PART I
Item 1. Business
New Concept Energy, Inc. (“New Concept,”
“NCE” or the “Company” or “we” or “us”) was incorporated in Nevada on May 31, 1991, under
the name Medical Resource Companies of America, Inc. The Company is the successor-by-merger to Wespac Investors Trust, a California
business trust that began operating in 1982. On March 26, 1996, the name was changed to Greenbriar Corporation. On
February 8, 2005, the name of the Company was changed to CabelTel International Corporation. On May 21, 2008, the name of the
company was changed to New Concept Energy, Inc.
Real Estate Operations
The Company owns approximately 190 acres
of land located in Parkersburg West Virginia. Located on the land are four structures totaling approximately 53,000 square feet. Of this
total area the main industrial / office building contains approximately 24,800 square feet of which as of December 31,2022 approximately
16,000 of industrial area is leased for $100,000 per annum.
Oil and Gas Operations
In August 2020, the Company sold its oil and gas
wells and mineral leases which were located in Ohio and West Virginia. The oil and operations for the periods included in this report
are reflected as discontinued operations.
Effective 1/1/2022 the company entered into a
Consulting Management Agreement with the current owner of the oil and gas wells whereby the Company will receive 10% of the revenue received
from these wells in exchange for providing advisory, accounting and management services. The agreement can be terminated by either party
after providing 60 days’ notice to the other party.
Business Strategy
The Company is a Nevada corporation.
The Company intends to continue to operate and
or sell its West Virginia property. The Company is providing advisory and management services for an independent West Virginia oil and
gas company. The Company seeks to establish or acquire new business operations.
Insurance
The Company currently maintains property and liability
insurance intended to cover claims for its real estate and corporate operations.
Employees
At December 31, 2022, the Company employed the
services of 3 people with the remainder of the work contracted to third parties. The Company believes it maintains good relationships
with its employees. None of the Company’s employees are represented by a collective bargaining group.
Management is not aware of any non-compliance
by the Company as regards applicable regulatory requirements that would have a material adverse effect on the Company’s financial
condition or results of operations.
Available Information
The Company maintains an internet website at www.newconceptenergy.com. The
Company has available through the website, free of charge, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K, reports filed pursuant to Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and amendments
to those reports as soon as reasonably practicable after we electronically file or furnish such materials to the Securities and Exchange
Commission. In addition, the Company has posted the charters for our Audit Committee, Compensation Committee and Governance
and Nominating Committee, as well as our Code of Business Conduct and Ethics, Corporate Governance Guidelines on Director Independence
and other information on the website. These charters and principles are not incorporated in this Report by reference. The
Company will also provide a copy of these documents free of charge to stockholders upon request. The Company issues Annual
Reports containing audited financial statements to its common stockholders.
Item 1A. Risk Factors
Risks Related to the Company
An investment in our securities involves various
risks. An investor should carefully consider the following risk factors in conjunction with the other information in this report
before trading our securities.
Our governing documents contain anti-takeover
provisions that may make it more difficult for a third party to acquire control of us. Our Articles of Incorporation contain
provisions designed to discourage attempts to acquire control of the Company by a merger, tender offer, proxy contest or removal of incumbent
management without the approval of our Board of Directors. As a result, a transaction which otherwise might appear to be in
your best interests as a stockholder could be delayed, deferred or prevented altogether, and you may be deprived of an opportunity to
receive a premium for your shares over prevailing market rates. The provisions contained in our Articles of Incorporation include:
| ● | the requirement of an 80% vote to make, adopt, alter, amend, change or repeal our Bylaws or certain key provisions of the Articles
of Incorporation that embody, among other things, the anti-takeover provisions; |
| ● | the so-called business combination “control act” requirements involving the Company and a person that beneficially owns
10% or more of the outstanding common stock except under certain circumstances; and |
| ● | the requirement of holders of at least 80% of the outstanding Common Stock to join together to request a special meeting of stockholders. |
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties
The Company’s principal offices are located
at 1603 LBJ Freeway Suite 800, Dallas, Texas 75234. The Company believes this space is presently suitable, fully utilized and
will be adequate for the foreseeable future.
The Company owns approximately 190 acres
of land located in Parkersburg West Virginia. Located on the land are four structures totaling approximately 53,000 square feet. Of this
total area the main industrial / office building contains approximately 24,800 square feet.
Item 3. Legal Proceedings
Currently the Company is not involved in any material
legal proceedings.
PART II
Item 5. Market for Registrant’s Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
The common stock of the Company is listed and
traded on the NYSE American using the symbol “GBR.” The following table sets forth the high and low sales prices
as reported in the reporting system of the NYSE American and other published financial sources.
| | |
2022 | | |
2021 | |
| | |
| | |
| | |
| | |
| |
| | |
High | | |
Low | | |
High | | |
Low | |
| First Quarter | |
$ | 6.25 | | |
$ | 2.22 | | |
$ | 30.99 | | |
$ | 1.79 | |
| Second Quarter | |
$ | 3.47 | | |
$ | 1.54 | | |
$ | 9.41 | | |
$ | 3.66 | |
| Third Quarter | |
$ | 2.34 | | |
$ | 1.05 | | |
$ | 7.35 | | |
$ | 3.11 | |
| Fourth Quarter | |
$ | 2.00 | | |
$ | 1.06 | | |
$ | 5.37 | | |
$ | 2.34 | |
On March 18, 2023, the closing price of the Company’s
Common Stock was $1.06 per share. The Company’s Common Stock was held by approximately 2,500 holders of record.
Dividends
The Company paid no dividends on its Common Stock
in 2022 or 2021. The Company has not paid cash dividends on its Common stock during at least the last ten fiscal years and
it has been the policy of the Board of Directors of the Company to retain all earnings to pay down debt and finance future expansion and
development of its businesses. The payment of dividends, if any, will be determined by the Board of Directors in the future
in light of conditions then existing, including the Company’s financial condition and requirements, future prospects, restrictions
in financing agreements, business conditions and other factors deemed relevant by the Board of Directors.
Purchases of Equity Securities
The Board of Directors has not authorized the
repurchase of any shares of its Common Stock under any share repurchase program. However, from time to time in the past, the Company has
purchased from stockholders, less than 100 shares on request of such persons to save the cost of commissions. No such purchases were made
in 2022 or 2021.
Item 6. Selected Financial Data
Optional and not included.
Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operation
Overview
The Company’s operations during 2022 include
both leasing its office building located in Parkersburg West Virginia and managing the oil and gas operations it sold in August 2020.
The Company’s principal source of cash and income was the interest it receives from notes receivables.
In August 2020, the Company sold its oil and gas
wells and mineral leases which were located in Ohio and West Virginia. The oil and operations for the periods included in this report
are reflected as discontinued operations.
Critical Accounting Policies and Estimates
The Company’s discussion and analysis of
its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the United States. Certain of the Company’s accounting
policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates. By
their nature, these judgments are subject to an inherent degree of uncertainty. These judgments and estimates are based upon
the Company’s historical experience, current trends and information available from other sources that are believed to be reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions.
Deferred Tax Assets
Significant management judgment is required in
determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred
tax assets. The future recoverability of the Company’s net deferred tax assets is dependent upon the generation of future
taxable income prior to the expiration of the loss carry forwards. At December 31, 2022, the Company had a deferred tax asset
due to tax deductions available to it in future years. However, as management could not determine that it was more likely than
not that the benefit of the deferred tax asset would be realized, a 100% valuation allowance was established.
Liquidity and Capital Resources
At December 31, 2022, the Company had current
assets of $4,008,000 and current liabilities of $60,000.
Cash and cash equivalents totaled $436,000 at
December 31, 2022 and $252,000 at December 31, 2021. New Concept’s principal sources of cash was rent from the tenant
occupying part of its building in West Virginia, management fees and interest from its notes receivable.
Results of Operations
Fiscal 2022 as compared to 2021
Revenues: Revenues from rent for the leased
property was $101,000 in 2022 and 2021. Revenues from managing the oil and gas operations for a third party was $111,000 in 2022.
Operating Expenses: Operating expenses
for the real estate property was $57,000 in 2022 and $77,000 in 2021. General and administrative expenses were $317,000 in 2022 and $360,000
in 2021.
Interest Income: Interest Income
was $212,000 in 2022 and $220,000 in 2021.
Other Income: Other income
was $131,000 in 2022 compared to $191,000 in 2021. Included in other income for 2022 is $63,000 which represents the collection of an
investment that had previously been fully reserved and a gain of $68,000 from the sale of equipment.
Fiscal 2021 as compared to 2020
Revenues: Total revenues from rent for
the leased property was $101,000 in 2021 and 2020.
Operating Expenses: Operating expenses
for the real estate property was $77,000 in 2021 and $72,000 in 2020. General and administrative expenses were $360,000 in 2021 and $396,000
in 2020.
Interest Income: Interest Income
was $220,000 in 2021 as compared to $242,000 in 2020. The decrease was due to the reduction in the principal balance outstanding due to
payments received.
Other Income: Other income
was $191,000 in 2021compared to $85,000 in 2020. Included in other income for 2021 is an income tax refund for prior years of $91,000
and $100,000 from the sale of a receivable that had been fully reserved in prior years. Other income was $85,000 in 2020 which is principally
an income tax refund for prior years.
Other income was $85,000 in 2020 which is an income
tax refund for prior years.
Item 7a: Quantitative and Qualitative Disclosures about
Market Risk
As of December 31, 2022 the Company has paid off
all outstanding long term debt, therefore, the Company has no risk from exposure to changes in interest rates.
Item 8. Financial Statements
The consolidated financial statements required
by this Item begin at page 16 of this Report.
Item 9. Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation by our management (with
the participation of our Principal Executive Officer and Principal Financial Officer), as of the end of the period covered by this report,
our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) were effective to provide
reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and
communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding
required disclosures.
There has been no change in our internal control
over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control
over Financial Reporting
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting for the Company. Our internal control over financial reporting
is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
in accordance with generally accepted accounting principles. There are inherent limitations to the effectiveness of any system
of internal control over financial reporting. These limitations include the possibility of human error, the circumvention of
overriding of the system and reasonable resource constraints. Because of its inherent limitations, our internal control over
financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies
or procedures may deteriorate.
Management assessed the effectiveness of the Company’s
internal control over financial reporting. In making this assessment, management used the criteria set forth in Internal
Control - Integrated Framework -2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based
on management’s assessments and those criteria, management has concluded that Company’s internal control over financial reporting
was effective as of December 31, 2022.
This annual report does not include an attestation
report of the Company’s registered public accounting firm regarding internal control over financial report. Management’s
report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and
Exchange Commission that permit the Company to provide only management’s report in this annual report.
Changes in Internal Control over Financial
Reporting
In preparation for management’s report on
internal control over financial reporting, we documented and tested the design and operating effectiveness of our internal control over
financial reporting. There were no changes in our internal controls over financial reporting (as such term is defined in Exchange
Act Rule 13a-15(f)) that occurred during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
Item 9B. Other Information
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate
Governance
Directors
The affairs of the Company are managed by the
Board of Directors. The directors are elected at the Annual Meeting of Stockholders or appointed by the incumbent Board and
serve until the next Annual Meeting of Stockholders, until a successor has been elected or approved, or until earlier resignation, removal
or death.
It is the Board’s objective that a majority
of the Board consists of independent directors. For a director to be considered “independent,” the Board must determine
that the director does not have any direct or indirect material relationship with the Company. The Board has established guidelines
to assist it in determining director independence, which conform to, or are more exacting than, the independence requirements in the NYSE
American Stock Exchange listing rules. The independence guidelines are set forth in the Company’s “Corporate Governance
Guidelines.” The text of this document has been posted on the Company’s internet website at http://www.newconceptenergy.com
and is available in print to any stockholder who requests it. In addition to applying these guidelines, the Board will consider
all relevant facts and circumstances in making an independent determination.
The Company has adopted a code of conduct that
applies to all directors, officers and employees, including our principal executive officer, principal financial officer and principal
accounting officer. Stockholders may find our Code of Conduct on our internet website address at http://www.newconceptenergy.com. We
will post any amendments to the Code of Conduct as well as any waivers that are required to be disclosed by the rules of the SEC or the
NYSE AMERICAN on our website.
Our Board of Directors has adopted charters for
our Audit, Compensation and Governance and Nominating Committees of the Board of Directors. Stockholders may find these documents
on our website by going to the website address http://www.newconceptenergy.com. Stockholders may also obtain a printed copy
of the materials referred to by contacting us at the following address:
New Concept Energy, Inc.
Attn: Investor Relations
1603 LBJ Freeway, Suite 800
Dallas, Texas 75234
972-407-8400 (Telephone)
The Audit Committee of the Board of Directors
is an “audit committee” for the purposes of Section 3(a) (58) of the Exchange Act. The members of that Committee
are Dan Locklear (Chairman), Raymond D. Roberts, Cecilia Maynard and Richard W. Humphrey. Mr. Locklear is qualified as an “audit
committee financial expert” within the meaning of SEC regulations and the Board has determined that he has the accounting and related
financial management expertise within the meaning of the listing standards of the NYSE American. All of the members of the
Audit Committee meet the independence and experience requirements of the listing standards of the NYSE American.
All members of the Audit Committee, Compensation
Committee and the Governance and Nominating Committee must be independent directors. Members of the Audit Committee must also
satisfy additional independence requirements which provide (i) that they may not accept, directly or indirectly, any consulting, advisory
or compensatory fee from the Company or any of its subsidiaries other than their director’s compensation (other than in their capacity
as a member of the Audit Committee, the Board of Directors or any other Committee of the Board), and (ii) no member of the Audit Committee
may be an “affiliated person” of the Company or any of its subsidiaries, as defined by the Securities and Exchange Commission.
The current directors of the Company are listed
below, together with their ages, terms of service, all positions and offices with the Company, their principal occupations, business experience
and directorships with other companies during the last five years or more. The designation “affiliated,” when used
below with respect to a director, means that the director is an officer or employee of the Company or one of its subsidiaries. The
designation “independent,” when used below with respect to a director, means that the director is neither an officer of the
Company nor a director, officer or employee of a subsidiary of the Company, although the Company may have certain business or professional
relationships with the director as discussed in Item 13. Certain Relationships and Related Transactions. No family relationship exists
between any executive officer and any of the directors of the company.
Raymond D. Roberts, age 91, (Independent) Director
since June 2015
Mr. Roberts is currently retired. He is a director
of American Realty Investors, Inc. (“ARL”), Transcontinental Realty Investors, Inc. (“TCI”) and Income Opportunity
Realty Investors, Inc. (IOR”) ARL and TCI common stock are listed and traded on the New York Stock Exchange and IOR common stock
is listed and traded on the NYSE American Exchange. These Companies are affiliated with both Realty Advisors, Inc. and Pillar Income Asset
Management. Mr. Roberts is a member of the Governance and Nominating Committee of the Board of Directors of the Registrant.
Gene S. Bertcher, age 74, (Affiliated) Director
November 1989 to September 1996 and since June 1999
Mr. Bertcher was elected President and Chief Financial
Officer effective November 1, 2004. He was elected Chairman and Chief Executive Officer in December 2006. Mr. Bertcher
has been Chief Financial Officer and Treasurer of the Company since November 1989 and Executive Vice President from November 1989 until
he was elected President. Mr. Bertcher was until June 30, 2019 Executive Vice-President and Chief Financial Officer of American Realty
Investors, Inc. and Transcontinental Realty Investors, Inc., both of which are traded on the NYSE. Mr. Bertcher was until December 16,
2021 Executive Vice-President and Chief Financial Officer of Income Opportunity Realty Investors, Inc., which is traded on the NYSE American
Exchange. He had occupied these positions since February 2008. Further Mr. Bertcher as of August 2020 is a Director of Pillar Income Asset
Management. He has been a certified public accountant since 1973.
Dan Locklear, age 69, (Independent) Director
since December 2003
Mr. Locklear has been Chief Financial Officer
of Sunridge Management Group, a real estate management company, for more than five years. Mr. Locklear was formerly employed
by Johnstown Management Company, Inc. and Trammel Crow Company. Mr. Locklear has been a certified public accountant since 1981
and a licensed real estate broker in the State of Texas since 1978.
Richard W. Humphrey, age 75, (Affiliated) Director
since October 2020
Mr. Humphrey has been, for more than the
past five years, Vice President of Regis Realty Prime, LLC, involved in sales and acquisitions of real estate properties. Mr. Humphrey
received from Southern Methodist University Cox School of Business both a Bachelor of Business Administration and Master of Business Administration
degree with emphasis in real estate. From 1976 to 1979, he was also a part-time faculty member at Southern Methodist University Cox School
of Business in Dallas, teaching real estate classes in undergraduate and graduate school. Regis Realty Prime, LLC and its predecessors
are affiliated with Realty Advisors, Inc. ("RAI").
Cecilia Maynard, age 70, (Independent) Director since January 2019
Ms. Maynard was employed by Pillar Income
Asset Management, Inc. (“Pillar”) from January 2011 through December 31, 2018. Pillar is a Nevada corporation which provides
management services to other entities. Ms. Maynard was also (May 31, 2018 to June 2021) a director, Vice President and Secretary of First
Equity Properties, Inc., a Nevada corporation, the common stock of which is registered under Section 12(g) of the Securities Exchange
Act of 1934.
Board Committees
The Board of Directors held four meetings during
2022. For such year, no incumbent director attended fewer than 75% of the aggregate of (i) the total number of meetings held
by the Board during the period for which he or she had been a director, and (ii) the total number of meetings held by all Committees of
the Board on which he or she served during the period that he or she served.
The Board of Directors has standing Audit, Compensation
and Governance and Nominating Committees. The Audit Committee was formed on December 12, 2003, and its function is to review
the Company’s operating and accounting procedures. A Charter of the Audit Committee has been adopted by the Board. The
current members of the Audit Committee, all of whom are independent within the SEC regulations, the listing standards of the NYSE American
and the Company’s Corporate Governance Guidelines are Messrs. Locklear (Chairman), Roberts and Ms. Maynard. Mr. Dan Locklear
is qualified as an Audit Committee financial expert within the meaning of SEC regulations, and the Board has determined that he has the
accounting and related financial management expertise within the meaning of the listing standards of the NYSE American. The Audit
Committee met four times in 2022.
The Governance and Nominating Committee is responsible
for developing and implementing policies and practices relating to the corporate governance, including reviewing and monitoring implementation
of the Company’s Corporate Governance Guidelines. In addition, the Committee develops and reviews background information
on candidates for the Board and makes recommendations to the Board regarding such candidates. The Committee also prepares and
supervises the Board’s annual review of director independence and the Board’s performance and self-evaluation. The members
of the Committee are Messrs. Locklear, Roberts and Ms. Maynard (Chairman).
The Board has also formed a Compensation Committee
of the Board of Directors, adopted a Charter for the Compensation Committee on October 20, 2004, the committee members are Mr. Roberts
(Chairman) and Messrs. Locklear and Ms. Maynard.
The members of the Board of Directors at the date
of this Report and the Committees of the Board on which they serve are identified below:
| Director |
Audit Committee |
Governance and Nominating Committee |
Compensation Committee |
| Raymond D. Roberts |
ü |
ü |
Chairman |
| Gene S. Bertcher |
|
|
|
| Cecilia Maynard |
ü |
Chairman |
ü |
| Dan Locklear |
Chairman |
ü |
ü |
| Richard W. Humphrey |
|
|
|
Executive Officers
The following person currently serves as the sole
executive officer of the Company: Gene S. Bertcher, Chairman of the Board, President, Chief Executive Officer and Treasurer. His
position with the Company is not subject to a vote of stockholders. His age, term of service and all positions and offices
with the Company, other principal occupations, business experience and directorships with other companies during the last five years or
more are listed under the caption “Directors” above.
In addition to the foregoing officer, the Company
has other officers not listed herein who are not considered executive officers.
Code of Ethics
The Board of Directors has adopted a code of ethics
entitled “Code of Business Conduct and Ethics” that applies to all directors, officers and employees of the Company and its
subsidiaries. In addition, the Company has adopted a code of ethics entitled “Code of Ethics for Senior Financial Officers”
that applies to the principal executive officer, president, principal financial officer, chief financial officer, principal accounting
officer and controller. The text of these documents is posted on the Company’s internet website address at http://www.newconceptenergy.com
and is available in print to any stockholder who requests them.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of Forms 3, 4 and 5
available to the Company pursuant to Rule 16a-3(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act “),
upon written representations received by the Company, the Company is not aware of any failure by any director, officer or beneficial owner
of more than 10% of the Company’s common stock to file with the Securities and Exchange Commission on a timely basis.
Item 11. Executive Compensation
The following tables set forth the compensation
in all categories paid by the Company for services rendered during the fiscal years ended December 31, 2022, 2021 and 2020 by the Chief
Executive Officer of the Company and to the other executive officers and Directors of the Company whose total annual salary in 2022 exceeded
$50,000.
SUMMARY COMPENSATION TABLE
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
Change in | |
| | | |
| | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
Pension | |
| | | |
| | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| Non- | | |
Value and | |
| | | |
| | |
| Name | |
| | |
| | | |
| | | |
| | | |
| | | |
| Equity | | |
Nonqualified | |
| | | |
| | |
| and | |
| | |
| | | |
| | | |
| | | |
| | | |
| Incentive | | |
Deferred | |
| All | | |
| | |
| Principal | |
| | |
| | | |
| | | |
| Stock | | |
| Option | | |
| Plan | | |
Compensation | |
| Other | | |
| | |
| Position | |
Year | | |
| Salary | | |
| Bonus | | |
| Awards | | |
| Awards | | |
| Compensation | | |
Earnings | |
| Compensation | | |
| Total | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | |
| Gene S. Bertcher (1) | |
2022 | | |
$ | 56,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
$ | 56,500 | |
| Chairman, President | |
2021 | | |
$ | 56,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
$ | 56,500 | |
| & Chief Financial | |
2020 | | |
$ | 56,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
$ | 56,500 | |
| Officer | |
| | |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
| | |
| (1) | The salary in the above table represents Mr. Bertcher’s compensation paid by the Company; he also receives additional compensation
for services to other entities which are related to the Company. |
GRANTS OF PLAN-BASED AWARDS
None
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
None
OPTION EXERCISES AND STOCK VESTED
None
PENSION BENEFITS
None
NONQUALIFIED DEFERRED COMPENSATION
None
DIRECTOR COMPENSATION
| Name | |
Fees Earned Or Paid in Cash | | |
Stock Awards | |
Option Awards | |
Non-Equity Incentive Plan Compensation | |
Change in Pension Value and Nonqualified Deferred Compensation Earnings | |
All Other Compensation | |
Total | |
| | |
| | |
| |
| |
| |
| |
| |
| |
| Gene S. Bertcher | |
$ | — | | |
| |
| |
| |
| |
| |
$ | — | |
| Raymond D. Roberts | |
$ | 10,500 | | |
| |
| |
| |
| |
| |
$ | 10,500 | |
| Dan Locklear | |
$ | 10,500 | | |
| |
| |
| |
| |
| |
$ | 10,500 | |
| Richard W. Humphrey | |
$ | 10,500 | | |
| |
| |
| |
| |
| |
$ | 10,500 | |
| Cecilia Maynard | |
$ | 10,500 | | |
| |
| |
| |
| |
| |
$ | 10,500 | |
MANAGEMENT AND CERTAIN SECURITY HOLDERS
None
Compensation of Directors
The Company pays each non-employee director a
fee of $2,500 per year, plus a meeting fee of $2,000 for each board meeting attended. Employee directors serve without compensation.
Item 12. Security Ownership of Certain Beneficial Owners
The following table sets forth
the ownership of the Company’s Common Stock, both beneficially and of record, both individually and in the aggregate, for those
persons or entities known by the Company to be the beneficial owners of more than 5% of its outstanding Common Stock as of the close of
business on March 18, 2022.
Name and Address of Beneficial Owner | |
Amount and Nature of Beneficial Ownership | |
Approximate
Percent of Class *
|
| | |
| |
| |
| Realty Advisors, Inc. | |
1,394,934 shares | |
| 27.18 | % |
| · | based on 5,131,934 shares outstanding on March
20, 2023. |
Security Ownership of Management
The following table sets forth
the ownership of the Company’s Common Stock, both beneficially and of record, both individually and in the aggregate for the directors
and executive officers of the Company, as of the close of business on March 20, 2023.
Name and Address of Beneficial Owner | |
Amount and Nature of Beneficial
Ownership* | | |
Approximate Percent of
Class** |
|
| | |
| | |
|
|
| Gene S. Bertcher | |
- | | |
| 0% |
|
| | |
| | |
| |
|
| Raymond Roberts | |
- | | |
| 0% |
|
| | |
| | |
| |
|
| Dan Locklear | |
- | | |
| 0% |
|
| | |
| | |
| |
|
| Richard Humphrey | |
- | | |
| 0% |
|
| | |
| | |
| |
|
| Cecilia Maynard | |
- | | |
| 0% |
|
| | |
| | |
| |
|
| All directors and executive officers as a group (5 people) | |
- | | |
| 0% |
|
* Beneficial Ownership means the sole or shared
power to vote, or to direct the voting of, a security or investment power with respect to a security, or any combination thereof.
** Percentages are based upon 5,131, 934 shares
of Common Stock outstanding at March 20, 2023.
Item 13. Certain Relationships and Related Transactions,
and Director Independence
Beginning in 2011 Pillar became the contractual
advisor to three other publically traded entities which are related to Realty Advisors, Inc. (“RAI”) through stock ownership
by RAI. In addition, the relationship with Mr. Bertcher New Concept conducts business with Pillar whereby Pillar provided the Company
with services including processing payroll, acquiring insurance and other administrative matters. The Company believes that by purchasing
these services through certain large entities it can get lower costs and better service. Pillar does not charge the Company a fee for
providing these services. Pillar is a wholly owned subsidiary of Realty Advisors, Inc.
Except as set forth above, the Reporting Persons
do not have any contracts, arrangements, understandings or relationships, legal or otherwise, with any person with respect to any securities
of the Issuer, including but not limited to, transfer or voting of any of the securities, finders’ fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, divisions of profits or losses, or the giving or withholding of proxies.
It is the policy of the Company that all transactions
between the Company and any officer or director, or any of their affiliates, must be approved by independent members of the Board of Directors
of the Company. All of the transactions described above were so approved.
See Item 10. Directors, Executive Officers and
Corporate Governance for information on the independence of Directors and the standards of the NYSE American Exchange.
Item 14. Principal Accounting Fees and Services
The following table sets forth the aggregate fees
for professional services rendered to the Company for the years 2022 and 2021 by the Company’s principal accounting firm Swalm &
Associates, P.C.:
| Type of Fees | |
2022 | | |
2021 | |
| Audit Fees | |
$ | 42,750 | | |
$ | 71,525 | |
| Tax Fees | |
| 2,750 | | |
| 12,530 | |
| Total Fees | |
$ | 48,000 | | |
$ | 84,055 | |
All services rendered by the principal auditors
are permissible under applicable laws and regulations and were pre-approved by either of the Board of Directors or the Audit Committee,
as required by law. The fees paid to principal auditors for services described in the above table fall under the categories
listed below:
Audit Fees: These are fees for professional
services performed by the principal auditor for the audit of the Company’s annual financial statements and review of financial statements
included in the Company’s Form 10-Q filings and services that are normally provided in connection with statutory and regulatory
filings or engagements.
Audit-Related Fees: These are fees
for assurance and related services performed by the principal auditor that are reasonably related to the performance of the audit or review
of the Company’s financial statements. These services include attestation by the principal auditor that is not required
by statute or regulation and consulting on financial accounting/reporting standards.
Tax Fees: These are fees for professional
services performed by the principal auditor with respect to tax compliance, tax planning, tax consultation, returns preparation and reviews
of returns. The review of tax returns includes the Company and its consolidated subsidiaries.
All Other Fees: These are fees for
other permissible work performed by the principal auditor that does not meet the above category descriptions.
These services are actively monitored (as to both
spending level and work content) by the Audit Committee to maintain the appropriate objectivity and independence in the principal auditor’s
core work, which is the audit of the Company’s consolidated financial statements.
Financial Information Systems Design and Implementation
Fees
Swalm & Associates, P.C. did not render professional
services to the Company in 2022 with respect to financial information systems design and implementation.
Under the Sarbanes-Oxley Act of 2002 (the “SO
Act”), and the rules of the Securities and Exchange Commission (the “SEC”), the Audit Committee of the Board of Directors
is responsible for the appointment, compensation and oversight of the work of the independent auditor. The purpose of the provisions
of the SO Act and the SEC rules for the Audit Committee’s role in retaining the independent auditor is two-fold. First,
the authority and responsibility for the appointment, compensation and oversight of the auditors should be with directors who are independent
of management. Second, any non-audit work performed by the auditors should be reviewed and approved by these same independent
directors to ensure that any non-audit services performed by the auditor do not impair the independence of the independent auditor. To
implement the provisions of the SO Act, the SEC issued rules specifying the types of services that an independent auditor may not provide
to its audit client and governing the Audit Committee’s administration of the engagement of the independent auditor. As
part of this responsibility, the Audit Committee is required to pre-approve the audit and non-audit services performed by the independent
auditor in order to assure that they do not impair the auditor’s independence. Accordingly, the Audit Committee has adopted
a pre-approval policy of audit and non-audit services (the “Policy”), which sets forth the procedures and conditions pursuant
to which services to be performed by the independent auditor are to be pre-approved. Consistent with the SEC rules establishing
two different approaches to pre-approving non-prohibited services, the Policy of the Audit Committee covers pre-approval of audit services,
audit-related services, international administration tax services, non-U.S. income tax compliance services, pension and benefit plan consulting
and compliance services, and U.S. tax compliance and planning. At the beginning of each fiscal year, the Audit Committee will
evaluate other known potential engagements of the independent auditor, including the scope of work proposed to be performed and the proposed
fees, and the approve or reject each service, taking into account whether services are permissible under applicable law and the possible
impact of each non-audit service on the independent auditor’s independence from management. Typically, in addition to
the pre-approved services, other services would include due diligence for an acquisition that may or may not have been known at the beginning
of the year. The Audit Committee has also delegated to any member of the Audit Committee designated by the Board or the financial
expert member of the Audit Committee responsibilities to pre-approve services to be performed by the independent auditor not exceeding
$25,000 in value or cost per engagement of audit and non-audit services, and such authority may only be exercised when the Audit Committee
is not in session.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the shareholders and the board of directors of
New Concept Energy, Inc.
Dallas, Texas
Opinion on the Financial Statements
We have audited the accompanying balance sheets
of New Concept Energy, Inc. and Subsidiaries (the Company) as of December 31, 2022 and 2021, and the related statements of operations,
stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes collectively referred to as the financial statements. In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31, 2022 in conformity with accounting principles generally accepted in
the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCOAB”)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from
the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and
that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements,
taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
Transactions with and Balances Due from Related Parties
Description of the Matter
The Company has significant transactions and balances due from and
due to related parties. The Company performs an assessment as to whether substantially all the amounts due under these receivables are
deemed probable of collection. When the Company concludes that it is not probable that it will collect amounts, the Company creates an
allowance for the amount not probable of the collection.
Auditing the Company’s collectability assessment is complex due
to the judgment involved in the Company’s determination of the collectability of these receivables. The determination involves consideration
of the terms of the receivable, whether the receivable is currently performing, and any security for the receivable.
How We addressed the Matter in Our Audit
We obtained an understanding of the Company’s controls over related
party receivables and their collectability assessment. Our testing included, among other things, confirmation of the receivables, reviewing
selected financial information of the related parties, reviewing subsequent collections and evaluating transaction documentation. The
relevant financial statement accounts are notes and interest receivable from related parties, and accounts payable to related parties
and interest income from related parties.
Emphasis of Related Party Transactions
As described in the notes to the consolidated financial statements
New Concept Energy, Inc. and Subsidiaries has significant transactions with and balances due from related parties.
/s/ Swalm & Associates, P.C.
Swalm & Associates, P.C.
We have served as the Company’s auditor since 2008.
Richardson, Texas
March 20, 2023
The accompanying notes are an integral part of
these consolidated financial statements.
The accompanying notes are an integral part of
these consolidated financial statements.
The accompanying notes are an integral
part of these consolidated financial statements.
The accompanying notes are an integral part of
these consolidated financial statements.
The accompanying notes are an integral part of
these consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2022
NOTE A – BUSINESS DESCRIPTION AND PRESENTATION
The Company owns approximately 190 acres
of land located in Parkersburg West Virginia. Located on the land are four structures totaling approximately 53,000 square feet. Of this
total area the main industrial / office building contains approximately 24,800 square feet of which as of December 31, 2022 approximately
16,000 of industrial area is leased for $101,000 per annum.
In August 2020, the Company sold its oil and gas
wells and mineral leases which were located in Ohio and West Virginia. The oil and operations for the periods included in this report
are reflected as discontinued operations.
The Company’s ability to meet current cash obligations relies
on cash received from operations and the collection of notes receivable, including a $3.5 million dollar receivable from a related party.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
A summary of the significant accounting policies applied in the preparation
of the accompanying consolidated financial statements follows:
Principles of Consolidation
The consolidated financial statements include
the accounts of New Concept Energy, Inc. and its majority-owned subsidiaries (collectively, the “Company,” New Concept or
“NCE”) and are prepared on the basis of accounting principles generally accepted in the United States of America “GAAP.” All
significant intercompany transactions and accounts have been eliminated. Certain accounting balances have been reclassified to conform
to the current year presentation.
Depreciation
Depreciation is provided for in amounts sufficient
to relate the cost of property and equipment to operations over their estimated service lives, ranging from 3 to 40 years. Depreciation
is computed by the straight-line method.
Depreciation expense, which is included in operations,
was $12,000, $13,000 and $12,000 for 2022, 2021 and 2020, respectively.
Segments
The Company operates one primary business segment:
real estate rental. Segment data is provided in “Note K” to these consolidated financial statements.
On August 31, 2020, the Company sold its oil and
gas segment which is now reflected as Discontinued Operations.
Revenue Recognition
Rental income for property leases are recorded
when due from the tenant and is recognized monthly as it is earned, which is not materially different than on a straight-line basis as
lease terms are generally for periods of one year or less.
Use of Estimates
In preparing financial statements in conformity
with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and revenues and expenses during the reporting period. Actual results could differ from those
estimates.
Cash Equivalents
The Company considers all short-term deposits
and money market investments with a maturity of less than three months to be cash equivalents.
Impairment of Notes Receivable
Notes receivable are identified as impaired when
it is probable that interest and principal will not be collected according to the contractual terms of the note agreements. The
accrual of interest is discontinued on such notes, and no income is recognized until all past due amounts of principal and interest are
recovered in full.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets and
certain identifiable intangibles for impairment when events or changes in circumstances indicate that the carrying amount of the assets
may not be recoverable. In reviewing recoverability, the Company estimates the future cash flows expected to result from use
of the assets and eventually disposing of them. If the sum of the expected future cash flows (undiscounted and without interest
charges) is less than the carrying amount of the asset, an impairment loss is recognized based on the asset’s fair value.
The Company determines the fair value of assets
to be disposed of and records the asset at the lower of fair value less disposal costs or carrying value. Assets are not depreciated
while held for disposal.
Sales of Real Estate
Gains on sales of real estate are recognized to
the extent permitted by Accounting Standards Codification Topic 360-20, “Real Estate Sales – Real Estate Sales”, (“ASC
360-20”). Until the requirements of ASC 360-20 have been met for full profit recognition, sales are accounted for by
the installment or cost recovery method, whichever is appropriate.
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 by such assets. A valuation allowance is provided for a portion or all of the deferred
tax assets when there is an uncertainty regarding the Company’s ability to recognize the benefits of the assets in future years.
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. Since management could not determine the likelihood that the benefit of the deferred
tax asset would be realized, no deferred tax asset was recognized by the Company.
NOTE C – RELATED PARTIES
Commencing in February 2008, three publicly traded
entities needed a chief financial officer, American Realty Investors, Inc. (“ARL”), Transcontinental Realty Investors, Inc.
(“TCI”) and Income Opportunity Realty Investors, Inc. (“IOR”), Mr. Bertcher, is a certified public accountant
and has a long history in their industry. New Concept made arrangements with the three entities whereby, in addition to his responsibilities
to New Concept Mr. Bertcher would be Chief Financial Officer for the three entities. Mr. Bertcher was paid directly for such services
by the contractual advisor for the three companies. Mr. Bertcher resigned as an officer of American Realty Investors, Inc. (“ARI”)
and Transcontinental Realty Investors, Inc. (“TCI”) on June 30, 2019, but continued on as an officer of Income Opportunity
Realty Investors, Inc. (“IOR”) until he resigned December 16, 2021.
Realty Advisors, Inc., (“RAI”) is
a privately owned investment company and by virtue of its stock ownership, the controlling shareholder for ARI, which in turn is the controlling
stockholder of TCI, which is the controlling stockholder of IOR. Mr. Bertcher was an officer of RAI until June 30, 2019.
Beginning in 2011 Pillar Income Asset Management
(“Pillar”) became the contractual advisor to the three publically traded entities. Pillar is a wholly owned subsidiary of
RAI and Mr. Bertcher serves as a director of Pillar. In addition to the relationship with Mr. Bertcher, the Company conducts business
with Pillar whereby Pillar provided the Company with services including processing payroll, acquiring insurance and other administrative
matters. The Company believes that by purchasing these services through certain large entities it can get lower costs and better service.
Pillar does not charge the Company a fee for providing these services. The Company reimburses Pillar for the direct cost for such services.
NOTE D - DISCONTINUED OPERATIONS
On August 31, 2020, the Company sold its entire oil and gas
operation for $85,000 to an independent third party. In prior years, the Company had accrued a liability of $2,745,000 to plug and abandon
the existing wells. This obligation was assumed by the buyer. Upon the sale of the wells the Company recorded a gain of $2,138,000.
Also included in discontinued operations are net operating expenses
the Company incurred during the period presented. For the year ended December 31, 2020 the Company recorded operating losses of $170,000,
NOTE E - NOTE RECEIVABLE
Note Receivable is comprised of the following
(in thousands):
| Schedule of notes receivable | |
| | | |
| | | |
| | |
| | |
Interest | | |
| | |
| |
| | |
Rate | | |
2022 | | |
2021 | |
| | |
| | | |
| | | |
| | |
| American Realty Investors, Inc. (a related party) receivable upon maturity in September 2023 | |
| 6 | % | |
$ | 3,542 | | |
$ | 3,560 | |
NOTE F - FIXED ASSETS
Land, building and furniture, fixtures and equitpment
are recorded at cost incurred to acquire the assets.
At Decemer 31, 2022, fixed assets are as follows:
| Schedule of property, plant
and equipment | |
| | | |
| | |
| | |
2022 | | |
2021 | |
| | |
| | |
| |
| Land and improvements | |
$ | 432 | | |
$ | 432 | |
| Buildings and improvements | |
| 341 | | |
| 341 | |
| Total fixed assets | |
| 773 | | |
| 773 | |
| Less: Accumulated depreciation | |
| (142 | ) | |
| (130 | ) |
| Net Fixed Assets | |
$ | 631 | | |
$ | 643 | |
NOTE G – INCOME TAXES
We account for income taxes under the asset and
liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events
that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis
of the differences between the financial statement and tax basis of liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse.
The effect of the change in tax rates on deferred
tax assets are liabilities recognized in income in the period that includes the enactment date. We recognize deferred tax assets to the
extent that we believe these assets are more likely than not to be realized. If we determine that we would be able to release our deferred
tax asset in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance,
which would reduce the provision for income taxes.
At December 31, 2022, the Company had net operating
loss carry forwards of approximately $7.5 million, which expire between 2022 and 2037.
The Company has no assurance as to if and when
the benefit of NOL carryforwards will be realized, therefore, a valuation allowance on the related deferred tax assets has been recorded.
Forms 1120, U.S, Corporation Income Tax Returns, for the years
ending December 31, 2022, 2021, 2020 are subject to examination, by the IRS, generally for three years after they are filed.
The following table presents the principal reasons for the difference
between the Company's effective tax rate and the United States statutory income tax rate.
| Schedule of effective income tax
rate | |
| | | |
| | | |
| | |
| | |
2022 | | |
2021 | | |
2020 | |
| Earned income tax at statutory rate of 21% | |
$ | 39 | | |
$ | 15 | | |
$ | 413 | |
| Net operating loss utilization | |
| (39 | ) | |
| (15 | ) | |
| (413 | ) |
| Deferred tax asset from NOL carry forwards | |
| 1,583 | | |
| 1,735 | | |
| 1,786 | |
| Valuation allowance | |
| (1,583 | ) | |
| (1,735 | ) | |
| (1,786 | ) |
| Reported income tax expense (benefit) | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | |
| | |
| | | |
| | | |
| | |
| Effective income tax rate | |
| 0.00 | % | |
| 0.00 | % | |
| 0.00 | % |
NOTE H – STOCKHOLDERS’ EQUITY
Outstanding Preferred Stock
Preferred stock consists of the following (amounts in thousands):
| Schedule of Stockholders Equity | |
| | |
| |
| | |
Year Ended | |
| | |
December 31, | |
| | |
2022 | | |
2021 | |
| Series B convertible preferred stock, $10 par value, liquidation value of $100, authorized 100 shares, issued and outstanding one share | |
| 1 | | |
| 1 | |
The Series B preferred stock has a liquidation
value of $100 per share. The right to convert expired April 30, 2003. Dividends at a rate of 6% are payable in cash or preferred
shares at the option of the Company.
NOTE I - CONCENTRATIONS
The Company maintains its cash balances at financial
institutions that participate in the Federal Deposit Insurance Corporation’s Transaction Account Guarantee Program which insures
depositors up to $250,000. At December 31, 2022, the Company has not experienced losses with respect to its bank balances in excess of
government provided insurance. Management believes that no significant concentration of credit risk exists with respect to these cash
balances at December 31, 2023.
NOTE J – OPERATING SEGMENTS
The following table reconciles the segment information
to the corresponding amounts in the Consolidated Statements of Operations and assets from continuing operations:
| Schedule of segment reporting information | |
| | | |
| | | |
| | | |
| | |
| Year ended December 31, 2022 | |
Current
Operations | | |
Corporate | | |
Total | | |
Discontinued
Operations
Oil & Gas | |
| | |
| | |
| | |
| | |
| |
| Operating revenue | |
$ | 212 | | |
$ | - | | |
$ | 212 | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating Expenses | |
| | | |
| | | |
| | | |
| | |
| Operating expenses | |
| 45 | | |
| 317 | | |
| 362 | | |
| - | |
| Depreciation, depletion and amortization | |
| 12 | | |
| - | | |
| 12 | | |
| - | |
| Impairment of oil and gas properties | |
| - | | |
| - | | |
| - | | |
| - | |
| Total Operating Expenses | |
| 57 | | |
| 317 | | |
| 374 | | |
| - | |
| Interest income | |
| - | | |
| 212 | | |
| 212 | | |
| - | |
| Interest expense | |
| - | | |
| - | | |
| - | | |
| - | |
| Other income (expense), net | |
| - | | |
| 131 | | |
| 131 | | |
| - | |
| Segment operating income (loss) | |
$ | 155 | | |
$ | 26 | | |
$ | 181 | | |
| - | |
| | |
| | | |
| | | |
| | | |
| | |
| Year ended December 31, 2021 | |
Current
Operations | | |
Corporate | | |
Total | | |
Discontinued
Operations
Oil & Gas | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating revenue | |
$ | 101 | | |
$ | - | | |
$ | 101 | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses | |
| 65 | | |
| 360 | | |
| 425 | | |
| | |
| Depreciation, depletion and amortization | |
| 12 | | |
| - | | |
| 12 | | |
| - | |
| Impairment of oil and gas properties | |
| - | | |
| - | | |
| - | | |
| - | |
| Total Operating Expenses | |
| 77 | | |
| 360 | | |
| 437 | | |
| | |
| Interest income | |
| - | | |
| 220 | | |
| 220 | | |
| - | |
| Interest expense | |
| - | | |
| (5 | ) | |
| (5 | ) | |
| | |
| Other income (expense), net | |
| - | | |
| 191 | | |
| 191 | | |
| - | |
| Segment operating income (loss) | |
$ | 24 | | |
$ | 46 | | |
$ | 70 | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Year ended December 31, 2020 | |
Current
Operations | | |
Corporate | | |
Total | | |
Discontinued
Operations
Oil & Gas | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating revenue | |
$ | 101 | | |
$ | - | | |
$ | 101 | | |
$ | 225 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses | |
| 60 | | |
| 390 | | |
| 450 | | |
| 395 | |
| Depreciation, depletion and amortization | |
| 12 | | |
| 6 | | |
| 18 | | |
| - | |
| Impairment of oil and gas properties | |
| - | | |
| - | | |
| - | | |
| - | |
| Total Operating Expenses | |
| 72 | | |
| 396 | | |
| 468 | | |
| 395 | |
| Interest income | |
| - | | |
| 242 | | |
| 242 | | |
| - | |
| Interest expense | |
| - | | |
| (12 | ) | |
| (12 | ) | |
| 2,138 | |
| Other income (expense), net | |
| - | | |
| 85 | | |
| 85 | | |
| - | |
| Segment operating income (loss) | |
$ | 29 | | |
$ | (81 | ) | |
$ | (52 | ) | |
$ | 1,968 | |
NOTE K - QUARTERLY DATA (UNAUDITED)
The table below reflects the Company’s selected
quarterly information for the years ended December 31, 2022, 2021 and 2020. Amounts shown are in thousands except per share
amounts.
| Schedule of quarterly financial information | |
| | | |
| | | |
| | | |
| | |
| | |
First | | |
Second | | |
Third | | |
Fourth | |
| Year ended December 31, 2022 | |
Quarter | | |
Quarter | | |
Quarter | | |
Quarter | |
| | |
| | |
| | |
| | |
| |
| Revenue | |
$ | 45 | | |
$ | 47 | | |
$ | 63 | | |
$ | 57 | |
| Operating (expense) | |
| (12 | ) | |
| (13 | ) | |
| (18 | ) | |
| (14 | ) |
| Corporate general and administrative expense | |
| (80 | ) | |
| (80 | ) | |
| (71 | ) | |
| (86 | ) |
| Other income (expense) net | |
| 52 | | |
| 184 | | |
| 53 | | |
| 54 | |
| Income (loss) allocable to common shareholders | |
| 5 | | |
| 138 | | |
| 27 | | |
| 11 | |
| Income (loss) per common share – basic | |
$ | 0.01 | | |
$ | 0.02 | | |
$ | 0.01 | | |
$ | 0.01 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
First | | |
Second | | |
Third | | |
Fourth | |
| Year ended December 31, 2021 | |
Quarter | | |
Quarter | | |
Quarter | | |
Quarter | |
| | |
| | | |
| | | |
| | | |
| | |
| Revenue | |
$ | 26 | | |
$ | 26 | | |
$ | 25 | | |
$ | 25 | |
| Operating (expense) | |
| (18 | ) | |
| (20 | ) | |
| (34 | ) | |
| (5 | ) |
| Corporate general and administrative expense | |
| (74 | ) | |
| (111 | ) | |
| (53 | ) | |
| (122 | ) |
| Other income (expense) net | |
| 145 | | |
| 154 | | |
| 54 | | |
| 53 | |
| Income (loss) allocable to common shareholders | |
| 79 | | |
| 49 | | |
| (8 | ) | |
| (49 | ) |
| Income (loss) per common share – basic | |
$ | 0.01 | | |
$ | 0.01 | | |
| ($0.01 | ) | |
$ | 0.00 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
First | | |
Second | | |
Third | | |
Fourth | |
| Year ended December 31, 2020 | |
Quarter | | |
Quarter | | |
Quarter | | |
Quarter | |
| | |
| | | |
| | | |
| | | |
| | |
| Revenue | |
$ | 25 | | |
$ | 25 | | |
$ | 25 | | |
$ | 26 | |
| Operating (expense) | |
| (18 | ) | |
| (18 | ) | |
| (18 | ) | |
| (18 | ) |
| Corporate general and administrative expense | |
| (104 | ) | |
| (127 | ) | |
| (65 | ) | |
| (100 | ) |
| Other income (expense) net | |
| 60 | | |
| 60 | | |
| 137 | | |
| 58 | |
| Income (loss) allocable to common shareholders | |
$ | (97 | ) | |
$ | (1,367 | ) | |
$ | 2,182 | | |
$ | (32 | ) |
| Income (loss) per common share – basic | |
$ | 0.02 | | |
| ($0.03 | ) | |
| ($0.43 | ) | |
$ | 0.00 | |
NOTE L: LIQUIDITY
The Company’s ability to meet current cash obligations relies
on cash received from operations and the collection of notes receivable, including a $3.5 million dollar receivable from a related party.
The Company is currently evaluating business opportunities to provide both additional income and cash flow.
NOTE M – SUBSEQUENT EVENTS
The date to which events occurring after December 31, 2022, the date
of the most recent balance sheet, have been evaluated for possible adjustments to the financial statements or disclosure is March 20,
2023, which is the date of which the financial statements were available to be issued. There are no subsequent events that would require
an adjustment to the financial statements.
The following documents are filed as exhibits
(or are incorporated by reference as indicated) into this Report:
Exhibit
Designation | |
Exhibit Description |
| 3.1 | |
Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit 3.1 to Registrant’s Form S-4 Registration Statement No. 333-55968 dated December 21, 1992) |
| 3.2 | |
Amendment to the Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit 3.5 to Registrant’s Form 8-K dated April 1, 1993) |
| 3.3 | |
Restated Articles of Incorporation of Greenbriar Corporation (incorporated by reference to Exhibit 3.1.1 to Registrant’s Form 10-K dated December 31, 1995) |
| 3.4 | |
Amendment to the Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit to Registrant’s PRES 14-C dated February 27, 1996) |
| 3.5 | |
Certificate of Decrease in Authorized and Issued Shares effective November 30, 2001 (incorporated by reference to Exhibit 2.1.7 to Registrant’s Form 10-K dated December 31, 2002) |
| 3.6 | |
Certificate of Designations, Preferences and Rights of Preferred Stock dated May 7, 1993 relating to Registrant’s Series B Preferred Stock (incorporated by reference to Exhibit 4.1.2 to Registrant’s Form S-3 Registration Statement No. 333-64840 dated June 22, 1993) |
| 3.7 | |
Certificate of Voting Powers, Designations, Preferences and Rights of Registrant’s Series F Senior Convertible Preferred Stock dated December 31, 1997 (incorporated by reference to Exhibit 2.2.2 of Registrant’s Form 10-KSB for the fiscal year ended December 31, 1997) |
| 3.8 | |
Certificate of Voting Powers, Designations, Preferences and Rights of Registrant’s Series G Senior Non-Voting Convertible Preferred Stock dated December 31, 1997 (incorporated by reference to Exhibit 2.2.3 of Registrant’s Form 10-KSB for the fiscal year ended December 31, 1997) |
| 3.9 | |
Certificate of Designations dated October 12, 2004 as filed with the Secretary of State of Nevada on October 13, 2004 (incorporated by reference to Exhibit 3.4 of Registrant’s Current Report on Form 8-K for event occurring October 12, 2004) |
| 3.10 | |
Certificate of Amendment to Articles of Incorporation effective February 8, 2005 (incorporated by reference to Exhibit 3.5 of Registrant’s Current Report on Form 8-K for event occurring February 8, 2005) |
| 3.11 | |
Certificate of Amendment to Articles of Incorporation effective March 21, 2007 (incorporated by reference to Exhibit 3.13 of Registrant’s Current Report on Form 8-K for event occurring March 21, 2005) |
| 3.12 | |
Amended and restated bylaws of New Concept Energy, Inc. dated November 18, 2008. |
| 10.1 | |
Registrant’s 1997 Stock Option Plan (filed as Exhibit 4.1 to Registrant’s Form S-8 Registration Statement, Registration No. 333-33985 and incorporated herein by this reference). |
| 10.2 | |
Registrant’s 2000 Stock Option Plan (filed as Exhibit 4.1 to Registrant’s Form S-8 Registration Statement, Registration No. 333-50868 and incorporated herein by this reference) |
| 14.0 | |
Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14.0 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003) |
| 21.1* | |
Subsidiaries of the Registrant |
| 31.1* | |
Rule 13a-14(a) Certification by Principal Executive Officer and Chief Financial Officer |
| 32.1* | |
Certification of Principal Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 99.1 | |
Reserve Study dated March 16, 2015 prepared by Lee Keeling and Associates, Inc is included as an exhibit |
| 99.2 | |
Shared Services Agreement effective December 31, 2010 (incorporated by reference to Exhibit 99.2 to
Registrants Form 10K/A for the year ended December 31, 2011 filed March 21, 2013) |
| 101 | |
Interactive data files pursuant to Rule 405 of Regulation S-T |
| | |
|
| *Filed herewith. |
