New Concept Energy, Inc.

1: BASIS OF 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, 2025 approximately 16,000 square feet is leased for $103,000 per annum.

In August 2020, the Company sold its oil and gas operations to a third party. On January 1, 2022, the Company entered into a Consulting Management Agreement with respect to such oil and gas operations; whereby, the Company would provide management, supervisory and administrative services for a fee of 10% of the gross revenue of such oil and gas operations. The agreement is effective January 1, 2022, and may be terminated by either party upon sixty days’ notice.

The Company’s ability to meet current cash obligations relies on cash received from operations and the collection of notes receivable, including a $3.5 million dollar note receivable.

2: 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.

Property and equipment, net

Property and equipment are recorded at cost. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes.

Depreciation expense, which is included in operating expenses, was $14,000 for 2025 and $13,000 for 2024, respectively.

Revenue Recognition

The Company recognizes revenues in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers. Under this guidance, the Company recognizes revenue when performance obligations under the terms of a contract with a customer are satisfied by analyzing exchanges with its customers using a five-step approach (1) identify the contract(s) with a customer; (2) identify the performance obligation in the contract(s); (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract(s); and (5) recognize the revenue when (or as) the Company satisfies a performance obligation. The Company derives revenue from rental income from property leases and consulting management fees. The Company’s contracted transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s contracts have a single performance obligation which are not separately identifiable from other promises in the contracts and is, therefore, not distinct. The Company’s performance obligation is satisfied upon the transfer of risk of loss to the customer. Revenue related to rental income from property leases are recognized monthly and consulting management fees are recognized quarterly as they are earned over a period of time.

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. As of December 31, 2025, the Company hadno 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 the 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 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.

Accounting Pronouncements Issued but not yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) were issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes, which enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid. The amendments are effective for the Company’s December 31, 2025 financial statements. The amendments will be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement, ASU 2024-03, as clarified by ASU 2025-01, is effective for the fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of these statements on our consolidated financial statements.

3: RELATED PARTIES

Beginning in 2011 Pillar Income Asset Management (“Pillar”) became an advisor to the Company. Pillar is a wholly owned subsidiary of Realty Advisors, Inc. Mr. Bertcher serves as a director of Pillar. The Company has conducted business with Pillar whereby Pillar provides the Company with services including processing payroll, acquiring insurance, information technology, cybersecurity and other administrative matters. The Company believes that by purchasing these services through Pillar it can get lower costs and better service.

Until August 31, 2024 the arrangement between the Company and Pillar for services and fees, has been on an informal basis. Effective September 1, 2024 the Company and Pillar have entered into a formal agreement whereby Pillar will provide certain management administrative and advisory services for an agreed upon fee. The fee for Pillar’s services for the year ended December 31, 2025 was $36,000.

4: NOTE RECEIVABLE

Note Receivable is comprised of the following at December 31, (in thousands):

The note is unsecured and bears interest at the Secured Overnight Financing rate at the end of each calander quarter (3.87% at December 31, 2025).

5: PROPERTY AND EQUIPMENT

Land, building and furniture, fixtures and equipment are recorded at cost incurred to acquire the assets. At December 31, 2025 and 2024, fixed assets are as follows (in thousands):

6: INCOME TAXES

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

Deferred tax assets are recognized to the extent that it is considered more likely than not that they will be realized. In assessing the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the scheduling of reversal of deferred tax liabilities, projected future taxable income, recent operating results, and tax planning strategies. If it is determined that deferred tax assets can be realized in the future in excess of their net recorded amount, the valuation allowance would be adjusted, and the provision for income taxes would be reduced in the period such determination is made.

Income tax expense

The components of income tax expense (benefit) for the years ended December 31, 2025 and 2024 were as follows (amounts in thousands):

The Company incurred net losses of $46 and $18 for the years ended December 31, 2025 and 2024, respectively. No income tax expense or benefit has been recorded for either period, primarily as a result of the Company’s net operating loss carryforwards and the full valuation allowance recorded against its deferred tax assets.

*Rate reconciliation

*A reconciliation between income taxes computed at the U.S. federal statutory corporate income tax rate and the Company’s effective income tax rate for the years ended December 31, 2025 and 2024 is summarized as follows:

For both 2025 and 2024, the Company’s effective income tax rate was 0%, as the expected federal tax benefit of pre-tax losses was fully offset by increases in the valuation allowance on deferred tax assets.

Deferred taxes

Deferred tax assets and liabilities are comprised primarily of the tax effects of net operating loss carryforwards. As of December 31, 2025 and 2024, the components of the Company’s deferred tax assets and valuation allowance were as follows (amounts in thousands):

The Company has recorded a full valuation allowance against its net deferred tax assets because, based on its evaluation of all available evidence, including a history of recent losses, it is not considered more likely than not that the deferred tax assets will be realized.

As of December 31, 2025 and 2024, the Company had federal net operating loss carryforwards of $6,525,544 and $6,465,544, respectively. A portion of these net operating loss carryforwards, totaling approximately $4.8 million at December 31, 2025, will expire at various dates from 2025 through 2036. The remaining approximately $1.7 million of federal net operating loss carryforwards may be carried forward indefinitely. Utilization of the Company’s net operating loss carryforwards may be subject to annual limitations under Internal Revenue Code Section 382 and similar state provisions in the event of certain changes in ownership of the Company.

Due to the Company’s recent operating results and uncertainty regarding the timing and amount of future taxable income, the Company has not recognized any benefit from these net operating loss carryforwards and has recorded a full valuation allowance against the related deferred tax assets.

The Company files U.S. federal income tax returns and applicable state income tax returns. The Company’s U.S. federal income tax returns for the years ended December 31, 2025 and 2024 remain subject to examination by the Internal Revenue Service, generally for three years from the date the returns are filed. State jurisdictions remain open to examination for periods consistent with the applicable statutes of limitations in those jurisdictions.

7: STOCKHOLDERS’ EQUITY

Outstanding Preferred Stock

Preferred stock consists of the following (amounts in thousands):

The Series B preferred stock has a liquidation value of $100 per share. The right to convert expired April 30, 2003. Noncumulative dividends at the rate of 6% are payable in cash or preferred shares at the option of the Company.

8: CASH CONCENTRATIONS

The Company maintains its cash balances at financial institutions that participate in the Federal Deposit Insurance Corporation’s Transaction Account Guarantee Program which insures depositors up to $250,000. From time to time, the Company has certain cash balances that may exceed insured limits. The Company utilizes large and reputable banking institutions which it believes mitigates these risks.

9: OTHER INCOME

The Company collected $50,000 for a note receivable that had been written off in prior years

10: OPERATING SEGMENTS

The following table reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations (in thousands):

11: QUARTERLY DATA (UNAUDITED)

The table below reflects the Company’s selected quarterly information for the years ended December 31, 2025 and 2024. Amounts shown are in thousands except per share amounts.

The following documents are filed as exhibits (or are incorporated by reference as indicated) into this Report:

*Filed herewith.