Capital Properties Inc 10-Q, filed Nov 9, 2021

Capital Properties Inc (CPTP)

10-Q 2021-11-09 For: 2021-09-30

Added on April 06, 2026

About this 10-Q

Capital Properties Inc filed this 10-Q on November 9, 2021, covering the quarter ended September 30, 2021.

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.4M; up 28.8% from $1.09M a year earlier
Net income: $577K; up 23.8% from net income of $466K a year earlier

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Rhode Island		05-0386287
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		identification No.)

	5 Steeple Street, Unit 303
	Providence, Rhode Island	02903
	(Address of principal executive offices)	(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Class A Common Stock, $.01 par value	CPTP	OTCQX

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller reporting company	☒
		Emerging Growth Company	☐

		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 4.	Controls and Procedures	13

	PART II – OTHER INFORMATION

Item 6.	Exhibits	14

	Signatures	15

	September 30, 2021 (Unaudited)		December 31, 2020
ASSETS

Properties and equipment (net of accumulated depreciation)	$	6,692,000	$	6,756,000
Cash and cash equivalents		1,818,000		1,642,000
Prepaid and other		100,000		101,000
Prepaid income taxes		-		48,000
Deferred income taxes associated with discontinued operations (Note 8)		103,000		132,000
	$	8,713,000	$	8,679,000

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Property taxes	$	353,000	$	210,000
Other		514,000		563,000
Income taxes payable		17,000	-
Deferred income taxes, net		196,000		234,000
Liability associated with discontinued operations (Note 8)		382,000		490,000
		1,462,000		1,497,000


Shareholders’ equity:
Class A common stock, $.01 par; authorized 10,000,000 shares;
issued and outstanding 6,599,912 shares		66,000		66,000
Capital in excess of par		782,000		782,000
Retained earnings		6,403,000		6,334,000
		7,251,000		7,182,000
	$	8,713,000	$	8,679,000

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenue and other income:
Leasing revenue	$	1,396,000		$	1,084,000		$	3,659,000		$	3,529,000
Other income, interest		1,000			1,000			2,000			7,000
		1,397,000			1,085,000			3,661,000			3,536,000
Expenses:
Operating		274,000			161,000			601,000			401,000
General and administrative		324,000			282,000			1,048,000			970,000
		598,000			443,000			1,649,000			1,371,000

Income from operations before income taxes		799,000			642,000			2,012,000			2,165,000

Income tax expense (benefit):
Current		194,000			185,000			595,000			659,000
Deferred		28,000			(9,000	)		(38,000	)		(75,000	)
		222,000			176,000			557,000			584,000

Net income		577,000			466,000			1,455,000			1,581,000

Retained earnings, beginning		6,288,000			6,390,000			6,334,000			5,737,000
Dividends on common stock ($.07 per share)
based upon 6,599,912 shares outstanding		(462,000	)		(462,000	)		(1,386,000	)		(924,000	)
Retained earnings, ending		6,403,000			6,394,000			6,403,000			6,394,000
Class A common stock		66,000			66,000			66,000			66,000
Capital in excess of par		782,000			782,000			782,000			782,000
Shareholders' equity, ending	$	7,251,000		$	7,242,000		$	7,251,000		$	7,242,000


Basic income per common share based upon 6,599,912 shares outstanding	$	0.09		$	0.07		$	0.22		$	0.24

	September 30, 2021		December 31, 2020
Properties on lease or held for lease:
Land and land improvements	$	4,010,000	$	4,010,000
Steeple Street property (see Note 6)		3,011,000	$	3,011,000
Office equipment		67,000		67,000
		7,088,000		7,088,000
Less accumulated depreciation:
Land improvements on lease or held for lease		93,000		93,000
Steeple Street property (see Note 6)		236,000		172,000
Office equipment		67,000		67,000
		396,000		332,000
	$	6,692,000	$	6,756,000

	September 30, 2021		December 31, 2020
Deferred revenue, Steeple Street property (see Note 6)	$	-	$	199,000
Accrued professional fees		140,000		152,000
Deposits and prepaid rent		239,000		121,000
Accrued payroll and related costs		102,000		75,000
Other		33,000		16,000
	$	514,000	$	563,000

	September 30, 2021			December 31, 2020
Gross deferred tax liabilities:
Property having a financial statement basis in excess of tax basis	$	361,000		$	361,000
Accounts receivable		196,000			98,000
Deferred income - conversion to cash basis of accounting for tax purposes		42,000			56,000
Insurance premiums and accrued leasing revenues		15,000			19,000
		614,000			534,000
Gross deferred tax assets:
Allowance for doubtful accounts		(184,000	)		(91,000	)
Prepaid rent		(55,000	)		(24,000	)
Accounts payable and accrued expenses		(85,000	)		(75,000	)
Accrued property taxes		(94,000	)		(56,000	)
Deferred income, Parcel 20		-			(54,000	)
		(418,000	)		(300,000	)
	$	196,000		$	234,000

3.1	Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the registrant’s report on Form 8-K filed on April 24, 2013)

3.2	By-laws, as amended, October 25, 2017 (incorporated by reference to Exhibit 3.2 to the registrant’s report on Form 8-K filed October 25, 2017)

10	Material contracts:

	(a)	Lease between Metropark, Ltd. and Company:
		(i) Dated January 1, 2017 (incorporated by reference to Exhibit 10 to the registrant’s annual report on Form 10-K for the year ended December 31, 2017)
		(ii) Letter agreement dated July 31, 2020 between the Company and Metropark, LTD modifying the rental obligations of Metropark.
	(b)	Loan Agreement between Bank Rhode Island and Company dated March 30, 2021.

31.1	Rule 13a-14(a) Certification of Chairman and Principal Executive Officer

31.2	Rule 13a-14(a) Certification of Treasurer and Principal Financial Officer

32.1	Certification of Chairman and Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of Treasurer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101	The following financial information from the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2021, filed with the Securities and Exchange Commission on August 4, 2021 formatted in iXBRL(“InLine eXtensible Business Reporting Language”):

	(i)	Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020
	(ii)	Condensed Consolidated Statements of Income and Shareholders’ Equity for the Three and Six Months ended September 30, 2021 and 2020
	(iii)	Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2021 and 2020
	(iv)	Notes to Condensed Consolidated Financial Statements.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	CAPITAL PROPERTIES, INC.

	By	/s/ Robert H. Eder
		Robert H. Eder
		Chairman and Principal Executive Officer

	By	/s/ Susan R. Johnson
		Susan R. Johnson
		Treasurer and Principal Financial Officer

	Revenue Split
Total Revenue	Metropark Share	Capital Share

$0 - $20,000	100%	0%
$20,001 - $29,999	50%	50%
$30,000 - $39,999	40%	60%
$40,000 - $69,999	30%	70%
Over $70,000		Full rent due

Total Revenue	Assumed Revenue for August $38,000	Metropark Share	CPI Share

$0 - $20,000	$20,000	$20,000	$0
$20,001 - $29,999	10,000	5,000	5,000
$30,000 - $39,999	8,000	3,200	4,800
	$38,000	$28,200	$9,800

AGREED AND ACCEPTED:
Capital Properties, Inc
By:		/s/ Susan R. Johnson
Print Name:		Susan R. Johnson
Title:		Treasurer

	Nine Months Ended September 30,
	2021			2020
Cash flows from operating activities:
Continuing operations:
Income from continuing operations	$	1,455,000		$	1,581,000
Adjustments to reconcile income from continuing operations to net cash provided by operating activities, continuing operations:
Depreciation		64,000			69,000
Deferred income taxes		(38,000	)		(75,000	)
Income taxes		65,000			(51,000	)
Other, net changes in prepaids, property tax payable and other		294,000			205,000
Net cash provided by operating activities, continuing operations		1,840,000			1,729,000

Cash flows from investing activities:
Continuing operations:
Deferred revenue		(199,000	)		76,000
Discontinued operations:
Cash used to settle obligations		(108,000	)		(187,000	)
Noncash adjustment to gain on sale of discontinued operations		29,000			52,000
Net cash used in discontinued operations		(79,000	)		(135,000	)
Net cash provided by (used in) investing activities		(278,000	)		(59,000	)

Cash flows used in financing activities, payment of dividends		(1,386,000	)		(924,000	)

Increase in cash and cash equivalents		176,000			746,000
Cash and cash equivalents, beginning		1,642,000			1,262,000
Cash and cash equivalents, ending	$	1,818,000		$	2,008,000

Supplemental disclosure:
Cash paid for income taxes	$	502,000		$	666,000

If to Borrower:		Capital Properties, Inc. c/o Susan Johnson, Treasurer 5 Steeple Street, Unit 303 Providence, Rhode Island 02903
with a copy to:		Stephen J. Carlotti, Esq. Hinckley Allen & Snyder LLP 100 Westminster Street, Suite 1500 Providence, Rhode Island 02903
If to Bank:		Bank Rhode Island One Turks Head Place Providence, Rhode Island 02903 Attn: Commercial Real Estate Lending
with a copy to:		Steven P. DeLuca, Esq. Wieck DeLuca & Gemma Incorporated One Turks Head Place, Suite 1300 Providence, Rhode Island 02903

WITNESS:	Capital Properties, Inc.


	By:	/s/ Susan R. Johnson
		Susan R. Johnson Treasurer

WITNESS:	Bank Rhode Island


	By:	/s/ Keb H. Brackenbury
		Keb H. Brackenbury
		Senior Vice President