MEXCO ENERGY CORP 10-Q

Item 1. Financial Statements Mexco Energy Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS September 30, March 31, 2025 2025 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 2,746,692 $ 1,753,955 Accounts receivable: Oil and natural gas sales 876,373 1,113,588 Trade 48,731 67,951 Prepaid costs and expenses 50,959 60,981 Prepaid drilling 13,756 24,381 Total current assets 3,736,511 3,020,856 Property and equipment, at cost Oil and gas properties, using the full cost method 52,270,022 51,611,782 Other 121,926 121,926 Accumulated depreciation, depletion and amortization ( 37,975,448 ) ( 36,637,530 ) Property and equipment, net 14,416,500 15,096,178 Investments – cost basis 2,300,000 2,100,000 Operating lease, right-of-use asset 101,595 126,525 Other noncurrent assets 2,149 4,298 Total assets $ 20,556,755 $ 20,347,857 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued expenses $ 253,744 $ 307,387 Income tax payable 147,079 192,802 Operating lease liability, current 53,341 51,003 Total current liabilities 454,164 551,192 Long-term liabilities Operating lease liability, long-term 48,254 75,522 Asset retirement obligations 689,954 688,842 Deferred income tax liabilities 197,588 320,604 Total long-term liabilities 935,796 1,084,968 Total liabilities 1,389,960 1,636,160 Commitments and contingencies - - Stockholders’ equity Preferred stock - $ 1.00 par value; 10,000,000 shares authorized; none outstanding - - Common stock - $ 0.50 par value; 40,000,000 shares authorized; 2,239,283 shares issued; and, 2,046,000 shares outstanding as of September 30, 2025 and March 31, 2025, respectively 1,119,641 1,119,641 Additional paid-in capital 8,939,194 8,844,953 Retained earnings 10,986,706 10,625,849 Treasury stock, at cost ( 193,283 shares) ( 1,878,746 ) ( 1,878,746 ) Total stockholders’ equity 19,166,795 18,711,697 Total liabilities and stockholders’ equity $ 20,556,755 $ 20,347,857 The accompanying notes are an integral part of the consolidated financial statements. Page 3 Mexco Energy Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) 2025 2024 2025 2024 Three Months Ended Six Months Ended September 30, September 30, 2025 2024 2025 2024 Operating revenues: Oil sales $ 1,302,105 $ 1,521,618 $ 2,698,042 $ 3,031,922 Natural gas sales 322,461 174,235 681,258 351,987 Other 110,177 53,374 169,619 93,153 Total operating revenues 1,734,743 1,749,227 3,548,919 3,477,062 Operating expenses: Production 369,093 413,405 773,863 850,825 Accretion of asset retirement obligations 8,043 7,813 16,016 15,524 Depreciation, depletion, and amortization 662,647 584,288 1,337,917 1,123,985 General and administrative 332,264 334,525 726,701 701,570 Total operating expenses 1,372,047 1,340,031 2,854,497 2,691,904 Operating income 362,696 409,196 694,422 785,158 Other income (expenses): Interest income 20,126 20,830 34,657 43,576 Interest expense ( 1,081 ) ( 1,075 ) ( 2,156 ) ( 2,158 ) Net other income (expense) 19,045 19,755 32,501 41,418 Income before provision for income taxes 381,741 428,951 726,923 826,576 Provision for income taxes 58,235 111,753 161,466 218,339 Net income $ 323,506 $ 317,198 $ 565,457 $ 608,237 Income per common share: Basic: $ 0.16 $ 0.15 $ 0.28 $ 0.29 Diluted: $ 0.16 $ 0.15 $ 0.27 $ 0.29 Weighted average common shares outstanding: Basic: 2,046,000 2,073,696 2,046,000 2,082,194 Diluted: 2,076,424 2,117,804 2,074,866 2,126,565 Dividends declared per share $ - $ - $ 0.10 $ 0.10 The accompanying notes are an integral part of the consolidated financial statements. Page 4 Mexco Energy Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) Common Stock Par Value Additional Paid-In Capital Retained Earnings Treasury Stock Total Stockholders’ Equity Balance at April 1, 2025 $ 1,119,641 $ 8,844,953 $ 10,625,849 $ ( 1,878,746 ) $ 18,711,697 Net income - - 241,951 - 241,951 Dividends paid - - ( 204,600 ) - ( 204,600 ) Stock-based compensation - 51,208 - - 51,208 Balance at June 30, 2025 $ 1,119,641 $ 8,896,161 $ 10,663,200 $ ( 1,878,746 ) $ 18,800,256 Net income - - 323,506 - 323,506 Stock-based compensation - 43,033 - - 43,033 Balance at September 30, 2025 $ 1,119,641 $ 8,939,194 $ 10,986,706 $ ( 1,878,746 ) $ 19,166,795 Common Stock Par Value Additional Paid-In Capital Retained Earnings Treasury Stock Total Stockholders’ Equity Balance at April 1, 2024 $ 1,113,458 $ 8,567,856 $ 9,122,481 $ ( 1,175,530 ) $ 17,628,265 Net income - - 291,039 - 291,039 Dividends paid ( 209,000 ) ( 209,000 ) Issuance of stock through options exercised 6,183 71,458 - - 77,641 Purchase of stock - - - ( 188,637 ) ( 188,637 ) Stock-based compensation - 52,439 - - 52,439 Balance at June 30, 2024 $ 1,119,641 $ 8,691,753 $ 9,204,520 $ ( 1,364,167 ) $ 17,651,747 Balance $ 1,119,641 $ 8,691,753 $ 9,204,520 $ ( 1,364,167 ) $ 17,651,747 Net income - - 317,198 - 317,198 Purchase of stock - - - ( 514,579 ) ( 514,579 ) Stock-based compensation - 51,630 - - 51,630 Balance at September 30, 2024 $ 1,119,641 $ 8,743,383 $ 9,521,718 $ ( 1,878,746 ) $ 17,505,996 Balance $ 1,119,641 $ 8,743,383 $ 9,521,718 $ ( 1,878,746 ) $ 17,505,996 SHARE ACTIVITY Common stock shares, issued: Balance at April 1, 2025 2,239,283 Issued - Balance at September 30, 2025 2,239,283 Common stock shares, held in treasury: Balance at April 1, 2025 ( 193,283 ) Acquisitions - Balance at September 30, 2025 ( 193,283 ) Common stock shares, outstanding at September 30, 2025 2,046,000 The accompanying notes are an integral part of the consolidated financial statements. Page 5 Mexco Energy Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended September 30, (Unaudited) 2025 2024 Cash flows from operating activities: Net income $ 565,457 $ 608,237 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income tax (benefit) expense ( 123,016 ) 119,661 Stock-based compensation 94,241 104,069 Depreciation, depletion and amortization 1,337,917 1,123,985 Accretion of asset retirement obligations 16,016 15,524 Amortization of debt issuance costs 2,149 2,149 Changes in operating assets and liabilities: Decrease in accounts receivable 256,435 88,478 Decrease (increase) in right-of-use asset 24,930 ( 131,099 ) Decrease in prepaid expenses 10,022 5,781 (Decrease) increase in accounts payable and accrued expenses ( 28,735 ) 15,199 Settlement of asset retirement obligations ( 17,214 ) ( 13,370 ) Decrease in income taxes payable ( 45,723 ) ( 63,308 ) (Increase) decrease in operating lease liability ( 24,930 ) 131,099 Net cash provided by operating activities 2,067,549 2,006,405 Cash flows from investing activities: Additions to oil and gas properties ( 676,601 ) ( 1,667,027 ) Investments in limited liability companies at cost ( 200,000 ) ( 400,000 ) Proceeds from sale of oil and gas properties and equipment 6,389 70 Net cash used in investing activities ( 870,212 ) ( 2,066,957 ) Cash flows from financing activities: Proceeds from exercise of stock options - 77,641 Acquisition of treasury stock - ( 703,216 ) Dividends paid ( 204,600 ) ( 209,000 ) Net cash used in financing activities ( 204,600 ) ( 834,575 ) Net increase (decrease) in cash and cash equivalents 992,737 ( 895,127 ) Cash and cash equivalents at beginning of period 1,753,955 2,473,484 Cash and cash equivalents at end of period $ 2,746,692 $ 1,578,357 Supplemental disclosure of cash flow information: Cash paid for interest $ 7 $ 9 Cash paid for income taxes $ 277,802 $ - Accrued capital expenditures included in accounts payable $ 13,511 $ 203,000 Non-cash investing and financing activities: Asset retirement obligations $ 1,469 $ 1,372 The accompanying notes are an integral part of the consolidated financial statements. Page 6 Mexco Energy Corporation and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Nature of Operations Mexco Energy Corporation (a Colorado corporation) and its wholly owned subsidiaries, Forman Energy Corporation (a New York corporation), Southwest Texas Disposal Corporation (a Texas corporation), and TBO Oil & Gas, LLC (a Texas limited liability company) (collectively, the “Company”) are engaged in the acquisition, exploration, development, and production of crude oil, natural gas, condensate, and natural gas liquids (“NGLs”). Most of the Company’s oil and gas interests are centered in West Texas and Southeastern New Mexico; however, the Company owns producing properties and undeveloped acreage in fourteen states. All of the Company’s oil and gas interests are operated by others. 2. Basis of Presentation and Significant Accounting Policies Principles of Consolidation . The consolidated financial statements include the accounts of Mexco Energy Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions associated with the consolidated operations have been eliminated. Estimates and Assumptions . In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), management is required to make informed judgments, estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the 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. Interim Financial Statements . In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 2025, and the results of its operations and cash flows for the interim periods ended September 30, 2025 and 2024. The consolidated financial statements as of September 30, 2025 and for the three and six month periods ended September 30, 2025 and 2024 are unaudited. The consolidated balance sheet as of March 31, 2025 was derived from the audited balance sheet filed in the Company’s 2025 annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full year. The accounting policies followed by the Company are set forth in more detail in Note 2 of the “Notes to Consolidated Financial Statements” in the Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC. However, the disclosures herein are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Form 10-K. Oil and Gas Properties . The Company uses the full cost method of accounting for its oil and natural gas properties. Under this method, all acquisition, exploration, and development costs are capitalized and amortized on a composite unit of production method based on proved oil and natural gas reserves. This includes any internal costs that are directly related to exploration and development activities but does not include any costs related to production, general corporate overhead or similar activities. The carrying amount of oil and gas properties also includes estimated asset retirement costs recorded based on the fair value of the asset retirement obligation (“ARO”) when incurred. Sales of oil and natural gas properties, whether or not being amortized currently, are accounted for as adjustments of capitalized costs, with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and natural gas. This includes any sales of properties such as Term Assignments and Assignments, Bill of Sales and Conveyances. Depletion of evaluated oil and natural gas properties is computed on the units of production method, whereby capitalized costs plus estimated future development costs are amortized over total proved reserves. 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 six months ended September 30, 2025 and 2024. Page 7 Investments . The Company accounts for investments of less than 3% in any limited liability companies at cost. The Company has no control of the limited liability companies. The cost of the investment is recorded as an asset on the consolidated balance sheets and when income from the investment is received, it is immediately recognized on the consolidated statements of operations. The Company evaluates investments for an impairment whenever events or changes in circumstances indicate that the carrying amount of an investment may not be recoverable. Indicators of impairment may include, but are not limited to, sustained declines in market value, investee financial condition and operating performance, industry or economic trends, and other relevant factors. Reclassifications . Certain amounts in prior periods’ consolidated financial statements have been reclassified to conform with the current period’s presentation. These reclassifications had no effect on previously reported results of operations, retained earnings or net cash flows. Segments . Based on the Company’s organizational structure, the Company has one operating segment, which is crude oil and natural gas development, exploration and production. In 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. 3. Asset Retirement Obligations The Company’s asset retirement obligations (“ARO”) relate to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. The ARO is included on the consolidated balance sheets with the current portion being included in the accounts payable and other accrued expenses. The following table provides a rollforward of the AROs for the first six months of fiscal 2026: Schedule of Rollforward of Asset Retirement Obligations Carrying amount of asset retirement obligations as of April 1, 2025 $ 718,842 Liabilities incurred 1,469 Liabilities settled ( 16,373 ) Accretion expense 16,016 Carrying amount of asset retirement obligations as of September 30, 2025 719,954 Less: Current portion 30,000 Non-Current asset retirement obligation $ 689,954 4. Long Term Debt On 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. On February 28, 2020, the Agreement was amended to increase the credit facility to $ 2,500,000 , extend the maturity date to March 28, 2023 and increase the borrowing base to $ 1,500,000 . On March 28, 2023, the Agreement was amended to extend the maturity date to March 28, 2026 . Under the Agreement, interest on the facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half of one percent (0.5%) floating daily. Interest on the outstanding amount under the Agreement is payable monthly. In addition, the Company will pay an unused commitment fee in an amount equal to one-half of one percent (0.5%) times the daily average of the unadvanced amount of the commitment. The unused commitment fee is payable quarterly in arrears on the last day of each calendar quarter. As of September 30, 2025, there was $ 1,500,000 available for borrowing by the Company on the facility. No 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. Amounts borrowed under the Agreement are collateralized by the common stock of the Company’s wholly owned subsidiaries and substantially all of the Company’s oil and gas properties. Page 8 The Agreement contains customary covenants for credit facilities of this type including limitations on change in control, disposition of assets, mergers, and reorganizations. The Company is also obligated to meet certain financial covenants under the Agreement and requires senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratios (Senior Debt/EBITDA) less than or equal to 4.00 to 1.00 measured with respect to the four trailing quarters and minimum interest coverage ratios (EBITDA/Interest Expense) of 2.00 to 1.00 for each quarter. In addition, this Agreement prohibits the Company from paying cash dividends on its common stock without written permission of WTNB. The Company obtained written permission from WTNB prior to declaring the regular annual dividend on May 13, 2025 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 approval. On September 17, 2025, WTNB reaffirmed the borrowing base at $ 1,500,000 . There was no balance outstanding on the credit facility as of September 30, 2025. 5. Stock-based Compensation The Company recognized stock-based compensation expense of $ 43,033 and $ 51,630 in general and administrative expense in the Consolidated Statements of Operations for the three months ended September 30, 2025 and 2024, respectively. Stock-based compensation expense recognized for the six months ended September 30, 2025 and 2024 was $ 94,241 and $ 104,069 , respectively. The total cost related to non-vested awards not yet recognized at September 30, 2025 totals $ 185,931 which is expected to be recognized over a weighted average of 1.32 years. During the six months ended September 30, 2025 and 2024, no stock options were granted. The following table is a summary of activity of stock options for the six months ended September 30, 2025: Schedule of Activity of Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Life in Years Intrinsic Value Outstanding at April 1, 2025 150,883 $ 9.52 5.98 $ - Granted - - Exercised - - Forfeited or Expired - - Outstanding at September 30, 2025 150,883 $ 9.52 5.48 $ - Vested at September 30, 2025 128,133 $ 8.64 5.15 $ 66,244 Exercisable at September 30, 2025 128,133 $ 8.64 5.15 $ 66,244 During the six months ended September 30, 2025, there were no stock options exercised. During the six months ended September 30, 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. No forfeiture rate is assumed for stock options granted to directors or employees due to the forfeiture rate history of these types of awards. There were no stock options forfeited or expired during the six months ended September 30, 2025. During the six months ended September 30, 2024, 1,875 unvested stock options and 625 vested stock options were forfeited due to the resignation of an employee. Outstanding options at September 30, 2025 expire between September 2028 and April 2033 and have exercise prices ranging from $ 3.34 to $ 18.05 . Page 9 6. Leases The Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for our corporate office located in Midland, Texas. This includes 702 square feet of office space shared with and paid by our principal shareholder. In June 2024, the Company agreed to re-extend its lease at a flat (unescalated) rate for another 36 months. The amended lease now expires on July 31, 2027 . The Company determines an arrangement is a lease at inception. Operating leases are recorded in operating lease right-of-use asset, operating lease liability, current, and operating lease liability, long-term on the consolidated balance sheets. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate used at adoption of the renewal 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. The balance sheets classification of lease assets and liabilities was as follows: Schedule of Operating Lease Assets and Liabilities September 30, 2025 Assets Operating lease right-of-use asset, beginning balance $ 126,525 Current period amortization ( 24,930 ) Lease extension - Total operating lease right-of-use asset $ 101,595 Liabilities Operating lease liability, current $ 53,341 Operating lease liability, long term 48,254 Total lease liabilities $ 101,595 Future minimum lease payments as of September 30, 2025 under non-cancellable operating leases are as follows: Schedule of Future Minimum Lease Payments Lease Obligation Fiscal Year Ended March 31, 2026 30,160 Fiscal Year Ended March 31, 2027 60,320 Fiscal Year Ended March 31, 2028 20,107 Total lease payments $ 110,587 Less: imputed interest ( 8,992 ) Operating lease liability 101,595 Less: operating lease liability, current ( 53,341 ) Operating lease liability, long term $ 48,254 Net cash paid for our operating lease for the six months ended September 30, 2025 and 2024 was $ 25,073 and $ 22,580 , respectively. Rent expense, less sublease income of $ 5,088 and $ 6,887 , respectively is included in general and administrative expenses. 7. Income Taxes On July 4, 2025, the “One Big Beautiful Bill” (“OBBB”) was enacted. The OBBB is a significant piece of legislation that includes significant changes to federal tax policy, environmental funding, and energy development regulations. Key provisions relevant to the crude oil and natural gas industry include (i) tax policy changes that extend and expand components of the 2017 Tax Cuts and Jobs Act and (ii) the introduction of fee and royalty-related provisions aimed at reducing financial and administrative burdens on domestic energy producers. The Company is currently evaluating the full impact of the OBBB on the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations and condensed consolidated statements of cash flows in its condensed consolidated financial statements. Page 10 The income tax provision consists of the following for the six months ended September 30, 2025 and 2024: Schedule of Income Tax Provision 2025 2024 Six Months Ended September 30 2025 2024 Current income tax expense: Federal $ 232,079 $ 51,692 State 52,403 46,986 Total current income tax expense 284,482 98,678 Deferred income tax (benefit) expense: Federal ( 123,298 ) 119,661 State 282 - Total deferred income tax (benefit) expense ( 123,016 ) 119,661 Total income tax expense: $ 161,466 $ 218,339 A reconciliation of the provision for income taxes to income taxes computed using the federal statutory rate for the six months ended September 30 follows: Schedule of Reconciliation of Provision for Income Taxes 2025 2024 Tax expense at federal statutory rate (1) $ 152,654 $ 173,581 Statutory depletion carryforward ( 49,319 ) - Change in valuation allowance - - Permanent differences 16,450 7,639 State income expense, net of federal benefit 41,621 37,119 Other 60 - Total income tax 161,466 218,339 Effective income tax rate 22.2 % 26.4 % (1) The federal statutory rate was 21 % for six months ended September 30, 2025 and 2024. Total income tax expense from continuing operations for the six months ended September 30, 2025 and 2024 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. 8. Related Party Transactions Related 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, 2025 and 2024 was $ 12,105 and $ 1,250 , respectively. The total billed to and reimbursed by the stockholder for the six months ended September 30, 2025 and 2024 was $ 22,875 and $ 5,288 , respectively. The principal stockholder pays for his share of the lease amount for the shared office space directly to the lessor. Amounts paid by the principal stockholder directly to the lessor for the three months ending September 30, 2025 and 2024 were $ 2,544 and $ 2,994 , respectively. Amounts paid by the principal stockholder directly to the lessor for the six months ending September 30, 2025 and 2024 were $ 5,088 and $ 6,887 , respectively. 9. Income Per Common Share The 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, 2025 and 2024. Schedule of Reconciliation of Basic and Diluted Net Income (Loss) Per Share 2025 2024 2025 2024 Three Months Ended Six Months Ended September 30, September 30, 2025 2024 2025 2024 Net income $ 323,506 $ 317,198 $ 565,457 $ 608,237 Shares outstanding: Weighted avg. shares outstanding – basic 2,046,000 2,073,696 2,046,000 2,082,194 Effect of assumed exercise of dilutive stock options 30,424 44,108 28,866 44,371 Weighted avg. shares outstanding – dilutive 2,076,424 2,117,804 2,074,866 2,126,565 Income per common share: Basic $ 0.16 $ 0.15 $ 0.28 $ 0.29 Diluted $ 0.16 $ 0.15 $ 0.27 $ 0.29 Page 11 For the three and six months ended September 30, 2025, 90,206 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 $ 13.09 at September 30, 2025. 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 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. 10. Stockholders’ Equity In April 2024, the Board of Directors (“the Board”) 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. 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. As of September 30, 2025, the Company’s repurchase program, approved in April 2024, has $ 296,784 in remaining funds. During the six months ended September 30, 2025, there were no shares of common stock repurchased for the treasury account. During 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 , an average price of $ 12.17 per share. On May 13, 2025, the Board of Directors declared a regular annual of $ 0.10 per common share. The Company paid the regular annual dividend of $ 204,600 on June 16, 2025 to the stockholders of record at the close of business on June 2, 2025. On April 30, 2024, the Board of Directors declared a regular annual dividend of $ 0.10 per common share. 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. The Company can provide no assurance that dividends will be declared in the future or as to the amount of any future dividend. Dividends 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. 11. Acquisitions In May 2025, the Company acquired royalty (mineral) interests in 2 producing wells operated by Chevron USA and located in Pecos County, Texas for a purchase price of $ 40,000 . This acquisition was effective April 1, 2025 and includes acreage for future development. In August 2025, the Company acquired royalty interests in 12 producing wells operated by Diamondback E & P and located in Martin County, Texas for a purchase price of $ 60,000 and royalty interests in 25 producing wells operated by Chevron USA and located in Weld County, Colorado for a purchase price of $ 26,000 . These acquisitions were effective September 1, 2025. Subsequently, in October 2025, the Company acquired royalty interests in 3 producing wells operated by Expand Operating and located in Caddo Parish, Louisiana for a purchase price of $ 31,000 ; royalty interests in 14 producing wells operated by Diamondback E & P and located in Martin County, Texas for a purchase price of $ 44,000 ; royalty interests in 3 producing wells operated by Permian Resources and located in Eddy County, New Mexico for a purchase price of $ 7,000 ; and, overriding royalty interest in 4 producing wells operated by Tap Rock Operating and located in Eddy County, New Mexico for a purchase price of $ 240,000 . All of these acquisitions are effective November 1, 2025. Page 12 12. Subsequent Events In October 2025, the Company expended approximately $ 50,000 to participate with a 2 % working interest in the drilling of an exploratory well in the Ellenburger Formation of Ward County, Texas. The Company completed a review and analysis of all events that occurred after the consolidated balance sheet date to determine if any such events must be reported and has determined that there are no other subsequent events to be disclosed.