New Concept Energy(GBR) - 2022 Q1 - Quarterly Report

PART I: FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited consolidated financial statements for New Concept Energy, Inc. and its subsidiaries, including balance sheets, statements of operations, cash flows, and changes in stockholders' equity, along with accompanying notes detailing the basis of presentation, nature of operations, significant accounting policies, liquidity, contingencies, and subsequent events Consolidated Balance Sheets Presents the Company's financial position, including assets, liabilities, and equity, as of March 31, 2022, and December 31, 2021 | Metric | March 31, 2022 (Unaudited, in thousands) | December 31, 2021 (Audited, in thousands) | | :---------------------- | :------------------------- | :-------------------------- | | Total Assets | $4,496 | $4,455 | | Total Current Assets | $3,856 | $3,812 | | Cash and Cash Equivalents | $254 | $252 | | Total Current Liabilities | $96 | $60 | | Total Shareholders' Equity | $4,400 | $4,395 | Consolidated Statements of Operations Details the Company's revenues, expenses, and net income (loss) for the three months ended March 31, 2022 and 2021 | Metric (amounts in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------- | :-------------------------------- | :-------------------------------- | | Total Revenues | $45 | $26 | | Operating (loss) | $(47) | $(66) | | Earnings (loss) applicable to common shares | $5 | $79 | | Net income (loss) per common share-basic and diluted | $0.01 | $0.01 | - Total revenues increased to $45,000 in Q1 2022 from $26,000 in Q1 2021, driven by new management fees[12] - Net income decreased significantly from $79,000 in Q1 2021 to $5,000 in Q1 2022, primarily due to a $91,000 tax refund recorded in the prior year[12][31] Consolidated Statements of Cash Flows Summarizes the Company's cash inflows and outflows from operating, investing, and financing activities | Metric (amounts in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $2 | $25 | | Net cash provided by (used in) financing activities | $0 | $(9) | | Net increase (decrease) in cash and cash equivalents | $2 | $16 | | Cash and cash equivalents at end of period | $254 | $43 | - Net cash provided by operating activities decreased from $25,000 in Q1 2021 to $2,000 in Q1 2022[15] Consolidated Statements of Changes in Stockholders' Equity Outlines changes in the Company's stockholders' equity, including net income and other comprehensive income, for the period | Metric (amounts in thousands) | December 31, 2021 | March 31, 2022 | | :---------------------------- | :---------------- | :------------- | | Total Stockholders' Equity | $4,395 | $4,400 | | Accumulated Deficit | $(59,236) | $(59,231) | - Total stockholders' equity increased slightly from $4,395,000 at December 31, 2021, to $4,400,000 at March 31, 2022, primarily due to net income[17] Notes To Consolidated Financial Statements Provides detailed explanations and disclosures supporting the consolidated financial statements, including accounting policies and contingencies - The financial statements are unaudited and prepared by management, reflecting all normal recurring adjustments[19][20] - The Company's ability to meet cash obligations relies on current operations and collection of notes receivable, and it is evaluating new business opportunities[21][24] - The Company owns approximately 190 acres of land in West Virginia with four structures, leasing about 16,000 square feet for $101,000 per annum[22] - Effective January 1, 2022, the Company entered into a Consulting Management Agreement for oil and gas operations, providing services for a fee of 10% of gross revenue[22] - Significant accounting policies involve estimates for depreciation, amortization, leases, revenue recognition, impairment, and real estate sales[23] - The full extent of the COVID-19 pandemic's negative impact on the global economy and the Company's business remains uncertain[25] - No subsequent events were reported through May 12, 2022[26] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and operational results, highlighting critical accounting policies, liquidity, and a comparison of performance for the three months ended March 31, 2022, versus 2021, along with forward-looking statements, inflation, and environmental considerations Critical Accounting Policies and Estimates Discusses key accounting policies and estimates that require significant management judgment and impact financial reporting - The Company's financial statements rely on judgments and estimates, particularly for depreciation, amortization, leases, revenue recognition, impairment, and real estate sales[26][27] Doubtful Accounts Explains the Company's policy and methodology for establishing allowances for uncollectible accounts receivable - Allowance for doubtful accounts is based on risk analysis of specific accounts, considering factors like age of receivable, payment history, and debtor financial condition[28] Deferred Tax Assets Addresses the Company's deferred tax assets and the valuation allowance established against them - A 100% valuation allowance was established against deferred tax assets at March 31, 2021, as management could not determine that the benefit would more likely than not be realized[29] Liquidity and Capital Resources Analyzes the Company's ability to meet its short-term and long-term financial obligations and fund operations | Metric (amounts in thousands) | March 31, 2022 | | :---------------------------- | :------------- | | Current Assets | $3,856 | | Current Liabilities | $96 | | Cash and Cash Equivalents | $254 | - Cash and cash equivalents increased slightly from $252,000 at December 31, 2021, to $254,000 at March 31, 2022[30] Results of Operations Compares the Company's financial performance for the three months ended March 31, 2022, and 2021 | Metric (amounts in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------- | :-------------------------------- | :-------------------------------- | | Net income from continuing operations | $5 | $79 | | Total Revenue | $45 | $26 | | Rent Revenue | $25 | $26 | | Management Fees | $20 | $0 | | Corporate General & Administrative Expenses | $80 | $74 | - Net income decreased significantly year-over-year, primarily due to a $91,000 tax refund recorded in Q1 2021 that did not recur[30][31] - Revenue increased due to $20,000 in management fees in Q1 2022, offsetting a slight decrease in rental income[30] Forward Looking Statements Provides cautionary statements regarding future results, highlighting inherent risks and uncertainties - The report includes a 'Safe Harbor' statement, cautioning that future results may differ materially due to inherent risks and uncertainties[32] - Key risks include interest rate fluctuations, ability to obtain financing, demand, pricing, competition, construction delays, and managing costs[32] Inflation Discusses the potential impact of inflation on the Company's revenues, costs, and financial performance - The Company's revenue from rents is highly dependent on market conditions, and principal costs include employee compensation and maintenance[33] - While the Company has not historically experienced adverse effects of inflation, there is no assurance it can offset future inflationary pressures by increasing rental rates[33] Environmental Matters Addresses the Company's compliance with environmental laws and any associated liabilities - Environmental assessments have not revealed any material adverse environmental liability, and the Company believes its properties comply with relevant laws[34] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section addresses the Company's exposure to market risks, specifically focusing on interest rate risk Interest Rate Risk Examines the Company's exposure to fluctuations in interest rates and its impact on financial instruments - The Company has minimal exposure to changes in interest rates as nearly all its debt is financed at fixed rates[35] Item 4. Controls and Procedures Management, including the Principal Executive Officer and Principal Financial Officer, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2022, and reported no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were effective to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[36] - No material change in internal control over financial reporting occurred during the most recent fiscal quarter[37] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including various corporate governance documents and certifications - Exhibits include Articles of Incorporation, Amendments, Bylaws, Certificates of Designations for Preferred Stock, and certifications[39] - Certifications pursuant to Rule 13a-14/15d-14 and 18 U.S.C. §1350 are filed herewith[39][40] Signatures The report was signed by Gene S. Bertcher, Principal Executive Officer and Chief Financial Officer, on May 12, 2022 - The report was duly signed on May 12, 2022, by Gene S. Bertcher, Principal Executive Officer, President, and Chief Financial Officer of New Concept Energy, Inc[41] Certifications This section contains certifications from the Principal Executive Officer and Chief Financial Officer regarding the Form 10-Q's accuracy and compliance Certification pursuant to Rule 13a-14 and 15d-14 Gene S. Bertcher, as Principal Executive Officer and Chief Financial Officer, certified the accuracy of the Form 10-Q, the fair presentation of financial information, the effectiveness of disclosure controls, and the design of internal control over financial reporting, also disclosing any significant deficiencies or fraud - The report does not contain any untrue statement of a material fact or omit material facts, and financial statements fairly present the Company's condition, results, and cash flows[42] - Disclosure controls and procedures were designed and evaluated as effective, and internal control over financial reporting was designed to provide reasonable assurance[42] - Disclosed to auditors and the audit committee any significant deficiencies, material weaknesses, or fraud affecting financial reporting[43] Certification pursuant to 18 U.S.C. § 1350 Gene S. Bertcher, as President and Chief Financial Officer, certified that the Form 10-Q fully complies with SEC requirements and fairly presents the Company's financial condition and results of operations - The report fully complies with Section 13(a) or 15(d) of the Securities Exchange Act of 1934[44] - The information in the report fairly presents, in all material respects, the financial condition and results of operations of the Company[44]