What changed in this filing

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Item 9A. Controls and Procedures

2025-06-27 compared with 2024-06-27 · 277 added, 279 removed, 857 unchanged (39% 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 of Directors, applicable to all directors,

officers and employees of Mexco.

selection and training of qualified personnel, and a written Code of Conduct adopted by our Board, 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

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OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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is hereby incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

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

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

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

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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

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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 F22 of this report.

on page 37 of this report.

FORM 10-K SUMMARY

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the leasehold in connection with a transfer to a subsequent owner.

A well suspended from production or injection but not abandoned.

The distance between wells producing from the same reservoir.

Spacing is often expressed in terms of acres (e.g., 40-acre spacing)

and is often established by regulatory agencies.

measure of discounted future net cash flows .

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

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

Energy Corporation in accordance with the U.S.

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

federal securities

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

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

makes significant estimates and assumptions, including forecasting the production decline rate of producing properties and forecasting

the timing and volume of production associated with the Company’s development plan for proved undeveloped properties.

the estimation of proved reserves is also impacted by management’s judgments and estimates regarding the financial performance

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

pricing assumptions required in the estimation of depletion expense.

We identified the estimation

of proved reserves of oil and gas properties, due to its impact on depletion expense and impairment evaluation, as a critical audit matter.

To estimate the volume of proved reserves and future revenues, management makes significant estimates and assumptions, including forecasting

the production decline rate of producing properties and forecasting the timing and volume of production associated with the Company’s

development plan for proved undeveloped properties.

In addition, the estimation of proved reserves is also impacted by management’s

judgments and estimates regarding the financial performance of wells associated with proved reserves to determine if wells are expected,

with reasonable certainty, to be economical under the appropriate pricing assumptions required in the estimation of depletion expense.

We identified the estimation of proved reserves of oil and gas properties, due to its impact on depletion expense and impairment evaluation,

as a critical audit matter.

principal consideration for our determination that the estimation of proved reserves is a critical audit matter is that changes in certain

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of proved reserves included the following, among others.

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

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

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

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

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

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

including examining the underlying support, on a sample basis.

Specifically, our audit procedures involved testing management’s

assumptions as follows:

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

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

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

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

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

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

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

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

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

Specifically, our audit procedures involved testing management’s assumptions

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

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capital expenditures used in the reserve report to amounts expended for recently drilled

and completed wells with similar locations;

and completed wells;

the working and net revenue interests used in the reserve report by inspecting a sample of

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have served as the Company’s auditor since 2017.

Energy Corporation and Subsidiaries

BALANCE SHEETS

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

Current assets

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10,000,000 shares authorized;

none outstanding

Common stock - $ 0.50 par value;

40,000,000 shares authorized;

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

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

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( 1,878,746 )

( 1,175,530 )

Total stockholders’ equity

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

Energy Corporation and Subsidiaries

STATEMENTS OF OPERATIONS

ended March 31,

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended March 31,

Operating revenues:

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Interest expense

Net other expense

Net other income (expense)

Income before provision for income taxes

Income tax expense:

Total income tax expense

Provision for income taxes

Income per common share:

Weighted average common shares outstanding:

Dividends declared per share

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

Energy Corporation and Subsidiaries

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

ended March 31, 2024 and 2023

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Years ended March 31, 2025 and 2024

Common Stock Par Value

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Treasury Stock

Total Stockholders’ Equity

Stockholders’ Equity

Balance at April 1, 2023

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Issuance of stock through options exercised

Profit from purchase of stock by insider

Dividends paid

Purchase of stock

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

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended March 31,

Cash flows from operating activities:

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

Deferred income tax expense

Stock-based compensation

Depreciation, depletion and amortization

Accretion of asset retirement obligations

Amortization of debt issuance costs

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable

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 (increase) in prepaid expenses

Increase (decrease) in accounts payable and accrued expenses

Decrease in prepaid expenses

in accounts payable and accrued expenses

(decrease) in operating lease liability

Increase in income tax payable

Settlement of asset retirement obligations

Net cash provided by operating activities

Cash flows from investing activities:

Additions to oil and gas properties

in income tax payable

of asset retirement obligations

cash provided by operating activities

flows from investing activities:

to oil and gas properties

( 3,416,616 )

( 3,349,326 )

Additions to other property and equipment

Drilling refund

Investment in limited liability companies at cost

Proceeds from sale of oil and gas properties and equipment

Net cash used in investing activities

in limited liability companies at cost

( 1,000,000 )

from sale of oil and gas properties and equipment

cash used in investing activities

( 4,154,575 )

Cash flows from financing activities:

Proceeds from exercise of stock options

Profits from purchase of stock by insider

Proceeds from long-term debt

Debt issuance costs

Dividends paid

Acquisition of treasury stock

Reduction of long-term debt

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplemental disclosure of cash flow information:

Cash paid for interest

Accrued capital expenditures included in accounts payable

Non-cash investing and financing activities:

Asset retirement obligations

( 3,416,499 )

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

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

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

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

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

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

The allowance for credit

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

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

the industry as a whole.

The Company has not experienced any significant credit losses.

For the years ended March 31,

2024 and 2023, no

allowance has been made for any credit losses.

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.

and Gas Properties .

Oil and gas properties are accounted for using the full cost method of accounting.

Under this method of accounting,

the costs of unsuccessful, as well as successful, acquisition, exploration and development activities are capitalized as property and

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

Generally, no gains or losses are recognized on the sale or disposition of 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.

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

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Property and Equipment .

Provisions for depreciation of office furniture and equipment are computed on the straight-line method based

on estimated useful lives of three to ten years .

Provisions for depreciation

of office furniture and equipment are computed on the straight-line method based on estimated useful lives of three 3

Per Common Share .

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would be anti-dilutive.

Recognition - Revenue from Contracts with Customers .

Revenues from our royalty and non-operated working interest properties are recorded

under the cash receipts approach as directly received from the remitters’ statement accompanying the revenue check.

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.

Gas imbalances are accounted for under the sales method whereby revenues are recognized based on production sold.

is recorded when excess takes of natural gas volumes exceed estimated remaining recoverable reserves (over produced).

No receivables

are recorded for those wells where the Company has taken less than its ownership share of gas production (under produced).

does not have any significant gas imbalances.

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.

Compensation .

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Investments .

The 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.

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,

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 .

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properties in areas with significant development potential.

Accounting Pronouncements .

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

Update (“ASU”) No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires

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

This ASU is effective for

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

The Company is currently evaluating

the impact of this standard on its tax disclosures.

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.

Accounting Pronouncements Not Yet Adopted .

In November 2024, the FASB issued ASU 2024-03, Topic 220 Income Statement – Reporting

Comprehensive Income – Expense Disaggregation Disclosures:

Disaggregation of the Income Statement Expenses.

The amendments in this

update require disclosure in the Company’s annual and interim consolidated financial statements of specified information about

certain costs and expenses, including depletion, depreciation and amortization recognized as part of crude oil and natural gas producing

activities, and employee compensation.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting

periods beginning after December 15, 2027.

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.

Long-Term Debt

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commitment reduction and a borrowing base to be evaluated annually.

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

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

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

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 .

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

which were also deferred over the life of the credit facility.

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

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Expense) of 2.00 to 1.00 for each quarter.

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

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

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

The Agreement does not permit the Company to enter into hedge agreements

covering crude oil and natural gas prices without prior WTNB approval.

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.

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on oil and gas properties.

The fair value of a liability for an ARO is recorded in the period in which it is incurred, discounted to

its present value using the credit adjusted risk-free interest rate, and a corresponding amount capitalized by increasing the carrying

amount of the related long-lived asset.

The liability is accreted each period until the liability is settled or the well is sold, at

which time the liability is removed.

The related asset retirement cost is capitalized as part of the carrying amount of our oil and natural

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

The IRA 2022, among other

tax provisions, imposes a 15% corporate alternative minimum tax based on financial statement income, 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.

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.

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

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federal and state income tax jurisdictions is 2020.

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

income tax provision consists of the following for the years ended March 31, 2025 and 2024:

of Income Tax Provision

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Total current income tax expense

Deferred income tax expense:

Deferred income tax expense (benefit):

Total deferred income tax expense

Total income tax expense:

tax for the year ended March 31, 2025 was $ 304,330 .

Income tax for the year ended March 31, 2024 was $ 620,544 .

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

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

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

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Excess financial accounting bases over tax bases of property and equipment

( 1,852,763 )

( 1,946,884 )

Deferred tax liability, net

$ ( 320,604 )

$ ( 311,661 )

Valuation allowance

Net deferred tax

Net deferred tax liabilities

$ ( 320,604 )

$ ( 311,661 )

of March 31, 2025, the Company has a statutory depletion carryforward of approximately $ 6,100,000 , which does not expire.

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

begin expiring in 2040 .

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

to reduce current and future U.S.

federal taxable income is subject to limitations under the Internal Revenue Code.

valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some

or all of the benefit from the deferred tax asset will not be realized.

To assess that likelihood, we use estimates and judgment regarding

our future taxable income, and we consider the tax consequences in the jurisdiction where such taxable income is generated, to determine

whether a valuation allowance is required.

Such evidence can include our current financial position, our results of operations, both

actual and forecasted, the reversal of deferred tax liabilities, and tax planning strategies as well as the current and forecasted business

economics of our industry.

reconciliation of the provision for income taxes to income taxes computed using the federal statutory rate for years ended March 31 follows:

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Change in valuation allowance

tax reform, corporate rate reduction

Permanent differences

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federal statutory rate was 21 % for fiscal years ending March 31, 2025 and 2024.

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

the years ended March 31, 2025 and 2024, 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

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and gas production.

fiscal 2024, one purchaser accounted for 59 % of the total operating revenues and 48 % of the total oil and natural gas accounts receivable

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

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

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

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.

Oil and Natural Gas Costs

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

Schedule of Aggregate Capitalized Costs Relating Oil and Gas Property Activities

of Aggregate Capitalized Costs Relating Oil and Gas Property Activities

Proved oil and gas properties

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Less accumulated DD&A

oil and gas properties

Total oil and gas properties

amounted to $ 13.74 and $ 12.81 per BOE of production for the years ended March 31, 2025 and 2024, respectively.

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Stockholders’ Equity

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

the treasury account.

This program does not have an expiration date and may be modified, suspended or terminated at any time by the Board.

Under the repurchase program, share of common stock may be purchased from time to time through open market purchases or other transactions.

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

stock, our financial performance and other conditions.

Repurchases may also be made form time-to-time in connection with the settlement

of our share-based compensation awards.

April 2024, the Company’s Board (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, share of common stock may be purchased from time to time through

open market purchases or other transactions.

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

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

Repurchases may also be made from time-to-time

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

Repurchases will be funded from cash flow.

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During the year ended March 31, 2024, the Company repurchased 50,101 shares for the treasury account

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

Subsequently, in April 2024, the Company’s Board

of Directors authorized the use of up to $ 1,000,000 to repurchase shares of the Company’s common stock, par value, $ 0.50 , for the

treasury account.

This authorization replaced the previously authorized $ 1,000,000 common stock repurchase program which had $ 414,965

remaining at the time it was replaced.

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

cost of $ 188,637 .

at an aggregate cost of $ 585,035 , an average price of $ 11.68 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, 2024, the Compensation Committee of the Board of Directors approved and the Company granted 32,000 stock options.

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

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.

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Treasury yield curve in effect at the time

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

understanding.

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

stock market conditions.

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

No dividend yield was used in the calculation on current options outstanding because at the time of the last issuance of stock

options, either no dividend had been declared or the Company had only declared a special one-time dividend.

Actual value realized, if

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

There is no assurance

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

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

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

During the year ended March 31, 2023,

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

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.

following table is a summary of activity of stock options for the years ended March 31, 2025 and 2024:

Summary of Activity of Stock Options

Schedule of Activity of Stock Options

Exercise Price

Remaining Contract Life

Weighted Aggregate

Contract Life

Outstanding at April 1, 2023

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The Company received proceeds of $ 19,662 from these exercises.

Subsequently, in April 2024,

stock options covering 12,367 shares were exercised.

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

information pertaining to option activity was as follows during the year ended March 31:

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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following table summarizes information about options outstanding at March 31, 2025:

Summary of Information About Options Outstanding

Weighted Average

Exercise Price

Weighted Average

Remaining Contract

Life in Years

$ 3.34 – 4.83

Schedule of Information About Options Outstanding

Range of Exercise Prices

Exercise Price Per Share

Weighted Average Remaining

Contract Life in

Intrinsic Value

$ 3.34 – 4.83

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

options at March 31, 2025 expire between September 2028 and April 2033 and have exercise prices ranging from $ 3.34 to $ 18.05 .

Related Party Transactions

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Amounts paid by the principal stockholder directly to the lessor for the year ending March 31, 2025 and

2023 were $ 15,572 .

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

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

1 unchanged sentence

This includes 702 square feet of office space shared with and paid by our principal shareholder.

The lease does

not include an option to renew and is a 36-month lease that was to expire in May 2021.

In June 2020, in exchange for a reduction in rent

for the months of June and July 2020, the Company agreed to a 2-month extension to its current lease agreement at the regular monthly

rate extending its current lease expiration date to July 2021.

In June 2021, the Company agreed to extend its current lease at a flat

(unescalated) rate for 36 months.

In June 2024, the

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

The amended lease now expires on July 31, 2027 .

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The incremental borrowing rate used at adoption was 9 %.

Significant judgement is required when determining the

incremental borrowing rate.

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.

1 unchanged sentence

of Operating Lease Assets and Liabilities

March 31, 2024

Operating lease right-of-use asset, beginning balance

Current period amortization

Lease amendment

Lease extension

Total operating lease right-of-use asset

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Fiscal Year Ended March 31, 2026

Fiscal Year Ended March 31, 2027

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, 2024 and 2023 was $ 42,668 .

Rent expense, less sublease income of $ 15,572

is included in general and administrative expenses.

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.

the year ended March 31, 2024, the Company incurred approximately $ 1,800,000 in acquisition costs to acquire various royalty interests

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

Oil and Gas Reserve Data (Unaudited)

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Natural gas per MMBtu

Company’s total estimated proved reserves at March 31, 2024 were approximately 1.547 MBOE of which 51 % was oil and natural gas

liquids and 49 % was natural gas.

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

in Proved Reserves :

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five-year timeframe.

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

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

The reserves written off were primarily

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

developed in the future.

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.

of Proved Developed and Undeveloped Reserves as of March 31, 2025 and 2024 :

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March 31, 2025, the Company reported estimated PUDs of 386 MBOE, which accounted for 28 % of its total estimated proved oil and gas reserves.

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

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

The cost of these projects would be funded,

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

The remainder may be funded through

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

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

2026, 12 wells in fiscal 2027 and 23 wells in fiscal 2028.

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

cash balances, cash flow from operations and bank borrowings.

The remainder may be funded through non-core asset sales and/or sales of

our common stock.

following table discloses the Company’s progress toward the conversion of PUDs during fiscal 2025.

of Converting Proved Undeveloped Reserves :

Schedule of Progress of Converting Proved Undeveloped Reserves

Oil & Natural

Development Costs

of Progress of Converting Proved Undeveloped Reserves

Oil & Natural Gas (BOE)

Future Development Costs

PUDs, beginning of year

Revision of previous estimates

( 1,621,802 )

Sales of reserves

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( 2,735,000 )

( 14,394,000 )

Changes in previously estimated development costs

( 1,111,000 )

Revisions of quantity estimates

4 unchanged sentences

Net change in income taxes

( 1,801,000 )

Accretion of discount

2 unchanged sentences

( 4,553,000 )

( 8,187,000 )

Standardized measure, beginning of year

1 unchanged sentence

Subsequent Events

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

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

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

April 2024, the Company’s Board of Directors authorized the use of up to $ 1,000,000 to repurchase shares of the Company’s

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

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

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

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

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

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

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

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

in Lea County, New Mexico.

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

May 2024, the Company expended approximately $ 90,000 to complete 2 horizontal wells in the Bone Spring Sand formation of the Delaware

Basin in Lea County, New Mexico.

May 13, 2025, 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 2, 2025.

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.

Company completed a review and analysis of all events that occurred after the consolidated balance sheet date to determine if any such

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

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

June 24, 1998, and incorporated herein by reference.

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.

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

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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