MMEX Resources Corp 10-Q for FY2023 Q3

MMEX Resources Corp (MMEX)

10-Q 2023-03-13 For: 2023-01-31

Added on April 11, 2026

About this 10-Q

MMEX Resources Corp filed this 10-Q on March 13, 2023, covering the quarter ended January 31, 2023 (FY2023 Q3).

Headline figures

Quarter ended January 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $0; compared with $0 a year earlier
Net loss: $307.88K; compared with a net loss of $605.82K a year earlier
Diluted EPS: -$0.01; compared with -$0.03 a year earlier

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Nevada		26-1749145
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

3600 Dickinson Fort Stockton, Texas 79735		855-880-0400
(Address of principal executive offices, including zip code)		(Issuer’s telephone number, including area code)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)		Emerging growth company	☐

PART I – FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32

	January 31, 2023			April 30, 2022
Assets	(unaudited)

Current assets:
Cash	$	7,518		$	136,867
Prepaid expenses and other current assets		24,833			47,333
Total current assets		32,351			184,200

Property and equipment, net		1,086,901			1,114,197

Total assets	$	1,119,252		$	1,298,397

Liabilities and Stockholders’ Deficit

Current liabilities:
Accounts payable	$	755,176		$	639,782
Accrued expenses		981,353			851,275
Accounts payable and accrued expenses – related parties		271,865			76,770
Note payable, currently in default		211,953			75,001
Note payable		784,000			904,452
Convertible notes payable, currently in default, net of discount of $0 and $0 at January 31, 2023 and April 30, 2022, respectively		75,000			75,000
Convertible notes payable, net of discount of $27,070 and $22,903 at January 31, 2023 and April 30, 2022, respectively		761,920			432,097
Total current liabilities		3,841,267			3,054,377

Total liabilities		3,841,267			3,054,377

Commitments and contingencies

Stockholders’ deficit:
Common stock; $0.001 par value; 200,000,000 shares authorized, 48,890,638 and 21,204,682 shares issued and outstanding at January 31, 2023 and April 30, 2022, respectively		48,891			21,205
Preferred stock; $0.001 par value; 1,000,000 shares authorized:
1,000 Series A preferred shares issued and outstanding at January 31, 2023 and April 30, 2022		1			1
1,481 and 1,500 Series B preferred shares issued and outstanding at January 31, 2023 and April 30, 2022, respectively		1			2
Additional paid-in capital		69,646,837			66,426,364
Non-controlling interest		9,871			9,871
Accumulated deficit		(72,427,616	)		(68,213,423	)
Total stockholders’ deficit		(2,722,015	)		(1,755,980	)

Total liabilities and stockholders’ deficit	$	1,119,252		$	1,298,397

	Three Months Ended January 31,						Nine Months Ended January 31,
	2023			2022			2023			2022

Revenues	$	-		$	-		$	-		$	-

Operating expenses:
General and administrative expenses		211,084			274,407			1,379,285			991,407
Project costs		20,520			369,950			96,560			1,379,676
Depreciation and amortization		9,099			8,888			27,296			26,852

Total operating expenses		240,703			653,245			1,503,141			2,397,935

Loss from operations		(240,703	)		(653,245	)		(1,503,141	)		(2,397,935	)

Other income (expense):
Interest expense		(67,177	)		(49,566	)		(193,190	)		(311,821	)
Gain (loss) on derivative liabilities		-			-			-			3,010,042
Gain (loss) on extinguishment of liabilities		-			96,993			16,540			233,303

Total other income (expense)		(67,177	)		47,427			(176,650	)		2,931,524

Income (loss) before income taxes		(307,880	)		(605,818	)		(1,679,791	)		533,589
Provision for income taxes		-			-			-			-

Net income (loss)		(307,880	)		(605,818	)		(1,679,791	)		533,589

Deemed dividend		-			-			2,534,402			-

Net income (loss) attributable to the common shareholders	$	(307,880	)	$	(605,818	)	$	(4,214,193	)	$	533,589

Net income (loss) per common share – basic	$	(0.01	)	$	(0.03	)	$	(0.15	)	$	0.05
Net income (loss) per common share – diluted	$	(0.01	)	$	(0.03	)	$	(0.15	)	$	0.01
Weighted average number of common shares outstanding - basic		34,392,998			18,244,276			27,819,443			10,486,385
Weighted average number of common shares outstanding - diluted		34,392,998			18,244,276			27,819,443			51,172,508

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	Common Stock				Series A Preferred Stock				Series B Preferred Stock				Additional Paid-in			Non-Controlling		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Interest		Deficit			Total
Balance, April 30, 2021		3,251,641	$	3,252		1,000	$	1		-	$	-	$	62,201,528		$	9,871	$	(67,984,693	)	$	(5,770,041	)
Shares issued with prefunded warrants for cash		170,000		170		-		-		-		-		2,999,830			-		-			3,000,000
Shares issued for conversion of convertible notes payable and accrued interest		11,814		11		-		-		-		-		42,520			-		-			42,531
Shares issued for reverse stock split		17,754		18		-		-		-		-		(18	)		-		-			-
Shares issued for the exercise of prefunded warrants		250,000		250		-		-		-		-		(250	)		-		-			-
Offering costs		-		-		-		-		-		-		(349,150	)		-		-			(349,150	)
Net income		-		-		-		-		-		-		-			-		2,291,291			2,291,291
Balance, July 31, 2021		3,701,209		3,701		1,000		1		-		-		64,894,460			9,871		(65,693,402	)		(785,369	)
Shares issued for conversion of convertible notes payable and accrued interest		6,421,929		6,422		-		-		-		-		105,484			-		-			111,906
Shares issued for conversion of related party convertible notes payable and accrued interest		6,817,224		6,817		-		-		-		-		68,172			-		-			74,989
Shares issued for the exercise of prefunded warrants		880,000		880		-		-		-		-		(880	)		-		-			-
Net (loss)		-		-		-		-		-		-		-			-		(1,151,884	)		(1,151,884	)
Balance, October 31, 2021		17,820,362		17,820		1,000		1		-		-		65,067,236			9,871		(66,845,286	)		(1,750,358	)
Shares issued with warrants for cash						-		-		1,500		2		1,499,998			-		-			1,500,000
Shares issued for the exercise of prefunded warrants		1,275,000		1,275		-		-		-		-		(1,275	)		-		-			-
Offering costs		-		-		-		-		-		-		(206,649	)		-		-			(206,649	)
Net (loss)		-		-		-		-		-		-		-			-		(605,818	)		(605,818	)
Balance, January 31, 2022		19,095,362	$	19,095		1,000	$	1		1,500	$	2	$	66,359,310		$	9,871	$	(67,451,104	)	$	(1,062,825	)

Name of Entity	%	Form of Entity	State of Incorporation	Relationship

MMEX Resources Corporation	-	Corporation	Nevada	Parent
Pecos Clean Fuels & Transport (formerly Pecos Refining & Transport, LLC	100%	LLC	Texas	Subsidiary
MMEX Solar Resources, LLC	100%	LLC	Texas	Subsidiary
Rolling Stock Marine, LLC	100%	LLC	Texas	Subsidiary
Hydrogen Global, LLC	100%	LLC	Texas	Subsidiary
Clean Energy Global, LLC (formerly Hydrogen Ultra, LLC)	100%	LLC	Texas	Subsidiary

Office furniture and equipment	10 years
Computer equipment and software	5 years
Land improvements	15 years
Land easements	10 years

	January 31, 2023		April 30, 2022

Accrued payroll	$	30,090	$	30,090
Accrued consulting		39,000		12,000
Accrued interest and penalties		818,089		714,827
Other		94,174		94,358

	$	981,353	$	851,275

	January 31, 2023		April 30, 2022

Note payable to an unrelated party, matured March 18, 2014, with interest at 10%	$	75,001	$	75,001
Note payable to an unrelated party with an issue date of March 11, 2021 with interest at 10% [1]		136,952		-

	$	211,953	$	75,001

	[2]	Effective March 11, 2021 the Company entered into a promissory note with Vista Capital Investments, Inc with a principal amount of $250,000. The maturity date of the note was March 11, 2022 which was amended on February 23, 2021 to extend the due date to December 31, 2022. The note has an interest rate of 10% per annum from the date of funding. On February 23, 2022 the Company made a payment of $113,048 to pay down the note principal and effective January 1, 2023 the note went into default as the due date had passed with no extension.

	[3]	Effective February 28, 2022 the Company entered into a promissory note with Oscar and Ilda Gonzales with a principal amount of $102,500. The maturity date of the note is February 28, 2026 and repayments on the note are to begin on March 1, 2023 in the amount of $3,309 per month. The note has an interest rate of 10% per annum.

	[4]	Effective March 3, 2022 the Company entered into a promissory note with Sabby Volatility Warrant Master Fund with a principal amount of $165,000 in full satisfaction of all liquidated damages pursuant to a registration rights agreement dated December 22, 2021. The maturity date of the note is the earlier of February 28, 2023 or the date MMEX receives at least $6 million of proceeds from an equity or equity-based financing. In accordance with the terms of the note, if the note was not paid in full prior to June 22, 2022, the principal amount of the note was to increase to $181,500. Accordingly, during the nine months ended January 31, 2023 we recognized $16,500 in interest expense to increase the principal balance.

	[1]	On March 8, 2010, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $50,000 convertible note in a private placement transaction. In the transaction, the Company received proceeds of $35,000 and the investor also paid $15,000 of consulting expense on behalf of the Company. The convertible note was due and payable on December 31, 2010 with an interest rate of 10% per annum. The note is convertible at the option of the holder into our common stock at a fixed conversion price of $3.70, subject to adjustment for stock splits and combinations.

	[2]	On January 28, 2011 and February 1, 2011, the Company closed a Convertible Note Agreement totaling $514,900 in principal amount of 25% Convertible Note (the "Notes") due on the first anniversary of the date of the Note, to a group of institutional and high net worth investors. The Notes are convertible into the Company's common stock at the holders' option at $1.00 per common share. All but $25,000 of the promissory notes plus interest were paid in full on March 23, 2011.

	January 31, 2023			April 30, 2022
Extension fee added to note payable to an accredited investor, with interest at 18%, convertible into common shares of the Company at a defined variable exercise price [1]	$	158,790		$	200,000
Extension fee added to note payable to an accredited investor, with interest at 18%, convertible into common shares of the Company at a defined variable exercise price [2]		-			90,000
Note payable to an accredited investor, with interest at 10%, convertible into common shares of the Company at $0.10 per share [3]		165,000			165,000
Note payable to an accredited investor, with interest at 10%, convertible into common shares of the Company at variable exercise prices [4]		31,700			-
Note payable to an accredited investor, with interest at 10%, convertible into common shares of the Company at $0.005 per share [5]		200,000			-
Note payable to an accredited investor, with interest at 10%, convertible into common shares of the Company at $0.11 per share [6]		78,750
Note payable to an accredited investor, with interest at 10%, convertible into common shares of the Company at $0.01 per share [7]		100,000			-
Note payable to an accredited investor, with interest at 10%, convertible into common shares of the Company at $0.11 per share [8]		54,750			-
Total		788,990			455,000
Less discount		(27,070	)		(22,903	)

Net	$	761,920		$	432,097

	[1]	Effective March 31, 2020, the Company entered into a second amendment to certain convertible notes with GS Capital Partners, LLC (“GS”) ($110,000 note dated September 13, 2018, $70,000 note dated September 18, 2018, $600,000 note dated October 5, 2018, and $110,000 note dated February 20, 2019) to extend the notes due dates to November 30, 2020. In consideration of the extension of the maturity dates of the notes the Company was to pay an extension fee of $200,000, which was added to the principal amount owed and would incur interest at 18% per annum. The extension fee is payable in cash at the earlier of (1) in connection with, and at the time of repayment of the Notes, or (2) on November 20, 2020, which, as of the date of this filing, has been extended to March 31, 2023. GS, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of common stock at a 40% discount from the lowest trading price during the 20 days prior to conversion (with a floor of $3.00 per share during the first six months after issuance). During the nine months ended January 31, 2023 the Company made repayments of $41,210 on the note principal.

	[2]	Effective September 12, 2019, the Company entered into an amendment to certain convertible notes with GS ($110,000 note dated September 13, 2018, $70,000 note dated September 18, 2018, and $600,000 note dated October 5, 2018) to extend the notes due dates to February 4, 2020. In consideration of the extension of the maturity dates of the notes the Company was to pay an extension fee of $90,000, which was added to the principal amount owed and would incur interest at 18% per annum The extension fee is payable in cash at the earlier of (1) in connection with, and at the time of repayment of the Notes, or (2) on November 20, 2020, which was extended to March 31, 2023. GS, at its option, could convert the unpaid principal balance of, and accrued interest on, the note into shares of common stock at a 40% discount from the lowest trading price during the 20 days prior to conversion (with a floor of $3.00 per share during the first six months after issuance). During the nine months ended January 31, 2023 the Company issued 710,802 shares of common stock to pay the note and its related interest in full and recognized a $16,540 gain on settlement to reduce the debt to zero.

	January 31, 2023			April 30, 2022

Office furniture and equipment	$	13,864		$	13,864
Computer equipment and software		6,555			17,517
Refinery land		721,828			721,828
Refinery land improvements		468,426			468,615
Refinery land easements		37,015			37,015
		1,247,688			1,258,839
Less accumulated depreciation and amortization		(160,787	)		(144,642	)

	$	1,086,901		$	1,114,197

	[3]	Effective April 12, 2022, the Company issued and delivered to GS a 10% convertible note in the principal amount of $165,000. The note was issued at a discount and the Company received net proceeds of $155,000 after payment of $10,000 of fees and expenses of the lender and its counsel. GS, at its option, can convert the unpaid principal balance of, and accrued interest on, the note into shares of common stock at a price of $0.10 per share. The Company can prepay the note with prepayment penalties ranging from 105% to 125% during the first 180 days after issuance.

	[4]	Effective June 7, 2022, the Company entered into a convertible promissory note with a principal amount of $105,000 with 1800 Diagonal Lending, LLC. The Company received $101,250 after payment of $3,750 in fees and expenses of the lender and its counsel. The note has an interest rate of 10% per annum and a maturity date of June 7, 2023. The note can be converted into shares of common stock at a price of $0.11 per share for the first 180 days and after that can be converted into shares of common stock at a variable exercise price that is equal to a 42% discount to the lowest trading price during the 10 days prior to conversion. During the nine months ended January 31, 2023 the note holder converted $73,300 worth of principal into 7,021,914 shares of common stock based on the variable conversion prices in effect on the date of the conversions.

	[5]	Effective July 26, 2022, the Company issued and delivered to GS a 10% convertible note in the principal amount of $200,000, which was not funded until August 1, 2022. The note was issued at a discount and the Company received net proceeds of $185,000 after payment of $5,000 of fees and expenses of the lender and its counsel. GS, at its option, can convert the unpaid principal balance of, and accrued interest on, the note into shares of common stock at a price of $0.055 per share, subject to adjustment if there are future financings with more favorable rates. The Company can prepay the note with prepayment penalties ranging from 105% to 125% during the first 180 days after issuance.

	[6]	Effective August 15, 2022, the Company entered into a convertible promissory note with a principal amount of $78,750 with 1800 Diagonal Lending, LLC. The Company received $75,000 after payment of $3,750 in fees and expenses of the lender and its counsel. The note has an interest rate of 10% per annum and a maturity date of August 15, 2023. The note can be converted into shares of common stock at a price of $0.11 per share for the first 180 days and after that can be converted into shares of common stock at a variable exercise price that is equal to a 42% discount to the lowest trading price during the 10 days prior to conversion.

	[7]	Effective September 15, 2022, the Company entered into a convertible promissory note with a principal amount of $100,000 with Boot Capital, LLC. The Company received $91,250 after payment of $8,750 in fees and expenses of the lender and its counsel. The note has an interest rate of 10% per annum and a maturity date of September 15, 2023. The note can be converted into shares of common stock at a 42% discount from the lowest trading price during the 10 days prior to conversion.

	[8]	Effective January 22, 2023, the Company entered into a convertible promissory note with a principal amount of $54,750 with 1800 Diagonal Lending, LLC. The Company received $50,000 after payment of $4,750 in fees and expenses of the lender and its counsel. The note has an interest rate of 10% per annum and a maturity date of January 18, 2024. The note can be converted into shares of common stock at a price of $0.11 per share for the first 180 days and after that can be converted into shares of common stock at a variable exercise price that is equal to a 42% discount to the lowest trading price during the 10 days prior to conversion.

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)

Outstanding, April 30, 2022		35,508,000		$	0.06		4.64
Granted		27,261,781		$	0.07
Cancelled / Expired		(17,575,500	)	$	0.10
Exercised		(16,245,000	)	$	0.00

Outstanding, January 31, 2023		28,949,281		$	0.09		5.54

	2023			2022

Cash, beginning of period	$	136,867		$	330,449
Net cash used in operating activities		(619,849	)		(2,946,469	)
Net cash used in investing activities		-			(255,504	)
Net cash provided by financing activities		490,500			3,767,370

Cash, end of period	$	7,518		$	895,846

31.1*		Certification by Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)

32.1*		Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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	MMEX Resources Corporation

Dated: March 13, 2023	By:	/s/ Jack W. Hanks
		Chief Executive Officer (Principal Executive Officer), President and Chief Financial Officer (Principal Financial and Accounting Officer)

1.	I have reviewed this Quarterly Report on Form 10-Q of MMEX Resources Corporation.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exhibit Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: March 13, 2023		/s/ Jack W. Hanks
	By:	Jack W. Hanks
		Chief Executive Officer and Chief Financial Officer