Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 12, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-11777 | |
Entity Registrant Name | FIRST EQUITY PROPERTIES INC | |
Entity Central Index Key | 0000726516 | |
Entity Incorporation, State or Country Code | NV | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,057,628 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Notes receivable and accrued interest - related parties | $ 1,553,267 | $ 1,553,267 |
Accounts receivable - related parties | 168,495 | |
Cash and cash equivalents | 192,704 | 41,526 |
Total assets | 1,745,971 | 1,763,288 |
Liabilities and Shareholders' Equity | ||
Notes payable and accrued interest - related parties | 599,088 | 584,360 |
Accounts payable - other | 774 | |
Accounts payable - related parties | 367,115 | 367,115 |
Total liabilities | 966,203 | 952,249 |
Shareholders' equity | ||
Preferred stock, $0.01 par value; 4,960,000 shares authorized; none issued or outstanding | ||
Common stock, $0.01 par value; 40,000,000 shares authorized; 1,057,628 issued and outstanding | 10,576 | 10,576 |
Paid in capital | 1,376,682 | 1,376,682 |
Retained earnings (deficit) | (607,490) | (576,219) |
Total shareholders' equity | 779,768 | 811,039 |
Total liabilities and shareholders' equity | $ 1,745,971 | $ 1,763,288 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
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 |
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 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Expenses | ||||
Administrative fees - related parties | $ 18,000 | $ 18,000 | $ 54,000 | $ 54,000 |
General and administrative | 3,587 | 4,594 | 12,717 | 13,466 |
Legal and professional | 3,319 | 2,512 | 37,288 | 36,113 |
Total operating expenses | 24,906 | 25,106 | 104,005 | 103,579 |
Income (loss) before interest expense and taxes | (24,906) | (25,106) | (104,005) | (103,579) |
Other income (expense) | ||||
Interest income - related parties | 39,151 | 39,151 | 116,601 | 116,176 |
Interest expense - related parties | (14,729) | (14,729) | (43,867) | (43,707) |
Net income (loss) applicable to common shareholders | $ (484) | $ (684) | $ (31,271) | $ (31,110) |
Earnings (loss) per share | $ (0.03) | $ (0.03) | ||
Weighted average shares outstanding | 1,057,628 | 1,057,628 | 1,057,628 | 1,057,628 |
Shareholders Equity (Unaudited)
Shareholders Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 1,057,628 | |||
Beginning balance, value at Dec. 31, 2018 | $ 10,576 | $ 1,376,682 | $ (545,708) | $ 841,550 |
Net income (loss) | (31,110) | (31,110) | ||
Ending balance, shares at Sep. 30, 2019 | 1,057,628 | |||
Ending balance, value at Sep. 30, 2019 | $ 10,576 | 1,376,682 | (576,818) | 810,440 |
Beginning balance, shares at Jun. 30, 2019 | 1,057,628 | |||
Beginning balance, value at Jun. 30, 2019 | $ 10,576 | 1,376,682 | (576,134) | 811,124 |
Net income (loss) | (684) | (684) | ||
Ending balance, shares at Sep. 30, 2019 | 1,057,628 | |||
Ending balance, value at Sep. 30, 2019 | $ 10,576 | 1,376,682 | (576,818) | 810,440 |
Beginning balance, shares at Dec. 31, 2019 | 1,057,628 | |||
Beginning balance, value at Dec. 31, 2019 | $ 10,576 | 1,376,682 | (576,219) | 811,039 |
Net income (loss) | (31,271) | (31,271) | ||
Ending balance, shares at Sep. 30, 2020 | 1,057,628 | |||
Ending balance, value at Sep. 30, 2020 | $ 10,576 | 1,376,682 | (607,490) | 779,768 |
Beginning balance, shares at Jun. 30, 2020 | 1,057,628 | |||
Beginning balance, value at Jun. 30, 2020 | $ 10,576 | 1,376,682 | (607,006) | 780,252 |
Net income (loss) | (484) | (484) | ||
Ending balance, shares at Sep. 30, 2020 | 1,057,628 | |||
Ending balance, value at Sep. 30, 2020 | $ 10,576 | $ 1,376,682 | $ (607,490) | $ 779,768 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities | ||
Net Income (Loss) | $ (31,271) | $ (31,110) |
Adjustments to reconcile net income applicable to common shareholders to net cash provided by (used in) operating activities: | ||
(Increase) decrease in Interest receivable - related parties | 39,151 | |
(Increase) decrease in Accounts receivable - related parties | 168,495 | (168,535) |
Increase (decrease) in Accounts payable - other | (774) | 794 |
Increase (decrease) in Accounts payable - related parties | (450) | |
Increase (decrease) in Interest payable - related parties | 14,728 | |
Net cash provided by (used for) operating activities | 151,178 | (160,150) |
Net increase (decrease) in cash and cash equivalents | 151,178 | (160,150) |
Cash and cash equivalents at the beginning of period | 41,526 | 201,057 |
Cash and cash equivalents at the end of period | 192,704 | 40,907 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest expense to related parties | $ 29,138 | $ 43,707 |
1. ORGANIZATION AND BASIS OF PR
1. ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2019. Operating results for the nine month period ended September 30, 2020 are not necessarily indicative of the results that may be expected for any subsequent quarter or for the fiscal year ending December 31, 2020. 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. |
2. FEDERAL INCOME TAX
2. FEDERAL INCOME TAX | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
FEDERAL INCOME TAX | 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. |
3. NOTES RECEIVABLE AND ACCRUED
3. NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
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 $1,164,113 and $389,154 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, 2021. Sept 30, 2020 Sept 30, 2019 Notes receivable – related parties Unsecured, due on demand, interest rate of 10%, due monthly $ 1,553,267 $ 1,553,267 Total notes and accounts receivable – related parties $ 1,553,267 $ 1,553,267 |
4. NOTES PAYABLE AND ACCRUED IN
4. NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES | NOTE 4. NOTES PAYABLE AND ACCRUED INTEREST – RELATED PARTIES September 30, 2020 September 30, 2019 Uncollateralized notes payable – related parties due on demand, interest rate of 10%, payable quarterly $ 584,360 $ 584,360 Accrued interest and intercompany – related parties 14,728 — Total notes payable – related parties $ 599,088 $ 584,360 Long term debt and accrued interest is due December 31, 2021. |
5. RELATED PARTIES TRANSACTIONS
5. RELATED PARTIES TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
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 terms, 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 nine months ended September 30, 2020 was $54,000 which is included in General and Administrative expenses of the Statements of Operations. The Company owes $367,115 to another related party as of September 30, 2020. |
6. SUBSEQUENT EVENTS
6. SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 6. SUBSEQUENT EVENTS We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business and across our portfolio. While we did not experience significant disruptions during the nine months ended September 30, 2020 from the COVID-19 pandemic, we are unable to predict the impact the COVID-19 pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties. The Company has evaluated subsequent events through November 12, 2020, the date the financial statements were available to be issued, and has determined that there are none to be reported. |
1. ORGANIZATION AND BASIS OF _2
1. ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2019. Operating results for the nine month period ended September 30, 2020 are not necessarily indicative of the results that may be expected for any subsequent quarter or for the fiscal year ending December 31, 2020. |
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. |
3. NOTES RECEIVABLE AND ACCRU_2
3. NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES | Sept 30, 2020 Sept 30, 2019 Notes receivable – related parties Unsecured, due on demand, interest rate of 10%, due monthly $ 1,553,267 $ 1,553,267 Total notes and accounts receivable – related parties $ 1,553,267 $ 1,553,267 |
4. NOTES PAYABLE AND ACCRUED _2
4. NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES | September 30, 2020 September 30, 2019 Uncollateralized notes payable – related parties due on demand, interest rate of 10%, payable quarterly $ 584,360 $ 584,360 Accrued interest and intercompany – related parties 14,728 — Total notes payable – related parties $ 599,088 $ 584,360 |
3. NOTES RECEIVABLE AND ACCRU_3
3. NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Receivables [Abstract] | |||
Notes receivable - related parties Unsecured, due on demand, interest rate of 10%, due monthly | $ 1,553,267 | $ 1,553,267 | |
Total notes and accounts receivable - related parties | $ 1,553,267 | $ 1,553,267 | $ 1,553,267 |
3. NOTES RECEIVABLE AND ACCRU_4
3. NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES (Details Narrative) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 |
Notes receivable - related parties | $ 1,553,267 | $ 1,553,267 | |
Note Receivable 1 [Member] | |||
Notes receivable - related parties | $ 1,164,113 | ||
Stated interet rate | 10.00% | ||
Debt maturity date | Dec. 31, 2021 | ||
Note Receivable 2 [Member] | |||
Notes receivable - related parties | $ 389,154 | ||
Stated interet rate | 10.00% | ||
Debt maturity date | Dec. 31, 2021 |
4. NOTES PAYABLE AND ACCRUED _3
4. NOTES PAYABLE AND ACCRUED INTEREST – RELATED PARTIES (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Disclosure [Abstract] | ||
Uncollateralized notes payable - related parties due on demand, interest rate of 10%, payable quarterly | $ 584,360 | $ 584,360 |
Accrued interest and intercompany - related parties | 14,728 | |
Total notes payable - related parties | $ 599,088 | $ 584,360 |
4. NOTES PAYABLE AND ACCRUED _4
4. NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES (Details Narrative) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt maturity date | Dec. 31, 2021 |
5. RELATED PARTIES TRANSACTIO_2
5. RELATED PARTIES TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Related Party Transactions [Abstract] | ||||
Related party expense | $ 18,000 | $ 18,000 | $ 54,000 | $ 54,000 |
Payable to related party | $ 367,115 |