New Concept Energy's Q3 Loss Widens Amid Rising Expenses

Ticker: GBR · Form: 10-Q · Filed: 2025-11-12T00:00:00.000Z

Sentiment: bearish

Topics: Real Estate, Energy Management, Small Cap, Net Loss, Cash Flow Negative, Related Party Transactions, Liquidity Risk

TL;DR

**GBR is bleeding cash and its related-party lifeline is shrinking, making it a risky bet for any investor looking for stability.**

AI Summary

New Concept Energy, Inc. (GBR) reported a net loss of $20,000 for the three months ended September 30, 2025, a significant increase from the $4,000 net loss in the same period of 2024. For the nine months ended September 30, 2025, the company posted a net loss of $58,000, a stark contrast to the net income of $1,000 reported for the nine months ended September 30, 2024. Total revenues increased slightly to $39,000 for the three months ended September 30, 2025, up from $37,000 in 2024, driven by a rise in management fees from $11,000 to $13,000. However, total operating expenses climbed to $102,000 for the quarter, compared to $93,000 in the prior year, primarily due to an increase in corporate general and administrative expenses from $79,000 to $88,000. Interest income from related parties decreased from $50,000 to $40,000 for the quarter, contributing to the larger net loss. The company's cash and cash equivalents decreased to $307,000 at September 30, 2025, from $363,000 at December 31, 2024, reflecting negative cash flow from operating activities of $56,000 for the nine-month period.

Why It Matters

New Concept Energy's widening net loss and declining cash reserves signal potential liquidity challenges for investors. The company's reliance on related-party interest income, which decreased by 20% this quarter, highlights a vulnerability in its revenue streams. For employees, the continued losses and lack of clear growth initiatives could raise concerns about job security. Customers of its leased property and management services might see limited investment in property improvements or service enhancements. In a competitive market, GBR's struggle to generate consistent profit and positive cash flow makes it a less attractive option compared to more stable real estate or energy management firms.

Risk Assessment

Risk Level: high — New Concept Energy reported a net loss of $58,000 for the nine months ended September 30, 2025, a significant deterioration from a $1,000 net income in the prior year. Cash and cash equivalents decreased by $56,000 to $307,000, and the company has an accumulated deficit of $59,152,000, indicating persistent unprofitability and limited liquidity.

Analyst Insight

Investors should avoid GBR given its consistent net losses, declining cash position, and reliance on related-party transactions. The company's inability to generate positive cash flow from operations and its accumulated deficit suggest a high-risk investment with limited upside potential.

Financial Highlights

debt To Equity
N/A
revenue
$39,000
operating Margin
-164.1%
total Assets
$4,542,000
total Debt
$63,000
net Income
$ -20,000
eps
$ -0.01
gross Margin
N/A
cash Position
$307,000
revenue Growth
+5.4%

Revenue Breakdown

SegmentRevenueGrowth
Rent$26,0000.0%
Management Fee$13,000+18.2%

Key Numbers

Key Players & Entities

FAQ

What were New Concept Energy's revenues for the three months ended September 30, 2025?

New Concept Energy's total revenues for the three months ended September 30, 2025, were $39,000, consisting of $26,000 from rental income and $13,000 from management fees.

How did New Concept Energy's net income change from Q3 2024 to Q3 2025?

New Concept Energy's net income shifted from a net loss of $4,000 in Q3 2024 to a net loss of $20,000 in Q3 2025, representing a significant increase in losses.

What is the status of New Concept Energy's cash and cash equivalents?

At September 30, 2025, New Concept Energy had cash and cash equivalents of $307,000, a decrease from $363,000 at December 31, 2024.

Does New Concept Energy have any significant related-party transactions?

Yes, New Concept Energy has an unsecured Note Receivable of $3,542,000 from American Realty Investors, Inc., a related party, due September 30, 2027, bearing interest at 4.24% as of September 30, 2025.

What are New Concept Energy's primary business operations?

New Concept Energy primarily owns and leases approximately 16,000 square feet of an industrial/office building in Parkersburg, West Virginia, and provides consulting management services for oil and gas operations.

What is New Concept Energy's accumulated deficit?

As of September 30, 2025, New Concept Energy's accumulated deficit was $59,152,000, indicating substantial historical losses.

What is New Concept Energy's risk level for investors?

New Concept Energy presents a high risk for investors due to its widening net losses, declining cash reserves, significant accumulated deficit, and reliance on related-party interest income.

How much did New Concept Energy pay in management fees to Pillar Income Asset Management?

New Concept Energy paid Pillar Income Asset Management $9,000 for services during the three months ended September 30, 2025, and $27,000 for the nine months ended September 30, 2025.

What is the outlook for New Concept Energy's net operating loss carryforwards?

New Concept Energy has approximately $6.5 million in net operating loss carryforwards, but a full valuation allowance has been recorded due to uncertainty regarding the realization of these deferred tax assets.

Is New Concept Energy considered a shell company?

Yes, New Concept Energy indicated by check mark that it is a shell company as defined in Rule 12b-2 of the Exchange Act.

Risk Factors

Industry Context

New Concept Energy, Inc. operates in a sector that can be capital-intensive and subject to market volatility. While the company's current activities appear focused on management fees and rent, the broader energy sector faces ongoing shifts towards renewable sources and evolving regulatory landscapes. Competition can be fierce, with established players and emerging companies vying for market share and investment.

Regulatory Implications

The company must adhere to standard financial reporting regulations, including accurate disclosure of its financial condition and results of operations. Any changes in tax laws or accounting standards could impact the valuation of its deferred tax assets and future profitability. Compliance with any industry-specific regulations relevant to its operations is also critical.

What Investors Should Do

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Key Dates

Glossary

Accumulated deficit
The total net losses of a company since its inception that have not been offset by net income. (Indicates the company's history of unprofitability, with a current deficit of $59,152,000.)
Valuation allowance
An account used to reduce the carrying value of deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. (A 100% valuation allowance on deferred tax assets signifies management's doubt about future taxable income to utilize these benefits.)
Net operating loss carryforwards
Tax deductions that can be carried forward to offset taxable income in future years. (The company has $6.5 million in these, but they are unlikely to be realized due to the valuation allowance.)
Related party
A person or entity that has the ability to control or significantly influence the operating decisions of another entity. (Key income and receivables are with related parties, such as American Realty Investors, Inc., which can present unique risks.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, New Concept Energy, Inc. has seen a significant deterioration in its financial performance. Total revenues have increased slightly from $110,000 to $117,000, driven by higher management fees. However, total operating expenses have also risen from $274,000 to $303,000. This combination has led to a substantial swing from a net income of $1,000 to a net loss of $58,000 for the nine months ended September 30, 2025. The company's cash position has also declined, and the accumulated deficit has grown, underscoring a bearish trend.

Filing Stats: 4,629 words · 19 min read · ~15 pages · Grade level 16.3 · Accepted 2025-11-12 07:08:53

Key Financial Figures

Filing Documents

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) 3 Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Operations 5 Condensed Consolidated Statements of Changes in Stockholders' Equity 6 Condensed Consolidated Statements of Cash Flows 7 Notes To Condensed Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 13

Controls and Procedures

Item 4. Controls and Procedures 13

: OTHER INFORMATION

PART II: OTHER INFORMATION 14

Exhibits

Item 6. Exhibits 14

Signatures

Signatures 15 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements NEW CONCEPT ENERGY, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands) September 30, 2025 December 31, 2024 (Unaudited) (Audited) Assets Current assets Cash and cash equivalents $ 307 $ 363 Other current assets 27 9 Total current assets 334 372 Property and equipment, net of depreciation Land, buildings and equipment 626 636 Note and interest receivable - related party Note receivable 3,542 3,542 Interest receivable 40 44 Note and interest receivable - related party 3,582 3,586 Total assets $ 4,542 $ 4,594 The accompanying notes are an integral part of these condensed consolidated

financial statements

financial statements. 3 Table of Contents NEW CONCEPT ENERGY, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS - CONTINUED (amounts in thousands, except share and par value amount) September 30, 2025 December 31, 2024 (Unaudited) (Audited) Liabilities and stockholders' equity Current liabilities Accounts payable $ 27 $ 20 Accrued expenses 36 37 Total current liabilities 63 57 Stockholders' equity Preferred stock, Series B, $ 10 par value; authorized 100,000 shares, 1 issued and outstanding at September 30, 2025 and December 31, 2024 1 1 Common stock, $ .01 par value; authorized, 100,000,000 shares; issued and outstanding, 5,131,934 shares at September 30, 2025 and December 31, 2024 51 51 Additional paid-in capital 63,579 63,579 Accumulated deficit ( 59,152 ) ( 59,094 ) Total stockholders' equity 4,479 4,537 Total liabilities & stockholders' equity $ 4,542 $ 4,594 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents NEW CONCEPT ENERGY, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (amounts in thousands, except per share data) For the Three Months ended September 30, For the Nine Months ended September 30, 2025 2024 2025 2024 Revenue Rent $ 26 $ 26 $ 78 $ 76 Management Fee 13 11 39 34 Total Revenues 39 37 117 110 Operating Expenses Operating Expenses 14 14 41 39 Corporate general and administrative 88 79 262 235 Total Operating Expenses 102 93 303 274 Loss from operations ( 63 ) ( 56 ) ( 186 ) ( 164 ) Other Income Interest income from related parties 40 50 117 160 Interest income from a third party 3 2 11 5 Total Other Income 43 52 128 165 Net income (loss) applicable to common shares $ ( 20 ) $ ( 4 ) $ ( 58 ) $ 1 Net income (loss) per common share-basic and diluted $ ( 0.01 ) $ ( 0.01 ) $ ( 0.01 ) $ 0.01

Management's Discussion and Analysis of Financial Condition

Item 2. Management's Discussion and Analysis of Financial Condition and Results of 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 condensed 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. The Company's significant accounting policies are summarized in Note B to our consolidated financial statements in our annual report on Form 10-K. The Company believes the following critical accounting policies are more significant to the judgments and estimates used in the preparation of its consolidated financial statements. Revisions in such estimates are recorded in the period in which the facts that give rise to the revisions become known. Doubtful Accounts The Company's allowance for doubtful accounts receivable and notes receivable is based on an analysis of the risk of loss on specific accounts. The analysis places particular emphasis on past due accounts. Management considers such information as the nature and age of the receivable, the payment history of the tenant, customer or other debtor and the financial condition of the tenant or other debtor. Management's estimat

Forward Looking Statements

Forward Looking Statements "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: A number of the matters and subject areas discussed in this filing that are not historical or current facts deal with potential future circumstances, operations and prospects. The discussion of such matters and subject areas is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from the Company's actual future experience involving any one or more of such matters and subject areas relating to interest rate fluctuations, the ability to obtain adequate debt and equity financing, demand, pricing, competition, construction, licensing, permitting, construction delays on new developments, contractual and licensure, and other delays on the disposition, transition, or restructuring of currently or previously owned, leased or managed properties in the Company's portfolio, and the ability of the Company to continue managing its costs and cash flow while maintaining high occupancy rates and market rate charges in its retirement community. The Company has attempted to identify, in context, certain of the factors that it currently believes may cause actual future experience and results to differ from the Company's current expectations regarding the relevant matter of subject area. These and other risks and uncertainties are detailed in the Company's reports filed with the Securities and Exchange Commission ("SEC"), including the Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Inflation The Company's principal source of revenue is rent fees for services rendered and interest income. Although the Company has not historically experienced any adverse effects of inflation on salaries or other operating expenses, there can be no assurance that such trends will continue. Environmental Matters The Company has conducted environmental assessments on most of its existing owned

Quantitative and Qualitative Disclosures about

Item 3. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk The Company has extinguished all its outstanding debt therefore; the Company has minimal risk from exposure to changes in interest rates.

CONTROLS AND PROCEDURES

Item 4. CONTROLS AND PROCEDURES (a) 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, summ

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