Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 06, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'FIRST EQUITY PROPERTIES INC | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0000726516 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 1,057,628 |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Current Reporting Status | 'No | ' |
Entity Voluntary Filers | 'Yes | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONSOLIDATED_BALANCE_SHEET
CONSOLIDATED BALANCE SHEET (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets {1} | ' | ' |
Notes receivables and accrued interest - affiliates | $2,745,745 | $3,101,233 |
Cash and cash equivalents | 316 | 1,542 |
Total assets | 2,746,061 | 3,102,775 |
Liabilities and Shareholders' Equity | ' | ' |
Notes payable and accrued interest - affiliates | 1,458,475 | 1,787,307 |
Accounts payable - other | 14,709 | 21,927 |
Accounts payable - affiliates | 397,115 | 424,616 |
Total liabilities | 1,870,299 | 2,233,850 |
Shareholders' equity | ' | ' |
Common stock, $0.01 par value; 40,000,000 shares authorized; 1,057,628 issued and outstanding | 10,576 | 10,576 |
Preferred stock, $0.01 par value; 4,960,000 shares authorized; none issued or outstanding | 0 | 0 |
Paid in capital | 1,376,682 | 1,376,682 |
Retained earnings (deficit) | -511,496 | -518,333 |
Total shareholders' equity | 875,762 | 868,925 |
Total liabilities and shareholders' equity | $2,746,061 | $3,102,775 |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Parentheticals | ' | ' |
Common Stock, par value | $0.01 | $0.01 |
Common Stock, shares authorized | 40,000,000 | 40,000,000 |
Common Stock, shares issued | 1,057,628 | 1,057,628 |
Common Stock, shares outstanding | 1,057,628 | 1,057,628 |
Preferred Stock, par value | $0.01 | $0.01 |
Preferred Stock, shares authorized | 4,960,000 | 4,960,000 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue | ' | ' | ' | ' |
Interest income | $60,683 | $60,683 | $180,071 | $180,730 |
Other income | 0 | 0 | 0 | 100 |
Total Revenue | 60,683 | 60,683 | 180,071 | 180,830 |
Operating Expenses | ' | ' | ' | ' |
General and administrative | 18,106 | 3,632 | 52,453 | 69,413 |
Legal and professional fees | 2,715 | 7,801 | 32,445 | 27,710 |
Total operating expenses | 20,821 | 11,433 | 84,898 | 97,123 |
Income (loss) before interest expense and taxes | 39,862 | 49,250 | 95,173 | 83,707 |
Other income (expense) | ' | ' | ' | ' |
Gain on sale | 0 | 0 | 0 | 259,071 |
Interest expense | -34,535 | -17,703 | -88,336 | -145,402 |
Income (loss) before income taxes | 5,327 | 31,547 | 6,837 | 197,376 |
Income tax (expense) benefit | 0 | 0 | 0 | 0 |
Net income (loss) applicable to common shareholders | $5,327 | $31,547 | $6,837 | $197,376 |
Earnings (loss) per share | $0.01 | $0.03 | $0.01 | $0.19 |
Weighted average shares outstanding | 1,057,628 | 1,057,628 | 1,057,628 | 1,057,628 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Common Stock Shares | Common Stock Amount | Paid In capital | Retained Earnings (Deficit) | Total Equity |
USD ($) | USD ($) | USD ($) | USD ($) | ||
Balances at Jan. 01, 2013 | 1,057,628 | 10,576 | 1,376,682 | -518,333 | 868,925 |
Net income/loss., | ' | $0 | $0 | $6,837 | $6,837 |
Balances at Sep. 30, 2013 | 1,057,628 | 10,576 | 1,376,682 | -511,496 | 875,762 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash Flows from Operating Activities | ' | ' |
Net Income (Loss) | $6,837 | $165,829 |
Adjustments to reconcile net income applicable to common shareholders to net cash provided by (used in) operating activities: | ' | ' |
Gain on sale | ' | -259,071 |
(Increase) decrease in interest receivable - affiliates | 355,488 | -120,047 |
Increase (decrease) in Accounts payable - other. | -7,218 | 42,028 |
Increase (decrease) in Accounts payable - affiliates | -27,501 | -15,000 |
Increase (Decrease ) Interest payable - affiliates | -46,363 | 127,698 |
Net cash provided by (used for) operating activities | 281,243 | -58,563 |
Cash Flows from Investing Activities | ' | ' |
Increase in investment in real estate | 0 | 4,120,300 |
Notes receivable - affiliates | 0 | 63,836 |
Net cash provided by (used for) investing activities | 0 | 4,184,136 |
Cash Flows from Financing Activities | ' | ' |
Notes payable - affiliates | -282,469 | -4,125,649 |
Net cash provided by (used for) financing activities | -282,469 | -4,125,649 |
Net increase (decrease) in cash and cash equivalents | -1,226 | -76 |
Cash and cash equivalents at the beginning of period | 1,542 | 508 |
Cash and cash equivalents at the end of period | 316 | 432 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest to Adams Realty | 0 | 39,550 |
Cash paid for interest to affiliates | 134,699 | 0 |
Non - cash items: | ' | ' |
Change in Investment in RE from land sales | 0 | 5,576,494 |
Debt assumed by purchaser | $0 | ($4,120,300) |
ORGANIZATION_AND_BASIS_OF_PRES
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2013 | |
ORGANIZATION AND BASIS OF PRESENTATION | ' |
ORGANIZATION AND BASIS OF PRESENTATION | ' |
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION | |
Organization | |
First Equity Properties, Inc. is Nevada based corporation organized in December 19, 1996 and the Company is headquartered in Dallas, TX. The Company’s principal line of business and source of revenue has been earnings on investments and interest on notes receivable. The Company is currently in the business of real estate investing. FEPI is a publicly traded company however, no trading marked presently exists for the shares of common stock and its value is therefore not determinable. | |
Basis of presentation | |
The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in the unaudited financial statements prepared in accordance with accounting principles generally accepted in the United States, or GAAP, have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. Certain 2011 balances have been reclassified to conform to the 2012 presentation. | |
The year-end Balance Sheet at December 31, 2012, was derived from the audited financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. | |
Cost capitalization | |
Costs related to planning and developing a project are capitalized and classified as Real Estate development costs in the Consolidated Balance Sheets. We capitalized certain operating expenses until development is substantially complete, but no later than one year from the cessation of major development activity. | |
Newly issued accounting pronouncements | |
We have considered all other newly issued accounting guidance that are applicable to our operations and the preparation of our statements, including that which we have not yet adopted. We do not believe that any such guidance will have a material effect on our financial position or results of operation. |
REAL_ESTATE_ACTIVITY
REAL ESTATE ACTIVITY | 9 Months Ended |
Sep. 30, 2013 | |
REAL ESTATE ACTIVITY | ' |
REAL ESTATE ACTIVITY | ' |
NOTE 2. REAL ESTATE ACTIVITY | |
On December 31, 2010 the Company acquired a subsidiary, ART Westwood FL, Inc. and purchased land from a related party. Effective March 31, 2011 ART Westwood FL, Inc. changed its name to Kelly Lot Development, Inc. On December 31, 2010 the Company owned various parcels of undeveloped land which consist of approximately 7.53 acres of Kelly Lots Land located in Farmers Branch, TX, approximately 6.916 acres of Vineyard Land located in Grapevine, TX and approximately 5.618 acres and 6.25 acres of Nashville Land located in Nashville, TN all purchased from a related party. On April 1, 2011 the Company purchased approximately 3.028 acres of Seminary West Land located in Fort Worth, Texas and 6.796 acres of Travis Ranch Land located in Kaufman County, Texas from a related party. On November 30, 2011 the Company purchased approximately 23.237 acres known as Cooks Lane located in Fort Worth, TX from a related party. | |
Effective April 1, 2012, the Company sold 100% of the outstanding stock of its former subsidiary Kelly Lot Development, Inc., a Nevada corporation (formerly ART Westwood FL, Inc.) (“KLD”) to Tacco Financial, Inc., a Nevada corporation (“TFI”). TFI’s only relationship with FEPI is that TFI loaned certain funds to FEPI in the past. The consideration given by TFI for the purchase of the stock of KLD total $5,576,494 comprised of and paid by the cancellation of a note and interest thereon due to TFI from FEPI in the amount of $4,120,300, assumption by TFI of certain indebtedness to third parties aggregating $1,456,194 including a note issued by FEPI to Adams Realty, Inc. in the amount of $944,000 and the assumption of an obligation to pay accrued real estate taxes on certain land in the amount of $32,313. |
FEDERAL_INCOME_TAXES
FEDERAL INCOME TAXES | 9 Months Ended |
Sep. 30, 2013 | |
FEDERAL INCOME TAXES | ' |
FEDERAL INCOME TAXES | ' |
NOTE 3. FEDERAL INCOME TAXES | |
The Company accounts for income taxes in accordance with Accounting Standards Codification, (“ASC”) No. 740, “Accounting for Income Taxes”. ASC 740 requires an asset and liability approach to financial accounting for income taxes. In the event differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities result in deferred tax assets, ASC 740 requires an evaluation of the probability of being able to realize the future benefits indicated. | |
Recognition of the benefits of deferred tax assets will require the Company to generate future taxable income. There is no assurance that the Company will generate earnings in future years. | |
NOTES_RECEIVABLE_AND_ACCRUED_I
NOTES RECEIVABLE AND ACCRUED INTEREST - AFFILIATE | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
NOTES RECEIVABLE AND ACCRUED INTEREST - AFFILIATE | ' | ||||||||
NOTES RECEIVABLE AND ACCRUED INTEREST - AFFILIATE | ' | ||||||||
NOTE 4. NOTES RECEIVABLE AND ACCRUED INTEREST – AFFILIATE | |||||||||
Receivables from affiliates primarily consist of two notes of $1,822,540 and $585,000 which are payable in quarterly installments of interest only. The notes accrue interest at 10% per annum. These notes came due December 31, 2011 and have been extended to December 31, 2013. The Company received $482,168 in May 2013 for the past interest receivable balance at December 31, 2012. | |||||||||
2013 | 2012 | ||||||||
Notes receivable – affiliates | |||||||||
Unsecured, due on demand, interest rate of 10%, due monthly | $ | 2,407,540 | $ | 2,407,540 | |||||
Accrued interest – affiliates | 180,071 | 482,168 | |||||||
Accounts receivable – affiliates | 158,134 | 211,525 | |||||||
Total notes and accounts receivable – affiliates | $ | 2,745,745 | $ | 3,101,233 |
RELATED_PARTIES_TRANSACTIONS
RELATED PARTIES TRANSACTIONS | 9 Months Ended |
Sep. 30, 2013 | |
RELATED PARTIES TRANSACTIONS | ' |
RELATED PARTIES TRANSACTIONS | ' |
NOTE 5. RELATED PARTIES TRANSACTIONS | |
Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis due to the absence of free market forces that naturally exist in business dealings between two or more unrelated entities. Related party transactions may not always be favorable to our business and may include terns, conditions and agreements that are not necessarily beneficial to or in best interest of our company. | |
The Company has an administrative agreement with Pillar Income Asset Management, Inc., an affiliated entity, for accounting and administrative services. This agreement was revised effective April 1, 2013 and was increased from $2,500 to $5,000 per month. The total expense of the nine months ended September 30, 2013 was $37,500 which is included in General and Administrative expenses of the Consolidated Statement of Operations. |
ACCOUNTING_POLICIES_POLICIES
ACCOUNTING POLICIES (POLICIES) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies | ' |
Organization | ' |
Organization | |
First Equity Properties, Inc. is Nevada based corporation organized in December 19, 1996 and the Company is headquartered in Dallas, TX. The Company’s principal line of business and source of revenue has been earnings on investments and interest on notes receivable. The Company is currently in the business of real estate investing. FEPI is a publicly traded company however, no trading marked presently exists for the shares of common stock and its value is therefore not determinable. | |
Basis of presentation | ' |
Basis of presentation | |
The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in the unaudited financial statements prepared in accordance with accounting principles generally accepted in the United States, or GAAP, have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. Certain 2011 balances have been reclassified to conform to the 2012 presentation. | |
The year-end Balance Sheet at December 31, 2012, was derived from the audited financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 | |
Cost capitalization | ' |
Cost capitalization | |
Costs related to planning and developing a project are capitalized and classified as Real Estate development costs in the Consolidated Balance Sheets. We capitalized certain operating expenses until development is substantially complete, but no later than one year from the cessation of major development activity. | |
Newly issued accounting pronouncements | ' |
Newly issued accounting pronouncements | |
We have considered all other newly issued accounting guidance that are applicable to our operations and the preparation of our statements, including that which we have not yet adopted. We do not believe that any such guidance will have a material effect on our financial position or results of operation. |
NOTES_RECEIVABLE_AND_ACCRUED_I1
NOTES RECEIVABLE AND ACCRUED INTEREST - AFFILIATE (TABLE) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
NOTES RECEIVABLE AND ACCRUED INTEREST - AFFILIATE {2} | ' | ||||||||
NOTES RECEIVABLE AND ACCRUED INTEREST - AFFILIATE | ' | ||||||||
2013 | 2012 | ||||||||
Notes receivable – affiliates | |||||||||
Unsecured, due on demand, interest rate of 10%, due monthly | $ | 2,407,540 | $ | 2,407,540 | |||||
Accrued interest – affiliates | 180,071 | 482,168 | |||||||
Accounts receivable – affiliates | 158,134 | 211,525 | |||||||
Total notes and accounts receivable – affiliates | $ | 2,745,745 | $ | 3,101,233 |
REAL_ESTATE_ACTIVITY_Details
REAL ESTATE ACTIVITY (Details) | Nov. 30, 2011 | Apr. 01, 2011 | Dec. 31, 2010 |
Land Details | ' | ' | ' |
7.53 acres of Kelly Lots Land located in Farmers Branch, TX, approximately | ' | ' | 6.916 |
6.25 acres Nashville Land located in Nashville | ' | ' | 5.618 |
Company purchased no of acres | 23.237 | 3.028 | ' |
TFI_Purchases_Details
TFI Purchases (Details) (USD $) | Apr. 01, 2012 |
Tfi Purchase details | ' |
Purchase of the stock of KLD total | $5,576,494 |
cancellation of a note and interest thereon due to TFI from FEPI | 4,120,300 |
Third parties aggregating amt | 1,456,194 |
Note issued by FEPI to Adams Realty, Inc. | 944,000 |
Real Estate Taxes | $32,313 |
NOTES_RECEIVABLE_AND_ACCRUED_I2
NOTES RECEIVABLE AND ACCRUED INTEREST (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Notes Receivables Details | ' | ' | ' |
Receivables from affiliates | $482,168 | $585,000 | $1,822,540 |
Notes accrue interest | 10.00% | 10.00% | 10.00% |
Notes_and_accounts_receivable_
Notes and accounts receivable - affiliates (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Notes receivable - affiliates {1} | ' | ' |
Unsecured, due on demand, interest rate of 10%, due monthly | $2,407,540 | $2,407,540 |
Accrued interest - affiliates | 180,071 | 482,168 |
Accounts receivable - affiliates | 158,134 | 211,525 |
Total notes and accounts receivable - affiliates | $2,745,745 | $3,101,233 |