New Concept Energy(GBR) - 2022 Q3 - Quarterly Report

PART I: FINANCIAL INFORMATION Financial Statements The company's financial statements for the period ended September 30, 2022, show an increase in total assets and stockholders' equity compared to year-end 2021, with improved net income driven by new management fee revenue, despite a decrease in operating cash flow Consolidated Balance Sheets As of September 30, 2022, total assets were $4,622 thousand, an increase from $4,455 thousand at December 31, 2021, primarily driven by an increase in cash and cash equivalents, while total stockholders' equity rose to $4,565 thousand from $4,395 thousand Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 (Unaudited) | Dec 31, 2021 (Audited) | | :--- | :--- | :--- | | Total Current Assets | $3,988 | $3,812 | | Total Assets | $4,622 | $4,455 | | Total Current Liabilities | $57 | $60 | | Total Stockholders' Equity | $4,565 | $4,395 | | Total Liabilities & Equity | $4,622 | $4,455 | Consolidated Statements of Operations For the third quarter of 2022, the company reported a net income of $27 thousand, a significant turnaround from a net loss of $8 thousand in the same period of 2021, with nine-month net income increasing to $170 thousand from $120 thousand due to new management fee revenue Operating Results (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $63 | $25 | $155 | $76 | | Management Fee | $38 | $0 | $79 | $0 | | Operating Loss | $(26) | $(62) | $(119) | $(233) | | Net Income (Loss) | $27 | $(8) | $170 | $120 | | EPS (basic & diluted) | $0.01 | $(0.01) | $0.03 | $0.02 | Consolidated Statements of Cash Flows For the nine months ended September 30, 2022, net cash provided by operating activities was $147 thousand, a decrease from $261 thousand in the prior-year period, with the company's cash and cash equivalents increasing to $399 thousand from $252 thousand Cash Flow Summary (in thousands) | Cash Flow Item | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $147 | $261 | | Net Cash from Investing Activities | $0 | $153 | | Net Cash from Financing Activities | $0 | $(192) | | Net Increase in Cash | $147 | $222 | | Cash at End of Period | $399 | $249 | Consolidated Statements of Changes in Stockholders' Equity Total stockholders' equity increased from $4,395 thousand at the end of 2021 to $4,565 thousand as of September 30, 2022, entirely due to the $170 thousand in net income earned during the first nine months of 2022 - For the nine months ended September 30, 2022, total stockholders' equity increased by $170 thousand, from $4,395 thousand to $4,565 thousand, reflecting the net income for the period[21] Notes To Consolidated Financial Statements The notes clarify that the company's primary operations involve owning and leasing property in West Virginia, with a new Consulting Management Agreement for oil and gas operations generating a 10% fee of gross revenue, and liquidity depending on cash from operations and notes receivable collection - The company owns 190 acres in Parkersburg, West Virginia, with four structures, and a portion of the main building is leased for $101 thousand per year[27] - Effective January 1, 2022, the company entered a Consulting Management Agreement to provide services for oil and gas operations for a fee of 10% of gross revenue[27] - The company's ability to meet cash obligations relies on cash from current operations and the collection of notes receivable[29] Management's Discussion and Analysis of Financial Condition and Results of Operations Management reports a stable liquidity position with current assets of approximately $3,988 thousand far exceeding current liabilities of $57 thousand, driven by new management fee revenue and other income, while maintaining a full valuation allowance against deferred tax assets Critical Accounting Policies and Estimates Management identifies estimates for doubtful accounts and deferred tax assets as critical accounting policies requiring significant judgment, establishing a 100% valuation allowance against net deferred tax assets due to uncertainty about generating future taxable income - A 100% valuation allowance was established against the deferred tax asset because management could not determine that it was more likely than not that the benefit would be realized[36] Liquidity and Capital Resources The company maintained a strong liquidity position as of September 30, 2022, with current assets at $3,988 thousand and current liabilities at $57 thousand, and cash and cash equivalents increasing to $399 thousand from $252 thousand at the end of 2021 Liquidity Snapshot (in thousands) | Metric | Sep 30, 2022 | | :--- | :--- | | Current Assets | $3,988 | | Current Liabilities | $57 | | Cash and cash equivalents | $399 | Results of Operations For Q3 2022, revenue grew to $63 thousand from $25 thousand in Q3 2021, driven by $38 thousand in new management fees, resulting in a net income of $27 thousand compared to an $8 thousand loss, with nine-month net income rising to $170 thousand from $120 thousand - For Q3 2022, the company earned net income of $27 thousand compared to a net loss of $8 thousand in Q3 2021, with revenue increasing due to $38 thousand in management fees[37] - For the nine months ended September 30, 2022, net income was $170 thousand compared to $120 thousand in the prior year period, with revenue increasing to $155 thousand from $76 thousand, including $79 thousand in management fees[39] - Other income for the nine months of 2022 was $130 thousand, which included $62 thousand from the collection of a previously reserved investment and a $68 thousand gain on the sale of equipment[40] Other Disclosures (Forward Looking Statements, Inflation, Environmental) This section contains a standard "Safe Harbor" statement regarding forward-looking statements, noting that inflation has not historically had an adverse effect, and environmental assessments have not revealed any material liabilities - The company has not historically experienced adverse effects from inflation on operating expenses, but there is no assurance that it can offset future inflationary pressures by increasing rental rates[42] - Environmental assessments have not revealed any environmental liability that would have a material adverse effect on the company's business, assets, or results of operations[43] Quantitative and Qualitative Disclosures about Market Risk This section is included by title only and does not contain any substantive quantitative or qualitative disclosures regarding the company's exposure to market risk - The report includes the heading for this item but provides no specific disclosures about market risk[44] Controls and Procedures Based on an evaluation as of September 30, 2022, the company's management, including the Principal Executive Officer and Principal Financial Officer, concluded that its disclosure controls and procedures are effective, with no material changes in internal control over financial reporting during the most recent fiscal quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective to provide reasonable assurance that required information is properly recorded and reported[45] - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[46] PART II: OTHER INFORMATION Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and required certifications by the Principal Executive Officer and Chief Financial Officer, specifically Exhibit 31.1 and Exhibit 32.1 - The report includes as exhibits the CEO/CFO certifications required by Rule 13a-14 (Exhibit 31.1) and 18 U.S.C. §1350 (Exhibit 32.1)[48] Signatures Signatures and Certifications The quarterly report was signed on November 9, 2022, by Gene S. Bertcher, in his capacity as Principal Executive Officer, President, and Chief Financial Officer, with his certifications affirming the accuracy and completeness of the financial information presented - The report was signed on November 9, 2022, by Gene S. Bertcher, Principal Executive Officer, President and Chief Financial Officer[50] - The CEO/CFO certifies that the report fairly presents the financial condition and results of operations and that disclosure controls and procedures are effective[51][55]