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, 1997
                               -------------------------------------------------

                                       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 registrant 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
--------------------------------------------------------------------------------
              (Registrant'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 registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. 

                         [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 5,285,323 shares
                       outstanding as of August 8, 1997.



                                  Page 1 of 17
<PAGE>
                     UNITED CAPITAL CORP. AND SUBSIDIARIES

                                      INDEX

                          PART I FINANCIAL INFORMATION
                                                                     PAGE

ITEM 1.       FINANCIAL STATEMENTS

              Consolidated Balance Sheets as
              of  June 30, 1997 and December 31, 1996                  3

              Consolidated Statements of  Income for
              the Three Months Ended June 30, 1997 and
              1996                                                     4

              Consolidated Statements of Income for the Six
              Months Ended June 30, 1997 and 1996                      5

              Consolidated Statements of Cash Flows for
              the Six  Months Ended June 30, 1997 and
              1996                                                     6 - 7

              Notes to Consolidated Financial Statements               8 - 11

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS            11 - 16

                            PART II OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS                                        16

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS      17

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K                         17

SIGNATURES                                                             17


                                  Page 2 of 17
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES

      CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 1997 AND DECEMBER 31, 1996
                                   (UNAUDITED)
<TABLE>
<CAPTION>
            ASSETS                                                                               1997                  1996
            ------                                                                               ----                  ----
<S>                                                                                          <C>                  <C>
CURRENT ASSETS:
     Cash and cash equivalents                                                               $  5,423,651         $  3,177,878
     Marketable securities                                                                        325,131              313,294
     Notes and accounts receivable, net                                                        21,832,194           22,443,743
     Inventories                                                                                6,705,062            7,853,229
     Prepaid expenses and other current assets                                                    801,014              801,639
     Deferred income taxes                                                                      1,873,983            1,831,768
                                                                                             ------------         ------------

              Total current assets                                                             36,961,035           36,421,551
                                                                                             ------------         ------------

PROPERTY, PLANT AND EQUIPMENT, net                                                              7,796,390            7,694,438



REAL PROPERTY HELD FOR RENTAL, net                                                             57,837,713           63,842,891


NONCURRENT NOTES RECEIVABLE                                                                     5,861,576            5,931,744


OTHER ASSETS                                                                                   11,446,622            5,912,647


DEFERRED INCOME TAXES                                                                           2,337,785            2,017,247


                                                                                             ------------         ------------
                Total assets                                                                 $122,241,121         $121,820,518
                                                                                             ============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY                                        `                    1997                  1996
------------------------------------                                                             ----                  ----

CURRENT LIABILITIES:
      Current maturities of long-term debt                                                   $  5,779,832         $  7,711,408
      Current portion of  borrowings under revolving credit facilities                         11,009,000           10,031,000
      Accounts payable and accrued liabilities                                                 18,440,403           17,286,927
      Income taxes payable                                                                      8,968,803            7,212,520
                                                                                             ------------         ------------

                   Total current liabilities                                                   44,198,038           42,241,855
                                                                                             ------------         ------------

LONG-TERM LIABILITIES:

      Borrowings under revolving credit facilities                                              7,161,000            9,789,000
      Long-term debt                                                                           28,915,733           31,670,258
      Other long-term liabilities                                                               8,357,851            8,544,581
                                                                                             ------------         ------------

                   Total liabilities                                                           88,632,622           92,245,694
                                                                                             ------------         ------------

COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS' EQUITY:

      Common stock                                                                                528,532              534,612
      Additional paid-in capital                                                                6,822,774            7,415,664
      Retained earnings                                                                        26,140,595           21,515,762
      Net unrealized gain on marketable securities, net of  tax                                   116,598              108,786
                                                                                             ------------         ------------

                   Total stockholders' equity                                                  33,608,499           29,574,824
                                                                                             ------------         ------------
                   Total liabilities and stockholders' equity                                $122,241,121         $121,820,518
                                                                                             ============         ============

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


                                  Page 3 of 17
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                        Three Months Ended
                                                                                                        ------------------
                                                                                             June 30, 1997            June 30, 1996
                                                                                             -------------            -------------
<S>                                                                                          <C>                       <C>         
REVENUES:
        Net sales                                                                            $ 14,862,436              $ 15,055,604
        Rental revenues from real estate operations                                             6,462,713                 5,909,434
                                                                                             ------------              ------------

        Total Revenues                                                                         21,325,149                20,965,038
                                                                                             ------------              ------------

COSTS AND EXPENSES:
        Cost of  sales                                                                         11,261,200                11,801,065
        Real estate operations -
            Mortgage interest expense                                                             777,711                   861,552
            Depreciation expense                                                                1,443,368                 1,607,170
            Other operating expenses                                                            1,597,681                 1,901,239
        General and administrative expenses                                                     1,697,252                 2,422,095
        Selling expenses                                                                        1,514,712                 1,761,537
                                                                                             ------------              ------------

          Total costs and expenses                                                             18,291,924                20,354,658
                                                                                             ------------              ------------

          Operating income                                                                      3,033,225                   610,380
                                                                                             ------------              ------------

OTHER INCOME (EXPENSE):
        Interest income                                                                           865,915                   276,502
        Interest expense                                                                         (456,144)                 (287,667)
        Other income and expense, net                                                             122,015                 2,544,295
                                                                                             ------------              ------------

          Total other income (expense)                                                            531,786                 2,533,130
                                                                                             ------------              ------------

          Income before income taxes                                                            3,565,011                 3,143,510

Provision for income taxes                                                                      1,575,000                 1,243,000
                                                                                             ------------              ------------

Net income                                                                                   $  1,990,011              $  1,900,510
                                                                                             ============              ============

Earnings per share:
          Net income                                                                         $        .37              $        .34
                                                                                             ============              ============

Weighted average number of common shares outstanding                                            5,350,946                 5,543,363
                                                                                             ============              ============
</TABLE>

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

                                  Page 4 of 17
<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                         Six Months Ended
                                                                                                         ----------------
                                                                                             June 30, 1997            June 30, 1996
                                                                                             -------------            -------------
<S>                                                                                          <C>                       <C>         
REVENUES:
        Net sales                                                                            $ 29,642,416              $ 30,699,957
        Rental revenues from real estate operations                                            12,088,381                11,826,882
                                                                                             ------------              ------------

        Total Revenues                                                                         41,730,797                42,526,839
                                                                                             ------------              ------------

COSTS AND EXPENSES:
        Cost of  sales                                                                         22,122,424                23,824,344
        Real estate operations -
            Mortgage interest expense                                                           1,589,001                 1,934,208
            Depreciation expense                                                                2,920,143                 3,245,895
            Other operating expenses                                                            3,156,812                 3,889,790
        General and administrative expenses                                                     3,905,062                 4,505,212
        Selling expenses                                                                        2,992,929                 3,337,003
                                                                                             ------------              ------------

          Total costs and expenses                                                             36,686,371                40,736,452
                                                                                             ------------              ------------

          Operating income                                                                      5,044,426                 1,790,387
                                                                                             ------------              ------------

OTHER INCOME (EXPENSE):
        Interest income                                                                         1,551,890                   492,228
        Interest expense                                                                         (886,889)                 (561,261)
        Other income and expense, net                                                           2,645,406                 3,042,908
                                                                                             ------------              ------------

          Total other income (expense)                                                          3,310,407                 2,973,875
                                                                                             ------------              ------------

          Income before income taxes                                                            8,354,833                 4,764,262

Provision for income taxes                                                                      3,730,000                 1,918,000
                                                                                             ------------              ------------

Net income                                                                                   $  4,624,833              $  2,846,262
                                                                                             ============              ============

Earnings per share:
          Net income                                                                         $        .87              $        .51
                                                                                             ============              ============

Weighted average number of common shares outstanding                                            5,340,202                 5,572,755
                                                                                             ============              ============
</TABLE>

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



                                  Page 5 of 17
<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                      1997                  1996
                                                                                                  ------------          ------------
<S>                                                                                               <C>                   <C>        
Cash Flows From Operating Activities:
          Net income                                                                              $  4,624,833          $ 2,846,262
                                                                                                  ------------          -----------
          Adjustments to reconcile net income to net cash
                 provided by operating activities:
          Depreciation and amortization                                                              3,581,580            4,079,152
          Loss from equity investments                                                                 212,505                 --
          Changes in assets and liabilities (A)                                                      7,103,163            2,862,845
                                                                                                  ------------          -----------

                 Total adjustments                                                                  10,897,248            6,941,997
                                                                                                  ------------          -----------

                 NET CASH PROVIDED BY OPERATING ACTIVITIES                                          15,522,081            9,788,259
                                                                                                  ------------          -----------

Cash Flows from Investing Activities:
          Investment in and advances to joint venture                                               (5,578,139)                --
          Acquisition of  property, plant and equipment                                               (763,098)            (365,804)
                                                                                                  ------------          -----------

                 NET CASH USED IN INVESTING ACTIVITIES                                              (6,341,237)            (365,804)
                                                                                                  ------------          -----------

Cash Flows from Financing Activities:
          Principal payments on mortgage commitments, notes and loans                               (4,686,101)          (7,289,851)
          Net borrowings under revolving credit facilities                                          (1,650,000)          (1,285,000)
          Purchase and retirement of common shares                                                    (656,970)          (2,003,000)
          Proceeds from exercise of stock options                                                       58,000              795,000
                                                                                                  ------------          -----------
                 NET CASH USED IN FINANCING ACTIVITIES                                              (6,935,071)          (9,782,851)
                                                                                                  ------------          -----------

Net increase (decrease) in cash and cash equivalents                                                 2,245,773             (360,396)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                     3,177,878            3,527,925
                                                                                                  ------------          -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                        $  5,423,651          $ 3,167,529
                                                                                                  ============          ===========


</TABLE>



                                  Page 6 of 17
<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (Continued)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                         1997               1996
                                                                                                     -----------        -----------
<S>                                                                                                  <C>                <C>
Supplemental Disclosures of Cash Flow
        Information:
            Cash Paid During the Period For:
                 Interest                                                                            $ 2,547,000        $ 2,607,000
                 Taxes                                                                                 1,258,000            821,000
                                                                                                     ===========        ===========

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, 1997 and
1996 are as follows:

Decrease in notes and accounts receivable, net                                                       $   611,549        $   265,882
Decrease (increase) in inventories                                                                     1,148,167           (331,364)
Decrease (increase) in prepaid expenses and other current assets                                             625           (123,362)
Increase in deferred income taxes                                                                       (366,778)          (568,990)
Decrease in real property held for rental, net                                                         3,084,742          2,478,284
Decrease in noncurrent notes receivable                                                                   70,168             14,158
Decrease (increase) in other assets                                                                     (168,339)           185,642
Increase (decrease) in accounts payable and accrued liabilities                                        1,153,476         (1,154,455)
Increase in income taxes payable                                                                       1,756,283          1,837,020
Increase (decrease) in other long-term liabilities                                                      (186,730)           260,030
                                                                                                     -----------        -----------

                 Total                                                                               $ 7,103,163        $ 2,862,845
                                                                                                     ===========        ===========

</TABLE>

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


                                  Page 7 of 17
<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, 1996.

         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:

                                            June 30, 1997     December 31, 1996
                                            -------------     -----------------

Raw materials                               $3,307,192           $3,893,865
Work in process                              1,671,877            2,126,849
Finished goods                               1,725,993            1,832,515
                                            ----------           ----------
                                            $6,705,062           $7,853,229
                                            ==========           ==========


                                  Page 8 of 17
<PAGE>
CONTINGENCIES

         The Registrant 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 Registrant 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.

         Environmental  studies at the second facility indicate that remediation
may be  necessary.  Based  upon the  facts  presently  available,  environmental
experts have advised the  Registrant  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
Registrant  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 Registrant as new or
additional information in these matters become 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  Registrant  believes  that it is entitled to full defense
and indemnification with respect to environmental  investigation and remediation
costs under its insurance policies,  the Registrant's  insurers have denied such
coverage.  Accordingly,  the  Registrant  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  Registrant  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 Registrant 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.

         As a result of the foregoing,  the Registrant has not recorded a charge
to  operations  for  the   environmental   remediation,   noted  above,  in  the
consolidated  financial  statements,  as  anticipated  proceeds  from  insurance
recoveries are expected to offset such  liabilities.  The Registrant has reached
settlements with several insurance carriers in this matter.

         At June 30, 1997 and  December  31,  1996,  a total of $2.9  million in
anticipated  insurance  recoveries is recorded in the accompanying  consolidated
financial statements and is included in other assets. Additionally,  in 1995 the
Company  received  approximately  $4.1  million  of  insurance  recoveries.  The
remaining  balance of $2.9 million at June 30, 1997 (from a total of $7 million)
is in dispute with the Registrant's insurance carriers. Management believes that
recoveries in excess of the amounts  reflected in the accompanying  consolidated
financial  statements,  are available under insurance policies but have not been
recorded.  There can be no assurance,  however, that the Registrant will prevail
in its efforts to obtain amounts at or in excess of the estimated recoveries.



                                  Page 9 of 17
<PAGE>
         In the opinion of management,  these matters will be resolved favorably
and such  amounts,  if any,  not  recovered  under  the  Registrant'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 Registrant.  However, adverse decisions or events,  particularly
as to the merits of the  Registrant's  factual  and legal  basis could cause the
Registrant  to change its estimate of liability  with respect to such matters in
the future.

         The  Registrant  is  involved  in various  other  litigation  and legal
matters which are being defended and handled in the ordinary course of business.
See Item 1. Legal  Proceedings  for  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 Registrant's consolidated financial position or
results of operations.

NET INCOME PER COMMON SHARE

         Net income per share  computations  for each quarterly period presented
are based on the weighted  average  number of common shares and dilutive  common
equivalent  shares  outstanding  during the  period.  Fully  diluted and primary
earnings  per common  share are  approximately  the same amounts for each of the
periods  presented.  Earnings  per share data is neither  restated  nor adjusted
currently to obtain  quarterly  amounts which equal the amount  computed for the
year-to-date.

         In February 1997,  Statement of Financial  Accounting Standard No. 128,
Earnings Per Share ("SFAS #128") was issued.  SFAS #128 changes the  methodology
utilized to compute  earnings per share and replaces primary EPS with basic EPS,
which does not include any dilution for potentially dilutive  securities.  Fully
diluted EPS, which is now called diluted EPS under SFAS #128, is still required.
This standard is effective for periods  ending after December 15, 1997 and early
application is prohibited. If EPS had been determined consistent with SFAS #128,
earnings per share would have been the proforma amounts indicated below:

                           Three Months Ended June 30   Six Months ended June 30
                           ---------------------------  ------------------------
                                  1997      1996           1997       1996
                                  ----      ----           ----       ----
Primary EPS, as reported        $   .37   $   .34         $   .87   $   .51
Pro Forma Basic EPS             $   .38   $   .34         $   .87   $   .51

Fully Diluted EPS, as reported  $   .37   $   .34         $   .86   $   .51
Pro Forma Diluted EPS           $   .37   $   .34         $   .87   $   .51


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.



                                 Page 10 of 17
<PAGE>
RECLASSIFICATIONS

         Certain amounts have been  reclassified in the prior year  consolidated
financial  statements  and notes  thereto 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, 1997 AND 1996

         Revenues   for  the  three  month  period  ended  June  30,  1997  were
$21,325,000  versus $20,965,000 during the comparable period in 1996. Net income
for the second  quarter of 1997 was  $1,990,000 or $.37 per share as compared to
$1,901,000 or $.34 per share during the comparable 1996 period.

         Revenues for the six month period ended June 30, 1997 were  $41,731,000
versus  $42,527,000  during the  comparable  period in 1996.  Net income for the
period was  $4,625,000 or $.87 per share as compared to net income of $2,846,000
or $.51 per share for the same period in 1996.

REAL ESTATE OPERATIONS

         Rental revenues from real estate operations  increased  $553,000 or 9%,
for the three month period ended June 30, 1997 as compared to the same period in
1996.  Rental  revenues  for the six  month  period  ended  June 30,  1997  were
$12,088,000,  an  increase  of  $261,000  or 2%  versus  such  revenues  of  the
comparable  1996  period.  These  increases  are  primarily  attributable  to  a
retroactive adjustment for percentage rents on certain properties.

         Mortgage  interest expense  decreased $84,000 or 10% during the current
quarter and  $345,000 or 18% during the six month  period  ended June 30,  1997,
versus such expense of the corresponding periods in 1996. These decreases result
from continuing  mortgage  amortization which approximated $6 million during the
last 12 months,  including repayments associated with properties sold during the
period.

         Depreciation   expense  associated  with  rental  properties  decreased
$164,000 or 10% during the three month  period  ended June 30, 1997 and $326,000
or 10%, during the first six months of 1997 as compared to such costs during the
corresponding  periods of 1996.  These decreases are primarily due to the impact
of properties sold in 1996.

         Operating  expenses  associated  with  the  management  of real  estate
properties  decreased $304,000 or 16% during the current quarter and $733,000 or
19% during the six month  period  ending  June 30,  1997 as compared to the same
periods in 1996. The implementation of certain capital  improvements in 1996 and
the timing of certain maintenance projects contributed to these reductions.


                                 Page 11 of 17
<PAGE>

ENGINEERED PRODUCTS

                  The  Registrant's  engineered  products segment includes Metex
Corporation and AFP  Transformers,  Inc. 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)                                                             1997             1996             1997             1996
                                                                           ----             ----             ----             ----

<S>                                                                        <C>             <C>              <C>              <C>    
Net Sales                                                                  $9,630          $10,983          $19,204          $22,033
                                                                           ======          =======          =======          =======

Cost of Sales                                                              $6,929          $ 8,060          $13,899          $16,345
                                                                           ======          =======          =======          =======

Selling, General and Administrative Expenses
                                                                           $1,778          $ 1,960          $ 3,576          $ 3,722
                                                                           ======          =======          =======          =======

Income from Operations                                                     $  923          $   963          $ 1,729          $ 1,966
                                                                           ======          =======          =======          =======
</TABLE>



         Net sales of the engineered  products segment decreased  $1,353,000 and
$2,829,000, respectively for the three and six month periods ended June 30, 1997
versus such results of the  corresponding  prior year periods.  These  decreases
from the prior year's  revenues  are  primarily  the result of  increased  price
competition and declining worldwide automotive sales.

         Cost of sales as a percentage of net sales  decreased by  approximately
1% and 2% for the three and six month  periods  ended June 30,  1997  versus the
corresponding  periods in 1996. These decreases were due to continued management
focus on cost containment as well as product mix.

         Selling, general and administrative expenses of the engineered products
segment decreased $182,000 and $146,000, respectively during the quarter and six
month  periods  ended June 30,  1997 versus  such costs of the  comparable  1996
periods.  These  reductions are  principally  due to reduced  selling  expenses,
primarily salary and salary related expenses.



                                 Page 12 of 17
<PAGE>
ANTENNA SYSTEMS

         The operating results of the antenna systems segment are as follows:

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

(In thousands)                                                       1997                1996              1997               1996
                                                                     ----                ----              ----               ----

<S>                                                                 <C>                <C>                <C>               <C>    
Net Sales                                                           $ 5,232            $ 4,073            $10,438           $ 8,667
                                                                    =======            =======            =======           =======

Cost of Sales                                                       $ 4,333            $ 3,741            $ 8,224           $ 7,479
                                                                    =======            =======            =======           =======

Selling, General and Administrative
       Expenses                                                     $   974            $ 1,177            $ 2,129           $ 2,460
                                                                    =======            =======            =======           =======

Income (Loss) from Operations                                       ($   75)           ($  845)           $    85           ($1,272)
                                                                    =======            =======            =======           =======
</TABLE>

         Net sales of the antenna  systems segment  increased  $1,159,000 or 28%
during the second  quarter and  $1,771,000 or 20% for the six month period ended
June 30, 1997 versus such sales  generated  during the respective  1996 periods.
The 1996 sales levels were the result of significant  operational  problems that
included  manufacturing  output well below planned  levels in spite of available
backlog to ship.  Actions  initiated by senior  management in 1996 increased the
sales  volume  in the  second  half of 1996 to a level  consistent  with the six
months ended June 30, 1997.

         Cost  of  sales  as a  percentage  of net  sales  decreased  9% and 8%,
respectively,  during the three and six month  periods  ended June 30, 1997 from
such  results of the  corresponding  1996 periods  principally  due to increased
productivity associated with higher shipment levels.

         Selling,  general  and  administrative  costs  of the  antenna  systems
segment decreased approximately $203,000 and $331,000, respectively,  during the
current quarter and year-to-date  periods just ended June 30, 1997,  versus that
of the  corresponding  prior year periods.  This reduction is principally due to
reduced salary and salary related expenses.

GENERAL AND ADMINISTRATIVE EXPENSES

         General and  administrative  ("G&A")  expenses not associated  with the
manufacturing  operations  decreased  by $590,000 and $469,000 for the three and
six month  periods  ended June 30,  1997,  respectively  versus that of the same
periods in 1996 principally due to lower salary and related expenses.


                                 Page 13 of 17
<PAGE>
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,
                                                                    --------------                          --------------

                                                               1997                1996                 1997               1996
                                                            -----------         -----------         -----------         ------------
<S>                                                         <C>                 <C>                 <C>                 <C>        
Gain on sale of real estate assets                          $   237,554         $ 3,134,362         $ 2,821,400         $ 3,612,849

(Loss) from equity investments                                 (151,949)               --              (212,505)               --

Other                                                            36,410            (590,067)             36,511            (569,941)
                                                            -----------         -----------         -----------         -----------

                                                            $   122,015         $ 2,544,295         $ 2,645,406         $ 3,042,908
                                                            ===========         ===========         ===========         ===========
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 1997 the Registrant's  current liabilities exceeded current
assets by approximately $7.2 million.  This shortfall in working capital results
from financing the purchase of long-term assets utilizing short-term  borrowings
and from the classification of current mortgage  obligations without the benefit
of a corresponding  current asset for such  properties.  Management is confident
that through cash flow  generated  from  operations,  together  with  borrowings
available  under  the line of  credit  discussed  below  and the sale of  select
assets, all obligations will be satisfied as they become due.

         Effective  January 15, 1997,  the  Registrant  entered into a Revolving
Credit Agreement  ("Revolver")  with two banks that provide for borrowings of up
to $40  million  and which  expires on January 15,  2000.  Borrowings  under the
Revolver,  at the  Registrant's  option,  bear  interest  at Prime or LIBOR plus
1.75%.  Under the terms of the Revolver,  the  Registrant  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.  The
terms of the Revolver  contain  certain  financial  and  restrictive  covenants,
including minimum consolidated equity,  interest coverage, debt service coverage
and  capital  expenditures  (other  than for  real  estate).  At June 30,  1997,
approximately  $19 million was available to be borrowed under the Revolver.  The
Registrant classified  $7,161,000 of borrowings  outstanding under this facility
at June 30, 1997 as long-term  debt as the  Registrant  has both the ability and
the intent to refinance  these amounts on a long-term basis under the new credit
facility.

         The Registrant 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  Registrant.  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.



                                 Page 14 of 17
<PAGE>
         At June 30,  1997 and  December  31,  1996 a total of $2.9  million  in
anticipated   insurance   recoveries  has  been  recorded  in  the  accompanying
consolidated financial statements and is included in other assets. Additionally,
in  1995  the  Registrant  received  approximately  $4.1  million  of  insurance
recoveries. The remaining balance of $2.9 million at June 30, 1997 (from a total
of  $7  million)  is  in  dispute  with  the  Registrant'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 Registrant will prevail in its efforts to obtain amounts at or
in excess of the estimated recoveries.

         The  cash  needs of the  Registrant  have  been  satisfied  from  funds
generated by current operations and additional  borrowings.  It is expected that
future operational cash needs will also be satisfied from ongoing operations and
additional  borrowings  on the Revolver.  The primary  source of capital to fund
additional  real  estate  acquisitions  will come from the sale,  financing  and
refinancing of the  Registrant's  properties and from the 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 Registrant may acquire
real  properties  in  exchange  for  the  issuance  of the  Registrant's  equity
securities.  The Registrant 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.

         Funds of the  Registrant in excess of that needed for working  capital,
purchasing real estate and arranging  financing for real estate acquisitions are
invested by the  Registrant in corporate  equity  securities,  corporate  notes,
other financial instruments, certificates of deposit and government securities.

BUSINESS TRENDS

         Total revenues of the Registrant decreased $796,000 or 2% for the first
half of 1997 versus such results of the comparable  1996 period.  Net income for
the first six months of 1997 was $4,625,000 or $.87 per share versus  $2,846,000
or $.51 per share during the same period in 1996.  The increase in net income is
primarily  attributable  to the  registrant's  real estate  operations  and to a
significant turnaround in the antenna systems segment.

         The results of the  Registrant's  real estate  operations  reflect a 2%
increase in revenues for the first six months of 1997,  primarily as a result of
a retroactive  adjustment for percentage rents on certain properties.  Operating
profit  of this  segment  for the six  months  ended  June  30,  1997  increased
$1,665,000 or 60% over the prior year. This segment was favorably  impacted by a
18% reduction in mortgage  interest  expense  resulting from the repayment of $6
million in mortgage indebtedness during the last 12 months.  Continuing mortgage
amortization  will continue to have a favorable  impact on these  operations and
will reduce  current  mortgage  obligations  to virtually zero in less than nine
years.

         The results of the Registrant's  engineered  products segment reflect a
13% decrease in revenues  during the first six months of 1997 versus  comparable
1996  results.  With the  continued  decrease  in world wide  automobile  sales,
management  is focused on new sales  opportunities  including  new  geographical
markets  for  its  existing   products  and  new   applications   for  its  core
technologies.  Operating  profits  as a  percentage  of sales for the six months
ended June 30, 1997 increased over the prior year  principally due to an ongoing
emphasis on cost reductions and productivity improvements.






                                 Page 15 of 17
<PAGE>

         The  results of the  Registrant's  antenna  systems  segment  reflect a
significant  turnaround from the prior year, which is primarily  attributable to
increased sales levels and to actions taken by senior management in 1996. Senior
management will continue to closely monitor the operations of this segment.

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 (the  "Exchange  Act"),
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,  competition,  potential  technology
changes and potential changes in customer  spending and purchasing  policies and
procedures. Although the Registrant believes that the 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 Registrant or any other person
that the objectives and plans of the Registrant will be achieved.

PART II OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDING

Rosatelli vs. United Capital Corp., et al

In August 1996,  Dennis  Rosatelli,  the  Registrant's  former  Chief  Financial
Officer  commenced  an action in  Superior  court of New Jersey,  Law  Division,
Bergen  County,  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  complaint  to include  Bank of America  Illinois,  Metex
Corporation,  Kentile Inc.,  A.F.  Petrocelli and another  officer of Kentile as
additional  defendants.  The  Registrant  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 Registrant in May, 1996
for cause. The matter has been removed to United States District Court, District
of New Jersey.  This action is in the early  stages of pretrial  discovery.  The
Registrant   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  Registrant  against  his claims  under his
employment contract.


                                 Page 16 of 17
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On June 19,  1997,  the  Registrant  held its Annual  Meeting  of  Stockholders,
whereby the stockholders elected Directors and approved a proposal to ratify the
appointment of Arthur Andersen LLP as the Company's independent auditors for the
year ending December 31, 1997. The vote on such matters was as follows:

1.   ELECTION OF DIRECTORS:

                                          For              Withheld
                                          ---              --------
         A.F. Petrocelli               4,475,055            3,060
         Howard M. Lorber              4,475,055            3,060
         Anthony J. Miceli             4,475,055            3,060
         Arnold S. Penner              4,474,939            3,176


2.   RATIFICATION  OF APPOINTMENT OF AUDITORS:  To ratify the appointment of
     Arthur Andersen LLP as the  independent  auditors of the Registrant for
     the year ending December 31, 1997.

                 For               Against              Abstain
                 ---               -------              -------
              4,473,930             2,766                1,419


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
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                        UNITED CAPITAL CORP.

Dated: August 14, 1997                  By:  /s/ Anthony J. Miceli
                                        --------------------------
                                        Anthony J. Miceli
                                        Vice President, Chief Financial Officer
                                        and Secretary of the Registrant


                                 Page 17 of 17