MEXCO ENERGY CORP 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-31785 MEXCO ENERGY CORPORATION (Exact name of registrant as specified in its charter) Colorado 84-0627918 ( State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 415 West Wall Street , Suite 475 Midland , Texas 79701 (Address of principal executive offices) (Zip code) (432) 682-1119 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.50 per share MXC NYSE American 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 and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company as defined in Rule 12b-2 of the Exchange Act. Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer ☐ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒ The number of shares outstanding of the registrant’s common stock, par value $.50 per share, as of November 5, 2021 was 2,121,666 . MEXCO ENERGY CORPORATION AND SUBSIDIARIES Table of Contents Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements 3 Consolidated Balance Sheets as of September 30, 2021 (Unaudited) and March 31, 2021 3 Consolidated Statements of Operations (Unaudited) for the three months and six months ended September 30, 2021 and September 30, 2020 4 Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the three and six months ended September 30, 2021 and September 30, 2020 5 Consolidated Statements of Cash Flows (Unaudited) for the six months ended September 30, 2021 and September 30, 2020 6 Notes to Consolidated Financial Statements (Unaudited) 7 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3. Quantitative and Qualitative Disclosures About Market Risk 17 Item 4. Controls and Procedures 17 PART II. OTHER INFORMATION Item 1. Legal Proceedings 18 Item 1A. Risk Factors 18 Item 6. Exhibits 18 SIGNATURES 19 CERTIFICATIONS Page 2 PART I – FINANCIAL INFORMATION Item 1. Financial Statements Mexco Energy Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS September 30, March 31, 2021 2021 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 93,574 $ 57,813 Accounts receivable: Oil and natural gas sales 791,184 621,384 Trade 55 30,402 Prepaid costs and expenses 43,237 47,895 Total current assets 928,050 757,494 Property and equipment, at cost Oil and gas properties, using the full cost method 39,274,777 38,664,347 Other 120,208 120,208 Accumulated depreciation, depletion and amortization ( 29,559,992 ) ( 29,015,612 ) Property and equipment, net 9,834,993 9,768,943 Investment – cost basis 225,000 200,000 Operating lease, right-of-use asset 156,318 20,861 Other noncurrent assets 23,143 83,389 Total assets $ 11,167,504 $ 10,830,687 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued expenses $ 129,880 $ 116,569 Operating lease liability, current 53,288 21,965 Total current liabilities 183,168 138,534 Long-term liabilities Long-term debt, net - 1,154,949 Operating lease liability, long-term 103,030 - Asset retirement obligations 731,900 713,797 Total long-term liabilities 834,930 1,868,746 Total liabilities 1,018,098 2,007,280 Commitments and contingencies - - Stockholders’ equity Preferred stock - $ 1.00 par value; 10,000,000 shares authorized; none outstanding - - Common stock - $ 0.50 par value; 40,000,000 shares authorized; 2,171,566 and 2,143,666 shares issued; 2,104,566 and 2,076,666 shares outstanding as of September 30, 2021 and March 31, 2021, respectively 1,085,783 1,071,833 Additional paid-in capital 7,832,429 7,624,214 Retained earnings 1,577,195 473,361 Treasury stock, at cost ( 67,000 shares) ( 346,001 ) ( 346,001 ) Total stockholders’ equity 10,149,406 8,823,407 Total liabilities and stockholders’ equity $ 11,167,504 $ 10,830,687 The accompanying notes are an integral part of the consolidated financial statements. Page 3 Mexco Energy Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended September 30, September 30, 2021 2020 2021 2020 Operating revenues: Oil sales $ 1,133,134 $ 504,957 $ 2,120,237 $ 787,327 Natural gas sales 408,037 125,007 676,499 206,816 Other 12,310 6,078 20,943 12,355 Total operating revenues 1,553,481 636,042 2,817,679 1,006,498 Operating expenses: Production 335,588 217,117 612,575 388,783 Accretion of asset retirement obligations 7,245 7,237 14,303 14,424 Depreciation, depletion, and amortization 280,060 236,134 544,380 460,239 General and administrative 214,242 192,360 522,409 441,238 Total operating expenses 837,135 652,848 1,693,667 1,304,684 Operating income (loss) 716,346 ( 16,806 ) 1,124,012 ( 298,186 ) Other income (expenses): Interest income 12 301 71 316 Interest expense ( 7,530 ) ( 13,515 ) ( 20,249 ) ( 24,570 ) Loss on derivative instruments - ( 11,950 ) - ( 19,200 ) Net other expense ( 7,518 ) ( 25,164 ) ( 20,178 ) ( 43,454 ) Income (loss) before income taxes 708,828 ( 41,970 ) 1,103,834 ( 341,640 ) Income tax - - - - Net income (loss) $ 708,828 $ ( 41,970 ) $ 1,103,834 $ ( 341,640 ) Income (loss) per common share: Basic: $ 0.34 $ ( 0.02 ) $ 0.53 $ ( 0.17 ) Diluted: $ 0.33 $ ( 0.02 ) $ 0.52 $ ( 0.17 ) Weighted average common shares outstanding: Basic: 2,091,417 2,040,941 2,084,127 2,040,553 Diluted: 2,143,743 2,040,941 2,131,889 2,040,553 The accompanying notes are an integral part of the consolidated financial statements. Page 4 Mexco Energy Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) Common Stock Par Value Additional Paid-In Capital Retained Earnings (Losses) Treasury Stock Total Stockholders’ Equity Balance at April 1, 2021 $ 1,071,833 $ 7,624,214 $ 473,361 $ ( 346,001 ) $ 8,823,407 2,143,666 ( 67,000 ) Net income - - 1,103,834 - 1,103,834 Issuance of stock through options exercised 13,950 171,782 185,732 Stock based compensation - 36,433 - - 36,433 27,900 - Balance at September 30, 2021 $ 1,085,783 $ 7,832,429 $ 1,577,195 $ ( 346,001 ) $ 10,149,406 2,171,566 ( 67,000 ) Common Stock Par Value Additional Paid-In Capital Retained Earnings (Losses) Treasury Stock Total Stockholders’ Equity Balance at June 30, 2021 $ 1,074,333 $ 7,669,579 $ 868,367 $ ( 346,001 ) $ 9,266,278 Net income - - 708,828 - 708,828 Issuance of stock through options exercised 11,450 140,282 151,732 Stock based compensation - 22,568 - - 22,568 Balance at September 30, 2021 $ 1,085,783 $ 7,832,429 $ 1,577,195 $ ( 346,001 ) $ 10,149,406 Common Stock Par Value Additional Paid-In Capital Retained Earnings Treasury Stock Total Stockholders’ Equity Balance at April 1, 2020 $ 1,053,583 $ 7,339,351 $ 317,429 $ ( 346,001 ) $ 8,364,362 Net loss - - ( 341,640 ) - ( 341,640 ) Issuance of stock through options exercised 750 8,685 - - 9,435 Stock based compensation - 27,948 - - 27,948 Balance at September 30, 2020 $ 1,054,333 $ 7,375,984 $ ( 24,211 ) $ ( 346,001 ) $ 8,060,105 Common Stock Par Value Additional Paid-In Capital Retained Earnings Treasury Stock Total Stockholders’ Equity Balance at June 30, 2020 $ 1,053,583 $ 7,353,356 $ 17,759 $ ( 346,001 ) $ 8,078,697 Net loss - - ( 41,970 ) - ( 41,970 ) Issuance of stock through options exercised 750 8,685 - - 9,435 Stock based compensation - 13,943 - - 13,943 Balance at September 30, 2020 $ 1,054,333 $ 7,375,984 $ ( 24,211 ) $ ( 346,001 ) $ 8,060,105 SHARE ACTIVITY Common stock shares, issued: Balance at April 1, 2021 2,143,666 Issued 27,900 Balance at September 30, 2021 2,171,566 Common stock shares, held in treasury: Balance at April 1, 2021 ( 67,000 ) Acquisitions - Balance at September 30, 2021 ( 67,000 ) Common stock shares, outstanding at September 30, 2021 2,104,566 The accompanying notes are an integral part of the consolidated financial statements. Page 5 Mexco Energy Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended September 30, (Unaudited) 2021 2020 Cash flows from operating activities: Net income (loss) $ 1,103,834 $ ( 341,640 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation 36,433 27,948 Depreciation, depletion and amortization 544,380 460,239 Accretion of asset retirement obligations 14,303 14,424 Amortization of debt issuance costs 6,263 6,263 Changes in operating assets and liabilities: Increase in accounts receivable ( 139,453 ) ( 36,667 ) (Increase) decrease in right-of-use asset ( 135,457 ) 23,017 Decrease in prepaid expenses 4,659 26,287 Increase in accounts payable and accrued expenses 16,553 7,185 Settlement of asset retirement obligations ( 1,052 ) ( 1,028 ) Increase (decrease) in operating lease liability 134,353 ( 21,791 ) Net cash provided by operating activities 1,584,816 164,237 Cash flows from investing activities: Additions to oil and gas properties ( 657,308 ) ( 714,079 ) Drilling refunds 115,552 42,060 Investment – cost basis ( 25,000 ) ( 25,000 ) Proceeds from sale of oil and gas properties and equipment 11,969 106,285 Additions to other property and equipment - ( 3,215 ) Net cash used in investing activities ( 554,787 ) ( 593,949 ) Cash flows from financing activities: Proceeds from exercise of stock options 185,732 9,435 Proceeds from long-term debt 275,000 673,574 Reduction of long-term debt ( 1,455,000 ) ( 225,000 ) Net cash (used in) provided by financing activities ( 994,268 ) 458,009 Net increase in cash and cash equivalents 35,761 28,297 Cash and cash equivalents at beginning of period 57,813 34,381 Cash and cash equivalents at end of period $ 93,574 $ 62,678 Supplemental disclosure of cash flow information: Cash paid for interest $ 14,834 $ 17,859 Non-cash investing and financing activities: Asset retirement obligations $ 7,472 $ 11,269 Operating lease – right of use asset and associated liabilities $ 165,007 $ 9,360 The accompanying notes are an integral part of the consolidated financial statements. Page 6 Mexco Energy Corporation and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Nature of Operations Mexco Energy Corporation (a Colorado corporation) and its wholly owned subsidiaries, Forman Energy Corporation (a New York corporation), Southwest Texas Disposal Corporation (a Texas corporation) and TBO Oil & Gas, LLC (a Texas limited liability company) (collectively, the “Company”) are engaged in the exploration, development and production of natural gas, crude oil, condensate and natural gas liquids (“NGLs”). Most of the Company’s oil and gas interests are centered in the West Texas and Southeastern New Mexico; however, the Company owns producing properties and undeveloped acreage in fourteen states. All of the Company’s oil and gas interests are operated by others. 2. Basis of Presentation and Significant Accounting Policies Principles of Consolidation . The consolidated financial statements include the accounts of Mexco Energy Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions associated with the consolidated operations have been eliminated. Estimates and Assumptions . In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), management is required to make informed judgments, estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. In addition, significant estimates are used in determining proved oil and gas reserves. Although management believes its estimates and assumptions are reasonable, actual results may differ materially from those estimates. The estimate of the Company’s oil and natural gas reserves, which is used to compute depreciation, depletion, amortization and impairment of oil and gas properties, is the most significant of the estimates and assumptions that affect these reported results. Interim Financial Statements . In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 2021, and the results of its operations and cash flows for the interim periods ended September 30, 2021 and 2020. The consolidated financial statements as of September 30, 2021 and for the three and six month periods ended September 30, 2021 and 2020 are unaudited. The consolidated balance sheet as of March 31, 2021 was derived from the audited balance sheet filed in the Company’s 2021 annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full year. The accounting policies followed by the Company are set forth in more detail in Note 2 of the “Notes to Consolidated Financial Statements” in the Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC. However, the disclosures herein are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Form 10-K. Investments . The Company accounts for investments of less than 1% in limited liability companies at cost. The Company has no control of the limited liability companies. The cost of the investment is recorded as an asset on the consolidated balance sheets and when income from the investment is received, it is immediately recognized on the consolidated statements of operations. Derivative Financial Instruments . The Company’s derivative financial instruments are used to manage commodity price risk attributable to expected oil and gas production. While there is risk the financial benefit of rising oil and gas prices may not be captured, the Company believes the benefits of stable and predictable cash flows outweigh the potential risks. Page 7 The Company accounts for derivative financial instruments using fair value accounting and recognizes gains and losses in earnings during the period in which they occur. Unsettled derivative instruments are recorded in the accompanying consolidated balance sheets as either a current or non-current asset or a liability measured at its fair value. The Company only offsets derivative assets and liabilities for arrangements with the same counterparty when right of offset exists. Derivative assets and liabilities with different counterparties are recorded gross in the consolidated balance sheets. Derivative contract settlements are reflected in operating activities in the accompanying consolidated statements of cash flows. As of September 30, 2021, the Company had no derivative contracts. During the six months ended September 30, 2020, the Company entered into a series of crude oil put option contracts. All of these such contracts expired in July and August 2020. 3. Asset Retirement Obligations The Company’s asset retirement obligations (“ARO”) relate to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. The fair value of a liability for an ARO is recorded in the period in which it is initially incurred, discounted to its present value using the credit adjusted risk-free interest rate, and a corresponding amount capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted each period until the liability is settled or the well is sold, at which time the liability is removed. The related asset retirement cost is capitalized as part of the carrying amount of our oil and natural gas properties. The ARO is included on the consolidated balance sheets with the current portion being included in the accounts payable and other accrued expenses. The following table provides a rollforward of the AROs for the first six months of fiscal 2022: Schedule of Rollforward of Asset Retirement Obligations Carrying amount of asset retirement obligations as of April 1, 2021 $ 728,797 Liabilities incurred 7,472 Liabilities settled ( 3,672 ) Accretion expense 14,303 Carrying amount of asset retirement obligations as of September 30, 2021 746,900 Less: Current portion 15,000 Non-Current asset retirement obligation $ 731,900 4. Long Term Debt Long-term debt on the Consolidated Balance Sheets consisted of the following as of the dates indicated: Schedule of Long-Term Debt September 30, 2021 March 31, 2021 Credit facility $ - $ 1,180,000 Unamortized debt issuance costs (1) - ( 25,051 ) Total long-term debt, net $ - $ 1,154,949 (1) For the current period, since the Company has no long term debt outstanding, unamortized debt issuance costs in the amount of $ 18,789 are included in Other noncurrent assets. For the current period, since the Company has no long term debt outstanding, unamortized debt issuance costs are included in Other noncurrent assets. On December 28, 2018, the Company entered into a loan agreement (the “Agreement”) with West Texas National Bank (“WTNB”), which provided for a credit facility of $ 1,000,000 with a maturity date of December 28, 2021 . The Agreement has no monthly commitment reduction and a borrowing base to be evaluated annually. On February 28, 2020, the Agreement was amended to increase the credit facility to $ 2,500,000 , extend the maturity date to March 28, 2023 and increase the borrowing base to $ 1,500,000 . Under the Agreement, interest on the facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half of one percent ( 0.5 %) floating daily. Interest on the outstanding amount under the Agreement is payable monthly. In addition, the Company will pay an unused commitment fee in an amount equal to one-half of one percent (0.5%) times the daily average of the unadvanced amount of the commitment . The unused commitment fee is payable quarterly in arrears on the last day of each calendar quarter. As of September 30, 2021, there was $ 1,500,000 available for borrowing by the Company on the facility. Page 8 No principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2023 . Upon closing with WTNB on the original Agreement, the Company paid a .5% loan origination fee in the amount of $ 5,000 plus legal and recording expenses totaling $ 34,532 , which were deferred over the life of the credit facility. Upon closing the amendment to the Agreement, the Company paid a .1% loan origination fee of $ 2,500 and an extension fee of $ 3,125 plus legal and recording expenses totaling $ 12,266 , which were also deferred over the life of the credit facility. Amounts borrowed under the Agreement are collateralized by the common stock of the Company’s wholly owned subsidiaries and substantially all of the Company’s oil and gas properties. The Agreement contains customary covenants for credit facilities of this type including limitations on change in control, disposition of assets, mergers and reorganizations. The Company is also obligated to meet certain financial covenants under the Agreement and requires senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratios (Senior Debt/EBITDA) less than or equal to 4.00 to 1.00 measured with respect to the four trailing quarters and minimum interest coverage ratios (EBITDA/Interest Expense) of 2.00 to 1.00 for each quarter . In addition, this Agreement prohibits the Company from paying cash dividends on its common stock without written permission of WTNB. The Agreement does not permit the Company to enter into hedge agreements covering crude oil and natural gas prices without prior WTNB approval. There was no balance outstanding on the line of credit as of September 30, 2021. The following table is a summary of activity on the WTNB line of credit for the six months ended September 30, 2021: Summary of Line of Credit Activity Principal Balance at April 1, 2021: $ 1,180,000 Borrowings 275,000 Repayments ( 1,455,000 ) Balance at September 30, 2021: $ - 5. Leases The Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for our corporate office located in Midland, Texas. This includes 1,112 square feet of office space shared with and reimbursed by our majority shareholder. The lease does not include an option to renew and is a 36 month lease that expired in May 2021. In June 2020, in exchange for a reduction in rent for the months of June and July 2020, the Company agreed to a 2-month extension to its current lease agreement at the regular monthly rate extending its current lease expiration date to July 2021 . In June 2021, the Company agreed to extend its current lease at a flat (unescalated) rate for 36 months . The amended lease now expires on July 31, 2024 . The Company determines an arrangement is a lease at inception. Operating leases are recorded in operating lease right-of-use asset, operating lease liability, current, and operating lease liability, long-term on the consolidated balance sheets. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate used at adoption was 3.75 %. Significant judgement is required when determining the incremental borrowing rate. Rent expense for lease payments is recognized on a straight-line basis over the lease term. Page 9 The balance sheets classification of lease assets and liabilities was as follows: Schedule of Operating Lease Assets and Liabilities September 30, 2021 Assets Operating lease right-of-use asset, beginning balance $ 20,861 Current period amortization ( 29,550 ) Lease amendment 165,007 Total operating lease right-of-use asset $ 156,318 Liabilities Operating lease liability, current $ 53,288 Operating lease liability, long term 103,030 Total lease liabilities $ 156,318 Future minimum lease payments as of September 30, 2021 under non-cancellable operating leases are as follows: Schedule of Future Minimum Lease Payments Lease Obligation Fiscal Year Ended March 31, 2022 29,120 Fiscal Year Ended March 31, 2023 58,240 Fiscal Year Ended March 31, 2024 58,240 Fiscal Year Ended March 31, 2025 19,413 Total lease payments $ 165,013 Less: imputed interest ( 8,695 ) Operating lease liability 156,318 Less: operating lease liability, current ( 53,288 ) Operating lease liability, long term $ 103,030 Net cash paid for our operating lease for the six months ended September 30, 2021 and 2020 was $ 20,903 and $ 21,693 , respectively. Rent expense, less sublease income of $ 10,768 and $ 9,459 , respectively, is included in general and administrative expenses. 6. Stock-based Compensation The Company recognized stock-based compensation expense of $ 22,568 and $ 13,943 in general and administrative expense in the Consolidated Statements of Operations for the three months ended September 30, 2021 and 2020, respectively. Stock-based compensation expense recognized for the six months ended September 30, 2021 and 2020 was $ 36,433 and $ 27,948 , respectively. The total cost related to non-vested awards not yet recognized at September 30, 2021 totals $ 265,248 which is expected to be recognized over a weighted average of 2.82 years. During the six months ended September 30, 2021, the Compensation Committee of the Board of Directors approved and the Company granted 31,000 stock options exercisable at $ 8.51 per share with an estimated fair value of $ 187,550 . During the six months ended September 30, 2020, no stock options were granted. These options are exercisable at a price not less than the fair market value of the stock at the date of grant, have an exercise period of ten years and generally vest over four years . Included in the following table is a summary of the grant-date fair value of stock options granted and the related assumptions used in the Binomial models for stock options granted during the six months ended September 30, 2021 and 2020. All such amounts represent the weighted average amounts. Summary of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binomial Models Six Months Ended September 30 2021 2020 Grant-date fair value $ 6.05 - Volatility factor 65.38 % - Dividend yield - - Risk-free interest rate 0.92 % - Expected term (in years) 6.25 - Page 10 The following table is a summary of activity of stock options for the six months ended September 30, 2021: Summary of Activity of Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Life in Years Intrinsic Value Outstanding at April 1, 2021 156,000 $ 5.28 5.53 $ 555,100 Granted 31,000 8.51 Exercised ( 27,900 ) 6.63 Forfeited or Expired - - Outstanding at September 30, 2021 159,100 $ 5.67 6.50 $ 752,622 Vested at September 30, 2021 87,350 $ 5.56 4.59 $ 422,362 Exercisable at September 30, 2021 87,350 $ 5.56 4.59 $ 422,362 During the six months ended September 30, 2021, stock options covering 27,900 shares were exercised with a total intrinsic value of $ 104,473 . The Company received proceeds of $ 185,732 from these exercises. During the six months ended September 30, 2020, stock options covering 1,500 shares were exercised with a total intrinsic value of $ 135 . The Company received proceeds of $ 9,435 from these exercises. There were no stock options forfeited or expired during the six months ended September 30, 2021 and 2020. No forfeiture rate is assumed for stock options granted to directors or employees due to the forfeiture rate history of these types of awards. Outstanding options at September 30, 2021 expire between April 2023 and July 2031 and have exercise prices ranging from $ 3.34 to $ 8.51 . 7. Income Taxes A valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. To assess that likelihood, we use estimates and judgment regarding our future taxable income, and we consider the tax consequences in the jurisdiction where such taxable income is generated, to determine whether a valuation allowance is required. Such evidence can include our current financial position, our results of operations, both actual and forecasted, the reversal of deferred tax liabilities, and tax planning strategies as well as the current and forecasted business economics of our industry. Based on the material write-downs of the carrying value of our oil and natural gas properties during fiscal 2016, we are in a net deferred tax asset position as of September 30, 2021. Our deferred tax asset is $ 1,045,531 as of September 30, 2021 with a valuation amount of $ 1,045,531 . We believe it is more likely than not that these deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of deferred tax assets. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as expected future growth. 8. Related Party Transactions Related party transactions for the Company relate to shared office expenditures in addition to administrative and operating expenses paid on behalf of the principal stockholder. The total billed to and reimbursed by the stockholder for the quarters ended September 30, 2021 and 2020 was $ 10,288 and $ 8,219 , respectively. The total billed to and reimbursed by the stockholder for the six months ended September 30, 2021 and 2020 was $ 23,056 and $ 18,321 , respectively. The principal stockholder pays for his share of the lease amount for the shared office space directly to the lessor. Amounts paid by the principal stockholder directly to the lessor for the three months ending September 30, 2021 and 2020 were $ 3,944 and $ 3,846 , respectively. Amounts paid by the principal stockholder directly to the lessor for the six months ending September 30, 2021 and 2020 were $ 7,988 and $ 7,649 , respectively. Page 11 9. Income (loss) Per Common Share The Company’s basic net income (loss) per share has been computed based on the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share assumes the exercise of all stock options having exercise prices less than the average market price of the common stock during the period using the treasury stock method and is computed by dividing net income (loss) by the weighted average number of common shares and dilutive potential common shares (stock options) outstanding during the period. In periods where losses are reported, the weighted-average number of common shares outstanding excludes potential common shares, because their inclusion would be anti-dilutive. The following is a reconciliation of the number of shares used in the calculation of basic and diluted net loss per share for the three and six month periods ended September 30, 2021 and 2020. Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share Three Months Ended Six Months Ended September 30, September 30, 2021 2020 2021 2020 Net income (loss) $ 708,828 $ ( 41,970 ) $ 1,103,834 $ ( 341,640 ) Shares outstanding: Weighted avg. shares outstanding – basic 2,091,417 2,040,941 2,084,127 2,040,553 Effect of assumed exercise of dilutive stock options 52,326 - 47,762 - Weighted avg. shares outstanding – dilutive 2,143,743 2,040,941 2,131,889 2,040,553 Income (loss) per common share: Basic $ 0.34 $ ( 0.02 ) $ 0.53 $ ( 0.17 ) Diluted $ 0.33 $ ( 0.02 ) $ 0.52 $ ( 0.17 ) For the three and six months ended September 30, 2021, 31,000 shares relating to stock options were excluded from the computation of diluted net income because their inclusion would be anti-dilutive. Due to a net loss for the for the three and six months ended September 30, 2020, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. 10. Subsequent Events On October 4, 2021, stock options covering 16,100 shares were exercised with a total intrinsic value of $ 128,615 . The Company received proceeds of $ 103,928 from these exercises. On October 5, 2021, stock options covering 1,000 shares were exercised with a total intrinsic value of $ 8,138 . The Company received proceeds of $ 5,980 from these exercises. On October 22, 2021, the Company expended $ 84,600 for the completion of four wells in Lea County, NM. On October 27, 2021, the Company expended $ 126,000 for the drilling of four wells in Lea County, NM. On November 1, 2021, the Company had cash on hand of approximately $ 335,000 . The Company completed a review and analysis of all events that occurred after the consolidated balance sheet date to determine if any such events must be reported and has determined that there are no other subsequent events to be disclosed. Page 12 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Unless the context otherwise requires, references to the “Company”, “Mexco”, “we”, “us” or “our” mean Mexco Energy Corporation and its consolidated subsidiaries. Cautionary Statements Regarding Forward-Looking Statements. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements regarding our plans, beliefs or current expectations and may be signified by the words “could”, “should”, “expect”, “project”, “estimate”, “believe”, “anticipate”, “intend”, “budget”, “plan”, “forecast”, “predict” and other similar expressions. Forward-looking statements appear throughout this Form 10-Q with respect to, among other things: profitability; planned capital expenditures; estimates of oil and gas production; future project dates; estimates of future oil and gas prices; estimates of oil and gas reserves; our future financial condition or results of operations; and our business strategy and other plans and objectives for future operations. Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement. While we have made assumptions that we believe are reasonable, the assumptions that support our forward-looking statements are based upon information that is currently available and is subject to change. All forward-looking statements in this Form 10-Q are qualified in their entirety by the cautionary statement contained in this section. We do not undertake to update, revise or correct any of the forward-looking information. It is suggested that these financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Form 10-K. Liquidity and Capital Resources. Historically, we have funded our operations, acquisitions, exploration and development expenditures from cash generated by operating activities, bank borrowings, sales of non-core properties and issuance of common stock. Our primary financial resource is our base of oil and gas reserves. We have pledged our producing oil and gas properties to secure our credit facility. We do not have any delivery commitments to provide a fixed and determinable quantity of its oil and gas under any existing contract or agreement. Our long term strategy is on increasing profit margins while concentrating on obtaining reserves with low cost operations by acquiring and developing oil and gas properties with potential for long-lived production. We focus our efforts on the acquisition of royalties and working interests and non-operated properties in areas with significant development potential. At September 30, 2021, we had working capital of $744,882 compared to working capital of $618,960 at March 31, 2021, an increase of $125,922 for the reasons set forth below. Cash Flows Changes in the net funds provided by or (used in) each of our operating, investing and financing activities are set forth in the table below: For the Six Months Ended September 30, 2021 2020 % Difference Net cash provided by operating activities 1,584,816 164,237 865 % Net cash used in investing activities (554,787 ) (593,949 ) (7 )% Net cash (used in) provided by financing activities (994,268 ) 458,009 (317 )% Cash Flow Provided by Operating Activities. Cash flow from operating activities is primarily derived from the production of our crude oil and natural gas reserves and changes in the balances of non-cash accounts, receivables, payables or other non-energy property asset account balances. Cash flow provided by our operating activities for the six months ended September 30, 2021 was $1,584,816 in comparison to $164,237 for the six months ended September 30, 2020. This increase of $1,420,579 in our cash flow operating activities consisted of an increase in our non-cash expenses of $92,505; an increase in our accounts receivable of $102,786; and, an increase in our net income for the current six months of $1,445,474 compared to a net loss the same six month period of the prior year. Variations in cash flow from operating activities may impact our level of exploration and development expenditures. Our expenditures in operating activities consist primarily of non-operated lease expenses and production expenses. Our expenses also consist of employee compensation, accounting, insurance and other general and administrative expenses that we have incurred in order to address normal and necessary business activities of a public company in the crude oil and natural gas production industry. Cash Flow Used in Investing Activities. Cash flow from investing activities is derived from changes in oil and gas property balances. For the six months ended September 30, 2021, we had net cash of $554,787 used for additions to oil and gas properties compared to $593,949 for the six months ended September 30, 2020. Page 13 Cash Flow Provided by Financing Activities. Cash flow from financing activities is derived from our changes in long-term debt and in equity account balances. Cash flow used in our financing activities was $994,268 for the six months ended September 30, 2021 compared to cash flow provided by our financing activities of $458,009 for the six months ended September 30, 2020. During the six months ended September 30, 2021 and 2020, we received advances of $275,000 and $605,000, respectively, from our credit facility. During the six months ended September 30, 2021 and 2020, we made payments of $1,455,000 and $225,000, respectively, on the credit facility. For the six months ended September 30, 2021 and 2020, we received proceeds of $185,732 and $9,435, respectively, from the exercise of employee and director stock options. For the six months ended September 30, 2020, we received $68,574 under the paycheck protection program (PPP). Accordingly, net cash increased $35,761, leaving cash and cash equivalents on hand of $93,574 as of September 30, 2021. Oil and Natural Gas Property Development New Participations in Fiscal 2022. The Company currently plans to participate in the drilling and completion of 39 horizontal wells at an estimated aggregate cost of approximately $1,000,000 for the fiscal year ending March 31, 2022. All of these horizontal wells are in the Delaware Basin located in the western portion of the Permian Basin in Lea and Eddy Counties, New Mexico and Reeves County, Texas. During the six months ended September 30, 2021, Mexco expended approximately $180,000 to participate in the drilling and completion of four horizontal wells in the Lower Wolfcamp Shale of the Delaware Basin in Eddy County, New Mexico. Mexco’s working interest in these wells is .44%. Also during the six months ended September 30, 2021, Mexco expended $31,500 for its share to participate in the drilling and completion of two horizontal wells in the 3 rd Bone Spring Sand formation of the Delaware Basin located in the western portion of the Permian Basin in Lea County, New Mexico. These wells were completed in August 2021 with initial average production rates of 1,294 barrels of oil, 3,345 barrels of water and 3,124,000 cubic feet of gas per day, or, 1,815 barrels of oil equivalent per day. Mexco’s working interest in these wells is .1%. In September 2021, Mexco expended approximately $43,000 to participate in the drilling of three horizontal wells in the 2 nd Bone Spring formation and two horizontal wells in the 3 rd Bone Spring formation of the Delaware Basin located in the western portion of the Permian Basin in Lea County, New Mexico. Mexco’s working interest in these wells is an average of approximately .22%. In August 2021, Mexco expended approximately $28,000 to participate in the drilling of two horizontal wells in the Wolfcamp Sand formation of the Delaware Basin located in the western portion of the Permian Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .37%. Subsequently, in October 2021, Mexco expended approximately $42,000 for the completion of these wells. In August 2021, Mexco expended approximately $52,000 to participate in the drilling of two horizontal wells in the Bone Spring formation of the Delaware Basin located in the western portion of the Permian Basin in Reeves County, Texas. Mexco working interest in these wells is approximately .6%. These wells have been drilled and are planned to be completed in November 2021. In May 2021, Mexco expended approximately $28,000 to participate in the drilling of two horizontal wells in the Wolfcamp Sand formation of the Delaware Basin located in the western portion of the Permian Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .37%. Subsequently, in October 2021, Mexco expended approximately $42,000 for the completion of these wells. Also, during the quarter ended June 30, 2021, Mexco participated in the drilling and completion of two horizontal wells in the Wolfcamp formation of the Delaware Basin located in the western portion of the Permian Basin in Lea County, New Mexico with aggregate costs of approximately $88,000. These wells were completed at the end of June 2021 with initial average production rates of 1,184 barrels of oil, 4,380 barrels of water and 1,818,000 cubic feet of gas per day, or 1,444 barrels of oil equivalent per day. Mexco’s working interest in these wells is .56%. Completion of Wells Drilled in Fiscal 2021. The Company expended approximately $165,000 for the additional completion costs of 12 horizontal wells located in Eddy and Lea Counties, New Mexico that the Company participated in drilling during fiscal 2021. Page 14 The Company participated in the completion of two horizontal wells in the Wolfcamp formation of the Delaware Basin located in the western portion of the Permian Basin in Lea County, New Mexico with aggregate costs of approximately $108,000. These wells were completed at the end of June 2021 and beginning of July 2021 with initial average production rates of 1,046 barrels of oil, 3,214 barrels of water and 2,146,000 cubic feet of gas per day, or 1,403 barrels of oil equivalent per day. Mexco’s working interest in these wells is 1.2%. The Company participated in the completion of two horizontal wells in the Wolfcamp formation of the Delaware Basin located in the western portion of the Permian Basin in Lea County, New Mexico with aggregate costs of approximately $55,000. These wells were completed at the end of June 2021 with initial average production rates of 774 barrels of oil, 2,648 barrels of water and 973,000 cubic feet of gas per day, or 913 barrels of oil equivalent per day. Mexco’s working interest in these wells is .56%. We are participating in other projects and are reviewing projects in which we may participate. The cost of such projects would be funded, to the extent possible, from existing cash balances and cash flow from operations. The remainder may be funded through borrowings on the credit facility and, if appropriate, sales of non-core properties. Crude oil and natural gas generally remained volatile during the last year. The volatility of the energy markets makes it extremely difficult to predict future oil and natural gas price movements with any certainty. For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $31.75 per bbl in October 2020 to a high of $71.43 per bbl in September 2021. The Henry Hub Spot Market Price (“Henry Hub”) for natural gas has ranged from a low of $1.41 per MMBtu in October 2020 to a high of $23.86 per MMBtu in February 2021. On September 30, 2021, the WTI posted price for crude oil as $71.01 and the Henry Hub spot price for natural gas was $5.58 per MMBtu. See Results of Operations below for realized prices. Contractual Obligations. We have no off-balance sheet debt or unrecorded obligations and have not guaranteed the debt of any other party. The following table summarizes our future payments we are obligated to make based on agreements in place as of September 30, 2021: Payments due in: Total less than 1 year 1 - 3 years over 3 years Contractual obligations: Leases (1) $ 165,013 $ 50,421 $ 114,593 $ - (1) The lease amount represents the monthly rent amount for our principal office space in Midland, Texas under a 38 month lease agreement effective May 15, 2018 and extended another 36 months to July 31, 2024. Of this total obligation for the remainder of the lease, our majority shareholder will pay $13,481 less than 1 year and $30,640 1-3 years for his portion of the shared office space. Results of Operations – Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020. There was net income of $708,828 for the quarter ended September 30, 2021 compared to a net loss of $41,970 for the quarter ended September 30, 2020. This was a result of an increase in oil and gas prices and an increase in oil and gas production partially offset by an increase in operating expenses that is further explained below. Oil and gas sales. Revenue from oil and gas sales was $1,541,171 for the second quarter of fiscal 2022, a 145% increase from $629,964 for the same period of fiscal 2021. This resulted from an increase in oil and gas prices as well as an increase in oil and gas production. 2021 2020 % Difference Oil: Revenue $ 1,133,134 $ 504,957 124.4 % Volume (bbls) 16,277 13,143 23.8 % Average Price (per bbl) $ 69.62 $ 38.42 81.2 % Gas: Revenue $ 408,037 $ 125,007 226.4 % Volume (mcf) 92,607 88,890 4.2 % Average Price (per mcf) $ 4.41 $ 1.41 212.8 % Page 15 Production and exploration. Production costs were $335,588 for the second quarter of fiscal 2022, a 55% increase from $217,117 for the same period of fiscal 2021. This is primarily the result of an increase in production taxes and marketing charges as a result of the increase in oil and gas revenues. Depreciation, depletion and amortization. Depreciation, depletion and amortization expense was $280,060 for the second quarter of fiscal 2022, a 19% increase from $236,134 for the same period of fiscal 2021, primarily due to an increase in oil and gas production and a decrease in oil and gas reserves partially offset by a decrease in the full cost pool amortization base. General and administrative expenses. General and administrative expenses were $214,242 for the second quarter of fiscal 2022, an 11% increase from $192,360 for the same period of fiscal 2021. This was primarily due to an increase in office and rent expenses and employee stock option compensation expense. Interest expense. Interest expense was $7,530 for the second quarter of fiscal 2022, a 44% decrease from $13,515 for the same period of fiscal 2021, due to a decrease in borrowings. Income taxes. There was no income tax expense for the three months ended September 30, 2021 and for the three months ended September 30, 2020. The effective tax rate for the three months ended September 30, 2021 and September 30, 2020 was 0%. We are in a net deferred tax asset position and believe it is more likely than not that these deferred tax assets will not be realized. Results of Operations – Six Months Ended September 30, 2021 Compared to Six Months Ended September 30, 2020. For the six months ended September 30, 2021, there was net income of $1,103,834 compared to a net loss of $341,640 for the six months ended September 30, 2020. This was a result of an increase in operating revenues partially offset by an increase in operating expenses that is further explained below. Oil and gas sales. Revenue from oil and gas sales was $2,796,736 for the six months ended September 30, 2021, a 181% increase from $994,143 for the same period of fiscal 2021. This resulted from an increase in oil and gas prices as well as an increase in oil and gas production. 2021 2020 % Difference Oil: Revenue $ 2,120,237 $ 787,327 169.3 % Volume (bbls) 31,715 24,677 28.5 % Average Price (per bbl) $ 66.85 $ 31.91 109.5 % Gas: Revenue $ 676,499 $ 206,816 227.1 % Volume (mcf) 182,670 168,406 8.5 % Average Price (per mcf) $ 3.70 $ 1.23 200.8 % Production and exploration. Production costs were $612,575 for the six months ended September 30, 2021, a 58% increase from $388,783 for the six months ended September 30, 2020. This increase is primarily the result of an increase in production taxes as a result of the increase in oil and gas revenues and an increase in lease operating expenses over last year due to numerous wells being shut-in during the month of May 2020 as well as cost cutting measures being implemented by the operators because of the depressed oil and gas prices during the pandemic. Depreciation, depletion and amortization. Depreciation, depletion and amortization expense was $544,380 for the six months ended September 30, 2021, an 18% increase from $460,239 for the six months ended September 30, 2020, primarily due to an increase in oil and gas production and a decrease of oil and gas reserves partially offset by a decrease in the full cost pool amortization base. General and administrative expenses. General and administrative expenses were $522,409 for the six months ended September 30, 2021, an 18% increase from $441,238 for the six months ended September 30, 2020. This was primarily due to an increase in bonuses and director’s fees which were significantly reduced last year due to the pandemic and an increase in accounting fees. Interest expense. Interest expense was $20,249 for the six months ended September 30, 2021, an 18% decrease from $24,570 for the same period fiscal 2021 due to a decrease in borrowings. Income taxes. There was no income tax expense for the six months ended September 30, 2021 and for the six months ended September 30, 2020. The effective tax rate for the six months ended September 30, 2021 and September 30, 2020 was 0%. We are in a net deferred tax asset position and believe it is more likely than not that these deferred tax assets will not be realized. Page 16 Item 3. Quantitative and Qualitative Disclosures About Market Risk The primary source of market risk for us includes fluctuations in commodity prices. All of our financial instruments are for purposes other than trading. Credit Risk. Credit risk is the risk of loss as a result of nonperformance by other parties of their contractual obligations. Our primary credit risk is related to oil and gas production sold to various purchasers and the receivables are generally not collateralized. At September 30, 2021, our largest credit risk associated with any single purchaser was $594,715 or 76% of our total oil and gas receivables. We have not experienced any significant credit losses. Energy Price Risk . Our most significant market risk is the pricing applicable to our crude oil and natural gas production. Our financial condition, results of operations, and capital resources are highly dependent upon the prevailing market prices of, and demand for, oil and natural gas. Pricing for oil and natural gas production has been volatile and unpredictable for several years, and we expect this volatility to continue in the future. For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $31.75 per bbl in October 2020 to a high of $71.43 per bbl in September 2021. The Henry Hub Spot Market Price (“Henry Hub”) posted price for natural gas has ranged from a low of $1.41 per MMBtu in October 2020 to a high of $23.86 per MMBtu in February 2021. On September 30, 2021, the WTI posted price for crude oil was $71.01 and the Henry Hub posted price for natural gas was $5.58. See Results of Operations above for the Company’s realized prices during the three and six months. Similarly, any improvements in oil and gas prices can have a favorable impact on our financial condition, results of operations and capital resources. If the average oil price had increased or decreased by ten dollars per barrel for the first six months of fiscal 2022, our pretax income would have increased or decreased by $317,150. If the average gas price had increased or decreased by one dollar per mcf for the first six months of fiscal 2022, our pretax income would have increased or decreased by $182,670. Information about market risks for the six months ended September 30, 2021, does not differ materially from that discussed under Item 7A of the registrant’s 2021 Annual Report on Form 10-K. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures to ensure that the information we must disclose in our filings with the SEC is recorded, processed, summarized and reported on a timely basis. At the end of the period covered by this report, our principal executive officer and principal financial officer reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e). Based on such evaluation, such officers concluded that, as of September 30, 2021, our disclosure controls and procedures were effective. Changes in Internal Control over Financial Reporting. No changes in our internal control over financial reporting occurred during the six months ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Page 17 PART II – OTHER INFORMATION Item 1. Legal Proceedings We may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business. We are not aware of any legal or governmental proceedings against us, or contemplated to be brought against us, under various environmental protection statutes or other regulations to which we are subject. Item 1A. Risk Factors There have been no material changes to the information previously disclosed in Item 1A. “Risk Factors” in our 2021 Annual Report on Form 10-K. Item 6. Exhibits 31.1 Certification of the Chief Executive Officer of Mexco Energy Corporation 31.2 Certification of the Chief Financial Officer of Mexco Energy Corporation 32.1 Certification of the Chief Executive Officer and Chief Financial Officer of Mexco Energy Corporation pursuant to 18 U.S.C. §1350 101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE iXBRL Instance Document iXBRL Taxonomy Extension Schema Document iXBRL Taxonomy Calculation Linkbase Document iXBRL Taxonomy Extension Definition Linkbase Document iXBRL Taxonomy Label Linkbase Document iXBRL Taxonomy Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). Page 18 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MEXCO ENERGY CORPORATION (Registrant) Dated: November 5, 2021 /s/ Nicholas C. Taylor Nicholas C. Taylor Chairman of the Board and Chief Executive Officer Dated: November 5, 2021 /s/ Tamala L. McComic Tamala L. McComic President, Chief Financial Officer, Treasurer and Assistant Secretary Page 19