What changed in this filing

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Item 9A. Controls and Procedures

2026-06-29 compared with 2025-06-27 · 347 added, 352 removed, 782 unchanged (47% of the section changed)

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internal control over financial reporting is supported by appropriate reviews by management, written policies and guidelines, careful

selection and training of qualified personnel, and a written Code of Conduct adopted by our Board, applicable to all directors, officers

selection and training of qualified personnel, and a written Code of Conduct adopted by our Board and applicable to all directors, officers,

and employees of Mexco.

chief executive officer and chief financial officer assessed the effectiveness our internal control over financial reporting using the

criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the 2013 “Internal Control - Integrated

Based upon that evaluation, our chief executive officer and chief financial officer concluded that our internal control

over financial reporting was effective as of March 31, 2025.

chief executive officer and chief financial officer assessed the effectiveness of our internal control over financial reporting using

the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the 2013 “Internal Control—Integrated Framework”.

Based upon that evaluation, our chief executive officer and chief financial officer concluded that our internal

control over financial reporting was effective as of March 31, 2026.

of Disclosure Controls and Procedures.

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is hereby incorporated by reference herein.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

AND FINANCIAL STATEMENT SCHEDULES

Financial Statements.

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For a list of the exhibits required by this Item and accompanying this Form 10-K see the “Index to Exhibits” set forth

on page 37 of this report.

FORM 10-K SUMMARY

on page F22 of this report.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed

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ENERGY CORPORATION

of the Board and Chief Executive Officer

and Chief Financial Officer

/s/ Nicholas C.

/s/ Tamala L.

Chairman of the Board and Chief Executive Officer

President and Chief Financial Officer

June 29, 2026

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on behalf of the Registrant and in the capacity indicated.

Executive Officer, Chairman of the Board of Directors

Financial Officer, President, Treasurer and Assistant Secretary

/s/ Nicholas C.

Chief Executive Officer, Chairman of the Board of Directors

Chief Financial Officer, President, Treasurer and Assistant

/s/ Michael J.

/s/ Kenneth L.

/s/ Thomas R.

/s/ Thomas H.

/s/ Christopher

Christopher M.

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gallons of liquid volume, used herein in reference to crude oil, condensate, or natural gas liquids.

hydrocarbons.

Barrels of oil equivalent, with six thousand cubic feet of natural gas being equivalent to one barrel of oil.

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structural feature and/or stratigraphic condition.

A layer of rock which has distinct characteristics that differs from nearby rock.

A layer of rock that has distinct characteristics differing from nearby rock.

acres or wells.

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

Refers to the total acres or wells, as the case may be, in which the Company owns a working, royalty, mineral, or other 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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The combination of proved developed producing and proved developed nonproducing reserves.

The estimated quantities of oil, natural gas, and natural gas liquids which geological and engineering data demonstrate

The estimated quantities of oil, natural gas, and natural gas liquids which can be estimated

with reasonable certainty to be commercially recoverable in future years from known reservoirs under existing economic and operating

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Also, the area covered by a unitization agreement.

The hole drilled by the bit that is equipped for crude oil or natural gas production on a completed well.

Also called well or borehole.

hole drilled by the bit that is equipped for crude oil or natural gas production on a completed well.

Also called a well or

An interest in an oil and gas lease that gives the owner of the interest the right to drill for and produce oil and natural

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TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

of Independent Registered Public Accounting Firm (PCAOB ID Number 410 )

Consolidated Balance Sheets

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of Independent Registered Public Accounting Firm

of Directors and Shareholders

Energy Corporation

of Directors and Shareholders of Mexco Energy Corporation

on the Financial Statements

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

Company) as of March 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ equity,

and cash flows for each of the two years in the period ended March 31, 2025, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of March 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended

March 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

“Company”) as of March 31, 2026 and 2025, and the related consolidated statements of operations, changes in

stockholders’ equity, and cash flows for each of the two years in the period ended March 31, 2026, and the related notes

(collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and

its cash flows for each of the two years in the period ended March 31, 2026, in conformity with accounting principles generally

accepted in the United States of America.

financial statements are the responsibility of the entity’s management.

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provide a reasonable basis for our opinion.

Audit Matters

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:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matters

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were

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

(1) relate to accounts or disclosures that are material

to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a

critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by

communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

of proved reserves impacting the recognition and valuation of depletion expense and impairment of oil and gas properties.

Accounting Matter Description

Audit Matter Description

described in Note 2 to the financial statements, the Company accounts for its oil and gas properties using the full cost method of accounting

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have served as the Company’s auditor since 2017.

Mexco Energy Corporation and Subsidiaries

Denver, Colorado

Energy Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

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10,000,000 shares authorized;

none outstanding

Common stock - $ 0.50 par value;

40,000,000 shares authorized;

2,239,283 and

2,226,916 shares issued;

and, 2,046,000 and 2,091,399 shares outstanding as of March 31, 2025 and 2024

2,239,283 shares issued and 2,046,000 shares outstanding as of March 31, 2026 and 2025

Additional paid-in capital

Retained earnings

Treasury stock, at cost ( 193,283 and 135,517 shares, respectively)

Treasury stock, at cost ( 193,283 shares)

( 1,878,746 )

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Other income (expenses):

Income from investments in LLCs

Interest income

Interest expense

Net other income (expense)

Net other income

Income before provision for income taxes

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

Mexco Energy Corporation and Subsidiaries

Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Years ended March 31, 2026 and 2025

Common Stock Par Value

Additional Paid-In Capital

Retained Earnings

Treasury Stock

Stockholders’ Equity

Stockholders’

Balance at April 1, 2024

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$ ( 1,878,746 )

$ ( 1,175,530 )

Issuance of stock through options exercised

Dividends paid

Purchase of stock

Stock based compensation

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$ ( 1,878,746 )

SHARE ACTIVITY

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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,

flows from operating activities:

to reconcile net income to net cash provided

by operating activities:

income tax expense

Depreciation,

depletion and amortization

of asset retirement obligations

of debt issuance costs

in operating assets and liabilities:

Decrease in accounts receivable

decrease in right-of-use asset

Decrease in prepaid expenses

in accounts payable and accrued expenses

(decrease) in operating lease liability

in income tax payable

of asset retirement obligations

cash provided by operating activities

flows from investing activities:

to oil and gas properties

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

Deferred income tax expense

Stock-based compensation

Depreciation, depletion and amortization

Accretion of asset retirement obligations

Amortization of debt issuance costs

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

(Decrease) 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

( 2,189,426 )

( 3,416,616 )

in limited liability companies at cost

Additions to other property and equipment

Drilling refund

Investment in limited liability companies at cost

( 1,000,000 )

from sale of oil and gas properties and equipment

cash used in investing activities

Proceeds from sale of oil and gas properties and equipment

Net cash used in investing activities

( 2,540,161 )

( 4,154,575 )

flows from financing activities:

from exercise of stock options

from long-term debt

issuance costs

of treasury stock

of long-term debt

cash used in financing activities

(decrease) increase in cash and cash equivalents

and cash equivalents at beginning of year

and cash equivalents at end of year

disclosure of cash flow information:

paid for interest

paid for income taxes

capital expenditures included in accounts payable

investing and financing activities:

retirement obligations

Cash flows from financing activities:

Proceeds from exercise of stock options

Proceeds from long-term debt

Debt issuance costs

Dividends paid

Acquisition of treasury stock

Reduction of long-term debt

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents

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

Cash paid for income taxes

Accrued capital expenditures included in accounts payable

Non-cash investing and financing activities:

Asset retirement obligations

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

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The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk.

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.

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, 2025 and 2024, no allowance has been made for any credit losses.

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

opening balance of accounts receivable from contracts with customers as of April 1, 2024, was $ 1,001,709 .

Credit is extended based

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

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

The Company has not experienced any significant credit losses.

For the years ended March 31, 2026 and 2025, no

allowance has been made for any credit losses.

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.

The Company accounts for its oil and natural gas properties using the full cost method of accounting.

method, all costs incurred in the acquisition, exploration, and development of oil and natural gas properties are capitalized and amortized

using the unit-of-production method based on proved reserves.

Costs directly related to exploration and development activities are capitalized,

while production costs, general corporate overhead, and similar activities are expensed as incurred.

carrying value of oil and natural gas properties includes asset retirement costs associated with the fair value of asset retirement obligations

(“ARO”) when incurred.

or other dispositions of oil and natural gas properties, whether or not currently being amortized, are generally accounted for as adjustments

to capitalized costs, with no gain or loss recognized unless the disposition significantly alters the relationship between capitalized

costs and proved reserves.

This treatment includes transactions involving Term Assignments and Assignments, Bills of Sale and Conveyances.

of evaluated oil and natural gas properties is calculated using the unit-of-production method, whereby capitalized costs plus estimated

future development costs are amortized over total proved reserves.

Oil and gas properties include costs that are excluded from capitalized costs being amortized.

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Under the full cost method of accounting, a ceiling test is performed each quarter.

The full cost ceiling test is an impairment

test to determine a limit, or ceiling, on the book value of oil and gas properties.

That limit is the after-tax present value of the

future net cash flows from proved crude oil and natural gas reserves and using an average price over the prior first day of the month

12-month period held flat for the life of production plus the lower of cost or fair market value of unproved properties.

If net capitalized

costs of crude oil and natural gas properties exceed the ceiling limit, the Company must charge the amount of the excess to earnings

as an expense reflected in additional accumulated DD&A.

This is called a “ceiling limitation write-down.” This impairment

to our oil and gas properties does not impact cash flow from operating activities, but does reduce stockholders’ equity and reported

The full cost ceiling test is

an impairment test to determine a limit, or ceiling, on the book value of oil and gas properties.

That limit is the after-tax

present value of the future net cash flows from proved crude oil and natural gas reserves, and using an unweighted arithmetic

average of the first-day-of-the-month prices for the preceding 12-month period, held constant for the life of production, plus the lower

of cost or fair market value of unproved properties.

If net capitalized costs of crude oil and natural gas properties exceed the

ceiling limit, the Company must charge the amount of the excess to earnings as an expense reflected in additional accumulated

This is called a “ceiling limitation write-down.” This impairment of our oil and gas properties does not

affect cash flow from operating activities but does reduce stockholders’ equity and reported earnings.

No impairment was recorded for the years ended March 31, 2026 or 2025.

Depreciation,

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Retirement Obligations .

The Company has significant obligations to plug and abandon natural gas and crude oil wells and related equipment

at the end of oil and gas production operations.

The Company records the fair value of a liability for an ARO in the period in which

it is incurred and a corresponding increase in the carrying amount of the related asset.

Subsequently, the asset retirement costs included

in the carrying amount of the related asset are allocated to expense using the units of production method.

In addition, increases in

the discounted ARO liability resulting from the passage of time are reflected as accretion expense in the Consolidated Statements of

the future ARO requires management to make estimates and judgments regarding timing and existence of a liability, as well as what constitutes

adequate restoration.

The Company uses the present value of estimated cash flows related to the ARO to determine the fair value.

in the present value calculation are numerous assumptions and judgments including the ultimate costs, inflation factors, credit adjusted

discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments.

To the extent future

revisions to these assumptions impact the present value of the existing ARO liability, a corresponding adjustment is made to the related

The Company accrues the estimated costs of plugging, restoration, and removal of facilities by recognizing

the fair value of a liability for an asset retirement obligation (“ARO”) in the period in which the obligation is incurred,

typically at the inception of a well’s life, with a corresponding increase in the carrying amount of the related long-lived asset.

The initial fair value is determined using the present value of estimated future cash flows, which incorporates management assumptions

regarding ultimate plugging and abandonment costs, inflation factors, credit-adjusted risk-free discount rates, and the timing of settlement.

Capitalized asset retirement costs are subsequently allocated to expense over the useful life of the related assets utilizing the units-of-production

method, while the discounted ARO liability is accreted over time to its expected settlement value, with such changes reflected as accretion

expense within the Consolidated Statements of Operations.

Management continuously evaluates its estimates against changes in the legal,

regulatory, environmental, and political environments;

any subsequent revisions to the timing or amount of undiscounted estimated cash

flows result in a corresponding adjustment to both the ARO liability and the carrying value of the related asset.

Settlement of the liability

is accounted for as an adjustment to the Company’s full cost pool with no gain or loss recognized, and for all periods presented,

estimated future costs of abandonment and dismantlement are included in the full cost amortization base pursuant to SEC Regulation S-X

Rule 4-10 and amortized as a component of depletion, depreciation, and amortization expense.

The Company recognizes deferred tax assets and liabilities for future tax consequences of temporary differences between the

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Recognition .

Revenues from our royalty and non-operated working interest properties are recorded in accordance with ASC 606, Revenue from Contracts with Customers.

Revenue is reported net of post-production costs

when such costs are contractually deducted by the operator prior to distribution.

Since the revenue checks are generally received two to three months

after the production month, the Company accrues for revenue earned but not received by estimating production volumes and product prices.

Any identified differences between its revenue estimates and actual revenue received historically have not been significant.

Revenues from our royalty and non-operated working interest properties are recorded in accordance with ASC 606, Revenue from Contracts

with Customers.

Revenue is reported net of post-production costs when such costs are contractually deducted by the operator prior to distribution.

Since revenue checks are generally received two to three months after the production month, the Company accrues revenue earned but not

yet received by estimating production volumes and product prices.

Any identified differences between its revenue estimates and actual

revenue received historically have not been significant.

Compensation .

The Company uses the Binomial option pricing model to estimate the fair value of stock-based compensation expenses

at grant date.

This expense is recognized as compensation expense in its consolidated financial statements over the vesting period.

Company recognizes the fair value of stock-based compensation awards as wages within general and administrative expense in the Consolidated

Statements of Operations based on a graded-vesting schedule over the vesting period.

The Company uses the Binomial option pricing model to estimate the grant-date fair value of stock-based awards.

expense is recognized within general and administrative expense in the Consolidated Statements of Operations using the graded-vesting

method over the applicable vesting period.

Reclassifications .

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Investments .

Company accounts for investments of less than 3% in 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.

Based on the Company’s organizational structure, the Company has one operating segment, which is crude oil and natural gas development,

The Company utilizes the measurement alternative to account for investments when it does not possess the ability to exercise significant influence or control and the investment does not have a readily determinable fair value.

Under this method, investments are initially recognized at cost and subsequently measured at cost, adjusted for any observable changes in the fair value of the investment.

In addition, the Company reviews the carrying value of investments measured under the measurement alternative for impairment on a regular basis.

If there is an indication of impairment, the Company assesses whether the carrying value of the investment exceeds its recoverable amount.

Any impairment losses are recognized in the consolidated statements of operations.

Income from these investments is recognized as Income from investments in LLCs in the consolidated statements of operations.

The Company’s chief operating decision maker (“CODM”), comprised of the Chairman of the Board and the President, evaluates

operating results and allocates capital resources on a consolidated basis.

Accordingly, the Company has one reportable segment:

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.

and Capital Resources .

Historically, we have funded our operations, acquisitions, exploration and development expenditures from cash

generated by operating activities, bank borrowings, sales of non-core properties and issuance of common stock.

Historically, we have funded our operations, acquisitions, exploration, and development expenditures from

cash generated by operating activities, bank borrowings, sales of non-core properties, and issuance of common stock.

Our long-term strategy

is on increasing profit margins while concentrating on obtaining reserves with low-cost operations by acquiring and developing oil and

is to increase profit margins while concentrating on obtaining reserves with low-cost operations by acquiring and developing oil and

gas properties with potential for long-lived production.

We focus our efforts on the acquisition of royalties and working interest, non-operated

properties in areas with significant development potential.

Adopted Accounting Pronouncements .

In December 2023, the FASB issued ASU 2023-09, Topic 740 Income Taxes:

Improvements to Income

Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in this

standard provide for enhanced income tax information primarily through changs to the rate reconciliation and income taxes paid.

ASU is effective for fiscal years beginning after December 15, 2024.

While the adoption of this ASU will modify the company’s

disclosures, it will not have an impact on the Company’s financial position, results of operations, or liquidity.

We focus our efforts on the acquisition of royalties and non-operated working

interests in areas with significant development potential.

Accounting Pronouncements Not Yet Adopted .

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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 .

which originally provided for a $ 1,000,000 credit facility 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 .

On September 17, 2025, WTNB reaffirmed the borrowing base at $ 1,500,000 .

March 28, 2026, the Agreement was amended to extend the maturity date to March 28, 2029 .

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

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As of March 31,

2025, there was $ 1,500,000 available for borrowing by the Company on the facility.

2026, the Company had $ 1,500,000 available to borrow under the facility.

principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2029 .

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 are amortized over the life of the credit facility.

third amendment to the Agreement, the Company paid a loan origination fee of $ 9,000 plus legal expenses totaling $ 12,200 , which are amortized

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.

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

of assets, mergers, and reorganizations.

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

including requirements that senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”)

ratios (Senior Debt/EBITDA) is 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.

Commencing with the fiscal quarter ending June

30, 2026, the amended Agreement requires the Company to maintain Senior Debt to EBITDA ratios less than or equal to 3.00 to 1.00

measured with respect to the four trailing quarters.

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 and the regular annual dividend

on April 30, 2024 as discussed in Note 9.

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, 2025.

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

facility for the years ended March 31, 2025 and 2024:

The Company obtained written permission from WTNB prior to declaring the regular annual dividend in 2025 and special dividend in 2024,

as discussed in Note 9.

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, 2026 and 2025.

The following table is a summary of activity on the

WTNB credit facility for the years ended March 31, 2026 and 2025:

of Line of Credit Activity

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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 accrued expenses.

The ARO is included on the consolidated balance sheets, with the current portion included in accounts payable

and accrued expenses.

following table provides a rollforward of the asset retirement obligations for fiscal years ended March 31:

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Non-Current asset retirement obligation

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

IRA 2022, among other tax provisions, imposes a 15% corporate alternative minimum tax on adjusted financial statement income of

certain large corporations (generally, corporations reporting more than $1 billion of average adjusted pre-tax net income

on their consolidated financial statements), 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 after

December 31, 2022.

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

consolidated financial statements.

July 4, 2025, the “One Big Beautiful Bill” (“OBBB”) was enacted.

The OBBB is a comprehensive 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 has evaluated the impact of the OBBB;

however, certain provisions continue to be assessed for their impact

on our consolidated financial statements in future periods.

Company files a consolidated federal income tax return and various state income tax returns.

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income tax provision consists of the following for the years ended March 31, 2026 and 2025:

of Income Tax Provision

Schedule of Income Tax Provision

Current income tax expense:

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Percentage depletion carryforwards

Deferred stock-based compensation

Stock-based compensation

Asset retirement obligation

Net operating loss

Total deferred tax assets

deferred tax assets

Deferred tax liabilities:

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Schedule of Reconciliation of Provision for Income Taxes

% of Income Before

Tax expense at federal statutory rate (1)

Statutory depletion carryforward

Change in valuation allowance

Excess percentage depletion

Permanent differences

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Total income tax

Effective income tax rate

federal statutory rate was 21 % for fiscal years ending March 31, 2026 and 2025.

the years ended March 31, 2026 and 2025, the Company did no t 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

impact on its results of operations.

The recognition of the total amount of the unrecognized tax benefits would have an impact on the

effective tax rate.

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

Major Customers

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and gas production.

fiscal 2025, Purchaser A accounted for 58 % of the total operating revenues and 43 % of the total oil and natural gas accounts receivable;

Purchaser B accounted for 5 % of the total operating revenues and 6 % of the total oil and natural gas accounts receivable;

and, Purchaser

C accounted for 4 % of the total operating revenues and 11 % of the total oil and natural gas accounts receivable.

In fiscal 2024, Purchaser

A accounted for 59 % of the total operating revenues and 48 % of the total oil and natural gas accounts receivable and Purchaser B accounted

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

fiscal 2026, BTA Oil Producers, LLC accounted for 33 % of the total operating revenues and 37 % of the total oil and natural gas accounts

Apex Natural Gas LLC accounted for 2 % of the total operating revenues and 11 % of the total oil and natural gas accounts receivable;

and Exxon Mobil Corporation accounted for 15 % of the total operating revenues and 7 % of the total oil and natural gas accounts receivable.

In fiscal 2025, BTA Oil Producers, LLC accounted for 59 % of the total operating revenues and 43 % of the total oil and natural gas accounts receivable;

Permian Resources Corporation accounted for 6 % of the total operating revenues and 6 % of the total oil and natural gas accounts receivable;

and, Pioneer Natural Resources accounted for 4 % of the total operating revenues and 11 % of the total oil and natural gas accounts receivable.

Oil and Natural Gas Costs

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not subject to amortization

Oil and gas properties, gross

Oil and gas properties,

Less accumulated DD&A

Total oil and gas properties

oil and gas properties

amounted to $ 11.02 and $ 13.74 per BOE of production for the years ended March 31, 2026 and 2025, respectively.

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Income per common share:

the year ended March 31, 2025, 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 March 31, 2025.

For the year ended March 31, 2024, 93,000 shares relating to stock options were excluded from the computation of diluted net income because

their inclusion would be anti-dilutive.

the years ended March 31, 2026 and 2025, 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 March

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common stock, par value $ 0.50 , for the treasury account.

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

This program has no 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.

Under the repurchase program, 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 from time to time

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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 year ended March 31, 2025, the Company repurchased 57,766 shares for the treasury account at an aggregate cost of $ 703,216 , an average

price of $ 12.17 per share per share.

During 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.

As of March 31,

2026, the Company’s repurchase program approved in April 2024 had $ 296,784 in remaining funds.

Subsequently,

in June 2026, the Board authorized the use of an additional $ 250,000 to repurchase shares of the Company’s common stock, par value

$ 0.50 , for the treasury account.

To date, the Company’s repurchase program has $ 546,784 remaining.

the year ended March 31, 2026, no shares of common stock were repurchased for the treasury account.

During the year ended March 31, 2025,

the Company repurchased 57,766 shares for the treasury account at an aggregate cost of $ 703,216 , an average price of $ 12.17 per share.

Stock-based Compensation

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exercise of stock options and the Company can repurchase shares exercised under the plan.

the year ended March 31, 2025, there were no stock options granted.

During the year ended March 31, 2024, the Compensation Committee

of the Board of Directors approved and the Company granted 32,000 stock options.

plan also provides for the granting of stock awards.

No stock awards were granted during fiscal 2025 and 2024.

Company recognized compensation expense of $ 174,000 and $ 205,639 related to vesting stock options in general and administrative expense

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There is no assurance

the value realized by an optionee will be at or near the value estimated by the Binomial model.

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 in fiscal 2025 and 2024.

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

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

For the year ended March 31,

Grant-date fair value

Volatility factor

Dividend yield

Risk-free interest rate

Expected term (in years)

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, 2025, 2,500 unvested stock options were forfeited due to the resignation of an employee.

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

that the value realized by an optionee will be at or near the value estimated by the Binomial model.

the years ended March 31, 2026 and 2025, there were no stock options granted.

plan also provides for the granting of stock awards.

No stock awards were granted during fiscal 2026 and 2025.

forfeiture rate is assumed for stock options granted to directors or employees due to the Company’s historically low

forfeiture experience for these types of awards.

During the year ended March 31, 2026, there were no

stock options forfeited or expired.

During the year ended March 31, 2025, 1,875

unvested stock options and 625

vested 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, 2026 and 2025:

Schedule of Activity of Stock Options

Exercise Price

Weighted Aggregate

Contract Life

Number of Shares

Weighted Average Exercise Price Per Share

Weighted Aggregate Average Remaining Contract Life

Intrinsic Value

Outstanding at April 1, 2024

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Exercisable at March 31, 2026

the year ended March 31, 2025, stock options covering 12,367 shares were exercised with a total intrinsic value of $ 92,316 .

received proceeds of $ 77,641 from these exercises.

During the year ended March 31, 2025, stock options covering 5,500 shares were exercised

with a total intrinsic value of $ 37,566 .

the year ended March 31, 2026, no stock options were exercised.

During the year ended March 31, 2025, 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.

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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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Schedule of Information About Options Outstanding

Range of Exercise Prices

Exercise Price Per Share

Weighted Average Remaining

Exercise Prices

Exercise Price

Weighted Average

Contract Life in

Intrinsic Value

$ 3.34 – 4.83

$ 3.34 – 18.05

options at March 31, 2026 expire between September 2028 and April 2033 and have exercise prices ranging from $ 3.34 to $ 18.05 .

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 years ended March 31, 2025

and 2024 were $3 1,506 and $ 23,379 , 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 year ending March 31, 2025 and

2024 were $ 11,974 and $ 15,572 , respectively.

party transactions for the Company consists of shared office expenditures, as well as administrative and operating expenses paid on

behalf of the principal stockholder.

The total amount billed to and reimbursed by the principal stockholder for the years ended

March 31, 2026 and 2025 were $ 49,661

and $ 31,506 ,

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 years ending March 31, 2026 and 2025 were $ 10,175

and $ 11,974 ,

respectively.

Commitments and Contingencies

time to time the Company is a party to litigation or other legal proceedings that the Company considers to be part of the ordinary course

The Company is currently not involved in any legal proceedings that it considers probable or reasonably possible, individually

or in the aggregate, to result in a material adverse effect on its financial condition, results of operations or liquidity.

time to time, the Company is a party to litigation or other legal proceedings that the Company considers to be part of the ordinary

course of business.

The Company is not currently involved in any legal proceedings that it considers probable to result in, or

reasonably likely to result in, a material adverse effect on its financial condition, results of

operations, or liquidity.

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

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Company agreed to extend its current lease at a flat (unescalated) rate for 36 months.

The amended lease now expires on July 31, 2027 .

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 sheet.

The amended lease expires on July 31, 2027 .

Company determines that an arrangement is a lease at inception.

Operating leases are recorded as operating lease right-of-use asset,

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

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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The incremental borrowing rate used at adoption was 9 %.

Significant judgement is required when determining the incremental

Significant judgment is required when determining the incremental

borrowing rate.

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Fiscal Year Ended March 31, 2028

Total lease payments

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Operating lease liability, long term

cash paid for our operating lease for the year ended March 31, 2025 and 2024 was $ 47,653 and $ 42,668 , respectively.

Rent expense, less

sublease income of $ 11,974 is included in general and administrative expenses.

the year ended March 31, 2025, the Company incurred approximately $ 2,000,000

in acquisition costs to acquire various royalty interests in approximately 840 producing wells located in Adams, Broomfield, and

Weld Counties, Colorado;

DeSoto Parish, Louisiana;

Eddy County, New Mexico;

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

Laramie County, Wyoming;

and multiple counties in Nebraska, North and South Dakota, and Montana.

cash paid for our operating lease for the years ended March 31, 2026 and 2025 was $ 50,145

and $ 47,653 ,

respectively.

Operating lease expense, including amortization of the operating lease right of use asset, and rent expense, less

sublease income of $ 10,175 ,

are included in general and administrative expenses on the consolidated statements of operations.

the year ended March 31, 2026, the Company incurred approximately $ 818,000 in acquisition costs to acquire various royalty interests

in approximately 340 producing wells in Crane, Ector, Howard, Midland, Reeves, and Upton Counties, Texas.

in approximately 270 producing wells in Colorado, Louisiana, New Mexico, and Texas.

These costs also included the purchase of additional royalty interests in 24 properties in

which we already hold an interest in Louisiana and Texas, as well as 40 undeveloped net acres in New Mexico.

the year ended March 31, 2025, the Company incurred approximately $ 2,000,000 in acquisition costs to acquire various royalty interests

in approximately 840 producing wells in Colorado, Louisiana, Montana, Nebraska, New Mexico, North and South Dakota, Texas, and Wyoming.

Oil and Gas Reserve Data (Unaudited)

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as additional information becomes available in the future.

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

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

SEC guidelines.

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

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Natural gas per MMBtu

Company’s total estimated proved reserves at March 31, 2025 were approximately 1.401 MBOE of which 48 % was oil and 52 % was natural

Company’s total estimated proved reserves at March 31, 2026 were approximately 1.437 MMBOE, of which 46 % was oil and 54 % was natural

in Proved Reserves :

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developed reserves are those expected to be recovered through existing wells, equipment, and operating methods.

Proved undeveloped reserves

(“PUD”) are proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells

where a relatively major expenditure is required for recompletion within five years of the date of their initial recognition.

the Company may be required to write down its proved undeveloped reserves if the operators do not drill on the reserves within the required

five-year timeframe.

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

change in the timing of new development.

The reserves written off were primarily in Lea County, New Mexico due to a change in the timing

of development in wells in which we own a working interest.

These interests are held by production and still in place to be developed

in the future.

Proved undeveloped

reserves (“PUD”) are proved reserves that are expected to be recovered from new wells on undrilled acreage or from

existing wells where a relatively major expenditure is required for recompletion within five years of the date of their initial

Moreover, the Company may be required to write down its proved undeveloped reserves if the operators do not drill on

the reserves within the required five-year timeframe.

The reduction in proved undeveloped reserves was primarily attributable to

properties in Lea County, New Mexico, due to changes in the timing of future development in wells in which we own a working

These interests are held by production and remain in place for future development.

of Proved Developed and Undeveloped Reserves as of March 31, 2026 and 2025 :

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March 31, 2026, the Company reported estimated PUDs of 274 MBOE, which accounted for 19 % of its total estimated proved oil and gas reserves.

This figure primarily consists of a projected 72 new wells (296 MBOE) operated by others, 37 wells are planned to be drilled in fiscal

This figure primarily consists of a projected 62 new wells (221 MBOE) operated by others.

Of these wells, 41 wells are planned to be drilled in fiscal

2027, 17 wells in fiscal 2029, and 4 wells in fiscal 2030.

The cost of these projects would be funded, to the extent possible, from existing

The cost of these projects is expected to 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.

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 2026.

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of Progress of Converting Proved Undeveloped Reserves

Oil & Natural Gas (BOE)

Future Development Costs

Oil & Natural Gas

Development Costs

PUDs, beginning of year

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costs, including abandonment costs, are based on the best estimate of such costs assuming current economic and operating conditions.

future cash flows estimated to be spent to develop the Company’s share of proved undeveloped properties through March 31, 2028

Estimated future development costs associated with the Company’s proved undeveloped properties through March 31, 2030

are $ 3,358,678 .

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and development costs over the current tax basis of the properties involved, less applicable carryforwards.

future net revenue information assumes no escalation of costs or prices, except for oil and natural gas sales made under terms of contracts

which include fixed and determinable escalation.

Future costs and prices could significantly vary from current amounts and, accordingly,

revisions in the future could be significant.

current reporting rules require that year end reserve calculations and future cash inflows be based on the 12-month average market prices

for sales of oil and gas on the first calendar day of each month during the fiscal year discounted at 10 % per year and assuming continuation

of existing economic conditions.

The average prices used for fiscal 2025 were $ 73.79 per bbl of oil and $ 2.14 per mcf of natural gas.

The average prices used for fiscal 2024 were $ 76.88 per bbl of oil and $ 2.75 per mcf of natural gas.

future net revenue information assumes no escalation of costs or prices, except for oil and natural gas sales made under contracts that

include fixed and determinable escalation.

Future costs and prices could significantly vary from current amounts and, accordingly, revisions

in the future could be significant.

SEC reporting rules require that year-end reserve estimates and related future net cash flows be calculated using the unweighted

arithmetic average of the first-day-of-the-month market prices for oil and natural gas during the 12-month period and discounted at 10 %

per year and assuming continuation of existing economic and operating conditions.

The average prices used for fiscal 2026 were $ 62.76

per bbl of oil and $ 2.24 per mcf of natural gas.

The average prices used for fiscal 2025 were $ 73.79 per bbl of oil and $ 2.14 per mcf

of natural gas.

standardized measure of discounted future net cash flows is computed by applying the 12-month unweighted average of the first day of

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of proved reserves and their valuation.

Therefore, the standardized measure of discounted future net cash flow is not necessarily indicative

Therefore, the standardized measure of discounted future net cash flows is not necessarily indicative

of the fair value of proved oil and gas properties.

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Standardized measure, end of year

Employee 401(k) Plan

January 2026, the Company adopted a defined contribution 401(k) retirement savings plan for eligible employees.

As of March 31, 2026,

the plan had not commenced operations, and no employee salary deferrals or employer matching contributions had been made.

no expense related to the plan was recognized during the year ended March 31, 2026.

Subsequent Events

May 13, 2025, the Company announced that its Board declared a regular annual dividend of $ 0.10 per common share to its shareholders of

April 2026, effective May 1, 2026, the Company acquired royalty interests in 144 producing wells in Weld County, Colorado and Atascosa,

Howard, LaSalle, Martin, and Yoakum Counties, Texas, and additional royalty interests in 3 properties in which we already hold an interest

in Howard County, Texas, for an aggregate purchase price of $ 1,028,600 .

May 2026, Mexco expended approximately $ 460,000 to participate in the drilling and completion of six horizontal wells in the Wolfcamp

A formation of the Delaware Basin in Reeves County, Texas.

June 4, 2026, the Company announced that its Board declared a regular annual dividend of $ 0.10 per common share to its shareholders of

record at the close of business on June 15, 2026.

The regular annual dividend in the amount of $204,600 was paid on June 16, 2025.

June 2025, the Company expended approximately $ 116,000 to participate in the drilling of 5 horizontal wells in the Bone Spring Sand formation

of the Delaware Basin in Eddy County, New Mexico.

The dividend in the amount of $204,600 is to be paid on June 30, 2026.

In June 2026, effective July 1, 2026, the Company acquired royalty interests in 256 producing wells in Adams and Larimer Counties,

Caddo and DeSoto Parishes, Louisiana;

Karnes, McMullen, Panola, and Winkler Counties, Texas;

and Ashtabula County, Ohio

for an aggregate purchase of $ 1,066,600 .

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.

Exhibit Number

Restated 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.

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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.

Third Amendment to Loan Agreement dated March 28, 2026 to the Loan Agreement between West Texas National Bank and Mexco Energy Corporation filed as Exhibit 10.6 to the Company’s Annual Report on Form 10-K dated June 26, 2026, 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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XBRL Taxonomy Extension Presentation Linkbase Document

Page Innteractive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

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