# MMEX Resources Corp: Form 10-K for the period ended Apr 30, 2023

- Company: [MMEX Resources Corp](/companies/mmex.md) (CIK 1440799)
- Form: 10-K
- Filed: 2023-07-17
- Accepted by EDGAR: Jul 17, 2023, 16:55 ET
- Period: 2023-04-30
- Accession: 0001477932-23-005360
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1440799/000147793223005360/mmex_10k.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1440799/000147793223005360/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-04-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 12 months, 2022-05-01 to 2023-04-30 | $0 | us-gaap:Revenues |
| Operating income | 12 months, 2022-05-01 to 2023-04-30 | −$1.8m | us-gaap:OperatingIncomeLoss |
| Interest expense | 12 months, 2022-05-01 to 2023-04-30 | $234.9k | us-gaap:InterestExpense |
| Income tax | 12 months, 2022-05-01 to 2023-04-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 12 months, 2022-05-01 to 2023-04-30 | −$2.0m | us-gaap:NetIncomeLoss |
| Operating cash flow | 12 months, 2022-05-01 to 2023-04-30 | −$682.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 12 months, 2022-05-01 to 2023-04-30 | $0 | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-04-30 | $10.4k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-04-30 | $34.4k | us-gaap:AssetsCurrent |
| Total assets | at 2023-04-30 | $1.1m | us-gaap:Assets |
| Current liabilities | at 2023-04-30 | $4.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-04-30 | $4.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-04-30 | −$2.9m | us-gaap:StockholdersEquity |

## Business

As filed, 13,701 characters.

#### Company Information and Business Plan

MMEX Resources Corporation (“MMEX”) was formed as a Nevada corporation in 2005. The current management team lead an acquisition of the Company (then named Management Energy, Inc.) through a reverse merger completed in 2010 and thereafter changed the Company’s name to MMEX Mining Corporation.

MMEX is focused on the development, financing, construction, and operation of clean fuels infrastructure projects powered by renewable energy. We have formed two operating sub-divisions of the Company - one sub-division to transition from legacy refining transportation fuels by producing them as ultra clean fuels with carbon capture or as stand-alone renewable or clean fuels projects, and the second sub-division which plans to produce green and/or blue hydrogen with the option of hydrogen conversion to ammonia or methanol. These two sub-divisions will be operating respectively as Clean Energy Global, LLC and Hydrogen Global, LLC. The planned projects are designed to be powered by solar and wind renewable energy.

Our portfolio contains the following pipeline of planned projects:

### Clean Energy Global, LLC

#### Project 1: Pecos Clean Fuels & Transport, LLC -Ultra Clean Fuels Refining-Pecos County, Texas

We have teamed with Polaris Engineering to develop an ultra-clean transportation fuel, up to 11,600 barrel per day feedrate crude oil refining facility at our Pecos County, Texas site to produce 87° gasoline, ultra-low sulphur diesel and low-sulphur fuel oil, utilizing the Polaris Ultra FuelsTM patented concept, which removes over 95% emissions of a standard refinery. The planned carbon capture features of the project will be owned, financed, constructed, and operated by an independent third-party. The Ultra FuelsTM concept, with capex and technical details completed in the Front-End Load-2 (“FEL-2”) study, features small size facilities to take advantage of proximity to smaller markets and/or locate directly near crude oil production areas near the Company’s owned 126-acre site. Because equipment is fabricated in modular units and shipped to site, this allows for an 18-month project completion time and more rapid implementation than traditional facilities. The smaller size and footprint, as well as lower emissions, also allows for faster permitting which we obtained for this facility from the Texas Commission on Environmental Quality on February 18, 2022.

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#### Project 2: Arroyo Cabral, Cordoba Province Argentina Solar Power Project.

The Company along with its international partners have entered a proposal with EPEC, the local utility in Cordoba Province to build potentially the Arroyo Cabral 48 MWe solar park for local power demand following the Company’s completion of a confidential information memorandum and pre-feasibility study for the project completed in June 2021. The local utility, EPEC, has proposed a Build Own Transfer structure with EPEC contributing 15% of the project costs as an equity contribution. The financing of the project potentially is to be provided by the Company’s international partners and other third parties.

### Hydrogen Global, LLC

#### Project 3: Hydrogen Global- Pecos County, Texas- Green Hydrogen Project

This planned project to utilize the proprietary electrolyzer technology of Siemens Energy, a major international technology provider to the Company, plans to convert water to hydrogen through electrolysis. The facility will utilize solar power, with the Company’s owned water supply to produce up to 55 tons of hydrogen production per day. The Company and Siemens have completed the Front-End Engineering and Design (“FEED”) study in April 2022, which outlines the capex of the electrolyzer complex on the Company’s 321-acre site. The Company is in discussions with several renewable power developers to become the technology provider for 160 MWe solar power component. In addition, the Company is in discussions with technology providers for the Ammonia and/or Methanol complex, for conversion of the hydrogen to ammonia or methanol to facilitate transportation of the finished product for the export market in either Europe or Asia and with international partners to provide turn-key mobility markets to include hydrogen fueling stations and buses utilizing hydrogen fuel cells. The potential markets would be the major metropolitan areas in the U.S. and Texas to include Austin, Dallas, Houston, and San Antonio.

#### Project 4: Hydrogen Global- Tierra del Fuego Province Argentina-Green Hydrogen Project

On April 28, 2022, the Province of Tierra del Fuego and the Company announced the potential joint development of a green hydrogen project in the Río Grande, Tierra del Fuego area powered by wind energy. The Company has signed an amendment with Siemens Energy to adapt the Green H2 electroylzer FEED Study completed for Pecos County to this Project. In addition, the Company has a preliminary understanding with Siemens Gamesa as the technology provider for the wind energy. The Company estimates the land requirement of up to 10,000 hectares for the wind farm and the Green H2 facilities. The Company is in discussions with the same technology provider for the Ammonia complex as for Pecos County. The potential market for the Ammonia is Europe or Asia and the project location is ideal for ocean borne shipping east or west.

#### Project 5: Hydrogen Global- Southern Coast of Peru-Green Hydrogen Project

The Company has entered advanced discussions with Peru’s principal electric power distribution company to develop potentially a Green Hydrogen project to produce up to 55 tons per day of hydrogen, requiring 160 MWe of constant and certified renewable power load. The Company plans to use its Siemens Energy Electrolyzer FEED template and adapt it for Peru. The Peru distribution company will also provide the land area as part of the transaction - approximately 5 hectares, by the sea to facilitate exports of green Hydrogen/Ammonia/Methanol to Asia and the U.S. West Coast. Peru’s mining industry with its use of heavy extraction and transportation equipment has significant market potential for the Company’s hydrogen production.

#### Project 6: Hydrogen Global- Pecos County, Texas-Blue Hydrogen Project

The Company is in planning discussions with a super major oil company (the “Super Major”) to develop a Blue Hydrogen project at the Company’s Pecos County, Texas site. The Project plans to utilize potentially a portion of the Super Major’s 2 billion cubic feet per day natural gas production and transportation from the area to produce hydrogen utilizing an autothermal reformer (“ATR”) technology, In turn, the hydrogen will be used in Siemens Energy turbines and generator sets to produce up to 70 MWe of electric power which are projected to utilize initially a 75% hydrogen-25% natural gas feed and moving to a 100% hydrogen feed, with the electric power to be purchased by the developer of a CO2 sequestration facility within the project area. The remainder of the hydrogen production is scheduled to be converted to ammonia and/or methanol. Solar and wind power will be utilized in the ATR and the Company is under discussions with the renewable power companies developing the Company’s other solar projects in the area. The planned carbon capture features of the project will be owned, financed, constructed, and operated by an independent third-party.

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### Trans Permian H2Hub, the Port of Corpus Christi Hydrogen Hub and Department of Energy Funding

On September 22, 2022, The US Department of Energy Office of Clean Energy Demonstration (“DOE”) released its Funding Opportunity Announcement (FOA) to solicit Regional Clean Hydrogen Hubs (H2Hubs) under the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law ( BIL). The FOA stated, “This $8 billion effort will catalyze investment in the development of H2Hubs that demonstrate the production, processing, delivery, storage, and end-use of clean hydrogen, in support of the Biden Administration’s goal to achieve a carbon-free electric grid by 2035 and a net zero emissions economy by 2050.” The DOE will select six to 10 regional hydrogen hubs with a preferred DOE investment for each hub in the range of $500 million to $1 billion with 50% of the amount funded by outside sources.

The Company on November 5, 2022, announced the formation and the filing of its Concept Paper for the regional hub Trans Permian H2Hub, LLC and to apply for DOE funding. On December 27, 2022, the Company received the decision by the DOE to proceed to the formal application stage in April 2023. The DOE encouraged both the Port of Corpus Christi Horizons Clean Hydrogen Hub (HCH2) and Trans Permian (Trans Permian) H2Hub to submit full applications through the DOE Regional Clean Hydrogen Hubs Program. On February 7, 2023, the Port of Corpus Christi and Trans Permian announced the combination of the two Hydrogen hubs into a single application, for which the Port of Corpus Christi is the prime applicant. The final DOE application was filed April 5, 2023. The DOE has indicated that final decisions will be made in September 2023.

As a sub-applicant in the joint application, The Trans Permian H2Hub geography includes the Texas Permian Basin cities of San Antonio, San Angelo, Big Spring, Midland, Odessa, El Paso, Fort Stockton, Alpine, Presidio and Del Rio. The planned projects within the Trans Permian H2Hub include the MMEX projects for production of hydrogen from diverse feedstocks as well as mobility projects, including hydrogen fuel cell bus manufacturing, hydrogen re-fueling stations, municipal transit projects, and freight mobility projects.

There is no assurance that DOE will select the HCH2 application with Trans Permian as a sub applicant as a finalist.

Completion of the Company projects is dependent upon our obtaining the necessary capital for planning, construction, and start-up costs. There is no assurance that such financing can be obtained on favorable terms.

### Regulation

Although we do not believe our planned blue hydrogen and green hydrogen projects will have any significant environmental or ecological impact, we will be subject to numerous environmental laws and regulations relating to the release of hazardous substances or solid wastes into the soil, groundwater, and surface water, and measures to control pollution of the environment. These laws generally regulate the generation, storage, treatment, transportation, and disposal of solid and hazardous waste. They also require corrective action, including investigation and remediation, at a facility where such waste may have been released or disposed. There are risks of accidental releases into the environment associated with our operations, such as releases of crude oil or hazardous substances from our pipelines or storage facilities. To the extent an event is not covered by our insurance policies, accidental releases could subject us to substantial liabilities arising from environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage, and fines or penalties for any related violations of environmental laws or regulations.

We expect to file with the Texas Commission on Environmental Quality (“TCEQ”) for construction and operation permits. We expect to employ carbon capture with the clean fuels and blue hydrogen facilities. We are studying the options for sequestration for the CO2 in the various saline formations under our sites, which will require permits from the EPA or the Texas Railroad Commission (which, we understand, is in the process of seeking primacy for sequestration permitting).

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Our planned operations may also be subject to the Department of Homeland Security’s Chemical Facility Anti-Terrorism Standards, which are designed to regulate the security of high-risk chemical facilities, and to the Transportation Security Administration’s Pipeline Security Guidelines and Transportation Worker Identification Credential program. If applicable, we will have to have an internal program of inspection designed to monitor and enforce compliance with all of these requirements, and we will need to develop a Facility Security Plan as required under the relevant law. We will also have to have in place procedures to monitor compliance with all applicable laws and regulations regarding the security of all our facilities.

Our planned operations will also be subject to the requirements of the Occupational Safety and Health Act (“OSHA”) and comparable state statutes that regulate the protection of the health and safety of workers. In addition, the OSHA hazard communication standard requires that information be maintained about hazardous materials used or produced in operations and that this information be provided to employees, state and local government authorities and citizens. We may also become subject to OSHA Process Safety Management regulations, which are designed to prevent or minimize the consequences of catastrophic releases of toxic, reactive, flammable or explosive chemicals. We will take measures to ensure that our operations are in substantial compliance with OSHA requirements, including general industry standards, record keeping requirements, and monitoring of occupational exposure to regulated substances.

### Employees

As of April 30, 2023, we had no employees but rather to reduce costs our key management team is working under consulting agreements. We contract for all professional services when needed.

### Legal Proceedings

See Item 3 of this Report.

## Properties

As filed, 388 characters.

Our office address for mailing purposes is 3616 Far West Blvd. #117-321, Austin, Texas 78731. Our executive physical office is located at 3600 Dickinson, Fort Stockton, Texas, 79735 near the sites of our proposed clean fuels and hydrogen projects.

We own a total of approximately 1,043.25 acres in Pecos County, Texas that are the sites for our planned clean fuels and hydrogen projects.

## Legal proceedings

As filed, 1,953 characters.

The Company previously issued a convertible note dated February 25, 2023 (the “Sabby Note”) to Sabby Volatility Warrant Master Fund, Ltd. (“Sabby”), which also holds the Company’s Series B Preferred Stock and substantial warrants to purchase shares of the Company’s common stock. On June 1, 2023, the Company was served notice that Sabby had filed a lawsuit in a New York Supreme Court, alleging breach of contract, fraud, and failure to maintain and deliver shares under the Sabby Note. Sabby is seeking monetary damages in an amount to be determined at trial, but not less than $226,875 plus interest and other damages under the Sabby Note, plus attorney’s fees and costs of the lawsuit. The Company filed its Original Answer on July, 1, 2023 pursuant to 22 New York Rules and Regulation 202.8 B, denying each and every material allegation contained in Plaintiff’s Complaint and demanded strict proof thereof. In its Original Answer, the Company reserves the right to amend its Answer to assert additional defenses, counterclaims and third-party claims, as may be required upon the completion of reasonable discovery and investigation.

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As a consequence of the Sabby Note acceleration, the Company’s obligations under other outstanding indebtedness may become accelerated pursuant to the event of default provisions thereunder. Some of these instruments are already past due and reflected as notes currently in default on the Company’s financial statements.

The Company does not have the cash resources to repay the Sabby Note or its other outstanding indebtedness and there is no assurance that it will be able to obtain sufficient capital to do so. The Company has disclosed that its ability to continue as a going concern should be considered in light of the problems, expenses and complications frequently encountered by entrance into established and emerging markets and the competitive environment in which it operates.

## Management's discussion and analysis

As filed, 14,622 characters.

*Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Special Note Regarding Forward-Looking Statements and Business sections in this Annual Report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.*

*The following discussion and analysis constitutes forward-looking statements for purposes of the Securities Act and the Exchange Act and as such involves known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The words “expect”, “estimate”, “anticipate”, “predict”, “believes”, “plan”, “seek”, “objective” and similar expressions are intended to identify forward-looking statements or elsewhere in this report. Important factors that could cause our actual results, performance or achievement to differ materially from our expectations are discussed in detail in Item 1 above. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by such factors. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Notwithstanding the foregoing, we are not entitled to rely on the safe harbor for forward looking statements under 27A of the Securities Act or 21E of the Exchange Act as long as our stock is classified as a penny stock within the meaning of Rule 3a51-1 of the Exchange Act. A penny stock is generally defined to be any equity security that has a market price (as defined in Rule 3a51-1) of less than $5.00 per share, subject to certain exceptions.*

The following discussion should be read in conjunction with the Consolidated Financial Statements, including the notes thereto.

### Overview

### Business Overview

Since 2016, the focus of our business has been to build crude oil distillation units and refining facilities (CDUs) in the Permian Basin in West Texas. We revised our business plan in 2021 to move MMEX to clean energy production, leveraging our history, management and business relationships from the traditional energy sector.

Since 2021 MMEX has expanded its focus to the development, financing, construction and operation of clean fuels infrastructure projects powered by renewable energy. We have formed two operating sub-divisions of the Company - one sub-division to transition from legacy refining transportation fuels by producing them as ultra clean fuels with carbon capture or as stand-alone renewable or clean fuels projects, and the second sub-division which plans to produce green and/or blue hydrogen with the option for conversion of hydrogen to ammonia or methanol. These two sub-divisions will be operating respectively as Clean Energy Global, LLC and Hydrogen Global, LLC. The planned projects are designed to be powered by solar and wind renewable energy.

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Through April 30, 2023, we have had no revenues and have reported continuing losses from operations.

### Results of Operations

We recorded a net loss of $4,513,882 or $(0.05) per share, for fiscal year ended April 30, 2023, compared to a net loss of $228,730 or $(0.02) per share, for the fiscal year ended April 30, 2022. As discussed below, the net income or loss for any fiscal year fluctuates materially due to non-operating gains and losses.

### Revenues

We have not yet begun to generate revenues.

### General and Administrative Expenses

Our general and administrative expenses increased $386,377 to $1,680,049 for the year ended April 30, 2023 from $1,293,672 for the year ended April 30, 2022. The increase resulted from higher professional fee costs, which included increased costs for consulting services.

### Project Costs

Our project costs decreased $1,540,186 to $94,556 for the year ended April 30, 2023 from $1,637,742 for the year ended April 30, 2022. The levels of spending on our projects will vary from period to period based on availability of financing and will be expensed as project costs are incurred. During the year ended April 30, 2023, the decrease in project costs was because we did not have funding available to invest in our projects during the current year.

### Depreciation and Amortization Expense

Our depreciation and amortization expenses increased $517 to $36,394 for the year ended April 30, 2023 from $35,877 for the year ended April 30, 2022. The expense results from the depreciation of land improvements and amortization of land easements.

### Other Income (Expense)

Our interest expense decreased $282,891 to $234,893 for the year ended April 30, 2023 from $517,784 for the year ended April 30, 2022. Despite having entered into new convertible debt agreements in the last few months of the year, the decrease in interest expense is attributed to debt being paid off, converted into shares of common stock and more favorable interest rates than in prior years.

For the years ended April 30, 2023 and 2022, we reported gains on derivative liabilities of $0 and 3,010,042, respectively. In a series of subscription agreements, we issued warrants in prior years that contained certain anti-dilution provisions that we have identified as derivatives. We also identified the variable conversion feature of certain convertible notes payable as derivatives. We estimated the fair value of the derivatives using multinomial lattice models that value the warrants based on a probability weighted cash flow model using projections of the various potential outcomes. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility and management’s estimates of various potential equity financing transactions. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material. During the year ended April 30, 2022 all derivative liabilities were written off the books, resulting in a large gain in the prior year.

We reported a gain on extinguishment of debt of $66,413 for the year ended April 30, 2023 compared to a gain on extinguishment of debt of $243,303 for the year ended April 30, 2022. The gain on extinguishment of debt generally results from the settlement and extinguishment of convertible notes payable and certain accounts payable and accrued expenses and can fluctuate over time as we are able to settle or pay off debt.

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### Net Income (Loss)

As a result of the above, we reported net losses of $1,979,480 and $228,730 for the years ended April 30, 2023 and 2022, respectively.

### Deemed Dividend

Effective June 7, 2022 we reduced the conversion price of our Series B preferred stock from $0.10 to $0.05. This resulted in the recognition of a deemed dividend of $2,534,402 during the year ended April 30, 2023 in order to account for the change in fair value of the Series B preferred stock.

### Net Income (Loss) Attributable to Common Shareholders

As a result of the deemed dividend, our net loss attributed to common shareholders was $4,513,882 for the year ended April 30, 2023. We had no similar activity during the year ended April 30, 2022, therefore net loss attributed to the Company was the same as net loss of $228,730.

### Liquidity and Capital Resources

### Working Capital

As of April 30, 2023, we had current assets of $34,363, comprised of cash of $10,363 and prepaid expenses and other current assets of $24,000, and current liabilities of $3,977,489, resulting in a working capital deficit of $3,943,126.

### Sources and Uses of Cash

Our sources and uses of cash for the years ended April 30, 2023 and 2022 were as follows:

|  | 2023 | 2022 |
| --- | ---: | ---: |
| Cash, Beginning of Year | $136,867 | $330,449 |
| Net Cash Used in Operating Activities | (682,004) | (3,402,572) |
| Net Cash Used in Investing Activities | - | (677,905) |
| Net Cash Provided by Financing Activities | 555,500 | 3,886,895 |
| Cash, End of Year | $10,363 | $136,867 |

We used net cash of $682,004 in operating activities for the year ended April 30, 2023 as a result of our net loss of $1,979,480, our non-cash gains of $66,412, our increase in accounts payable of $94,075, and our increase in accounts payable and accrued expenses - related parties of $198,488, our increase in accrued expenses of $409,939, partially offset by non-cash expenses totaling $638,053 and our decrease in prepaid expenses and other current assets of $23,333.

In comparison, we used net cash of $3,402,572 in operating activities for the year ended April 30, 2022 as a result of our net loss of $228,730, our non-cash gains of $3,253,345, our increase in prepaid expenses and other current assets of $9,440, our increase in accounts payable of $116,276, and our increase in accounts payable and accrued expenses - related parties of $156,064, partially offset by non-cash expenses totaling $279,887, a decrease in our deposit of $900, and an increase in accrued expenses of $80,496.

Net cash used in investing activities was $0 and $677,905 for the years ended April 30, 2023 and 2022, respectively, comprised on the purchase of property and equipment.

Net cash provided by financing activities was $555,500 for the year ended April 30, 2023, comprised of proceeds from notes payable of $15,000, proceeds from convertible notes payable of $552,500, and proceeds from the sale of common of $41,209, partially offset by repayments of convertible notes payable of $41,209, and the payment of $12,000 in offering costs.

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By comparison, net cash provided by financing activities was $3,886,895 for the year ended April 30, 2022, comprised of proceeds from notes payable of $352,500, proceeds from convertible notes payable of $233,500, proceeds from the sale of common and series B preferred stock and warrants of $4,500,000, and proceeds from warrant exercise of $73, partially offset by repayments of notes payable of $388,048, repayments of convertible notes payable of $255,331, and the payment of $555,799 in offering costs.

### Going Concern Uncertainty

Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred continuous losses from operations, have an accumulated deficit of $72,727,305 and a total stockholders’ deficit of $2,865,323 at April 30, 2023, and have reported negative cash flows from operations since inception. In addition, as of April 30, 2023 we did not have the cash resources to meet our operating commitments for the next twelve months. We require capital investments to implement our business plan, including the development of our planned hydrogen projects. Additionally, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which we operate.

We expect to continue to seek additional funding through private or public equity and debt financing. Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. However, there can be no assurance that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by our operations will be adequate to meet our needs. These factors, among others, raise substantial doubt that we will be able to continue as a going concern for a reasonable period of time.

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

### Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

### Critical Accounting Policies

Our results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to inventories, investments, intangible assets, income taxes, financing operations, and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

For further information on our significant accounting policies see the notes to our consolidated financial statements included in this Annual Report. There were no material changes to our significant accounting policies during the year ended April 30, 2023 and there are no policies we deem to be critical accounting policies.

## Market risk

As filed, 127 characters.

As a smaller reporting company, we are not required to provide the information required by this item.

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## Controls and procedures

As filed, 4,742 characters.

### Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of April 30, 2023, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

### Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of April 30, 2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Based on our evaluation, management concluded that we maintained effective internal control over financial reporting as of April 30, 2023, based on the COSO framework criteria. Management believes our processes and controls are sufficient to ensure the consolidated financial statements included in this Form 10-K were fairly stated in accordance with U.S. GAAP.

### Changes in Internal Control Over Financial Reporting

Management has made changes to the Company’s internal control over financial reporting through the date of this report and/or through the quarter ended April 30, 2023, that materially affected the Company’s internal control over financial reporting. Specifically, management increased its accounting personnel and made numerous changes to its accounting processes which resulted in a segregation of duties and the implementation of reviews and monitoring activities which have added controls into the accounting processes and improved our financial reporting. Additionally, management established a formal written policy for the approval, identification, and authorization of related party transactions.

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### Limitations on Effectiveness of Controls and Procedures

Our management does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

### Independent Registered Accountant’s Internal Control Attestation

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Filed Jul 17, 2023.
Source: SEC EDGAR, the filing index for accession 0001477932-23-005360. Last ingested by Listed: Nov 5, 2026, 12:23 ET. No prices; not investment advice.