Capital Properties Inc 10-Q, filed Aug 3, 2022

Capital Properties Inc (CPTP)

10-Q 2022-08-03 For: 2022-06-30

Added on April 06, 2026

About this 10-Q

Capital Properties Inc filed this 10-Q on August 3, 2022, covering the quarter ended June 30, 2022.

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $603K; up 21.8% from net income of $495K 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	10
Item 4.	Controls and Procedures	12

	PART II – OTHER INFORMATION

Item 6.	Exhibits	13

	Signatures	14

	June 30, 2022 (Unaudited)		December 31, 2021
ASSETS

Properties and equipment (net of accumulated depreciation)	$	6,627,000	$	6,670,000
Cash and cash equivalents		1,762,000		1,443,000
Prepaid and other		114,000		122,000
Prepaid income taxes		-		85,000
Deferred income taxes associated with discontinued operations (Note 8)		83,000		100,000
	$	8,586,000	$	8,420,000

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Property taxes	$	425,000	$	277,000
Other		449,000		350,000
Income taxes payable		5,000		-
Deferred income taxes, net		187,000		262,000
Liability associated with discontinued operations (Note 8)		298,000		358,000
		1,364,000		1,247,000


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		6,374,000		6,325,000
		7,222,000		7,173,000
	$	8,586,000	$	8,420,000

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021

Leasing revenue	$	1,452,000		$	1,216,000		$	2,615,000		$	2,264,000

Expenses:
Operating		286,000			163,000			539,000			327,000
General and administrative		343,000			371,000			735,000			724,000
		629,000			534,000			1,274,000			1,051,000

Income from operations before income taxes		823,000			682,000			1,341,000			1,213,000

Income tax expense (benefit):
Current		263,000			209,000			443,000			401,000
Deferred		(43,000	)		(22,000	)		(75,000	)		(66,000	)
		220,000			187,000			368,000			335,000

Net income		603,000			495,000			973,000			878,000

Retained earnings, beginning		6,233,000			6,255,000			6,325,000			6,334,000
Dividends on common stock ($.07 per share)
based upon 6,599,912 shares outstanding		(462,000	)		(462,000	)		(924,000	)		(924,000	)
Retained earnings, ending		6,374,000			6,288,000			6,374,000			6,288,000
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	$	7,222,000		$	7,136,000		$	7,222,000		$	7,136,000


Basic income per common share based upon 6,599,912 shares outstanding	$	0.09		$	0.08		$	0.15		$	0.13

	June 30, 2022		December 31, 2021
Properties on lease or held for lease:
Land and land improvements	$	4,439,000	$	4,439,000
Building and improvements, Steeple Street		2,582,000		2,582,000
		7,021,000		7,021,000
Less accumulated depreciation:
Land improvements on lease or held for lease		93,000		93,000
Steeple Street property (see Note 6)		301,000		258,000
		394,000		351,000
	$	6,627,000	$	6,670,000

	June 30, 2022		December 31, 2021
Accrued professional fees	$	126,000	$	152,000
Deposits and prepaid rent		196,000		87,000
Accrued payroll and related costs		94,000		75,000
Other		33,000		36,000
	$	449,000	$	350,000

	June 30, 2022			December 31, 2021
Gross deferred tax liabilities:
Property having a financial statement basis in excess of tax basis	$	362,000		$	361,000
Accounts receivable		257,000			213,000
Deferred income - conversion to cash basis of accounting for tax purposes		28,000			38,000
Insurance premiums and accrued leasing revenues		21,000			23,000
		668,000			635,000
Gross deferred tax assets:
Allowance for doubtful accounts		(248,000	)		(206,000	)
Prepaid rent		(53,000	)		(23,000	)
Accounts payable and accrued expenses		(66,000	)		(69,000	)
Accrued property taxes		(114,000	)		(75,000	)
		(481,000	)		(373,000	)
	$	187,000		$	262,000

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 June 30, 2022, filed with the Securities and Exchange Commission on August 3, 2022 formatted in iXBRL(“InLine eXtensible Business Reporting Language”):

	(i)	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021
	(ii)	Condensed Consolidated Statements of Income and Shareholders’ Equity for the Three Months ended June 30, 2022 and 2021
	(iii)	Condensed Consolidated Statements of Cash Flows for the Three Months ended June 30, 2022 and 2021
	(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

	Six Months Ended June 30,
	2022			2021
Cash flows from operating activities:
Continuing operations:
Income from continuing operations	$	973,000		$	878,000
Adjustments to reconcile income from continuing operations to net cash provided by operating activities, continuing operations:
Depreciation		43,000			43,000
Deferred income taxes		(75,000	)		(66,000	)
Income taxes		90,000			60,000
Other, net changes in prepaids, property tax payable and other		255,000			161,000
Net cash provided by operating activities, continuing operations		1,286,000			1,076,000

Cash flows from investing activities:
Continuing operations:
Deferred revenue		-			54,000
Discontinued operations:
Cash used to settle obligations		(60,000	)		(82,000	)
Noncash adjustment to gain on sale of discontinued operations		17,000			22,000
Net cash used in discontinued operations		(43,000	)		(60,000	)
Net cash used in investing activities		(43,000	)		(6,000	)

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

Increase in cash and cash equivalents		319,000			146,000
Cash and cash equivalents, beginning		1,443,000			1,642,000
Cash and cash equivalents, ending	$	1,762,000		$	1,788,000

Supplemental disclosure:
Cash paid for income taxes	$	338,000		$	320,000

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