-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J6++Mc1dagcPrPpymWs2hpIYsLFkZjeza6exwOCrepNkeUBBaRFA4DBwV7bbgaBR rh5gOc9zLS57+gxUa832vw== 0000950134-03-014942.txt : 20031112 0000950134-03-014942.hdr.sgml : 20031111 20031112091022 ACCESSION NUMBER: 0000950134-03-014942 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST EQUITY PROPERTIES INC CENTRAL INDEX KEY: 0000726516 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 956799846 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11777 FILM NUMBER: 03990824 BUSINESS ADDRESS: STREET 1: 10670 NORTH CENTRAL EXPRESSWAY STREET 2: SUITE 501 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 2147505800 MAIL ADDRESS: STREET 1: 10670 NORTH CENTRAL EXPRESSWAY STREET 2: SUITE 501 CITY: DALLAS STATE: TX ZIP: 75231 FORMER COMPANY: FORMER CONFORMED NAME: WESPAC INVESTORS TRUST III DATE OF NAME CHANGE: 19970123 10-Q 1 d10437e10vq.txt FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from to Commission file number 0-11777 FIRST EQUITY PROPERTIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in the charter) Nevada 95-6799846 - --------------------------------------------- -------------------------- (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 1800 Valley View Lane, Suite 160, Dallas, Texas 75234 --------------------------------------------------------- (Address of principal executive offices) 214-750-5800 --------------------------------------------------------- (Registrant's telephone number, including area code) --------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Act). Yes [ ] No [X]. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]. No [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS. Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [X]. No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: As of September 30, 2003, registrant had 10,570,944 shares of Common Stock issued and outstanding. 1 FIRST EQUITY PROPERTIES, INC. & SUBSIDIARIES FORM 10-Q September 30, 2003 INDEX
Page No. Part I Financial Information: Item 1. Financial Statements Consolidated Balance Sheets September 30, 2003 (Unaudited) and December 31, 2002.............................. 3 Consolidated Statement of Earnings (Unaudited) Three Months and Nine Months Ended September 30, 2003 and 2002.................... 4 Consolidated Statement of Cash Flows (Unaudited) Nine Months Ended September 30, 2003 and 2002..................................... 5 Notes to Consolidated Financial Statements.......................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................. 7 Item 4. Controls and Procedures.................................................... 7 Part II Other Information: Item 6. Exhibits and Reports on Form 8-K........................................... 8
2 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
ASSETS September 30, 2003 December 31, (Unaudited) 2002 ------------------ ------------ Cash and cash equivalents $ 24,364 $ 5,450 Accounts receivable - affiliate 346,346 346,338 Notes and interest receivable 623,786 -- Investments 40,528,449 41,113,449 ------------------ ------------ $ 41,522,945 $ 41,465,237 ================== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable - trade $ 239,999 $ 239,999 Accounts payable - affiliate 2,841,432 2,958,933 ------------------ ------------ Total liabilities 3,081,431 3,198,932 Minority interest in limited partnership 547,498 547,498 Shareholders' equity Common stock, $0.01 par, 40,000,000 shares authorized, 10,570,944 shares issued and outstanding 105,710 105,710 Capital in excess of par value 1,281,548 1,281,548 Retained earnings 36,506,758 36,331,549 ------------------ ------------ Total shareholders' equity 37,894,016 37,718,807 ------------------ ------------ $ 41,522,945 $ 41,465,237 ================== ============
3 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Three months ended September 30, Nine months ended September 30, ------------------------------- -------------------------------- 2003 2002 2003 2002 -------------- -------------- -------------- --------------- Revenue Management fees $ 72,162 $ 46,964 $ 166,973 $ 141,907 Interest income 14,748 2 38,794 30 -------------- -------------- -------------- --------------- 86,910 46,966 205,767 141,937 Operating expenses General and administrative 908 818 2,595 2,529 Legal and professional fees 1,494 11,400 27,963 26,427 -------------- -------------- -------------- --------------- Total operating expenses 2,402 12,218 30,558 28,956 -------------- -------------- -------------- --------------- Net earnings (loss) $ 84,508 $ 34,748 $ 175,209 $ 112,981 ============== ============== ============== =============== Earnings (loss) per share $ .01 $ -- $ .02 $ .01 ============== ============== ============== =============== Weighted average shares outstanding 10,570,944 10,570,944 10,570,944 10,570,944 ============== ============== ============== ===============
4 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2003 and 2002 (Unaudited)
2003 2002 ------------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 175,209 $ 112,981 Adjustments to reconcile net income to net cash provided by operating activities Change in Accounts receivable - affiliate (8) (48,267) Interest receivable (38,786) -- Accounts payable - affiliate (117,501) (60,000) ------------- ------------ Net cash provided by operating activities 18,914 4,714 Net increase in cash and cash equivalents 18,914 4,714 ------------- ------------ Cash and cash equivalents at beginning of period 5,450 8,985 ------------- ------------ Cash and cash equivalents at end of period $ 24,364 $ 13,699 ============= ============ Noncash investing and financing activities: Exchange of investment for note receivable $ 585,000 $ --
5 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2003 (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the interim period presented are not necessarily indicative of the results that may be expected for the year ended December 31, 2003. For further information, refer to the Company's annual report on Form 10-K for the year ended December 31, 2002. NOTE B - NOTE AND INTEREST RECEIVABLE In 2003, the company exchanged an investment in stock for a note receivable. The note receivable bears interest at a rate of 10% per year and is due January 31, 2005. The amount on the balance sheet includes interest receivable of $38,786. 6 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Three months ended September 30, 2003 compared to three months ended September 30, 2002 Revenues increased to $86,910 versus prior year of $46,966. The increase was due to interest income in the current quarter that was not present in the same quarter last year and an increase in management fees. Total operating expenses decreased to $2,402 in 2003 from $12,218 in 2002 due to decreased professional fees. Results of Operations Nine months ended September 30, 2003 compared to nine months ended September 30, 2002 Revenues increased to $205,767 versus prior year of $141,937. The increase was due to interest income on a new note receivable in the current year that was not present last year and an increase in management fees. Total operating expenses increased to $30,558 from $28,956 primarily due to increased professional fees. Financial Condition and Liquidity At September 30, 2003, the Company had total assets of $41,522,945 compared to $41,465,237 at December 31, 2002. Cash and cash equivalents were $24,364. During the first quarter of 2003, the Company exchanged an investment in stock for a note receivable in the amount of $585,000. At September 30, 2003 the Company had total illiquid investments of $40,528,449, which consists of preferred stock of Realty Advisors, Inc., an affiliated company, and a note receivable including interest receivable of $38,786, in the amount of $623,786 that is due on January 31, 2005. Total liabilities were $3,081,431 versus $3,198,932 at December 31, 2002. Item 4. Controls and Procedures Based on their most recent evaluation, which was completed within 90 days of the filing of this Form 10-Q, our Acting Principal Executive Officer and Chief Financial Officer, believe our disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are effective. There were not any significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, and there has not been any corrective action with regard to significant deficiencies and material weaknesses. 7 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES Part II Other Information Item 6. Exhibits and Reports on Form 8 - K (a) Exhibits Exhibit 31.1 - Certification Pursuant to Rules 13a-14 and 15d-14 Under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. Exhibit 32.1 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. (b) Reports on Form 8-K - None 8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to he signed on its behalf by the undersigned thereunto duly authorized. FIRST EQUITY PROPERTIES, INC. November 12, 2003 /s/ Ronald E. Kimbrough, Director, Vice President and Treasurer 9 EX-31.1 3 d10437exv31w1.txt CERTIFICATION PURSUANT TO RULES 13-A14 AND 15D-14 EXHIBIT 31.1 CERTIFICATION PURSUANT TO RULES 13a-14 AND 15d-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Ronald E. Kimbrough, Acting Principal Executive Officer and Chief Financial Officer of First Equity Properties, Inc. ("the Company"), certify that: 1. I have reviewed this quarterly report on Form 10-Q of the Company; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the company and its consolidated subsidiaries is made known to me by others within those entities, particularly for the periods presented in this quarterly report; b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. c. evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 10 CERTIFICATION PURSUANT TO RULES 13a-14 AND 15d-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - CONTINUED d. disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and 5. I have disclosed based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and Audit Committee of the Board of Directors (or persons fulfilling the equivalent function): a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize, and report financial data; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. /s/ Ronald E. Kimbrough Ronald E. Kimbrough Acting Principal Executive Officer and Chief Financial Officer November 12, 2003 11 EX-32.1 4 d10437exv32w1.txt CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of First Equity Properties, Inc. ("the Company") on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof ("the Report"), I, Ronald E. Kimbrough, Acting Principal Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that: (1) The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Ronald E. Kimbrough Ronald E. Kimbrough Acting Principal Executive Officer and Chief Financial Officer November 12, 2003 12 -----END PRIVACY-ENHANCED MESSAGE-----