-----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, E6HPDoUz1K6qQ9Rz9UVkeQ2IAoRhmS4o0kB6XutZoHyoKHLvWLsIMAbRiubz4JmF 29OxRfxyjps4ZAZ+m25cMw== /in/edgar/work/0000950134-00-009673/0000950134-00-009673.txt : 20001115 0000950134-00-009673.hdr.sgml : 20001115 ACCESSION NUMBER: 0000950134-00-009673 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST EQUITY PROPERTIES INC CENTRAL INDEX KEY: 0000726516 STANDARD INDUSTRIAL CLASSIFICATION: [6798 ] IRS NUMBER: 956799846 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11777 FILM NUMBER: 764056 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 d81881e10-q.txt FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2000 1 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, 2000 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.) 10670 N. CENTRAL EXPRESSWAY, SUITE 410, DALLAS, TEXAS 75231 ----------------------------------------------------------- (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 (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, 2000, registrant had 10,570,944 shares of Common Stock issued and outstanding. 2 FIRST EQUITY PROPERTIES, INC. & SUBSIDIARIES FORM 10-Q September 30, 2000 INDEX
Part I Financial Information: Page No. Item 1. Financial Statements Consolidated Balance Sheets September 30, 2000 (Unaudited) and December 31, 1999..........................3 Consolidated Statement of Earnings (Unaudited) Three Months and Nine Months Ended September 30, 2000 and 1999................4 Consolidated Statement of Cash Flows (Unaudited) Nine Months Ended September 30, 2000 and 1999.................................5 Notes to Consolidated Financial Statements......................................7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................................8 Part II Other Information: Item 6. Exhibits and Reports on Form 8-K.......................................8
2 3 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS
September 30, December 31, 2000 1999 ----------- ----------- (Unaudited) Cash and cash equivalents $ 56,927 $ 550 Investments 51,137,790 55,512,710 Accounts receivable - affiliate 939,036 -- Notes receivable 3,128,213 3,457,617 ----------- ----------- $55,261,966 $58,970,877 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable $ 2,077,032 $ 2,234,040 Notes payable - affiliate -- -- Accounts payable - trade 5,548,224 5,548,224 Accounts payable - affiliate -- 3,370,010 Income taxes payable -- 72,000 ----------- ----------- Total liabilities 7,625,256 11,224,274 Minority interest in limited partnership 10,073,956 10,074,447 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 36,175,496 36,284,898 ----------- ----------- Total shareholders' equity 37,562,754 37,672,156 ----------- ----------- $55,261,966 $58,970,877 =========== ===========
3 4 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Three months ended September 30, Nine months ended September 30, -------------------------------- -------------------------------- 2000 1999 2000 1999 ------------- ------------- ------------- ------------- Revenue Commission income $ -- $ 3,670,703 $ -- $ 10,213,526 Management fee income -- 1,821,594 -- 5,530,960 Consulting fee income -- 195,755 -- 2,748,453 Other 35 288,673 2,667 1,088,362 Interest 70,077 73,357 212,582 229,572 ------------- ------------- ------------- ------------- 70,112 6,050,082 215,249 19,810,873 Operating expenses Salaries and wages 241 1,191,776 241 5,293,721 Consulting fees expense -- 5,000,000 -- 5,000,000 General and administrative 130 361,146 737 1,410,715 Minority interest in limited partnership -- 282,982 -- 1,212,340 Insurance and taxes 4,816 729,784 4,816 1,024,740 Other operating expenses -- 38,932 7,500 240,868 Legal and professional fees 9,739 44,520 45,619 261,197 Loss on sale of motel properties -- 94,095 -- 97,129 Depreciation and amortization -- 26,469 -- 94,406 Telephone and utilities -- 17,420 -- 56,998 Repairs and maintenance -- 12,968 -- 20,238 Advertising and promotion -- 1,640 -- 5,410 ------------- ------------- ------------- ------------- Total operating expenses 14,926 7,801,732 58,913 14,717,762 ------------- ------------- ------------- ------------- Income from operations 55,186 (1,751,650) 156,336 5,093,111 Other expenses Interest expense (47,709) (112,528) (265,738) (342,125) ------------- ------------- ------------- ------------- Earnings before income taxes 7,477 (1,864,178) (109,402) 4,750,986 Deferred tax benefit (expense) -- -- -- -- Current tax provision -- 635,000 -- (1,615,000) ------------- ------------- ------------- ------------- -- 635,000 -- (1,615,000) ------------- ------------- ------------- ------------- Net income $ 7,477 $ (1,229,178) $ (109,402) $ 3,135,986 ============= ============= ============= ============= Earnings per share $ -- $ (.11) $ (.01) $ .30 ============= ============= ============= ============= Weighted average shares outstanding 10,570,944 10,570,944 10,570,944 10,570,944 ============= ============= ============= =============
4 5 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2000 and 1999 (Unaudited)
2000 1999 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) $ (109,402) $ 3,135,986 Adjustments to reconcile net earnings (loss) to net cash used for operating activities Loss on sale of motel properties -- 97,129 Depreciation and amortization -- 94,406 Minority interest in limited partnership (491) 1,212,340 Non-cash litigation settlement -- 175,000 Other -- (2,125) (Increase) decrease in Accounts receivable - trade -- (618,411) Accounts receivable - affiliate (939,036) (7,965,515) Prepaid expenses and other -- (1,885) Notes receivable -- (115,804) Increase (decrease) in Accounts payable -- 791,526 Accrued expenses -- 217,549 Accounts payable - affiliate 125,823 1,320,743 Accrued interest - notes payable - affiliate -- 156,863 Income taxes payable (72,000) 1,376,500 ----------- ----------- Net cash used for operating activities (995,106) (125,698) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment -- (54,095) Proceeds from sale -- 525,000 Collections from note receivable 329,404 -- ----------- ----------- Net cash provided by investing activities 329,404 470,905 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes payable - related parties 879,087 -- Payments on long term debt (157,008) (376,088) ----------- ----------- Net cash provided by (used for) financing activities 722,079 (376,088) ----------- ----------- Net increase (decrease) in cash and cash equivalents 56,377 (30,881) Cash and cash equivalents at beginning of period 550 325,699 ----------- ----------- Cash and cash equivalents at end of period $ 56,927 $ 294,818 =========== ===========
5 6 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued For the nine months ended September 30, 2000 and 1999 (Unaudited)
2000 1999 ----------- ----------- Exchange of account payable from affiliate for a note payable from affiliate $ 3,495,833 $ -- Exchange of an investment in preferred stock of an affiliate for a note payable to an affiliate $ 4,374,920 $ -- Exchange of account receivable from affiliate for an investment in preferred stock of affiliate $ -- $14,647,710
6 7 FIRST EQUITY PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2000 (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, 2000. For further information, refer to the Company's annual report on Form 10-K for the year ended December 31, 1999. 7 8 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, 2000 compared to three months ended September 30, 1999 Revenues decreased to $70,112 versus prior year of $6,050,082. The decrease was due to the loss of property management and brokerage contracts in the fourth quarter of 1999. Total operating expenses decreased to $14,926 in 2000 from $7,801,732 in 1999. The decrease in income tax expense was due to lower operating income. Results of Operations Nine months ended September 30, 2000 compared to nine months ended September 30, 1999 Revenues decreased to $215,249 versus prior year of $19,810,873. The decrease was due to lower commission and management fee income, lower consulting fee income and lower motel revenue. In the fourth quarter of 1999, all property management and brokerage contracts were terminated and awarded to non-affiliated companies. Total operating expenses decreased to $58,913 in 2000 from $14,717,762 in 1999. The decrease in income tax expense was due to lower operating income. Financial Condition and Liquidity At September 30, 2000, the Company had total assets of $55,261,966 compared to $58,970,877 at December 31, 1999. Cash and cash equivalents were $56,927. Total liabilities were $7,625,256 versus $11,224,274 at December 31, 1999. Part II Other Information Item 6. Exhibits and Reports on Form 8 - K (a) Exhibits 27 Financial Data Schedules, filed herewith (b) Reports on Form 8-K - None 8 9 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 13, 2000 /s/ F. Terry Shumate, Director, Vice President, Secretary and Treasurer 10 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- ----------- 27 Financial Data Schedule
EX-27 2 d81881ex27.txt FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 56,927 0 3,128,213 0 0 0 0 0 55,261,966 0 2,077,032 0 0 105,710 37,457,044 55,261,966 0 215,249 0 0 58,913 0 265,738 (109,402) 0 (109,402) 0 0 0 (109,402) (.01) (.01)
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