Financial Analysis

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

BusinessCombinationDisclosureTextBlock

12. Commitments and Contingencies From 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.

CommitmentsAndContingenciesDisclosureTextBlock

16. Employee 401(k) Plan In 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. Accordingly, no expense related to the plan was recognized during the year ended March 31, 2026.

CompensationAndEmployeeBenefitPlansTextBlock

10. Stock-based Compensation In September 2019, the Company adopted the 2019 Employee Incentive Stock Plan (the 2019 Plan). The 2019 Plan provides for the award of stock options up to 200,000 shares and includes option awards as well as stock awards. Option awards are granted with the restriction of requiring payment for the shares. Stock awards are granted without restrictions and without payment by the recipient. Neither option awards nor stock awards may exceed 25,000 shares granted to any one individual in any fiscal year. Stock options may be an incentive stock option or a nonqualified stock option. Options to purchase common stock under the plan are granted at the fair market value of the common stock at the date of grant, become exercisable to the extent of 25 % of the shares optioned on each of four anniversaries of the date of grant, expire ten years from the date of grant and are subject to forfeiture if employment terminates. The 2019 Plan expires ten years from the date of adoption. According to the Companys employee stock incentive plan, new shares will be issued upon the exercise of stock options and the Company can repurchase shares exercised under the plan. The Company recognized compensation expense of $ 174,000 and $ 205,639 related to vesting stock options in general and administrative expense in the Consolidated Statements of Operations for fiscal 2026 and 2025, respectively. The total cost related to non-vested awards not yet recognized at March 31, 2026 …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

5. Income Taxes On 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. The Company files a consolidated federal income tax return and various state income tax returns. The amount of income taxes the Company records requires the interpretation of complex rules and regulations of federal and state taxing jurisdictions. With few exceptions, the earliest year open to examination by U.S. federal and state income tax jurisdictions is 2021. The income tax provision consists of the following for the years ended March 31, 2026 and 2025: Schedule of Income Tax Provision 2026 2025 Year Ended March 31 2026 2025 Current income tax expense: Federal $ 107,292 $ 232,035 State 58,682 63,352 Total current income tax expense $ 165,974 $ 295,387 Deferred income tax expense (benefit): Federal 224,910 56,614 State (11,841 ) (47,671 ) Total def …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

13. Leases The Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for the corporate office located in Midland, Texas. This includes 702 square feet of office space shared with and paid by our principal shareholder. In June 2024, the Company agreed to extend its current lease at a flat (unescalated) rate for 36 months. The amended lease expires on July 31, 2027 . The 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. Operating lease right-of-use assets represent the Companys right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Companys lease does not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate used at adoption was 9 %. Significant judgment is required when determining the incremental borrowing rate. Rent expense for lease payments is recognized on a straight-line basis over the lease term. The balance sheet classification of …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

3. Long-Term Debt On December 28, 2018, the Company entered into a loan agreement (the Agreement) with West Texas National Bank (WTNB), which originally provided for a $ 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 . On March 28, 2026, the Agreement was amended to extend the maturity date to March 28, 2029 . Under the Agreement, interest on the facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half of one percent (.5%), floating daily. Interest on the outstanding amount under the Agreement is payable monthly. In addition, the Company will pay an unused commitment fee in an amount equal to one-half of one percent (.5%) times the daily average of the unadvanced amount of the commitment. The unused commitment fee is payable quarterly in arrears on the last day of each calendar quarter. As of March 31, 2026, the Company had $ 1,500,000 available to borrow under the facility. No principal payments are anticipated to be required through the maturity date of the cred …

LongTermDebtTextBlock · excerpt; the full note is in the filing

New 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 Companys 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 Companys disclosures, it will not have an impact on the Companys financial position, results of operations, or liquidity. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

11. Related Party Transactions Related 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.

RelatedPartyTransactionsDisclosureTextBlock

2. Summary of Significant Accounting Policies Principles of Consolidation . The consolidated financial statements include the accounts of Mexco Energy Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions associated with the consolidated operations have been eliminated. Estimates and Assumptions . In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP), management is required to make informed judgments, estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and affect the reported amounts of revenues and expenses during the reporting period. In addition, significant estimates are used in determining proved oil and gas reserves. Although management believes its estimates and assumptions are reasonable, actual results may differ materially from those estimates. The estimate of the Companys oil and natural gas reserves, which is used to compute depreciation, depletion, amortization and impairment of oil and gas properties, is the most significant of the estimates and assumptions that affect these reported results. Cash and Cash Equivalents . The Company considers all highly liquid debt instruments purchased with maturities of three months or less and money market funds to be cash equivalents. The Company maintains cash in bank deposit accounts that may, at times, exceed f …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

9. Stockholders Equity In April 2024, the Companys Board (the Board) authorized the use of up to $ 1,000,000 to repurchase shares of the Companys common stock, par value $ 0.50 , for the treasury account. This program has no expiration date and may be modified, suspended, or terminated at any time by the Board. 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 in connection with the settlement of our share-based compensation awards. Repurchases will be funded from cash flow. As of March 31, 2026, the Companys 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 Companys common stock, par value $ 0.50 , for the treasury account. To date, the Companys repurchase program has $ 546,784 remaining. During 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. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

17. Subsequent Events In 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 . In 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. On 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 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, Colorado; Caddo and DeSoto Parishes, Louisiana; Karnes, McMullen, Panola, and Winkler Counties, Texas; and Ashtabula County, Ohio for an aggregate purchase of $ 1,066,600 . The Company completed a review and analysis of all events that occurred after the consolidated balance sheet date to determine if any such events must be reported and has determined that there are no other subsequent events to be disclosed.

SubsequentEventsTextBlock