______________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
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[X] |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 5(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
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For
the Year ended December 31, 2020 |
OR
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[ ] |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
FOR THE TRANSITION PERIOD
FROM TO
Commission File Number 000-08187
(Exact name of registrant as specified in its charter)
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Nevada |
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75-2399477 |
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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1603 LBJ Freeway
Suite 800
Dallas, Texas
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(Address
of principal executive offices) |
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75234 |
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(Zip
Code) |
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(972)
407-8400 |
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(Registrant’s
telephone number, including area code) |
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Securities registered pursuant to Section 12(b) of the Exchange
Act:
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Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
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Common
Stock, par value $0.01 |
GBR |
NYSE
AMERICAN |
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Securities registered pursuant to
Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes
[ ] No [X]
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes
[ ] No [X]
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes
[X] No [ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate website if any, every
interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files) Yes [X] No
[ ]
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Act). Yes
[ ] No [X]
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act. Yes
[ ] No [X]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
non-accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer,” ”accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange
Act. (Check one):
|
Large
accelerated filer [ ] |
Accelerated
filer [ ] |
|
Non-accelerated
filer [ ](Do
not check if a smaller reporting Company) |
Smaller
reporting company [X] |
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Emerging growth company [ ] |
The aggregate market value of the shares of voting and non-voting
common equity held by non-affiliates of the Registrant, computed by
reference to the closing price at which the common equity was last
sold which was the sales price of the Common Stock on the NYSE
American as of June 30, 2020 (the last business day of the
Registrant’s most recently completed second fiscal quarter) was
$2,394,000 based upon a total of 1,946,935 shares held as of June
30, 2020 by persons believed to be non-affiliates of the
Registrant. The basis of the calculation does not
constitute a determination by the Registrant as defined in Rule 405
of the Securities Act of 1933, as amended, such calculation, if
made as of a date within sixty days of this filing, would yield a
different value.
As of March 30, 2021 there were 5,131,934 shares of common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
NEW CONCEPT ENERGY, INC.
Index to Annual Report on Form 10-K
Fiscal year ended December 31, 2020
NEW CONCEPT ENERGY, INC.
Forward-Looking Statements
Certain statements in this Form 10-K are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. The
words “estimate”, “plan”, “intend”, “expect”, “anticipate”, “and
believe” and similar expressions are intended to identify
forward-looking statements. These forward-looking
statements are found at various places throughout this Report and
in the documents incorporated herein by reference. New
Concept Energy, Inc. disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or
otherwise. Although we believe that our expectations are
based upon reasonable assumptions, we can give no assurance that
our goals will be achieved. Important factors that could
cause our actual results to differ from estimates or projections
contained in any forward-looking statements are described under
Item 1A. Risk Factors beginning on page 5.
PART
I
Item
1. Business
New Concept Energy, Inc. (“New Concept”, “NCE” or the
“Company” or “we” or “us”) was incorporated in Nevada on May 31,
1991, under the name Medical Resource Companies of America,
Inc. The Company is the successor-by-merger to Wespac
Investors Trust, a California business trust that began operating
in 1982. On March 26, 1996, the name was changed to
Greenbriar Corporation. On February 8, 2005, the name of
the Company was changed to CabelTel International
Corporation. On May 21, 2008, the name of the company
was changed to New Concept Energy, Inc.
Real Estate Operations
The Company, owns approximately 190 acres of land located in
Parkersburg West Virginia. Located on the land are four structures
totaling approximately 53,000 square feet. Of this total area the
main industrial / office building contains approximately 24,800
square feet of which as of December 31, 2020 approximately 16,000
of industrial area is leased for $101,000 per annum.
Oil and Gas Operations
In August 2020 the Company sold its oil and gas wells and mineral
leases which were located in Ohio and West Virginia. The oil and
operations for the periods included in this report are reflected as
discontinued operations.
Business Strategy
The Company is a Nevada corporation.
The Company intends to continue operate and or sell its West
Virginia property while management of the Company explores
alternatives, seeking to establish or acquire new business
operations.
Insurance
The Company currently maintains property and liability insurance
intended to cover claims for its real estate and corporate
operations.
Employees
At December 31, 2020, the Company employed the services of 2 people
with the remainder of the work contracted to third parties. The
Company believes it maintains good relationships with its
employees. None of the Company’s employees are
represented by a collective bargaining group.
The Company’s operations are subject to the Fair Labor Standards
Act.
Management is not aware of any non-compliance by the Company as
regards applicable regulatory requirements that would have a
material adverse effect on the Company’s financial condition or
results of operations.
Available Information
The Company maintains an internet website at
www.newconceptenergy.com. The Company has
available through the website, free of charge, Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K, reports filed pursuant to Section 16 of the Securities
Exchange Act of 1934 (the “Exchange Act”) and amendments to those
reports as soon as rea-sonably practicable after we electronically
file or furnish such materials to the Securities and Exchange
Commission. In addition, the Company has posted the
charters for our Audit Committee, Compensation Committee and
Governance and Nominating Committee, as well as our Code of
Business Conduct and Ethics, Corporate Governance Guidelines on
Director Independence and other information on the
website. These charters and principles are not
incorporated in this Report by reference. The Company
will also provide a copy of these documents free of charge to
stockholders upon request. The Company issues Annual
Reports containing audited financial statements to its common
stockholders.
Item
1A. Risk Factors
Risks Related to the Company
During 2020, a strain of coronavirus (“COVID – 19”) was reported
worldwide, resulting in decreased economic activity and concerns
about the pandemic, which would adversely affect the broader global
economy. At this point, the extent to which COVID – 19 may impact
the global economy and our business is uncertain, but pandemics or
other significant public health events could have a material
adverse effect on our business and results of operations.
An investment in our securities involves various
risks. An investor should carefully consider the
following risk factors in conjunction with the other information in
this report before trading our securities.
Our governing documents contain anti-takeover provisions that
may make it more difficult for a third party to acquire control of
us. Our Articles of Incorporation contain provisions
designed to discourage attempts to acquire control of the Company
by a merger, tender offer, proxy contest or removal of incumbent
management without the approval of our Board of
Directors. As a result, a transaction which otherwise
might appear to be in your best interests as a stockholder could be
delayed, deferred or prevented altogether, and you may be deprived
of an opportunity to receive a premium for your shares over
prevailing market rates. The provisions contained in our
Articles of Incorporation include:
|
● |
the requirement of an 80% vote to make, adopt, alter, amend,
change or repeal our Bylaws or certain key provisions of the
Articles of Incorporation that embody, among other things, the
anti-takeover provisions; |
|
● |
the so-called business combination “control act” requirements
involving the Company and a person that beneficially owns 10% or
more of the outstanding common stock except under certain
circumstances; and |
|
● |
the requirement of holders of at least 80% of the outstanding
Common Stock to join together to request a special meeting of
stockholders. |
Item
1B. Unresolved Staff Comments
Not applicable.
Item
2. Properties
The Company’s principal offices are located at 1603 LBJ Freeway
Suite 800, Dallas, Texas 75234. The Company believes
this space is presently suitable, fully utilized and will be
adequate for the foreseeable future.
The Company, owns approximately 190 acres of land located in
Parkersburg West Virginia. Located on the land are four structures
totaling approximately 53,000 square feet. Of this total area the
main industrial / office building contains approximately 24,800
square feet.
Item
3. Legal Proceedings
The Company has been named as a defendant in lawsuits in the
ordinary course of business. Management is of the
opinion that these lawsuits will not have a material effect on the
financial condition, results of operations or cash flows of the
Company.
PART
II
Item
5. Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity
Securities
Market Information
The common stock of the Company is listed and traded on the NYSE
American using the symbol “GBR”. The following table
sets forth the high and low sales prices as reported in the
reporting system of the NYSE American and other published financial
sources
| |
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2020 |
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2019 |
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High |
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Low |
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High |
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Low |
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| First Quarter |
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$ |
1.47 |
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$ |
0.55 |
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|
$ |
2.24 |
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|
$ |
1.50 |
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| Second Quarter |
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$ |
1.64 |
|
|
$ |
0.64 |
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|
$ |
2.39 |
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$ |
1.66 |
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| Third Quarter |
|
$ |
2.19 |
|
|
$ |
1.27 |
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|
$ |
1.88 |
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|
$ |
1.41 |
|
| Fourth Quarter |
|
$ |
3.50 |
|
|
$ |
1.40 |
|
|
$ |
1.47 |
|
|
$ |
1.20 |
|
On March 31, 2021 the closing price of the Company’s Common Stock
was $4.39 per share. The Company’s Common Stock was held by
approximately 2,500 holders of record.
Dividends
The Company paid no dividends on its Common Stock in 2020 or
2019. The Company has not paid cash dividends on its
Common stock during at least the last ten fiscal years and it has
been the policy of the Board of Directors of the Company to retain
all earnings to pay down debt and finance future expansion and
development of its businesses. The payment of dividends,
if any, will be determined by the Board of Directors in the future
in light of conditions then existing, including the Company’s
financial condition and requirements, future prospects,
restrictions in financing agreements, business conditions and other
factors deemed relevant by the Board of Directors.
Purchases of Equity Securities
The Board of Directors has not authorized the repurchase of any
shares of its Common Stock under any share repurchase program.
However, from time to time in the past, the Company has purchased
from stockholders, less than 100 shares on request of such persons
to save the cost of commissions. No such purchases were made in
2019 or 2020.
Item
6. Selected Financial Data
Optional and not included
Item
7. Management’s Discussion and Analysis of Financial
Condition and Results of Operation
Overview
The Company current operations include leasing its office building
located in Parkersburg West Virginia, Its principal source of cash
and income is the interest it receives from notes receivables.
In August 2020 the Company sold its oil and gas wells and mineral
leases which were located in Ohio and West Virginia. The oil and
operations for the periods included in this report are reflected as
discontinued operations.
Critical Accounting Policies and Estimates
The Company’s discussion and analysis of its financial condition
and results of operations are based upon the Company’s consolidated
financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United
States. Certain of the Company’s accounting policies
require the application of judgment in selecting the appropriate
assumptions for calculating financial estimates. By
their nature, these judgments are subject to an inherent degree of
uncertainty. These judgments and estimates are based
upon the Company’s historical experience, current trends and
information available from other sources that are believed to be
reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates
under different assumptions or conditions.
Deferred Tax Assets
Significant management judgment is required in determining the
provision for income taxes, deferred tax assets and liabilities and
any valuation allowance recorded against net deferred tax
assets. The future recoverability of the Company’s net
deferred tax assets is dependent upon the generation of future
taxable income prior to the expiration of the loss carry
forwards. At December 31, 2020, the Company had a
deferred tax asset due to tax deductions available to it in future
years. However, as management could not determine that
it was more likely than not that the benefit of the deferred tax
asset would be realized, a 100% valuation allowance was
established.
Liquidity and Capital Resources
At December 31, 2020, the Company had current assets of $3,802,000
and current liabilities of $164,000.
Cash and cash equivalents totaled $27,000 at December 31, 2020 and
$22,000 at December 31, 2019. New Concept’s principal
sources of cash are rent from the tenant occupying part of its
building in West Virginia and interest from its notes
receivable.
Results of Operations
Fiscal 2020 as compared to 2019
Revenues: Total revenues from rent for the leased property
was $101,000 in 2020 and $98,000 in 2019.
Operating Expenses: Operating expenses for the real estate
property was $72,000 in 2020 and $61,000 in 2019. General and
administrative expenses were $396,000 in 2020 and 418,000 in
2019.
Interest Income: Interest Income was $242,000 in
2020 as compared to $257,000 in 2019. The decrease was due to the
reduction in the principal balance outstanding due to payments
received.
Other Income: Other income was $85,000 in 2020
which is an income tax refund for prior years. Other income was
$199,000 in 2019 which is comprised of a gain on sale of equipment
of $46,000 and the settlement of a legal claim of $153,000.
Discontinued Operations: During the first nine months of
2020 the Company recorded a net loss from its oil and gas
operations of $170,000. In August 2020 the Company sold the oil and
gas operation and recorded a gain of $2,138,000.
Fiscal 2019 as compared to 2018
Revenues: Total revenues from rent for the leased property
was $98,000 in 2019 and $123,000 in 2018.
Operating Expenses: Operating expenses for the real estate
property was $61,000 in 2019 and $59,000 in 2018. General and
administrative expenses were $418,000 in 2019 and $359,000 in 2018.
The increase was principally due to an increase in consulting
expenses.
Interest Income: Interest Income was $257,000 in
2019 as compared to $37,000 in 2018. The increase was due to the
interest earned from investing the proceeds from the issuance and
sale of common stock in December 2018.
Discontinued Operations: The Company recorded a loss from
its oil and gas operation of $2,412,000 in 2019 and $219,000 in
2018. The Company recorded an impairment loss from its oil and gas
operations of $2,285,000 resulting in an overall loss from the oil
and gas operation of $2,412,000.
Item
7a: Quantitative and Qualitative Disclosures about
Market Risk
All of the Company’s debt is financed at fixed rates of
interest. Therefore, the Company has minimal risk from
exposure to changes in interest rates.
Item
8. Financial Statements
The consolidated financial statements required by this Item begin
at page 16 of this Report.
Item
9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
Item
9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation by our management (with the participation of
our Principal Executive Officer and Principal Financial Officer),
as of the end of the period covered by this report, our Principal
Executive Officer and Principal Financial Officer concluded that
our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) were effective to provide
reasonable assurance that information required to be disclosed by
us in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms and that such information
is accumulated and communicated to our management, including our
Principal Executive Officer and Principal Financial Officer, to
allow timely decisions regarding required disclosures.
There has been no change in our internal control over financial
reporting (as defined in Exchange Act Rule 13a-15(f)) during the
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over
financial reporting.
Management’s Report on Internal Control over Financial
Reporting
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting for the
Company. Our internal control over financial reporting
is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements in accordance with generally accepted accounting
principles. There are inherent limitations to the
effectiveness of any system of internal control over financial
reporting. These limitations include the possibility of
human error, the circumvention of overriding of the system and
reasonable resource constraints. Because of its inherent
limitations, our internal control over financial reporting may not
prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in
conditions or that the degree of compliance with policies or
procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal
control over financial reporting. In making this
assessment, management used the criteria set forth in Internal
Control - Integrated Framework -2013 issued by the Committee of
Sponsoring Organizations of the Treadway Commission
(COSO). Based on management’s assessments and those
criteria, management has concluded that Company’s internal control
over financial reporting was effective as of December 31, 2020.
This annual report does not include an attestation report of the
Company’s registered public accounting firm regarding internal
control over financial report. Management’s report was
not subject to attestation by the Company’s registered public
accounting firm pursuant to rules of the Securities and Exchange
Commission that permit the Company to provide only management’s
report in this annual report.
Changes in Internal Control over Financial Reporting
In preparation for management’s report on internal control over
financial reporting, we documented and tested the design and
operating effectiveness of our internal control over financial
reporting. There were no changes in our internal
controls over
financial reporting (as such term is defined in Exchange Act Rule
13a-15(f)) that occurred during the quarter ended December 31, 2020
that have materially affected, or are reasonably likely to
materially affect, our internal control over financial
reporting.
Item
9B. Other Information
Not applicable.
PART
III
Item
10. Directors, Executive Officers and Corporate
Governance
Directors
The affairs of the Company are managed by the Board of
Directors. The directors are elected at the Annual
Meeting of Stockholders or appointed by the incumbent Board and
serve until the next Annual Meeting of Stockholders, until a
successor has been elected or approved, or until earlier
resignation, removal or death.
It is the Board’s objective that a majority of the Board consists
of independent directors. For a director to be
considered “independent”, the Board must determine that the
director does not have any direct or indirect material relationship
with the Company. The Board has established guidelines
to assist it in determining director independence, which conform
to, or are more exacting than, the independence requirements in the
NYSE American Stock Exchange listing rules. The
independence guidelines are set forth in the Company’s “Corporate
Governance Guidelines”. The text of this document has
been posted on the Company’s internet website at
http://www.newconceptenergy.com, and is available in
print to any stockholder who requests it. In addition to
applying these guidelines, the Board will consider all relevant
facts and circumstances in making an independent determination.
The Company has adopted a code of conduct that applies to all
directors, officers and employees, including our principal
executive officer, principal financial officer and principal
accounting officer. Stockholders may find our Code of
Conduct on our internet website address at
http://www.newconceptenergy.com. We will
post any amendments to the Code of Conduct as well as any waivers
that are required to be disclosed by the rules of the SEC or the
NYSE AMERICAN on our website.
Our Board of Directors has adopted charters for our Audit,
Compensation and Governance and Nominating Committees of the Board
of Directors. Stockholders may find these documents on
our website by going to the website address
http://www.newconceptenergy.com. Stockholders may
also obtain a printed copy of the materials referred to by
contacting us at the following address:
New Concept Energy, Inc.
Attn: Investor Relations
1603 LBJ Freeway, Suite 800
Dallas, Texas 75234
972-407-8400 (Telephone)
The Audit Committee of the Board of Directors is an “audit
committee” for the purposes of Section 3(a) (58) of the Exchange
Act. The members of that Committee are Dan Locklear
(Chairman), Raymond D. Roberts, Cecilia Maynard and Victor L.
Lund. Mr. Locklear is qualified as an “audit committee
financial expert” within the meaning of SEC regulations and the
Board has determined that he has the accounting and related
financial management expertise within the meaning of the listing
standards of the NYSE American. All of the members of
the Audit Committee meet the independence and experience
requirements of the listing standards of the NYSE American.
All members of the Audit Committee, Compensation Committee
and the Governance and Nominating Committee must be independent
directors. Members of the Audit Committee must also
satisfy additional independence requirements which provide (i) that
they may not accept, directly or indirectly, any consulting,
advisory or compensatory fee from the Company or any of its
subsidiaries other than their director’s compensation (other than
in their capacity as a member of the Audit Committee, the Board of
Directors or any other Committee of the Board), and (ii) no member
of the Audit Committee may be an “affiliated person” of the Company
or any of its subsidiaries, as defined by the Securities and
Exchange Commission.
The current directors of the Company are listed below, together
with their ages, terms of service, all positions and offices with
the Company, their principal occupations, business experience and
directorships with other companies during the last five years or
more. The designation “affiliated”, when used below with
respect to a director, means that the director is an officer or
employee of the Company or one of its subsidiaries. The
designation “independent”, when used below with respect to a
director, means that
the director is neither an officer of the Company nor a director,
officer or employee of a subsidiary of the Company, although the
Company may have certain business or professional relationships
with the director as discussed in Item 13. Certain Relationships
and Related Transactions. No family relationship exists between any
executive officer and any of the directors of the company.
Raymond D. Roberts, age 89, (Independent) Director since June
2015
Mr. Roberts is currently retired. He is a director of American
Realty Investors, Inc. (“ARL”), Transcontinental Realty Investors,
Inc. (“TCI”) and Income Opportunity Realty Investors, Inc. (IOR”)
ARL and TCI common stock are listed and traded on the New York
Stock Exchange and IOR common stock is listed and traded on the
NYSE American Exchange. These Companies are affiliated with both
Realty Advisors, Inc. and Pillar Income Asset Management. Mr.
Roberts is a member of the Governance and Nominating Committee of
the Board of Directors of the Registrant.
Gene S. Bertcher, age 72, (Affiliated) Director November 1989 to
September 1996 and since June 1999
Mr. Bertcher was elected President and Chief Financial Officer
effective November 1, 2004. He was elected Chairman and
Chief Executive Officer in December 2006. Mr. Bertcher
has been Chief Financial Officer and Treasurer of the Company since
November 1989 and Executive Vice President from November 1989 until
he was elected President. Also, Mr. Bertcher was until
June 30, 2019 Executive Vice-President and Chief Financial Officer
of American Realty Investors, Inc. and Transcontinental Realty
Investors, Inc., both of which are traded on the NYSE. Mr. Bertcher
is currently Executive Vice-President and Chief Financial Officer
Income Opportunity Realty Investors, Inc. which is traded on the
NYSE American exchange, positions he has occupied since February
2008. Further Mr. Bertcher as of August 2020 is a Director of
Pillar Income Asset Management. He has been a certified public
accountant since 1973.
Dan Locklear, age 67, (Independent) Director since December
2003
Mr. Locklear has been Chief Financial Officer of Sunridge
Management Group, a real estate management company, for more than
five years. Mr. Locklear was formerly employed by
Johnstown Management Company, Inc. and Trammel Crow
Company. Mr. Locklear has been a certified public
accountant since 1981 and a licensed real estate broker in the
State of Texas since 1978.
Richard W. Humphrey, age 73, (Affiliated) Director since October
2020
Mr. Humphrey has been, for more than the past five years,
Vice President of Regis Realty Prime, LLC, involved in sales and
acquisitions of real estate properties. Mr. Humphrey received from
Southern Methodist University Cox School of Business both a
Bachelors of Business Administration and Masters of Business
Administration degree with emphasis in real estate. From 1976 to
1979, he was also a part-time faculty member at Southern Methodist
University Cox School of Business in Dallas, teaching real estate
classes in undergraduate and graduate school. Regis Realty Prime,
LLC and its predecessors are affiliated with Realty Advisors, Inc.
("RAI").
Cecilia Maynard, age 68, (Independent) Director since January
2019
Ms. Maynard was employed by Pillar Income Asset
Management, Inc. (“Pillar”) from January 2011 through December 31,
2018. Pillar is a Nevada corporation which provides management
services to other entities. Ms. Maynard has also (since May 31,
2018) been a director, Vice President and Secretary of First Equity
Properties, Inc., a Nevada corporation, the common stock of which
is registered under Section 12(g) of the Securities Exchange Act of
1934.
Board Committees
The Board of Directors held four meetings during
2020. For such year, no incumbent director attended
fewer than 75% of the aggregate of (i) the total number of meetings
held by the Board during the period for which he or she had been a
director, and (ii) the total number of meetings held by all
Committees of the Board on which he or she served during the period
that he or she served.
The Board of Directors has standing Audit, Compensation and
Governance and Nominating Committees. The Audit
Committee was formed on December 12, 2003, and its function is to
review the Company’s operating and accounting
procedures. A Charter of the Audit Committee has been
adopted by the Board. The current members of the Audit
Committee, all of whom are independent within the SEC regulations,
the listing standards of the NYSE American and the Company’s
Corporate Governance Guidelines are Messrs. Locklear (Chairman),
Roberts and Lund. Mr. Dan Locklear is qualified as an
Audit Committee financial expert within the meaning of SEC
regulations, and the Board has determined that he has the
accounting and related financial management expertise within the
meaning of the listing standards of the NYSE American. The
Audit Committee met four times in 2020.
The Governance and Nominating Committee is responsible for
developing and implementing policies and practices relating to the
corporate governance, including reviewing and monitoring
implementation of the Company’s Corporate Governance
Guidelines. In addition, the Committee develops and
reviews background information on candidates for the Board and
makes recommendations to the Board regarding such
candidates. The Committee also prepares and supervises
the Board’s annual review of director independence and the Board’s
performance and self-evaluation. The members of the Committee
are Messrs. Lund (Chairman), Roberts and Ms. Maynard.
The Board has also formed a Compensation Committee of the Board of
Directors, adopted a Charter for the Compensation Committee on
October 20, 2004, The committee members are Mr. Roberts (Chairman)
and Messrs. Locklear and Ms. Maynard.
The members of the Board of Directors at the date of this Report
and the Committees of the Board on which they serve are identified
below:
|
Director |
Audit
Committee |
Governance
and Nominating Committee |
Compensation
Committee |
| Raymond D. Roberts |
✓ |
✓ |
Chairman |
| Gene S. Bertcher |
|
|
|
| Cecilia Maynard |
✓ |
Chairman |
✓ |
| Dan Locklear |
Chairman |
✓ |
✓ |
|
Richard W.
Humphrey |
|
|
|
Executive Officers
The following person currently serves as the sole executive officer
of the Company: Gene S. Bertcher, Chairman of the Board,
President, Chief Executive Officer and Treasurer. His
position with the Company is not subject to a vote of
stockholders. His age, term of service and all positions
and offices with the Company, other principal occupations, business
experience and directorships with other companies during the last
five years or more are listed under the caption “Directors”
above.
In addition to the foregoing officers, the Company has other
officers not listed herein who are not considered executive
officers.
Code of Ethics
The Board of Directors has adopted a code of ethics entitled “Code
of Business Conduct and Ethics” that applies to all directors,
officers and employees of the Company and its
subsidiaries. In addition, the Company has adopted a
code of ethics entitled “Code of Ethics for Senior Financial
Officers” that applies to the principal executive officer,
president, principal financial officer, chief financial officer,
principal accounting officer and controller. The text of
these documents is posted on the Company’s internet website address
at http://www.newconceptenergy.com and is available
in print to any stockholder who requests them.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of Forms 3, 4 and 5 furnished to the
Company pursuant to Rule 16a-3(e) promulgated under the Securities
Exchange Act of 1934 (the “Exchange Act“), upon written
representations received by the Company, the Company is not aware
of any failure by any director, officer or beneficial owner of more
than 10% of the Company’s common stock to file with the Securities
and Exchange Commission on a timely basis.
Item
11. Executive Compensation
The following tables set forth the compensation in all categories
paid by the Company for services rendered during the fiscal years
ended December 31, 2020, 2019 and 2018 by the Chief Executive
Officer of the Company and to the other executive officers and
Directors of the Company whose total annual salary in 2020 exceeded
$50,000.
|
SUMMARY COMPENSATION TABLE |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
Pension |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
Value and |
|
|
|
|
|
|
|
|
Name |
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
Nonqualified |
|
All |
|
|
|
|
|
|
and |
|
|
|
|
|
|
|
|
|
|
|
|
Plan |
|
Deferred |
|
Other |
|
|
|
|
|
|
Principal |
|
|
|
|
|
|
|
|
Stock |
|
Option |
|
Compen- |
|
Compensation |
|
Compen- |
|
|
|
|
|
|
Position |
|
Year |
|
|
Salary |
|
Bonus |
|
Awards |
|
Awards |
|
sation |
|
Earnings |
|
sation |
|
|
Total |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gene S. Bertcher (1)
|
|
2020 |
|
$ |
56,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
56,500 |
|
|
|
Chairman, President |
|
2019 |
|
$ |
56,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
56,500 |
|
|
|
& Chief Financial |
|
2018 |
|
$ |
53,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
53,650 |
|
|
|
Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The salary in the above table
represents Mr. Bertcher’s compensation paid by the Company; he also
receives additional compensation for services to three other
publicly traded entities which are unrelated to the
Company. |
GRANTS OF PLAN-BASED AWARDS
None
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
None
OPTION EXERCISES AND STOCK VESTED
None
PENSION BENEFITS
None
NONQUALIFIED DEFERRED COMPENSATION
None
|
DIRECTOR COMPENSATION |
| Name |
|
|
Fees Earned
Or Paid in
Cash
|
|
|
Stock
Awards
|
|
Option
Awards
|
|
Non-Equity
Incentive Plan
Compensation
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation
|
|
|
Total |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gene S. Bertcher |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
| Raymond D. Roberts |
|
$ |
10,500 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,500 |
|
| Dan Locklear |
|
$ |
10,500 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,500 |
|
| Richard W. Humphrey |
|
$ |
4,000 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,000 |
|
| Cecilia Maynard |
|
$ |
10,500 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,500 |
|
MANAGEMENT AND CERTAIN SECURITY HOLDERS
None
Compensation of Directors
The Company pays each non-employee director a fee of $2,500 per
year, plus a meeting fee of $2,000 for each board meeting
attended. Employee directors serve without
compensation.
Item
12. Security Ownership of Certain Beneficial
Owners
The following table sets forth the ownership of the Company’s
Common Stock, both beneficially and of record, both individually
and in the aggregate, for those persons or entities known by the
Company to be the beneficial owners of more than 5% of its
outstanding Common Stock as of the close of business on March 31,
2021.
|
Name and Address of
Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Approximate
Percent of Class *
|
|
Realty Advisors, Inc.
|
1,403,354
shares |
27.34%
|
|
· |
based
on 5,131,934 shares outstanding at March 31, 2021. |
Security Ownership of Management
The following table sets forth the ownership of the Company’s
Common Stock, both beneficially and of record, both individually
and in the aggregate for the directors and executive officers of
the Company, as of the close of business on March 31, 2021.
|
Name and Address of Beneficial Owner
|
Amount and Nature of Beneficial Ownership*
|
Approximate
Percent of Class** |
|
Gene
S. Bertcher
|
-
|
0%
|
|
Raymond Roberts
|
-
|
0%
|
|
Dan
Locklear
|
-
|
0%
|
|
Richard w. Humphrey
|
-
|
0%
|
|
Cecilia Maynard
|
-
|
0%
|
|
All
directors and executive officers as a group (5 people)
|
-
|
0%
|
|
* Beneficial Ownership means the sole or shared power to vote, or
to direct the voting of, a security or investment power with
respect to a security, or any combination thereof.
** Percentages are based upon 5,131, 934 shares of Common Stock
outstanding at March 31, 2021.
|
Item
13. Certain Relationships and Related Transactions, and
Director Independence
Beginning in 2011 Pillar became the contractual advisor to three
other publically traded entities which are related to Realty
Advisors, Inc. (“RAI”) through stock ownership by RAI. In addition
the relationship with Mr. Bertcher New Concept conducts business
with Pillar whereby Pillar provided the Company with services
including processing payroll, acquiring insurance and other
administrative matters. The Company believes that by purchasing
these services through certain large entities it can get lower
costs and better service. Pillar does not charge the Company a fee
for providing these services. Pillar is a wholly owned subsidiary
of Realty Advisors, Inc.
Except as set forth above, the Reporting Persons do not have any
contracts, arrangements, understandings or relationships, legal or
otherwise, with any person with respect to any securities of the
Issuer, including but not limited to, transfer or voting of any of
the securities, finders’ fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, divisions of
profits or losses, or the giving or withholding of proxies.
It is the policy of the Company that all transactions between the
Company and any officer or director, or any of their affiliates,
must be approved by independent members of the Board of Directors
of the Company. All of the transactions described above
were so approved.
See Item 10. Directors, Executive Officers and Corporate Governance
for information on the independence of Directors and the standards
of the NYSE American Exchange.
Item
14. Principal Accounting Fees and Services
The following table sets forth the aggregate fees for professional
services rendered to the Company for the years 2020 and 2019 by the
Company’s principal accounting firm Swalm & Associates,
P.C.:
|
Type of Fees |
|
2020 |
|
2019 |
|
Audit Fees |
|
$ |
70,250 |
|
|
$ |
69,000 |
|
|
Tax Fees |
|
|
10,550 |
|
|
|
9,000 |
|
|
Total Fees |
|
$ |
80,800 |
|
|
$ |
78,000 |
|
All services rendered by the principal auditors are permissible
under applicable laws and regulations and were pre-approved by
either of the Board of Directors or the Audit Committee, as
required by law. The fees paid to principal auditors for
services described in the above table fall under the categories
listed below:
Audit Fees: These are fees for professional services
performed by the principal auditor for the audit of the Company’s
annual financial statements and review of financial statements
included in the Company’s Form 10-Q filings and services that are
normally provided in connection with statutory and regulatory
filings or engagements.
Audit-Related Fees: These are fees for assurance and related
services performed by the principal auditor that are reasonably
related to the performance of the audit or review of the Company’s
financial statements. These services include attestation
by the principal auditor that is not required by statute or
regulation and consulting on financial accounting/reporting
standards.
Tax Fees: These are fees for professional services performed
by the principal auditor with respect to tax compliance, tax
planning, tax consultation, returns preparation and reviews of
returns. The review of tax returns includes the Company
and its consolidated subsidiaries.
All Other Fees: These are fees for other permissible work
performed by the principal auditor that does not meet the above
category descriptions.
These services are actively monitored (as to both spending level
and work content) by the Audit Committee to maintain the
appropriate objectivity and independence in the principal auditor’s
core work, which is the audit of the Company’s consolidated
financial statements.
Financial Information Systems Design and Implementation
Fees
Swalm & Associates, P.C. did not render professional services
to the Company in 2020 with respect to financial information
systems design and implementation.
Under the Sarbanes-Oxley Act of 2002 (the “SO Act”), and the rules
of the Securities and Exchange Commission (the “SEC”), the Audit
Committee of the Board of Directors is responsible for the
appointment, compensation and oversight of the work of the
independent auditor. The purpose of the provisions of
the SO Act and the SEC rules for the Audit Committee’s role in
retaining the independent auditor is two-fold. First,
the authority and responsibility for the appointment, compensation
and oversight of the auditors should be with directors who are
independent of management. Second, any non-audit work
performed by the auditors should be reviewed and approved by these
same independent directors to ensure that any non-audit services
performed by the auditor do not impair the independence of the
independent auditor. To implement the provisions of the
SO Act, the SEC issued rules specifying the types of services that
an independent auditor may not provide to its audit client, and
governing the Audit Committee’s administration of the engagement of
the independent auditor. As part of this responsibility,
the Audit Committee is required to pre-approve the audit and
non-audit services performed by the independent auditor in order to
assure that they do not impair the auditor’s
independence. Accordingly, the Audit Committee has
adopted a pre-approval policy of audit and non-audit services (the
“Policy”), which sets forth the procedures and conditions pursuant
to which services to be performed by the independent auditor are to
be pre-approved. Consistent with the SEC rules
establishing two different approaches to pre-approving
non-prohibited services, the Policy of the Audit Committee covers
pre-approval of audit services, audit-related services,
international administration tax services, non-U.S. income tax
compliance services, pension and benefit plan consulting and
compliance services, and U.S. tax compliance and
planning. At the beginning of each fiscal year, the
Audit Committee will evaluate other known potential engagements of
the independent auditor, including the scope of work proposed to be
performed and the proposed fees, and the approve or reject each
service, taking into account whether services are permissible under
applicable law and the possible impact of each non-audit service on
the independent auditor’s independence from
management. Typically, in addition to the generally
pre-approved services, other services would include due diligence
for an acquisition that may or may not have been known at the
beginning of the year. The Audit Committee has also
delegated to any member of the Audit Committee designated by the
Board or the financial expert member of the Audit Committee
responsibilities to pre-approve services to be performed by the
independent auditor not exceeding $25,000 in value or cost per
engagement of audit and non-audit services, and such authority may
only be exercised when the Audit Committee is not in session.
PART
IV
Item
15. Exhibits, Financial Statement and Supplementary
Schedules
INDEX TO FINANCIAL STATEMENTS
Page
FINANCIAL STATEMENT SCHEDULES: Other financial
statement schedules have been omitted because they are not
required, are not applicable, or the information required is
included in the Consolidated Financial Statements or the notes
thereto.
Item 16.
FORM 10-K SUMMARY
Optional and not included herein.
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the board of directors of
New Concept Energy, Inc.
Dallas, Texas
Opinion on the Financial Statements
We have audited the accompanying balance sheets of New Concept
Energy, Inc. and Subsidiaries (the Company) as of December 31, 2020
and 2019, and the related statements of operations, stockholders’
equity, and cash flows for each of the years in the three-year
period ended December31, 2020, and the related notes and schedules
collectively referred to as the financial statements. In our
opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of December 31,
2020 and 2019, and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31,
2020 in conformity with accounting principles generally accepted in
the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting
Oversight Board (United States) (“PCOAB”) and are required to be
independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting. As part of our audits, we are required to obtain and
understanding of internal control over financial reporting, but not
for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis
for our opinion.
Critical Audit Matters
The
critical audit matters communicated below are matters arising from
the current period audit of the financial statements that were
communicated or required to be communicated to the audit committee
and that: (1) relate to accounts or disclosures that are material
to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of
critical audit matters does not alter in any way our opinion on the
financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or
disclosures to which they relate.
Transactions with and Balances Due from Related
Parties
Description of the Matter
The
Company has significant transactions and balances due from related
parties. The Company performs an assessment as to whether
substantially all the amounts due under these receivables are
deemed probable of collection. When the Company concludes that it
is not probable that it will collect amounts, the Company creates
an allowance for the amount not probable of collection.
Auditing the Company’s collectability assessment is complex due to
the judgment involved in the Company’s determination of the
collectability of these receivables. The determination involves
consideration of the terms of the receivable, whether the
receivable is currently performing, and any security for the
receivable.
How We addressed the Matter in Our Audit
We obtained an understanding of the Company’s controls over related
party receivables and their collectability assessment. Our testing
included, among other things, confirmation of the receivables,
reviewing selected financial information of the related parties,
reviewing collections and evaluating transaction documentation. The
relevant financial statement accounts are notes and interest
receivable from related parties and interest income from related
parties.
Emphasis of Related Party Transactions
As described in the notes to the consolidated financial statements
New Concepts Energy, Inc. and Subsidiaries has significant
transactions with and balances due from related parties.
/s/ Swalm & Associates, P.C.
Swalm & Associates, P.C.
We have served as the Company’s auditor since 2008.
Richardson, Texas
March 31, 2021
|
NEW CONCEPT ENERGY,
INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(amounts in thousands) |
| |
|
|
|
|
| |
|
December 31, |
| |
|
2020 |
|
2019 |
| Assets |
|
|
|
|
| |
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
|
| Cash
and cash equivalents |
|
$ |
27 |
|
|
$ |
22 |
|
| Current portion
note receivable (including $ $3,631 and $4,005 in 2020 and 2019
from related parties) |
|
|
3,683 |
|
|
|
4,046 |
|
| Other
current assets |
|
|
92 |
|
|
|
— |
|
| Total
current assets |
|
|
3,802 |
|
|
|
4,068 |
|
| |
|
|
|
|
|
|
|
|
| Property and
equipment, net of depreciation |
|
|
|
|
|
|
|
|
| Land, buildings and
equipment |
|
|
656 |
|
|
|
668 |
|
| |
|
|
|
|
|
|
|
|
| Note
Receivable |
|
|
153 |
|
|
|
214 |
|
| |
|
|
|
|
|
|
|
|
| Assets
held for sale |
|
|
— |
|
|
|
840 |
|
| |
|
|
|
|
|
|
|
|
| Total
assets |
|
$ |
4,611 |
|
|
$ |
5,790 |
|
| |
|
|
|
|
|
|
|
|
| The accompanying notes
are an integral part of these consolidated financial
statements. |
|
NEW
CONCEPT ENERGY, INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS - CONTINUED |
|
(amounts in thousands, except share amounts) |
| |
|
|
|
|
| |
|
December 31, |
| |
|
2020 |
|
2019 |
| Liabilities and
stockholders' equity |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable - trade (including $55 and
$180 in 2020 and 2019 due to related parties) |
|
$ |
80 |
|
|
$ |
226 |
|
|
Accrued expenses |
|
|
32 |
|
|
|
20 |
|
|
Current portion of long term debt |
|
|
52 |
|
|
|
44 |
|
| Total current
liabilities |
|
|
164 |
|
|
|
290 |
|
| |
|
|
|
|
|
|
|
|
| Long-term debt |
|
|
|
|
|
|
|
|
|
Notes payable less current portion |
|
|
122 |
|
|
|
177 |
|
| |
|
|
|
|
|
|
|
|
| Liabilities of
assets held for sale |
|
|
— |
|
|
|
2,914 |
|
|
|
|
|
|
|
|
|
|
|
| Total
liabilities |
|
|
286 |
|
|
|
3,381 |
|
| |
|
|
|
|
|
|
|
|
| Stockholders'
equity |
|
|
|
|
|
|
|
|
| Series B
convertible preferred stock, $10 par value, liquidation value |
|
|
|
|
|
|
|
|
| of $100
authorized 100 shares, issued and outstanding one share |
|
|
1 |
|
|
|
1 |
|
| Common stock, $.01
par value; authorized, 100,000,000 |
|
|
|
|
|
|
|
|
| shares; issued and
outstanding, 5,131,934 shares |
|
|
|
|
|
|
|
|
| at December 31,
2020 and 2019 |
|
|
51 |
|
|
|
51 |
|
|
Additional paid-in capital |
|
|
63,579 |
|
|
|
63,579 |
|
|
Accumulated deficit |
|
|
(59,306 |
) |
|
|
(61,222 |
) |
| |
|
|
4,325 |
|
|
|
2,409 |
|
| |
|
|
|
|
|
|
|
|
| Total
liabilities & stockholders' equity |
|
$ |
4,611 |
|
|
$ |
5,790 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| The accompanying notes
are an integral part of these consolidated financial
statements. |
|
NEW CONCEPT
ENERGY, INC. AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(amounts in thousands, except per share data) |
| |
|
|
|
|
|
|
| |
|
Year Ended December 31, |
| |
|
2020 |
|
2019 |
|
2018 |
| Revenue |
|
|
|
|
|
|
|
Rent |
|
$ |
101 |
|
|
$ |
98 |
|
|
$ |
123 |
|
| |
|
|
101 |
|
|
|
98 |
|
|
|
123 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
Expenses |
|
|
72 |
|
|
|
61 |
|
|
|
59 |
|
|
Corporate general and administrative |
|
|
396 |
|
|
|
418 |
|
|
|
359 |
|
| |
|
|
468 |
|
|
|
479 |
|
|
|
418 |
|
| Operating loss |
|
|
(367 |
) |
|
|
(381 |
) |
|
|
(295 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest income
(including $226 and $240 for the year ended 2020 and 2019 from
related parties) |
|
|
242 |
|
|
|
257 |
|
|
|
37 |
|
| Interest
expense |
|
|
(12 |
) |
|
|
(15 |
) |
|
|
(18 |
) |
| Other
income (expense), net |
|
|
85 |
|
|
|
199 |
|
|
|
11 |
|
|
|
|
|
315 |
|
|
|
441 |
|
|
|
30 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) from continuing
operations |
|
|
(52 |
) |
|
|
60 |
|
|
|
(265 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) from discontinued
operations |
|
|
|
|
|
|
|
|
|
|
|
|
| Gain
(loss) from discontinued operations |
|
|
(170 |
) |
|
|
(2,412 |
) |
|
|
(219 |
) |
|
Gain from Disposal of oil and gas
operations |
|
|
2,138 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
1,968 |
|
|
|
(2,412 |
) |
|
|
(219 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss)
applicable to common shares |
|
$ |
1,916 |
|
|
$ |
(2,352 |
) |
|
$ |
(484 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income
(loss) per common share-basic and diluted |
|
$ |
0.37 |
|
|
$ |
(0.46 |
) |
|
$ |
(0.21 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average common and equivalent
shares outstanding - basic |
|
|
5,132 |
|
|
|
5,132 |
|
|
|
2,358 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| The accompanying notes
are an integral part of these consolidated financial
statements. |
|
NEW CONCEPT ENERGY,
INC AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(amounts in thousands) |
|
|
| |
|
Year ended December 31, |
| |
|
2020 |
|
2019 |
|
2018 |
| Cash flows from
operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) from
continuing operations |
|
$ |
(52 |
) |
|
$ |
60 |
|
|
$ |
(265 |
) |
| Net income (loss) from discontinued
operations |
|
$ |
1,968 |
|
|
$ |
(2,412 |
) |
|
$ |
(219 |
) |
| Adjustments to reconcile net income
(loss) to net cash provided by (used in) operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale
of oil and gas operations |
|
|
(2,138 |
) |
|
|
— |
|
|
|
— |
|
|
Depreciation, depletion and
amortization |
|
|
12 |
|
|
|
18 |
|
|
|
43 |
|
|
Impairment of oil &
gas properties |
|
|
— |
|
|
|
2,285 |
|
|
|
— |
|
| Changes in operating assets and
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Other current and
non-current assets |
|
|
(197 |
) |
|
|
42 |
|
|
|
182 |
|
|
Accounts payable and other liabilities |
|
|
(128 |
) |
|
|
(232 |
) |
|
|
(378 |
) |
| Net cash provided
by (used) in operating activities |
|
|
(535 |
) |
|
|
239 |
|
|
|
(637 |
) |
| Cash flows from
investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note receivables - related
party |
|
|
— |
|
|
|
— |
|
|
|
(4,000 |
) |
|
Proceeds from the sale of
discontinued operations |
|
|
85 |
|
|
|
— |
|
|
|
— |
|
|
Fixed asset addition |
|
|
— |
|
|
|
(68 |
) |
|
|
— |
|
|
Collections of note receivable |
|
|
508 |
|
|
|
12 |
|
|
|
40 |
|
| Net cash provided
by (used) in investing activities |
|
|
593 |
|
|
|
(56 |
) |
|
|
(3,960 |
) |
| Cash flows from
financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment on notes payable |
|
|
(53 |
) |
|
|
(44 |
) |
|
|
(70 |
) |
|
Proceeds from the sale of
common stock |
|
|
— |
|
|
|
— |
|
|
|
4,609 |
|
| Net cash provided
by (used) in financing activities |
|
|
(53 |
) |
|
|
(44 |
) |
|
|
4,539 |
|
| Net increase (decrease) in cash and
cash equivalents |
|
|
5 |
|
|
|
(339 |
) |
|
|
(58 |
) |
| Cash and cash
equivalents at beginning of year |
|
|
22 |
|
|
|
361 |
|
|
|
419 |
|
| Cash and cash
equivalents at end of year |
|
$ |
27 |
|
|
$ |
22 |
|
|
$ |
361 |
|
| Supplemental disclosures of cash flow
information |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid for interest on notes
payable: |
|
$ |
15 |
|
|
$ |
15 |
|
|
$ |
18 |
|
| Cash paid for principal on notes
payable: |
|
$ |
47 |
|
|
$ |
44 |
|
|
$ |
70 |
|
| The accompanying notes
are an integral part of these consolidated financial
statements. |
NEW CONCEPT
ENERGY, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
EQUITY
(amounts in thousands)
| |
|
Series B |
|
|
|
Additional |
|
Accum- |
|
|
| |
|
Preferred
stock |
|
Common
Stock |
|
paid in |
|
ulated |
|
|
|
|
| |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
capital |
|
deficit |
|
Total |
| Balance at December 31, 2017 |
|
|
1 |
|
|
$ |
1 |
|
|
|
2,037 |
|
|
$ |
21 |
|
|
$ |
59,000 |
|
|
$ |
(58,386 |
) |
|
$ |
636 |
|
| Isaunce of Common Stock |
|
|
|
|
|
|
|
|
|
|
3,095 |
|
|
$ |
30 |
|
|
$ |
4,579 |
|
|
|
|
|
|
$ |
4,609 |
|
| Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(484 |
) |
|
|
(484 |
) |
| Balance at December 31, 2018 |
|
|
1 |
|
|
|
1 |
|
|
|
5,132 |
|
|
$ |
51 |
|
|
$ |
63,579 |
|
|
|
(58,870 |
) |
|
|
4,761 |
|
| Issuance of Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,352 |
) |
|
|
(2,352 |
) |
| Balance at December 31, 2019 |
|
|
1 |
|
|
|
1 |
|
|
|
5,132 |
|
|
$ |
51 |
|
|
$ |
63,579 |
|
|
|
(61,222 |
) |
|
|
2,409 |
|
| Issuance of Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,916 |
|
|
|
1,916 |
|
| Balance at December 31, 2020 |
|
|
1 |
|
|
$ |
1 |
|
|
|
5,132 |
|
|
$ |
51 |
|
|
$ |
63,579 |
|
|
$ |
(59,306 |
) |
|
$ |
4,325 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| The
accompanying notes are an integral part of these consolidated
financial statements. |
New Concept
Energy Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
NOTE A – BUSINESS DESCRIPTION AND PRESENTATION
The Company, owns approximately 190 acres of land located in
Parkersburg West Virginia. Located on the land are four structures
totaling approximately 53,000 square feet. Of this total area the
main industrial / office building contains approximately 24,800
square feet of which as of December 31, 2020 approximately 16,000
of industrial area is leased for $101,000 per annum.
In August 2020 the Company sold its oil and gas wells and mineral
leases which were located in Ohio and West Virginia. The oil and
operations for the periods included in this report are reflected as
discontinued operations.
The
Company’s ability to meet current cash obligations relies on cash
received from operations and the collection of notes receivable,
including a $3.6 million dollar receivable from a related
party.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A
summary of the significant accounting policies applied in the
preparation of the accompanying consolidated financial statements
follows:
Principles of Consolidation
The consolidated financial statements include the accounts of New
Concept Energy, Inc. and its majority-owned subsidiaries
(collectively, the “Company”, New Concept or “NCE”) and are
prepared on the basis of accounting principles generally accepted
in the United States of America “GAAP”. All significant
intercompany transactions and accounts have been eliminated.
Certain accounting balances have been reclassified to conform to
the current year presentation.
Depreciation
Depreciation is provided for in amounts sufficient to relate the
cost of property and equipment to operations over their estimated
service lives, ranging from 3 to 40 years. Depreciation is
computed by the straight-line method.
Depreciation expense, which is included in operations, was $12,000,
$18,000 and $43,000 for 2020, 2019 and 2018, respectively.
Segments
The Company operates one primary business segment: real estate
rental. Segment data is provided in “Note J” to these
consolidated financial statements.
On August 31, 2020 the Company sold its oil and gas segment which
is now reflected as Discontinued Operations.
Accounting for Leases
Leases of property, plant and equipment where the Company assumes
substantially all the benefits and risks of ownership are
classified as finance leases. Finance leases are capitalized at the
estimated present value of the underlying lease payments. Each
lease payment is allocated between the liability and finance
charges so as to achieve a constant rate on the finance balance
outstanding. The corresponding rental obligations, net of finance
charges, are included in other long-term payables. The interest
element of the finance charge is charged to the income statement
over the lease period. Property, plant and equipment acquired under
finance leasing contracts are depreciated over the useful life of
the asset.
Leases of assets under which all the risks and benefits of
ownership are effectively retained by the lessor are classified as
operating leases. Payments made under operating leases are charged
to the income statement on a straight-line basis over the period of
the lease. When an operating lease is terminated before
the lease period has expired, any payment required to be made to
the lessor by way of penalty is recognized as an expense in the
period in which termination takes place.
Revenue Recognition
Rental income for property leases are recorded when due from the
tenant and is recognized monthly as it is earned.
Use of Estimates
In preparing financial statements in conformity with accounting
principles generally accepted in the United States of America,
management is required to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and revenues and expenses during
the reporting period. Actual results could differ from
those estimates.
Cash Equivalents
The Company considers all short-term deposits and money market
investments with a maturity of less than three months to be cash
equivalents.
Impairment of Notes Receivable
Notes receivable are identified as impaired when it is probable
that interest and principal will not be collected according to the
contractual terms of the note agreements. The accrual of
interest is discontinued on such notes, and no income is recognized
until all past due amounts of principal and interest are recovered
in full.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets and certain identifiable
intangibles for impairment when events or changes in circumstances
indicate that the carrying amount of the assets may not be
recoverable. In reviewing recoverability, the Company
estimates the future cash flows expected to result from use of the
assets and eventually disposing of them. If the sum of
the expected future cash flows (undiscounted and without interest
charges) is less than the carrying amount of the asset, an
impairment loss is recognized based on the asset’s fair value.
The Company determines the fair value of assets to be disposed of
and records the asset at the lower of fair value less disposal
costs or carrying value. Assets are not depreciated while held for
disposal.
Sales of Real Estate
Gains on sales of real estate are recognized to the extent
permitted by Accounting Standards Codification Topic 360-20, “Real
Estate Sales – Real Estate Sales”, (“ASC 360-20”). Until the
requirements of ASC 360-20 have been met for full profit
recognition, sales are accounted for by the installment or cost
recovery method, whichever is appropriate.
Income Taxes
The Company accounts for income taxes in accordance with Accounting
Standards Codification, (“ASC”) No. 740, “Accounting for
Income Taxes”. ASC 740 requires an asset and liability approach to
financial accounting for income taxes. In the event differences
between the financial reporting basis and the tax basis of the
Company’s assets and liabilities result in deferred tax assets, ASC
740 requires an evaluation of the probability of being able to
realize the future benefits indicated by such assets. A valuation
allowance is provided for a portion or all of the deferred tax
assets when there is an uncertainty regarding the Company’s ability
to recognize the benefits of the assets in future years.
Recognition of the benefits of deferred tax assets will require the
Company to generate future taxable income. There is no assurance
that the Company will generate earnings in future years. Since
management could not determine the likelihood that the benefit of
the deferred tax asset would be realized, no deferred tax asset was
recognized by the Company.
Recent Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12. Income Taxes
(Topic 740): Simplifying the Accounting for Income Taxes. The
amendments in this Update simplify the accounting for income taxes
by removing certain exceptions from ASC 740. Also, the amendments
in this Update simplify the accounting for income tax by requiring
that an entity recognize a franchise tax (or similar tax) that is
partially based on income as an income-based tax, requiring that an
entity evaluate when a step up in the tax basis of goodwill should
be considered part of the business combination, and other targeted
changes. The effective date of the amendments is for fiscal years,
and interim periods within those years, beginning after December
15, 2020. The adoption of the standard on January 1, 2020, did not
have a material impact on our financial position and results of
operations.
NOTE C– RELATED PARTIES
Commencing in February 2008, three publicly traded entities needed
a chief financial officer, American Realty Investors, Inc. (“ARL”),
Transcontinental Realty Investors, Inc. (“TCI”) and Income
Opportunity Realty Investors, Inc. (“IOR”), Mr. Bertcher, is a
certified public accountant and has a long history in their
industry. New Concept made arrangements with the three entities
whereby, in addition to his responsibilities to New Concept Mr.
Bertcher would be Chief Financial Officer for the three entities.
Mr. Bertcher was paid directly for such services by the contractual
advisor for the three companies. Mr. Bertcher resigned as an
officer of American Realty Investors, Inc. (“ARI”) and
Transcontinental Realty Investors, Inc. (“TCI”) on June 30, 2019,
but continued on as an officer of Income Opportunity Realty
Investors, Inc. (“IOR”).
Beginning in 2011 Pillar Income Asset Management (“Pillar”) became
the contractual advisor to the three publically traded entities.
Pillar is a wholly owned subsidiary of RAI. In addition to the
relationship with Mr. Bertcher, New Concept conducts business with
Pillar whereby Pillar provided the Company with services including
processing payroll, acquiring insurance and other administrative
matters. The Company believes that by purchasing these services
through certain large entities it can get lower costs and better
service. Pillar does not charge the Company a fee for providing
these services. The Company reimburses Pillar for the direct cost
for such services.
Realty Advisors, Inc., (“RAI”) is a privately owned investment
company and by virtue of its stock ownership, the controlling
shareholder for the three public entities. Mr. Bertcher was an
officer of RAI until June 30, 2019.
NOTE D – DISCONTINUED OPERATIONS
On August 31, 2020, the Company sold its entire oil and gas
operation for $85,000 to an independent third party. In prior years
the Company accrued a liability of $2,745,000 to plug and abandon
the existing wells. This obligation was assumed by the buyer. Upon
the sale of the wells the Company recorded a gain on sale of
$2,138,000.
Also included in discontinued operations are net operating expenses
the Company incurred during the period presented. For the years
ended December 31, 2020, 2019 and 2018 the Company recorded
operating losses of $170,000, $2,412,000 and $219,000. In September
2019 the Company wrote down the accounting value of its oil and gas
reserves by $2,285,000.
NOTE E – NOTES RECEIVABLE
Notes Receivable are comprised of the following (in thousands):
| |
|
|
Interest |
|
|
|
|
|
|
|
| |
|
|
Rate |
|
2020 |
|
2019 |
| American Realty Investors, Inc.
(a related party) receivable upon maturity |
|
|
|
|
|
|
|
|
|
|
|
|
| in September 2021 |
|
|
6% |
|
$ |
3,631 |
|
|
$ |
4,005 |
|
| Third Party
receivable payable monthly and matures in July 2025 |
|
|
6% |
|
|
205 |
|
|
|
255 |
|
| |
|
|
|
|
|
3,836 |
|
|
|
4,260 |
|
| less:
current portion of notes receivable |
|
|
|
|
|
3,683 |
|
|
|
4,046 |
|
| Notes
Receivable |
|
|
|
|
$ |
153 |
|
|
$ |
214 |
|
The Company holds a note receivable from a non related party. The
original note was $415,000 payable in 120 monthly payments at 6%
interest. Balance due at December 31, 2020 is $205,000 with $52,000
due currently.
NOTE F – FIXED ASSETS
Land, building and furniture, fixtures and equitpment are recorded
at cost incurred to acquire the assets.
At December 31, 2020, fixed assets are as follows:
| |
|
2020 |
|
2019 |
| Land and
improvements |
|
$ |
432 |
|
|
$ |
432 |
|
| Buildings and improvements |
|
|
341 |
|
|
|
341 |
|
| Total fixed assets |
|
|
773 |
|
|
|
773 |
|
|
Less: Accumulated depreciation |
|
|
(117 |
) |
|
|
(105 |
) |
| Net Fixed
Assets |
|
$ |
656 |
|
|
$ |
668 |
|
NOTE G – NOTES PAYABLE
Notes payable is comprised of the following (in thousands):
| |
|
2020 |
|
2019 |
| |
|
|
|
|
| Bank Debt |
|
$ |
192 |
|
|
$ |
245 |
|
| Less current
portion of long term debt |
|
$ |
(52 |
) |
|
$ |
(44 |
) |
| |
|
$ |
140 |
|
|
$ |
201 |
|
| Less deferred
borrowing costs - net of amortization |
|
$ |
(18 |
) |
|
$ |
(24 |
) |
| |
|
$ |
122 |
|
|
$ |
177 |
|
Bank debt represent loan from a bank to finance drilling and
equipment at the Company’s oil and gas operation. The interest rate
ranges from 5% to 5 ½ %. The loans are collateralized by the
Company’s oil & gas leases as well as real property
and equipment.
Aggregate annual principal maturities of long-term debt at December
31, 2020 are as follows (in thousands):
| |
2021 |
|
|
|
52 |
|
| |
2022 |
|
|
|
55 |
|
| |
2023 |
|
|
|
58 |
|
| |
2024 |
|
|
|
27 |
|
| |
|
|
|
$ |
192 |
|
NOTE H – INCOME TAXES
At December 31, 2020, the Company had net operating loss carry
forwards of approximately $8.5 million, which expire between 2021
and 2036.
Forms
1120, U.S, Corporation Income Tax Returns, for the years
ending December 31, 2020, 2019, 2018 are subject to examination, by
the IRS, generally for three years after they are filed.
The
following table presents the principal reasons for the difference
between the Company's effective tax rate and the United States
statutory income tax rate.
| |
|
2020 |
|
2019 |
|
2018 |
| Earned income tax at statutory
rate |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Net operating loss utilization |
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Deferred tax asset from
NOL carry forwards |
|
|
1,786 |
|
|
|
2,200 |
|
|
|
2,183 |
|
| Valuation
allowance |
|
|
(1,786 |
) |
|
|
(2,200 |
) |
|
|
(2,183 |
) |
| Reported income
tax expense (benefit) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Effective
income tax rate |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
NOTE I – STOCKHOLDERS’ EQUITY
Outstanding Preferred Stock
Preferred stock consists of the following (amounts in
thousands):
| |
|
Year Ended |
| |
|
December 31, |
| |
|
2020 |
|
2019 |
Series B convertible preferred stock, $10 par value, liquidation
value of
$100, authorized 100 shares, issued and outstanding one share |
|
|
1 |
|
|
|
1 |
|
The Series B
preferred stock has a liquidation value of $100 per share. The
right to convert expired April 30, 2003. Dividends at
a rate of 6% are payable
in cash or preferred shares at the option of the
Company.
NOTE J – CONTINGENCIES
The Company has been named as a defendant in lawsuits in the
ordinary course of business. Management is of the opinion that
these lawsuits will not have a material effect on the financial
condition, results of operations or cash flows of the Company.
NOTE K – OPERATING SEGMENTS
The following table reconciles the segment information to the
corresponding amounts in the Consolidated Statements of Operations
and assets from continuing operations:
|
Year ended December 31, 2020 |
|
Current Operations |
|
Corporate |
|
Total |
|
Discontinued Operations Oil & Gas |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Operating revenue |
|
$ 101 |
|
$ - |
|
$ 101 |
|
$ 225 |
| |
|
|
|
|
|
|
|
|
| Operating expenses |
|
60 |
|
390 |
|
450 |
|
395 |
| Depreciation, depletion and
amortization |
|
12 |
|
6 |
|
18 |
|
- |
| Impairment of oil and gas
properties |
|
- |
|
- |
|
- |
|
- |
| Total Operating Expenses |
|
72 |
|
396 |
|
468 |
|
395 |
| Interest income |
|
- |
|
242 |
|
242 |
|
- |
| Interest expense |
|
- |
|
(12) |
|
(12) |
|
- |
| Gain in sale of oil & gas
operations |
|
- |
|
- |
|
- |
|
2,138 |
| Other income (expense), net |
|
- |
|
85 |
|
85 |
|
- |
| Segment operating income (loss) |
|
$ 29 |
|
$ (81) |
|
$ (52) |
|
$ 1,968 |
| |
|
|
|
|
|
|
|
|
|
Year ended December 31, 2019 |
|
Current Operations |
|
Corporate |
|
Total |
|
Discontinued Operations Oil & Gas |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Operating revenue |
|
$ 98 |
|
$ - |
|
$ 98 |
|
$ 492 |
| |
|
|
|
|
|
|
|
|
| Operating expenses |
|
50 |
|
412 |
|
462 |
|
550 |
| Depreciation, depletion and
amortization |
|
11 |
|
6 |
|
17 |
|
69 |
| Impairment of oil and gas
properties |
|
- |
|
- |
|
- |
|
2,285 |
| Total Operating Expenses |
|
61 |
|
418 |
|
479 |
|
2,904 |
| Interest income |
|
- |
|
257 |
|
257 |
|
- |
| Interest expense |
|
- |
|
(15) |
|
(15) |
|
- |
| Other income (expense), net |
|
- |
|
199 |
|
199 |
|
- |
| Segment operating income (loss) |
|
$ 37 |
|
$ 23 |
|
$ 60 |
|
$ (2,412) |
| |
|
|
|
|
|
|
|
|
|
Year ended December 31, 2018 |
|
Current Operations |
|
Corporate |
|
Total |
|
Discontinued Operations Oil & Gas |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Operating revenue |
|
$ 123 |
|
$ - |
|
$ 123 |
|
$ 559 |
| |
|
|
|
|
|
|
|
|
| Operating expenses |
|
50 |
|
353 |
|
403 |
|
540 |
| Depreciation, depletion and
amortization |
|
9 |
|
6 |
|
15 |
|
238 |
| Impairment of oil and gas
properties |
|
- |
|
- |
|
- |
|
- |
| Total Operating Expenses |
|
59 |
|
359 |
|
418 |
|
778 |
| Interest income |
|
- |
|
37 |
|
37 |
|
- |
| Interest expense |
|
- |
|
(18) |
|
(18) |
|
- |
| Other income (expense), net |
|
- |
|
11 |
|
11 |
|
- |
| Segment operating income (loss) |
|
$ 64 |
|
$ (329) |
|
$ (265) |
|
$ (219) |
NOTE L - QUARTERLY DATA (UNAUDITED)
The table below reflects the Company’s selected quarterly
information for the years ended December 31, 2020, 2017 and
2016. Amounts shown are in thousands except per share
amounts.
|
|
First |
|
Second |
|
Third |
|
Fourth |
| Year ended
December 31, 2020 |
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
| |
|
|
|
|
|
|
|
| Revenue |
$ 25 |
|
$ 25 |
|
$ 25 |
|
$ 26 |
| Operating (expense) |
(18) |
|
(18) |
|
(18) |
|
(18) |
| Corporate general and administrative expense |
(104) |
|
(127) |
|
(65) |
|
(100) |
| Other income (expense) net |
60 |
|
60 |
|
137 |
|
58 |
| Income (loss) allocable to common shareholders |
(97) |
|
(137) |
|
2,182 |
|
(32) |
| Income (loss) per common share – basic |
($0.02) |
|
($0.03) |
|
$0.43 |
|
$0.00 |
| |
|
|
|
|
|
|
|
|
|
First |
|
Second |
|
Third |
|
Fourth |
| Year ended
December 31, 2019 |
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
| |
|
|
|
|
|
|
|
| Revenue |
$ 24 |
|
$ 24 |
|
$ 25 |
|
$ 25 |
| Operating (expense) |
(15) |
|
(15) |
|
(15) |
|
(16) |
| Corporate general and administrative expense |
(88) |
|
(134) |
|
(92) |
|
(104) |
| Other income (expense) net |
60 |
|
213 |
|
106 |
|
62 |
| Income (loss) allocable to common shareholders |
126 |
|
(141) |
|
(2,320) |
|
(17) |
| Income (loss) per common share – basic |
$0.02 |
|
($0.03) |
|
($0.45) |
|
$0.00 |
| |
|
|
|
|
|
|
|
|
|
First |
|
Second |
|
Third |
|
Fourth |
| Year ended
December 31, 2018 |
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
| |
|
|
|
|
|
|
|
| Revenue |
$ 37 |
|
$ 36 |
|
$ 25 |
|
$ 25 |
| Operating (expense) |
(15) |
|
(15) |
|
(15) |
|
(14) |
| Corporate general and administrative expense |
(75) |
|
(108) |
|
(99) |
|
(77) |
| Other income (expense) net |
5 |
|
5 |
|
5 |
|
15 |
| Income (loss) allocable to common shareholders |
$ (134) |
|
$ (174) |
|
$ (121) |
|
$ (4) |
| Income (loss) per common share – basic |
($0.07) |
|
($0.08) |
|
($0.06) |
|
$0.00 |
NOTE M: LIQUIDITY
The Company’s ability to meet current cash obligations relies in
cash received from operations and the collection of notes
receivable, including a $3.6 million dollar receivable from a
related party.
NOTE N – SUBSEQUENT EVENTS
During 2021, a strain of coronavirus (“COVID – 19”) was reported
worldwide, resulting in decreased economic activity and concerns
about the pandemic, which would adversely affect the broader global
economy. At this point, the extent to which COVID – 19 may impact
the global economy and our business is uncertain, but pandemics or
other significant public health events could have a material
adverse effect on our business and results of operations.
The Company has evaluated subsequent events through March 31, 2021,
the date the financial statements were available to be issued, and
has determined that there are none to be reported.
The following documents are filed as exhibits (or are incorporated
by reference as indicated) into this Report:
|
Exhibit
Designation |
Exhibit
Description |
| 3.1 |
Articles
of Incorporation of Medical Resource Companies of America
(incorporated by reference to Exhibit 3.1 to Registrant’s Form S-4
Registration Statement No. 333-55968 dated December 21,
1992) |
| 3.2 |
Amendment
to the Articles of Incorporation of Medical Resource Companies of
America (incorporated by reference to Exhibit 3.5 to Registrant’s
Form 8-K dated April 1, 1993) |
| 3.3 |
Restated
Articles of Incorporation of Greenbriar Corporation (incorporated
by reference to Exhibit 3.1.1 to Registrant’s Form 10-K dated
December 31, 1995) |
| 3.4 |
Amendment
to the Articles of Incorporation of Medical Resource Companies of
America (incorporated by reference to Exhibit to Registrant’s PRES
14-C dated February 27, 1996) |
| 3.5 |
Certificate
of Decrease in Authorized and Issued Shares effective November 30,
2001 (incorporated by reference to Exhibit 2.1.7 to Registrant’s
Form 10-K dated December 31, 2002) |
| 3.6 |
Certificate
of Designations, Preferences and Rights of Preferred Stock dated
May 7, 1993 relating to Registrant’s Series B Preferred Stock
(incorporated by reference to Exhibit 4.1.2 to Registrant’s Form
S-3 Registration Statement No. 333-64840 dated June 22,
1993) |
| 3.7 |
Certificate
of Voting Powers, Designations, Preferences and Rights of
Registrant’s Series F Senior Convertible Preferred Stock dated
December 31, 1997 (incorporated by reference to Exhibit 2.2.2 of
Registrant’s Form 10-KSB for the fiscal year ended December 31,
1997) |
| 3.8 |
Certificate
of Voting Powers, Designations, Preferences and Rights of
Registrant’s Series G Senior Non-Voting Convertible Preferred Stock
dated December 31, 1997 (incorporated by reference to Exhibit 2.2.3
of Registrant’s Form 10-KSB for the fiscal year ended December 31,
1997) |
| 3.9 |
Certificate
of Designations dated October 12, 2004 as filed with the Secretary
of State of Nevada on October 13, 2004 (incorporated by reference
to Exhibit 3.4 of Registrant’s Current Report on Form 8-K for event
occurring October 12, 2004) |
| 3.10 |
Certificate
of Amendment to Articles of Incorporation effective February 8,
2005 (incorporated by reference to Exhibit 3.5 of Registrant’s
Current Report on Form 8-K for event occurring February 8,
2005) |
| 3.11 |
Certificate
of Amendment to Articles of Incorporation effective March 21, 2007
(incorporated by reference to Exhibit 3.13 of Registrant’s Current
Report on Form 8-K for event occurring March 21, 2005) |
| 3.12 |
Amended
and restated bylaws of New Concept Energy, Inc. dated November 18,
2008. |
| 10.1 |
Registrant’s
1997 Stock Option Plan (filed as Exhibit 4.1 to Registrant’s Form
S-8 Registration Statement, Registration No. 333-33985 and
incorporated herein by this reference). |
| 10.2 |
Registrant’s
2000 Stock Option Plan (filed as Exhibit 4.1 to Registrant’s Form
S-8 Registration Statement, Registration No. 333-50868 and
incorporated herein by this reference) |
| 14.0 |
Code
of Ethics for Senior Financial Officers (incorporated by reference
to Exhibit 14.0 to Registrant’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2003) |
| 21.1* |
Subsidiaries
of the Registrant |
| 31.1* |
Rule
13a-14(a) Certification by Principal Executive Officer and Chief
Financial Officer |
| 32.1* |
Certification
of Principal Executive Officer and Chief Financial Officer pursuant
to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
| 99.1* |
Reserve
Study dated March 16, 2015 prepared by Lee Keeling and Associates,
Inc is included as an exhibit |
| 99.2 |
Shared
Services Agreement effective December 31, 2010 (incorporated by
reference to Exhibit 99.2 to Registrants Form 10K/A for the year
ended December 31, 2011 filed March 21, 2013) |
| 101 |
Interactive
data files pursuant to Rule 405 of Regulation S-T |
| |
| *Filed
herewith. |
| |
| |
|
|
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| |
NEW
CONCEPT ENERGY, INC. |
| |
|
| March
31, 2021 |
By: |
/s/
Gene S. Bertcher |
| |
Gene
S. Bertcher, Principal Executive |
| |
Officer,
President and Chief Financial Officer |
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons in
the capacities and on the dates indicated.
| Signature |
Title |
Date |
|
/s/ Gene S. Bertcher
Gene
S. Bertcher
|
Chairman,
President, Principal Executive Officer, Chief Financial Officer and
Director |
March
31, 2021 |
|
/s/ Raymond D Roberts
Raymond D Roberts
|
Director |
March 31, 2021 |
|
/s/ Victor L. Lund
Victor L. Lund
|
Director |
March 31, 2021 |
|
/s/ Dan Locklear
Dan
Locklear
|
Director |
March 31, 2021 |
|
/s/ Cecilia Maynard
Cecilia Maynard
|
Director |
March 31, 2021 |
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