Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 14, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | FIRST EQUITY PROPERTIES INC | |
Entity Central Index Key | 726,516 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,057,628 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 | |
Entity Small Business | true |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Notes receivable and accrued interest - related parties | $ 1,593,200 | $ 2,106,229 |
Accounts receivable - related parties | 249,562 | 0 |
Cash and cash equivalents | 685 | 914 |
Total assets | 1,843,447 | 2,107,143 |
Liabilities and Shareholders' Equity | ||
Notes payable and accrued interest - related parties | 619,544 | 836,953 |
Accounts payable - other | 3,376 | 669 |
Accounts payable - related parties | 367,115 | 383,413 |
Total liabilities | 990,035 | 1,221,035 |
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) | (533,846) | (501,150) |
Total shareholders' equity | 853,412 | 886,108 |
Total liabilities and shareholders' equity | $ 1,843,447 | $ 2,107,143 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
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 |
Statement of Operations (Unaudi
Statement of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue | ||||
Revenue from operations | $ 0 | $ 0 | $ 0 | $ 0 |
Total revenue | 0 | 0 | 0 | 0 |
Operating Expenses | ||||
Administrative fees - related parties | 18,000 | 18,000 | 36,000 | 36,000 |
General and administrative | 8,575 | 7,474 | 41,002 | 38,051 |
Total operating expenses | 26,575 | 25,474 | 77,002 | 74,051 |
Income (loss) before interest expense and taxes | (26,575) | (25,474) | (77,002) | (74,051) |
Other income (expense) | ||||
Interest income - related parties | 38,755 | 51,221 | 81,330 | 101,878 |
Interest expense - related parties | (16,894) | (20,354) | (37,024) | (40,483) |
Net income (loss) applicable to common shareholders | $ (4,714) | $ 5,393 | $ (32,696) | $ (12,656) |
Earnings (loss) per share | $ 0 | $ 0.01 | $ (0.03) | $ (0.01) |
Weighted average shares outstanding | 1,057,628 | 1,057,628 | 1,057,628 | 1,057,628 |
Statement of Changes in Shareho
Statement of Changes in Shareholders' Equity (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earningd (Deficit) | Total |
Beginning balance, shares at Dec. 31, 2017 | 1,057,628 | |||
Beginning balance, value at Dec. 31, 2017 | $ 10,576 | $ 1,376,682 | $ (501,150) | $ 886,108 |
Net income (loss) | (32,696) | (32,696) | ||
Ending balance, shares at Jun. 30, 2018 | 1,057,628 | |||
Ending balance, value at Jun. 30, 2018 | $ 10,576 | $ 1,376,682 | $ (533,846) | $ 853,412 |
Statement of Cash Flows (Unaudi
Statement of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net Income (Loss) | $ (32,696) | $ (12,656) |
Adjustments to reconcile net income applicable to common shareholders to net cash provided by (used in) operating activities: | ||
Interest receivable - related parties | 13,029 | 563 |
Accounts receivable - related parties | (265,860) | 0 |
Accounts payable - other | 2,707 | (4,732) |
Accounts payable - related parties | 0 | 16,465 |
Interest payable - related parties | (10,394) | (224) |
Net cash provided by (used for) operating activities | (293,214) | (584) |
Cash Flows from Investing Activities | ||
Notes receivable - related parties | 500,000 | 0 |
Net cash provided by (used for) investing activities | 500,000 | 0 |
Cash Flows from Financing Activities | ||
Notes payable - related parties | (207,015) | 0 |
Net cash provided by (used for) financing activities | (207,015) | 0 |
Net increase (decrease) in cash and cash equivalents | (229) | (584) |
Cash and cash equivalents at the beginning of period | 914 | 900 |
Cash and cash equivalents at the end of period | 685 | 316 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest expense to related parties | $ 47,417 | $ 40,707 |
1. ORGANIZATION AND BASIS OF PR
1. ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
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, 2017. Operating results for the six month period ended June 30, 2018 are not necessarily indicative of the results that may be expected for any subsequent quarter or for the fiscal year ending December 31, 2018. 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 TAXES
2. FEDERAL INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
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. |
3. NOTES RECEIVABLE AND ACCRUED
3. NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES | 6 Months Ended |
Jun. 30, 2018 | |
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 $1,165,292 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, 2019. A payment was received in March 2018 for $51,783 which paid the remaining interest balance due in 2017 and in May 2018 for $42,575 which made the interest receivable balances current for first quarter 2018. 2018 2017 Notes receivable – related parties Unsecured, due on demand, interest rate of 10%, due monthly $ 1,554,446 $ 2,054,446 Accrued interest – related parties 38,754 51,783 Total notes and accounts receivable – related parties $ 1,593,200 $ 2,106,229 Subsequent payments for interest on notes receivable were received in July 2018 for $38,754 which makes the interest receivable balances current. |
4. NOTES PAYABLE AND ACCRUED IN
4. NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES | NOTE 4. NOTES PAYABLE AND ACCRUED INTEREST – RELATED PARTIES 2018 2017 Uncollateralized notes payable – related parties due on demand, interest rate of 10%, payable quarterly $ 609,360 $ 816,376 Accrued interest and intercompany – related parties 10,184 20,577 Total notes payable – related parties $ 619,544 $ 836,953 Long term debt and accrued interest is due December 31, 2019. Subsequent payments for interest on notes payable were made in July 2018 totaling $10,184 which makes the notes and interest payable balances current. |
5. RELATED PARTIES TRANSACTIONS
5. RELATED PARTIES TRANSACTIONS | 6 Months Ended |
Jun. 30, 2018 | |
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 six months ended June 30, 2018 was $36,000 which is included in General and Administrative expenses of the Statements of Operations. Pillar owes the Company $249,562 at June 30, 2018. The Company owes another related entity $367,115 as of June 30, 2018. |
6. SUBSEQUENT EVENTS
6. SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 6. SUBSEQUENT EVENTS The Company has evaluated subsequent events through August 14, 2018, the date the financial statements were available to be issued, and has determined that there has been subsequent payments received in July 2018 for interest on notes receivable and subsequent payments made in July 2018 for principal and interest owed on notes payable. |
1. ORGANIZATION AND BASIS OF 13
1. ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2017. Operating results for the six month period ended June 30, 2018 are not necessarily indicative of the results that may be expected for any subsequent quarter or for the fiscal year ending December 31, 2018. |
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 ACCRU14
3. NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES | 2018 2017 Notes receivable – related parties Unsecured, due on demand, interest rate of 10%, due monthly $ 1,554,446 $ 2,054,446 Accrued interest – related parties 38,754 51,783 Total notes and accounts receivable – related parties $ 1,593,200 $ 2,106,229 |
4. NOTES PAYABLE AND ACCRUED 15
4. NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES | 2018 2017 Uncollateralized notes payable – related parties due on demand, interest rate of 10%, payable quarterly $ 609,360 $ 816,376 Accrued interest and intercompany – related parties 10,184 20,577 Total notes payable – related parties $ 619,544 $ 836,953 |
3. NOTES RECEIVABLE AND ACCRU16
3. NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Notes receivable - related parties Unsecured, due on demand, interest rate of 10%, due monthly | $ 1,554,446 | $ 2,054,446 |
Accrued interest - related parties | 38,754 | 51,783 |
Total notes and accounts receivable - related parties | $ 1,593,200 | $ 2,106,229 |
3. NOTES RECEIVABLE AND ACCRU17
3. NOTES RECEIVABLE AND ACCRUED INTEREST - RELATED PARTIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 7 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jul. 31, 2018 | Dec. 31, 2017 | |
Notes receivable - related parties | $ 1,554,446 | $ 1,554,446 | $ 2,054,446 | |||
Proceeds from notes receivable | 500,000 | $ 0 | ||||
Interest income received | 38,755 | $ 51,221 | 81,330 | $ 101,878 | ||
Note Receivable 1 [Member] | ||||||
Notes receivable - related parties | 1,165,292 | $ 1,165,292 | ||||
Stated interet rate | 10.00% | |||||
Receivable maturity date | Dec. 31, 2019 | |||||
Note Receivable 2 [Member] | ||||||
Notes receivable - related parties | $ 389,154 | $ 389,154 | ||||
Stated interet rate | 10.00% | |||||
Receivable maturity date | Dec. 31, 2019 | |||||
Notes Receivable [Member] | ||||||
Interest income received | $ 51,783 | |||||
Notes Receivable [Member] | Interest Receivable [member] | ||||||
Interest income received | $ 42,575 | |||||
Notes Receivable [Member] | Interest Receivable [member] | Subsequent Event [Member] | ||||||
Interest income received | $ 38,754 |
4. NOTES PAYABLE AND ACCRUED 18
4. NOTES PAYABLE AND ACCRUED INTEREST – RELATED PARTIES - NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Uncollateralized notes payable - related parties due on demand, interest rate of 10%, payable quarterly | $ 609,360 | $ 816,376 |
Accrued interest and intercompany - related parties | 10,184 | 20,577 |
Total notes payable - related parties | $ 619,544 | $ 836,953 |
4. NOTES PAYABLE AND ACCRUED 19
4. NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTIES (Details Narrative) - USD ($) | 6 Months Ended | 7 Months Ended |
Jun. 30, 2018 | Jul. 31, 2018 | |
Debt maturity date | Dec. 31, 2019 | |
Debt interest rate | 10.00% | |
Note Payable [Member] | Subsequent Event [Member] | ||
Repayment of notes payable, interest | $ 10,184 |
5. RELATED PARTIES TRANSACTIO20
5. RELATED PARTIES TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Related party expense | $ 18,000 | $ 18,000 | $ 36,000 | $ 36,000 |
Due from related party | 249,562 | 249,562 | ||
Due to related party | $ 367,115 | 367,115 | ||
Accounting And Admin [Member] | ||||
Related party expense | $ 36,000 |