Overview
The Company's operations during 2022 include both leasing its office building
located in Parkersburg West Virginia and managing the oil and gas operations it
sold in August 2020. The Company's principal source of cash and income was 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.
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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, 2022, 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, 2022, the Company had current assets of $4,008,000 and current
liabilities of $60,000.
Cash and cash equivalents totaled $436,000 at December 31, 2022 and $252,000 at
December 31, 2021. New Concept's principal sources of cash was rent from the
tenant occupying part of its building in West Virginia, management fees and
interest from its notes receivable.
Results of Operations
Fiscal 2022 as compared to 2021
Revenues: Revenues from rent for the leased property was $101,000 in 2022 and
2021. Revenues from managing the oil and gas operations for a third party was
$111,000 in 2022.
Operating Expenses: Operating expenses for the real estate property was $57,000
in 2022 and $77,000 in 2021. General and administrative expenses were $317,000
in 2022 and $360,000 in 2021.
Interest Income: Interest Income was $212,000 in 2022 and $220,000 in 2021.
Other Income: Other income was $131,000 in 2022 compared to $191,000 in 2021.
Included in other income for 2022 is $63,000 which represents the collection of
an investment that had previously been fully reserved and a gain of $68,000 from
the sale of equipment.
Fiscal 2021 as compared to 2020
Revenues: Total revenues from rent for the leased property was $101,000 in 2021
and 2020.
Operating Expenses: Operating expenses for the real estate property was $77,000
in 2021 and $72,000 in 2020. General and administrative expenses were $360,000
in 2021 and $396,000 in 2020.
Interest Income: Interest Income was $220,000 in 2021 as compared to $242,000 in
2020. The decrease was due to the reduction in the principal balance outstanding
due to payments received.
Other Income: Other income was $191,000 in 2021compared to $85,000 in 2020.
Included in other income for 2021 is an income tax refund for prior years of
$91,000 and $100,000 from the sale of a receivable that had been fully reserved
in prior years. Other income was $85,000 in 2020 which is principally an income
tax refund for prior years.
Other income was $85,000 in 2020 which is an income tax refund for prior years.
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