CONTINGENCIES

3 Months Ended

Mar. 31, 2017

CONTINGENCIES

CONTINGENCIES

NOTE E: CONTINGENCIES

Carlton Energy Group, LLC 

In December 2006, Carlton Energy Group, LLC (“Carlton”) instituted litigation against an individual, Eurenergy Resources Corporation (“Eurenergy”) and several other entities including New Concept Energy, Inc., which was then known as CabelTel International Corporation (the “Company”) alleging tortuous conduct, breach of contract and other matters and as to the Company that it was the alter ego of Eurenergy. The trial judge ruled that the Company was not the alter-ego of Eurenergy however that decision was subsequently reversed by the Court of Appeals. The matter was then appealed to the Texas Supreme Court who determined that the damages had been miscalculated and sent the matter back to the Court of Appeals to determine what the acutual damages should be. At this point the damages according to the courts appear to be in the range of $32 million dollars. We anticipate that the matter will be sent back to the Texas Supreme Court.

Management notes that in connection with the original appeal, the individual defendant deposited alternative security with the Trial Court to supersede the judgment which the court determined to have a value in excess of $56 million. Management believes that the maximum exposure would be in an amount significantly less than the amount on deposit. Accordingly, management believes that any adverse outcome is fully secured by that deposit.

For a discussion of this legal matter see Item: 3 of the Company’s Form 10-K for December 31, 2016.

Other

The Company has been named as a defendant in other 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.