SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  Exchange
Act of 1934

For the quarterly period ending                  June 30, 1999
                               -------------------------------------------------


                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

    For the transition period from                     to
                                  ----------------------------------------------


    Commission File Number:                          1-10104
                           -----------------------------------------------------


                                 United Capital Corp.
--------------------------------------------------------------------------------
               (Exact name of Company as specified in its charter)


       Delaware                                       04-2294493
--------------------------------------------------------------------------------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)

  9 Park Place, Great Neck, New York                                  11021
--------------------------------------------------------------------------------
(Address of principal executive offices)                            (Zip Code)


                                  516-466-6464
--------------------------------------------------------------------------------
                (Company's telephone number, including area code)


                                      N/A
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the Company (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  Company  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

               [X] Yes [ ] No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

            Common stock, $.10 par value 5,013,647 shares outstanding
                             as of August 10, 1999.

                                  Page 1 of 20
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES

                                      INDEX

                          PART I FINANCIAL INFORMATION
                                                                            PAGE
                                                                            ----

ITEM 1.     FINANCIAL STATEMENTS

            Consolidated Balance Sheets as
            of  June 30, 1999 and December 31, 1998                           3

            Consolidated Statements of  Income for
            the Three Months Ended June 30, 1999 and
            1998                                                              4

            Consolidated Statements of Income for the Six
            Months Ended June 30, 1999 and 1998                           5 - 6

            Consolidated Statements of Cash Flows for
            the Six Months Ended June 30, 1999 and
            1998                                                          7 - 8

            Notes to Consolidated Financial Statements                   9 - 13

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS               13 - 19


                      PART II OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS                                                19

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS         19 - 20

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K                                 20

SIGNATURES                                                                   20

                                  Page 2 of 20
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES

           CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 1999 (UNAUDITED)
                             AND DECEMBER 31, 1998
                                 (In Thousands)

              ASSETS                                           1999        1998
              ------                                           ----        ----

CURRENT ASSETS:
        Cash and cash equivalents                           $ 16,115   $  8,154
        Marketable securities                                 20,756     14,290
        Notes and accounts receivable, net                     7,837      7,819
        Inventories                                            4,232      4,339
        Prepaid expenses and other current assets                393        209
                                                            --------   --------
            Total current assets                              49,333     34,811
                                                            --------   --------

     PROPERTY, PLANT & EQUIPMENT, net                          4,699      4,686

     REAL PROPERTY HELD FOR RENTAL, net                       67,740     71,437

     NONCURRENT NOTES RECEIVABLE                                 217        593

     OTHER ASSETS                                              8,678     11,296

     DEFERRED INCOME TAXES                                     2,398      3,289
                                                            --------   --------

             Total assets                                   $133,065   $126,112
                                                            ========   ========

LIABILITIES AND STOCKHOLDERS' EQUITY                           1999        1998
------------------------------------                           ----        ----

CURRENT LIABILITIES:
   Current maturities of long-term debt                     $  5,976   $  5,875
   Current portion of  borrowings under credit facilities      1,400      1,400
   Accounts payable and accrued liabilities                    9,642     10,821
   Income taxes payable                                        7,135      6,355
   Deferred income taxes                                         638        152
                                                            --------   --------

              Total current liabilities                       24,791     24,603
                                                            --------   --------

LONG-TERM LIABILITIES:
   Borrowings under credit facilities                          3,150      3,850
   Long-term debt                                             30,265     26,929
   Other long-term liabilities                                18,306     18,312
                                                            --------   --------

              Total liabilities                               76,512     73,694
                                                            --------   --------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

   Common stock                                                  501        515
   Additional paid-in capital                                    748      3,536
   Retained earnings                                          51,591     45,429
   Accumulated other comprehensive income, net of  tax         3,713      2,938
                                                            --------   --------

          Total stockholders' equity                          56,553     52,418
                                                            --------   --------

          Total liabilities and stockholders' equity        $133,065   $126,112
                                                            ========   ========

                     THE ACCOMPANYING NOTES TO CONSOLIDATED
       FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE BALANCE SHEETS.


                                  Page 3 of 20

<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                             1999         1998
                                                             ----         ----
REVENUES:
     Net sales                                            $  7,912    $  8,634
     Rental revenues from real estate operations             6,801       6,362
                                                          --------    --------

     Total revenues                                         14,713      14,996
                                                          --------    --------

COSTS AND EXPENSES:
     Cost of  sales                                          5,478       5,997
     Real estate operations -
          Mortgage interest expense                            753         661
          Depreciation expense                               1,380       1,396
          Other operating expenses                           1,653       1,667
     General and administrative expenses                     1,438       2,052
     Selling expenses                                          993         961
                                                          --------    --------


Total costs and expenses                                    11,695      12,734
                                                          --------    --------

Operating income                                             3,018       2,262
                                                          --------    --------

OTHER INCOME (EXPENSE):
     Interest and dividend income                              455         352
     Interest expense                                         (165)       (206)
     Other income and expense, net                           1,183       3,607
                                                          --------    --------

Total other income                                           1,473       3,753
                                                          --------    --------

Income before income taxes                                   4,491       6,015

Provision for income taxes                                   1,915       2,592
                                                          --------    --------

Net income                                                $  2,576    $  3,423
                                                          ========    ========

EARNINGS PER COMMON SHARE:

    Basic                                                 $    .51    $    .66
    Diluted                                               $    .51    $    .64


           THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    ARE AN INTEGRAL PART OF THESE STATEMENTS



                                  Page 4 of 20
<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                 FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)



                                                          1999        1998
                                                        --------    --------
REVENUES:
     Net sales                                          $ 15,565    $ 16,940
     Rental revenues from real estate operations          13,323      12,604
                                                        --------    --------

     Total revenues                                       28,888      29,544
                                                        --------    --------

COSTS AND EXPENSES:
     Cost of  sales                                       11,138      11,881
     Real estate operations -
       Mortgage interest expense                           1,356       1,354
       Depreciation expense                                2,747       2,795
       Other operating expenses                            3,661       2,378
     General and administrative expenses                   2,976       3,175
     Selling expenses                                      1,984       1,898
                                                        --------    --------

Total costs and expenses                                  23,862      23,481
                                                        --------    --------

Operating income                                           5,026       6,063
                                                        --------    --------

OTHER INCOME (EXPENSE):
     Interest and dividend income                            765         747
     Interest expense                                       (328)       (429)
     Other income and expense, net                         5,184       3,784
                                                        --------    --------

Total other income                                         5,621       4,102
                                                        --------    --------

Income from continuing operations before income taxes     10,647      10,165

Provision for income taxes                                 4,485       4,328
                                                        --------    --------

Income from continuing operations                          6,162       5,837
                                                        --------    --------


                             Page 5 of 20

<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
           FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (CONTINUED)
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)



                                                              1999          1998
                                                         ---------    ----------
DISCONTINUED OPERATIONS:
    Gain on disposal of discontinued operations,
      net of tax provision of $3,700                             0         4,849
                                                         ---------    ----------


Income from discontinued operations, net of tax                  0         4,849
                                                         ---------    ----------


Net income                                               $   6,162    $   10,686
                                                         =========    ==========


EARNINGS PER COMMON SHARE:
    Basic- continuing operations                         $    1.22    $    1.12
    Basic- discontinued operations                             .00          .92
                                                         ---------    ----------
    Net income per basic common share                    $    1.22    $    2.04
                                                         =========    ==========

    Diluted- continuing operations                       $    1.21    $    1.09
    Diluted- discontinued operations                           .00          .91
                                                         ---------    ----------
    Net income per diluted common share                  $    1.21    $    2.00
                                                         =========    ==========



           THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    ARE AN INTEGRAL PART OF THESE STATEMENTS


                                  Page 6 of 20
<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                              1999       1998
                                                                            --------    ------
<S>                                                                        <C>         <C>
Cash Flows From Operating Activities:
    Net income                                                             $  6,162    $ 10,686
                                                                           --------    --------
    Adjustments to reconcile net income to net cash
       provided by operating activities:
    Gain on disposal of investments in affiliates                            (1,989)          0
    Gain on sale of discontinued operations, net of tax                           0      (4,849)
    Purchase of trading securities                                                0      (5,891)
    Proceeds from sale of trading securities                                      0       5,966
    Depreciation and amortization                                             3,333       3,237
    Loss from equity investments                                                  0         176
    Gain on sale of trading securities                                            0         (75)
    Changes in assets and liabilities (A)                                     4,020      (4,880)
                                                                           --------    --------


       Total adjustments                                                      5,364      (6,316)
                                                                           --------    --------

         NET CASH PROVIDED BY OPERATING ACTIVITIES                           11,526       4,370
                                                                           --------    --------

Cash Flows From Investing Activities:
       Purchase of available-for-sale securities                             (5,205)          0
       Proceeds from disposal of investments in affiliates                    2,450           0
       Proceeds from sale of discontinued operations                              0      16,000
       Acquisition of property, plant and equipment                            (689)       (589)
       Investment in and advances to affiliates                                 (57)       (359)
                                                                           --------    --------

         NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES                 (3,501)     15,052
                                                                           --------    --------

Cash Flows From Financing Activities:
       Principal payments on mortgage commitments, notes and loans           (3,123)     (2,945)
       Proceeds from mortgage commitments, notes and loans                    6,560           0
       Net borrowings under credit facilities                                  (700)     (5,300)
       Purchase and retirement of common shares                              (2,943)     (1,990)
       Proceeds from exercise of stock options                                  142          18
                                                                           --------    --------

         NET CASH USED IN FINANCING ACTIVITIES                                  (64)    (10,217)
                                                                           --------    --------

Net increase in cash and cash equivalents                                     7,961       9,205

CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD                             8,154       5,250
                                                                           --------    --------

CASH AND CASH EQUIVALENTS, AT END OF PERIOD                                $ 16,115    $ 14,455
                                                                           ========    ========
</TABLE>

                                  Page 7 of 20

<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (CONTINUED)
                                   (UNAUDITED)
                                 (IN THOUSANDS)

                                                    1999          1998
                                                ------------   ------------
Supplemental Disclosures of Cash Flow
     Information:
       Cash Paid During the Period For:
         Interest                                   $1,622      $1,746
         Taxes                                       2,811       3,534
                                                     =====       =====

Supplemental Schedule of Noncash Investing
   and Financing Activities:
        See Notes to Consolidated Financial Statements


(A) Changes in assets and liabilities for the six months ended June 30, 1999 and
1998, are as follows:

Notes and accounts receivable, net                    ($18)       $2,892
Inventories                                            107           163
Prepaid expenses and other current assets             (184)          (31)
Deferred income taxes                                  891           346
Real property held for rental, net                   1,038        (5,275)
Noncurrent notes receivable                            376           (70)
Other assets                                         2,214          (157)
Accounts payable and accrued liabilities            (1,179)       (3,288)
Income taxes payable                                   780           606
Other long-term liabilities                             (5)          (66)
                                                    ------       --------

         Total                                      $4,020       ($4,880)
                                                    ======       ========


       THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN
                       INTEGRAL PART OF THESE STATEMENTS

                                  Page 8 of 20
<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

BASIS OF PRESENTATION
---------------------

         The accompanying  unaudited Consolidated Financial Statements have been
prepared in  accordance  with the  instructions  to Form 10-Q used for quarterly
reports  under  Section 13 or 15(d) of the  Securities  Exchange Act of 1934, as
amended,  and therefore,  do not include all information and footnotes necessary
for a fair  presentation of financial  position,  results of operations and cash
flows in conformity with generally accepted accounting principles.

         The consolidated financial information included in this report has been
prepared in conformity  with the  accounting  principles and methods of applying
those accounting principles,  reflected in the Consolidated Financial Statements
included  in the  Annual  Report  on Form 10-K  filed  with the  Securities  and
Exchange Commission for the year ended December 31, 1998.

         All  adjustments  necessary for a fair statement of the results for the
interim periods presented have been recorded.

         The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year.

INVENTORIES
-----------

         The components of inventory are as follows:

(In Thousands)                      June 30, 1999      December 31, 1998
                                    -------------      -----------------

Raw materials                               $2,266               $1,851
Work in process                                401                  403
Finished goods                               1,565                2,085
                                             -----                -----
                                            $4,232               $4,339
                                            ======               ======

CONTINGENCIES
-------------

         The Company has  undertaken  the  completion of  environmental  studies
and/or remedial action at Metex' two New Jersey facilities.

         The process of remediation has begun at one facility pursuant to a plan
filed with the New Jersey  Department  of  Environmental  Protection  and Energy
("NJDEPE"). Environmental experts engaged by the Company estimate that under the
most probable  remediation  scenario the remediation of this site is anticipated
to  require  initial  expenditures  of  $860,000  including  the cost of capital
equipment,  and $86,000 in annual operating and maintenance costs over a 15-year
period.

                                  Page 9 of 20


<PAGE>

         Environmental  studies at the second facility indicate that remediation
may be  necessary.  Based  upon the  facts  presently  available,  environmental
experts  have  advised  the  Company  that under the most  probable  remediation
scenario,  the estimated  cost to remediate  this site is anticipated to require
$2.3 million in initial costs,  including  capital equipment  expenditures,  and
$258,000 in annual  operating and maintenance  costs over a 10-year period.  The
Company may revise such estimates in the future due to the uncertainty regarding
the nature, timing and extent of any remediation efforts that may be required at
this site,  should an  appropriate  regulatory  agency  deem such  efforts to be
necessary.

         The  foregoing  estimates  may also be revised by the Company as new or
additional  information in these matters becomes  available or should the NJDEPE
or other  regulatory  agencies  require  additional or  alternative  remediation
efforts in the future.  It is not  currently  possible to estimate  the range or
amount of any such liability.

         Although the Company  believes  that it is entitled to full defense and
indemnification  with respect to  environmental  investigation  and  remediation
costs under its  insurance  policies,  the  Company's  insurers have denied such
coverage. Accordingly, the Company has filed an action against certain insurance
carriers  seeking  defense  and  indemnification  with  respect to all prior and
future costs incurred in the  investigation and remediation of these sites. Upon
the  advice  of  counsel,  the  Company  believes  that  based  upon  a  present
understanding of the facts and the present state of the law in New Jersey, it is
probable  that the Company  will prevail in the pending  litigation  and thereby
access all or a very  substantial  portion of the insurance  coverage it claims;
however, the ultimate outcome of litigation cannot be predicted.

         Amounts   recorded  as   anticipated   insurance   recoveries   in  the
accompanying Consolidated Financial Statements are in dispute with the Company's
insurance carriers. Management believes that recoveries in excess of the amounts
reflected in the accompanying  Consolidated Financial Statements,  are available
under  the  insurance  policies  but  have not been  recorded.  There  can be no
assurance,  however,  that the  Company  will  prevail in its  efforts to obtain
amounts at or in excess of the estimated recoveries.

         In the opinion of management,  these matters will be resolved favorably
and such amounts,  if any, not recovered under the Company's  insurance policies
will be paid gradually over a period of years and, accordingly,  should not have
a material adverse effect upon the business,  liquidity or financial position of
the Company. However, adverse decisions or events, particularly as to the merits
of the  Company's  factual and legal basis could cause the Company to change its
estimate of liability with respect to such matters in the future.

         The Company is involved in various other  litigation  and legal matters
which are being  defended  and handled in the ordinary  course of business.  See
Part II Other  Information  - Item 1.  Legal  Proceedings  for a  discussion  of
ROSATELLI VS. UNITED CAPITAL CORP., et al. None of these matters are expected to
result  in a  judgment  having  a  material  adverse  effect  on  the  Company's
consolidated financial position or results of operations.

                                 Page 10 of 20

<PAGE>

EARNINGS PER SHARE
------------------

         The  following  table sets forth the  computation  of basic and diluted
earnings per share:

<TABLE>
<CAPTION>
                                                                    Three Months                  Six Months
                                                                    Ended June 30,              Ended June 30,
                                                                    --------------              --------------

<S>                                                                <C>          <C>             <C>         <C>
(In Thousands, Except Per Share Data)                              1999         1998            1999        1998
                                                                   ----         ----            ----        ----

Numerator:
   Income from continuing operations                             $2,576       $3,423          $6,162      $5,837
                                                                 ------       ------          ------      ------
Denominator:
   Denominator for basic earnings per
        share -weighted-average shares outstanding                5,011        5,204           5,053       5,227
Effect of dilutive securities:
   Employee stock options                                            20          116              23         128
                                                                 ------       ------          ------      ------
   Denominator for diluted earnings per
        share-adjusted weighted-average shares and
        assumed conversions                                       5,031        5,320           5,076       5,355
                                                                  -----        -----           -----       -----

Basic earnings per share - continuing operations                   $.51         $.66           $1.22       $1.12
                                                                   ====         ====           =====       =====

Diluted earnings per share - continuing operations                 $.51         $.64           $1.21       $1.09
                                                                   ====         ====           =====       =====
</TABLE>


COMPREHENSIVE INCOME
--------------------

         The Company's  comprehensive  income  consists of unrealized  gains and
losses from  investments  in  available-for-sale  securities.  The components of
other comprehensive income are as follows:

<TABLE>
<CAPTION>
                                                               Three Months                       Six Months
                                                               Ended June 30,                    Ended June 30,
                                                             --------------------               ----------------

(In Thousands)                                               1999            1998               1999        1998
                                                             ----            ----               ----        ----

<S>                                                        <C>             <C>                <C>        <C>
Net income                                                 $2,576          $3,423             $6,162     $10,686

Other comprehensive income, net of tax:
Unrealized     holding     gains     (losses)    on
available-for-sale    securities,    net   of   tax
(provision)  benefit  of ($896)  and $4, and ($486)
and $6, respectively                                        1,572             (8)                775        (11)
                                                           ------          ------             ------     -------

Comprehensive income                                       $4,148          $3,415             $6,937     $10,675
                                                           ======          ======             ======     =======
</TABLE>


                                 Page 11 of 20
<PAGE>

BUSINESS SEGMENTS
-----------------

         The  Company  operates  through  two  business  segments:  real  estate
investment and management and engineered  products.  The real estate  investment
and  management  segment is engaged in the business of investing in and managing
real estate properties and the making of high-yield, short-term loans secured by
desirable properties.  Engineered products are manufactured through wholly-owned
subsidiaries  of the Company and primarily  consist of knitted wire products and
components and transformer products.

         Operating results of the Company's business segments are as follows:

<TABLE>
<CAPTION>
                                                               Three Months                        Six Months
                                                              Ended June 30,                     Ended June 30,
                                                              --------------                     --------------
(In Thousands)
                                                            1999             1998                 1999         1998
                                                            ----             ----                 ----         ----
<S>                                                       <C>              <C>                 <C>          <C>
Net revenues and sales-
     Real estate investment and management                $6,801           $6,362              $13,323      $12,604
     Engineered products                                   7,912            8,634               15,565       16,940
                                                         -------          -------              -------      -------

                                                         $14,713          $14,996              $28,888      $29,544
                                                         =======          =======              =======      =======

Operating income-
     Real estate investment and management                $3,015           $2,638               $5,560       $6,077
     Engineered products                                     686              936                  972        1,736
                                                         -------          -------              -------      -------

                                                           3,701            3,574                6,532        7,813

General corporate expenses                                  (683)          (1,312)              (1,506)      (1,750)
Other income, net                                          1,473            3,753                5,621        4,102
                                                         -------          -------              -------      -------

            Income from continuing
              operations before income taxes              $4,491           $6,015              $10,647      $10,165
                                                         =======          =======              =======      =======
</TABLE>


NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------

         In June 1998, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standards No. 133 "Accounting for Derivative
Instruments  and  Hedging   Activities"  ("SFAS  No.  133"),  which  establishes
accounting  and reporting  standards for  derivative  instruments.  SFAS No. 133
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities in the statement of financial position and measure those instruments
at fair value.  The  statement  requires that changes in the  derivative's  fair
value be  recognized  currently in earnings  unless  specific  hedge  accounting
criteria are met. Special accounting for qualifying hedges allows a derivative's
gains and losses to offset  related  results  on the  hedged  item in the income
statement. In June 1999, FASB issued Statement of Financial Accounting Standards
No. 137 "Accounting for Derivative  Instruments and Hedging Activities- Deferral
of the  Effective  Date of FASB  Statement No. 133," which changes the effective
date to all fiscal  quarters of all fiscal years  beginning after June 15, 2000.
SFAS No. 133

                                 Page 12 of 20

<PAGE>

cannot be applied  retroactively to financial  statements of prior periods.  The
Company  is  in  the  process  of  evaluating   the   accounting  and  reporting
requirements  and believes that SFAS No. 133 will not have a material  impact on
the consolidated results of operations, financial position or cash flows.

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 period. Actual results could differ from those estimates.

RECLASSIFICATIONS
-----------------

         Certain amounts have been  reclassified in the prior year  Consolidated
Financial  Statements  to present  them on a basis  consistent  with the current
year.

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
---------------------------------------

         Revenues  for the three  month  period  ended June 30,  1999 were $14.7
million which resulted in operating  income of $3.0 million  versus  revenues of
$15.0 million and operating income of $2.3 million during the comparable  period
in 1998.  Net income during this period was $2.6 million or $.51 per basic share
versus $3.4  million or $.66 per basic  share  during the  comparable  period in
1998.

         Revenues  for the six month  period  ended  June 30,  1999  were  $28.9
million resulting in income from continuing  operations of $6.2 million or $1.22
per basic  share  versus  revenues of $29.5  million and income from  continuing
operations of $5.8 million or $1.12 per basic share during the  comparable  1998
period.  In 1998, the Company sold its antenna  business,  resulting in a pretax
gain from  discontinued  operations  of  approximately  $8.6 million or $.92 per
basic  share on an after tax basis.  Net  income  was $6.2  million or $1.22 per
basic share in 1999 versus  $10.7  million or $2.04 per basic share for the same
period in 1998.

REAL ESTATE OPERATIONS
----------------------

         Rental revenues from real estate  operations  increased  $439,000 or 7%
for the three  months and  $719,000 or 6% for the six months ended June 30, 1999
when  compared  to the  corresponding  periods  in  1998.  These  increases  are
primarily attributable to revenues generated from properties acquired in 1998.

         Mortgage  interest expense increased $92,000 during the current quarter
and less than 1% for the six month  period  ended June 30 1999,  compared to the
corresponding  periods in 1998. These increases are due to mortgages obtained in
connection with 1998 property  acquisitions  offset by lower


                                 Page 13 of 20
<PAGE>

interest  expense  on  mortgages  refinanced  in 1998 and  1999  and  continuing
mortgage amortization, including repayments associated with properties sold.

         Depreciation   expense  associated  with  rental  properties  decreased
$16,000 or 1% during the three month  period  ended June 30, 1999 and $48,000 or
2%,   during  the  six  month  period  ended  June  30,  1999  compared  to  the
corresponding  periods of 1998.  These  decreases  are  primarily due to reduced
depreciation expense associated with properties sold in 1999 and 1998.

         Operating  expenses  associated  with the management of real properties
decreased  $14,000 for the current  quarter and  increased  $1.3 million for the
first six months of 1999  compared  to the  corresponding  periods in 1998.  The
increase for the six month period was  principally  due to 1998 expenses  having
been reduced by a non-recurring  real estate tax abatement of  approximately  $1
million.  The remainder of the increase was principally due to expenses incurred
for the maintenance of properties acquired in 1998.

ENGINEERED PRODUCTS
-------------------

         The  Company's   engineered   products   segment  includes  Metex  Mfg.
Corporation and AFP  Transformers,  LLC. The operating results of the engineered
products segment are as follows:

<TABLE>
<CAPTION>
                                                  Three Months                     Six Months
                                                 Ended June 30,                  Ended June 30,
                                                 --------------                  --------------

(In Thousands)                                1999           1998              1999           1998
                                              ----           ----              ----           ----

<S>                                         <C>            <C>              <C>            <C>
Net Sales                                   $7,912         $8,634           $15,565        $16,940
                                            ======         ======           =======        =======

Cost of  Sales                              $5,478         $5,997           $11,138        $11,881
                                            ======         ======           =======        =======

Selling, General and Administrative
Expenses                                    $1,748         $1,701           $ 3,455        $ 3,323
                                            ======         ======           =======        =======

Income from Operations                      $  686         $  936           $   972        $ 1,736
                                            ======         ======           =======        =======
</TABLE>


         Net sales of the engineered  products segment  decreased 8% for each of
the current  quarter and six month  period  ended June 30, 1999  compared to the
same periods in 1998.  These  decreases are primarily  attributable to continued
price competition and weakened demand for certain of the Company's products.

         Cost of sales as a percentage of sales for the three month period ended
June 30, 1999 remained  virtually  unchanged when compared to the same period in
1998  principally due to efficient  material  purchases and a commitment to cost
reductions.  For the six month period  ended June 30,  1999,  cost of sales as a
percentage  of sales  increased  to 71.6% from 70.1% in 1998.  This  increase is
principally  due to  non-recurring  costs  associated  with a labor  strike  and
subsequent  union  settlement,  start up  operations  in  Mexico  and the mix of
products sold.

                                 Page 14 of 20

<PAGE>

         Selling, general and administrative expenses ("SG&A") of the engineered
products  segment  increased  $47,000 or 3% and  $132,000  or 4%,  respectively,
during the quarter and six month period ended June 30, 1999 versus such costs of
the comparable 1998 periods.  Savings from cost containment efforts in this area
were offset by amounts  invested to expand the Company's  product  offerings and
improve  competitiveness  including  costs  associated  with  the  start  up  of
operations in Mexico.

GENERAL AND ADMINISTRATIVE EXPENSES
-----------------------------------

         General  and  administrative   ("G&A")  expenses  not  associated  with
manufacturing  operations decreased by $629,000 and $244,000 for the three month
and six month period ended June 30, 1999, respectively,  versus the same periods
in 1998. The decrease in the current quarter is principally due to non-recurring
charges recorded in the corresponding prior year period. Absent these items, G&A
expenses not associated with  manufacturing  operations  approximated prior year
amounts for the three  months ended June 30,  1999.  For the six month  periods,
after  adjusting for  non-recurring  items in 1998,  G&A expenses not associated
with  manufacturing   operations  increased  $134,000  due  to  an  increase  in
professional fees.

OTHER INCOME AND EXPENSE
------------------------

         The  components  of  other  income  and  expense  in  the  accompanying
Consolidated Statements of Income are, as follows:

<TABLE>
<CAPTION>
                                                          Three Months              Six Months
                                                         Ended June 30,           Ended June 30,
                                                         --------------           --------------

         (In Thousands)                                  1999        1998          1999        1998
                                                         ----        ----          ----        ----

<S>                                                        <C>         <C>       <C>             <C>
         Gain on disposal of investment in
         affiliates                                        $0          $0        $1,989          $0

         Gain on sale of real estate assets               835       3,653         2,806       3,874

         Loss from investment in affiliates                 0         (50)            0        (176)

         Gain on sale of marketable securities              0           0             0          75

         Other, net                                       348           4           389          11
                                                       ------      ------        ------      ------

                                                       $1,183      $3,607        $5,184      $3,784
                                                       ======      ======        ======      ======

</TABLE>

                                 Page 15 of 20
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

        At June 30, 1999,  the Company's  cash and  marketable  securities  were
$36.9  million and working  capital was  approximately  $25 million.  Management
believes  that  the  real  estate  market  continues  to be  overvalued  and the
Company's recent  acquisitions have been limited to those select properties that
meet its financial requirements.  Management believes that the available working
capital  along with the $40  million of  availability  on the  revolving  credit
facility  discussed below, puts it in an opportune position to fund acquisitions
and grow the portfolio as attractive  long-term  opportunities become available.
The current  liabilities of the Company have  historically  exceeded its current
assets  principally  due to the  financing of the  purchase of long-term  assets
utilizing short-term  borrowings and from the classification of current mortgage
obligations without the corresponding current asset for such properties.  Future
financial  statements  may  reflect  current  liabilities  in excess of  current
assets.   Management  is  confident   that  through  cash  flow  generated  from
operations,  together  with  borrowings  available  under the  revolving  credit
facility  discussed below and the sale of select assets, all obligations will be
satisfied as they come due.

         The Company's  portfolio of  available-for-sale  securities  had a fair
market value of $20.8  million at June 30, 1999,  reflecting  pretax  unrealized
holding gains of approximately $5.7 million.

         The Company's  Credit  Agreement  with two banks provides for both a $7
million  term loan ("Term  Loan") and a $40 million  revolving  credit  facility
("Revolver").  Under the terms of the  Credit  Agreement,  the  Company  will be
provided  with  eligibility  based  upon  the  sum of (i)  50% of the  aggregate
annualized  and  normalized   year-to-date  net  operating  income  of  eligible
properties, as defined,  capitalized at 11.5% and (ii) the lesser of $12 million
or the sum of 75% of eligible accounts receivable and 50% of eligible inventory,
as defined.  Eligibility is also limited by amounts  outstanding  under the Term
Loan. At June 30, 1999,  eligibility  under the Revolver was $40 million,  based
upon the above  terms.  The Credit  Agreement  contains  certain  financial  and
restrictive covenants, including minimum consolidated equity, interest coverage,
debt service coverage and capital expenditures (other than for real estate). The
Company  was in  compliance  with all  covenants  at June 30,  1999.  The Credit
Agreement also contains provisions which allow the lenders to perfect a security
interest in certain  operating and real estate assets in the event of a default,
as  defined in the  Credit  Agreement.  Borrowings  under the  Revolver,  at the
Company's  option,  bear  interest at the bank's  prime  lending  rate or at the
London  Interbank  Offered Rate ("LIBOR") plus 1.75% while  borrowings under the
Term Loan bear  interest at 90 day LIBOR plus 1.4%.  The Term Loan is payable in
quarterly  principal  installments  of  $350,000  with the final  payment due on
September 30, 2002. The Revolver  expires on January 15, 2000. At June 30, 1999,
there were no amounts  outstanding  under the  Revolver and  approximately  $4.6
million was outstanding on the Term Loan.

         The Company has an interest-rate swap agreement to effectively  convert
its floating  rate Term Loan to a fixed rate basis,  thus reducing the impact of
interest rate changes on future expense.  Under the swap agreement,  the Company
agreed to exchange  with the  counterparty  (a commercial  bank) the  difference
between the fixed and floating rate interest  amounts.  The  differential  to be
paid or received on the interest  rate swap is  recognized  over the term of the
agreement  as an  adjustment  to  interest  expense.  The fair value of the swap
agreement is not recognized in the financial statements.

                                 Page 16 of 20
<PAGE>

         The Company has  undertaken  the  completion of  environmental  studies
and/or  remedial  action at Metex'  two New Jersey  facilities  and has filed an
action against certain insurance carriers seeking recovery of costs incurred and
to be incurred in these  matters.  Based upon the advice of counsel,  management
believes  such  recovery is probable  and  therefore  should not have a material
effect on the  liquidity  or capital  resources  of the  Company.  However,  the
ultimate  outcome of litigation  cannot be predicted.  To date  settlements have
been  reached with several  carriers in this matter.  See Notes to  Consolidated
Financial Statements -- Contingencies.

         Amounts   recorded  as   anticipated   insurance   recoveries   in  the
accompanying Consolidated Financial Statements are in dispute with the Company's
insurance carriers. Management believes that recoveries in excess of the amounts
reflected in the accompanying  Consolidated  Financial  Statements are available
under  the  insurance  policies  but  have not been  recorded.  There  can be no
assurance,  however,  that the  Company  will  prevail in its  efforts to obtain
amounts at or in excess of the estimated recoveries.

         The cash needs of the Company have been satisfied from funds  generated
by current  operations  and  additional  borrowings.  It is expected that future
operational  cash needs and the cash required to repurchase the Company's common
stock will also be satisfied from existing cash balances, ongoing operations and
additional  borrowings  on the Revolver.  The primary  source of capital to fund
additional real estate  acquisitions and to make additional  high-yield mortgage
loans will come from existing funds, the sale,  financing and refinancing of the
Company's  properties  and from third party  mortgages and purchase  money notes
obtained in connection with specific acquisitions.

         In  addition  to  the  acquisition  of  properties  for   consideration
consisting of cash and mortgage financing proceeds, the Company may acquire real
properties in exchange for the issuance of the Company's equity securities.  The
Company may also  finance  acquisitions  of other  companies  in the future with
borrowings from institutional  lenders and/or the public or private offerings of
debt or equity securities.

         Repurchases  of the  Company's  common  stock will be made from time to
time in the open market at prevailing market prices and may be made in privately
negotiated transactions, subject to available resources. Funds of the Company in
excess of that needed for working capital,  purchasing real estate and arranging
financing for real estate  acquisitions are invested by the Company in corporate
equity securities, corporate notes, other financial instruments, certificates of
deposit and government securities.

BUSINESS TRENDS
---------------

         Total revenues for the first six months of 1999 were $28.9  million,  a
decrease of $656,000 or 2% from the comparable 1998 period  principally due to a
decline in revenues from the Company's engineered products segment.  Income from
continuing  operations for this period was $6.2 million or $1.22 per basic share
versus $5.8 million or $1.12 per basic share during the same period in 1998.

                                 Page 17 of 20
<PAGE>

         The  results  of the  Company's  real  estate  operations  reflect a 6%
increase in revenues for the first six months of 1999, primarily due to revenues
generated from properties  acquired in 1998.  Operating  profit from real estate
operations  for this period was $5.6  million,  a decrease of $519,000  from the
corresponding 1998 period.  Increased rental revenues of $719,000 were offset by
higher real estate operating  expenses  resulting from 1998 expenses having been
reduced by a non-recurring real estate tax abatement of approximately $1 million
and an increase in expenses incurred for the maintenance of properties  acquired
in 1998.

         Revenues for six month  period ended June 30, 1999 from the  engineered
products segment  decreased 8% from the prior year principally due to continuing
price  competition  and weakened  demand for certain of the Company's  products.
Savings from cost  containment  efforts and efficient  material  purchases  were
offset by amounts invested to expand the Company's product offerings and improve
competitiveness  including  costs  associated with the start up of operations in
Mexico.  Management  remains  committed  to  growing  these  businesses  and  is
aggressively  pursuing  new  sales  opportunities,  including  new  geographical
markets  for  its  existing   products  and  new   applications   for  its  core
technologies.

YEAR 2000 CONVERSION
--------------------

         The Company currently  believes that its essential  processes,  systems
and business functions will be ready for the millennium transition and is taking
the necessary steps to accomplish this objective. The Company has undertaken the
implementation in its manufacturing  operations of a fully integrated Enterprise
Resource  Planning  (ERP)  software  package.   Although  the  ERP  package  was
implemented  for purposes other than  remediating  the Year 2000 issue,  the ERP
package is certified  as Year 2000  compliant.  As part of this  implementation,
which was  completed in December  1998,  the Company also  believes  that it has
identified and addressed all its related Year 2000 hardware issues.  The Company
believes that the costs, if any,  directly  associated with Year 2000 compliance
will not be material to its financial  condition or results of operations.  Year
2000  issues  are not  significant  to the  Company's  real  estate  operations.
Substantially  all third parties  (banks,  suppliers,  customers)  for which the
Company has a business relationship are among the largest and most sophisticated
companies in the country and the Company is  providing  the data  necessary  for
these companies to evaluate their Year 2000 issues.

         The Company  believes that it has taken  reasonable  steps in preparing
for the Year 2000 issue,  but cannot  ensure that all of its Year 2000 issues or
those  of  its   significant   third  parties  will  be  resolved  or  addressed
satisfactorily  before the Year 2000 commences.  Any resulting  disruption could
have a material adverse impact on its business.

FORWARD-LOOKING STATEMENTS
--------------------------

         This Form 10-Q contains certain  forward-looking  statements within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors  created  thereby.  All  forward-looking  statements
involve risks and uncertainty,  including without  limitation,  general economic
conditions,  interest  rates,  competition,  potential  technology  changes  and
potential changes in customer  spending and purchasing  policies and procedures.
Although   the   Company   believes   that  the

                                 Page 18 of 20
<PAGE>

assumptions  underlying  the  forward-looking  statements  contained  herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the  forward-looking  statements included in this Form 10-Q
will prove to be accurate. In light of the significant uncertainties inherent in
the   forward-looking   statements   included  herein,  the  inclusion  of  such
information  should not be  regarded as a  representation  by the Company or any
other person that the objectives and plans of the Company will be achieved.

PART II OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

ROSATELLI VS. UNItED CAPITAL CORP.
----------------------------------

         In August 1996, Dennis Rosatelli,  the Company's former Chief Financial
Officer  commenced  an action in  Superior  Court of New Jersey,  Law  Division,
Bergen County ("Superior Court"), seeking, among other things, payment under his
employment contract,  and indemnification for claims against him by the Internal
Revenue Service and other matters in connection with his tenure.  In March 1997,
Mr. Rosatelli amended his compliant to include Bank of America  Illinois,  Metex
Corporation,  Kentile Inc.,  A.F.  Petrocelli and another  officer of Kentile as
additional defendants.  The Company believes that as a result of Mr. Rosatelli's
gross  negligence,  recklessness  and/or  willful  disregard  of his  duties and
responsibilities,  Mr. Rosatelli is not entitled to the recoveries he seeks. Mr.
Rosatelli's employment was terminated by the Company in May, 1996 for cause. The
matter was removed to United States  District  Court,  District of New Jersey in
October 1996. In March 1998 the U.S.  District  Court  dismissed  certain of Mr.
Rosatelli's  claims and  remanded  the  remainder of the action back to Superior
Court.  In May 1998, Mr.  Rosatelli  amended his complaint to include  Kentile's
assignee for the benefit of creditors as an  additional  defendant and to remove
the officer of Kentile  previously  named as a defendant  from this action.  The
material  allegations  of the complaint are  unchanged.  The Company  intends to
vigorously  defend  this  action  and has  asserted  counterclaims  against  Mr.
Rosatelli  for,  among  other  things,  the set off of  amounts  by which he has
damaged the Company against his claims under his employment contract. The matter
is scheduled for trial in September, 1999.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         On June 15, 1999, the Company held its Annual Meeting of  Stockholders,
whereby the stockholders  elected Directors and approved a proposal to amend the
Company's stock option plans to extend the termination  dates.  The vote on such
matters was as follows:

1.       ELECTION OF DIRECTORS:

                                       For                   Withheld
                                       ---                   --------
       A. F. Petrocelli             4,400,272                144,294
       Howard M. Lorber             4,400,272                144,294
       Anthony J. Miceli            4,401,041                143,525
       Arnold S. Penner             4,401,017                143,549

                                 Page 19 of 20
<PAGE>

2.   APPROVAL OF AMENDMENTS  TO 1988 JOINT  INCENTIVE  AND  NON-QUALIFIED  STOCK
     OPTION PLAN AND THE 1988 INCENTIVE  STOCK OPTION PLAN: To adopt  amendments
     to extend the termination  date of the Joint Plan and the Incentive Plan to
     December 31, 2008.

             For                      Against                  Abstain
             ---                      -------                  -------
           3,817,221                  338,702                   2,904


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

       (a)  Exhibit 27.  Financial Data Schedule
       (b)  Reports on Form 8-K.  None.




                                   SIGNATURES

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

                                   UNITED CAPITAL CORP.

                                   By: /s/ Anthony J. Miceli
                                       ---------------------------
                                       Anthony J. Miceli
                                        Vice President, Chief Financial Officer
                                        and Secretary of the Company

Dated:  August 12, 1999

                                 Page 20 of 20