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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005
 Commission file number 0-11777
 FIRST EQUITY PROPERTIES, INC.
  Nevada
    
    95-6799846(State or other jurisdiction of incorporation
    
    (I.R.S. Employeror organization)
    
    Identification No.)
  
   
  
   þ o
 o þ
 
  þ o




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FIRST EQUITY PROPERTIES, INC.
 
  Page No.Part I Financial Information:Item 1. Financial StatementsBalance Sheets June 30, 2005 (Unaudited) and December 31, 2004
    
    
    3Statement of Earnings (Unaudited)

Three Months and Six Months Ended June 30, 2005 and 2004
    
    
    4Statement of Cash Flows (Unaudited)

Six Months Ended June 30, 2005 and 2004
    
    
    5Notes to Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial

Condition and Results of Operations
    
    
    8Item 4. Controls and Procedures
    
    
    8Part II Other Information:Item 6. Exhibits
    
    
    9Certification Pursuant to Section 302Certification Pursuant to Section 906
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FIRST
EQUITY PROPERTIES, INC.
 
  ASSETS
 June 30, 2005
    
    December 31,(Unaudited)
    
    2004Cash and cash equivalents
    
    $
    951
    
    
    $
    4,621Notes and interest receivable
    
    
    2,548,741
    
    
    
    2,626,588$
    2,549,692
    
    
    $
    2,631,209
 LIABILITIES AND SHAREHOLDERS EQUITY
 Accounts payable  affiliate
    
    $
    2,259,340
    
    
    $
    2,448,936Total liabilities
    
    
    2,259,340
    
    
    
    2,448,936Shareholders equityPreferred stock, $0.01 par, 4,960,000 shares
authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par, 40,000,000 shares
authorized, 1,057,628 shares issued and outstanding
    
    
    10,576
    
    
    
    10,576Capital in excess of par value
    
    
    1,376,682
    
    
    
    1,376,682Retained earnings (deficit)
    
    
    (1,096,906
    )
    
    
    (1,204,985
    )Total shareholders equity
    
    
    290,352
    
    
    
    182,273$
    2,549,692
    
    
    $
    2,631,209
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FIRST
EQUITY PROPERTIES, INC.
 
 
 Three months ended June 30,
    
    Six months ended June 30,2005
    
    2004
    
    2005
    
    2004RevenueInterest income
    
    $
    60,023
    
    
    $
    45,045
    
    
    $
    119,388
    
    
    $
    59,63260,023
    
    
    
    45,045
    
    
    
    119,388
    
    
    
    59,632Operating expensesGeneral and administrative
    
    
    754
    
    
    
    1,157
    
    
    
    1,890
    
    
    
    1,893Legal and professional fees
    
    
    5,044
    
    
    
    12,730
    
    
    
    9,419
    
    
    
    17,667Total operating expenses
    
    
    5,798
    
    
    
    13,887
    
    
    
    11,309
    
    
    
    19,560Net income from continuing
operations
    
    
    54,225
    
    
    
    31,158
    
    
    
    108,079
    
    
    
    40,072Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,715Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,931,116
    )NET EARNINGS (LOSS)
    
    $
    54,225
    
    
    $
    31,158
    
    
    $
    108,079
    
    
    $
    (37,845,329
    )Earnings (loss) per shareNet earnings from continuing
operations
    
    $
    .05
    
    
    $
    .03
    
    
    $
    .10
    
    
    $
    .04Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35.82
    )Net earnings (loss)
    
    $
    .05
    
    
    $
    .03
    
    
    $
    .10
    
    
    $
    (35.78
    )Weighted average shares outstanding
    
    
    1,057,628
    
    
    
    1,057,628
    
    
    
    1,057,628
    
    
    
    1,057,628
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FIRST EQUITY PROPERTIES, INC.
 
 
 2005
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet earnings (loss)
    
    $
    108,079
    
    
    $
    90,701Adjustments to reconcile net income to net cash
provided by (used for) operating activities(Increase) decrease inInterest receivable
    
    
    77,847
    
    
    
    (24,041
    )Accounts receivable  affiliate
    
    
    
    
    
    
    12,590Increase (decrease) inAccounts payable  affiliate
    
    
    (189,596
    )
    
    
    (77,500
    )Net cash provided by (used for) operating activities
    
    
    (3,670
    )
    
    
    1,750Net increase (decrease) in cash and cash equivalents
    
    
    (3,670
    )
    
    
    1,750Cash and cash equivalents at beginning of period
    
    
    4,621
    
    
    
    5,450Cash and cash equivalents at end of period
    
    $
    951
    
    
    $
    7,200Noncash investing and financing activities:Exchange of investment for note receivable
    
    
    
    
    
    
    585,000
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FIRST
EQUITY PROPERTIES, INC.
 
 
 NOTE A  BASIS OF PRESENTATION
   NOTE B  DISCONTINUED OPERATIONS
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FIRST
EQUITY PROPERTIES, INC.
 
 NOTE B  DISCONTINUED OPERATIONS  continued
   Three months ended June 30,
    
    Six months ended June 30,2005
    
    2004
    
    2005
    
    2004Operating revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    45,715Net income from
discontinued
operations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    45,715
 NOTE B  REVERSE STOCK SPLIT
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FIRST EQUITY PROPERTIES, INC.
 
 Item 2.
    
    Managements Discussion and Analysis of
Financial Condition and Results of Operations
        
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(a)
    
    ExhibitsExhibit 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.
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FIRST EQUITY PROPERTIES, INC.August 19, 2005
    
    /s/ Ken L. Joines,Vice President, Secretary and Chief      Accounting
Officer
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