What changed in this filing

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Item 1. Financial Statements

2025-02-07 compared with 2024-11-07 · 188 added, 197 removed, 297 unchanged (56% of the section changed)

2 unchanged sentences

BALANCE SHEETS

September 30,

Current assets

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2,239,283 and 2,226,916 shares issued;

and, 2,046,000 and 2,091,399 shares outstanding as of September 30, 2024 and March 31, 2024, respectively

2,046,000 and 2,091,399 shares outstanding as of December 31, 2024 and March 31, 2024, respectively

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Operating revenues:

Nine Months Ended

Operating revenue:

Natural gas sales

1 unchanged sentence

Operating expenses:

Accretion of asset retirement obligations

Accretion of asset retirement obligation

Depreciation, depletion, and amortization

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Interest expense

Net other income

Net other income (expense)

Income before provision for income taxes

Income tax expense:

Total income tax expense

(Benefit from) provision for income taxes

Income tax expense (benefit):

Total income tax (benefit) expense

Income per common share:

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Treasury Stock

Stockholders’ Equity

Total Stockholders’ Equity

Balance at April 1, 2024

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$ ( 1,878,746 )

Stock based compensation

Balance at December 31, 2024

$ ( 1,878,746 )

Common Stock Par Value

2 unchanged sentences

Treasury Stock

Stockholders’ Equity

Total Stockholders’ Equity

Balance at April 1, 2023

5 unchanged sentences

$ ( 590,495 )

Purchase of stock

Prurchase of stock

Stock based compensation

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$ ( 915,751 )

Stock based compensation

Purchase of stock

Balance at December 31, 2023

$ ( 1,045,627 )

SHARE ACTIVITY

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Balance at April 1, 2024

Balance at September 30, 2024

Balance at December 31, 2024

Common stock shares, held in treasury:

Balance at April 1, 2024

Balance at September 30, 2024

Common stock shares, outstanding at September 30, 2024

Balance at Dec.

Common stock shares, outstanding

at December 31, 2024

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

1 unchanged sentence

STATEMENTS OF CASH FLOWS

the Six Months Ended September 30,

the Nine Months Ended December 31,

Cash flows from operating activities:

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

Deferred income tax expense

Adjustments to reconcile net income to net cash provided by operating

Deferred income tax (benefit) expense

Stock-based compensation

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Changes in operating assets and liabilities:

Decrease in accounts receivable

(Increase) decrease in accounts receivable

(Increase) decrease in right-of-use asset

Decrease in prepaid expenses

Increase (decrease) in accounts payable and accrued expenses

Increase in accounts payable and accrued expenses

Settlement of asset retirement obligations

Decrease in income taxes payable

Increase in income taxes payable

Decrease (increase) in operating lease liability

4 unchanged sentences

( 1,471,543 )

Investments in limited liability companies at cost

Investment in limited liability companies at cost

Proceeds from sale of oil and gas properties and equipment

4 unchanged sentences

Proceeds from exercise of stock options

Acquisition of treasury stock

Dividends paid

Debt issuance costs

Proceeds from long-term debt

Reduction of long-term debt

Dividends paid

Acquisition of treasury stock

Net cash used in financing activities

Net (decrease) increase in cash and cash equivalents

( 1,563,479 )

Cash and cash equivalents at beginning of period

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Cash paid for interest

Cash paid for income taxes

Accrued capital expenditures included in accounts payable

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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.

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

All of the Company’s oil and gas interests are

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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 consolidated 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.

management believes its estimates and assumptions are reasonable, actual results may differ materially from those estimates.

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,

2024, and the results of its operations and cash flows for the interim periods ended September 30, 2024 and 2023.

(consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of December 31, 2024,

and the results of its operations and cash flows for the interim periods ended December 31, 2024 and 2023.

The consolidated financial

statements as of September 30, 2024 and for the three and six month periods ended September 30, 2024 and 2023 are unaudited.

statements as of December 31, 2024 and for the three and nine month periods ended December 31, 2024 and 2023 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.

Oil and Natural Gas Properties .

The Company uses the full cost method

of accounting for oil and natural gas properties.

Under this method, all costs (direct and indirect) associated with acquisition, exploration,

and development of oil and natural gas properties are capitalized.

Costs capitalized include acquisition costs, geological and geophysical

expenditures, lease rentals on undeveloped properties and costs of drilling and equipping productive and non-productive wells.

costs include directly related overhead costs.

All of the Company’s capitalized costs are subject to amortization.

In addition, capitalized costs less accumulated depletion and related deferred

income taxes are not allowed to exceed an amount (the full cost ceiling) equal to the sum of:

1)the present value of estimated future

net revenues discounted at ten percent computed in compliance with SEC guidelines;

2)plus the cost of properties not being amortized;

3)plus the lower of cost or estimated fair value of unproven properties included in the costs being amortized;

4)less income tax effects

related to differences between the book and tax basis of the properties.

No impairments on oil and natural gas properties as a result of the ceiling

test were recorded for the three and nine months ended December 31, 2024 and 2023.

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

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the investment is received, it is immediately recognized on the consolidated statements of operations.

Based on the Company’s organizational

structure, the Company has one operating segment, which is crude oil and natural gas development, exploration and production.

addition, the Company has a single, company-wide management team that allocates capital resources to maximize profitability and

measures financial performance as a single enterprise.

Asset Retirement Obligations

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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 2025:

following table provides a rollforward of the AROs for the first nine months of fiscal 2025:

Schedule of Rollforward of Asset Retirement Obligations

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Accretion expense

Carrying amount of asset retirement obligations as of September 30, 2024

Carrying amount of asset retirement obligations as of December 31, 2024

Current portion

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.

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

and increase the borrowing base to $ 1,500,000 .

On March 28, 2023, the Agreement was amended to extend the maturity date to March 28,

the Agreement, interest on the facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half

of one percent ( 0.5 %) floating daily.

Interest on the outstanding amount under the Agreement is payable monthly.

In addition, the Company

will pay an unused commitment fee in an amount equal to one-half of one percent (0.5%) times the daily average of the unadvanced amount

of the commitment .

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

As of September

30, 2024, 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

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 deferred over the life of the credit facility.

borrowed under the Agreement are collateralized by the common stock of the Company’s wholly owned subsidiaries and substantially

all of the Company’s oil and gas properties.

Agreement contains customary covenants for credit facilities of this type including limitations on change in control, disposition of

assets, mergers and reorganizations.

The Company is also obligated to meet certain financial covenants under the Agreement and requires

senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratios (Senior Debt/EBITDA) less

than or equal to 4.00 to 1.00 measured with respect to the four trailing quarters and minimum interest coverage ratios (EBITDA/Interest

Expense) of 2.00 to 1.00 for each quarter.

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

Company obtained written permission from WTNB prior to declaring the regular annual dividend on April 30, 2024 as discussed in Note 10.

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 line of credit as of September 30, 2024.

Stock-based Compensation

Company recognized stock-based compensation expense of $ 51,630 and $ 58,847 in general and administrative expense in the Consolidated

Statements of Operations for the three months ended September 30, 2024 and 2023, respectively.

Statements of Operations for the three months ended December 31, 2024 and 2023, respectively.

Stock-based compensation expense recognized

for the six months ended September 30, 2024 and 2023 was $ 104,069 and $ 113,823 , respectively.

for the nine months ended December 31, 2024 and 2023 was $ 155,699 and $ 172,670 , respectively.

The total cost related to non-vested awards

not yet recognized at September 30, 2024 totals $ 381,743 which is expected to be recognized over a weighted average of 2.04 years.

the six months ended September 30, 2024, no stock options were granted.

During the six months ended September 30, 2023, the Compensation

not yet recognized at December 31, 2024 totals $ 330,113 which is expected to be recognized over a weighted average of 1.78 years.

the nine months ended December 31, 2024, no stock options were granted.

During 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

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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, 2024 and 2023.

models for stock options granted during the nine months ended December 31, 2024 and 2023.

All such amounts represent the weighted average

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

Six Months Ended

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

Nine Months Ended

Grant-date fair value

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Expected term (in years)

following table is a summary of activity of stock options for the six months ended September 30, 2024:

following table is a summary of activity of stock options for the nine months ended December 31, 2024:

Summary of Activity of Stock Options

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Forfeited or Expired

Outstanding at September 30, 2024

Vested at September 30, 2024

Exercisable at September 30, 2024

the six months ended September 30, 2024, stock options covering 12,367 shares were exercised with a total intrinsic value of $ 92,316 .

Outstanding at December 31, 2024

Vested at December 31, 2024

Exercisable at December 31, 2024

the nine months ended December 31, 2024, stock options covering 12,367 shares were exercised with a total intrinsic value of $ 92,316 .

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

During the six months ended September 30, 2023, stock options covering

During the nine months ended December 31, 2023, stock options covering

500 shares were exercised with a total intrinsic value of $ 2,416 .

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

the six months ended September 30, 2024, 1,875 unvested stock options and 625 vested stock options were forfeited due to the resignation

the nine months ended December 31, 2024, 1,875 unvested stock options and 625 vested stock options were forfeited due to the resignation

of an employee.

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

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

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, 2024 expire between September 2028 and April 2033 and have exercise prices ranging from $ 3.34 to $ 18.05 .

options at December 31, 2024 expire between September 2028 and April 2033 and have exercise prices ranging from $ 3.34 to $ 18.05 .

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.

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

and increase the borrowing base to $ 1,500,000 .

On March 28, 2023, the Agreement was amended to extend the maturity date to March 28,

the Agreement, interest on the facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half

of one percent ( 0.5 %) floating daily.

Interest on the outstanding amount under the Agreement is payable monthly.

In addition, the Company

will pay an unused commitment fee in an amount equal to one-half of one percent (0.5%) times the daily average of the unadvanced amount

of the commitment.

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

As of December

31, 2024, 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, 2026 .

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 deferred over the life of the credit facility.

borrowed under the Agreement are collateralized by the common stock of the Company’s wholly owned subsidiaries and substantially

all of the Company’s oil and gas properties.

Agreement contains customary covenants for credit facilities of this type including limitations on change in control, disposition of

assets, mergers and reorganizations.

The Company is also obligated to meet certain financial covenants under the Agreement and requires

senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratios (Senior Debt/EBITDA) less

than or equal to 4.00 to 1.00 measured with respect to the four trailing quarters and minimum interest coverage ratios (EBITDA/Interest

Expense) of 2.00 to 1.00 for each quarter.

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

Company obtained written permission from WTNB prior to declaring the special dividend on April 30, 2024 as discussed in Note 10.

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 December 31, 2024.

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

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of lease payments.

The incremental borrowing rate used at adoption of the renewal was 9 %.

Significant judgement is required when determining

the incremental borrowing rate.

The incremental borrowing rate used at adoption was 9 %.

Significant judgement is required when determining the incremental

borrowing rate.

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

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

of Operating Lease Assets and Liabilities

September 30, 2024

Schedule of Operating Lease Assets and Liabilities

December 31, 2024

Operating lease right-of-use asset, beginning balance

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Total 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, 2024 under non-cancellable operating leases are as follows:

Schedule of Future Minimum Lease Payments

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Operating lease liability, long term

cash paid for our operating lease for the six months ended September 30, 2024 was $ 22,580 .

Rent expense, less sublease income of $ 6,887

is included in general and administrative expenses.

Net cash paid for our operating lease for the six months ended September 30, 2023

was $ 21,334 .

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

The IRA 2022, among other

tax provisions, imposes a 15% corporate alternative minimum tax on corporations with book financial statement income in excess of $1.0

billion, effective for tax years beginning after December 31, 2022.

The IRA 2022 also establishes a 1% excise tax on stock repurchases

made by publicly traded U.S.

corporations, effective for stock repurchases in excess of an annual limit of $1.0 million after December

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, 2024 and 2023:

of Income Tax Provision

Six Months Ended

cash paid for our operating lease for the nine months ended December 31, 2024 and 2023 was $ 35,116 and $ 32,001 , respectively.

Rent expense,

less sublease income of $ 9,430 is included in general and administrative expenses.

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

Schedule of Income Tax Provision

Nine Months Ended

Current income tax expense:

Total current income tax expense

Deferred income tax expense:

Total deferred income tax expense

Deferred income tax (benefit) expense:

Total deferred income tax (benefit) expense

Total income tax expense:

income tax for the six months ended September 30, 2024 was $ 171,353 .

Federal income tax for the six months ended September 30, 2023 was

following table summarizes our income tax expense and effective income tax rate for the six months ended September 30 follows:

following table summarizes our income tax expense and effective income tax rate for the nine months ended December 31 follows:

Schedule of Reconciliation of Provision for Income Taxes

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Effective income tax rate (1)

federal statutory rate was 21 % for three months ended September 30, 2024 and 2023.

Total income tax expense from continuing operations for the six months ended

September 30, 2024 and 2023 differed from amounts computed by applying the U.S.

federal statutory tax rate to pre-tax income primarily

due to state income taxes, net of federal benefit, and the impact of permanent differences between book and taxable income.

Related Party Transactions

party transactions for the Company primarily relate to shared office expenditures in addition to administrative and operating

expenses paid on behalf of the principal stockholder.

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

ended September 30, 2024 and 2023 was $ 1,250

and $ 8,612 ,

respectively.

The total billed to and reimbursed by the stockholder for the six months ended September 30, 2024 and 2023 was $ 5,288

and $ 17,994 ,

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, 2024 and 2023 were $ 2,994

and $ 3,893 ,

respectively.

Amounts paid by the principal stockholder directly to the lessor for the six months ending September 30, 2024 and 2023

The federal statutory rate was 21 % for nine months ended December

31, 2024 and 2023.

respectively.

income tax expense from continuing operations for the nine months ended December 31, 2024 and 2023 differed from amounts computed by

applying the U.S.

federal statutory tax rate to pre-tax income primarily due to state income taxes net of federal benefit and the impact

of permanent differences between book and taxable income.

Related Party Transactions

party transactions for the Company primarily relate to shared office expenditures in addition to administrative and operating expenses

paid on behalf of the principal stockholder.

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

31, 2024 and 2023 was $ 16,174 and $ 3,625 , respectively.

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

December 31, 2024 and 2023 was $ 21,462 and $ 21,619 , 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, 2024 and 2023 were $ 2,544 and $ 3,893 , respectively.

Amounts paid by the principal stockholder directly to the lessor

for the nine months ending December 31, 2024 and 2023 were $ 9,430 and $ 11,679 , 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

and six month periods ended September 30, 2024 and 2023.

and nine month periods ended December 31, 2024 and 2023:

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

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

Shares outstanding:

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Income per common share:

For the three months ended September

30, 2024, 61,125 shares relating to stock options were excluded from the computation of diluted net income because their inclusion

would be anti-dilutive.

For the six months ended September 30, 2024, 60,500 shares relating to stock options were excluded from the computation of diluted

the three and nine months ended December 31, 2024, 60,500 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 $ 15.34

at September 30, 2024.

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

at December 31, 2024.

For 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.

exercise price of $ 15.32 at December 31, 2023.

Stockholders’ Equity

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Repurchases may also be made from

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

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”).

The IRA 2022, among other

tax provisions, establishes a 1 % excise tax on stock repurchases made by publicly traded U.S.

corporations, effective for stock repurchases

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

the six months ended September 30, 2024 there were 57,766 shares of common stock repurchased for the treasury account at an aggregate

cost of $ 703,216 .

During 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 .

the nine months ended December 31, 2024, the Company repurchased 57,766 shares for the treasury at an aggregate cost of $ 703,216 .

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

April 30, 2024 , the Board of Directors declared a regular annual dividend of $ 0.10 per common share.

The Company paid the special dividend

of $ 209,000 on June 4, 2024 to the stockholders of record at the close of business on May 21, 2024.

The Company paid the dividend of

$ 209,000 on June 4, 2024 to the stockholders of record at the close of business on May 21, 2024.

On April 10, 2023 , the Board of Directors

declared a special dividend of $ 0.10 per common share.

The Company paid the special dividend of $ 213,600 on May 15, 2023 to the stockholders

The Company paid the dividend of $ 213,600 on May 15, 2023 to the stockholders

of record at the close of business on May 1, 2023.

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or as to the amount of any future dividend.

declared by the Board and stock repurchased during the period are presented in the Company’s consolidated statements of changes in stockholders’

equity as dividends paid and purchases of treasury stock, respectively.

Dividends paid and stock repurchased during the period are presented

as cash used in financing activities in the Company’s consolidated statements of cash flows.

Stock repurchases are included as treasury

stock in the consolidated balance sheets.

the six months ended September 30, 2024, the Company incurred approximately $ 900,000 in acquisition costs to acquire various royalty

interests in approximately 300 wells located in Adams and Weld Counties, Colorado;

Karnes and Reeves Counties, Texas;

and Laramie County,

During the six months ended September 30, 2023, the Company incurred $ 20,000 in acquisition costs to acquire various royalty

interests 6 producing wells in Howard County, Texas.

declared by the Board and stock repurchased during the period are presented in the Company’s consolidated statements of changes

in stockholders’ equity as dividends paid and purchases of treasury stock, respectively.

Dividends paid and stock repurchased during

the period are presented as cash used in financing activities in the Company’s consolidated statements of cash flows.

Stock repurchases

are included as treasury stock in the consolidated balance sheets.

the nine months ended December 31, 2024, the Company incurred approximately $ 2,000,000 in acquisition costs to acquire various royalty

interests in approximately 700 wells located in Adams, Broomfield and Weld Counties, Colorado;

DeSoto Parish, Louisiana;

Karnes, Live Oak, Reagan, Reeves and Upton Counties, Texas;

Laramie County, Wyoming;

and multiple counties in Nebraska, North

and South Dakota and Montana.

the nine months ended December 31, 2023, the Company incurred approximately $ 490,000 in acquisition costs to acquire various royalty

interests in approximately 60 producing wells in Crane, Ector, Howard, Midland, Reeves and Upton Counties, Texas.

Subsequent Events

October 2024, the Company acquired royalty interests in 3

producing wells and 5

undrilled locations operated by Mewbourne Oil located in Eddy County, New Mexico for a purchase price of $ 260,000 ;

royalty interests in 6

producing wells operated by SWN Production and located in DeSoto Parish, Louisiana for a purchase price of $ 25,000 ;

royalty interests in 8

producing wells operated by Marathon Oil and located in Live Oak, Texas for a purchase price of $ 20,000 ;

royalty interests in 10

producing wells operated by Ovintiv and located in Upton County, Texas for a purchase price of $ 65,000 ;

royalty interests in 12

producing wells operated by Pioneer Natural Resources and located in Reagan, Texas for a purchase price of $ 66,000 ;

interests in approximately 230

producing wells operated by Petro-Hunt Corporation, ConocoPhillips Company and others in Montana, Nebraska, North Dakota and South

Dakota for a purchase price of $ 188,000 .

All of these acquisitions are effective November 1, 2024.

October 2024, the Company expended approximately $ 74,000 to drill two horizontal wells in the Bone Spring Sand formation of the Delaware

Basin in Lea County, New Mexico.

Mexco’s working interest in these wells is .53 %.

In November 2024, the Company entered into an agreement to acquire royalty interests in 15 producing wells with potential

for additional development located in Adams and Broomfield Counties, Colorado and operated by Civitas Resources for a purchase price of

January 2025, the Company expended approximately $ 70,000 for 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

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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-Q

Item 1. Financial Statements