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<SEC-DOCUMENT>0001010549-08-000921.txt : 20081114
<SEC-HEADER>0001010549-08-000921.hdr.sgml : 20081114
<ACCEPTANCE-DATETIME>20081114163020
ACCESSION NUMBER:		0001010549-08-000921
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20080930
FILED AS OF DATE:		20081114
DATE AS OF CHANGE:		20081114

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			New Concept Energy, Inc.
		CENTRAL INDEX KEY:			0000105744
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				752399477
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-08187
		FILM NUMBER:		081191875

	BUSINESS ADDRESS:	
		STREET 1:		1755 WITTINGTON PLACE
		STREET 2:		SUITE 340
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
		BUSINESS PHONE:		9724078400

	MAIL ADDRESS:	
		STREET 1:		1755 WITTINGTON PLACE
		STREET 2:		SUITE 340
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CabelTel International Corp
		DATE OF NAME CHANGE:	20050211

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GREENBRIAR CORP
		DATE OF NAME CHANGE:	19960514

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MEDICAL RESOURCE COMPANIES OF AMERICA
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>nce10q93008.htm
<TEXT>
<html>
    <head>
        <title></title>
    </head>

    <body style="FONT-SIZE: 12pt; FONT-FAMILY: 'TIMES NEW ROMAN'">
        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 14pt">UNITED STATES</font></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 14pt">SECURITIES AND EXCHANGE COMMISSION</font></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 11pt">WASHINGTON, D.C. 20549</font></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 14pt">FORM 10-Q</font></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font face="Wingdings" size="+0">x</font><b>&nbsp;&nbsp;QUARTERLY REPORT</b> <b>PURSUANT TO</b> <b>SECTION 13 OR 15(d) OF THE</b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b>SECURITIES EXCHANGE ACT OF 1934</b><br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b>FOR THE QUARTER ENDED</b> <b>SEPTEMBER 30, 2008</b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b>or</b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font face="Wingdings" size="+0">o</font>&nbsp;&nbsp;TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE</b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b>SECURITIES EXCHANGE ACT OF 1934</b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b>FOR THE TRANSITION PERIOD FROM TO</b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 12pt">Commission File Number 000-</font></b><b><font style="FONT-SIZE: 12pt">0</font></b><b><font style="FONT-SIZE: 12pt">8187</font></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 18pt">NEW CONCEPT ENERGY, INC.</font></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 7.5pt">(Exact Name of Registrant as Specified in Its Charter)</font></b></p>

        <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
            <tr>
                <td style="BORDER-BOTTOM: black 0.5pt solid" valign="top" width="41%" colspan="2">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 10pt">Nevada</font></b></p>
                </td>

                <td valign="top" width="13%">&nbsp;</td>

                <td style="BORDER-BOTTOM: black 0.5pt solid" valign="top" width="44%" colspan="2">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 10pt">75-2399477</font></b></p>
                </td>
            </tr>

            <tr>
                <td style="BORDER-TOP: medium none" valign="top" width="41%" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 7.5pt">(State or Other Jurisdiction of<br>
                    Incorporation or Organization)</font></b></p>
                </td>

                <td valign="top" width="13%">&nbsp;</td>

                <td style="BORDER-TOP: medium none" valign="top" width="44%" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 7.5pt">(I.R.S. Employer<br>
                    Identification No.)</font></b></p>
                </td>
            </tr>

            <tr>
                <td valign="top" width="100%" colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 10pt">1755 Wittington Place, Suite 340<br>
                    Dallas, Texas</font></b></p>
                </td>
            </tr>

            <tr>
                <td valign="top" width="29%">&nbsp;</td>

                <td style="BORDER-TOP: black 0.5pt solid" valign="top" width="39%" colspan="3">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 8pt">(Address of principal executive offices)</font></b></p>
                </td>

                <td valign="top" width="30%">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="29%">&nbsp;</td>

                <td valign="top" width="39%" colspan="3">&nbsp;</td>

                <td valign="top" width="30%">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="29%">&nbsp;</td>

                <td style="BORDER-BOTTOM: black 0.5pt solid" valign="top" width="39%" colspan="3">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 10pt">75234</font></b></p>
                </td>

                <td valign="top" width="30%">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="29%">&nbsp;</td>

                <td style="BORDER-TOP: medium none" valign="top" width="39%" colspan="3">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 8pt">(Zip Code)</font></b></p>
                </td>

                <td valign="top" width="30%">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="29%">&nbsp;</td>

                <td valign="top" width="39%" colspan="3">&nbsp;</td>

                <td valign="top" width="30%">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="29%">&nbsp;</td>

                <td valign="top" width="39%" colspan="3">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 10pt">(972) 407-8400</font></b></p>
                </td>

                <td valign="top" width="30%">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="29%">&nbsp;</td>

                <td style="BORDER-BOTTOM: black 0.5pt solid" valign="top" width="39%" colspan="3">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 8pt">(Registrant&rsquo;s telephone number, including area code)</font></b></p>
                </td>

                <td valign="top" width="30%">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="29%">&nbsp;</td>

                <td style="BORDER-TOP: medium none; BORDER-BOTTOM: black 0.5pt solid" valign="top" width="39%" colspan="3">&nbsp;</td>

                <td valign="top" width="30%">&nbsp;</td>
            </tr>

            <tr>
                <td valign="top" width="29%">&nbsp;</td>

                <td style="BORDER-TOP: medium none" valign="top" width="39%" colspan="3">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 8pt">(Former name, former address and former fiscal year, if changed since last report)</font></b></p>
                </td>

                <td valign="top" width="30%">&nbsp;</td>
            </tr>
        </table>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
        days.&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;<font face="Wingdings" size="+0">x</font>|.&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;<font face="Wingdings" size="+0">o</font>.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><font style="FONT-SIZE: 9pt">Indicate by check mark whether the</font> <font style="FONT-SIZE: 9pt">Registrant</font> <font style="FONT-SIZE: 9pt">is an accelerated filer (as defined in Rule 12b-2 of the</font> <font style="FONT-SIZE: 9pt">Exchange</font> <font style="FONT-SIZE: 9pt">Act).</font></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><font style="FONT-SIZE: 9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;<font face="Wingdings" size="+0">o</font>.&nbsp;&nbsp;&nbsp;&nbsp; No&nbsp;&nbsp;<font face="Wingdings" size="+0">x</font>.</font></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><font style="FONT-SIZE: 9pt">Indicate by check mark whether the</font> <font style="FONT-SIZE: 9pt">Registrant</font> <font style="FONT-SIZE: 9pt">is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of accelerated filer in Rule 12b-2 of the Exchange Act (Check one):</font></p>

        <table cellspacing="0" cellpadding="0" width="75%" align="center" border="0">
            <tr>
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" width="33%">Large accelerated filer&nbsp;<font face="Wingdings" size="+0">o</font></td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" width="33%">
                    <p>Accelerated filer&nbsp;<font face="Wingdings" size="+0">o</font></p>
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" width="33%">
                    <p align="right">Non-accelerated filer&nbsp;<font face="Wingdings" size="+0">x</font></p>
                </td>
            </tr>
        </table>
        <font style="FONT-SIZE: 9pt">&nbsp;&nbsp;&nbsp;<br>
        &nbsp;&nbsp;Indicate by check mark whether the</font> <font style="FONT-SIZE: 9pt">Registrant</font> <font style="FONT-SIZE: 9pt">is a shell company (as defined in Rule 12b-2 of the Exchange Act).<br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;<font face="Wingdings" size="+0">o</font>.&nbsp;&nbsp;&nbsp;&nbsp; No&nbsp;&nbsp;<font face="Wingdings" size="+0">x</font>.</font><br>
        <br>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 24px" align="center"><b><font style="FONT-SIZE: 9pt">APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE</font></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 24px" align="center"><font style="FONT-SIZE: 9pt"><strong>PRECEDING FIVE YEARS:</strong></font></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 24px" align="center"><font style="FONT-SIZE: 9pt">Indicate by check mark whether the</font> <font style="FONT-SIZE: 9pt">Registrant</font> <font style="FONT-SIZE: 9pt">has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;<font face="Wingdings" size="+0">o</font>.&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;<font face="Wingdings" size="+0">o</font>.</font></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 9pt">APPLICABLE ONLY TO CORPORATE ISSUERS:</font></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 9pt">Indicate the number of shares outstanding of each of the issuer&rsquo;s classes of Common Stock, as of the latest practicable date.<br>
        &nbsp;</font></p>

        <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
            <tr>
                <td style="BORDER-BOTTOM: black 0.5pt solid" valign="top" width="33%">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 9pt">Common Stock, $.01 par value</font></b></p>
                </td>

                <td valign="top" width="33%">&nbsp;</td>

                <td style="BORDER-BOTTOM: black 0.5pt solid" valign="top" width="33%">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 9pt">1,936,935</font></b></p>
                </td>
            </tr>

            <tr>
                <td style="BORDER-TOP: medium none" valign="top" width="33%">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 9pt">(Class)</font></b></p>
                </td>

                <td valign="top" width="33%">&nbsp;</td>

                <td style="BORDER-TOP: medium none" valign="top" width="33%">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 9pt">(Outstanding at November</font></b> <b><font style="FONT-SIZE: 9pt">13</font></b><b><font style="FONT-SIZE: 9pt">, 200</font></b><b><font style="FONT-SIZE: 9pt">8</font></b><b><font style="FONT-SIZE: 9pt">)</font></b></p>
                </td>
            </tr>
        </table>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">1</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr align="center" width="100%" color="#000000">
        </div>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 13pt">NEW CONCEPT ENERGY, INC.</font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">Index to Quarterly Report on Form 10-Q</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">Period ended September 30, 2008</p>

        <p style="FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; EEPStyleName: Bold Left Head 12pt TNR" align="center"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom" bgcolor="#ccffff" height="20">
                <td style="FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; EEPStyleName: Bold Left Head 12pt TNR" align="left" colspan="3">PART I: FINANCIAL INFORMATION</td>

                <td align="right" width="2%">3</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" height="25">
                <td align="left" width="24">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" colspan="2">Item 1. Financial Statements</td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" width="2%">
                    <p align="right">3</p>
                </td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#ccffff" height="15">
                <td align="left" width="24">
                </td>

                <td align="left" width="22">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="686">&nbsp;consolidated balance sheets</td>

                <td align="right" width="2%">3</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" height="15">
                <td align="left" width="24">
                </td>

                <td align="left" width="22">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="686">&nbsp;consolidated statements of operations</td>

                <td align="right" width="2%">5</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#ccffff" height="15">
                <td align="left" width="24">
                </td>

                <td align="left" width="22">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="686">&nbsp;consolidated statements of cash flow</td>

                <td align="right" width="2%">6</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" height="20">
                <td align="left" width="24">
                </td>

                <td align="left" width="22">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="686">&nbsp;Notes To Consolidated Financial Statements</td>

                <td align="right" width="2%">8</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#ccffff" height="25">
                <td align="left" width="24">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" colspan="2">Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations&nbsp;</td>

                <td align="right" width="2%">12</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" height="25">
                <td align="left" width="24">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" colspan="2">Item 3. Quantitative and Qualitative Disclosures About Market Risk&nbsp;</td>

                <td align="right" width="2%">14</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#ccffff" height="25">
                <td align="left" width="24">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" colspan="2">Item 4. Controls and Procedures&nbsp;</td>

                <td align="right" width="2%">15</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" height="25">
                <td style="FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; EEPStyleName: Bold Left Head 12pt TNR" align="left" colspan="3">PART II: OTHER INFORMATION&nbsp;</td>

                <td align="right" width="2%">16</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#ccffff" height="25">
                <td align="left" width="24">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" colspan="2">Item 2. Unregistered Sales of Equity Securities and Use of Proceeds&nbsp;</td>

                <td align="right" width="2%">16</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" height="25">
                <td align="left" width="24">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" colspan="2">Item 6. Exhibits&nbsp;</td>

                <td align="right" width="2%">16</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>

            <tr valign="bottom" bgcolor="#ccffff" height="25">
                <td align="left" width="24">
                </td>

                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" colspan="2">Signatures&nbsp;</td>

                <td align="right" width="2%">18</td>

                <td align="left" width="2%">&nbsp;</td>
            </tr>
        </table>
        <br>
        <br>

        <p style="FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; EEPStyleName: Bold Left Head 12pt TNR" align="center">&nbsp;</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">2</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr align="center" width="100%" color="#000000" noshade>
        </div>

        <p style="MARGIN-TOP: 0pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><a name="_Toc451152480"></a><a name="_Toc467054462"></a><a name="_Toc214417148">PART I:</a> FINANCIAL INFORMATION</b></p>

        <p align="left"><b><u><a name="_Toc451152481"></a><a name="_Toc467054463"></a><a name="_Toc214417149">Item 1</a>. Financial Statements</u></b></p>

        <p align="left"></p>

        <table cellspacing="0" cellpadding="0" width="100%" align="right" border="0">
            <tr>
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 14pt; COLOR: #000000">New Concept Energy, Inc.</font></b></p>
                </th>
            </tr>

            <tr>
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-WEIGHT: normal; COLOR: #000000"><a name="_Toc467054464"></a><a name="_Toc214417150">consolidated balance s</a>heets</font></b></p>
                </th>
            </tr>

            <tr>
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><i><font style="COLOR: #000000">(a</font></i><i><font style="COLOR: #000000">mounts in thousands)</font></i></p>
                </th>
            </tr>

            <tr valign="bottom" height="25">
                <th colspan="2">
                </th>

                <th width="102">
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">September</font> <font style="FONT-SIZE: 10pt; COLOR: #000000">30,</font></p>
                </th>

                <th>
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">December 31,</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                    <p align="left">Assets</p>
                </th>

                <th width="102">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2008</font></p>
                </th>

                <th>
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2007</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="102">
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">(Unaudited)</font></p>
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left" width="398"><font face="Times New Roman" size="3"><strong>Current assets</strong></font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120">
                </td>

                <td align="left" width="4%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120">
                </td>

                <td align="left" width="2%"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">677</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">172</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">389</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes and interest receivable - related party</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">10,809</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">2,200</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="120"><font face="Times New Roman" size="3">707</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="120"><font face="Times New Roman" size="3">8</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right" height="30">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<strong>Total current assets</strong></font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">12,582</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">2,380</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right" height="25">
                <td align="left" width="398"><font face="Times New Roman" size="3"><strong>Oil and gas properties (full cost method) at cost</strong></font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">11,154</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">6,848</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right" height="25">
                <td align="left" width="398"><font face="Times New Roman" size="3"><strong>Property and equipment (non-oil and gas), at cost</strong></font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td align="right" width="120">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td align="right" width="120">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land and improvements</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">1,020</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">20</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buildings and improvements</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">422</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">172</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equipment and furnishings</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="120"><font face="Times New Roman" size="3">401</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="120"><font face="Times New Roman" size="3">336</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">1,843</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">528</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less accumulated depreciation</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="120"><font face="Times New Roman" size="3">427</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="120"><font face="Times New Roman" size="3">397</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right">
                <td align="left" width="398"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">1,416</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">131</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right" height="25">
                <td align="left" width="398"><font face="Times New Roman" size="3"><strong>Deferred tax asset</strong></font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="120"><font face="Times New Roman" size="3">250</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right" height="25">
                <td align="left" width="398"><font face="Times New Roman" size="3"><strong>Other assets</strong></font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="120"><font face="Times New Roman" size="3">314</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="120"><font face="Times New Roman" size="3">177</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" align="right" height="25">
                <td align="left" width="398"><font face="Times New Roman" size="3"><strong>Total Assets</strong></font></td>

                <td align="left" width="63"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="102"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="120"><font face="Times New Roman" size="3">25,466</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="120"><font face="Times New Roman" size="3">9,786</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p align="left">&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" align="center">The accompanying notes are an integral part of these Consolidated Financial Statements.</p>

        <p title="EE+ Page Footer" style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
        <!-- PAGE BREAK  -->

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">3</font></a>
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        <p></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 14pt; COLOR: #000000">New Concept Energy, Inc.</font></b></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="COLOR: #000000">consolidated</font> <font style="COLOR: #000000">balance</font> <font style="COLOR: #000000">sheets &ndash; Continued</font></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><i><font style="COLOR: #000000">(</font></i><i><font style="COLOR: #000000">a</font></i><i><font style="COLOR: #000000">mounts in thousands, except share amounts)</font></i></p>
                </th>
            </tr>

            <tr valign="bottom" height="29">
                <th colspan="2">
                </th>

                <th width="86">
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">September</font> <font style="FONT-SIZE: 10pt; COLOR: #000000">30,</font></p>
                </th>

                <th width="29">
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">December 31,</font></p>
                </th>

                <th width="15">
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><b><font style="FONT-SIZE: 10pt">Liabilities and Stockholders</font></b><b><font style="FONT-SIZE: 10pt">&rsquo;</font></b> <b><font style="FONT-SIZE: 10pt">equity</font></b></p>
                </th>

                <th width="86">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2008</font></p>
                </th>

                <th width="29">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2007</font></p>
                </th>

                <th width="15">
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="86">
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">(Unaudited)</font></p>
                </th>

                <th width="29">
                </th>

                <th colspan="2">
                </th>

                <th width="15">
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3"><strong>Current liabilities</strong></font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="111">
                </td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="111">
                </td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current maturities of long term debt</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">90</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">--</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax payable</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">1,522</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">--</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="15">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">1,362</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">90</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">426</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">175</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="30">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<strong>&nbsp;Total current liabilities</strong></font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">3,400</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">265</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="25">
                <td align="left" width="342"><font face="Times New Roman" size="3"><strong>Long term debt</strong></font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">1,177</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111">
                </td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="25">
                <td align="left" width="342"><font face="Times New Roman" size="3"><strong>Long term debt &ndash; related party</strong></font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">--</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">6,921</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="25">
                <td align="left" width="342"><font face="Times New Roman" size="3"><strong>Other long-term liabilities</strong></font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">412</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">459</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="25">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;<strong>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</strong></font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">4,989</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">7,645</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="25">
                <td align="left" width="342"><font face="Times New Roman" size="3"><strong>Stockholders&rsquo; equity</strong></font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td width="7">
                </td>

                <td valign="bottom" align="right" width="111">
                </td>

                <td width="29">
                </td>

                <td width="9">
                </td>

                <td valign="bottom" align="right" width="111">
                </td>

                <td width="15">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, Series B</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">1</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">1</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="17">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock $.01 par value; authorized,</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td width="7">
                </td>

                <td valign="bottom" align="right" width="111">
                </td>

                <td width="29">
                </td>

                <td width="9">
                </td>

                <td valign="bottom" align="right" width="111">
                </td>

                <td width="15">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100,000,000 shares; 986,939 shares at</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td width="7">
                </td>

                <td valign="bottom" align="right" width="111">
                </td>

                <td width="29">
                </td>

                <td width="9">
                </td>

                <td valign="bottom" align="right" width="111">
                </td>

                <td width="15">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;September 30, 2007 and 1,936,935 shares at</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td width="7">
                </td>

                <td valign="bottom" align="right" width="111">
                </td>

                <td width="29">
                </td>

                <td width="9">
                </td>

                <td valign="bottom" align="right" width="111">
                </td>

                <td width="15">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;September 30, 2008 issued and outstanding</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">19</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">10</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">58,814</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">55,992</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">(38,357</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">)</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">(53,862</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom" height="20">
                <td align="left" width="342"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">20,477</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">2,141</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="20">
                <td align="left" width="342"><font face="Times New Roman" size="3"><strong>Total Liabilities and Equity</strong></font></td>

                <td align="left" width="53"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="86"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="7"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">25,466</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="9"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" valign="bottom" align="right" width="111"><font face="Times New Roman" size="3">9,786</font></td>

                <td align="left" width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" align="center">The accompanying notes are an integral part of these Consolidated Financial Statements.</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><a name="OLE_LINK3"></a></p>

        <div title="EE+ Page Footer" style="MARGIN-TOP: 12pt">
            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
        </div>
        <!-- PAGE BREAK  -->

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">4</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr align="center" width="100%" color="#000000" noshade>
        </div>

        <p></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <th colspan="15">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 14pt; COLOR: #000000">New Concept Energy, Inc.</font></b></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="15">
                    <p style="MARGIN-TOP: 0pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-WEIGHT: normal; COLOR: #000000"><a name="_Toc120957800"></a><a name="OLE_LINK2"></a><a name="_Toc214417151">c</a>onsolidated</font> <font style="FONT-WEIGHT: normal; COLOR: #000000">statements of</font> <font style="FONT-WEIGHT: normal; COLOR: #000000">operations</font></b></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="15">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><i><font style="COLOR: #000000">(</font></i><i><font style="COLOR: #000000">a</font></i><i><font style="COLOR: #000000">mounts in thousands, except per share data)</font></i></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="55">
                </th>

                <th colspan="2">
                </th>

                <th width="15">
                </th>

                <th colspan="2">
                </th>

                <th width="15">
                </th>

                <th colspan="2">
                </th>

                <th width="15">
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="55">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">For The Three Months</font></p>
                </th>

                <th width="15">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">For The Nine Months</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="55">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">Ended</font> <font style="FONT-SIZE: 10pt; COLOR: #000000">September 30,</font></p>
                </th>

                <th width="15">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">Ended</font> <font style="FONT-SIZE: 10pt; COLOR: #000000">September 30,</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="55">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2008</font></p>
                </th>

                <th width="15">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2007</font></p>
                </th>

                <th width="15">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2008</font></p>
                </th>

                <th width="15">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2007</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="55">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">(Unaudite)</font></p>
                </th>

                <th width="15">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font face="Times New Roman" size="3"><font style="FONT-SIZE: 10pt; COLOR: #000000">(Unaudited)</font></font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">Revenue</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="100">
                </td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td width="100">
                </td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td width="100">
                </td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td width="100">
                </td>

                <td align="left" width="2%"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oil and gas operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">154</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">154</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">704</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">751</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">2,107</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">2,233</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">858</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">751</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">2,261</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">2,233</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">Operating expenses</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oil and gas operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">70</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">70</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">338</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">294</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">966</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">924</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease expense</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">244</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">232</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">717</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">691</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate general and administrative</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">108</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">225</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">633</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">699</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="20">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">760</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">751</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">2,386</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">2,314</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating loss</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">98</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(125</font></td>

                <td width="15"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(81</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">Other income (expense)</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">479</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">28</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">729</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">84</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(230</font></td>

                <td width="15"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of leasehold interests</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">16,440</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">45</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">77</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">457</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">142</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">524</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">105</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">17,396</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">226</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings from continuing operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">622</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">105</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">17,271</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">145</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for income taxes</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">140</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">1,766</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income from continuing operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">482</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">105</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">15,505</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">145</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">Discontinued operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" height="16">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(159</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) from sale of assets</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(314</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) on discontinued operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(473</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom" height="16">
                <td align="left" width="276"><font face="Times New Roman" size="3">Net income (loss) applicable to common shares</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">482</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">105</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">15,505</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(328</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">Net earnings (loss) per common share &ndash;</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">basic and diluted</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Continuing operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">0.25</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">0.11</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">8.93</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">0.15</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discontinued operations</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(0.48</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) per share</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">0.25</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">0.11</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">8.93</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(0.33</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">Weighted average of common and</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;equivalent shares outstanding &ndash;</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td width="15">
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="276"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;basic and diluted</font></td>

                <td align="left" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="55"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">1,937</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">986</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">1,736</font></td>

                <td width="15"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">986</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" align="center">The accompanying notes are an integral part of these Consolidated Financial Statements.</p>

        <p title="EE+ Page Footer" style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
        <!-- PAGE BREAK  -->

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">5</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr align="center" width="100%" color="#000000" noshade>
        </div>

        <p></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 14pt; COLOR: #000000">New Concept Energy, Inc.</font></b></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-WEIGHT: normal; COLOR: #000000"><a name="_Toc467054466"></a><a name="_Toc120957801"></a><a name="_Toc214417152">c</a>onsolidated</font> <font style="FONT-WEIGHT: normal; COLOR: #000000">statements of</font> <font style="FONT-WEIGHT: normal; COLOR: #000000">cash</font>
                    <font style="FONT-WEIGHT: normal; COLOR: #000000">flow</font></b></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><i><font style="COLOR: #000000">(</font></i><i><font style="COLOR: #000000">a</font></i><i><font style="COLOR: #000000">mounts in thousands)</font></i></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">For The Nine Months</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">Ended September 30,</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2008</font></p>
                </th>

                <th>
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2007</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">(Unaudited)</font></p>
                </th>

                <th>
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">(Unaudited)</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">Cash flows from operating activities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="100">
                </td>

                <td align="left" width="5%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="100">
                </td>

                <td align="left" width="2%"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="14">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net earnings from continuing operations</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">15,505</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">145</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="14">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net earnings (loss) to net</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right">
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cash used in operating activities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right">
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">Depreciation and amortization</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">43</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">42</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">Gain on sale of mineral interests</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(16,440</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">Changes in deferred tax asset</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">250</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">Changes in operating assets and liabilities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right">
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest receivable</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">83</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(84</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current and non-current assets</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(488</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(2</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(149</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">122</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other current liabilities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">1,529</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(213</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current maturities of long term debt</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">90</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax payable</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">1,516</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(47</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(26</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">Net cash provided by (used in)operating activities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">1,892</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(16</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom" height="29">
                <td align="left" width="413"><font face="Times New Roman" size="3">Cash flows used in investing activities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right">
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan to affiliate</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(19,232</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan to affiliates &ndash; repayment</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">10,540</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed asset additions</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(1,316</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(32</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assets held for sale</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(600</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in potential oil and gas operation</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(11,154</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of mineral rights</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">23,288</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Funding of note receivable</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(100</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right">
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;activities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">1,526</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(132</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom" height="31">
                <td align="left" width="413"><font face="Times New Roman" size="3">Financing Activities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right">
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale of common stock</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">2,831</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt created for the CESI acquisition</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">1,177</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on notes payable</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(6,921</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(2,913</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="30">
                <td align="left" width="413"><font face="Times New Roman" size="3">Cash flows from discontinued operations</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right">
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash used in operating activities</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(46</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash provided by (used for) investing activities &ndash;</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;proceeds from sale</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(22</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in discontinued operations</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(68</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom" height="29">
                <td align="left" width="413"><font face="Times New Roman" size="3">NET INCREASE (DECREASE) IN CASH AND</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td valign="bottom" align="right" width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">CASH EQUIVALENTS</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">505</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">(216</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom" height="29">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at beginning of period</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">172</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">324</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="30">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at end of period</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">677</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" valign="bottom" align="right" width="100"><font face="Times New Roman" size="3">108</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" align="center">The accompanying notes are an integral part of these Consolidated Financial Statements.</p>

        <p title="EE+ Page Footer" style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
        <!-- PAGE BREAK  -->

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">6</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr align="center" width="100%" color="#000000" noshade>
        </div>

        <p></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 14pt; COLOR: #000000">New Concept Energy, Inc.</font></b></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-WEIGHT: normal; COLOR: #000000">consolidated</font> <font style="FONT-WEIGHT: normal; COLOR: #000000">statements of</font> <font style="FONT-WEIGHT: normal; COLOR: #000000">cash</font> <font style="FONT-WEIGHT: normal; COLOR: #000000">flow</font></b></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="9">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><i><font style="COLOR: #000000">(</font></i><i><font style="COLOR: #000000">a</font></i><i><font style="COLOR: #000000">mounts in thousands)</font></i></p>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">For The Nine Months</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th colspan="5">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">Ended September 30,</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2008</font></p>
                </th>

                <th>
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">2007</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">(Unaudited)</font></p>
                </th>

                <th>
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000">(Unaudited)</font></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="115">
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">Supplemental disclosure of cash flow information</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td>
                </td>

                <td width="100">
                </td>

                <td>
                </td>

                <td>
                </td>

                <td width="100">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of the Gainesville Outlet Mall</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman" size="3">(473</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assets held for sale</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman" size="3">483</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="413"><font face="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liabilities held for sale</font></td>

                <td align="left" width="27"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="115"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman" size="3">78</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" align="center">The accompanying notes are an integral part of these Consolidated Financial Statements.</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">7</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr align="center" width="100%" color="#000000">
        </div>

        <p></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr>
                <td style="FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; EEPStyleName: Bold Left Head 12pt TNR" width="100%">
                    <p align="center"><a name="_Toc41185696"><strong>New Concept Energy, Inc.</strong></a></p>
                </td>
            </tr>

            <tr>
                <td style="FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman', Times, serif" width="100%">
                    <p align="center"><a name="_Toc214417153"><strong>Notes To Consolidated Financial Statements</strong></a></p>
                </td>
            </tr>
        </table>

        <p align="left"><b>Note A: Basis of Presentation</b></p>

        <p style="MARGIN-TOP: 3pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 9pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The accompanying unaudited consolidated financial statements include the accounts of New Concept Energy, Inc. and its majority-owned subsidiaries (collectively, &ldquo;NCE&rdquo; or the &ldquo;Company&rdquo;). All significant intercompany transactions and accounts have been eliminated. Certain 2007 balances have been reclassified to conform to the 2008 presentation.</p>

        <p style="MARGIN-TOP: 3pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 9pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The unaudited financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly present such information. All such adjustments are of a normal recurring nature.
        Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to such rules and regulations.</p>

        <p style="MARGIN-TOP: 3pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 9pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ending December 31, 2007. Operating results for the three and nine month period ended September 30, 2008 are not necessarily indicative of the results that may be expected for
        any subsequent quarter or for the fiscal year ending December 31, 2008.</p>

        <p style="MARGIN-TOP: 0pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><b>Note B: Business Description</b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><i>Sale of</i> <i>Leases for Mineral Interests</i></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">On November 1,&nbsp;2007, a wholly owned subsidiary of New Concept Energy, Inc. entered into an agreement with Source Rock Energy of Arkansas, LLC, a Nevada limited liability company (&ldquo;SRA&rdquo;), a related party, to acquire 1,712 net acres of mineral leasehold interests in four separate sections of land in the Fayetteville Shale area of Arkansas in exchange for the
        issuance of a promissory note. The acquisition price was $4,000 per net acre payable on December&nbsp;31, 2010 with interest at 9.5% per annum. The subsidiary also acquired two separate options to acquire additional leasehold interests of 1,815 net acres and 583 net acres in the same county in Arkansas at the same price of $4,000 per net acre.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">At the time of the acquisition it was the Company&rsquo;s intention, subject to the availability of funds, to develop and drill gas wells on the acreage however an opportunity developed where the Company could sell the mineral rights to an independent third party for cash.<br>
        &nbsp;<br>
        On May 9, 2008 the company exercised its options to acquire the additional 2,398 acres and completed a sale of all its 4,112 acres of mineral rights. The company received cash and recorded income after costs and expenses and before taxes of $16,440,000.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><i>Acquisition of an Oil and Gas Company</i><br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Effective September 1, 2008, the Company completed the acquisition of certain entities, mineral interests and related assets through entities named Carl E. Smith, Inc., a West Virginia corporation, two of its affiliates, Carl E. Smith Petroleum, Inc. and Carl E. Smith Real Estate, Inc. and other privately owned related assets (collectively &ldquo;CESI&rdquo;).</p>

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        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Immediately after the acquisition, all of the acquired entities and assets were merged into Carl E. Smith, Inc., the name of which was changed to Mountaineer State Energy, Inc. (&ldquo;Mountaineer&rdquo;) which became a wholly-owned subsidiary of NCE. The assets acquired include 94 producing gas wells, 121 non-producing wells and related equipment, mineral leases covering
        20,000 acres located in Athens and Meigs Counties in Ohio as well as Calhoun, Jackson and Roane Counties in West Virginia. In addition to the wells and mineral leases, the acquisition included a complex covering approximately 41 acres of land with 8,000 square feet of office and storage buildings, an adjacent 12 acres site with a 24 stall horse barn, machinery and equipment in excess of the needs of the gas operation and approximately $1.5 million in cash. NCE is evaluating the excess
        equipment and currently plans on selling any excess land and equipment not needed for current or planned future operations.<br>
        &nbsp;<br>
        The entities involved were the subject of bankruptcy proceedings in the Southern District of West Virginia originally filed in 2003 styled <i>In Re Carl E. Smith, Inc.</i>, Case No. 03-22274 (Chapter 11) pending in the United Stated Bankruptcy Court for the Southern District of West Virginia, which was substantively consolidated with Carl E. Smith Real Estate, Inc., Case No. 03-22298 and Carl E. Smith Petroleum, Inc., Case No. 08-20022 (the &ldquo;Bankruptcy Proceedings&rdquo;).
        Pursuant to the Bankruptcy Proceedings, a subsidiary of NCE acquired a claim of an independent third party, and engaged in a bidding contest which resulted in the Court awarding NCE the bid on August 6, 2008, which was confirmed August 16, 2008, but various documents and instruments confirming the matter were not completed until September 19, 2008. Pursuant to the confirmed Plan of Reorganization, NCE paid all existing debt to third parties of approximately $5 million, paid cash of $7.3
        million dollars to certain shareholders and paid or will pay approximately $1.6 million dollars in fees and bankruptcy related costs.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">In addition, the Company entered into several agreements in which the Company agreed to payout two former shareholders and a family member.&nbsp;<br>
        &nbsp;<br>
        In the first agreement there were two shareholders to receive a total of $1,760,000 less administrative costs incurred over $500,000.&nbsp; The administrative costs incurred over $500,000 were approximately $1.2 million.&nbsp; The Company is to make payments to each former shareholder in the amount of $1,000 a week for the next 17 years. However, before any payments are made, the Company is entitled to recover its $1.2 million.&nbsp; Therefore, the first payments to the two shareholders
        will begin in 11.5 years. After deducting the administrative costs and imputing an interest rate of 8 percent the total amount the Company owes is approximately $122,000.<br>
        &nbsp;<br>
        The second agreement was in the amount of $777,500 and stated the Company should make payments of $7,500 a month for 60 months then the remaining balance of $323,500 due.&nbsp; The Company imputed an interest rate of 8 percent and recorded a balance due of approximately $605,000.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The third agreement was in the amount of $800,000 and state the Company should make payments in the amount of 75% of available funds from the operation of the business. However, the payments do not begin until the second agreement is fully funded. The agreement further provides that is be paid within seven years.&nbsp; The Company imputed an interest rate of 8 percent of the amount and
        recorded a balance of approximately $540,000.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The cash portion of the asset acquisition totaling approximately $13.9 million dollars was or will be paid from existing working capital held by NCE. No material relationship existed, other than in respect to the transaction, among NCE and the various entities or their shareholders.</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">&nbsp;</p>

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        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"></p>

        <p></p>
        <i>Pacific Pointe Retirement Inn</i>

        <p></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The Company leases and operates a retirement community in King City, Oregon, with a capacity of 114 residents.</p>

        <p style="MARGIN-TOP: 11.3pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><b>Note C</b><b>: Short-Term Note Receivable</b> <b>&ndash; Related Party</b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The Company has been developing a program to acquire and develop acreage and drill gas wells in the Fayetteville, Arkansas area and has been raising cash to achieve its objectives. Until such time as the funds are needed the Company has invested the funds in short term notes with related parties.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">In July 2006, the Company <a name="OLE_LINK4"></a><a name="OLE_LINK5">made an unsecured $1,377,000 loan to</a> Eurenergy Resources Corporation (a company that is 20% owned by an entity deemed to be related to NCE). The loan has an annual interest rate of 8% with principal and interest payable within 30 days after demand, and if not sooner demanded, on July 17, 2007.
        Effective July 17, 2007 the existing accrued interest was added to the principal balance, which increased the principal balance to $1,487,160, and the maturity date was extended to July, 17, 2009. All other terms of the note remain the same. As of September 30, 2008, the principal and accrued interest totaled $1,635,423. In August 2008, the Company extended a line of credit to Eurenergy for operating purposes. As of September 30, 2008, the balance due on that line of credit was $1.1
        million. On September 30, 2008, all loans and accrued interest due from Eurenergy Resources Corporation to the Company totaled $2.3 million.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">In November 2007, the Company made an unsecured $630,000 loan to Prime Income Asset Management, Inc., a related party. The loan has an annual interest rate of 8.5% with principal and interest payable within 30 days after demand. The note and accrued interest was paid on August 22, 2008.<br>
        &nbsp;<br>
        On March 18, 2008, the Company sold 950,000 shares of common stock to a related party for $2,850,000 after expenses.<br>
        &nbsp;<br>
        The Company made an unsecured $2,800,000 loan to Prime Income Asset Management, Inc., a related party. The loan has an annual interest rate of prime plus two percent with principal and interest payable within 30 days after demand, and if not sooner demanded, on March 6, 2009. The note and accrued interest was paid on August 22, 2008.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">On May 9, 2008 the Company made a $16,432,000 unsecured loan to Prime Income Asset Management, a related party. The note is payable on demand and bears interest at prime rate, as published in <i>The Wall Street Journal,</i> plus two percent. Prime repaid $8,070,000 of the note leaving a balance, including accrued interest, of $8,362,316 owed the Company. The Company used
        the repayment to acquire CESI.</p>

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            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
        </div>
        <!-- PAGE BREAK  -->

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            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">10</font></a>
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        <p style="MARGIN-TOP: 12pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><b>Note D: Discontinued Operations</b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><i>Gainesville Outlet Mall</i></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The Gainesville Outlet Mall, which the Company acquired in 2003, has incurred both cash and accounting losses since its acquisition. The Company incurred operating losses of $159,000 at the mall and recorded an impairment loss of $314,000 in the quarter ended March 31, 2007. Subsequent to March 31, 2007 the Company did not fund any cash shortfalls incurred by the mall.
        Beginning in April 2007 the operating losses at the mall were funded by an unrelated third party who had guaranteed the bank debt. Effective December 31, 2007, the Company transferred all of its ownership in the mall and approximately 40 acres of undeveloped land to the unrelated third party. The chart below shows the operations of the Mall as of September 30, 2007.</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="60%" align="center" border="0">
            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="78">
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 10pt">Nine</font></b> <b><font style="FONT-SIZE: 10pt">Months</font></b></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="78">
                </th>

                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 10pt">Ended</font></b></p>
                </th>

                <th>
                </th>
            </tr>

            <tr>
                <th colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><b><font style="FONT-SIZE: 10pt">Discontinued Operations</font></b></p>
                </th>

                <th width="78">
                </th>

                <th style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" colspan="2">
                    <p align="center">September 30<b>,</b></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th width="78">
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-SIZE: 10pt">2007</font></b></p>
                </th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">Revenue</td>

                <td align="left" width="11"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="78"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="10"><font face="Times New Roman" size="3">$</font></td>

                <td align="right" width="95"><font face="Times New Roman" size="3">542</font></td>

                <td align="left" width="2%"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr height="20">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">
                </td>

                <td align="left" width="11">
                </td>

                <td align="left" width="78">
                </td>

                <td align="right" width="10">
                </td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="95">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr valign="bottom">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">Operating expenses</td>

                <td align="left" width="11"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="78"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="95"><font face="Times New Roman" size="3">663</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">Operating loss</td>

                <td align="left" width="11"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="78"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="95"><font face="Times New Roman" size="3">(121</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr height="20">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">
                </td>

                <td align="left" width="11">
                </td>

                <td align="left" width="78">
                </td>

                <td width="10">
                </td>

                <td width="95">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">Income (expense)</td>

                <td align="left" width="11"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="78"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td width="10">
                </td>

                <td width="95">
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">Interest expense</td>

                <td align="left" width="11"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="78"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="95"><font face="Times New Roman" size="3">(78</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr valign="bottom">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">Other income</td>

                <td align="left" width="11"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="78"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="95"><font face="Times New Roman" size="3">40</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">Loss from continuing operations</td>

                <td align="left" width="11"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="78"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="95"><font face="Times New Roman" size="3">(159</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr height="20">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">
                </td>

                <td align="left" width="11">
                </td>

                <td align="left" width="78">
                </td>

                <td align="right" width="10">
                </td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="95">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr valign="bottom">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">Loss on sale of assets</td>

                <td align="left" width="11"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="78"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="10"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="95"><font face="Times New Roman" size="3">(314</font></td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>

            <tr height="20">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">
                </td>

                <td align="left" width="11">
                </td>

                <td align="left" width="78">
                </td>

                <td align="right" width="10">
                </td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="95">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr valign="bottom">
                <td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left" width="559">Net loss on discontinued operations</td>

                <td align="left" width="11"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="78"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="10"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" width="95">
                    <p align="right"><font face="Times New Roman" size="3">(473</font></p>
                </td>

                <td align="left"><font face="Times New Roman" size="3">)</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p></p>

        <p></p>

        <p style="MARGIN-TOP: 12pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><b><a name="_Toc451152482"></a><a name="_Toc41185697">Note</a> E: Contingencies</b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The Company is involved in various lawsuits arising in the ordinary course of business. Management is of the opinion that the outcome of these lawsuits will have no material impact on the Company&rsquo;s financial condition, results of operations or liquidity.</p>

        <div title="EE+ Page Footer" style="MARGIN-TOP: 12pt">
            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
        </div>
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        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">11</font></a>
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        <p style="MARGIN-TOP: 12pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0.8in; TEXT-TRANSFORM: uppercase; TEXT-INDENT: -72px; FONT-VARIANT: small-caps; TEXT-DECORATION: underline" align="left"><b><u><a name="_Toc214417154">It</a>em 2. Management's Discussion and Analysis of Financial Condition and Results of Operations</u></b></p>

        <p style="MARGIN-TOP: 12pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><b>Critical Accounting Policies and Estimates</b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The Company&rsquo;s discussion and analysis of its financial condition and results of operations are based upon the Company&rsquo;s Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. Certain of the Company&rsquo;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&rsquo;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.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 3pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 9pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">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.</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The Company&rsquo;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, customer or other debtor. Management&rsquo;s estimate of the required allowance, which is reviewed on a quarterly basis, is subject to revision as these factors change.</p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><b>Deferred Tax Assets</b></p>

        <p style="MARGIN-TOP: 3pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 9pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">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&rsquo;s net deferred tax assets is dependent upon the generation of future taxable income prior to the expiration of the loss carry
        forwards. The Company believes that it will generate future taxable income to fully utilize the net deferred tax assets.</p>

        <p style="MARGIN-TOP: 12pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><b>Liquidity and Capital Resources</b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">At September 30, 2008, the Company had current assets of $12.6 million and current liabilities, of $3.4 million.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Cash and cash equivalents at September 30, 2008 were $677,000, as compared to $172,000 at December 31, 2006.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Net cash used in operating activities was $1.9 million for the nine months ended September 30, 2008. During the nine-month period, the Company had a net income from continuing operations of $15.5 million.<br>
        &nbsp;<br>
        Net cash provided by investing activities was $1.5 million for the nine months ended September 30, 2008, consisting of short term loans to an affiliates of $8.7 million net of repayments, $11.2 million for the purchase of CESI, $23.3 million before costs and expenses for the sale of mineral rights and the purchase of $1.3 million of equipment at the Company&rsquo;s oil and gas operations.</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">12</font></a>
        </div>

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        </div>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Cash flows used in financing activities in the nine months ended September 30, 2008, were $2.9 million.</p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><b>Results of Operations</b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The Company reported a net profit (loss) of $482,000 and $15.5 million for the three and nine months ended September 30, 2008, as compared to $105,000 and ($328,000) for the three and nine months ended September 30, 2007.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">For the three and nine months ended September 30, 2008, the Company recorded revenues of $858,000 and $2.2 million as compared to $751,000 and $2.2 million for the three and nine months ended September 30, 2007. The increase is due to the acquisition of the Carl E. Smith Companies.<br>
        &nbsp;<br>
        For the three and nine months ended September 30, 2008, operating expenses were $408,000 and $1.0 million, as compared to $294,000 and $924,000 for the three and nine months ended September 30, 2007. The increase is due to the acquisition of the Carl E. Smith Companies.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">General and administrative expenses for the three and nine months ended September 30, 2008 were $108,000 and $633,000 as compared to $225,000 and $699,000 for the same periods in 2007. 2007 includes $29,000 for prior year income taxes. An overall reduction in administrative costs in the latter part of 2006 continued in 2007 and 2008.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">For the three and nine months ended September 30, 2008, interest income was $479,000 and $729,000, as compared to $28,000 and $84,000 for the three and nine months ended September 30, 2007. The majority of the interest income is from current and former notes receivable from affiliated parties that are held by the Company.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">There was no interest expense for the three months and $230,000 for the nine months ended September 30, 2008, as compared to no interest expense for the three and nine months ended September 30, 2007.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Other income was $45,000 and $457,000 for the three and nine months ended September 30, 2008, compared to $77,000 and $142,000 for the three and nine month periods ended September 30, 2007. The income of the income represents cash received from receivables that were previously fully reserved.</p>

        <div title="EE+ Page Footer" style="MARGIN-TOP: 12pt">
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        </div>
        <!-- PAGE BREAK  -->

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            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">13</font></a>
        </div>

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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><b><a name="_Toc451152487"></a><a name="_Toc41185699">Forward Looking Statements</a></b></p>

        <p style="MARGIN-TOP: 3pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 9pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">&ldquo;Safe Harbor&rdquo; 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&rsquo;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&rsquo;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&rsquo;s current expectations regarding the relevant
        matter of subject area. These and other risks and uncertainties are detailed in the Company&rsquo;s reports filed with the Securities and Exchange Commission (&ldquo;SEC&rdquo;), including the Company&rsquo;s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.</p>

        <p style="MARGIN-TOP: 12pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><b><a name="_Toc41185703">Inflation</a></b></p>

        <p style="MARGIN-TOP: 3pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 9pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The Company&rsquo;s principal source of revenue is rents from a retirement community and fees for services rendered. The real estate operation is affected by rental rates that are highly dependent upon market conditions and the competitive environment in the areas where the property is located. Compensation to employees and maintenance are the principal cost elements
        relative to the operation of this property. 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 or that, should inflationary pressures arise, the Company will be able to offset such costs by increasing rental rates in its real estate operation.</p>

        <p style="MARGIN-TOP: 12pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><b>Environmental Matters</b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">The Company has conducted environmental assessments on most of its existing owned or leased properties. These assessments have not revealed any environmental liability that the Company believes would have a material adverse affect on the Company&rsquo;s business, assets or results of operations. The Company is not aware of any such environmental liability. The Company believes that all of
        its properties are in compliance in all material respects with all federal, state and local laws, ordinances and regulations regarding hazardous or toxic substances or petroleum products. The Company has not been notified by any governmental authority and is not otherwise aware of any material non-compliance, liability or claim relating to hazardous or toxic substances or petroleum products in connection with any of its communities.</p>

        <p></p>

        <p style="MARGIN-TOP: 12pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0.8in; TEXT-TRANSFORM: uppercase; TEXT-INDENT: -72px; FONT-VARIANT: small-caps; TEXT-DECORATION: underline" align="left"><b><u><a name="_Toc101325097"></a><a name="_Toc104102892"></a><a name="_Toc120441519"></a><a name="_Toc214417155">Item 3. Quantitative and Qualitative Disclosures About Market Risk</a></u></b></p>

        <p style="MARGIN-TOP: 12pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><b>Interest Rate Risk</b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Nearly all of the Company&rsquo;s debt is financed at fixed rates of interest. Therefore, the Company has minimal risk from exposure to changes in interest rates.</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">14</font></a>
        </div>

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            <hr align="center" width="100%" color="#000000">
        </div>

        <p style="MARGIN-TOP: 12pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0.8in; TEXT-TRANSFORM: uppercase; TEXT-INDENT: -72px; FONT-VARIANT: small-caps; TEXT-DECORATION: underline" align="left"><b><u><a name="_Toc104102893"></a><a name="_Toc120441520"></a><a name="_Toc214417156">Item 4. Controls and Procedures</a></u></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><a name="_Toc104102894"></a><a name="_Toc120441521">As required by Rule 13(a)-15(b), the Company&rsquo;s management, including the principal executive officer, chief financial officer and principal accounting officer, conducted an evaluation as of the end of the period covered by t</a>his Report, of the effectiveness of the Company&rsquo;s disclosure controls and
        procedures as defined in Exchange Act Rule 13(a)-15(e). Based on that evaluation, the chief executive officer and the chief financial officer concluded that the Company&rsquo;s disclosure controls and procedures were effective as of the end of the period covered by this Report. As required by Rule 13(a)-15(d), the Company&rsquo;s management, including the chief executive officer, chief financial officer and principal accounting officer, also conducted an evaluation of the
        Company&rsquo;s internal controls over financial reporting to determine whether any changes occurred in the third fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company&rsquo;s internal control over financial reporting. Based on that evaluation, there has been no such change during the third fiscal quarter.<br>
        &nbsp;<br>
        It should be noted that any system of controls, however well designed and operated, can only provide reasonable and not absolute assurance that the objectives of the system will be met. In addition, the design of any control system is based, in part, on certain assumptions about the likelihood of future events.</p>

        <p></p>

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            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
        </div>
        <!-- PAGE BREAK  -->

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="left">
            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">15</font></a>
        </div>

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            <hr align="center" width="100%" color="#000000" noshade>
        </div>

        <p style="MARGIN-TOP: 0pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><a name="_Toc214417157">PART II:</a> OTHER INFORMATION</b></p>

        <p style="MARGIN-TOP: 12pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0.8in; TEXT-TRANSFORM: uppercase; TEXT-INDENT: -72px; FONT-VARIANT: small-caps; TEXT-DECORATION: underline" align="left"><b><u><a name="_Toc120441522"></a><a name="_Toc214417158">Item</a> 2. Unregistered Sales of Equity Securities and Use of Proceeds</u></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">During the period of time covered by this Report, New Concept Energy, Inc. did not repurchase any of its equity securities under any formal repurchase plan. The following table sets forth a summary for the quarter, indicating no repurchases were made under a formal program and that, at the end of the period covered by this Report, no specified number of shares may be yet
        be repurchased under any program in place.</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">Total</th>

                <th>
                </th>

                <th colspan="2">Maximum</th>

                <th>
                </th>
            </tr>

            <tr>
                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">Number</th>

                <th>
                </th>

                <th colspan="2">Number</th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">of Shares</th>

                <th>
                </th>

                <th colspan="2">of Shares</th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">Purchased</th>

                <th>
                </th>

                <th colspan="2">that May</th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">Total</th>

                <th>
                </th>

                <th colspan="2">Average</th>

                <th>
                </th>

                <th colspan="2">as Part</th>

                <th>
                </th>

                <th colspan="2">Yet be</th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">Number</th>

                <th>
                </th>

                <th colspan="2">Price</th>

                <th>
                </th>

                <th colspan="2">of Publicly</th>

                <th>
                </th>

                <th colspan="2">Purchased</th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                </th>

                <th>
                </th>

                <th colspan="2">of Shares</th>

                <th>
                </th>

                <th colspan="2">Paid per</th>

                <th>
                </th>

                <th colspan="2">Announced</th>

                <th>
                </th>

                <th colspan="2">Under the</th>

                <th>
                </th>
            </tr>

            <tr valign="bottom">
                <th colspan="2">
                    <p align="left"><u>Period</u></p>
                </th>

                <th>
                </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">Purchased</th>

                <th style="BORDER-BOTTOM: black 1px solid"><font face="Times New Roman" size="3">&nbsp;</font> </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">Share</th>

                <th style="BORDER-BOTTOM: black 1px solid"><font face="Times New Roman" size="3">&nbsp;&nbsp;</font> </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">Program</th>

                <th style="BORDER-BOTTOM: black 1px solid"><font face="Times New Roman" size="3">&nbsp;</font> </th>

                <th style="BORDER-BOTTOM: black 1px solid" colspan="2">Program<b><sup>(a)</sup></b></th>

                <th>
                </th>
            </tr>

            <tr valign="bottom" height="18">
                <td align="left" width="232"><font face="Times New Roman" size="3">Balance as of June 30, 2008</font></td>

                <td align="left" width="39"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left" width="4%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">4</font></td>

                <td align="left" width="5%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">$</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">354</font></td>

                <td align="left" width="5%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left" width="5%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left" width="2%"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="18">
                <td align="left" width="232"><font face="Times New Roman" size="3">July 1-31, 2008</font></td>

                <td align="left" width="39"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="18">
                <td align="left" width="232"><font face="Times New Roman" size="3">August 1-31, 2008</font></td>

                <td align="left" width="39"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="18">
                <td align="left" width="232"><font face="Times New Roman" size="3">September 1-30, 2008</font></td>

                <td align="left" width="39"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" height="18">
                <td align="left" width="232"><font face="Times New Roman" size="3">Total</font></td>

                <td align="left" width="39"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="75"><font face="Times New Roman" size="3">4</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="75"><font face="Times New Roman" size="3">415</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="3">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="75"><font face="Times New Roman" size="3">--</font></td>

                <td align="left"><font face="Times New Roman" size="3">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">&nbsp;</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.5in; TEXT-INDENT: -37px" align="justify"><font style="FONT-SIZE: 10pt">(a)</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font style="FONT-SIZE: 10pt">As a courtesy to stockholders of less than 100 shares and to relieve such stockholders of having to pay a broker&rsquo;s commission, the Company, although not obligated to do so, has periodically repurchased its common stock at the then most recent closing price of the Company&rsquo;s
        common stock on the last trading day before the stock certificate(s) is</font> <font style="FONT-SIZE: 10pt">(are)</font> <font style="FONT-SIZE: 10pt">actually received by the Company from the stockholder. The number of such shares purchased in any period of time has been minimal.</font> <font style="FONT-SIZE: 10pt">No</font> <font style="FONT-SIZE: 10pt">shares</font> <font style="FONT-SIZE: 10pt">were</font> <font style="FONT-SIZE: 10pt">purchased</font>
        <font style="FONT-SIZE: 10pt">during the quarter ended</font> <font style="FONT-SIZE: 10pt">September 30, 2008.</font></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.8in; TEXT-TRANSFORM: uppercase; TEXT-INDENT: -72px; FONT-VARIANT: small-caps; TEXT-DECORATION: underline" align="left"><b><u><a name="_Toc143051666"></a></u></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.8in; TEXT-TRANSFORM: uppercase; TEXT-INDENT: -72px; FONT-VARIANT: small-caps; TEXT-DECORATION: underline" align="left"><a name="_Toc214417159">Item 6.</a> Exhibits</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">The following exhibits are filed herewith or incorporated by reference as indicated below.</p>

        <p></p>

        <table cellspacing="0" cellpadding="0" width="636" align="center" border="0">
            <tr>
                <td valign="bottom" width="126">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b>Exhibit Designation</b></p>
                </td>

                <td valign="bottom" width="510">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b>Exhibit Description</b></p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.1</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit 3.1 to Registrant&rsquo;s Form S-4 Registration Statement No. 333-55968 dated December 21, 1992)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.2</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Amendment to the Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit 3.5 to Registrant&rsquo;s Form 8-K dated April 1, 1993)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.3</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Restated Articles of Incorporation of Greenbriar Corporation (incorporated by reference to Exhibit 3.1.1 to Registrant&rsquo;s Form 10-K dated December 31, 1995)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.4</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Amendment to the Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit to Registrant&rsquo;s PRES 14-C dated February 27, 1996)</p>
                </td>
            </tr>
        </table>

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            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
        </div>
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        <p>&nbsp;</p>

        <p></p>

        <table cellspacing="0" cellpadding="0" width="636" align="center" border="0">
            <tr>
                <td valign="bottom" width="126">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b>Exhibit Designation</b></p>
                </td>

                <td valign="bottom" width="510">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b>Exhibit Description</b></p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.5</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Bylaws of Registrant (incorporated by reference to Exhibit 3.2 to Registrant&rsquo;s Form S-4 Registration Statement No. 333-55968 dated December 21, 1992)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.6</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Amendment to Section 3.1 of Bylaws of Registrant adopted October 9, 2003 (incorporated by reference to Exhibit 3.2.1 to Registrant&rsquo;s Form S-4 Registration Statement No. 333-55968 dated December 21, 1992)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.7</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Certificate of Decrease in Authorized and Issued Shares effective November 30, 2001 (incorporated by reference to Exhibit 2.1.7 to Registrant&rsquo;s Form 10-K dated December 31, 2002)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.8</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Certificate of Designations, Preferences and Rights of Preferred Stock dated May 7, 1993 relating to Registrant&rsquo;s Series B Preferred Stock (incorporated by reference to Exhibit 4.1.2 to Registrant&rsquo;s Form S-3 Registration Statement No. 333-64840 dated June 22, 1993)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.9</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Certificate of Voting Powers, Designations, Preferences and Rights of Registrant&rsquo;s Series F Senior Convertible Preferred Stock dated December 31, 1997 (incorporated by reference to Exhibit 2.2.2 of Registrant&rsquo;s Form 10-KSB for the fiscal year ended December 31, 1997)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.10</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Certificate of Voting Powers, Designations, Preferences and Rights of Registrant&rsquo;s Series G Senior Non-Voting Convertible Preferred Stock dated December 31, 1997 (incorporated by reference to Exhibit 2.2.3 of Registrant&rsquo;s Form 10-KSB for the fiscal year ended December 31, 1997)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.11</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Certificate of Designations dated October 12, 2004 as filed with the Secretary of State of Nevada on October 13, 2004 (incorporated by reference to Exhibit 3.4 of Registrant&rsquo;s Current Report on Form 8-K for event occurring October 12, 2004)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">3.12</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Certificate of Amendment to Articles of Incorporation effective February 8, 2005 (incorporated by reference to Exhibit 3.5 of Registrant&rsquo;s Current Report on Form 8-K for event occurring February 8, 2005)</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">31.1*</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Certification pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended, of Principal Executive Officer and Chief Financial Officer</p>
                </td>
            </tr>

            <tr>
                <td valign="middle" width="126">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">32.1*</p>
                </td>

                <td valign="top" width="510">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Certification of Principal Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. &amp;#65533; 1350</p>
                </td>
            </tr>

            <tr>
                <td valign="top" width="636" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
                </td>
            </tr>

            <tr>
                <td valign="top" width="636" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">*Filed herewith.</p>
                </td>
            </tr>
        </table>
        <br>
        <br>

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            <a name="PAGENUM"><font face="Times New Roman" color="#000000" size="3">17</font></a>
        </div>

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        </div>

        <p style="MARGIN-TOP: 12pt; FONT-WEIGHT: bold; FONT-SIZE: 12pt; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 0in; TEXT-TRANSFORM: uppercase; TEXT-INDENT: 0px; FONT-VARIANT: small-caps; TEXT-DECORATION: underline" align="center"><b><u><a name="_Toc214417160">Signatures</a></u></b></p>

        <p></p>

        <p style="MARGIN-TOP: 3pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 9pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">Pursuant to the requirements of the Securities and Exchange Act of 1934, Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.</p>

        <p style="MARGIN-TOP: 3pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 9pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
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                <td width="33%">
                </td>

                <td width="220">
                </td>

                <td width="26">
                </td>

                <td style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" width="265">New Concept Energy, Inc.</td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="220">
                </td>

                <td width="26">
                </td>

                <td width="265">
                </td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="220">
                </td>

                <td width="26">
                </td>

                <td width="265">
                </td>
            </tr>

            <tr>
                <td style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" width="33%">Date: November 14, 2007</td>

                <td style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" width="220">
                </td>

                <td style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" width="26">
                    <p align="left">By:</p>
                </td>

                <td style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; BORDER-BOTTOM: black 1px solid" width="265">/s/ Gene S. Bertcher</td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="220">
                </td>

                <td width="26">
                </td>

                <td style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" width="265">President and</td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="220">
                </td>

                <td width="26">
                </td>

                <td style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" width="265">&nbsp;Chief Financial Officer</td>
            </tr>
        </table>
        <br>
        <br>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">&nbsp;</p>

        <p></p>

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                <a name="PAGENUM"></a>&nbsp;
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>nce10q93008ex311.htm
<TEXT>
<html>
    <head>
        <title></title>
        <!-- Created by EDGAR Ease Plus (EDGAR Ease+) -->
        <!-- Control Number:                                                                  -->
        <!-- Rev Number:                                                                      -->
        <!-- Client Name:                                                                     -->
        <!-- Project Name:                                                                    -->
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    <body text="#000000" vlink="#800000" link="#0000ff" bgcolor="#ffffff">
        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">
        <b><a name="CERTS">CERFITICATIONS</a></b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
        EXHIBIT 31.</b><b>1</b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b> <b>PRINCIPAL EXECUTIVE OFFICER AND</b> <b>CHIEF FINANCIAL OFFICER</b><b>&rsquo;</b><b>S<br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RULE 13a-14(a)/15d-14(a) <a name="OLE_LINK1">CERTIFICATION</a></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">I, Gene S. Bertcher, certify that:</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of New Concept Energy, Inc.;</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made in light of the circumstances under which such statements were made, and is not misleading with respect to the period covered by this report;</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements and other financial information included in this report fairly present, in all material respects, the financial condition, results of operations and cash flows of the Registrant as of and for the periods presented in this report;</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13<font style="FONT-FAMILY: 'TIMES NEW ROMAN'">(a)-15(f) and 15</font>(d)-15(f)) for the Registrant and have:</p>

        <p></p>

        <p style="MARGIN: 0pt 0.5in; TEXT-INDENT: 36px" align="justify">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or used such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;</p>

        <p></p>

        <p style="MARGIN: 0pt 0.5in; TEXT-INDENT: 36px" align="justify">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;</p>

        <p></p>

        <p style="MARGIN: 0pt 0.5in; TEXT-INDENT: 36px" align="justify">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the Registrant&rsquo;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures as of the end of the period covered by this report based on such evaluation; and</p>

        <p></p>

        <p style="MARGIN: 0pt 0.5in; TEXT-INDENT: 36px" align="justify">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the Registrant&rsquo;s internal control over financial reporting that occurred during the Registrant&rsquo;s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant&rsquo;s internal control over financial reporting.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant&rsquo;s auditors and the audit committee of Registrant&rsquo;s board of directors (or persons performing the equivalent functions):</p>

        <p></p>

        <p style="MARGIN: 0pt 0.5in; TEXT-INDENT: 36px" align="justify">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant&rsquo;s ability to record, process, summarize and report financial information; and</p>

        <p></p>

        <p style="MARGIN: 0pt 0.5in; TEXT-INDENT: 36px" align="justify">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant&rsquo;s internal controls.</p>

        <p style="MARGIN: 0pt 0.5in; TEXT-INDENT: 36px" align="justify">&nbsp;</p>

        <p align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr>
                <td width="33%">Dated: November 14, 2007</td>

                <td width="277">
                </td>

                <td width="234">
                </td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td width="234">
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            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td style="BORDER-BOTTOM: black 1px solid" width="234">/s/ Gene S. Bertcher&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td width="234">Gene S. Bertcher, President and</td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td width="234">
                    <p align="justify">Chief Financial Officer (Principal Executive and</p>
                </td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td width="234">Financial Officer)</td>
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        </table>
        <br>
        <br>


        <p style="MARGIN: 0pt 0.5in; TEXT-INDENT: 36px" align="justify">&nbsp;</p>

        <p style="MARGIN: 0pt 0.5in; TEXT-INDENT: 36px" align="justify">&nbsp;</p>

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        <p align="justify">&nbsp;</p>

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</TEXT>
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<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>3
<FILENAME>nce10q93008ex321.htm
<TEXT>
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        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>EXHIBIT 32.1</b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OFFICERS</b><b>&rsquo;</b> <b>SECTION 1350 CERTIFICATIONS</b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">The undersigned officer of New Concept Energy, Inc., a Nevada corporation (the &ldquo;Company&rdquo;) hereby certifies that:</p>

        <p></p>

        <p style="MARGIN: 0pt 0.5in 0pt 1in; TEXT-INDENT: -36px" align="justify"><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company</font>&rsquo;s Quarterly Report on Form 10-Q for the period ended September 30, 2008 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and</p>

        <p></p>

        <p style="MARGIN: 0pt 0.5in 0pt 1in; TEXT-INDENT: -36px" align="justify"><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information contained in the Company</font>&rsquo;s Quarterly Report on Form 10-Q for the period ended September 30, 2008 fairly presents, in all material respects, the financial condition and results of operations of the Company, at and for the periods indicated.</p>

        <p style="MARGIN: 0pt 0.5in 0pt 1in; TEXT-INDENT: -36px" align="justify">&nbsp;</p>

        <p align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr>
                <td width="33%">Dated: November 14, 2007</td>

                <td width="277">
                </td>

                <td width="234">
                </td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td width="234">
                </td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td style="BORDER-BOTTOM: black 1px solid" width="234">/s/ Gene S. Bertcher&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td width="234">Gene S. Bertcher, President and</td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td width="234">
                    <p align="justify">Chief Financial Officer (Principal Executive and</p>
                </td>
            </tr>

            <tr>
                <td width="33%">
                </td>

                <td width="277">
                </td>

                <td width="234">Financial Officer)</td>
            </tr>
        </table>
        <br>
        <br>


        <p style="MARGIN: 0pt 0.5in 0pt 1in; TEXT-INDENT: -36px" align="justify">&nbsp;</p>

        <p align="justify">&nbsp;</p>

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