Direct Investment (FEPI) 10-Q 13 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 12, 2015
Document and Entity Information
Entity Registrant Name	FIRST EQUITY PROPERTIES INC
Entity Trading Symbol	fepi
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Entity Central Index Key	726,516
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	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS (un

CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Assets {1}
Notes receivable and accrued interest - related parties	$ 2,106,229	$ 2,172,752
Cash and cash equivalents	1,618	1,776
Total assets	2,107,847	2,174,528
Liabilities and Shareholders' Equity
Notes payable and accrued interest - related parties	836,953	877,850
Accounts payable - other	3,788	3,177
Accounts payable - related parties	387,038	417,555
Total liabilities	1,227,779	1,298,582
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)	(507,190)	(511,312)
Total shareholders' equity	880,068	875,946
Total liabilities and shareholders' equity	$ 2,107,847	$ 2,174,528

CONSOLIDATED BALANCE SHEETS PAR

CONSOLIDATED BALANCE SHEETS PARENTHETICALS - $ / shares	Sep. 30, 2015	Dec. 31, 2014
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
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue
Interest income - related parties	$ 51,783	$ 54,149	$ 156,229	$ 164,871
Total income	51,783	54,149	156,229	164,871
Operating Expenses
General and administrative - related parties	15,000	15,000	45,000	45,000
General and administrative	3,248	5,037	10,920	10,992
Legal and professional fees	4,238	11,049	33,465	33,643
Total operating expenses	22,486	31,086	89,385	89,635
Income (loss) before interest expense and taxes	29,297	23,063	66,844	75,236
Other income (expense)
Interest expense - related parties	(20,577)	(26,621)	(62,722)	(86,761)
Income (loss) before income taxes	8,720	(3,558)	4,122	(11,525)
Income tax (expense) benefit	0	0	0	0
Net income (loss) applicable to common shareholders	$ 8,720	$ (3,558)	$ 4,122	$ (11,525)
Earnings (loss) per share	$ 0.01	$ 0	$ 0	$ (0.01)
Weighted average shares outstanding	1,057,628	1,057,628	1,057,628	1,057,628

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) - 9 months ended Sep. 30, 2015 - USD ($)	Common Stock Shares	Common Stock Amount	Paid in Capital	Retained Earnings (Deficit)	Total Equity
Balances at at Jan. 01, 2015	1,057,628	10,576	1,376,682	(511,312)	875,946
Net income (loss)	$ 0	$ 0	$ 0	$ 4,122	$ 4,122
Balances at. at Sep. 30, 2015	1,057,628	10,576	1,376,682	(507,190)	880,068

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash Flows from Operating Activities
Net Income (Loss)	$ 4,122	$ (11,525)
(Increase) decrease in
Interest receivable - related parties	1,870	75,883
Increase (decrease) in
Accounts payable - other	611	229
Accounts payable - related parties	(30,517)	18,638
Interest payable - related parties	(1,132)	(70,914)
Net cash provided by (used for) operating activities	(25,046)	12,311
Cash Flows from Investing Activities
Notes receivable - related parties	64,653	304,985
Net cash provided by (used for) investing activities	64,653	304,985
Cash Flows from Financing Activities
Notes payable - related parties	(39,765)	(314,000)
Net cash provided by (used for) financing activities	(39,765)	(314,000)
Net increase (decrease) in cash and cash equivalents	(158)	3,296
Cash and cash equivalents at the beginning of period	1,776	346
Cash and cash equivalents at the end of period	1,618	3,642
Supplemental disclosures of cash flow information:
Cash paid for interest to related parties	63,856	157,674
Cash received for interest on notes receivable	$ 158,099	$ 240,754

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2015
ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION Organization and business First Equity Properties, Inc. is a 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 is currently 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 market 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 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. The year-end Balance Sheet at December 31, 2014, 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, 2014. 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 is 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.

FEDERAL INCOME TAXES

FEDERAL INCOME TAXES	9 Months Ended
	Sep. 30, 2015
FEDERAL INCOME TAXES
FEDERAL INCOME TAXES	NOTE 2. 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 IN

NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES	9 Months Ended
	Sep. 30, 2015
NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES
NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES	NOTE 3. NOTES RECEIVABLE AND ACCRUED INTEREST – RELATED PARTIES Receivables from related parties primarily consist of two notes of $1,565,292 and $489,154 which are payable in quarterly installments of interest only. The notes accrue interest at 10% per annum. The maturity date of these notes has been extended to December 31, 2015. A payment was received in March 2015 for $72,752.12 which paid the remaining interest balance due in 2014 and some principal on these notes. Also, a payment for $150,000 was received in July 2015 which made the notes and interest receivable balances current. 2015 2014 Notes receivable – related parties Unsecured, due on demand, interest rate of 10%, due monthly $ 2,054,446 $ 2,119,099 Accrued interest – related parties 51,783 53,653 Total notes and accounts receivable – related parties $ 2,106,229 $ 2,172,752

NOTES PAYABLE AND ACCRUED INTER

NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES	9 Months Ended
	Sep. 30, 2015
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES	NOTE 4. NOTES PAYABLE AND ACCRUED INTEREST – RELATED PARTIES 2015 2014 Uncollateralized notes payable – related parties due on demand, interest rate of 10%, payable quarterly $ 816,376 $ 856,140 Accrued interest and intercompany – related parties 20,577 21,710 Total notes payable – related parties $ 836,953 $ 877,850 Principal and interest payments due by period Total 2015 2016 2017 2018 2019 therafter Long term debt $ 836,953 $ 836,953 $ - $ - $ - $ - $ - $ 836,953 $ 836,953 $ - $ - $ - $ - $ -

RELATED PARTIES TRANSACTIONS

RELATED PARTIES TRANSACTIONS	9 Months Ended
	Sep. 30, 2015
RELATED PARTIES TRANSACTIONS
RELATED PARTIES TRANSACTIONS	NOTE 5. RELATED PARTIES TRANSACTIONS Transactions involving related parties The Company has an administrative agreement with Pillar Income Asset Management, Inc., an affiliated entity, for accounting and administrative services. The total expense of the nine months ended September 30, 2015 was $45,000 which is included in General and Administrative expenses of the Consolidated Statement of Operations.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2015
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 6. SUBSEQUENT EVENTS

ACCOUNTING POLICIES (POLICIES)

ACCOUNTING POLICIES (POLICIES)	9 Months Ended
	Sep. 30, 2015
Accounting Policies
Organization and Business	Organization and business First Equity Properties, Inc. is a 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 is currently 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 market 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 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. The year-end Balance Sheet at December 31, 2014, 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, 2014.
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 is 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 RECIEVABLE AND ACCRUED IN

NOTES RECIEVABLE AND ACCRUED INTEREST - RELATED PARTIES (Tables)	9 Months Ended
	Sep. 30, 2015
NOTES RECIEVABLE AND ACCRUED INTEREST - RELATED PARTIES
NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES	A payment for $150,000 was received in July 2015 which made the notes and interest receivable balances current. 2015 2014 Notes receivable – related parties Unsecured, due on demand, interest rate of 10%, due monthly $ 2,054,446 $ 2,119,099 Accrued interest – related parties 51,783 53,653 Total notes and accounts receivable – related parties $ 2,106,229 $ 2,172,752

NOTES PAYABLE AND ACCRUED INT15

NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES (Tables)	9 Months Ended
	Sep. 30, 2015
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES {2}
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES	2015 2014 Uncollateralized notes payable – related parties due on demand, interest rate of 10%, payable quarterly $ 816,376 $ 856,140 Accrued interest and intercompany – related parties 20,577 21,710 Total notes payable – related parties $ 836,953 $ 877,850 Principal and interest payments due by period Total 2015 2016 2017 2018 2019 therafter Long term debt $ 836,953 $ 836,953 $ - $ - $ - $ - $ - $ 836,953 $ 836,953 $ - $ - $ - $ - $ -

NOTES RECEIVABLE AND ACCRUED 16

NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES (DETAILS) - USD ($)	Sep. 30, 2015	Sep. 30, 2014
NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES {3}
Unsecured, due on demand, interest rate of 10%, due monthly	$ 2,054,446	$ 2,119,099
Accrued interest - related parties	51,783	53,653
Total notes and accounts receivable - related parties	$ 2,106,229	$ 2,172,752

RECEIVABLES RELATED PARTIES (DE

RECEIVABLES RELATED PARTIES (DETAILS) - USD ($)	Sep. 30, 2015	Jul. 31, 2015	Mar. 31, 2015
Receivables related parties
Receivable related parties primary note 1 mature on 31/12/2015	$ 1,565,292
Receivable related parties primary note 2 31/12/2015	$ 489,154
Notes accrued interest per annum at	10.00%
Payment received			$ 72,752
Subsequent payment for principal and interest on notes receivable		$ 150,000

NOTES PAYABLE AND ACCRUED INT18

NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES (DETAILS) - USD ($)	Sep. 30, 2015	Sep. 30, 2014
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES DETAILS
Uncollateralized notes payable - related parties due on demand, interest rate of 10%, payable quarterly	$ 816,376	$ 856,140
Accrued interest and intercompany - related parties	20,577	21,710
Total notes payable - related parties	$ 836,953	$ 877,850

LONG TERM DEBT PAYMENTS DUE BY

LONG TERM DEBT PAYMENTS DUE BY PERIOD (DETAILS) - USD ($)	Sep. 30, 2015	Sep. 30, 2014
Long term debt Payments due by period
Long term debt Payments due in 2015	$ 836,953	$ 836,953
Long term debt Payments due in 2016	0	0
Long term debt Payments due in 2017	0	0
Long term debt Payments due in 2018	0	0
Long term debt Payments due in 2019	0	0
Long term debt Payments due Thereafter	0	0
Long term debt Payments due Total	$ 836,953	$ 836,953

RELATED PARTIES (DETAILS)

RELATED PARTIES (DETAILS)	9 Months Ended
	Sep. 30, 2015USD ($)
Related Parties
Total expense	$ 45,000