UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange of 1934 (Amendment No. __)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[
]
|
Preliminary
Proxy Statement.
|
[
]
|
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)).
|
[X]
|
Definitive
Proxy Statement.
|
[
]
|
Definitive
Additional Materials.
|
[
]
|
Soliciting
Material Pursuant to Section 240.14a-12.
|
NEW CONCEPT ENERGY, INC.
(Name of Registrant as Specified In Its
Charter)
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check
the appropriate box):
[X]
|
No
fee required.
|
|
|
[
]
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
|
|
|
1)
|
Title
of each class of securities to which transaction applies:
|
|
|
|
|
|
|
|
2)
|
Aggregate
number of securities to which transaction applies:
|
|
|
|
|
|
|
|
3)
|
Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
|
|
|
|
|
|
|
|
4)
|
Proposed
maximum aggregate value of transaction:
|
|
|
|
|
|
|
|
5)
|
Total
fee paid:
|
|
|
|
[
]
|
Fee
paid previously with preliminary materials.
|
[
]
|
Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
|
|
|
|
|
1)
|
Amount
Previously Paid:
|
|
|
|
|
|
|
|
2)
|
Form,
Schedule or Registration Statement No.:
|
|
|
|
|
|
|
|
3)
|
Filing
Party:
|
|
|
|
|
|
|
|
4)
|
Date
Filed:
|
|
|
|
NEW CONCEPT ENERGY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 10, 2018
New Concept Energy, Inc.
will hold its Annual Meeting of Stockholders on Wednesday, October 10, 2018, at 10:30 a.m., local Dallas, Texas time, at 1603
LBJ Freeway, Suite 800, Dallas, Texas 75234. The purpose of the meeting is to consider and act upon:
• Election
of a Board of four directors to serve until the next Annual Meeting of Stockholders and until their successors are duly elected
and qualified.
• Ratification
of the selection of Swalm & Associates, P.C. as the independent registered public accounting firm.
• Approval
of issuance of 3,000,000 new shares of Common Stock, par value $0.01 per share, to Realty Advisors, Inc. for cash to increase
stockholders’ equity.
• Such
other matters as may properly be presented at the Annual Meeting.
Only Stockholders of record
at the close of business on Friday, August 31, 2018, will be entitled to vote at the meeting.
Your vote is important.
Whether or not you plan to attend the meeting, please complete, sign, date and return the enclosed proxy card in the accompanying
envelope provided. Your completed proxy will not prevent you from attending the meeting and voting in person should you choose.
Dated: September 4, 2018
By order of the Board
of Directors,
Gene S. Bertcher, President
__________________________
This Proxy Statement
is available at
www.newconceptenergy.com
.
Among other things,
the Proxy Statement contains information regarding:
· The date,
time and location of the meeting
· A list of
the matters being submitted to Stockholders
· Information
concerning voting in person
NEW CONCEPT ENERGY, INC.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 10, 2018
The Board of Directors
of New Concept Energy, Inc. (the “Company”or “we” or “us”) is soliciting proxies to be used
at the Annual Meeting of Stockholders following the fiscal year ended December 31, 2017 (the “Annual Meeting”). Distribution
of this Proxy Statement and a Proxy Form is scheduled to begin on September 5, 2018. The mailing address of the Company’s
principal executive offices is 1603 LBJ Freeway, Suite 300, Dallas, Texas 75234.
About the Meeting
Who Can Vote
Record holders of Common
Stock and Series B Preferred Stock of the Company at the close of business on Friday, August 31, 2018 (the “Record Date”),
may vote at the Annual Meeting. On that date, 2,131,935 shares of Common Stock and 559 shares of Series B Preferred Stock were
outstanding. Each share is entitled to cast one vote.
How Can You Vote
If you return your signed
proxy before the Annual Meeting, we will vote your shares as you direct. You can specify whether your shares should be voted for
all, some or none of the nominees for director. You can also specify whether you approve, disapprove or abstain from the other
proposal to ratify the selection of auditors.
If a proxy is executed
and returned but no instructions are given, the shares will be voted according to the recommendations of the Board of Directors.
The Board of Directors recommends a vote
FOR
all three Proposals 1, 2 and 3.
Revocation of Proxies
You may revoke your proxy
at any time before it is exercised by (a) delivering a written notice of revocation to the Corporate Secretary, (b) delivering
another proxy that is dated later than the original proxy, or (c) casting your vote in person at the Annual Meeting. Your last
vote will be the vote that is counted.
Vote Required
The holders of a majority
of the shares entitled to vote who are either present in person or represented by a proxy at the Annual Meeting will constitute
a quorum for the transaction of business at the Annual Meeting. As of August 31, 2018, there were 2,131,935 shares of Common Stock
and 559 shares of Series B Preferred Stock issued and outstanding. The presence, in person or by proxy, of stockholders entitled
to cast at least 1,065,968 votes constitutes a quorum for adopting the proposals at the Annual Meeting. If you have properly signed
and returned your proxy card by mail, you will be considered part of the quorum, and the persons named on the proxy card will
vote your shares as you have instructed. If the broker holding your shares in “street” name indicates to us on a proxy
card that the broker lacks discretionary authority to vote your shares, we will not consider your shares as present or entitled
to vote for any purpose.
A plurality of the votes
cast is required for the election of directors. This means that the director nominee with the most votes for a particular slot
is elected to that slot. A proxy that has properly withheld authority with respect to the election of one or more directors will
not be voted with respect to the director or directors indicated, although it will be counted for purposes of determining whether
there is a quorum.
For the other two proposals,
the affirmative vote of the holders of a majority of the shares represented in person or by proxy entitled to vote on the proposal
will be required for approval. An abstention with respect to such proposal will not be voted, although it will be counted for
purposes of determining whether there is a quorum. Accordingly, an abstention will have the effect of a negative vote.
If you received multiple
proxy cards, this indicates that your shares are held in more than one account, such as two brokerage accounts, and are registered
in different names. You should vote each of the proxy cards to ensure that all your shares are voted.
Other Matters to be Acted Upon at the Annual
Meeting
We do not know of any
other matters to be validly presented or acted upon at the Annual Meeting. Under our Bylaws, no business besides that stated in
the Annual Meeting Notice may be transacted at any meeting of stockholders. If any other matter is presented at the Annual Meeting
on which a vote may be properly taken, the shares represented by proxies will be voted in accordance with the judgment of the
person or persons voting those shares.
Expenses of Solicitation
The Company is making
this solicitation and will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials
and soliciting votes. Some of our directors, officers and employees may solicit proxies personally, without any additional compensation,
by telephone or mail. Proxy materials will also be furnished without cost to brokers and other nominees to forward to the beneficial
owners of shares held in their names.
Available Information
Our internet website address
is
www.newconceptenergy.com
.
We make available free of charge through our website
our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those
reports as soon as reasonably practicable after we electronically file or furnish such materials to the Securities and Exchange
Commission (the “SEC”). In addition, we have posted the Charters of our Audit Committee, Compensation Committee, and
Governance and Nominating Committee, as well as our Code of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers,
Corporate Governance Guidelines and Corporate Governance Guidelines on Director Independence, all under separate headings. These
charters and principles are not incorporated in this instrument by reference. We will also provide a copy of these documents free
of charge to stockholders upon written request. The Company issues Annual Reports containing audited financial statements to its
common stockholders.
Multiple Stockholders Sharing the Same
Address
The SEC rules allow for
the delivery of a single copy of an annual report and proxy statement to any household at which two or more stockholders reside,
if it is believed the stockholders are members of the same family. Duplicate account mailings will be eliminated by allowing stockholders
to consent to such elimination, or through implied consent if a stockholder does not request continuation of duplicate mailings.
Depending upon the practices of your broker, bank or other nominee, you may need to contact them directly to continue duplicate
mailings to your household. If you wish to revoke your consent to house holding, you must contact your broker, bank or other nominee.
If you hold shares of
common stock in your own name as a holder of record, house holding will not apply to your shares.
If you wish to request
extra copies free of charge of any annual report, proxy statement or information statement, please send your request to New Concept
Energy, Inc., Attention: Investor Relations, 1603 LBJ Freeway, Suite 300, Dallas, Texas 75234 or call (800) 400-6407.
Questions
You may call our Investor
Relations Department at 800-400-6407 if you have any questions.
PLEASE VOTE - YOUR VOTE IS IMPORTANT
Corporate Governance and Board Matters
The affairs of the Company
are managed by the Board of Directors. The Directors are elected at the annual meeting of stockholders each year or appointed
by the incumbent Board of Directors and serve until the next annual meeting of stockholders or until a successor has been elected
or approved.
Current members of the Board
The members of the Board
of Directors on the date of this proxy statement, and the committees of the Board on which they serve, are identified below:
Director
|
Audit Committee
|
Compensation Committee
|
Governance and Nominating
Committee
|
Gene S. Bertcher
|
|
|
|
Dan Locklear
|
Chair
|
ü
|
ü
|
Victor Lund
|
ü
|
ü
|
Chair
|
Raymond D. Roberts, Sr.
|
ü
|
Chair
|
ü
|
Role of the Board’s Committees
The Board of Directors
has standing Audit, Governance and Nominating, and Compensation Committees.
Audit Committee
.
The functions of the Audit Committee are described below under the heading “
Report of the Audit Committee.
”
The Audit Committee is an “audit committee” for purposes of Section 3(a)(58) of the Securities Exchange Act of 1934,
as amended. The charter of the Audit Committee was adopted on December 12, 2003, and is available on the Company’s Investor
Relations website (
www.newconceptenergy.com
).
The Audit Committee was initially
formed on December 12, 2003. All of the members of the Audit Committee are independent within the meaning of the SEC regulations,
the listing standards of the NYSE American (formerly, the American Stock Exchange) and the Company’s
Corporate Governance
Guidelines
. Mr. Locklear, a member and Chair of the Committee, is qualified as an “audit committee financial expert”
within the meaning of SEC regulations and the Board has determined that he has 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. The Audit Committee met four times in 2017.
Governance and Nominating
Committee
. The Governance and Nominating Committee is responsible for developing and implementing policies and practices
relating to 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 self-evaluation. The charter of the Governance and Nominating Committee was adopted
on October 20, 2004, and is available on the Company’s Investor Relations website (
www.newconceptenergy.com
).
The Governance and Nominating Committee was initially formed on October 20, 2004. All of the members of the Governance
and Nominating Committee are independent within the meaning of the listing standards of the NYSE American and the Company's
Corporate
Governance Guidelines.
The Governance and Nominating Committee met two times in 2017.
Compensation Committee
.
The Compensation Committee is responsible for overseeing the policies of the Company relating to compensation to be paid by the
Company to the Company’s principal executive officer and any other officers designated by the Board and make recommendations
to the Board with respect to such policies, produce necessary reports on executive compensation for inclusion in the Company’s
proxy statement in accordance with applicable rules and regulations and to monitor the development and implementation of succession
plans for the principal executive officer and other key executives and make recommendations to the Board with respect to such
plans. The charter of the Compensation Committee was adopted on October 20, 2004, and is available on the Company’s Investor
Relations website (
www.newconceptenergy.com
). The Compensation Committee was initially
formed on October 20, 2004. All of the members of the Compensation Committee are independent within the meaning of the listing
standards of the NYSE American and the Company’s
Corporate Governance Guidelines
. The Compensation Committee is to
be comprised of at least three directors who are independent of management and the Company. The Compensation Committee met one
time in 2017.
Presiding Director
On November 8, 2011, the
Board created a new position of Presiding Director, whose primary responsibility is to preside over periodic executive sessions
of the Board in which management directors and other members of management do not participate. The Presiding Director also advises
the Chairman of the Board and, as appropriate, Committee chairs with respect to agendas and information needs relating to Board
and Committee meetings, provides advice with respect to the selection of Committee chairs and perform other duties that the Board
may from time to time delegate to assist the Board in the fulfillment of its responsibilities. The nonmanagement members of the
Board designated Dan Locklear to serve in this position until the Company’s annual meeting of stockholders to be held following
the fiscal year ended December 31, 2017 (
i.e.
, this meeting).
Selection of Nominees for the Board
The Governance and Nominating
Committee will consider candidates for Board membership suggested by its members and other Board members, as well as management
and stockholders. The Committee may also retain a third-party executive search firm to identify candidates upon request of the
Committee from time to time. A stockholder who wishes to recommend a prospective nominee for the Board should notify the Company's
Corporate Secretary or any member of the Governance and Nominating Committee in writing with whatever supporting material the
stockholder considers appropriate. The Governance and Nominating Committee will also consider whether to nominate any person nominated
by a stockholder pursuant to the provisions of the Company's bylaws relating to stockholder nominations.
Once the Governance and
Nominating Committee has identified a prospective nominee, the Committee will make an initial determination as to whether to conduct
a full evaluation of the candidate. This initial determination will be based on whatever information is provided to the Committee
with the recommendation of the prospective candidate, as well as the Committee's own knowledge of the prospective candidate, which
may be supplemented by inquiries to the person making the recommendation or others. The preliminary determination will be based
primarily on the need for additional Board members to fill vacancies or expand the size of the Board and the likelihood that the
prospective nominee can satisfy the evaluation factors described below. If the Committee determines, in consultation with the
Chairman of the Board and other Board members as appropriate, that additional consideration is warranted, it may request the third-party
search firm to gather additional information about the prospective nominee's background and experience and to report its findings
to the Committee. The Committee will then evaluate the prospective nominee against the standards and qualifications set out in
the Company's
Corporate Governance Guidelines,
including:
• the
ability of the prospective nominee to represent the interests of the stockholders of the Company;
• the
prospective nominee's standards of integrity, commitment and independence of thought and judgment;
• the
prospective nominee's ability to dedicate sufficient time, energy and, attention to the diligent performance of his or her duties,
including the prospective nominee's service on other public company boards, as specifically set out in the Company's
Corporate
Governance Guidelines
;
• the
extent to which the prospective nominee contributes to the range of talent, skill and expertise appropriate for the Board;
• the
extent to which the prospective nominee helps the Board reflect the diversity of the Company's stockholders, employees, customers,
guests and communities; and
• the
willingness of the prospective nominee to meet any minimum equity interest holding guideline.
The Committee also considers such other relevant
factors as it deems appropriate, including the current composition of the Board, the balance of management and independent directors,
the need for Audit Committee expertise and the evaluations of other prospective nominees. In connection with this evaluation,
the Committee determines whether to interview the prospective nominee, and if warranted, one or more members of the Committee,
and others as appropriate, interview prospective nominees in person or by telephone. After completing this evaluation and interview,
the Committee makes a recommendation to the full Board as to the persons who should be nominated by the Board, and the Board determines
the nominees after considering the recommendation and report of the Committee.
The Bylaws of the Company
provide that any stockholder entitled to vote in the election of directors generally may nominate one or more persons for election
as directors at a meeting only if one hundred twenty (120) days prior written notice of such stockholders’ intention to
make such nomination has been delivered personally to, or has been mailed to and received by the Board of Directors at the principal
office of the Company with a copy to the President and Secretary of the Company. If a stockholder has a suggestion for candidates
for election, the stockholder should follow this procedure. Each notice from a stockholder must set forth (i) the name and address
of the stockholder who intends to make the nomination and the name of the person to be nominated, (ii) the class and number
of shares of stock held of record, owned beneficially and represented by proxy by such stockholder as of the record date for the
meeting and as of the date of such notice, (iii) a representation that the stockholder intends to appear in person or by
proxy at the meeting to nominate the person specified in the notice, (iv) a description of all arrangements or understandings
between such stockholder and each nominee and any other person (naming those persons) pursuant to which the nomination is to be
made by such stockholder, (v) such other information regarding each nominee proposed by such stockholder as would be required
to be included in a proxy statement filed pursuant to the proxy rules, and (vi) the consent of each nominee to serve as a director
of the Company if so elected. The chairman of the Annual Meeting may refuse to acknowledge the nomination of any person not made
in compliance with this procedure.
Determinations of Director Independence
In October 2004, the Board
enhanced its
Corporate Governance Guidelines.
The
Guidelines
adopted by the Board meet or exceed the new listing
standards adopted during the year by the American Stock Exchange. The full text of the
Guidelines
can be found in the Investor
Relations section of the Company's website (
www.newconceptenergy.com
).
A copy may
also be obtained upon request from the Company's Corporate Secretary.
Pursuant to the
Guidelines,
the Board undertook its annual review of director independence in December 2017. During this review, the Board considered
transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries
and affiliates, including those reported under
"Certain Relationships and Related Transactions”
below. The Board
also examined transactions and relationships between directors or their affiliates and members of the Company's senior management
or their affiliates. As provided in the
Guidelines
, the purpose of this review was to determine whether any such relationships
or transactions were inconsistent with a determination that the director is independent.
As a result of this review,
the Board affirmatively determined that the then directors, Messrs. Huffstickler, Locklear, Lund and Roberts, are each independent
of the Company and its management under the standards set forth in the
Corporate Governance Guidelines
.
Directors’ Service for Other Publicly
Held Entities
Raymond
D. Roberts, Sr. serves as a member of the Audit Committee of this Company as well as three other corporations which are part of
a consolidated group for financial statement reporting purposes, all of which are involved in another industry, the common stock
of each of which is listed and available for trading on the NYSE and/or NYSE American, thus making four entities for which Mr.
Roberts serves in a similar capacity. The Board has determined, after discussion, that the fact that three of the entities are
part of a consolidated group requires Mr. Roberts to be familiar with the financial reporting requirements and standards of each
of those entities due to the fact of consolidation and does not create an additional burden upon Mr. Roberts but also confers
a benefit on each of those three entities, as it may well save on Mr. Roberts’ time and responsibility. This entity (and
the other three consolidated entities) has no specific policy or prohibition upon Mr. Roberts’ or any other person’s
service to any other publicly held entities, but the members of this Board periodically review other relationships among Committee
and Board members with other independent entities to ensure that no conflict exists and, in fact, have confirmed that Mr. Roberts’
service to other entities in other industries benefits the expertise of Mr. Roberts and the Company.
Board Meetings During Fiscal 2017
The
Board met six times during fiscal 2017. Each director attended 75% or more of the meetings of the Board and Committees on which
he served. Under the Company’s
Corporate Governance Guidelines
, each Director is expected to dedicate sufficient
time, energy an attention to ensure the diligent performance of his or her duties, including by attending meetings of the stockholders
of the Company, the Board and Committees of which he is a member. In addition, the independent directors met in executive session
four times during fiscal 2017.
Directors’
Compensation
Each
nonemployee director currently receives an annual retainer of $2,500 plus a meeting fee of $2,000 plus reimbursement for expenses.
The Company also reimburses directors for travel expenses incurred in connection with attending Board, committee and stockholder
meetings and for other Company/business related expenses. Directors who are also employees of the Company receive no additional
compensation for service as a director.
During
2017, $42,000 was paid to the nonemployee directors in total directors’ fees for all services, including the annual fee
for service during the period from January 1, 2017, through December 31, 2017. Those fees received by directors were James E.
Huffstickler, who resigned on October 20, 2017 ($10,500), Dan Locklear ($10,500), Victor Lund ($10,500) and Raymond D. Roberts,
Sr. ($10,500).
Stockholders’
Communication with the Board
Stockholders
and other parties interested in communicating directly with the presiding director or with the nonmanagement directors as a group
may do so by writing to Dan Locklear, Director, P.O. Box 830163, Richardson, Texas 75083-0160. Effective October 20, 2004, the
Governance and Nominating Committee of the Board also approved a process for handling letters received by the Company and addressed
to members of the Board but received at the Company. Under that process, the Corporate Secretary of the Company reviews all such
correspondence and regularly forwards to the Board a summary of all such correspondence and copies of all correspondence that,
in the opinion of the Corporate Secretary, deals with the functions of the Board or committees thereof or that he otherwise determines
requires their attention. Directors may at any time review a log of all correspondence received by the Company that is addressed
to members of the Board and received by the Company and request copies of any such correspondence. Concerns relating to accounting,
internal controls or auditing matters are immediately brought to the attention of the Chairman of the Audit Committee and handled
in accordance with procedures established by the Audit Committee with respect to such matters.
Code of Ethics
The
Company has adopted a Code of Business Conduct and Ethics, which applies to all directors, officers and employees (including those
of the contractual advisor). In addition, on October 20, 2004, the Company 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, the principal accounting officer and controller. The text of both documents is available on the Company's
Investor Relations website (
www.newconceptenergy.com
).
The Company intends
to post amendments to or waivers from its Code of Ethics for Senior Financial Officers (to the extent applicable to the Company's
chief executive officer, principal financial officer or principal accounting officer) at this location on its website.
Compliance
With Section 16(a) of Reporting Requirements
Section
16(a) under the Securities Exchange Act of 1934 requires the Company’s directors, executive officers and any persons holding
10% or more of the Company’s shares of Common Stock are required to report their ownership of the Company’s shares
of Common Stock and any changes in that ownership to the SEC on specified report forms. Specific due dates for these reports have
been established, and the Company is required to report any failure to file by these dates during each fiscal year. All of these
filing requirements were satisfied by the Company’s directors and executive officers and holders of more than 10% of the
Company’s Common Stock during the fiscal year ended December 31, 2017. In making these statements, the Company has relied
upon the written representations of its directors and executive officers and the holders of 10% or more of the Company’s
Common Stock and copies of the reports that each has filed with the SEC.
Security Ownership
of Certain Beneficial Owners and Management
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 August 31, 2018.
Name
and Address of
Beneficial
Owner
|
Amount
and Nature of
Beneficial
Ownership
|
Approximate
Percent
of Class
|
None
|
None
|
None
|
Realty
Advisors, Inc., a Nevada corporation and the purchaser under the “Purchase Agreement,” which is the subject of Proposal
3, is the owner and holder of 60,000 shares of Common Stock (2.81% of the outstanding). Assuming the approval of Proposal 3 and
the issuance of 3,000,000 shares of Common Stock of the Company to Realty Advisors, Inc., it would then hold 3,060,000 shares
(approximately 59% of the then outstanding shares). See Proposal 3 below.
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 August 31, 2018.
Name and Address
of Beneficial Owner
|
Amount
and Nature of Beneficial Ownership*
|
Approximate
Percent of Class*
*
|
Gene S. Bertcher
|
-
|
0%
|
Dan Locklear
|
-
|
0%
|
Victor L. Lund
|
-
|
0%
|
Raymond D. Roberts,
Sr.
|
-
|
0%
|
All directors and
executive officers as a group (4 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 2,131,935 shares of Common Stock outstanding at August 31, 2018.
PROPOSAL 1
ELECTION OF
DIRECTORS
Four
directors are to be elected at the Annual Meeting. Each director elected will hold office until the Annual Meeting following the
fiscal year ending December 31, 2018. All of the nominees for director are now serving as directors. Each of the nominees has
consented to being named in this proxy statement as a nominee and has agreed to serve as a director if elected. The persons named
on the proxy card will vote for all of the nominees for director listed unless you withhold authority to vote for one or more
of the nominees. The nominees receiving a plurality of votes cast at the Annual Meeting will be elected as directors. Abstentions
and broker non-votes will not be treated as a vote for or against any particular nominee and will not affect the outcome of the
election of directors. Cumulative voting for the election of directors is not permitted. If any director is unable to stand for
reelection, the Board will designate a substitute. If a substitute nominee is named, the persons named on the proxy card will
vote for the election of the substitute director.
James
E. Huffstickler, 74, a director of the Company since December 2003, resigned, effective October 20, 2017. He is retired and previously
served as the Chief Financial Officer of Sunchase American, Ltd., a multistate property management firm, for more than 22 years.
He has been a certified public accountant since 1976. Following Mr. Huffstickler’s resignation, the committees of the Board
of Directors were restructured.
The
nominees for election as directors at the Annual Meeting are listed below, together with their ages, terms of service, all positions
and offices with the Company, other principal occupations, business experience and directorships with other companies during the
last five years or more. No family relationship exists among any of the directors or executive officers of the Company. The designation
“affiliated” when used below with respect to a director means that the director is an officer, director or employee
of the Company.
Gene
S. Bertcher, age 69, (Affiliated) Director since 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. He relinquished the position of President in September 2008 and was reelected President in April 2009.
From January 3, 2003 until that date he was also Chief Executive Officer. Mr. Bertcher has been Executive Vice President, Chief
Financial Officer and Treasurer of the Company (November 1989 to November 2004). He has been a certified public accountant since
1973. Mr. Bertcher is also Executive Vice president (since February 2008) and Chief Financial Officer (since November 2, 2009)
of American Realty Investors, Inc., a Nevada corporation (“ARL”) which has its common stock listed and traded on the
New York Stock Exchange (“NYSE”), Transcontinental Realty Investors, Inc., a Nevada corporation (“TCI”)
which also has its common stock listed and traded on the NYSE and Income Opportunity Realty Investors, Inc., a Nevada corporation
(“IOR”) which has its common stock listed and traded on the NYSE American. All of ARL, TCI and IOR are Dallas, Texas
based real estate entities; prior to May 2008 and from February 2008 to April 2008, he was also Interim Chief Financial Officer
of ARL, TCI and IOR. Until November 1989, Mr. Bertcher was a partner in Grant Thornton, LLP having served as Chairman of its National
Real Estate and Construction Committee.
Dan
Locklear, age 64, (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.
Victor L. Lund, age
88, (Independent) Director since March 1996
Mr. Lund founded Wedgwood
Retirement Inns, Inc. in 1977, which became a wholly owned subsidiary of the Company in 1996. For most of Wedgwood’s existence,
Mr. Lund was Chairman of the Board, President and Chief Executive Officer, positions he held until Wedgwood was acquired by the
Company. Mr. Lund is President and Chief Executive Officer of Wedgwood Services, Inc., a construction services company not affiliated
with the Company.
Raymond D. Roberts,
Sr., age 86, (Independent) Director since June 2015
Mr. Roberts was originally
elected a director on June 17, 2015, by the Board to fill a vacancy; he was elected at the last Annual Meeting. He is retired.
For more than five years prior to December 31, 2014, he was Director of Aviation of Steller Aviation, Inc., a privately held Nevada
corporation, engaged in the business of aircraft and logistical management. Mr. Roberts has been (since June 2, 2016) a member
of the Board of Directors of each of ARL, TCI and IOR.
The Board of Directors unanimously recommends
a vote FOR
the election of all of the Nominees named
above.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit Committee has
appointed Swalm & Associates, P.C. as the independent registered public accounting firm for New Concept Energy, Inc. for the
2018 fiscal year and to conduct quarterly reviews through September 30, 2018. The Company’s Bylaws do not require that stockholders
ratify the appointment of Swalm & Associates, P.C. as the Company’s independent registered public accounting firm. Swalm
& Associates, P.C. has served as the Company’s independent registered public accounting firm for each of the fiscal
years ended December 31, 2008 through 2017. The Audit Committee will consider the outcome of this vote in its decision to appoint
an independent registered public accounting firm next year; however, it is not bound by the stockholders’ decision. Even
if the selection is ratified, the Audit Committee, in its sole discretion, may change the appointment at any time during the year
if it determines that such a change would be in the best interest of the Company and its stockholders.
A representative of Swalm
& Associates, P.C. will attend the Annual Meeting. The representative will have an opportunity to make a statement if he or
she desires to do so and will be available to respond to appropriate questions from the stockholders.
The Board of Directors unanimously recommends
a vote FOR the ratification of the
appointment of Swalm & Associates, P.C.
as the Company’s
independent registered public accounting
firm.
Fiscal Years 2016 and 2017 Audit Firm Fee
Summary
The following table sets
forth the aggregate fees for professional services rendered to the Company for the years 2016 and 2017 by the Company’s
principal accounting firm, Swalm & Associates, P.C.:
Type of Fees
|
|
2016
|
2017
|
Audit Fees
|
|
$
|
62,000
|
|
$
|
67,000
|
|
Audit-Related Fees
|
|
|
—
|
|
|
—
|
|
Tax Fees
|
|
|
9,000
|
|
|
12,000
|
|
All Other Fees
|
|
|
—
|
|
|
—
|
|
Total Fees:
|
|
$
|
71,000
|
|
$
|
79,000
|
|
____________________________
All services rendered
by the principal auditors are permissible under applicable laws and regulations and were preapproved by either the Board of Directors
or the Audit Committee, as required by law. The fees paid the principal auditors for services as 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 10-Q filings and services that are normally provided
in connection with statutory and regulatory filing 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 attestations by the
principal auditor that are 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 review 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 do 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.
Swalm & Associates
PC did not render professional services to the Company in 2016 involving any financial information systems design and implementation.
Report of the Audit Committee
of the Board of Directors
The Audit Committee of
the Board of Directors is composed of three directors, each of whom satisfies the requirements of independence, experience and
financial literacy under the requirements of the NYSE American and the SEC. The Audit Committee has directed the preparation of
this report and has approved its content and submission to the stockholders.
The Audit Committee is
responsible for, among other things:
• retaining
and overseeing the independent registered public accounting firm that serves as our independent auditor and evaluating their performance
and independence;
• reviewing
the annual audit plan with management and the independent registered public accounting firm;
• preapproving
any permitted non-audit services provided by our independent registered public accounting firm;
• approving
the fees to be paid to our independent registered public accounting firm;
• reviewing
the adequacy and effectiveness of our internal controls with management, internal auditors and the independent registered public
accounting firm;
• reviewing
and discussing the annual audited financial statements and the interim unaudited financial statements with management and the
registered public accounting firm; and
• approving
our internal audit plan and reviewing reports of our internal auditors.
The Audit Committee operates
under a written charter adopted by the Board of Directors. The Committee’s responsibilities are set forth in this charter
which is available on our website at
www.newconceptenergy.com
.
The Audit Committee assists
the Board in fulfilling its responsibilities for general oversight of the integrity of the Company’s financial statements,
the adequacy of the Company’s system of internal controls, the Company’s risk management, the Company’s compliance
with legal and regulatory requirements, the independent auditors’ qualifications and independence, and the performance of
the Company’s independent auditors. The Committee has sole authority over the selection of the Company’s independent
auditors and manages the Company’s relationship with its independent auditors. The Committee has the authority to obtain
advice and assistance from outside legal, accounting or other advisors as the Committee deems necessary to carry out its duties
and receive appropriate funding, as determined by the Committee, from the Company for such advice and assistance.
The Committee met four
times during 2017. The Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of
its tasks. The Committee’s meetings include private sessions with the Company’s independent auditors without the presence
of the Company’s management, as well as executive sessions consisting of only Committee members. The Committee also meets
senior management from time to time.
Management has the primary
responsibility for the Company’s financial reporting process, including its system of internal control over financial reporting
and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the
United States of America. The Company’s independent auditors are responsible for auditing those financial statements in
accordance with professional standards and expressing an opinion as to their material conformity with U.S. generally accepted
accounting principles and for auditing management’s assessment of, and the effective operation of, internal control over
financial reporting. The Committee’s responsibility is to monitor and review the Company’s financial reporting process
and discuss management’s report on the Company’s internal control over financial reporting. It is not the Committee’s
duty or responsibility to conduct audits or accounting reviews or procedures. The Committee has relied, without independent verification,
on management’s representation that the financial statements have been prepared with integrity and objectivity and in conformity
with accounting principles generally accepted in the United States of America and on the opinion of the independent registered
public accountants included in their report on the Committee’s financial statements.
As part of its oversight
of the Company’s financial statements, the Committee reviews and discusses with both management and the Company’s
independent registered public accountants all annual and quarterly financial statements prior to their issuance. During 2017,
management advised the Committee that each set of financial statements reviewed had been prepared in accordance with accounting
principles generally accepted in the United States of America, and reviewed significant accounting and disclosure issues with
the Committee. These reviews include discussions with the independent accountants of the matters required to be discussed pursuant
to
Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards),
including the quality (not
merely the acceptability) of the Company’s accounting principles, the reasonableness of significant judgments, the clarity
of disclosures in the financial statements and disclosures related to critical accounting practices. The Committee has also discussed
with Swalm & Associates, P.C. matters relating to its independence, including a review of audit and non-audit fees, and written
disclosures from Swalm & Associates, P.C. to the Company pursuant to
Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees)
. The Committee also considered whether non-audit services, provided by the independent
accountants are compatible with the independent accountant’s independence. The Company also received regular updates on
the amount of fees and scope of audit, audit related, and tax services provided.
In addition, the Committee
reviewed key initiatives and programs aimed at strengthening the effectiveness of the Company’s internal and disclosure
control structure. As part of this process, the Committee continued to monitor the scope and adequacy of the Company’s internal
controls, reviewed staffing levels and steps taken to implement recommended improvements in any internal procedures and controls.
Based on the Committee’s
discussion with management and the independent accountants and the Committee’s review of the representation of management
and the report of the independent accountants to the Board of Directors, the Audit Committee recommended to the Board of Directors,
and the Board of Directors has approved, that the audited consolidated financial statements be included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC. The Audit Committee and the Board of Directors
have also selected Swalm & Associates, P.C. as the Company’s independent registered public accountants and auditors
for the fiscal year ending December 31, 2018.
AUDIT COMMITTEE
Raymond D. Roberts, Sr.
|
Dan Locklear
|
Victor Lund
|
Pre-Approval Policy for Audit and Non-Audit
Services
Under the Sarbanes-Oxley
Act of 2002 (the “SO Act”), and the rules of 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 role in retaining the independent auditor is twofold. 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
preapprove 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 adopted on March 22, 2004 a written 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 preapproved. Consistent with the SEC rules establishing two different approaches
to 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 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
generally preapproved 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 preapprove 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.
PROPOSAL 3
APPROVAL OF THE ISSUANCE OF 3,000,000 SHARES
OF COMMON STOCK TO REALTY ADVISORS, INC.
The Company’s Common
Stock is listed and traded on the NYSE American under the symbol “GBR.” In order to maintain that listing, the Company
must comply with various policies of the NYSE American with respect to continued listing. The rules of the NYSE American provide
generally that its Board of Directors may, in its discretion, at any time and without notice, suspend dealings in, or may remove
any security from, listing or unlisted trading privileges. However, the NYSE American, as a matter of policy, only considers the
suspension of trading in or removal from listing of a security when, in the opinion of the NYSE American, any one of five conditions
exists with respect to an entity. Following the filing of the Company’s Form 10-K Annual Report for the fiscal year ended
December 31, 2017 (the “2017 10-K”), by letter dated April 23, 2018, the Company was notified by NYSE Regulation that
the Company’s 2017 10-K shows that the Company was below compliance with Section 1003(a)(i) and (ii) since the Company reported
stockholders’ equity of $0.6 million as of December 31, 2017 and losses from continuing operations in three of its four
most recent fiscal years ended December 31, 2017.
The letter was NYSE Regulation’s
official notice of noncompliance with the NYSE American continued listing standards and required the Company to make a public
announcement through news media (done April 26, 2018), contact the NYSE American to confirm receipt of such letter (done April
27, 2018) and submit a Plan to NYSE Regulation by May 23, 2018, advising of actions the Company will take to regain compliance
by October 23, 2019, which plan should include specific milestones, quarterly financial projections and details related to any
strategic initiatives. Part of the plan submitted by the Company to NYSE Regulation includes the sale of additional shares of
its Common Stock to increase the level of stockholders’ equity to a level above that required by the continued listing standards
of the NYSE American. This Proposal 3 listed below is part of that Plan to sell 3,000,000 shares of Common Stock at a price sufficient
to increase stockholders’ equity of the Company above the required level. The principal reason that total stockholders’
equity of the Company was reduced to the level indicated at December 31, 2017 was the downward revision of reserve estimates (a
noncash charge).
By letter dated July 9,
2018, NYSE Regulation advised that the plan submitted by the Company was approved and granted a plan period through October 23,
2019 to regain compliance with NYSE Regulation’s staff reviewing the Company periodically for compliance with the initiatives
outlined in the plan. The July 9, 2018 letter also required the Company to issue a public announcement through news media (which
was done).
Prior to the actual issuance
of certificates representing 3,000,000 new shares of Common Stock, the potential issuance must be approved by the stockholders
in accordance with Sections 705 and 713 of the NYSE American Company Guide in order for NYSE American to approve an application
to list the additional shares to be issued. Section 713 of the NYSE American Company Guide requires stockholder approval as a
prerequisite to approval of applications to list additional shares to be issued when the present or potential issuance of Common
Stock (or securities convertible into Common Stock) could result in an increase in outstanding Common Stock of 20% or more. The
Company currently has 2,131,935 shares of Common Stock outstanding; issuance of 3,000,000 new shares exceeds the 20% rule.
Under Nevada law, the
Board of Directors has the authority to issue shares of Common Stock of the Company in such amounts and for such consideration
as the Board of Directors may deem appropriate under Section 78.211 of the Nevada General Corporation Law. The Board of Directors
has already approved the proposed issuance as well as the execution by the Company of the Subscription Agreement and Letter of
Investment Intent, effective as of May 22, 2018* (the “Purchase Agreement”), and recommended to the stockholders approval
of such action. By virtue of the requirements of the NYSE American Company Guide, this Proposal 3 has been submitted to all stockholders
of the Company for approval prior to consummation of the transaction and issuance of any shares. The actual issuance of share
certificates representing the 3,000,000 shares of Common Stock to be issued to Realty Advisors, Inc. in exchange for the consideration
of $1.50 per share (
i.e.
, $4,500,000 cash) will not be effectuated until at least twenty (20) calendar days after the date
of approval of this Proposal have elapsed, after which time, the actual share certificates covering 3,000,000 shares of Common
Stock may only be issued to Realty Advisors, Inc. upon payment to the Company of the sum of $4,500,000.
____________________________
* The
Purchase Agreement is effective for accounting purposes (
i.e.
, although it may not have been executed at that date, it
may be treated for accounting purposes as though it was signed on that date) as of May 22, 2018, the date the Company received
the subscription for the Shares; the Purchase Agreement was actually executed by the parties on May 23, 2018, following the approval
by the Board of Directors of the Common Stock, but subject to stockholder approval.
Recent Price Range of Common Stock
During the current calendar
year of 2017 and 2018 through August 31, 2018, shares of Common Stock of the Company, which are listed on the NYSE American and
traded under the symbol “GBR,” have traded at various prices. The following table sets forth the high and low sales
prices as reported for the periods indicated in the reporting system of the NYSE American and other published financial sources.
|
Price
Range of Common Stock
|
Period
Calendar Year 2017
1
st
Quarter Ended March
31, 2017
2
nd
Quarter Ended June 30,
2017
3
rd
Quarter Ended September
30, 2017
4
th
Quarter Ended December
31, 2017
Calendar Year 2018
1
st
Quarter Ended March
31, 2018
2
nd
Quarter Ended June 30,
2018
3
rd
Quarter Through
August 31, 2018
|
High
$2.70
$2.10
$1.54
$1.74
$2.45
$4.75
$12.75
|
Low
$1.02
$1.32
$1.23
$1.20
$1.27
$1.23
$2.16
|
The following table sets
forth the closing market prices of the Common Stock during the twenty trading days prior to May 22, 2018, the effective date of
the Purchase Agreement.
Date
|
Close
|
Volume
in Shares
|
April 23, 2018
|
$1.34
|
11,200
|
April 24, 2018
|
$1.36
|
26,700
|
April 25, 2018
|
$1.34
|
10,700
|
April 26, 2018
|
$1.32
|
26,200
|
April 27, 2018
|
$1.33
|
44,600
|
April 30, 2018
|
$1.31
|
24,600
|
May 1, 2018
|
$1.29
|
27,500
|
May 2, 2018
|
$1.32
|
33,600
|
May 3, 2018
|
$1.31
|
12,000
|
May 4, 2018
|
$1.38
|
327,200
|
May 7, 2018
|
$1.55
|
883,000
|
May 8, 2018
|
$1.40
|
199,400
|
May 9, 2018
|
$1.38
|
114,000
|
May 10, 2018
|
$1.39
|
36,200
|
May 11, 2018
|
$1.42
|
78,300
|
May 14, 2018
|
$1.41
|
24,000
|
May 15, 2018
|
$1.32
|
24,500
|
May 16, 2018
|
$1.35
|
20,500
|
May 17, 2018
|
$1.37
|
48,100
|
May 18, 2018
|
$1.39
|
22,100
|
May 21, 2018
|
$1.42
|
15,700
|
Effective as of May 22,
2018, the Company entered into the Purchase Agreement with Realty Advisors, Inc., a Nevada corporation, covering the purchase
by Realty Advisors, Inc. of 3,000,000 shares of Common Stock of the Company at a price of $1.50 per share (a total of $4,500,000).
Period of Abnormal Trading Volume
On several trading days,
reliable published financial sources reported prices and volume of trading of the Company’s Common Stock which are not capable
of explanation by the Company, as the volume of shares traded as reported far exceeded the number of shares outstanding of 2,131,935,
yet few shares were actually transferred during the period as reported by the Transfer Agent. The trading and abnormal volumes
are summarized in the table below for days reflecting volume in excess of the total number of outstanding shares of Common Stock
of the Company.
Date
|
Open
|
High
|
Low
|
Close
|
Volume in
Shares
|
June 28, 2018
|
3.05
|
3.60
|
1.71
|
1.72
|
8,941,500
|
June 29, 2018
|
1.69
|
4.75
|
1.53
|
4.22
|
18,649,600
|
July 2, 2018
|
5.90
|
12.17
|
5.84
|
8.90
|
15,939,700
|
July 3, 2018
|
12.00
|
12.00
|
4.00
|
4.11
|
10,408,300
|
July 5, 2018
|
5.03
|
6.25
|
4.52
|
4.95
|
5,786,100
|
July 6, 2018
|
4.76
|
5.35
|
4.20
|
4.26
|
1,923,000
|
July 9, 2018
|
4.15
|
4.21
|
3.24
|
3.31
|
1,226,000
|
July 10, 2018
|
3.32
|
4.40
|
3.31
|
3.88
|
4,277,200
|
July 17, 2018
|
3.47
|
4.50
|
3.12
|
3.20
|
6,822,000
|
July 25, 2018
|
2.65
|
3.40
|
2.52
|
2.92
|
2,930,700
|
The Company made inquiries
of the “market maker” and others, reviewed the trades to the extent possible and searched (without success) for an
answer to any reason for this kind of activity. The Company has no evidence of any reasonable answer.
According to Forms 3 and
4 on file with the SEC, which can be accessed on
www.sec.gov
, MintBroker International
Limited, an entity incorporated in the United Kingdom on May 15, 2015 (“MintBroker”), advised on June 29, 2018 that
MintBroker beneficially owned 1,073,713 shares (50.36% of the current outstanding) of Common Stock of the Company. The closing
price on the NYSE American of shares of Common Stock on June 29, 2018 was $4.22 per share. On July 2, 2018, MintBroker’s
Form 4 advises that it sold or otherwise disposed of 114,576 shares of Common Stock of the Company at a price of $11.32 (a total
of $1,636,600.30) and continued to own 959,137 shares on that date. On July 3, 2018, MintBroker’s Form 4 advises that it
sold 959,137 shares of Common Stock of the Company at a price of $8.682 per share (a total of $8,327,227.40), retaining no shares
at the end of such trading day. That would ultimately equate to a profit to MintBroker over potential cost of at least $5,093,158.90,
assuming the acquisition price of the shares was $4.28 per share (unconfirmed). According to the Certificate of Incorporation
of MintBroker (formerly named Swiss America Securities UK Limited), the sole director of MintBroker is Mr. Guy Gentile of Nassau,
Bahamas and Putnam Valley, New York.
As noted in the table
under the caption “Period of Abnormal Trading Volume,” on each of such days, the trading volume of shares of Common
Stock of the Company far exceeded the entire number of shares issued and outstanding of 2,131,935 by over eight times on June
29, by over seven times on July 2 and by over five times on July 3, 2018. MintBroker’s activities during the period, unless
some exemption is available, would fall squarely within the provisions of Section 16(b) under the Securities Exchange Act of 1934
(profits from purchase and sale of security within six months). Counsel for the Company has notified MintBroker by letter of the
suspicious activity and demanded payment to the Company of the short-swing profits.
Rights of Exiting Holders; Dilution
The Shares of the Common
Stock of the Company to be issued to Realty Advisors, Inc. are current shares of Common Stock without modification, and no difference
will exist between the currently outstanding shares of Common Stock of the Company and the 3,000,000 shares to be issued. Each
such share of Common Stock will continue to be subject only to one vote per share. The current shares of Common Stock are presently
listed on the NYSE American. The Company intends to apply for additional listing and registration on such Exchange of the 3,000,000
shares of Common Stock to be issued after approval of this Proposal 3.
Although the rights of
current holders of shares of Common Stock of the Company will not change after the issuance of 3,000,000 shares of Common Stock
to Realty Advisors, Inc., such newly issued shares will ultimately comprise approximately 58.46% of the issued and outstanding
Common Stock which will obviously dilute all existing stockholders and reduce the voting power of those current stockholders.
The issuance of such 3,000,000 shares of Common Stock to Realty Advisors, Inc.
may
also have the following effects upon
current stockholders and/or the value of the shares of Common Stock currently outstanding:
• Although
Realty Advisors, Inc., as the holder of 3,000,000 shares of Common Stock will be restricted in its ability to resell shares for
a period of time, any sales privately of substantial amounts of our Common Stock or in the public market or a perception that
such sales may occur in the future may create a perception in the market place which causes the market price of the Common Stock
to decline.
• The
sale and issuance of 3,000,000 shares of Common Stock to a single holder may impair the Company’s ability to raise capital
through the future sale of additional Common or Preferred stock in the future.
• Although
the Company’s Bylaws and Articles of Incorporation, as amended, currently contain provisions which could have the effect
of discouraging certain stockholder actions or opposition to candidates selected by the Board of Directors or provide incumbent
management a greater opportunity to oppose stockholder nominees or hostile actions by stockholders or others, the existence of
a block of Common Stock representing an aggregate of approximately 58.46% of the outstanding shares of Common Stock may well have
a chilling effect upon persons wishing to propose a “takeover” of the Company without the consent and support of the
holders of the issued and outstanding Common Stock.
• The
existence of what may be perceived as a “control” block of Common Stock of the Company may have some effect upon any
third parties’ desires to purchase or sell the Company’s Common Stock.
• With
a stockholder holding approximately 58.46% of the issued and outstanding shares and votes, the holder of 58.46% of the votes will
be able to cause the approval of any matter submitted to the stockholders which requires approval of more than a majority but
less than 75% of the votes without the votes of any other stockholders.
Information about Realty Advisors, Inc.
Realty Advisors, Inc.
is a Nevada corporation, organized by Articles of Incorporation filed with the Secretary of State of Nevada on May 4, 1990; its
sole stockholder is May Realty Holdings, Inc., a Nevada corporation. Mickey Ned Phillips is the sole director of Realty Advisors,
Inc. The principal executive officers of Realty Advisors, Inc. are:
Name
|
Office
|
Daniel J. Moos
|
President
|
Gene S. Bertcher
|
Vice President and Treasurer
|
Louis J. Corna
|
Vice President and Secretary
|
Consideration for the Purchase of Shares
The Purchase Price of
$1.50 per share under the Purchase Agreement was established by the Board of Directors of the Company through negotiation with
representatives of the Purchaser. The $1.50 per share price is effectively 110% of the average closing price of the Company’s
Common Stock on the NYSE American during the twenty trading days ending Friday preceding the date of the Purchase Agreement (May
22, 2018). The table on Page 17 sets forth the high and low sales prices during calendar quarterly periods during 2017 and 2018.
The Company’s Common Stock traded at a range of $1.61 per share on January 2, 2018, to a low of $1.29 per share on May 1,
2018, to a closing price of $1.42 on May 21, 2018. The Company’s Common Stock is presently held by approximately 460 holders
of records. The Company does not have an explanation for the volatility of the price range of the Company’s Common Stock
after May 22, 2018 - see “Period of Abnormal Trading Volume” above.
Use of Proceeds
The Company expects to
utilize approximately $4,500,000 of the net proceeds from the sale of issuance of 3,000,000 shares of Common Stock to Realty Advisors,
Inc. to pay for existing trade payables and current liabilities from the Company’s activities during 2018 and to fund the
first development well in a four-well package, at $370,000 per well. The balance of $4,000,000 is expected to be utilized in the
future to pay for development costs and preparation for drilling and/or actual drilling of development wells on acreage held by
the Company and its subsidiaries. However, no definitive determination has been made concerning the expenditures or use of the
balance of the proceeds of $4,000,000 from the sale of Common Stock. At such time as same is received in exchange for the issuance
of certificates representing such 3,000,000 shares (which will not occur until after approval of this Proposal by stockholders
and after approval by the NYSE American of an additional listing application and a period of some twenty-one days shall have lapsed),
the expectation of the Company is to invest the remainder of such net proceeds and hold same as working capital for the Company.
Change of Control
At the time of issuance
of such 3,000,000 shares of Common Stock to Realty Advisors, Inc., a “deemed” change of control will occur. See the
table on page 9 for information about the resulting percentage ownership of Common Stock of the Company by various individuals
and groups. At the time of its issuance of the 3,000,000 shares of Common Stock to Realty Advisors, Inc., it will control, in
the aggregate, approximately 58.46% of the Common Stock of the Company.
Realty Advisors, Inc.
is currently the holder of only 60,000 shares of Common Stock of the Company, has one person who is a common officer with the
Company, has a subsidiary which has leased office space and provided services to the Company and may be deemed to be a “Related
Party” for accounting purposes. If the transaction which is the subject of Proposal 3 is approved and consummated, Realty
Advisors, Inc. will become an “Affiliate” (as defined in Rule 405 under the Securities Act of 1933, as amended) of
the Company.
Voting Power of Management; Vote Required
Approval of this Proposal
3 requires only the affirmative vote by the holders of a majority of the shares of Common Stock present at a meeting once a quorum
is established.
Certain Pro Forma Information
A pro forma balance sheet
and pro forma statement of earnings is not presented herein because such pro forma statements would not be materially different
than the combined historical balance sheet and statement of earnings contained in the Company’s Form 10-Q for the quarter
ended March 30, 2018, except that the components of the stockholders’ equity section would be changed and pro forma primary
earnings per share would be given. Pro forma stockholders’ equity and pro forma primary earnings per share are presented
below.
The following table sets
forth the approximate pro forma consolidated book value per share of Common Stock after giving effect to the issuance of 3,000,000
additional shares of Common Stock based on the audited balance sheet of the Company as at December 31, 2017, and the unaudited
balance sheet of the Company at June 30, 2018, and that the total outstanding, after giving effect to such issuance, would be
5,131,935 shares of Common Stock:
Pro Forma Consolidated Book Value Per Share
of Common Stock Outstanding
|
12/31/17
|
06/30/18
|
Before Issuance (
1
) . . . . . . .
. . .
|
$0.31
|
$0.25
|
After Issuance (
2
) . . . . . . .
. . . .
|
$0.124
|
$0.10
|
___________________________
(
1
) Based
on 2,036,935 shares of Common Stock issued and outstanding.
(
2
) Based
on 5,131,935 shares of Common Stock issued and outstanding.
In the foregoing table,
the reduction in pro forma book value per share of Common Stock after the issuance results solely from the issuance of the additional
shares.
The following table sets
forth the approximate pro forma primary net earnings per share of Common Stock before and after such exchange.
Pro Forma Primary Earnings Per Share of
Common Stock
|
12/31/17
|
06/30/18
|
Before Issuance (
1
) . . . . . . .
. . .
|
($1.59)
|
($0.14)
|
After Issuance (
2
) . . . . . . .
. . . .
|
($0.632)
|
($0.058)
|
___________________________
(
1
) Based
on 2,036,935 shares of Common Stock issued and outstanding.
(
2
) Based
on 5,131,935 shares of Common Stock issued and outstanding and assuming the 3,000,000 shares were sold at the beginning of each
period presented and the funds received by the Company were invested at 3% per annum.
The following table sets
forth the capitalization of the Company at June 30, 2018 and the pro forma capitalization of the Company as adjusted as of such
date to reflect the exchange:
(Amounts in Thousands)
|
|
6/30/2018
|
|
As Adjusted
to Reflect
Change
|
Accounts Payable and Accrued Expenses
|
|
|
|
|
Liabilities Held for Sale
|
|
|
|
|
Current Liabilities
|
|
$
|
396
|
|
|
$
|
590
|
|
Other Liabilities – Long Term Debt
|
|
$
|
2,999
|
|
|
$
|
2,999
|
|
Total Liabilities
|
|
$
|
3,395
|
|
|
$
|
3,395
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
Preferred Stock, Series B
|
|
|
1
|
|
|
|
1
|
|
Common Stock
|
|
|
21
|
|
|
|
25
|
|
Additional Paid-In Capital
|
|
|
59,000
|
|
|
|
64,470
|
|
Accumulated Deficit
|
|
|
(58,523
|
)
|
|
|
(58,523
|
)
|
Total Stockholders’
Equity
|
|
$
|
499
|
|
|
$
|
5,973
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
$
|
3,894
|
|
|
$
|
9,368
|
|
The Board of Directors unanimously recommends
a vote FOR approval
of the issuance of 3,000,000 shares of Common
Stock to Realty Advisors, Inc.
EXECUTIVE COMPENSATION
The Company has few employees,
and no payroll or benefit plans and pays compensation to only one executive officer. The following tables set forth the compensation
in all categories paid by the Company for services rendered during the fiscal years ended December 31, 2017, 2016, and 2015, by
the Principal Executive Officer of the Company and to the other executive officers and Directors of the Company, whose total annual
salaries in 2017 exceeded $100,000, the number of options granted to any of such persons during 2017 and the value of the unexercised
options held by any of such persons on December 31, 2017.
SUMMARY COMPENSATION TABLE
Name and
Principal Position
|
Year
|
Salary
|
Bonus
|
Stock Awards
|
Option Awards
|
Non-Equity Incentive Plan
Compensation
|
Change in Pension Value
and Non-qualified Deferred Compensation Earnings
|
All Other Compensation
|
Total
|
Gene S. Bertcher (1)
Chairman, President
& Chief Financial Officer
|
2017
2016
2015
|
$56,500
$53,650
$107,300
|
–
–
–
|
–
–
–
|
–
–
–
|
–
–
–
|
–
–
–
|
–
–
–
|
$107,300
$107,300
$107,300
|
(1) Commencing
in February 2008, on a then interim basis, three other publicly held entities (Income Opportunity Realty Investors, Inc., Transcontinental
Realty Investors, Inc., and American Realty Investors, Inc., each of which have the same contractual advisor, now Pillar Income
Asset Management, Inc. [“Pillar”]) arranged with the Company for accounting and administrative services of the Company,
specifically Gene S. Bertcher, who is a certified public accountant and had a long history in the industry in which such entities
were engaged. At the time, the Company, through Bertcher, was also providing accounting and administrative services to other entities
on a fee based arrangement to assist those entities when the Company had excess capacity and personnel to provide accounting services.
Commencing February 2008, Mr. Bertcher was elected as Officer and Chief Financial Officer of each of IOR, TCI, and ARL. As a compensation
arrangement evolved over time, the three entities agreed to reimburse the Company for one half of the gross compensation and related
expenses of Bertcher at the Company and, from and after December 31, 2010, arranged to provide office space for Mr. Bertcher and
certain other Company personnel rather than requiring operating out of two separate locations. Beginning January 1, 2011, the
Company’s accounting department moved into offices maintained by the contractual advisor of the three entities, and the
Company was then allowed the use of certain administrative services, such as space on the contractual advisor’s computer
server, use of copiers, telephone services, and other related items. The Company has not been charged for the use of such office
space, computer services, telephone service, or other day-to-day cost of operating an office. Each of the three entities effectively
split the cost, generally, one third each. ARL (together with subsidiaries) owns in excess of 80% of the Common Stock of TCI,
and TCI, in turn, owns in excess of 80% of the Common Stock of IOR. The arrangement renews on an annual basis and is terminable
on sixty (60) days written notice. For purposes of the table set forth above, the net cost to the Company is 25% to 50% of the
salary amount for each year. The amount reflected in the table above is one quarter (2016 and 2017) to one half (2015) of the
total compensation for Mr. Bertcher, attributable 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
NON-QUALIFIED 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 Non-
qualified
Deferred Compensation Earnings
|
All Other Compensation
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gene S. Bertcher
|
$
—
|
$
—
|
James E. Huffstickler*
|
$10,500
|
$10,500
|
Dan Locklear
|
$10,500
|
$10,500
|
Victor L. Lund
|
$10,500
|
$10,500
|
Raymond D. Roberts
,
Sr.
|
$10,500
|
$10,500
|
__________________________
* Mr.
Huffstickler resigned effective October 20, 2017.
The Company pays each
nonemployee director a fee of $2,500 per annum plus a meeting fee of $2,000 for each Board meeting attended
.
Directors
who are also employees of the Company serve without additional compensation.
MANAGEMENT AND CERTAIN SECURITY HOLDERS
None
Compensation Committee Report
The Compensation Committee
of the Board of Directors is comprised of at least two directors who are independent of management and the Company. Each member
of the Compensation Committee must be determined to be independent by the Board under the Corporate Governance Guidelines on Director
Independence adopted by the Board and under the NYSE American standards for nonemployee directors and Rule 16b-3(b)(3)(i) of the
rules and regulations promulgated under the Securities Exchange Act of 1934 and the requirements for “outside directors”
set forth in Treasury Regulations, Section 27(e)(3). Each member of the Committee is to be free of any relationship that in the
judgment of the Board from time to time may interfere with the exercise of his or her independent judgment. Each Committee member
is appointed annually subject to removal at any time by the Board and serves until his or her Committee appointment is terminated
by the Board. The Compensation Committee is composed of three directors, each of whom meets the standards described above.
The purposes of the Compensation
Committee are to oversee the policies of the Company relating to compensation to be paid by the Company to the Company’s
principal executive officer (“CEO”) and any other officers designated by the Board and make recommendations to the
Board with respect to such policies, produce necessary reports and executive compensation for inclusion in the Company’s
proxy statement, in accordance with applicable rules and regulations, and monitor the development and implementation of succession
plans for the CEO and other key executives and make recommendations to the Board with respect to such plans.
The Board of Directors
determined that the primary forms of executive compensation should be the incentive system discussed above. The Company’s
performance is a key consideration (to the extent that such performance can be fairly attributed or related to an executive’s
performance) and each executive’s responsibilities and capabilities are key considerations. The independent directors strive
to keep executive compensation competitive for comparable positions in other corporations where possible. In addition, the Compensation
Committee believes in equity compensation wherein executives will be additionally rewarded based on increasing the Company’s
stockholder value. Base salaries are predicated on a number of factors, including:
• recommendation
of the CEO;
• knowledge
of similarly situated executives at other companies;
• the
executive’s position and responsibilities within the Company;
• the
Board of Directors’ subjective evaluation of the executive’s contribution to the Company’s performance;
• the
executive’s experience; and
• the
term of the executive’s tenure with the Company.
The charter of the Compensation
Committee was adopted on October 2, 2004, and the members of the Compensation Committee, all of whom are independent within the
meaning of the listing standards of the NYSE American and the Company’s Corporate Governance Guidelines, are listed below.
Since its formation, the Compensation Committee has annually reviewed its existing charter and regularly performed the tasks described
above.
COMPENSATION COMMITTEE
Victor S. Lund
|
Raymond D. Roberts, Sr.
|
Dan Locklear
|
Compensation Committee Interlocks and Insider
Participation
The Company’s Compensation
Committee is made up of nonemployee directors who have never served as officers of, or been employed by the Company. None of the
Company’s executive officers serve on a board of directors of any entity that has a director or officer serving on this
Committee.
Executive Officers
The only executive officer
of the Company is Gene S. Bertcher, Chairman of the Board, President, Chief Executive and Financial Officer. His age, term of
service and all positions and offices with the Company and other information is described above under “PROPOSAL 1 - ELECTION
OF DIRECTORS.”
Certain Relationships and Related Transactions
Historically, the Company
has engaged in and may continue to engage in business transactions, including real estate partnerships, with related parties.
Management believes that all of the related party transactions represented the best investments available at the time and were
at least as advantageous to the Company as could have been obtained from unrelated third parties.
Beginning in 2011, Pillar
became the contractual advisor to the three other publically traded entities. In addition to the relationship with Mr. Bertcher,
the Company conducts business with Pillar, whereby Pillar provides 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 theses services. Pillar is a
wholly owned subsidiary of Realty Advisors, Inc.
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
nonmanagement members of the Board of Directors of the Company. All of the transactions described above were so approved.
OTHER MATTERS
The Board of Directors
knows of no other matters that may be properly or should be brought before the Annual Meeting. However, if any other matters are
properly brought before the Annual Meeting, the persons named in the enclosed proxy or their substitutes will vote in accordance
with their best judgment on such matters.
FINANCIAL STATEMENTS
The audited financial
statements of the Company, in comparative form, for the years ended December 31, 2016 and 2017, are contained in the 2017 Annual
Report to Stockholders, which was mailed to stockholders in April 2018. Such report and the financial statements contained therein
are not to be considered part of this solicitation.
SOLICITATION OF PROXIES
THIS PROXY STATEMENT
IS FURNISHED TO STOCKHOLDERS TO SOLICIT PROXIES ON BEHALF OF THE BOARD OF DIRECTORS OF NEW CONCEPT ENERGY, INC.
The cost of
soliciting proxies will be born by the Company. Directors and officers of the Company may, without additional compensation, solicit
by mail, in person or by telecommunication.
FUTURE PROPOSALS OF STOCKHOLDERS
Stockholder proposals
for our Annual Meeting to be held in 2019 must be received by us by December 31, 2018, and must otherwise comply with the rules
promulgated by the Securities and Exchange Commission to be considered for inclusion in our proxy statement for that year. Any
stockholder proposal, whether or not to be included in our proxy materials, must be sent to our Corporate Secretary at 1603 LBJ
Freeway, Suite 300, Dallas, Texas 75234.
COPIES OF NEW CONCEPT
ENERGY, INC.’S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017, TO THE SECURITIES AND EXCHANGE COMMISSION ON FORM
10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (WITHOUT EXHIBITS) ARE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE THROUGH
OUR WEBSITE AT
WWW.NEWCONCEPTENERGY.COM
OR UPON WRITTEN REQUEST TO NEW CONCEPT
ENERGY, INC., 1603 LBJ FREEWAY, SUITE 300, DALLAS, TEXAS 75234, ATTN: DIRECTOR OF INVESTOR RELATIONS.
Dated: September 4, 2018
By order of the Board of Directors,
Gene S. Bertcher,
President
New
Concept Energy, Inc.
NOTICE OF INTERNET AVAILABILITY
OF PROXY MATERIAL
The Notice of Meeting, Proxy Statement
and Proxy Card
are available at
www.newconceptenergy.com
.
This Proxy is Solicited on Behalf
of the Board of Directors
The
undersigned acknowledges receipt of the notice of annual meeting of stockholders of New Concept Energy, Inc. (the “Company”),
to be held at 1603 LBJ Freeway, Suite 800, Dallas, Texas 75234, on October 10, 2018, beginning at 10:30 AM, Dallas Time, and the
proxy statement in connection therewith and appoints Gene S. Bertcher the undersigned
'
s
proxy with full power of substitution for and in the name, place and stead of the undersigned, to vote upon and act with respect
to all of the shares of Common Stock and Series B Preferred Stock of the Company standing in the name of the undersigned, or with
respect to which the undersigned is entitled to vote and act, at the meeting and at any adjournment thereof.
The
undersigned directs that the undersigned’s proxy be voted as follows:
|
1.
|
ELECTION
OF DIRECTORS [ ] For all nominees (except as marked to the contrary below)
|
[
] Withhold authority to vote for all nominees listed below
Nominees:
Gene S. Bertcher, Dan Locklear, Victor L. Lund, Raymond D. Roberts, Sr.
_____________________________________________________________________________________________________
(Instruction:
To withhold authority to vote any individual nominee, write that nominee
=
s
name on the line provided above.)
|
2.
|
RATIFICATION
OF THE SELECTION OF SWALM AND ASSOCIATES AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2018 AND ANY INTERIM PERIOD.
|
[
] FOR [ ] AGAINST [
] ABSTAIN
3.
|
APPROVAL
OF THE ISSUANCE OF 3,000,000 NEW SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, TO REALTY ADVISORS, INC. FOR CASH TO INCREASE
STOCKHOLDERS' EQUITY.
|
[
] FOR [ ] AGAINST [
] ABSTAIN
|
4.
|
IN
THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING.
|
[
] FOR [ ] AGAINST [
] ABSTAIN
This proxy
will be voted as specified above.
If no specification is made, this proxy will be voted for the election of the director nominees
in 1 above.
The
undersigned hereby revokes any proxy heretofore given to vote or act with respect to the Common Stock or Series B Preferred Stock
of the Company and hereby ratifies and confirms all that the proxies, their substitutes, or any of them may lawfully do by virtue
hereof.
If
more than one of the proxies named shall be present in person or by substitute at the meeting or at any adjournment thereof, the
majority of the proxies so present and voting, either in person or by substitute, shall exercise all of the powers hereby given.
Please
date, sign and mail this proxy in the enclosed envelope. No postage is required.
Date:
_____________________, 2018
_____________________________________
Signature
of Stockholder
_____________________________________
Signature
of Stockholder
Please
date this proxy and sign your name exactly as it appears hereon. Where there is more than one owner, each should sign. When signing
as an attorney, administrator, executor, guardian or trustee, please add your title as such. If executed by a corporation, the
proxy should be signed by a duly authorized officer.
New Concept Energy (AMEX:GBR)
Historical Stock Chart
From Feb 2024 to Mar 2024
New Concept Energy (AMEX:GBR)
Historical Stock Chart
From Mar 2023 to Mar 2024