MMEX Resources Corp 10-Q for FY2021 Q3

MMEX Resources Corp (MMEX)

10-Q 2021-03-15 For: 2021-01-31

Added on April 11, 2026

About this 10-Q

MMEX Resources Corp filed this 10-Q on March 15, 2021, covering the quarter ended January 31, 2021 (FY2021 Q3).

Headline figures

Quarter ended January 31, 2021, 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: $506.1K; compared with a net loss of $1.28M a year earlier

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

3616 Far West Blvd. #117-321 Austin, Texas 78731		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.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39

	January 31, 2021			April 30, 2020
Assets	(unaudited)

Current assets:
Cash	$	57,558		$	66,830
Prepaid expenses and other current assets		-			23,145
Total current assets		57,558			89,975

Property and equipment, net		480,888			507,044
Deposit		900			900

Total assets	$	539,346		$	597,919

Liabilities and Stockholders’ Deficit

Current liabilities:
Accounts payable	$	903,905		$	764,945
Accrued expenses		1,117,605			519,447
Accounts payable and accrued expenses – related parties		445,027			236,514
Note payable, currently in default		75,001			75,001
Convertible notes payable, currently in default, net of discount of $0 and $0 at January 31, 2021 and April 30, 2020, respectively		785,810			323,133
Convertible notes payable, net of discount of $100,482 and $140,941 at January 31, 2021 and April 30, 2020, respectively		1,129,518			1,587,239
Convertible notes payable – related parties, net of discount of $2,253 and $2,232 at January 31, 2021 and April 30, 2020, respectively		137,513			41,268
PPP loans payable		317,900			167,900
SBA express bridge loan payable		10,000			-
Derivative liabilities		1,418,564			2,607,433
Total current liabilities		6,340,843			6,322,880

Total liabilities		6,340,843			6,322,880

Commitments and contingencies

Stockholders’ deficit:
Common stock; $0.001 par value; 25,000,000,000 shares authorized, 17,449,348,348 and 13,352,828,472 shares issued and outstanding at January 31, 2021 and April 30, 2020, respectively		17,449,350			13,352,830
Preferred stock; $0.001 par value; 10,000,000 shares authorized, 1,000 Series A shares issued and outstanding		1			1
Additional paid-in capital		20,616,794			24,370,144
Non-controlling interest		9,871			9,871
Accumulated (deficit)		(43,877,513	)		(43,457,807	)
Total stockholders’ deficit		(5,801,497	)		(5,724,961	)

Total liabilities and stockholders’ deficit	$	539,346		$	597,919

	Three Months Ended January 31,						Nine Months Ended January 31,
	2021			2020			2021			2020

Revenues	$	-		$	-		$	-		$	-

Operating expenses:
General and administrative expenses		183,325			191,236			553,356			736,655
Refinery start-up costs		37,700			43,467			128,385			182,406
Depreciation and amortization		8,718			8,718			26,156			25,943

Total operating expenses		229,743			243,421			707,897			945,004

Loss from operations		(229,743	)		(243,421	)		(707,897	)		(945,004	)

Other income (expense):
Interest expense		(206,522	)		(245,823	)		(931,665	)		(1,468,027	)
Gain (loss) on derivative liabilities		(69,837	)		(800,734	)		1,219,856			(961,778	)
Gain on extinguishment of liabilities		-			6,563			-			8,555

Total other income (expense)		(276,359	)		(1,039,994	)		288,191			(2,421,250	)

Loss before income taxes		(506,102	)		(1,283,415	)		(419,706	)		(3,366,254	)
Provision for income taxes		-			-			-			-

Net loss		(506,102	)		(1,283,415	)		(419,706	)		(3,366,254	)

Non-controlling interest in income of consolidated subsidiaries		-			-			-			-

Net loss attributable to the Company	$	(506,102	)	$	(1,283,415	)	$	(419,706	)	$	(3,366,254	)

Net loss per common share – basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding -basic and diluted		15,192,601,276			11,619,713,601			14,152,881,106			4,496,124,028

	Common Stock				Class A Preferred Stock				Additional Paid-in			Non-Controlling		Accumulated
	Shares		Amount		Shares		Amount		Capital			Interest		Deficit			Total

Balance, April 30, 2019		68,172,427	$	68,174		-	$	-	$	35,622,398		$	9,871	$	(39,064,118	)	$	(3,363,675	)

Shares issued for:
Services		30,000		30		-		-		54			-		-			84
Accrued expenses		169,913,936		169,914		-		-		(122,969	)		-		-			46,945
Conversion of convertible notes payable		6,678,348,473		6,678,348		-		-		(5,866,672	)		-		-			811,676
Conversion of related party convertible notes payable		6,436,363,636		6,436,364		-		-		(6,082,364	)		-		-			354,000
Preferred shares issued to related party for services		-		-		1,000		1		23,899			-		-			23,900
Settlement of derivative iabilities		-		-		-		-		785,914			-		-			785,914
Net loss		-		-		-		-		-			-		(3,366,254	)		(3,366,254	)

Balance, January 31, 2020		13,352,828,472	$	13,352,830		1,000	$	1	$	24,360,260		$	9,871	$	(42,430,372	)	$	(4,707,410	)

	Common Stock				Series A Preferred Stock				Additional Paid-in			Non-Controlling		Accumulated
	Shares		Amount		Shares		Amount		Capital			Interest		Deficit			Total

Balance, April 30, 2020		13,352,828,472	$	13,352,830		1,000	$	1	$	24,370,144		$	9,871	$	(43,457,807	)	$	(5,724,961	)

Shares issued for conversion of convertible notes payable and accrued interest		4,096,519,876		4,096,520		-		-		(3,843,369	)		-		-			253,151

Settlement of derivative liabilities		-		-		-		-		90,019			-		-			90,019

Net loss		-		-		-		-		-			-		(419,706	)		(419,706	)

Balance, January 31, 2021		17,449,348,348	$	17,449,350		1,000	$	1	$	20,616,794		$	9,871	$	(43,877,513	)	$	(5,801,497	)

Name of Entity	%	Form of Entity	State of Incorporation	Relationship

MMEX Resources Corporation (“MMEX”)	-	Corporation	Nevada	Parent
Pecos Refining & Transport, LLC (“Pecos Refining”)	100%	Corporation	Texas	Subsidiary
Armadillo Holdings Group Corp. (“AHGC”)	100%	Corporation	British Virgin Isles	Subsidiary
Armadillo Mining Corp. (“AMC”)	98.6%	Corporation	British Virgin Isles	Subsidiary

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

January 31, 2021	Total		Level 1		Level 2		Level 3

Derivative liabilities	$	1,418,564	$	-	$	-	$	1,418,564

April 30, 2020	Total		Level 1		Level 2		Level 3

Derivative liabilities	$	2,607,433	$	-	$	-	$	2,607,433

	January 31, 2020			April 30, 2020

Office furniture and equipment	$	13,864		$	13,864
Computer equipment and software		10,962			10,962
Refinery land		67,088			67,088
Refinery land improvements		452,005			452,005
Refinery land easements		37,015			37,015
		580,934			580,934
Less accumulated depreciation and amortization		(100,046	)		(73,890	)

	$	480,888		$	507,044

	January 31, 2021		April 30, 2020

Accrued payroll	$	30,090	$	30,090
Accrued consulting		24,000		24,000
Accrued interest and penalties		1,000,974		402,126
Other		62,541		63,231

	$	1,117,605	$	519,447

	January 31, 2021		April 30, 2020

Note payable to an unrelated party, matured March 18, 2014, with interest at 10%	$	75,001	$	75,001

	$	75,001	$	75,001

	January 31, 2021			April 30, 2020

Notes payable to GS Capital Partners, LLC, maturing December 31, 2021, with interest at 18%, convertible into common shares of the Company at a defined variable exercise price:
Issued September 13, 2018	$	-		$	24,700
Issued September 18, 2018		70,000			70,000
Issued October 5, 2018		600,000			600,000
Issued February 20, 2019		110,000			110,000
Issued February 4, 2020		90,000			90,000
Issued March 31, 2020		200,000			200,000
Issued December 15, 2020		80,000			-
Issued December 31, 2020		80,000			-
Note payable to an accredited investor, matured May 7, 2020, with interest at 12%, convertible into common shares of the Company at a defined variable exercise price (in default as of January 31, 2021)		-			35,900
Note payable to an accredited investor, matured May 7, 2020, with interest at 10%, convertible into common shares of the Company at a defined variable exercise price (in default as of January 31, 2021)		-			100,000
Note payable to an accredited investor, matured June 19, 2020, with interest at 10%, convertible into common shares of the Company at a defined variable exercise price (in default as of January 31, 2021)		-			250,000
Note payable to an accredited investor, matured June 25, 2020, with interest at 9%, convertible into common shares of the Company at a defined variable exercise price (in default as of January 31, 2021)		-			56,500
Note payable to an accredited investor, matured September 4, 2020, with interest at 9%, convertible into common shares of the Company at a defined variable exercise price (in default as of January 31, 2021)		-			56,500
Note payable to an individual, maturing December 27, 2020, with interest at 5%, convertible into common shares of the Company at a defined variable exercise price (in default as of January 31, 2021)		-			10,000
Note payable to an accredited investor, maturing two years from each advance, with an original issue discount equal to 10% and a one-time interest charge of 12% added to principal, convertible into common shares of the Company at a defined variable exercise price:
Advance dated September 13, 2018, matured September 13, 2020 (in default as of January 31, 2021)		-			1,380
Advance dated October 16, 2018, matured October 16, 2020 (in default as of January 31, 2021)		-			123,200
Total		1,230,000			1,728,180
Less discount		(100,482	)		(140,941	)

Net	$	1,129,518		$	1,587,239

Related Party	Maturity Date	Consideration	January 31, 2021			April 30, 2020
Maple Resources Corporation	December 27, 2020	Cash of $5,500 and Financing Fees of $5,500	$	11,000		$	11,000
BNL Family Trust	December 27, 2020	Cash		11,000			11,000
Shareholder and consultant	December 27, 2020	Accrued Consulting Fees		10,000			10,000
Shareholder and consultant	January 22, 2021	Cash		6,500			6,500
Maple Resources Corporation	February 12, 2021	Cash		5,000			5,000
Maple Resources Corporation	March 2, 2021	Cash		800			-
Maple Resources Corporation	May 12, 2021	Accrued Consulting Fees		41,466			-
Shareholder and consultant	May 14, 2021	Accrued Consulting Fees		34,000			-
Maple Resources Corporation	July 31, 2021	Cash		10,000			-
Shareholder and consultant	September 9, 2021	Cash		10,000			-

Total				139,766			43,500
Less discount				(2,253	)		(2,232	)

Net			$	137,513		$	41,268

	Options and		Convertible
	Warrants		Notes			Total

Balance, April 30, 2020	$	15	$	2,607,418		$	2,607,433
New issuances of options, warrants and debt		-		121,006			121,006
Decrease due to conversions		-		(90,019	)		(90,019	)
Change in fair value of derivative liabilities		77,892		(1,297,748	)		(1,219,856	)

Balance, January 31, 2021	$	77,907	$	1,340,657		$	1,418,564

	·	Stock prices on all measurement dates were based on the fair market value
	·	Risk-free interest rate of 0.05% - 0.70%
	·	The probability of future financing was estimated at 100%
	·	Computed volatility ranging from 412.7% to 1,556.1%

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

Outstanding, April 30, 2020		446,037,755	$	1.00		1.91
Granted		136,836,070	$	1.00
Canceled / Expired		-
Exercised		-

Outstanding, January 31, 2021		582,873,825	$	1.00		1.16

	1.	The Company instructed its transfer agent to create an additional reserve of 1.5 billion common shares for issuance upon conversion of outstanding GS convertible notes;
	2.	GS terminated the prior pledge by Maple and BNL of shares of Series A preferred stock of the Company and instructed its counsel to dismiss with prejudice an outstanding judgment executed by the parties; and
	3.	The maturity dates of all convertible notes payable to GS were extended to the earlier of (i) December 31, 2021 or (ii) the consummation by the Company of an equity or equity-based financing providing net proceeds to the Company sufficient to retire the outstanding indebtedness of the Company to GS;

	2021			2020

Cash, beginning of period	$	66,830		$	55,188
Net cash used in operating activities		(264,272	)		(626,903	)
Net cash used in investing activities		-			(10,540	)
Net cash provided by financing activities		255,000			583,800

Cash, end of period	$	57,558		$	1,545

	1.	As of January 31, 2021, we did not maintain effective controls over the control environment. Specifically, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-B. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

	2.	As of January 31, 2021, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

	3.	As of January 31, 2021, we did not establish a formal written policy for the approval, identification and authorization of related party transactions.

	4.	As of January 31, 2021, we had no full-time employees with the requisite expertise in the key functional areas of finance and accounting. As a result, there is a lack of proper segregation of duties necessary to ensure that all transactions are accounted for accurately and in a timely manner.

4.12*		Sixth Amendment to Promissory Notes, dated February 22, 2021, by and between MMEX Resources Corporation and GS Capital, Partners LLC

4.13*		10% Promissory Note, due December 31, 2021, payable to GS Capital Partners LLC

4.14*		10% Promissory Note, due December 31, 2021, payable to JSJ Investments, Inc.

4.15*		10% Promissory Note, due March 11, 2022, payable to Vista Capital Investments, LLC.

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

101.INS**		XBRL Instance Document

101.SCH**		XBRL Taxonomy Extension Schema Document

101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**		XBRL Taxonomy Extension Label Linkbase Document

101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document

	MMEX Resources Corporation

Dated: March 15, 2021	By:	/s/ Jack W. Hanks
		Chief Executive Officer (Principal Executive Officer), President and Chief Financial Officer (Principal Financial and Accounting Officer)

	MMEX Resources Corporation

	By:	/S/ JACK W. HANKS
		Jack W. Hanks, CEO

	GS Capital Partners, LLC

	By:	/S/ GABE SAYEGH
		Gabe Sayegh, President

MMEX RESOURCES CORPORATION

By:	/S/ JACK W. HANKS
	Jack W. Hanks
	President and Chief Executive Officer

	MMEX RESOURCES CORPORATION

	By:	/s/ JACK W. HANKS
		Jack W. Hanks, President and CEO

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

	(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.

	(1)	The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.