What changed in this filing

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Item 9A. Controls and Procedures

2024-06-27 compared with 2023-06-26 · 274 added, 269 removed, 862 unchanged (39% of the section changed)

31 unchanged sentences

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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is hereby incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

information required by this item will be contained in the Proxy Statement under the captions “Security Ownership of Certain Beneficial

Owners and Management” and “Employee Incentive Stock Option Plans”, and is hereby incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

information required by this item will be contained in the Proxy Statement under the captions “Certain Relationships and Related

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acres or wells.

Refers to the total acres or wells in which the Company owns any amount of working interest.

Refers to the total acres or wells, as the case may be, in which an interest is owned any amount of working interest.

An instrument which grants to another (the lessee) the exclusive right to enter and explore for, drill for, produce, store and remove

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so long thereafter” as minerals are producing.

One thousand cubic feet of natural gas at standard atmospheric conditions.

One thousand cubic feet of natural gas.

One thousand barrels of oil equivalent.

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Energy Corporation

on the Consolidated Financial Statements

on the Financial Statements

have audited the accompanying consolidated balance sheets of Mexco Energy Corporation (a Colorado corporation) and Subsidiaries (the

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We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (“PCAOB”) and are required to be independent with respect to Mexco Energy Corporation in accordance with the U.S.

States) (“PCAOB”) and are required to be independent with respect to Mexco

Energy Corporation in accordance with the U.S.

federal securities

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Audit Matters

critical audit matter communicated below are matters arising from the current period audit of the financial statements that were communicated

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

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which requires management to make estimates of proved reserve volumes and future revenues and expenses to calculate depletion expense.

and measure its oil and gas properties for potential impairment.

To estimate the volume of proved reserves and future revenues, management

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of wells associated with proved reserves to determine if wells are expected, with reasonable certainty, to be economical under the appropriate

pricing assumptions required in the estimation of depletion expense and potential impairment measurements.

pricing assumptions required in the estimation of depletion expense.

We identified the estimation

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of proved reserves included the following, among others.

evaluated the level of knowledge, skill, and ability of the Company’s reservoir engineering

specialists and their relationship to the Company, made inquiries of those reservoir engineers

regarding the process followed and judgments made to estimate the Company’s proved

reserve volumes, and read the reserve report prepared by the Company’s specialists.

the extent key, sensitive inputs and assumptions used to determine proved reserve volumes

and other cash flow inputs and assumptions are derived from the Company’s accounting

records, such as commodity pricing, historical pricing differentials, operating costs, estimated

capital costs and working and net revenue interests, we tested management’s process

for determining the assumptions, including examining the underlying support, on a sample

Specifically, our audit procedures involved testing management’s assumptions

We evaluated the level of knowledge, skill, and ability of the Company’s reservoir engineering specialists and their relationship

to the Company, made inquiries of those reservoir engineers regarding the process followed and judgments made to estimate the Company’s

proved reserve volumes, and read the reserve report prepared by the Company’s specialists.

To the extent key, sensitive inputs and assumptions used to determine proved reserve volumes and other cash flow inputs and assumptions

are derived from the Company’s accounting records, such as commodity pricing, historical pricing differentials, operating costs,

estimated capital costs and working and net revenue interests, we tested management’s process for determining the assumptions,

including examining the underlying support, on a sample basis.

Specifically, our audit procedures involved testing management’s

assumptions as follows:

the estimated pricing differentials used in the reserve report to realized prices related

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Current assets

Cash and cash

Cash and cash equivalents

Accounts receivable:

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Total current assets

Property and equipment,

Oil and gas properties,

using the full cost method

Accumulated depreciation,

depletion and amortization

Property and equipment, at cost

Oil and gas properties, using the full cost method

Accumulated depreciation, depletion and amortization

( 34,184,837 )

( 32,215,095 )

Property and equipment,

Investment – cost

Operating lease, right-of-use

Property and equipment, net

Investment – cost basis

Operating lease, right-of-use asset

Other noncurrent assets

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable and accrued

Operating lease liability,

Accounts payable and accrued expenses

Income tax payable

Operating lease liability, current

Total current liabilities

Long-term liabilities

Long-term debt

Operating lease liability,

Operating lease liability, long-term

Deferred income tax liability

Asset retirement obligations

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Stockholders’ equity

Preferred stock - $ 1.00

Preferred stock - $ 1.00 par value;

10,000,000 shares authorized;

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2,226,916 and 2,221,416 shares issued;

2,136,000 and 2,149,416 shares outstanding as of March 31, 2023

and, 2,091,399 and 2,136,000 shares outstanding as of March 31, 2024 and 2023

Additional paid-in capital

Retained earnings

Treasury stock, at cost

67,000 shares, respectively)

Total stockholders’

Total liabilities and stockholders’

Treasury stock, at cost ( 135,517 and 85,416 shares, respectively)

( 1,175,530 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

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Operating expenses:

Accretion of asset retirement

Depreciation, depletion

and amortization

Accretion of asset retirement obligation

Depreciation, depletion and amortization

General and administrative

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Income before provision for income taxes

State income tax expense

Income tax expense:

Total income tax expense

Income per common share:

Weighted average common shares outstanding:

accompanying notes to the consolidated financial statements are an integral

part of these statements.

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

Energy Corporation and Subsidiaries

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ended March 31, 2024 and 2023

Stock Par Value

Paid-In Capital

Stockholders’ Equity

Common Stock Par Value

Additional Paid-In Capital

Retained Earnings

Treasury Stock

Total Stockholders’ Equity

Balance at April 1, 2022

$ ( 346,001 )

of stock through options exercised

based compensation

Issuance of stock through options exercised

Profit from purchase of stock by insider

Purchase of stock

Stock based compensation

Balance at March 31, 2023

$ ( 590,495 )

Issuance of stock through

options exercised

Profit from purchase of

stock by insider

$ ( 590,495 )

Issuance of stock through options exercised

Dividends paid

Purchase of stock

based compensation

Stock based compensation

Balance at March 31, 2024

$ ( 1,175,530 )

SHARE ACTIVITY

Common stock shares, issued:

At beginning of year

At end of year

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At beginning of year

At end of year

Common stock shares, outstanding

At end of year

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

Energy Corporation and Subsidiaries

STATEMENTS OF CASH FLOWS

ended March 31,

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

Years ended March 31,

Cash flows from operating activities:

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:

Increase in accounts receivable

Decrease (increase) in

right-of-use asset

Increase in prepaid expenses

(Decrease) increase in

accounts payable and accrued expenses

(Decrease) increase in

operating lease liability

of asset retirement obligations

Net cash provided by operating

Cash flows from investing

Additions to oil and gas

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 in right-of-use asset

Decrease (increase) in prepaid expenses

Increase (decrease) in accounts payable and accrued expenses

Decrease in operating lease liability

Increase in income tax payable

Settlement of asset retirement obligations

Net cash provided by operating activities

Cash flows from investing activities:

Additions to oil and gas properties

( 3,349,326 )

( 5,310,036 )

Additions to other property

and equipment

Additions to other property and equipment

Drilling refund

Investment in limited liability

companies at cost

from sale of oil and gas properties and equipment

Net cash used in investing

Investment in limited liability companies at cost

Proceeds from sale of oil and gas properties and equipment

Net cash used in investing activities

( 3,416,499 )

( 5,441,075 )

Cash flows from financing

Proceeds from exercise

of stock options

Profits from purchase of

stock by insider

Proceeds from long-term

Cash flows from financing activities:

Proceeds from exercise of stock options

Profits from purchase of stock by insider

Proceeds from long-term debt

Debt issuance costs

Acquisition of treasury

of long-term debt

( 1,455,000 )

cash used in financing activities

Dividends paid

Acquisition of treasury stock

Reduction of long-term debt

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents

at beginning of year

and cash equivalents at end of year

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplemental disclosure of cash flow information:

Cash paid for interest

Accrued capital expenditures

included in accounts payable

Accrued capital expenditures included in accounts payable

Non-cash investing and financing activities:

Asset retirement obligations

Operating lease –

right of use asset and associated liabilities

accompanying notes to the consolidated financial statements are an integral

part of these statements.

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

ENERGY CORPORATION AND SUBSIDIARIES

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Accounts receivable includes trade receivables from joint interest owners and oil and gas purchasers.

Credit is extended

based on an evaluation of a customer’s financial condition and, generally, is uncollateralized.

Accounts receivable under joint

operating agreements have a right of offset against future oil and gas revenues if a producing well is completed.

The collectibility

of receivables is assessed and an allowance is made for any doubtful accounts.

The allowance for doubtful accounts is determined based

on the Company’s previous loss history.

is extended based on an evaluation of a customer’s financial condition and, generally, is uncollateralized.

receivable under joint operating agreements have a right of offset against future oil and gas revenues if a producing well is

The collectibility of receivables is assessed and an allowance is made for any credit losses.

The allowance for credit

losses is determined based on a number of factors, including the length of time accounts receivable are past due, the

Company’s previous loss history, the debtor’s current ability to pay its obligation to the Company, the condition of the general economy and

the industry as a whole.

The Company has not experienced any significant credit losses.

For the years ended March 31,

31, 2023 and 2022, no allowance has been made for doubtful accounts.

2024 and 2023, no

allowance has been made for any credit losses.

and Gas Properties .

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properties in areas with significant development potential.

Accounting Pronouncements .

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards

Update (“ASU”) No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires

disaggregated information about the Company’s effective tax rate reconciliation and income taxes paid.

This ASU is effective for

annual periods beginning after December 15, 2024 on a prospective basis and early adoption is permitted.

The Company is currently evaluating

the impact of this standard on its tax disclosures.

Long-Term Debt

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principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2026 .

Upon closing the first 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.

Upon closing the second amendment to the Agreement, the Company paid a

loan origination fee of $ 9,000

plus legal and recording expenses totaling $ 12,950 ,

Upon closing the

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 also deferred over the life of the credit facility.

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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 fiscal quarters and minimum interest coverage ratios (EBITDA/Interest

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.

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

The Company obtained written permission from WTNB prior to declaring the special dividend on April 10, 2023 as discussed in Note 14.

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

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

The Company obtained written permission from WTNB prior to declaring the special dividend on April 10, 2023 and the regular

annual dividend on April 30, 2024 as discussed in Note 14.

The 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 credit facility as of March 31, 2024.

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facility for the years ended March 31, 2024 and 2023:

Summary of Line of Credit Activity

of Line of Credit Activity

Balance at April 1, 2022:

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Schedule of Rollforward of Asset Retirement Obligations

Carrying amount of asset retirement

obligations, beginning of year

Carrying amount of asset retirement obligations, beginning of year

Liabilities incurred

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Accretion expense

Carrying amount of asset retirement obligations,

Carrying amount of asset retirement obligations, end of year

Current portion

Non-Current asset retirement

Non-Current asset retirement obligation

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

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federal and state income tax jurisdictions is 2019.

income tax provision consists of the following for the years months ended March 31, 2024 and 2023:

of Income Tax Provision

Current income tax expense:

Total current income tax expense

Deferred income tax expense:

Total deferred income tax expense

Total income tax expense:

income tax for the year ended March 31, 2024 was $ 500,915 .

There was no federal income tax expense for the year ended March 31, 2023

because the Company was in a net deferred tax asset position.

requires deferred income tax assets and liabilities to be measured at the enacted tax rate expected to apply when temporary differences

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Deferred tax assets:

depletion carryforwards

Percentage depletion carryforwards

Deferred stock-based compensation

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Deferred tax liabilities:

financial accounting bases over tax bases of property and equipment

Deferred tax asset, net

Excess financial accounting bases over tax bases of property and equipment

Deferred tax liability, net

Valuation allowance

Net deferred tax

of March 31, 2024, the Company has a statutory depletion carryforward of approximately $ 5,400,000 , which does not expire.

2023, the Company had a net operating loss carryforward for regular income tax reporting purposes of approximately $ 3,200,000 , which

will begin expiring in 2036 .

2024, the Company had a net operating loss carryforward for regular income tax reporting purposes of approximately $ 720,000 , which will

begin expiring in 2040 .

The Company’s ability to use some of its net operating loss carryforwards and certain other tax attributes

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Schedule of Reconciliation of Provision for Income Taxes

Tax expense at federal statutory

Tax expense at federal statutory rate (1)

Statutory depletion carryforward

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Permanent differences

State income expense

State income expense, net of federal benefit

Total income tax

Effective income tax rate

(1) The federal statutory rate was 21 % for fiscal years ending March 31, 2023 and 2022.

the years ended March 31, 2023 and 2022, the Company did no t have any uncertain tax positions.

federal statutory rate was 21 % for fiscal years ending March 31, 2024 and 2023.

the years ended March 31, 2024 and 2023, the Company did not have any uncertain tax positions.

the amount of unrecognized tax benefits may change in the next 12 months, the Company does not expect any change to have a significant

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If these unrecognized tax benefits are disallowed, the Company will be required to pay additional taxes.

on the material write-downs of the carrying value of our oil and natural gas properties for the year ending March 31, 2016, we are in

a net deferred tax asset position for years ending March 31, 2023 and 2022.

Our deferred tax asset is $ 3,578 as of March 31, 2023 with

a valuation amount of $ 3,578 .

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

Management considers

the likelihood that the Company’s net operating losses and other deferred tax attributes will be utilized prior to their expiration,

if applicable.

The determination to record a valuation allowance was based on management’s assessment of all available evidence,

both positive and negative, supporting realizability of the Company deferred tax asset as required by applicable accounting standards.

In light of those 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 March 31, 2023.

Major Customers

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and another purchaser accounted for 8 % of the total operating revenues and 8 % of the total oil and natural gas accounts receivable.

In fiscal 2022, one purchaser accounted for 67 % of the total operating revenues and 60 % of the total oil and natural gas accounts receivable.

fiscal 2023, one purchaser accounted for 53 % of the total operating revenues and 46 % of the total oil and natural gas accounts receivable

and another purchaser accounted for 8 % of the total operating revenues and 21 % of the total oil and natural gas accounts receivable.

Oil and Natural Gas Costs

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Property acquisition costs:

Capitalized asset

retirement obligations

costs incurred for oil and gas properties

Capitalized asset retirement obligations

Total costs incurred for oil and gas properties

Company had the following aggregate capitalized costs relating to its oil and gas property activities at March 31:

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subject to amortization

not subject to amortization

Oil and gas properties, gross

Less accumulated

Total oil and gas properties

Less accumulated DD&A

oil and gas properties

amounted to $ 12.81 and $ 14.56 per BOE of production for the years ended March 31, 2024 and 2023, respectively.

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Weighted avg.

common shares outstanding

Effect of the assumed

exercise of dilutive stock options

common shares outstanding – basic

Effect of the assumed exercise of dilutive stock options

Weighted avg.

shares outstanding – dilutive

common shares outstanding – dilutive

Income per common share:

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Stockholders’ Equity

September 2022, the Board of Directors authorized the use of up to $ 250,000 to repurchase shares of the Company’s common stock

for the treasury account.

During the year ended March 31, 2023, the Company repurchased 18,416 shares for the treasury account at an

aggregate cost of $ 244,494 , an average price of $ 13.28 per share per share.

There were no shares of common stock repurchased for the

treasury account during fiscal 2022.

Subsequently, in April 2023, the Company’s 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 authorization replaced

the previously authorized $ 250,000 common stock repurchase program which had $ 5,506 remaining at the time it was replaced.

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

Under the repurchase program, share 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

stock, our financial performance and other conditions.

Repurchases may also be made form 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”).

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corporations, effective for stock repurchases

after December 31, 2022.

The IRA 2022 does provide for certain exceptions for repurchases of stock including an exception as long as

the aggregate value of the repurchases for the tax year does not exceed $ 1,000,000 .

On 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 Act of 1934.

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

the year ended March 31, 2024, the Company repurchased 50,101 shares for the treasury account at an aggregate cost of $ 585,035 , an average

price of $ 11.68 per share per share.

During the year ended March 31, 2023, the Company repurchased 18,416 shares for the treasury account

at an aggregate cost of $ 244,494 , an average price of $ 13.28 per share per share.

Subsequently, in April 2024, the Company’s 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 authorization replaced the previously authorized $ 1,000,000 common stock repurchase program which had $ 414,965

remaining at the time it was replaced.

Also in April 2024, the Company repurchased 13,766 shares for the treasury account at an aggregate

cost of $ 188,637 .

Stock-based Compensation

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During the year ended March 31, 2023, the Compensation Committee of the Board of Directors approved and the Company granted 31,000 stock

Subsequently, in April 2023, the Compensation Committee approved and the Company granted 32,000 stock options.

plan also provides for the granting of stock awards.

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Treasury yield curve in effect at the time

Since the Company has only declared a special one-time dividend, no dividend yield was used in the calculation.

realized, if any, is dependent on the future performance of the Company’s common stock and overall stock market conditions.

is no assurance the value realized by an optionee will be at or near the value estimated by the Binomial model.

Since the Company has only declared a special one-time dividend, no dividend yield was used in the calculation on current options

understanding.

Actual value realized, if any, is dependent on the future performance of the Company’s common stock and overall

stock market conditions.

There is no assurance the value realized by an optionee will be at or near the value estimated by the Binomial

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

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All such amounts represent the weighted average amounts for each period.

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

the year ended March 31,

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

For the year ended March 31,

Grant-date fair value

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

During the year ended March 31, 2023, 1,000 unvested stock options were forfeited due to the resignation of an employee.

the year ended March 31, 2022, there were no stock options forfeited or expired.

During the year ended March 31, 2024, there were no stock options forfeited or expired.

During the year ended March 31, 2023,

1,000 unvested stock options were forfeited due to the resignation of an employee.

following table is a summary of activity of stock options for the years ended March 31, 2024 and 2023:

Summary of Activity of Stock Options

Average Exercise Price Per Share

Aggregate Average Remaining Contract Life

Exercise Price

Remaining Contract Life

Outstanding at April 1, 2022

Forfeited or Expired

Outstanding at March 31, 2023

Forfeited or Expired

Outstanding at March 31, 2024

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

Subsequently, in May 2023,

stock options covering 500 shares were exercised by a former employee.

Subsequently, in April 2024,

stock options covering 12,367 shares were exercised.

The Company received proceeds of $ 77,641 from these exercises.

1 unchanged sentence

Schedule of Other Information Pertaining to Option Activity

Weighted average grant-date fair value of stock

options granted (per share)

Weighted average grant-date fair value of stock options granted (per share)

Total fair value of options vested

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Summary of Information About Options Outstanding

Exercise Prices

Average Exercise Price Per Share

Average Remaining Contract Life in Years

Intrinsic Value

Weighted Average

Exercise Price

Weighted Average

Remaining Contract

Life in Years

$ 3.34 – 4.83

$ 3.34 – 18.05

options at March 31, 2023 expire between August 1, 2024 and August 2032 and have exercise prices ranging from $ 3.34 to $ 18.05 .

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

Related Party Transactions

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Amounts paid by the principal stockholder directly to the lessor for the year ending March 31, 2024 and

2022 were $ 15,572 and $ 15,775 , respectively.

2023 were $ 15,572 .

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

in Midland, Texas.

This includes 1,112 square feet of office space shared with and reimbursed by the majority shareholder.

does not include an option to renew and is a 36 -month lease that was to expire 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.

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

The lease does

not include an option to renew and is a 36-month lease that was to expire 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 .

1 unchanged sentence

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.

lease liability, current, and operating lease liability, long-term on the consolidated balance sheet.

lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent

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Rent expense for lease payments is recognized on a straight-line basis over the lease term.

balance sheets classification of lease assets and liabilities was as follows:

balance sheet classification of lease assets and liabilities was as follows:

of Operating Lease Assets and Liabilities

Operating lease

right-of-use asset, beginning balance

March 31, 2024

Operating lease right-of-use asset, beginning balance

Current period amortization

Lease amendment

Total operating lease right-of-use

Operating lease liability,

Total operating lease right-of-use asset

Operating lease liability, current

Operating lease liability, long term

Total lease liabilities

1 unchanged sentence

Schedule of Future Minimum Lease Payments

Fiscal Year Ended March 31, 2024

Lease Obligation

Fiscal Year Ended March 31, 2025

2 unchanged sentences

Operating lease liability

operating lease

liability, current

Operating lease liability,

cash paid for our operating lease for the year ended March 31, 2023 and 2022 was $ 42,668 and $ 42,237 , respectively.

Rent expense, less

sublease income of $ 15,572 and $ 18,555 , respectively, is included in general and administrative expenses.

operating lease liability, current

Operating lease liability, long term

cash paid for our operating lease for the year ended March 31, 2024 and 2023 was $ 42,668 .

Rent expense, less sublease income of $ 15,572

is included in general and administrative expenses.

Oil and Gas Reserve Data (Unaudited)

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following table presents the weighted average first-day-of-the-month prices used for oil and gas reserve preparation, based upon SEC

Schedule of Changes in Proved Reserve

Prices utilized in the reserve estimates before

Schedule of Weighted Average First-day-of-the-month Prices Used for Oil and Gas Reserve

Prices utilized in the reserve estimates before adjustments:

Natural gas per MMBtu

5 unchanged sentences

As of April 1, 2022

Revision of previous

Purchase of minerals

Revision of previous estimates

Purchase of minerals in place

Extensions and discoveries

Sales of minerals in

Sales of minerals in place

As of March 31, 2023

Revision of previous

Purchase of minerals

Revision of previous estimates

Purchase of minerals in place

Extensions and discoveries

Sales of minerals in

Sales of minerals in place

As of March 31, 2024

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five-year timeframe.

Such downward revisions are primarily the result of reserves written off due to the five-year limitation and the

change in the timing of new development.

They are primarily royalty interests on leases in Loving, Pecos and Ward Counties, Texas which

are held by production and still in place to be developed in the future.

Such downward revisions are primarily attributable to a decrease in crude oil and natural gas prices and partially

the result of reserves written off due to the five-year limitation and the change in the timing of new development.

The reserves written off were primarily

royalty interests on leases in DeSoto Parish, Louisiana and Karnes County, Texas which are held by production and still in place to be

developed in the future.

of Proved Developed and Undeveloped Reserves as of March 31, 2024 and 2023 :

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This figure primarily consists of a projected 64 new wells (205 MBOE) operated by others, 14 wells are currently being drilled with plans

for 15 wells to follow in fiscal 2024, 41 wells in fiscal 2025, 16 wells in fiscal 2026 and 4 wells fiscal 2027.

The cost of these projects

would be funded, to the extent possible, from existing cash balances, cash flow from operations and bank borrowings.

The remainder may

be funded through non-core asset sales and/or sales of our common stock.

for 37 wells to follow in fiscal 2025, 104 wells in fiscal 2026 and 6 wells in fiscal 2027.

The cost of these projects would be funded,

to the extent possible, from existing cash balances, cash flow from operations and bank borrowings.

The remainder may be funded through

non-core asset sales and/or sales of our common stock.

following table discloses the Company’s progress toward the conversion of PUDs during fiscal 2024.

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Schedule of Progress of Converting Proved Undeveloped Reserves

Oil & Natural Gas

Oil & Natural

Development Costs

PUDs, beginning of year

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Conversions to PD reserves

( 3,612,315 )

Additional PUDs added

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Future net cash flows

Annual 10% discount

for estimated timing of cash flows

Annual 10% discount for estimated timing of cash flows

( 14,480,000 )

( 22,793,000 )

Standardized measure

of discounted future net cash flows

Standardized measure of discounted future net cash flows

in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves:

Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows to Proved Oil and Gas Reserves

Sales of oil and gas produced,

net of production costs

Sales of oil and gas produced, net of production costs

$ ( 4,936,000 )

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( 14,394,000 )

Changes in previously estimated development

Changes in previously estimated development costs

Revisions of quantity estimates

1 unchanged sentence

( 4,313,000 )

Net change due to purchases and sales of

minerals in place

Extensions and discoveries, less related

Net change due to purchases and sales of minerals in place

Extensions and discoveries, less related costs

Net change in income taxes

( 1,801,000 )

( 3,861,000 )

Accretion of discount

Changes in timing

of estimated cash flows and other

Changes in timing of estimated cash flows and other

Changes in standardized measure

Standardized measure,

beginning of year

Standardized measure,

( 8,187,000 )

Standardized measure, beginning of year

Standardized measure, end of year

Subsequent Events

April 10, 2023, the Company announced that its Board of Directors declared a special dividend of $ 0.10 per common share to its shareholders

April 30, 2024, the Company announced that its Board of Directors declared a regular annual dividend of $ 0.10 per common share to its shareholders

of record at the close of business on May 21, 2024.

The special dividend was paid on May 15, 2023.

April 2023, the Company expended approximately $ 133,200 to participate in the drilling of 4 horizontal wells in the Wolfcamp Sand formation

of the Delaware Basin in Lea County, New Mexico.

May 2023, the Company expended approximately $ 210,600 to complete 4 horizontal wells in the Wolfcamp Sand formation of the Delaware Basin

in Lea County, New Mexico that were drilled during fiscal 2023.

June 2023, the Company received approximately $ 258,000 in cash from a sale of joint venture leasehold acreage and marginal producing

working interest wells in Reagan County, Texas.

The regular annual dividend was paid on June 4, 2024.

April 2024, the Company’s 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.

Also in April 2024, the Company repurchased 13,766 shares for the treasury

account at an aggregate cost of $ 188,637 , an average price of $ 13.70 per share.

April 2024, the Company acquired small royalty (mineral) interests in 21 wells operated by Anadarko Petroleum and Cimarex Energy and

located in Reeves County, Texas for a purchase price of $ 158,000 .

April 2024, stock options covering 12,367 shares were exercised.

The Company received proceeds of $ 77,641 from these exercises.

April 2024, Mexco expended approximately $ 207,800 to participate in the drilling of nine horizontal wells located in the Delaware Basin

in Lea County, New Mexico.

May 2024, the Company funded another $ 200,000 toward its $ 2,000,000 equity investment in a limited liability company.

May 2024, the Company expended approximately $ 90,000 to complete 2 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

events must be reported and has determined that there are no other subsequent events to be disclosed.

Articles of Incorporation of Mexco Energy Corporation filed as Exhibit 3.1 to the Company’s

Annual Report on Form 10-K dated June 24, 1998, and incorporated herein by reference.

Articles of Incorporation of Mexco Energy Corporation filed as Exhibit 3.1 to the Company’s Annual Report on Form 10-K dated

June 24, 1998, and incorporated herein by reference.

Amended Bylaws of Mexco Energy Corporation as amended on September 13, 2011 filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated September 14, 2011, and incorporated herein by reference.

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Loan Agreement dated December 28, 2018 between West Texas National Bank and Mexco Energy Corporation filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 31, 2018, and incorporated herein by reference.

First Amendment to Loan Agreement dated February 28, 2020 to the Loan Agreement between West Texas National Bank and Mexco Energy Corporation dated December 31, 2018, and incorporated herein by reference.

Second Amendment to Loan Agreement dated March 28, 2023 to the Loan Agreement between West Texas National Bank and Mexco Energy Corporation dated December 31, 2018.

First Amendment to Loan Agreement dated February 28, 2020 to the Loan Agreement between West Texas National Bank and Mexco Energy Corporation filed as Exhibit 10.4 to the Company’s Annual Report on form 10-K filed on June 26, 2020, and incorporated herein by reference.

Second Amendment to Loan Agreement dated March 28, 2023 to the Loan Agreement between West Texas National Bank and Mexco Energy Corporation filed as Exhibit 10.5 to the Company’s Annual Report on Form 10-K dated June 26, 2023, and incorporated herein by reference.

Code of Business Conduct and Ethics of Mexco Energy Corporation filed with the Company’s Quarterly Report on Form 10-Q filed on November 15, 2004, and incorporated herein by reference.

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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-K

Item 9A. Controls and Procedures