom?). An affiliate of
Tunicom was engaged in the ownership and operation of an adult rental
apartment complex until the sale of the apartment complex in August
2000. Since that time, Tunicom?s only business was activities relating
to its attempts to sell its only remaining asset, five acres of
commercial and residential land in Broward County, Florida (the
?Remaining Property?) For a description of the subsequent sale of the
Remaining Property by Tunicom and the liquidating distribution by the
Company, see Item 1(b)(i). Following the completion of the transactions
described in Item (b)(ii) the Company became a ?shell company? (as
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended) because is has no or nominal operations and no or nominal
assets (other than cash). In March 2007, the Company entered into an
Acquisition Agreement which contemplates a reverse merger with a private
operating Chinese pharmaceutical company provided that certain
conditions are satisfied, including approval of the transaction by its
partners (See Item 1(b)(ii)).
(b) NARRATIVE DESCRIPTION OF BUSINESS
(i) Remaining Property Sale
On December 19, 2006, Tunicom sold the Remaining
Property and thereafter distributed the net sales proceeds to its
members, including the Company, as a final liquidating distribution.
After payment of certain debt and after setting aside a reserve for
expenses, the Company distributed the remaining cash to its partners.
Following the distribution, the Company has no assets other than a small
cash reserve which it has set aside for payment of anticipated final
expenses of the Company.
I-4
PART 1 (CONTINUED)
(ii) Acquisition Agreement
The Company had been negotiating a definitive
agreement with Hubei Longdan Biological Medicine Technology Co., Ltd.
(?Longdan?), a company organized under the laws of the People?s
Republic of China (the ?PRC?), pursuant to which the Company would
issue approximately eighty nine percent (89%) of its capital stock to
Longdan?s shareholders in return for acquisition of the business of
Longdan (the ?Acquisition?). Longdan is engaged in the marketing and
sale of pharmaceutical products in the PRC.
On March 14, 2007, the Company, Longdan
Delaware, Longdan and Longdan International Inc., a corporation formed
under the laws of Nevis (?Longdan International?), entered into an
Acquisition Agreement (the ?Agreement?) pursuant to which the Company
will acquire Longdan International and an indirect interest in Longdan
and the shareholders of Longdan International will acquire a controlling
interest in the Company. The Company will account for the transaction as
a reverse merger.
Under the terms of the Agreement, it is
contemplated that the Company will convert from a Delaware limited
partnership to a newly-formed Delaware corporation to be called Longdan
International Holdings, Inc. (?LIH?) and Longdan International will
merge with and into Longdan Delaware. At the Merger Effective Time (as
defined in the Agreement), the shareholders of Longdan will be issued
shares representing approximately eighty nine percent (89%) of the
capital stock of the Company and the Company?s shareholders will hold
shares representing approximately eleven percent (11%) of the capital
stock of the Company, in each case, on an ?as if converted basis?.
The Acquisition has been structured to comply
with certain limitations on the foreign ownership of Chinese companies
under the laws of the PRC. In anticipation of the possible Acquisition,
on December 20, 2006, Longdan entered into certain agreements with
Longdan International. Pursuant to these agreements, Longdan
International provides exclusive technology consulting and other general
business operations services to Longdan in return for payment of
consulting fees that are equal to Longdan?s net profits. Longdan?s
shareholders have pledged their equity interest in Longdan to Longdan
International to secure the contract obligations and have granted
Longdan International an irrevocable proxy to vote their interests and
an exclusive option to purchase these interests, which arrangements are
enforceable to the fullest extent permitted under the laws of the PRC.
Longdan has advised the Company that it believes
that this structure qualifies Longdan International as a variable
interest entity that is permitted to consolidate its financial
statements with Longdan, the operating entity with which it has
qualifying contractual arrangements.
Longdan has agreed to pay all costs associated
with the Acquisition, including legal fees incurred in connection with
the related corporate law transactions and required filings under the
securities laws, and has also agreed to pay for any costs incurred by the
Company in connection with maintaining its registration under the
Securities Exchange Act of 1934, as amended, after June 30, 2007.
I-5
PART 1 (CONTINUED)
(ii) Acquisition Agreement (Continued)
The approval of the Company?s partners is a
condition to the consummation of the Acquisition. In this regard on April
16, 2007, the Company filed a Preliminary Proxy Statement with the United
States Securities Exchange Commission (?SEC?) in connection with a
meeting of partners to vote on the Acquisition.
The Company received comments from the SEC on the
proxy material and has filed an amendment to its preliminary proxy
materials responsive to the comments. It is waiting for the SEC to
complete its review of its response. The acquisition of the Longdan
business is contingent on the SEC?s approval of the proxy material and
the affirmative vote in favor of the transaction by the Company?s
partners, as well as the satisfaction of certain other conditions to
closing, including payment of all related expenses by Longdan. The
Company can provide no assurances that such approvals will be obtained,
that the other conditions to the closing will be satisfied and that the
reverse merger transaction will be consummated
(iii) Registrant has no plans for any new products.
(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 in bank.
+
(vii) No portion of Registrant?s business involved
government contracts.
(viii) Registrant incurs no research and development
expenses.
(ix) Registrant employs no employees.
(c) Tunicom had no foreign operations or export sales.
ITEM 1A. RISK FACTORS
The Company received comments from the SEC on the
proxy material and has filed an amendment to its preliminary proxy
materials responsive to the comments. It is waiting for the SEC to
complete its review of its response. The acquisition of the Longdan
business is contingent on the SEC?s approval of the proxy material and
the affirmative vote in favor of the transaction by the Company?s
partners, as well as the satisfaction of certain other conditions to
closing, including payment of all related expenses by Longdan. The
Company can provide no assurances that such approvals will be obtained,
that the other conditions to the closing will be satisfied and that the
reverse merger transaction will be consummated. The Company has included
additional risk factors in its proxy materials that relate to risks
associated with the transactions contemplated by the Acquisition
Agreement.
I-6
PART 1 (CONTINUED)
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
None.
ITEM 3. LEGAL PROCEEDINGS
None.
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-7
PART II
ITEM 5. MARKET FOR THE REGISTRANT?S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
(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,
2007. The Company has no knowledge of other transactions. Therefore, no
bid and ask prices could be ascertained.
(b) As of June 30 2007, there were 1,316 holders of
record of 3,118,065 limited partnership interests.
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.
(c) The Company never paid cash dividends on its common
stock while it was a corporation. The Partnership distributed $.05 per
unit on February 6, 2007.
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial information should be
read in conjunction with ?Item 7 ? Management?s Discussion and Analysis
of The Financial Condition and Results of Operations? and the audited
financial statements and footnotes included elsewhere in this Form 10-K.
II-1
ALL-STATE PROPERTIES L.P
(A LIMITED PARTNERSHIP)
SELECTED FINANCIAL DATA
AS OF AND FOR THE YEARS ENDED JUNE 30,
SELECTED CASH FLOW AND
AND OPERATING STATEMENT
DATA 2 0 0 7 2 0 0 6 2 0 0 5 2 0 0 4 2 0 0 3
REVENUE:
Equity in income
(loss) of real estate
partnerships $ 209,201 $ (24,102) $ (17,667) $ (20,643) $ (10,082)
Realization of deferred revenue
on sale of land 68,207 - - - -
Other income 1,088 - - - 5,594
Total $ 278,496 $ (24,102) $ (17,667) $ (20,643) $ (4,488)
Net income (loss) $ 141,243 $ (78,016) $ (72,285) $ (69,206) $ (56,121)
Per share/unit ?
fully diluted:
Net income (loss) $ 0.05 $ (0.03) $ (0.02) $ (0.02) $ (0.02)
SELECTED BALANCE SHEET DATA
Total assets $ 28,134 $ 238,131 $ 270,031 $ 302,025 $ 307,148
Notes, mortgages and con-
struction loans $ - $ 185,809 $ 152,696 $ 112,128 $ 34,000
Total $ - $ 185,809 $ 152,696 $ 112,128 $ 34,000
Cash distributions declared
per share/unit $ 0.05 $ NONE $ NONE $ NONE $ NONE
II-2
TUNICOM LLC
(A LIMITED LIABILITY COMPANY)
SELECTED FINANCIAL DATA
AS OF AND FOR THE YEARS ENDED JUNE 30,
SELECTED INCOME STATEMENT DATA
2 0 0 7 2 0 0 6 2 0 0 5 2 0 0 4 2 0 0 3
Gain on sale of land $ 661,397 $ - $ - $ - $ -
Interest and other
income 16,902 10,225 8,230 1,510 778
Total revenues $ 678,299 $ 10,225 $ 8,230 $ 1,510 $ 778
Net income(loss) $ 591,858 $ (66,726) $ (47,827) $ (57,152) $ (28,161)
SELECTED BALANCE
SHEET DATA
Total assets $ - $ 1,114,131 $ 1,060,073 $ 959,883 $ 855,276
Partners? cash
distributions $ 1,249,311 $ NONE $ NONE $ NONE $ NONE
II-3
ITEM 7. MANAGEMENT?S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ?
ALL-STATE PROPERTIES L.P.
The following discussion and analysis of our financial condition,
results of operations, liquidity and capital resources should be read in
conjunction with our financial statements and notes thereto.
YEAR ENDED JUNE 30, 2007 COMPARED TO YEAR ENDED JUNE 30, 2006
The net income for the year ended June 30, 2007 as compared to the net
loss for the year ended June 30, 2006 is the result of income earned
from its investment in the real estate limited liability company,
Tunicom LLC from the gain on the sale of land in December 2006. The
Company had no operations during the subsequent six months ended June
30, 2007. The loss for the year ended June 30, 2006 representing results
of operations due to the administration of the Company and from its
investment in the real estate limited liability company, Tunicom LLC.
YEAR ENDED JUNE 30, 2006 COMPARED TO YEAR ENDED JUNE 30, 2005
The net loss for the year ended June 30 2006 as compared to the year
ended June 30, 2005 represents the results of operations due to the
administration of the Company and loss from its investment in the real
estate limited liability company, Tunicom LLC.
LIQUIDITY AND CAPITAL RESOURCES
During the years ended June 30, 2007 and June 30, 2006, cash used in
operations was $96,796 and $36,798, respectively, primarily for the
payment of general and administrative expenses. Through its investment
in Tunicom, the Company received a net cash distribution of $446,372 in
connection with its share of Tunicom?s sale of land which occurred in
December, 2006. The related party advances and accrued interest of
$247,562 were repaid, $155,903 was distributed to the partners, of which
$6,500 was retained as partial settlement of interest receivable on
promissory notes, and the balance was retained for future general and
administrative expenses.
On March 14, 2007, the Company entered into a definitive Acquisition
Agreement with Longdan and certain related entities whereby the Company
will acquire the business of Longdan and account for the transaction as
a reverse merger. On April 6, 2007, the Company filed a preliminary
proxy statement and form of proxy card with the SEC relating to the vote
on the reverse merger transaction with Longdan. The Company has received
comments from the SEC on the proxy material and is currently reviewing
the comments and considering its response. The Acquisition of the
Longdan business is contingent on the SEC?s approval of the proxy
material and the affirmative vote in favor of the transaction by the
Company?s partners, as well as the satisfaction of certain other
conditions to closing, including payment of all related expenses by
Longdan. The Company can provide no assurances that such approvals will
be obtained, that the other conditions to the closing will be satisfied
and that the Acquisition will be consummated. Longdan has agreed to pay
all costs associated with the reverse merger acquisition, including
legal fees incurred in connection with the related corporate law
transactions and required filings under the securities laws, and has
also agreed to pay for any costs incurred after June 30, 2007 by the
Company in connection with maintaining its registration under the
Securities Exchange Act of 1934.
II-4
ITEM 7. MANAGEMENT?S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION ?
TUNICOM LLC
The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with our financial
statements and notes thereto.
YEAR ENDED JUNE 30, 2007 COMPARED TO YEAR ENDED JUNE 30, 2006
The net income for the year ended June 30, 2007 was primarily a result
of the gain on sale of land in December, 2006. The loss for the year
ended June 30, 2006 represents the results of operations and
administration of its then remaining asset.
YEAR ENDED JUNE 30, 2006 COMPARED TO YEAR ENDED JUNE 30, 2005
The net loss for the year ended June 30, 2006 as compared to the year
ended June 30, 2005 represents the results of operations due to the
administration of the Company and its lone remaining asset,
approximately five acres of real estate.
LIQUIDITY AND CAPITAL RESOURCES
During the year ended June 30, 2007 net cash provided by investing
activities was $1,490,115 as a result of the sale of land in December,
2006.
During the year ended June 30, 2007 and June 30, 2006, cash used in
operations was $84,585 and $10,623, respectively. The increase in 2007
was primarily costs associated with the sale of land in December, 2006.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
II-5
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
I N D E X
PAGE
Report of Independent Registered Public Accounting Firm -
Morrison, Brown, Argiz & Farra, LLP II-7
Report of Independent Registered Public Accounting Firm -
Freeman, Buczyner & Gero II-8
FINANCIAL STATEMENTS:
Consolidated Balance Sheets II-9
Consolidated Statements of Operations II-10
Consolidated Statements of Changes in Partners?
Capital (Deficiency) II-11
Consolidated Statements of Cash Flows II-12
Notes to Consolidated Financial Statements II-14
II-6
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners of
All-State Properties, L.P. and Subsidiary
Lauderhill, Florida
We have audited the accompanying consolidated balance sheet of All-State
Properties, L.P. and Subsidiary (the ?Company?) as of June 30, 2007
and the related consolidated statements of operations, changes in
partners? capital (deficiency), and cash flows for the year ended June
30, 2007. These consolidated financial statements are the responsibility
of the Company?s management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audit. The
financial statements of All-State Properties, L.P., as of June 30, 2006,
and for the years ended June 30, 2006 and 2005 were audited by other
auditors who have ceased operations. Those auditors expressed an
unqualified opinion on those financial statements in their report dated
September 15, 2006.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of All-
State Properties, L.P. and Subsidiary as of June 30, 2007 and the
results of their operations and their cash flows for the year ended June
30, 2007 in conformity with accounting principles generally accepted in
the United States of America.
As discussed in Note 8, the Company plans to either consummate a reverse
merger with an unrelated party or, if not consummated, liquidate and
distribute its remaining net assets or liability. Accordingly, the
Company may not continue in business in the future.
/s/ Morrison, Brown, Angiz & Farra, LLP
Miami, Florida
September 24, 2007
II-7
FREEMAN, BUCZYNER & GERO
ONE SOUTHEAST THIRD AVENUE
SUITE 2150
MIAMI, FLORIDA 33131
305-375-0766
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM *
To the Partners of
All-State Properties, L.P.
Lauderhill, Florida
We have audited the accompanying balance sheets of All-State Properties
L.P. as of June 30, 2006, and 2005 and the related statements of
operations, changes in partners? capital (deficiency) and cash flows for
each of the three years in the period ended June 30, 2006. These
financial statements are the responsibility of the partnership?s
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provided a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of All-State
Properties L.P. at June 30, 2006 and 2005 and the results of its
operations and its cash flows for each of three years in the period
ended June 30, 2006 in conformity with the generally accepted accounting
principles in the United States of America.
Miami, Florida
September 15, 2006
* This report is a copy of the previously issued report and the
predecessor auditor has not reissued the report.
II-8
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2007 AND 2006
A S S E T S
JUNE 30
2 0 0 7 2 0 0 6
Cash $ 28,134 $ 961
Investment in real estate
limited liability company ? related party - 237,170
TOTAL ASSETS 28,134 $ 238,131
LIABILITIES AND PARTNERS? CAPITAL (DEFICIENCY)
LIABILITIES:
Deferred revenue ? related
party $ - $ 68,207
Accounts payable and
other liabilities 28,134 24,378
Note payable ? related
party (including accrued
interest of $0 and $12,809,
respectively) - 185,809
TOTAL LIABILITIES 28,134 278,394
PARTNERS? CAPITAL (DEFICIENCY):
Partners? capital
(3,772,419 units authorized,
3,118,065 units outstanding) - 154,517
Notes receivable - partners
(including accrued interest
of $0 and $54,923, respectively) - (194,780)
- (40,263)
TOTAL LIABILITIES AND PARTNERS?
CAPITAL (DEFICIENCY) $ 28,134 $ 238,131
The accompanying notes are an integral part of these consolidated
financial statements.
II-9
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
2 0 0 7 2 0 0 6 2 0 0 5
REVENUES:
Equity in income (loss)
of real estate limited
liability company -
related party $ 209,201 $ (24,102) $ (17,667)
Realization of deferred
revenue on sale of land 68,207 - -
Other 1,088 - -
Total $ 278,496 $ (24,102) $ (17,667)
COST AND EXPENSES:
General and
administrative
expenses 77,778 44,401 47,050
Write off of accrued
interest receivable 48,423 - -
Interest expense 11,052 9,513 7,568
Total 137,253 53,914 54,618
NET INCOME (LOSS) 141,243 $ (78,016) $ (72,285)
NET INCOME OR (LOSS)
PER PARTNERSHIP UNIT $ 0.05 $ (0.03) $ (0.02)
CASH DISTRIBUTIONS PER
UNIT $ 0.05 $ NONE $ NONE
The accompanying notes are an integral part of these consolidated
financial statements.
II-10
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS? CAPITAL (DEFICIENCY)
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTES TOTAL
RECEIVABLE PARTNERS?
NUMBER GENERAL LIMITED OFFICERS/ CAPITAL
OF UNITS PARTNER PARTNERS PARTNERS (DEFICIENCY)
BALANCE - June 30, 2004 3,118,065 $ 2 $ 304,816 $ (194,780) $ 110,038
Net loss - - (72,285) - (72,285)
BALANCE - June 30, 2005 3,118,065 $ 2 $ 232,531 $ (194,780) $ 37,753
Net loss - - (78,016) - (78,016)
BALANCE - June 30, 2006 3,118,065 $ 2 $ 154,515 $ (194,780) $ (40,263)
Net income - (2) 141,245 - 141,243
Partners distribution - - (155,903) - (155,903)
Write off of notes receivable ?
partners - - (139,857) 139,857 -
Payment of interest receivable ?
partners - - - 6,500 6,500
Write off of interest receivable ?
partners - - - 48,423 48,423
BALANCE ? June 30, 2007 3,118,065 $ - $ - $ - $ -
The accompanying notes are an integral part of these consolidated
financial statements.
II-11
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
YEARS ENDED JUNE 30,
2 0 0 7 2 0 0 6 2 0 0 5
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
Cash Flows from Operating
Activities:
Interest income $ 1,088 $ - $ -
Cash paid for general and
administrative expenses (74,023) (31,398) (37,175)
Interest paid (23,861) (5,400) -
Payment for shares escheated - - (10,152)
Net Cash Used in Operating
Activities (96,796) (36,798) (47,327)
Cash Flows from Investing
Activities:
Distributions from investment
in real estate limited
liability company ? related
party 458,050 - -
Payment from distribution from
investment in real estate limited
liability company ? related party (11,678) - -
Net Cash Provided by
Investing Activities 446,372 - -
Cash Flows from Financing
Activities:
Proceeds (payments) on
note-related party, net (173,000) 29,000 33,000
Distribution to partners (155,903) - -
Payment of interest receivable ?
partners 6,500 - -
Net Cash (Used) Provided
by Financing Activities (322,403) 29,000 33,000
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 27,173 (7,798) (14,327)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 961 8,759 23,086
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 28,134 $ 961 $ 8,759
The accompanying notes are an integral part of these consolidated
financial statements.
II-12
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
YEARS ENDED JUNE 30,
2 0 0 7 2 0 0 6 2 0 0 5
Reconciliation of net income (loss)
to net cash used in operating
activities:
Net Income (Loss) $ 141,243 $ (78,016) $ (72,285)
Adjustments to reconcile net
income(loss) to net cash used
in operating activities:
Equity in (income) loss from
real estate limited liability
company ? related party (209,201) 24,102 17,667
Recognition of deferred revenue (68,207) - -
Interest receivable partners
write-off 48,423 - -
Changes in assets and liabilities:
(Decrease) increase in accrued
interest ? related party note (12,809) 4,113 7,568
Increase in accounts payable
and other liabilities 3,755 13,003 9,875
(Decrease) in partnership
distributions payable - - (10,152)
Total Adjustments (238,039) 41,218 24,958
NET CASH USED IN OPERATING
ACTIVITIES $ (96,796) $ (36,798) $ (47,327)
NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Undistributed earnings in
limited liability company ?
related party $ - $ 24,102 $ 17,667
Income (loss) from real
estate limited liability
company - related party $ - $ (24,102) $ (17,667)
Note receivable ? partners
write-off $ 139,857 $ - $ -
Interest receivable ? partners
write-off $ 48,423 $ - $ -
The accompanying notes are an integral part of these consolidated
financial statements.
II-13
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Operations
All-State Properties L.P. (a limited partnership) (the
?Company?) was organized under the Revised Uniform Limited
Partnership Act of Delaware on April 27, 1984 to conduct the
business formerly carried on by a predecessor corporation, All-
State Properties, Inc. (the Corporation). Pursuant to a Plan of
Liquidation adopted by shareholders of the Corporation on
September 30, 1984, the Corporation transferred substantially
all of its assets to All-State Properties L.P., and the
Corporation distributed such limited partnership interests to
its shareholders.
The Company owns a member interest of approximately 35% in
Tunicom LLC, Florida limited liability company (?Tunicom?).
The Tunicom investment was the only significant asset of the
Company. In January 2007, the Company received a full
distribution of its remaining investment in Tunicom. The
Company has no other operating business and no source of
operating income.
On March 14, 2007, Hubei Longdan (Delaware), Inc. (?Longdan
Delaware? and ?Subsidiary?) was organized under the laws of
the State of Delaware as a wholly-owned subsidiary of the
Company. Longdan Delaware was formed exclusively for the
purpose of entering into an acquisition and has had no
operations. In March 2007, the Company and Subsidiary entered
into an Acquisition Agreement to acquire an operating business
(See Note 7). The Company?s primary purpose is the consummation
of this acquisition.
B. Basis of Consolidation
The accompanying consolidated financial statements of the
Company include the accounts of All-State Properties L.P. and
its 100% owned Subsidiary since its inception date, March 14,
2007.
C. Limited Partnership
The accompanying consolidated financial statements include only
those assets, liabilities and results of operations, which
relate to the business of All-State Properties, L.P. and
Subsidiary. The consolidated financial statements do not
include any assets, liabilities, revenues, or expenses
attributable to the partners? individual activities.
D. Cash and Cash Equivalents
For the purposes of the consolidated statements of cash flows,
the Company considers all highly liquid investments with a
maturity of three months or less to be cash equivalents.
II-14
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Investments
The Company owns approximately 35% of a Florida limited
liability corporation, Tunicom, and uses the equity method of
accounting to recognize income from its investment.
F. Revenue Recognition and Deferred Revenue
In accordance with Securities Exchange Commission Staff
Accounting Bulletin No. 101, ?Revenue Recognition?, the
Company recognizes income from its investment in Tunicom
utilizing the equity method, and interest is recognized as
earned with passage of time.
Deferred revenue represents deferred profit that resulted from
a previous sale of land to Tunicom LLC. The deferred revenue
was recognized when Tunicom sold the land to a third party.
G. 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.
H. Concentration of Credit Risk
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash and
cash equivalents. The Company maintains its cash balances in
one financial institution. The balances are insured by the
Federally Deposit Insurance Corporation up to $100,000.
I. Fair Value of Financial Instruments
Management estimates that the fair market value of cash,
receivables, accounts payable, accrued expenses and short-term
borrowings are not materially different from their respective
carrying values due to the short-term nature of these
instruments. Disclosures about the fair value of financial
instruments are based on pertinent information available to
management as of June 30, 2007.
J. Income Taxes
The Company is a partnership in which all elements of income
and deductions are included in the tax returns of the partners
of the Company. Therefore, no income tax provision is recorded
by the Company.
II-15
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
K. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles in the United States
of America requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
L. Recent Accounting Pronouncements
Accounting Changes and Error Corrections
In May 2005, the Financial Accounting Standards Board (?FASB?)
issued Statement of Financial Accounting Standards (?SFAS?)
No. 154, ?Accounting Changes and Error Corrections?. SFAS No.
154 establishes, unless impracticable, retrospective
application as the required method for reporting a change in
accounting principles in the absence of explicit transition
requirements specific to a newly adopted accounting principle.
This statement was effective for the Company for all accounting
changes and any error corrections occurring after July 1, 2006.
The adoption of this statement did not have an effect on the
Company?s consolidated financial statements.
Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements
In September 2006, the Securities and Exchange Commission
(?SEC?) issued Staff Accounting Bulletin No. 108, (?SAB No.
108?) ?Considering the Effects of Prior Year Misstatements
When Quantifying Misstatements in Current Year Financial
Statements?. SAB No. 108 addresses how to quantify the effect
of an error on the financial statements concluding that the
dual balance sheet and income approach be used to compute the
impact of the amount of a misstatement. Specifically, the
amount should be computed using both the ?rollover? (income
statement approach) and ?iron curtain? (balance sheet
approach) methods. SAB No. 108 is effective for fiscal years
ending after November 15, 2006. The Company adopted SAB No. 108
during the 2007 fiscal year. The adoption of this statement did
not have a material effect on the Company?s consolidated
financial statements.
II-16
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
L. Recent Accounting Pronouncements (Continued)
Taxes Collected From Customers For Governmental Authorities
In June 2006, the FASB ratified the consensus reached on
Emerging Issues Task Force (?EITF?) Issue No. 06-3 ?How Taxes
Collected from Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That
Is, Gross Versus Net Presentation)? (?EITF Issue No. 06-3?).
The scope of EITF Issue No. 06-3 includes any transaction-based
tax assessed by a governmental authority that is imposed
concurrent with or subsequent to a revenue-producing
transaction between a seller and a customer. The scope does not
include taxes that are based on gross receipts or total
revenues imposed during the inventory procurement process. The
gross versus the net classification on the income statement of
that tax is an accounting policy decision and a voluntary
change would be considered a change in accounting policy
requiring the application of SFAS No. 154, ?Accounting Changes
and Error Corrections?. EITF Issue No. 06-3 is effective for
interim and annual periods beginning after December 15, 2006.
The Company adopted this statement in the quarter ended March
31, 2007 and it did not have any impact on the Company?s
consolidated financial statements.
Fair Value Measurement
In September 2006, the FASB issued SFAS No. 157, ?Fair Value
Measurement? (?SFAS 157?). SFAS No. 157 provides enhanced
guidance for measuring fair value. Under the standard, fair
value refers to the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants in the market in which the entity
transacts. The standard clarifies that fair value should be
based on assumptions market participants would use when pricing
the asset or liability. This statement is effective for fiscal
years beginning after November 15, 2007 with early adoption
permitted. Management has not determined what impact, if any,
adopting this statement will have on the Company?s consolidated
financial statements.
II-17
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
L. Recent Accounting Pronouncements (Continued)
The Fair Value Option for Financial Assets and Financial
Liabilities
In February 2007, the FASB issued SFAS No. 159, ?The Fair Value
Option for Financial Assets and Financial Liabilities ?
Including an Amendment of FASB Statement No. 115? (?SFAS No.
159?). Under SFAS No. 159, companies have an opportunity to use
fair value measurements in financial reporting and permits
entities to choose to measure many financial instruments and
certain other items at fair value. SFAS No. 159 is effective
for fiscal years beginning after November 15, 2007. Management
has not determined what impact, if any, adopting this statement
will have on the Company?s consolidated financial statements.
NOTE 2 ? INVESTMENT IN REAL ESTATE LIMITED LIABILITY COMPANY ? RELATED PARTY
The Company owns a member interest of approximately 35% in Tunicom and
the following information summarizes the activity of the limited
liability company for the years ended June 30, 2007, 2006 and 2005:
2 0 0 7 2 0 0 6 2 0 0 5
Total assets $ - $ 1,114,131 $ 1,060,073
Total liabilities - 456,678 336,980
Net assets $ - $ 657,453 $ 723,093
Revenues $ 678,299 $ 10,225 $ 8,230
Net Income (loss) $ 591,858 $ (66,726) $ (47,827)
Company?s share of net income
(loss) $ 209,201 $ (24,102) $ (17,667)
Equity in net assets $ - $ 237,170 $ 261,272
On December 19, 2006, Tunicom sold its sole asset, five acres of
undeveloped commercial and residential land located in Lauderhill,
Florida. In January 2007, Tunicom distributed to the Company $458,050.
From the distribution paid to the Company, the Company paid Tunicom
$247,562 representing the principal amount of, plus accrued and unpaid
interest on, related party loans. The Company also paid an aggregate of
$11,678 from the distribution received to certain individuals for their
II-18
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 2 ? INVESTMENT IN REAL ESTATE LIMITED LIABILITY COMPANY ? RELATED PARTY
(CONTINUED)
ownership interest in Tunicom. These individuals received their
ownership interest in Tunicom by providing funding to Tunicom on behalf
of All-State. The Company?s share of net income was adjusted by $4,578
for net accumulative ownership interest adjustments for the year ended
June 30, 2007.
The Company and its general partner abstaining, representing a majority
interest in Tunicom voted to approve the sale of land transaction and
the payment at closing of a fee in the amount of $250,000 to All-State
Properties, L.P.?s general partner for obtaining all of the necessary
approvals, governmental and otherwise required under the agreement of
purchase and sale and for assisting the buyer in securing the required
financing. The general partner of All-State Properties, L.P. is the
president of the management company of Tunicom.
NOTE 3 ? NOTES RECEIVABLE ? PARTNERS
The notes receivable ? partners had a stated interest rate of 4% per
annum, are non-recourse and are payable solely from the Company?s
distributions. The Company has a lien on and a security interest in the
130,000 units purchased with these notes. All cash distributions are to
be applied first to accrued interest, and then as a reduction of
principal until paid in full. The notes and interest receivable have no
maturity dates and because they are payable solely from the
distributions, are reflected as a reduction of the equity of the
Company. In February, 2007, the Company distributed $6,500 to these
partners (See Note 5) that was applied to accrued interest receivable.
The balance of the notes and accrued interest were written off after the
distribution was applied.
NOTE 4 - ACCOUNTS PAYABLE AND OTHER LIABILITIES:
Account payable and other
liabilities consist of the
following at June 30,
2 0 0 7 2 0 0 6
Fees $ 28,134 $ 22,578
Other - 1,800
$ 28,134 $ 24,378
The Company has $28,134 of cash remaining at June 30, 2007 for the payment
of accounts payable and other liabilities. Any cash shortfalls will
require partners? capital contributions to satisfy any remaining
liabilities.
II-19
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 5 - PARTNERS? CAPITAL (DEFICIENCY)
In February 2007, the Company made a final distribution to its partners in
an aggregate amount of $155,903, or approximately $0.05 per partnership
unit.
NOTE 6 ? NOTES PAYABLE ? RELATED PARTY
As of June 30, 2006, the Company had an unsecured demand note with Tunicom
including accrued interest in the amount of $185,909. Interest on the note
accrued at 6% per annum. In January 2007, the note and accrued interest
was paid off in full. Interest expense for the years ended June 30, 2007,
2006 and 2005 was $11,052, $9,513 and $7,568, respectively.
NOTE 7 ? ACQUISITION AGREEMENT
The Company had been negotiating a definitive agreement with Hubei
Longdan Biological Medicine Technology Co., Ltd. (?Longdan?), a company
organized under the laws of the People?s Republic of China (the ?PRC?),
pursuant to which the Company would issue approximately eighty nine
percent (89%) of its capital stock to Longdan?s shareholders in return
for the acquisition of the business of Longdan (the ?Acquisition?).
Longdan is engaged in the production and sale of pharmaceutical products
in the PRC.
On March 14, 2007, All-State Properties L.P., Longdan Delaware, Longdan
and Longdan International Inc., a corporation formed under the laws of
Nevis (?Longdan International?), entered into an Acquisition Agreement
(the ?Agreement?) pursuant to which the Company will acquire Longdan
International and an indirect interest in Longdan and the shareholders
of Longdan International will acquire a controlling interest in the
Company.
Under the terms of the Agreement, it is contemplated that All-State
Properties L.P. will convert from a Delaware limited partnership to a
newly-formed Delaware corporation to be called Longdan International
Holdings, Inc. (?LIH?) and Longdan International will merge with and
into Longdan Delaware. At the Merger effective time (as defined in the
Agreement), the shareholders of Longdan will be issued shares
representing approximately eighty nine percent (89%) of the capital
stock of LIH and the Company?s shareholders will ultimately hold shares
representing approximately eleven percent (11%) of the capital stock of
the Company, in each case, on an ?as if converted basis?.
The Acquisition has been structured to comply with certain limitations
on the foreign ownership of Chinese companies under the laws of the PRC.
In anticipation of the possible Acquisition, on December 20, 2006,
Longdan entered into certain agreements with Longdan International.
Pursuant to these agreements, Longdan International provides exclusive
technology consulting and other general business operations services to
Longdan in return for payment of consulting fees that are equal to
II-20
ALL-STATE PROPERTIES L.P. AND SUBSIDIARY
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006, AND 2005
NOTE 7 ? ACQUISITION AGREEMENT (Continued)
Longdan?s net profits. Longdan?s shareholders have pledged their equity
interest in Longdan to Longdan International to secure the contract
obligations and have granted Longdan International an irrevocable proxy
to vote their interests and an exclusive option to purchase these
interests, which arrangements are enforceable to the fullest extent
permitted under the laws of the PRC.
Longdan has advised the Company that it believes that this structure
qualifies Longdan International as a variable interest entity permitted
to consolidate its financial statements with Longdan, the operating
entity with which it has qualifying contractual arrangements.
Longdan has agreed to pay all costs associated with the Acquisition,
including legal fees incurred in connection with the related corporate law
transactions and required filings under the securities laws, and has also
agreed to pay for any costs incurred by the Company in connection with
maintaining its registration under the Securities Exchange Act of 1934, as
amended, after June 30, 2007. The Acquisition will be accounted for as a
reverse merger transaction that uses the historical asset values of
Longdan to determine the valuation of the transaction.
The approval of the Company?s partners is a condition to the consummation
of the Acquisition. In this regard of April 16, 2007, the Company filed a
Preliminary Proxy Statement with the United States Securities Exchange
Commission (?SEC?) in connection with a meeting of partners to vote on
the Acquisition.
The Company received comments from the SEC on the proxy material and has
filed an amendment to its preliminary proxy materials responsive to the
comments. It is waiting for the SEC to complete its review of its
response. The acquisition of the Longdan business is contingent on the
SEC?s approval of the proxy material and the affirmative vote in favor of
the Acquistion by the Company?s partners, as well as the satisfaction of
certain other conditions to closing, including payment of all related
expenses by Longdan. The Company can provide no assurances that such
approvals will be obtained, that the other conditions to the closing will
be satisfied and that the Acquisition will be consummated.
NOTE 8 ? BUSINESS CONTINUITY
These consolidated financial statements have been prepared on a going
concern basis. As of February 6, 2007, the Company has realized its last
remaining asset and has distributed all cash except for $28,134 in bank at
June 30, 2007. This cash will be used to pay the outstanding liabilities
of the Company. Any future liabilities of the Company will require partner
contribution to satisfy. If the Company does not reach a satisfactory
agreement with Longdan or fails to receive approval for the Acquisition
from its partners, it intends to dissolve the Company. Accordingly, the
Company may not continue in business in the future.
II-21
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
C O N T E N T S
PAGE
Report of Independent Registered Public Accounting Firm ?
Morrison, Brown, Argiz & Farra, LLP II-23
Report of Independent Registered Public Accounting Firm ?
Freeman, Buczyner & Gero II-24
Financial Statements:
Balance Sheets II-25
Statements of Operations II-26
Statements of Changes in Members? Equity II-27
Statements of Cash Flows II-28
Notes to Financial Statements II-30
II-22
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Members of
Tunicom, LLC
Lauderhill, Florida
We have audited the accompanying balance sheet of Tunicom, LLC (the
?Company?) as of June 30, 2007 and the related statements of operations,
changes in members? equity, and cash flows for the year ended June 30, 2007.
These financial statements are the responsibility of the Company?s
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of Tunicom, LLC, as
of June 30, 2006, and for the years ended June 30, 2006 and 2005 were
audited by other auditors who have ceased operations. Those auditors
expressed an unqualified opinion on those financial statements in their
report dated September 15, 2006.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Tunicom, LLC as of June
30, 2007 and the results of its operations and its cash flows for the year
ended June 30, 2007 in conformity with accounting principles generally
accepted in the United States of America.
As discussed in Note 7, the Company has distributed all assets and
liquidated all liabilities and plans to terminate the limited liability
corporation.
/s/ Morrison, Brown, Argiz & Farra, LLP
Miami, Florida
September 17, 2007
II-23
FREEMAN, BUCZYNER & GERO
ONE SOUTHEAST THIRD AVENUE
SUITE 2150
MIAMI, FLORIDA 33131
305-375-0766
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM *
To the Members of
Tunicom LLC
Lauderhill, Florida
We have audited the accompanying balance sheets of Tunicom LLC (formerly
Unicom Partnernship, Ltd.) as of June 30, 2006, and 2005 and the related
statements of operations, changes in member?s equity and cash flows for each
of the three years in the period ended June 30, 2006. These financial
statements are the responsibility of the Company?s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provided a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tunicom LLC as of June 30,
2006 and 2005, and the results of its operations and its cash flows for each
of the three years in the period ended June 30, 2006, in conformity with
generally accepted accounting principles in the United States of America.
Miami, Florida
September 15, 2006
* This report is a copy of the previously issued report and the predecessor
auditor has not reissued the report.
II-24
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
BALANCE SHEETS
JUNE 30, 2007 AND 2006
A S S E T S
JUNE 30
2 0 0 7 2 0 0 6
Land and development costs $ - $ 828,718
Cash - 5,533
Funds held in escrow - 50,000
Notes receivable and accrued interest ?
related parties - 199,855
Prepaid expenses - 30,025
TOTAL ASSETS $ - $ 1,114,131
LIABILITIES AND MEMBERS? EQUITY
LIABILITIES:
Accounts payable and accrued
expenses $ - $ 72,403
Notes payable (including accrued
interest of $0 and $27,127,
respectively) - 334,275
Deposit on sale of land - 50,000
Total liabilities - 456,678
MEMBERS? EQUITY - 657,453
TOTAL LIABILITIES AND MEMBERS?
EQUITY $ - $ 1,114,131
The accompanying notes are an integral part of these
financial statements.
II-25
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
2 0 0 7 2 0 0 6 2 0 0 5
REVENUES:
Gain on sale of land $ 661,397 $ - $ -
Interest and other
income 16,902 10,225 8,230
678,299 10,225 8,230
EXPENSES:
General and
administrative 62,373 20,258 23,127
Taxes and insurance 8,448 25,396 18,341
70,821 45,654 41,468
NET INCOME (LOSS) BEFORE
OTHER EXPENSES: 607,478 (35,429) (33,238)
OTHER EXPENSES:
Interest 15,620 31,297 14,589
NET INCOME (LOSS) $ 591,858 $ (66,726) $ (47,827)
The accompanying notes are an integral part of these
financial statements.
II-26
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
STATEMENTS OF CHANGES IN MEMBERS? EQUITY
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
2 0 0 7 2 0 0 6 2 0 0 5
MEMBERS? EQUITY
- Beginning $ 657,453 $ 724,179 $ 772,006
Net income (loss) 591,858 (66,726) (47,827)
Distributions (1,249,311) - -
MEMBERS? EQUITY
- Ending $ - $ 657,453 $ 724,179
The accompanying notes are an integral part of these
financial statements.
II?27
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
2 0 0 7 2 0 0 6 2 0 0 5
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
Cash Flows from Operating
Activities:
Interest received $ 31,237 $ 5,400 $ -
Cash paid for interest (42,747) - (13,379)
Cash paid to suppliers and
employees (24,435) (15,039) (19,377)
Cash paid for taxes and insurance (48,640) (984) (18,341)
Net Cash Used in
Operating Activities (84,585) (10,623) (51,097)
Cash Flows from Investing
Activities:
Capital expenditures - (14,909) (12,212)
Net cash from sale of land 1,490,115 - -
Net Cash Provided by (Used in)
Investing Activities 1,490,115 (14,909) (12,212)
Cash Flows from Financing
Activities:
Cash paid to related party (40,125) (30,420) (33,000)
Cash received notes receivable -
related parties, net 185,521 58,770 97,362
Net repayment of notes payable (307,148) - -
Distribution to members, net (1,249,311) - -
Net Cash (Used in) Provided
by Financing Activities (1,411,063) 28,350 64,362
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS (5,533) 2,818 1,053
CASH AND CASH EQUIVALENTS -
BEGINNING OF YEAR 5,533 2,715 1,662
CASH AND CASH EQUIVALENTS -
END OF YEAR $ - $ 5,533 $ 2,715
The accompanying notes are an integral part of these
financial statements.
II-28
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
YEARS ENDED JUNE 30,
2 0 0 7 2 0 0 6 2 0 0 5
Reconciliation of net income
(loss) to net cash used in
operating activities:
Net Income (Loss) $ 591,858 $ (66,726) $ (47,827)
Adjustments to reconcile net
income (loss) to net cash
used in operating activities:
Gain on sale of land (661,397) - -
Changes in assets and liabilities:
Decrease (increase) in funds
held in escrow $ 50,000 $ - $ (50,000)
Decrease (increase) in accrued
interest ? notes receivable 14,336 (4,825) (8,230)
Decrease in prepaid assets 30,025 - 3,219
(Decrease) increase in accounts
payable and accrued expenses (32,278) 32,571 531
(Decrease) increase in accrued
interest payable (27,129) 28,357 1,210
(Decrease) increase in deposit
on sale of land (50,000) - 50,000
Total Adjustments (676,443) 56,103 3,270
NET CASH USED IN OPERATING
ACTIVITIES $ (84,585) $ (10,623) $ (51,097)
The accompanying notes are an integral part of these
financial statements.
II-29
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Operations
Tunicom LLC (?Tunicom? or the ?Company?) (formerly known as
Unicom Partnership, Ltd.) was formed on October 27, 1986 to
acquire land from City Planned Communities (a former related
entity liquidated on July 1, 2001) for the purpose of
constructing and operating a 324 unit rental project in Broward
County, Florida, which operated as an adult apartment rental
complex (AARC). In August 2000, the rental property was sold.
In the current year the only asset of the Company, five acres
of vacant undeveloped land was sold. The Company is inactive at
June 30, 2007.
B. Cash and Cash Equivalent
For purposes of the statements of cash flows, the Company
considers all cash on hand with maturities of three months or
less to be cash equivalents.
C. Land and Development Cost
Land is recorded at cost and includes costs capitalized in
connection with the development of real estate.
D. Concentration of Credit Risk
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash and
cash equivalents. The Company maintains its cash balances in
one financial institution. The balances are insured by the
federal deposit insurance corporation up to $100,000.
E. Fair Value of Financial Instrument
Management estimates that the fair market value of cash,
receivables, accounts payable, accrued expenses and short-term
borrowings are not materially different from their respective
carrying values due to the short-term nature of these
instruments. Disclosures about the fair value of financial
instruments are based on pertinent information available to
management as of June 30, 2006.
F. Income Tax Reporting
No provision is made in the financial statements for income
taxes since such taxes are the responsibility of the members
and not the Company.
II?30
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
H. Recent Accounting Pronouncements
Accounting Changes and Error Corrections
In May 2005, the Financial Accounting Standards Board (?FASB?)
issued Statement of Financial Accounting Standards (?SFAS?)
No. 154, ?Accounting Changes in Error Corrections?. SFAS No.
154 establishes, unless impracticable, retrospective
application as the required method for reporting a change in
accounting principles in the absence of explicit transition
requirements specific to a newly adopted accounting principle.
This statement was effective for the Company for all accounting
changes and any error corrections occurring after July 1, 2006.
The adoption of this statement did not have an effect on the
Company?s financial statements.
Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements
In September 2006, the Securities and Exchange Commission
(?SEC?) issued Staff Accounting Bulletin No. 108, (?SAB No.
108?) ?Considering the Effects of Prior Year Misstatements
When Quantifying Misstatements in Current Year Financial
Statements?. SAB No. 108 addresses how to quantify the effect
of an error on the financial statements concluding that the
dual balance sheet and income approach be used to compute the
impact of the amount of a misstatement. Specifically, the
amount should be computed using both the ?rollover? (income
statement approach) and ?iron curtain? (balance sheet
approach) methods. SAB No. 108 is effective for fiscal years
ending after November 15, 2006. The Company adopted SAB No. 108
during the 2007 fiscal year. The adoption of this statement did
not have a material effect on the Company?s financial
statements.
II?31
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
H. Recent Accounting Pronouncements (Continued)
Taxes Collected From Customers For Governmental Authorities
In June 2006, the FASB ratified the consensus reached on
Emerging Issues Task Force (?EITF?) Issue No. 06-3 ?How Taxes
Collected from Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That
Is, Gross Versus Net Presentation)? (?EITF Issue No. 06-3?).
The scope of EITF Issue No. 06-3 includes any transaction-based
tax assessed by a governmental authority that is imposed
concurrent with or subsequent to a revenue-producing
transaction between a seller and a customer. The scope does not
include taxes that are based on gross receipts or total
revenues imposed during the inventory procurement process. The
gross versus the net classification on the income statement of
that tax is an accounting policy decision and a voluntary
change would be considered a change in accounting policy
requiring the application of SFAS No. 154, ?Accounting Changes
and Error Corrections?. EITF Issue No. 06-3 is effective for
interim and annual periods beginning after December 15, 2006.
The Company adopted this statement in the quarter ended March
31, 2007 and it did not have any impact on the Company?s
financial statements.
Fair Value Measurement
In September 2006, the FASB issued SFAS No. 157, ?Fair Value
Measurement? (?SFAS 157?). SFAS No. 157 provides enhanced
guidance for measuring fair value. Under the standard, fair
value refers to the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants in the market in which the entity
transacts. The standard clarifies that fair value should be
based on assumptions market participants would use when pricing
the asset or liability. This statement is effective for fiscal
years beginning after November 15, 2007 with early adoption
permitted. Management has not determined what impact, if any,
adopting this statement will have on the Company?s financial
statements.
II-32
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Recent Accounting Pronouncements (Continued)
The Fair Value Option for Financial Assets and Financial
Liabilities
In February 2007, the FASB issued SFAS No. 159, ?The Fair Value
Option for Financial Assets and Financial Liabilities ?
Including an Amendment of FASB Statement No. 115? (?SFAS No.
159?). Under SFAS No. 159, companies have an opportunity to use
fair value measurements in financial reporting and permits
entities to choose to measure many financial instruments and
certain other items at fair value. SFAS No. 159 is effective
for fiscal years beginning after November 15, 2007. Management
has not determined what impact, if any, adopting this statement
will have on the Company?s financial statements.
NOTE 2 ? NOTE RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES
Tunicom advanced funds to two related entities under common ownership.
The funds are due on demand and accrued interest at 6% per annum.
Accrued interest of $14,435 is included in the notes as of June 30,
2006. The note and accrued interest has been paid in full during the
fiscal year ended June 30, 2007.
NOTE 3 ? ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued
expenses consist of the following
at June 30,:
2 0 0 7 2 0 0 6
Accounts payable (includes
$31,375 of related party
amounts for 2006) $ - $ 37,211
Real estate taxes - 35,192
$ - $ 72,403
II-33
TUNICOM LLC (A LIMITED LIABILITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
NOTE 4 ? NOTES PAYABLE
Tunicom had a secured promissory note with a financial institution that
accrued interest at 6% per annum through September 29, 2004 and at the
stated prime rate plus 2% per annum thereafter. The note was secured by
the Company?s assets and was paid off on December 19, 2006. The total
balance outstanding including accrued interest at June 30, 2006 was
$248,000.
Tunicom had a line of credit that was entered into with a financial
institution on November 15, 2005 for $100,000. The line of credit was
secured by a certificate of deposit held in the name of a related party
(the General Partner of All-State Properties, L.P.). The line accrued
interest at the stated prime rate plus .5%. The total balance outstanding
including accrued interest at June 30, 2006 was $86,275. The line of
credit was paid off in full on December 19, 2006.
Total interest expense for the years ended June 30, 2007, 2006 and 2005
was approximately $15,620, $31,297 and $14,589, respectively.
NOTE 5 ? SALE OF LAND
On December 19, 2006 Tunicom sold its sole asset, five acres of
undeveloped land for $1,800,000 and recognized a gain of $661,397. Members
of Tunicom (with All-State Properties L.P. and its general partner
abstaining) representing a majority interest in Tunicom voted to approve
the transaction and the payment at closing of a fee in the amount of
$250,000, to All-State Properties, L.P.?s general partner for obtaining
all of the necessary approvals, governmental and otherwise, required under
the agreement of purchase and sale and for assisting the buyer in securing
the required financing. The general partner of All-State Properties L.P.
is the president of the management company of Tunicom. This fee was netted
in the gain on sale of land for the year ended June 30, 2007.
II-34
TUNICOM LLC(A LIMITED LIABILITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2006, 2005 AND 2004
NOTE 6 ? TRANSACTIONS WITH RELATED PARTIES
A. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses include amounts payable to
entities under common ownership in the amount of $31,375 as of June 30,
2006.
B. Management Fees
Tunicom pays management fees to a company owned by the general partner
at a rate of $1,250 a month. The total fee was $8,750 for 2007 and
$15,000 each for the two years in the periods ended June 30, 2006 and
2005 and is included in general and administrative expense.
C. Land Sale Fees
Tunicom made a $250,000 payment to the general partner of All-State
Properties L.P. (Member), for services rendered in the sale of land for
the year ended June 30, 2007. (See Note 5)
D. Distributions
During fiscal year ended June 30, 2007 certain members returned, in the
aggregate, $19,420 of distributions received to settle the remaining
liabilities of the Company.
NOTE 7 ? BUSINESS LIQUIDATION
The Company has distributed all assets and liquidated all liabilities
and plans to terminate the legal limited liability corporation.
II-35
PART II
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no disagreements with accountants on accounting or
financial disclosures during the last three fiscal years. On January 1, 2007,
Freeman, Buczyner & Gero (?FBG?) resigned from their position as our
independent registered public accounting firm and our General Partner retained
the services of Morrison, Brown, Argiz & Farra, LLP to serve as our new
independent registered public accounting firm.
The resignation of FBG became effective as of the date FBG
completed its procedures on our unaudited interim financial statements as of
September 30, 2006 and for the three month period then ended and the quarterly
report on Form 10-Q in which such unaudited interim financial statements were
included. For more information with respect to this matter, see our current
reports on Form 8-K and 8-K/A filed on May 17, 2007 and June 18, 2007,
respectively.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures
The Company?s general partner, who serves as its chief executive
and chief financial officer, evaluated the effectiveness of the Company?s
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-
15(e) promulgated under the Securities Exchange Act of 1934, as amended (the
?Exchange Act?)) as of the end of the period covered by this report. Based
on this evaluation, the general partner has concluded that, at June 30, 2007,
the Company?s disclosure controls and procedures were effective to ensure that
information required to be disclosed by the Company in the reports it files or
submits under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC?s rules and forms.
(b) Changes in internal controls over financial reporting:
There has been no changes in the Company?s internal control over
financial reporting during the year ended June 30, 2007 that has materially
affected, or is reasonably likely to affect, the Company?s internal control
over financial reporting.
ITEM 9B OTHER INFORMATION
None.
II-36
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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 78 General Partner;
President and Chief
Executive Officer of
predecessor All-State
Properties, L.P. since
1971
Managing Member of
Tunicom LLC.
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 three year period
ended June 30, 2007.
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-
III-1
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth as of June 30, 2007 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).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The following discussion of certain relationships and related
transactions should be read in conjunction with our financial statements and
notes as of June 30, 2007.
Name of specified person: Stanley R. Rosenthal
Relationship of such person: General Partner with
5% ownership interest
Amount of transactions: Land sale consulting fees
(netted in gain on sale
of land) $ 250,000
III-2
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
On January 1, 2007, the Registrant retained the services of
Morrison, Brown, Argiz & Farra, LLP as independent accountants for the Company
replacing Freeman, Buczyner & Gero.
The following fees were invoiced by the auditing firm for the
years ended June 30,
2 0 0 7 2 0 0 6
Audit fees $ 20,500 $ 20,000
Tax fees 3,500 3,500
Total $ 24,000 $ 23,500
Professional services are approved by the Company?s general partner prior to
the completion of the audit.
Tax fees consists of fees billed for professional services including
assistance regarding federal and state tax compliance and related services.
III-3
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1. FINANCIAL STATEMENTS:
PAGE
Financial Statements included in Part II
of this report:
Registrant:
Balance Sheets as of June 30, 2007 and 2006 II-9
Statements of Operations for the years ended
June 30, 2007, 2006, and 2005 II-10
Statements of Changes in Partners' Capital
(Deficiency) for the years ended June 30, 2007,
2006 and 2005 II-11
Statements of Cash Flows for the years ended
June 30, 2007, 2006 and 2005 II-12/13
Notes to Financial Statements for the years
ended June 30, 2007, 2006 and 2005 II-14/21
Investment in real estate limited liability company:
Balance Sheets as of June 30, 2007 and 2006 II-25
Statements of Operations for the years ended
June 30, 2007, 2006 and 2005 II-26
Statements of Changes in Members? Equity
for the years ended June 30, 2007, 2006
and 2005 II-27
Statements of Cash Flows for the years ended
June 30, 2007, 2006 and 2005 II-28/29
Notes to Financial Statements for the years
Ended June 30, 2007, 2006 and 2005 II-30/35
2. FINANCIAL STATEMENT SCHEDULES:
All other schedules are omitted, as the required information is
not applicable or the information is presented in the financial
statements or the notes thereto.
IV-1
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
3. EXHIBITS: PAGE NO. OR INCORPORATION
BY REFERENCE
See Exhibit Index below:
(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. Tunicom 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 Tunicom 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 Tunicom 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
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
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 Tunicom 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 Tunicom 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 Tunicom and to Form 10-K for the year
Senior Lifestyle Corporation ended June 30, 1992
dated as of Jan. 1, 1992
k. Management Agreement Incorporated by reference
between Tunicom and Stanley to Form 10-K for the year
R. Rosenthal, Managing ended June 30, 1995
Partner of Owner dated
August 1, 1995
l. Employment Agreement Incorporated by reference
between Tunicom and Stanley to Form 10-K for the year
R. Rosenthal, effective ended June 30, 1995
August 1, 1995
m. Lease and option to pur- Incorporated by reference
chase agreements between to Form 8-K dated October
Tunicom and CareMatrix 10, 1997
Corporation effective
as of July 1, 1997
n. Disposition of assets in Incorporated by reference
accordance with Option to Form 8-K dated August
Agreement on August 16, 2000 16, 2000
o. Acquisition Agreement dated Incorporated by reference as
March 14, 2007 by and among Exhibit 10.1 to Form 8K dated
All-State Properties, L.P., March 14, 2007
Hubei Longdan (Delaware), Inc.,
Hubei Longdan Biological Medicine
Technology Co., Ltd. And Longdan
International, Inc.
IV-3
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
(11) Exhibits indicating computa- IV-5
tion of earnings per unit for
the years ended June 30, 2007
2006 and 2005
(16) Letter of change in certifying Incorporated by reference to Form
accountant as of January 1, 2007 8-K/A dated June 18, 2007
(22) Subsidiaries of the Registrant:
(d) NONE
Signature Page IV-6
(31) Certification pursuant to IV-7
18 U.S.C. Section 1350, as
adopted pursuant to Section
302 of the Sarbanes-Oxley
Act of 2002
(32) Certification of Chief IV-8
Executive Officer pursuant
to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906
of the Sarbanes-Oxley Act of
2002
IV-4
EXHIBIT 11
ALL-STATE PROPERTIES L.P.
(A LIMITED PARTNERSHIP)
EXHIBITS INDICATING THE COMPUTATION OF EARNINGS PER UNIT
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
2 0 0 7 2 0 0 6 2 0 0 5
Computation of pri-
mary earnings per
unit:
Units issued 3,118,065 3,118,065 3,118,065
3,118,065 3,118,065 3,118,065
Net income (loss)
before extraordinary
items $ 141,243 $ (78,016) $ (72,285)
Computation of fully
diluted income (loss)
per unit before extra-
ordinary items $ 0.05 $ (0.03) $ (0.02)
Net income (loss)
after extraordinary
items $ 141,243 $ (78,016) $ (72,285)
Computation of fully
diluted income (loss)
per unit after extra-
ordinary items $ 0.05 $ (0.03) $ (0.02)
(A) Weighted average number of units outstanding
See notes to financial statements.
IV-5
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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: /s/Stanley R. Rosenthal_
STANLEY R. ROSENTHAL
General Partner
Date: September 28, 2007
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.
ALL-STATE PROPERTIES L.P.
By: /s/Stanley R. Rosenthal
STANLEY R. ROSENTHAL
General Partner
Date: September 28, 2007
IV-6
EXHIBIT 31
CERTIFICATION OF CHIEF EXECUTIVE OFFICER OF
ALL-STATE PROPERTIES, L.P.
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Stanley Rosenthal, certify that:
1. I have reviewed this report on Form 10-K of All-State Properties L.P.;
2. Based on my knowledge this report does not contain any untrue statement of a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of , and for, the periods presented in this report;
4. As the registrants certifying officer I am responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant
and have:
a) Designed such disclosure controls and procedures or caused such disclosure
controls and procedures to designed under my supervision, to ensure that
material information relating to the registrant, is made known to us by
others within those entities, particularly during the period in which this
annual report is being prepared;
b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under my
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
c) Evaluated the effectiveness of the registrant?s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end of
the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant?s internal control
over financial reporting that occurred during the registrant?s fourth
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant?s internal control over financial
reporting; and
5. As the registrant?s certifying officer, I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant?s auditors and the audit committee of registrant?s board of
directors (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant?s ability to record,
process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant?s internal
controls over financial reporting.
Date: September 28, 2007
By:/s/Stanley Rosenthal
_____________________
Stanley Rosenthal
General Partner
IV-7
EXHIBIT 32
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Stanley R. Rosenthal, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the
Report on Form 10-K of All-State Properties L.P. for the year ended June 30,
2007 (the ?Report?) fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 and that information contained in
such Report on Form 10-K fairly presents in all material respects the
financial condition and results of operations of All-State Properties L.P.
Date: September 28, 2007
By: /s/Stanley R. Rosenthal
Name: Stanley R. Rosenthal
Title: General Partner
A signed original of this written statement required by Section 906 has been
provided to All-State Properties L.P. and will be retained by All-State
Properties L.P. and furnished to the Securities and Exchange Commission or its
staff upon request.
IV-8