Direct Investment (FEPI) 10-Q 15 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 15, 2017
Document and Entity Information
Entity Registrant Name	FIRST EQUITY PROPERTIES INC
Entity Trading Symbol	fepi
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
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	2,017
Document Fiscal Period Focus	Q1

BALANCE SHEETS

BALANCE SHEETS - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Assets {1}
Notes receivable and accrued interest - related parties	$ 2,105,103	$ 2,106,229
Cash and cash equivalents	838	900
Total assets	2,105,941	2,107,129
Liabilities and Shareholders' Equity
Notes payable and accrued interest - related parties	836,506	836,953
Accounts payable - other	29,226	4,732
Accounts payable - related parties	368,542	375,728
Total liabilities	1,234,274	1,217,413
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)	(515,591)	(497,542)
Total shareholders' equity	871,667	889,716
Total liabilities and shareholders' equity	$ 2,105,941	$ 2,107,129

BALANCE SHEETS PARENTHETICALS

BALANCE SHEETS PARENTHETICALS - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Parentheticals
Preferred Stock, par value	$ 0.01	$ 0.01
Preferred Stock, shares authorized	4,960,000	4,960,000
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

STATEMENT OF OPERATIONS (unaudi

STATEMENT OF OPERATIONS (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue
Revenue from operations	$ 0	$ 0
Total revenue	0	0
Operating Expenses
Administrative fees - related parties	18,000	15,000
General and administrative	2,026	2,718
Legal and professional fees	28,551	30,829
Total operating expenses	48,577	48,547
Income (loss) before interest expense and taxes	(48,577)	(48,547)
Other income (expense)
Interest income - related parties	50,658	51,220
Interest expense - related parties	(20,130)	(20,353)
Net income (loss) applicable to common shareholders	$ (18,049)	$ (17,680)
Earnings (loss) per share	$ (0.02)	$ (0.02)
Weighted average shares outstanding	1,057,628	1,057,628

STATEMENT OF CHANGES IN SHAREHO

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) - 3 months ended Mar. 31, 2017 - USD ($)	Common Stock Shares	Common Stock Amount	Paid-in Capital	Retained Earningd (Deficit)	Total Equity
Balance at Jan. 01, 2017	1,057,628	10,576	1,376,682	(497,542)	889,716
Net Income (Loss)		$ 0	$ 0	$ (18,049)	$ (18,049)
Balance at Mar. 31, 2017	1,057,628	10,576	1,376,682	(515,591)	871,667

STATEMENT OF CASH FLOWS (unaudi

STATEMENT OF CASH FLOWS (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities
Net Income (Loss)	$ (18,049)	$ (17,680)
(Increase) decrease in
Interest receivable - related parties	1,126	563
Increase (decrease) in
Accounts payable - other	24,494	31,190
Accounts payable - related parties	(7,186)	(13,001)
Interest payable - related parties	(447)	(223)
Federal income tax payable	0	0
Net cash provided by (used for) operating activities	(62)	849
Cash Flows from Investing Activities
Notes receivable - related parties	0	0
Net cash provided by (used for) investing activities	0	0
Cash Flows from Financing Activities
Notes payable - related parties	0	0
Net cash provided by (used for) financing activities	0	0
Net increase (decrease) in cash and cash equivalents	(62)	849
Cash and cash equivalents at the beginning of period	900	867
Cash and cash equivalents at the end of period	838	1,716
Supplemental disclosures of cash flow information:
Cash paid for interest expense to related parties	20,577	20,577
Cash received for interest on notes receivable	$ 51,783	$ 51,783

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2017
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, 2016, 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, 2016. 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	3 Months Ended
	Mar. 31, 2017
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	3 Months Ended
	Mar. 31, 2017
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 due to the Company 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, 2017. A payment was received in March 2017 for $51,783 which paid the remaining interest balance due in 2016. 2017 2016 Notes receivable – related parties Unsecured, due on demand, interest rate of 10%, due monthly $ 2,054,446 $ 2,054,446 Accrued interest – related parties 50,657 51,783 Total notes and accounts receivable – related parties $ 2,105,103 $ 2,106,229 Subsequent payments for interest on notes receivable were received in May 2017 for $50,657 which makes the interest receivable balances current.

NOTES PAYABLE AND ACCRUED INTER

NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES	3 Months Ended
	Mar. 31, 2017
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES	NOTE 4. NOTES PAYABLE AND ACCRUED INTEREST – RELATED PARTIES 2017 2016 Uncollateralized notes payable – related parties due on demand, interest rate of 10%, payable quarterly $ 816,376 $ 816,376 Accrued interest and intercompany – related parties 20,130 20,577 Total notes payable – related parties $ 836,506 $ 836,953 Long term debt and accrued interest is due December 31, 2017. Subsequent payments for interest on notes payable were made in May 2017 totaling $20,130 which makes the notes and interest payable balances current.

RELATED PARTIES TRANSACTIONS

RELATED PARTIES TRANSACTIONS	3 Months Ended
	Mar. 31, 2017
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. The total expense of the three months ended March 31, 2017 was $18,000 which is included in General and Administrative expenses of the Statements of Operations.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2017
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 6. SUBSEQUENT EVENTS The Company has evaluated subsequent events through May 15, 2017, the date the financial statements were available to be issued, and has determined that there has been subsequent payments received in May 2017 for interest on notes receivable and subsequent payments made in May 2017 for interest owed on notes payable.

ACCOUNTING POLICIES (Policies)

ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2017
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, 2016, 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, 2016.
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)	3 Months Ended
	Mar. 31, 2017
NOTES RECIEVABLE AND ACCRUED INTEREST - RELATED PARTIES
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 due to the Company 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, 2017. A payment was received in March 2017 for $51,783 which paid the remaining interest balance due in 2016. 2017 2016 Notes receivable – related parties Unsecured, due on demand, interest rate of 10%, due monthly $ 2,054,446 $ 2,054,446 Accrued interest – related parties 50,657 51,783 Total notes and accounts receivable – related parties $ 2,105,103 $ 2,106,229

NOTES PAYABLE AND ACCRUED INT15

NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES (Tables)	3 Months Ended
	Mar. 31, 2017
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES {2}
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES	Uncollateralized notes payable – related parties due on demand, interest rate of 10%, payable quarterly $ 816,376 $ 816,376 Accrued interest and intercompany – related parties 20,130 20,577 Total notes payable – related parties $ 836,506 $ 836,953

NOTES RECEIVABLE AND ACCRUED 16

NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Notes receivable - related parties {1}
Unsecured, due on demand, interest rate of 10%, due monthly	$ 2,054,446	$ 2,054,446
Accrued interest - related parties	50,657	51,783
Total notes and accounts receivable - related parties	$ 2,105,103	$ 2,106,229

RECEIVABLES RELATED PARTIES (De

RECEIVABLES RELATED PARTIES (Details)	Mar. 31, 2017USD ($)
RECEIVABLES RELATED PARTIES Details
Receivable related parties primary note 1 mature on December 31, 2017	$ 1,565,292
Receivable related parties primary note 2	$ 489,154
Notes accrued interest per annum at	10.00%
Payment received in March 2017	$ 51,783
Subsequent payments for interest on notes receivable were received in May 2017	$ 50,657

NOTES PAYABLE AND ACCRUED INT18

NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES DETAILS
Uncollateralized notes payable - related parties due on demand, interest rate of 10%, payable quarterly	$ 816,376	$ 816,376
Accrued interest and intercompany - related parties	20,130	20,577
Total notes payable - related parties	836,506	836,953
Subsequent payments for interest on notes payable were made in May 2017 totaling	$ 20,130	$ 0

RELATED PARTIES TRANSACTIONS (D

RELATED PARTIES TRANSACTIONS (Details)	3 Months Ended
	Mar. 31, 2017USD ($)
RELATED PARTIES TRANSACTIONS Details
Total expense	$ 30,000