What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-02-09 compared with 2023-11-08 · 253 added, 206 removed, 218 unchanged (68% of the section changed)

2 unchanged sentences

BALANCE SHEETS

and cash equivalents

and natural gas sales

costs and expenses

Current assets

and equipment, at cost

and gas properties, using the full cost method

Cash and cash

Accounts receivable:

Oil and natural gas sales

Prepaid costs and expenses

Total current assets

Property and equipment,

Oil and gas properties,

using the full cost method

depreciation, depletion and amortization

1 unchanged sentence

( 32,215,095 )

and equipment, net

lease, right-of-use asset

Property and equipment,

Investments – cost

Operating lease, right-of-use

noncurrent assets

AND STOCKHOLDERS’ EQUITY

payable and accrued expenses

lease liability, current

LIABILITIES AND STOCKHOLDERS’

Current liabilities

lease liability, long-term

retirement obligations

Accounts payable and accrued

lease liability, current

Total current liabilities

Long-term liabilities

Operating lease liability,

Asset retirement obligations

income tax liabilities

long-term liabilities

and contingencies

Stockholders’

stock - $ 1.00 par value;

Total liabilities

Commitments and contingencies

Stockholders’ equity

Preferred stock - $ 1.00 par value;

shares authorized;

none outstanding

stock - $ 0.50 par value;

Common stock - $ 0.50 par value;

shares authorized;

2,221,916 and 2,221,416 shares issued;

and, 2,110,500 and 2,136,000 shares

outstanding as of September 30, 2023 and March 31, 2023, respectively

paid-in capital

2,099,339 and 2,136,000 shares outstanding as of December 31, 2023 and

March 31, 2023, respectively

Additional paid-in capital

Retained earnings

stock, at cost ( 122,577 and 85,416 shares, respectively)

stockholders’ equity

( 1,045,627 )

Total stockholders’

liabilities and stockholders’ equity

2 unchanged sentences

STATEMENTS OF OPERATIONS

operating revenues

of asset retirement obligations

Depreciation,

depletion, and amortization

Three Months Ended

Nine Months Ended

Operating revenue:

Natural gas sales

Total operating revenues

Operating expenses:

Accretion of asset retirement

Depreciation, depletion,

and amortization

and administrative

operating expenses

income (expenses):

Operating income

Other income (expenses):

Interest income

other income (expense)

before provision for income taxes

Income before provision for income taxes

Income tax expense:

Income per common

Weighted average

common shares outstanding:

accompanying notes are an integral part of

consolidated financial statements.

Total income tax expense

Income per common share:

Weighted average common shares outstanding:

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

Earnings (Losses)

Stockholders’

at April 1, 2023

Balance at April 1, 2023

$ ( 590,495 )

of stock through options exercised

Dividends paid

Issuance of stock through

options exercised

based compensation

1 unchanged sentence

$ ( 590,495 )

Purchase of stock

based compensation

at September 30, 2023

Balance at September 30, 2023

$ ( 915,751 )

Stock based compensation

Purchase of stock

Balance at December 31, 2023

$ ( 1,045,627 )

Stock Par Value

1 unchanged sentence

Stockholders’

at April 1, 2022

Balance at April 1, 2022

$ ( 346,001 )

2 unchanged sentences

$ ( 346,001 )

from purchase of stock by insider

Profit from purchase of

stock by insider

based compensation

at September 30, 2022

Balance at September 30, 2022

$ ( 346,001 )

stock shares, issued:

at April 1, 2023

at September 30, 2023

stock shares, held in treasury:

at April 1, 2023

at September 30, 2023

Common stock shares, outstanding at September 30, 2023

Issuance of stock through

options exercised

Stock based compensation

Purchase of stock

Balance at December 31, 2022

$ ( 514,261 )

SHARE ACTIVITY

Common stock shares, issued:

Balance at April 1, 2023

Balance at Dec.

Common stock shares, held in treasury:

Balance at April 1, 2023

Common stock shares,

outstanding at December 31, 2023

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

1 unchanged sentence

STATEMENTS OF CASH FLOWS

the Six Months Ended September 30,

flows from operating activities:

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

income tax expense

Depreciation,

depletion and amortization

of asset retirement obligations

of debt issuance costs

in operating assets and liabilities:

in accounts receivable

in right-of-use asset

in prepaid expenses

in accounts payable and accrued expenses

of asset retirement obligations

the Nine Months Ended December 31,

Cash flows from operating

Adjustments to reconcile

net income to net cash provided by operating activities:

Deferred income tax expense

Stock-based compensation

Depreciation, depletion

and amortization

Accretion of asset retirement

Amortization of debt issuance

Changes in operating assets

and liabilities:

Decrease (increase) in

accounts receivable

Decrease in right-of-use

Decrease in prepaid expenses

Increase (decrease) in

accounts payable and accrued expenses

Settlement of asset retirement

in operating lease liability

cash provided by operating activities

flows from investing activities:

to oil and gas properties

Net cash provided by operating

Cash flows from investing

Additions to oil and gas

( 1,471,543 )

( 4,760,880 )

in limited liability companies at cost

Additions to other property

and equipment

Drilling refunds

Investment in limited liability

companies at cost

from sale of oil and gas properties and equipment

to other property and equipment

cash used in investing activities

Net cash used in investing

( 1,365,030 )

( 4,969,269 )

flows from financing activities:

from exercise of stock options

from purchase of stock by insider

Cash flows from financing

Proceeds from exercise

of stock options

Profits from purchase of

stock by insider

Debt issuance costs

Proceeds from long-term

Reduction of long-term

Dividends paid

of treasury stock

issuance costs

from long-term debt

of long-term debt

cash (used in) provided by financing activities

increase (decrease) in cash and cash equivalents

and cash equivalents at beginning of period

cash used in financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents

at beginning of period

and cash equivalents at end of period

investing and financing activities:

retirement obligations

Non-cash investing and financing activities:

Asset retirement obligations

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

5 unchanged sentences

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 the West Texas and Southeastern New Mexico;

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

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

6 unchanged sentences

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 consolidated financial statements and affect the reported amounts

of revenues and expenses during the reporting period.

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 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.

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.

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,

2023, and the results of its operations and cash flows for the interim periods ended September 30, 2023 and 2022.

(consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of December 31, 2023,

and the results of its operations and cash flows for the interim periods ended December 31, 2023 and 2022.

The consolidated financial

statements as of September 30, 2023 and for the three and six month periods ended September 30, 2023 and 2022 are unaudited.

statements as of December 31, 2023 and for the three and nine month periods ended December 31, 2023 and 2022 are unaudited.

The consolidated

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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.

It is suggested that these financial statements be read in conjunction

with the financial statements and notes thereto included in the Form 10-K.

Investments .

The Company accounts for investments of less than 3% in any limited liability companies at cost .

The Company accounts for investments of less than 3% of any limited liability companies at cost .

The Company has no control of the

16 unchanged sentences

oil and natural gas properties.

The ARO is included on the consolidated balance sheets with the current portion being included in the

The ARO is included in the consolidated balance sheets with the current portion being included in the

accounts payable and other accrued expenses.

following table provides a rollforward of the AROs for the first six months of fiscal 2024:

following table provides a rollforward of the AROs for the first nine months of fiscal 2024:

of Rollforward of Asset Retirement Obligations

amount of asset retirement obligations as of April 1, 2023

Carrying amount of

asset retirement obligations as of September 30, 2023

Carrying amount of asset retirement obligations as

of April 1, 2023

Liabilities incurred

Liabilities settled

Accretion expense

Carrying amount of asset retirement obligations as of December 31, 2023

Current portion

asset retirement obligation

Non-Current asset retirement

Stock-based Compensation

Company recognized stock-based compensation expense of $ 58,847 and $ 41,460 in general and administrative expense in the Consolidated

Statements of Operations for the three months ended December 31, 2023 and 2022, respectively.

Stock-based compensation expense recognized

for the nine months ended December 31, 2023 and 2022 was $ 172,670 and $ 101,462 , respectively.

The total cost related to non-vested awards

not yet recognized at December 31, 2023 totals $ 559,490 which is expected to be recognized over a weighted average of 2.39 years.

the nine months ended December 31, 2023, the Compensation Committee of the Board of Directors approved and the Company granted 32,000

stock options exercisable at $ 12.68 per share with an estimated fair value of $ 279,360 .

During the nine months ended December 31, 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 .

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 nine months ended December 31, 2023 and 2022.

All such amounts represent the weighted average

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

Nine 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 nine months ended December 31, 2023:

of Activity of Stock Options

Contract Life in Years

Outstanding at April 1, 2023

Outstanding at December 31, 2023

Vested at December 31, 2023

Exercisable at December 31, 2023

the nine months ended December 31, 2023, stock options covering 500 shares were exercised with a total intrinsic value of $ 2,416 .

Company received proceeds of $ 2,962 from these exercises.

During the nine months ended December 31, 2022, stock options covering 5,000

shares were exercised with a total intrinsic value of $ 47,575 .

The Company received proceeds of $ 16,700 from these exercises.

were no stock options forfeited or expired during the nine months ended December 31, 2023 and 2022.

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 December 31, 2023 expire between August 2024 and April 2033 and have exercise prices ranging from $ 3.34 to $ 18.05 .

Long Term Debt

13 unchanged sentences

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

As of September

As of December

31, 2023, there was $ 1,500,000 available for borrowing by the Company on the facility.

1 unchanged sentence

Upon closing the

second amendment to Agreement, the Company paid a loan origination fee of $ 9,000 plus legal and recording expenses totaling $ 12,950 ,

second amendment to the Agreement, the Company paid a loan origination fee of $ 9,000 plus legal and recording expenses totaling $ 12,950 ,

which were deferred over the life of the credit facility.

10 unchanged sentences

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, 2023.

Stock-based Compensation

Company recognized stock-based compensation expense of $ 58,848 and $ 34,431 in general and administrative expense in the Consolidated

Statements of Operations for the three months ended September 30, 2023 and 2022, respectively.

Stock-based compensation expense recognized

for the six months ended September 30, 2023 and 2022 was $ 113,823 and $ 60,002 , respectively.

The total cost related to non-vested awards

not yet recognized at September 30, 2023 totals $ 618,338 which is expected to be recognized over a weighted average of 2.64 years.

the six months ended September 30, 2023, the Compensation Committee of the Board of Directors approved and the Company granted 32,000

stock options exercisable at $ 12.68 per share with an estimated fair value of $ 279,360 .

During 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 .

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, 2023 and 2022.

All such amounts represent the weighted average

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

Months Ended September 30

interest rate

term (in years)

following table is a summary of activity of stock options for the six months ended September 30, 2023:

of Activity of Stock Options

Average Exercise Price

Average Remaining Contract Life in Years

at April 1, 2023

Outstanding at September

Vested at September

Exercisable at September

the six months ended September 30, 2023, stock options covering 500 shares were exercised with a total intrinsic value of $ 2,416 .

Company received proceeds of $ 2,962 from these exercises.

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

were no stock options forfeited or expired during the six months ended September 30, 2023 and 2022.

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, 2023 expire between August 2024 and April 2033 and have exercise prices ranging from $ 3.34 to $ 18.05 .

was no balance outstanding on the line of credit as of December 31, 2023.

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 paid by our majority shareholder.

This includes 1,112 square feet of office space shared with and paid by our principal shareholder.

The lease does not

22 unchanged sentences

of Operating Lease Assets and Liabilities

lease right-of-use asset, beginning balance

period amortization

Operating lease

right-of-use asset, beginning balance

Current period amortization

operating lease right-of-use asset

lease liability, current

Operating lease liability,

lease liability, long term

lease liabilities

minimum lease payments as of September 30, 2023 under non-cancellable operating leases are as follows:

minimum lease payments as of December 31, 2023 under non-cancellable operating leases are as follows:

of Future Minimum Lease Payments

Year Ended March 31, 2024

Year Ended March 31, 2025

lease payments

Fiscal Year Ended March 31, 2024

Fiscal Year Ended March 31, 2025

Total lease payments

imputed interest

lease liability

operating lease liability, current

lease liability, long term

cash paid for our operating lease for the six months ended September 30, 2023 and 2022 was $ 21,334 .

Operating lease liability

operating lease

liability, current

Operating lease liability,

cash paid for our operating lease for the nine months ended December 31, 2023 and 2022 was $ 32,001 .

Rent expense, less sublease income

8 unchanged sentences

The IRA 2022 did not impact the Company’s current year tax provision or the Company’s financial statements.

income tax provision consists of the following for the six months ended September 30, 2023 and 2022:

income tax provision consists of the following for the nine months ended December 31, 2023 and 2022:

of Income Tax Provision

Months Ended September 30

income tax expense:

Nine Months Ended

Current income tax expense:

income tax expense:

Total current income tax

Deferred income tax expense:

income tax expense:

income tax for the six months ended September 30, 2023 was $ 149,862 .

There was no federal income tax expense for the six months ended

September 30, 2022 because the Company was in a net deferred tax asset position.

reconciliation of the provision for income taxes to income taxes computed using the federal statutory rate for the six months ended September

deferred income tax expense

Total income tax expense:

income tax for the nine months ended December 31, 2023 was $ 319,848 .

There was no federal income tax expense for the nine months ended

December 31, 2022 because the Company was in a net deferred tax asset position.

reconciliation of the provision for income taxes to income taxes computed using the federal statutory rate for the nine months ended

December 31 follows:

of Reconciliation of Provision for Income Taxes

expense at federal statutory rate (1)

depletion carryforward

in valuation allowance

tax reform, corporate rate reduction

income expense

income tax rate

The federal statutory rate was 21 % for six months ended September

30, 2023 and 2022.

Tax expense at federal statutory rate ( 1 )

Statutory depletion carryforward

Change in valuation allowance

Permanent differences

State income expense

Total income tax

Effective income tax rate

federal statutory rate was 21 % for nine months ended December 31, 2023 and 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 September 30,

2023 and 2022 was $ 8,612 and $ 13,649 , respectively.

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

The total billed to and reimbursed by the stockholder for the three months ended December

31, 2023 and 2022 was $ 3,625 and $ 11,598 , 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, 2023 and 2022 were $ 3,893 .

Amounts paid by the principal stockholder directly to the lessor for the six months ending September 30,

2023 and 2022 were $ 7,786 .

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

December 31, 2023 and 2022 was $ 21,619 and $ 35,333 , 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 December 31, 2023 and 2022 were $ 3,893 .

Amounts paid by the principal stockholder directly to the lessor for the nine months ending

December 31, 2023 and 2022 were $ 11,679 .

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

and six month periods ended September 30, 2023 and 2022.

and nine month periods ended December 31, 2023 and 2022:

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

Three Months Ended

Nine Months Ended

Shares outstanding:

Weighted avg.

outstanding – basic

of assumed exercise of dilutive stock options

shares outstanding – basic

Effect of assumed exercise of dilutive stock options

Weighted avg.

shares outstanding – dilutive

Income per common

the three and six months ended September 30, 2023, 63,000 shares relating to stock options were excluded from the computation of diluted

Income per common share:

the three and nine months ended December 31, 2023, 63,000 shares relating to stock options were excluded from the computation of diluted

net income because their inclusion would be anti-dilutive.

Anti-dilutive stock options have a weighted average exercise price of $ 15.32

at September 30, 2023.

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

at December 31, 2023.

For the three and nine months ended December 31, 2022, 31,000 shares relating to stock options were excluded from

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

Anti-dilutive stock options have a weighted average

exercise price of $ 18.05 at September 30, 2022.

exercise price of $ 18.05 at December 31, 2022.

Stockholders’ Equity

June 2023, the Board of Directors authorized the use of up to $ 1,000,000 to repurchase shares of the Company’s common stock, par

March 2023, the Board of Directors authorized the use of up to $ 1,000,000 to repurchase shares of the Company’s common stock, par

value $ 0.50 , for the treasury account.

This program does not have an expiration date and may be modified, suspended or terminated at

any time by the board of directors.

Under the repurchase program, shares of common stock may be purchased from time to time through open

market purchases or other transactions.

The amount and timing of repurchases will be subject to the availability of stock, prevailing

market conditions, the trading price of the stock, our financial performance and other conditions.

Repurchases may also be made from

time-to-time in connection with the settlement our share-based compensation awards.

Repurchases will be funded from cash flow from operations.

any time by the Board.

Under the repurchase program, shares of common stock may be purchased from time to time through open market purchases

or other transactions.

The amount and timing of repurchases will be subject to the availability of stock, prevailing market conditions,

the trading price of the stock, our financial performance and other conditions.

Repurchases may also be made from time-to-time in connection

with the settlement of our share-based compensation awards.

Repurchases will be funded from cash flow.

August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA 2022”).

3 unchanged sentences

in excess of an annual limit of $ 1,000,000 after December 31, 2022.

the six months ended September 30, 2023 there were 26,000 shares of common stock repurchased for the treasury account at an aggregate

cost of $ 325,256 .

During the six months ended September 30, 2022 there were no shares of common stock repurchased for the treasury account.

Subsequently, in October 2023, the Company repurchased 6,000 shares for the treasury at an aggregate cost of $ 75,477 .

the nine months ended December 31, 2023, the Company repurchased 37,161 shares for the treasury at an aggregate cost of $ 455,133 .

the nine months ended December 31, 2022, the Company repurchased 12,416 shares for the treasury at an aggregate cost of $ 168,260 .

Subsequently,

in January 2024, the Company repurchased 1,501 shares for the treasury at an aggregate cost of $ 15,018 .

April 10, 2023, the Board of Directors declared a special dividend of $ 0.10 per common share.

10 unchanged sentences

Subsequent Events

October 2023, the Company signed a Letter of Intent regarding a 3 -year Term Assignment of 98 % of the Company’s leasehold interest

in certain deep rights of 200 acres in Loving and Ward Counties, Texas.

The Company expects to receive $ 5,000 per net leasehold acre

in the total amount of approximately $ 980,000 .

The Company will retain the remaining 2% leasehold interest as a participating interest

in the full unit at approximately .625% working interest .

The Company will also retain an overriding royalty interest of 5 % proportionately

October 2023, the Company entered into an agreement, pending completion of title search, to purchase small producing and non-producing

mineral interests in 1,280 gross acres in Ector, Midland and Upton Counties, Texas for a purchase price of $ 60,500 .

February 2024, Mexco expended approximately $ 244,000 to participate in the drilling of six horizontal wells in the Bone Spring Sand formation

of the Delaware Basin in Lea County, New Mexico.

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