What changed in this filing

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Item 1. Financial Statements

2022-11-09 compared with 2022-08-15 · 226 added, 193 removed, 179 unchanged (70% of the section changed)

Financial Statements

Energy Corporation and Subsidiaries

BALANCE SHEETS

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

September 30,

Current assets

Cash and cash

Cash and cash equivalents

Accounts receivable:

Oil and natural gas sales

costs and expenses

Prepaid costs and expenses

Prepaid drilling

Total current assets

Property and equipment,

Oil and gas properties,

using the full cost method

depreciation, depletion and amortization

Property and equipment, at cost

Oil and gas properties, using the full cost method

Accumulated depreciation, depletion and amortization

( 31,132,555 )

( 30,361,047 )

Property and equipment,

Investment in limited liability

company at cost

Operating lease, right-of-use

noncurrent assets

LIABILITIES AND STOCKHOLDERS’

Property and equipment, net

Investment in limited liability company at cost

Operating lease, right-of-use asset

Other noncurrent assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable and accrued

lease liability, current

Accounts payable and accrued expenses

Operating lease liability, current

Total current liabilities

Long-term liabilities

Operating lease liability,

retirement obligations

long-term liabilities

Operating lease liability, long-term

Asset retirement obligations

Total long-term liabilities

Total liabilities

1 unchanged sentence

Stockholders’ equity

Preferred stock - $ 1.00

Preferred stock - $ 1.00 par value;

10,000,000 shares authorized;

none outstanding

Common stock - $ 0.50

Common stock - $ 0.50 par value;

40,000,000 shares authorized;

2,216,416 shares issued and 2,149,416 shares outstanding

as of June 30, 2022 and March

31, 2022, respectively

2,216,416 shares issued and, 2,149,416 shares outstanding as of

September 30, 2022 and March 31, 2022, respectively

Additional paid-in capital

Retained earnings

stock, at cost ( 67,000 shares)

stockholders’ equity

liabilities and stockholders’ equity

Treasury stock, at cost ( 67,000 shares)

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes are an integral part of the consolidated financial statements.

Energy Corporation and Subsidiaries

STATEMENTS OF OPERATIONS

the Three Months Ended June 30,

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Six Months Ended

September 30,

Operating revenues:

2 unchanged sentences

Operating expenses:

Accretion of asset retirement

Depreciation, depletion

and amortization

and administrative

operating expenses

Accretion of asset retirement obligations

Depreciation, depletion, and amortization

General and administrative

Total operating expenses

Operating income

Other income (expense):

Other income (expenses):

Interest income

other expense

Income before provision for income taxes

Interest expense

Net other expense

Income before income taxes

Income per common share:

1 unchanged sentence

accompanying notes are an integral part of the consolidated financial statements.

Energy Corporation and Subsidiaries

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Stock Par Value

Paid-In Capital

Stockholders’ Equity

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Stockholders’

Balance at April 1, 2022

$ ( 346,001 )

based compensation

Profit from purchase of stock by insider

Stock based compensation

Balance at September 30, 2022

$ ( 346,001 )

Stockholders’

Balance at June 30, 2022

$ ( 346,001 )

Stock Par Value

Paid-In Capital

Stockholders’ Equity

Profit from purchase of stock by insider

Stock based compensation

Balance at September 30, 2022

$ ( 346,001 )

Stockholders’

Balance at April 1, 2021

$ ( 346,001 )

Issuance of stock through

options exercised

based compensation

Issuance of stock through options exercised

Stock based compensation

Balance at September 30, 2021

$ ( 346,001 )

Stockholders’

Balance at June 30, 2021

$ ( 346,001 )

Issuance of stock through options exercised

Stock based compensation

Balance at September 30, 2021

$ ( 346,001 )

SHARE ACTIVITY

1 unchanged sentence

Balance at April 1, 2022

Balance at June 30, 2022

Balance at September 30, 2022

Common stock shares, held in treasury:

Balance at April 1, 2022

Balance at June 30,

Common stock shares, outstanding at June

Balance at September 30, 2022

Common stock shares, outstanding at September 30, 2022

accompanying notes are an integral part of the consolidated financial statements.

Energy Corporation and Subsidiaries

STATEMENTS OF CASH FLOWS

the Three Months Ended June 30,

Cash flows from operating

Adjustments to reconcile

net income to net cash provided by operating activities:

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended September 30,

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Stock-based compensation

Depreciation, depletion

and amortization

Accretion of asset retirement

Amortization of debt

issuance costs

Changes in operating

assets and liabilities

Increase in accounts

Decrease in prepaid

Decrease (increase)

in right-of-use asset

(Decrease) increase

in accounts payable and accrued expenses

Settlement of asset

retirement obligations

increase in operating lease liability

Net cash provided by

operating activities

Cash flows from investing

Additions to oil and

gas properties

Depreciation, depletion and amortization

Accretion of asset retirement obligations

Amortization of debt issuance costs

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable

Decrease (increase) in right-of-use asset

Decrease in prepaid expenses

(Decrease) increase in accounts payable and accrued expenses

Settlement of asset retirement obligations

(Decrease) increase in operating lease liability

Net cash provided by operating activities

Cash flows from investing activities:

Additions to oil and gas properties

( 4,245,064 )

Additions to other property

and equipment

Investment in limited

liability company at cost

Drilling refund

from sale of oil and gas properties and equipment

Net cash used in investing

Drilling refunds

Investment – cost basis

Proceeds from sale of oil and gas properties and equipment

Additions to other property and equipment

Net cash used in investing activities

( 4,253,453 )

Cash flows from financing

Proceeds from exercise

of stock options

Reduction of long-term

from long-term debt

cash used in financing activities

Net (decrease) increase in cash and cash

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

Cash flows from financing activities:

Proceeds from exercise of stock options

Profits from purchase of stock by insider

Proceeds from long-term debt

Reduction of long-term debt

( 1,455,000 )

Net cash provided by (used in) financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of cash flow information:

2 unchanged sentences

Asset retirement obligations

Operating lease –

right of use asset and associated liabilities

accompanying notes are an integral part of the consolidated financial

Operating lease – right of use asset and associated liabilities

accompanying notes are an integral part of the consolidated financial statements.

Energy Corporation and Subsidiaries

3 unchanged sentences

Texas Disposal Corporation (a Texas corporation) and TBO Oil & Gas, LLC (a Texas limited liability company) (collectively, the “Company”)

are engaged in the acquisition, exploration, development and production of crude oil, natural gas, condensate and natural gas liquids

Most of the Company’s oil and gas interests are centered in West Texas and Southeastern New Mexico;

are engaged in the acquisition, exploration, development and production of natural gas, crude oil, condensate and natural gas liquids

Most of the Company’s oil and gas interests are centered in the West Texas and Southeastern New Mexico;

the Company owns producing properties and undeveloped acreage in fourteen states.

All of Company’s oil and gas interests are operated

All of the Company’s oil and gas interests are

operated by others.

Basis of Presentation and Significant Accounting Policies

3 unchanged sentences

and Assumptions .

In preparing 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 consolidated financial statements and affect the reported amounts of revenues

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.

5 unchanged sentences

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 June 30, 2022,

and the results of its operations and cash flows for the interim periods ended June 30, 2022 and 2021.

The consolidated financial statements

as of June 30, 2022 and for the three-month periods ended June 30, 2022 and 2021 are unaudited.

The consolidated balance sheet as of

March 31, 2022 was derived from the audited balance sheet filed in the Company’s 2022 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 .

(consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30,

2022, and the results of its operations and cash flows for the interim periods ended September 30, 2022 and 2021.

The consolidated financial

statements as of September 30, 2022 and for the three and six month periods ended September 30, 2022 and 2021 are unaudited.

The consolidated

balance sheet as of March 31, 2022 was derived from the audited balance sheet filed in the Company’s 2022 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.

The Company accounts for investments of less than 1% in limited liability companies at cost .

15 unchanged sentences

accounts payable and other accrued expenses.

following table provides a rollforward of the AROs for the first three months of fiscal 2022:

following table provides a rollforward of the AROs for the first six months of fiscal 2023:

Schedule of Rollforward of Asset Retirement Obligations

Carrying amount of asset retirement obligations as

of April 1, 2022

Carrying amount of asset retirement obligations as of April 1, 2022

Liabilities incurred

1 unchanged sentence

Accretion expense

Carrying amount of asset retirement obligations as of June 30, 2022

Carrying amount of asset retirement obligations as of September 30, 2022

Current portion

Non-Current asset retirement

Non-Current asset retirement obligation

Long Term Debt

December 28, 2018, the Company entered into a loan agreement (the “Agreement”) with West Texas National Bank (“WTNB”),

which originally 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.

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.

February 28, 2020, the Agreement was amended to increase the credit facility to $ 2,500,000 , extend the maturity date to March 28, 2023

7 unchanged sentences

The unused commitment fee is payable quarterly in arrears on the last day of each calendar quarter .

As of June 30,

2022, there was $ 1,500,000 available on the facility.

As of September

30, 2022, there was $ 1,500,000 available for borrowing by the Company on the facility.

principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2023 .

13 unchanged sentences

Expense) of 2.00 to 1.00 for each quarter.

addition, this Agreement prohibits the Company from paying cash dividends on its common stock without prior 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

was no balance outstanding on the credit facility as of June 30, 2022.

Stock-based Compensation

Company recognized compensation expense of $ 25,571 and $ 13,865 related to vesting stock options in general and administrative expense

in the Consolidated Statements of Operations for the first quarter of fiscal 2023 and 2022, respectively.

The total cost related to non-vested

awards not yet recognized at June 30, 2022 totals $ 188,537 , which is expected to be recognized over a weighted average of 2.14 years.

following table is a summary of stock options activity for the three months ended June 30, 2022:

Summary of Activity of Stock Options

Average Exercise Price Per Share

Aggregate Average Remaining Contract Life

Outstanding at April 1, 2022

Outstanding at June

Vested at June 30, 2022

Exercisable at June 30, 2022

the three months ended June 30, 2022 and 2021, no stock options were granted.

the three months ended June 30, 2022, no stock options were exercised.

During the three months ended June 30, 2021, stock options covering

5,000 shares were exercised with a total intrinsic value of $ 15,036 .

The Company received proceeds of $ 34,000 from these exercises.

forfeiture rate is assumed for stock options granted to directors or employees due to the forfeiture rate history for these types of

During the three months ended June 30, 2022 and 2021, there were no stock options forfeited or expired.

options at June 30, 2022 expire between August 2024 and July 2031 and have exercise prices ranging from $ 3.34 to $ 8.51 .

addition, this Agreement prohibits the Company from paying cash dividends on its common stock without written permission of WTNB.

Agreement does not permit the Company to enter into hedge agreements covering crude oil and natural gas prices without prior WTNB approval.

was no balance outstanding on the line of credit as of September 30, 2022.

The following table is a summary of activity on the WTNB line

of credit for the six months ended September 30, 2022:

Summary of Line of Credit Activity

Balance at April 1, 2022:

Balance at September 30, 2022:

Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for our corporate office located

24 unchanged sentences

Schedule of Operating Lease Assets and Liabilities

Operating lease right-of-use

asset, beginning balance

September 30,

Operating lease right-of-use asset, beginning balance

Current period amortization

operating lease right-of-use asset

Operating lease liability,

lease liability, long term

lease liabilities

minimum lease payments as of June 30, 2022 under non-cancellable operating leases are as follows:

Total operating lease right-of-use asset

Operating lease liability, current

Operating lease liability, long term

Total lease liabilities

minimum lease payments as of September 30, 2022 under non-cancellable operating leases are as follows:

Schedule of Future Minimum Lease Payments

Lease Obligation

Fiscal Year Ended March 31, 2023

4 unchanged sentences

Operating lease liability

operating lease

liability, current

Operating lease liability,

cash paid for our operating lease for the three months ended June 30, 2022 and 2021 was $ 10,667 and $ 10,929 , respectively.

operating lease liability, current

Operating lease liability, long term

cash paid for our operating lease for the six months ended September 30, 2022 and 2021 was $ 21,334 and $ 20,903 , respectively.

Rent expense,

less sublease income of $ 7,786 and $ 10,768 , respectively, is included in general and administrative expenses.

Stock-based Compensation

Company recognized stock-based compensation expense of $ 34,431 and $ 22,568 in general and administrative expense in the Consolidated

Statements of Operations for the three months ended September 30, 2022 and 2021, respectively.

Stock-based compensation expense recognized

for the six months ended September 30, 2022 and 2021 was $ 60,002 and $ 36,433 , respectively.

The total cost related to non-vested awards

not yet recognized at September 30, 2022 totals $ 539,745 which is expected to be recognized over a weighted average of 2.88 years.

the six months ended September 30, 2022, the Compensation Committee of the Board of Directors approved and the Company granted 31,000

stock options exercisable at $ 18.05 per share with an estimated fair value of $ 385,640 .

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 .

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 .

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, 2022 and 2021.

All such amounts represent the weighted average

Summary of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binomial Models

Six Months Ended

Grant-date fair value

Volatility factor

Dividend yield

Risk-free interest rate

Expected term (in years)

following table is a summary of activity of stock options for the six months ended September 30, 2022:

Summary of Activity of Stock Options

Weighted Average

Contract Life in

Outstanding at April 1, 2022

Forfeited or Expired

Outstanding at September 30, 2022

Vested at September 30, 2022

Exercisable at September 30, 2022

the six months ended September 30, 2022, no stock options were exercised.

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

were no stock options forfeited or expired during the six months ended September 30, 2022 and 2021.

No forfeiture rate is assumed for

stock options granted to directors or employees due to the forfeiture rate history of these types of awards.

options at September 30, 2022 expire between August 2024 and August 2032 and have exercise prices ranging from $ 3.34 to $ 18.05 .

valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some

7 unchanged sentences

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 June 30, 2022.

Our deferred tax asset is $ 526,846 as of June 30, 2022 with a valuation amount of $ 526,846 .

tax asset position as of September 30, 2022.

Our deferred tax asset is $ 313,582 as of September 30, 2022 with a valuation amount of $ 313,582 .

We believe it is more likely than not that these deferred tax assets will not be realized.

5 unchanged sentences

criteria for recognizing the tax benefit of deferred tax assets, the Company’s assessment resulted in application of a valuation

allowance against the deferred tax asset as of June 30, 2022.

allowance against the deferred tax asset as of September 30, 2022.

Related Party Transactions

1 unchanged sentence

paid on behalf of the principal stockholder.

The total billed to and reimbursed by the stockholder for the quarters ended June 30, 2022

The total billed to and reimbursed by the stockholder for the quarters ended September 30,

2022 and 2021 was $ 13,649 and $ 10,288 , 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 less sublease income for the three months

ending June 30, 2022 and 2021 were $ 3,893 and $ 4,045 , respectively.

The total billed to and reimbursed by the stockholder for the six months ended September

30, 2022 and 2021 was $ 23,735 and $ 23,056 , 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, 2022 and 2021 were $ 3,893 and $ 3,944 , respectively.

Amounts paid by the principal stockholder directly to the lessor for the six

months ending September 30, 2022 and 2021 were $ 7,786 and $ 7,988 , respectively.

Income Per Common Share

following is a reconciliation of the number of shares used in the calculation of basic and diluted net income per share for the three-month

periods ended June 30, 2022 and 2021.

following is a reconciliation of the number of shares used in the calculation of basic and diluted net income per share for the three

and six month periods ended September 30, 2022 and 2021.

Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share

Three Months Ended

Six Months Ended

September 30,

Shares outstanding:

Weighted average common shares outstanding

of the assumed exercise of dilutive stock options

Weighted average common

Weighted avg.

shares outstanding – basic

Effect of assumed exercise of dilutive stock options

Weighted avg.

shares outstanding – dilutive

Income per common share:

the three months ended June 30, 2022 and 2021, no anti-dilutive shares relating to stock options were excluded from the computation of

diluted net income.

the three and six months ended September 30, 2022 and 2021, 31,000 shares relating to stock options were excluded from the computation

of diluted net income because their inclusion would be anti-dilutive.

Stockholders’ Equity

September 6, 2022, one of the Company’s directors paid the Company $ 30,179 , representing profit on Company stock purchased within

the six-month window of a previous Company stock sale.

Such payment was made in accordance with Section 16(b) of the Securities Exchange

Subsequent Events

July 2022, Mexco expended approximately $ 300,000 for the remaining balance in the drilling and completion of four horizontal wells Eddy

County, New Mexico.

July and August 2022, Mexco expended approximately $ 768,000 to purchase additional working interests and to complete three horizontal

wells in Reagan County, Texas.

July and August 2022, Mexco expended approximately $ 377,000 to purchase additional working interests and to complete a horizontal well

in Reagan County, Texas.

August 2022, Mexco expended approximately $ 33,000 to participate in the drilling of two horizontal wells in Lea County, New Mexico.

October 3, 2022, the Company expended approximately $ 698,000 for the drilling and completion of seven wells in Eddy and Lea Counties,

October 21, 2022, the Company expended $ 147,600 for the completion of four wells in Lea County, New Mexico.

October 27, 2022, the Company made an approximately 2 % equity investment commitment in a limited liability company amounting to $ 2,000,000 .

The limited liability is capitalized at approximately $ 100 million to purchase mineral interests in the Utica and Marcellus areas in

the state of Ohio.

Company completed a review and analysis of all events that occurred after the consolidated balance sheet date to determine if any such

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements