New Concept Energy, Inc. (GBR) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This filing covers the quarterly period ended March 31, 2026. New Concept Energy, Inc. (NCE) operates primarily as a real estate holding company owning approximately 190 acres in Parkersburg, West Virginia, including four structures totaling 53,000 square feet. The company leases approximately 16,000 square feet of its main industrial/office building under an operating lease expiring in October 2029. Additionally, NCE provides management and administrative services for oil and gas operations sold in 2020, earning a 10% fee on gross revenue. The company is classified as a smaller reporting company and an emerging growth company.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $39,000 | $38,000 |
| Net Loss | $(14,000) | $(20,000) |
| Net Loss Per Share | $(0.01) | $(0.01) |
| Cash and Cash Equivalents | $318,000 | $333,000 |
| Total Assets | $4,541,000 | $4,560,000 |
| Total Liabilities | $64,000 | $69,000 |
| Stockholders' Equity | $4,477,000 | $4,517,000 |
| Operating Cash Flow | $(65,000) | $(30,000) |
Revenue Breakdown (Q1 2026): Rent ($26,000) and Management Fees ($13,000).
Expense Breakdown (Q1 2026): Operating Expenses ($13,000) and Corporate G&A ($77,000).
Other Income: Interest income of $37,000, primarily from a related-party note receivable.
Material Changes vs. Prior Period
- Net Loss Improvement: The net loss decreased by $6,000 (30%) compared to Q1 2025, driven primarily by a reduction in Corporate General and Administrative expenses from $89,000 to $77,000.
- Revenue Growth: Total revenue increased slightly by $1,000, with management fees rising by $1,000 while rental income remained flat at $26,000.
- Cash Flow Deterioration: Net cash used in operating activities increased to $(65,000) from $(30,000) in the prior year, largely due to a $49,000 increase in other current assets.
- Liquidity: Cash balances declined by $65,000 during the quarter, ending at $318,000.
Outlook, Risks, and Contingencies
Management Commentary: The company is evaluating business opportunities to generate additional income and cash flow. Management notes that operating results for the quarter are not necessarily indicative of future results.
Risks and Contingencies:
- Liquidity Risk: The company relies on interest income from a related-party note and rental income. Continued operating losses may require additional financing.
- Related Party Dependence: A significant portion of assets ($3.54 million) and interest income ($34,000 of $37,000 total) is tied to a note receivable from American Realty Investors, Inc., a related party. The note bears a variable interest rate (SOFR + spread) and matures September 30, 2027.
- Deferred Tax Assets: The company maintains a 100% valuation allowance against its deferred tax assets due to uncertainty regarding future taxable income.
- Market Risk: The company has no debt obligations but is exposed to interest rate fluctuations on its variable-rate note receivable.
Investor Verification Checklist
- Related Party Note: Verify the collectability and terms of the $3.54 million note receivable from American Realty Investors, Inc., which represents the majority of the company's assets.
- Lease Expiration: Confirm the status of the primary tenant lease expiring October 1, 2029, which generates the bulk of operating revenue.
- Cash Burn Rate: Assess the sustainability of the current cash position ($318,000) given the negative operating cash flow of $65,000 for the quarter.
- Corporate Expenses: Review the composition of the $77,000 in corporate G&A expenses, including the $9,000 fee paid to Pillar Income Asset Management for administrative services.