10-Q 1 fepi_10q.htm QUARTERLY REPORT
0000726516 false 2022 Q1 --12-31 0000726516 2022-01-01 2022-03-31 0000726516 2022-05-12 0000726516 2022-03-31 0000726516 2021-12-31 0000726516 2021-01-01 2021-03-31 0000726516 us-gaap:CommonStockMember 2021-12-31 0000726516 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0000726516 us-gaap:RetainedEarningsMember 2021-12-31 0000726516 us-gaap:CommonStockMember 2020-12-31 0000726516 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0000726516 us-gaap:RetainedEarningsMember 2020-12-31 0000726516 2020-12-31 0000726516 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0000726516 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0000726516 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0000726516 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0000726516 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0000726516 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0000726516 us-gaap:CommonStockMember 2022-03-31 0000726516 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0000726516 us-gaap:RetainedEarningsMember 2022-03-31 0000726516 us-gaap:CommonStockMember 2021-03-31 0000726516 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0000726516 us-gaap:RetainedEarningsMember 2021-03-31 0000726516 2021-03-31 0000726516 fepi:StockPurchaseAgreementMember fepi:TPSIncomeIncMember 2021-04-01 2021-04-07 0000726516 fepi:StockPurchaseAgreementMember fepi:NevadaSeaInvestmentsIncMember 2021-04-01 2021-04-07 0000726516 fepi:StockPurchaseAgreementMember fepi:NevadaSeaInvestmentsIncMember 2021-04-07 0000726516 fepi:DirectedMortgageInvestorsMember 2022-01-01 2022-03-31 0000726516 fepi:DirectedMortgageInvestorsMember 2022-03-31 0000726516 fepi:DirectedMortgageInvestorsMember 2021-03-31 0000726516 fepi:CarmelRealtyMember 2022-01-01 2022-03-31 0000726516 fepi:CarmelRealtyMember 2022-03-31 0000726516 fepi:CarmelRealtyMember 2021-03-31 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

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 000-11777

Direct Investment Holdings Group, Inc.

(formerly, First Equity Properties, Inc.)

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada 95-6799846

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

150 S. Pine Island Rd

Suite 300

Plantation, FL 33324

(Address of principal executive offices) (Zip Code)

 

(855) 456-9782

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class Trading Symbol(s)

Name of each exchange

on which registered

Common Stock FEPI None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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   ☐  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☑   Yes      ☐  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ☐ Accelerated filer  ☐
Non-accelerated filer     ☐  (Do not check if a smaller reporting company) Smaller reporting company  
  Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   ☐ Yes  ☑   No

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

 

Common Stock, $.0 par value   1,057,628
(Class)   (Outstanding at May 12, 2022)

  
 

DIRECT INVESTMENT HOLDINGS GROUP, INC.

FORM 10-Q

TABLE OF CONTENTS

 

    PAGE
PART I. FINANCIAL INFORMATION 3
     
Item 1. Financial Statements  
  Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021 3
  Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited) 4
  Statement of Shareholders’ Equity for the three months ended March 31, 2022 and 2021 (unaudited) 5
  Statements of Cash Flows for three months ended March 31, 2022 and 2021  (unaudited) 6
  Notes to Financial Statements 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 9
Item 3. Controls and Procedures 10
   
PART II. OTHER INFORMATION 11 
     
Item 4. Exhibits 11
SIGNATURES 12

  

 

 

 

 

 

 

 

 

 2 
 

  PART I. FINANCIAL INFORMATION

 

ITEM 1.FINANCIAL STATEMENTS  

 

DIRECT INVESTMENT HOLDINGS GROUP, INC.

BALANCE SHEET

           

 

           
   31-Mar-22    31-Dec-21 
    (unaudited)    (audited)  
Assets          
Note receivable and accrued interest - related party  $652,495   $700,767 
Cash and cash equivalents   90,368    51,659 
Total assets  $742,863   $752,426 
Liabilities and Shareholders' Equity          
Accounts payable - other   30,000    9,969 
Accounts payable - related party   12,386    12,386 
Total liabilities   42,386    22,355 
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            
Paid in capital   1,376,682    1,376,682 
Retained earnings (deficit)   (686,781)   (657,187)
           
Total shareholders' equity   700,477    730,071 
           
Total liabilities and shareholders' equity  $742,863   $752,426 
           

 

 

The accompanying notes are an integral part of these financial statements.

 

 3 
 

DIRECT INVESTMENT HOLDINGS GROUP, INC.
STATEMENTS OF OPERATIONS
             

 

                
  

For the three months ended

March 31,

   2022  2021
Operating Expenses          
   Administrative fees - related parties  $0   $3,015 
   General and administrative   1,322    7,876 
   Legal and professional fees   30,000    32,639 
Total operations expenses   31,322    43,530 
           
Loss from operation before interest expense and taxes   (31,322)   (43,530)
           
Other income (expense)          
   Interest income - related parties   1,728    18,506 
Net loss applicable to common shareholders  $(29,594)  $(25,024)
           
Loss per share  $(0.03)  $(0.02)
           
Weighted average shares outstanding   1,057,628    1,057,628 
           

 

The accompanying notes are an integral part of these financial statements.

 

 4 
 

DIRECT INVESTMENT HOLDINGS GROUP, INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                     
                     

 

                          
   Common Stock                
    Shares    Amount    Paid in Capital    Earnings (Deficit)    Total Equity 
Balance at January 1, 2022   1,057,628   $10,576   $1,376,682   $(657,187)  $730,071 
Net loss                 $(29,594)  $(29,594)
Balance at March 31, 2022   1,057,628   $10,576   $1,376,682   $(686,781)  $700,477 
                          

 

    Common Stock                 
    Shares    Amount    Paid in Capital    Earnings (Deficit)    Total Equity 
Balance at January 1, 2021   1,057,628   $10,576   $1,376,682   $(611,711)  $775,547 
Net loss                 $(25,024)  $(25,024)
Balance at March 31, 2021   1,057,628   $10,576   $1,376,682   $(636,735)  $750,523 
                          

 

The accompanying notes are an integral part of these financial statement

 

 

 5 
 

 

DIRECT INVESTMENT HOLDINGS GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
             

 

                
  

For the three months ended

March 31,

   2022  2021
Cash Flows from Operating Activities          
Net Loss  $(29,594)  $(25,024)
Adjustments to reconcile net loss applicable to common shareholders to net cash provided by (used in) operating activities:          
    Increase (decrease) in Accounts payable - other   20,031    (2,494)
           
Net cash provided by (used for) operating activities   (9,563)   (27,518)
           
Cash Flows from Investing Activities          
    (Increase) decrease in notes receivable - related parties   48,272       
           
Net cash provided by (used for) investing activities   48,272       
           
Net increase (decrease) in cash and cash equivalents   38,709   (27,518)
Cash and cash equivalents at the beginning of period   51,659    27,518 
           
Cash and cash equivalents at the end of period  $90,368   $   
           
Supplemental disclosures of cash flow information:          
Cash paid for interest expense to related parties  $     $   
           

 

 

The accompanying notes are an integral part of these financial statements.

 

 

 6 
 

DIRECT INVESTMENT HOLDINGS GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1.  ORGANIZATION AND BASIS OF PRESENTATION

Organization and business

Direct Investment Holdings Group, Inc.was incorporated in Nevada on December 19, 1996 and the Company is headquartered in Plantation, FL. The Company’s principal line of business and source of revenue is currently investments and interest on notes receivable. Direct Investment Holdings Group, Inc. 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, 2021.  Operating results for the three months period ended March 31, 2022 are not necessarily indicative of the results that may be expected for any subsequent quarter or for the fiscal year ending December 31, 2022.

NOTE 2. CHANGE OF CONTROL

A Stock Purchase Agreement (the “Agreement”) was made, entered into, and closed as of April 7, 2021, by and among A Way Financial, Inc., a Delaware Business Corporation (the “Purchaser”) and TPS Income, Inc., and Nevada Sea Investments, Inc. (the “Sellers”).

 

Sellers were, prior to the transaction closing the beneficial owner of the following shares of the Company:  (i)TPS Income, Inc.(“TPS”) owned 37.48%; and (ii) Nevada Sea Investments, Inc.(“Nevada Sea”)owned 37.82% of 1,057,628 shares of all issued and outstanding shares of the Company’s Common Stock which were held in the respective name of the Sellers.  As of the completion of the closing on April 7, 2021, the shares formerly owned by Sellers are owned by the Purchaser.  

 

 7 
 

DIRECT INVESTMENT HOLDINGS GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

 

NOTE 3. NOTE RECEIVABLE AND ACCRUED INTEREST – RELATED PARTY

In connection with change of control, note receivable - Carmel Realty, Inc., a related party, was purchased by A Way Financial Inc, a Delaware business, a related party and guaranteed by Direct Mortgage Investors Inc., a related party. The company received in full the note receivable and all accrued interest subsequent to March 31, 2022, on April 12, 2022. 

 

      
   31-Mar-22  31-Mar-21

Note receivable – Directed Mortgage Investors, Inc. - related party

Unsecured, due on demand, annual interest rate of 1% due quarterly

  $652,495   $ 
           

  Note receivable - Carmel Realty, Inc – related party

   Unsecured, due on demand, annual interest rate of 10% due quarterly

       750,523 
           
Total note and account receivable – related party  $652,495   $750,523 

 

NOTE 4. 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.

 

NOTE 5. 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.

 

NOTE 6. OTHER MATTERS 

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 2021 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.

 

First Equity Properties, Inc., a Nevada Business Corporation, had a name change to Direct Investment Holdings, Inc. filed effective 11/02/2021 with the Secretary of State, State of Nevada.

 

NOTE 7. SUBSEQUENT EVENTS 

 

The Company has evaluated subsequent events through May 12, 2022, the date the financial statements were available to be issued and has determined that there are none to be reported.

 

 8 
 

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. We caution investors that any forward-looking statements presented in this report, or which management may make orally or in writing from time to time, are based on beliefs and assumptions made by, and information currently available to, management. When used, the words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “might”, “plan”, “project”, “result”, “should”, “will” and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected by the forward-looking statements. We caution you that while forward-looking statements reflect our good-faith beliefs when we make them, they are not guarantees of future performance and are impacted by actual events when they occur after we make such statements. Accordingly, investors should use caution in relying on forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Change of Control Transaction

1.  A Stock Purchase Agreement (the “Agreement”) has been made and entered into and closing completed as of 4/7/2021, by and among A Way Financial Inc., a Delaware Business Corporation (the “Purchaser”) and TPS Income, inc., and nevada SEA investments, inc (the “Sellers”).

 

2.  Sellers were, prior to the transaction closing the beneficial owner of the following shares of Direct Investment Holdings Group, Inc. (“FEPI”) Common Stock: (i) TPS Income, Inc. (“TPS”) owned 37.48%; and (ii) Nevada Sea Investments, Inc. (“Nevada Sea”) owned 37.82% of 1,057,628 shares of all issued and outstanding shares of FEPI Common Stock (“Shares”). The Shares were held in the respective names of the Sellers.

 

3.  As of completion of the closing, the shares formerly owned by Sellers are owned by the Purchaser.

 

4.  The Company, in connection with the change in control, the $750,523 note receivable was purchased by A Way Financial Inc, a Delaware business, a related party and guaranteed by Direct Mortgage Investors Inc., a related party. The company received in full the note receivable and all accrued interest subsequent to December 31, 2021, on April 12, 2022.

 

5. First Equity Properties, Inc., a Nevada Business Corporation, had a name change to Direct Investment Holdings, Inc. filed effective 11/02/2021 with the Secretary of State, State of Nevada.

Related parties

We apply ASC Topic 805, “Business Combinations”, to evaluate business relationships. Related parties are persons or entities who have one or more of the following characteristics, which include entities for which investments in their equity securities would be required, trust for the benefit of persons including principal owners of the entities and members of their immediate families, management personnel of the entity and members of their immediate families and other parties with which the entity may deal if one party controls or can significantly influence the decision making of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests, or affiliates of the entity.


Results of Operations

The following discussion is based on our Statement of Operations within our Financial Statements as presented in Part 1, Item 1 of this report for the three months ended March 31, 2022, and 2021. The discussion is not meant to be an all-inclusive discussion of the changes within our operations. Instead, we have focused on the significant items relevant to obtain an understanding of the changes in our operations.

The results of operations for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

 

 9 
 

Our sole source of income is from the interest received on affiliated receivables. Expenses are primarily related to professional and administrative fees.

Comparison of the three months ended Mach 31, 2022 to the same period ended 2021.

We reported net loss applicable to common shareholders of ($29,594) for the three months ended March 31, 2022, as compared to a net loss to common shareholders of ($25,024) for the same period ended 2021. The interest rate on our notes receivable was reduced from 10% to 1%.

Liquidity and Capital Resources

General

Our principal liquidity needs for the next twelve months are funding of normal recurring expenses of legal and administrative fees.

Our note receivable was collected on April 12, 2022, in full and all accrued interest subsequent to December 31, 2021. 

Our cash and cash equivalents increased $ 38,709 from operation in 1st quarter 2022. 

Our accounts payable – increased by payments $ 20,031 in the 1st quarter 2022. 

Stockholders’ equity decreased by $ 29,594 in the 1st quarter 2022, resulting in retained earning decrease. 

 

ITEM 3 . CONTROLS AND PROCEDURES 

(a)Evaluation of Disclosure Controls and Procedures.
   
  A review and evaluation was performed by management under the supervision and with the participation of the Principal Executive Officers of the effectiveness of the Company’s disclosure controls and procedures, as required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2022. Based upon that most recent evaluation, which was completed as of the end of the period covered by this Form 10-Q, the Principal Executive Officers that the Company’s disclosure controls and procedures were effective at March 31, 2022 to ensure that information required to be disclosed in reports that the Company files submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time period specified by the Securities and Exchange Commission (“SEC”) rules and forms. As a result of this evaluation, there were no significant changes in the Company’s internal control over financial reporting during the period ended March 31, 2022, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

(b)Changes in Internal Controls over Financial Reporting. There have been no changes in the Company’s internal controls over financial reporting during the quarter ended March 31, 2022 that have materially affected or are reasonably likely to materially affect the Company’s internal controls over financial reporting.

 

 10 
 

 PART II – OTHER INFORMATION 

ITEM 4. EXHIBITS

The following exhibits are filed with this report or incorporated by reference as indicated.

Exhibit Number  Description
    
 3.1  Articles of Incorporation of Wespac Property Corporation as filed with and endorsed by the Secretary of State of California on December 16, 1996 (incorporation by reference is made to Exhibit 3.1 to Form 8-K of First Equity Properties, Inc. for event reported June 19, 1996).
     
 3.2  Articles of Incorporation of First Equity Properties, Inc. filed with and approved by the Secretary of State of Nevada on December 19, 1996 (incorporation by reference is made to Exhibit 3.2 to Form 8-K of First Equity Properties Inc, Inc. for event reported June 19, 1996).
     
 3.3  Bylaws of Direct Investment Holdings Group, Inc. as adopted December 20, 1996 (incorporation by reference is made to Exhibit 3.3 to Form 8-K of First Equity Properties, Inc. for event reported June 19, 1996).
     
 3.4  Agreement and Plan of Merger of Wespac Property Corporation and First Equity Properties, Inc. dated December 23, 1996 (incorporation by reference is made to Exhibit 3.4 to Form 8-K of First Equity Properties, Inc. for event reported June 19, 1996).
     
 3.5  Articles of Merger of Wespac Property Corporation into First Equity Properties, Inc. as filed with and approved with the Secretary of State in Nevada December 24, 1996 (incorporation by reference is made to Exhibit 3.5 to Form 8-K of First Equity Properties, Inc. for event reported June 19, 1996).
     
 3.6  Certificate of Designation of Preferences and Relative Participating or Optional of Other Special Rights and Qualifications, Limitations or Restrictions thereof of the Series A 8% Cumulative Preferred Stock (incorporation by reference is made to Exhibit 3.6 to Form 10-KSB of First Equity Properties, Inc. for the fiscal year ended December 31, 1996.)
     
 31.1*  Certification of Principal Executive Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.
     
 31.2*  Certification of Principal Financial and Accounting Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.
     
 32.1*  Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
 101.INS*  XBRL Instance Document
     
 101.SCH*  XBRL Taxonomy Extension Schema Document
     
 101.CAL*  XBRL Taxonomy Calculation Linkbase Document
     
 101.DEF*  XBRL Taxonomy Extension Definition Linkbase Document
     
 101.LAB*  XBRL Taxonomy Extension Label Linkbase Document
     
 101.PRE*  XBRL Taxonomy Extension Presentation Linkbase Document
     
 *Filed herewith.   
     

 11 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

          DIRECT INVESTMENT HOLDINGS GROUP, INC.
           
Date: May 12, 2022         /s/ JAMES ANDERSON
          James Anderson 
          Director, President & Treasurer

 

           
          DIRECT INVESTMENT HOLDINGS GROUP, INC.
           
Date: May 12, 2022         /s/ GLEN GOMEZ
          Glen Gomez
          Director, Vice President & Secretary

 

 

 

 

 

 

 

 

 

 

 

 12