MMEX Resources Corp: Form 10-K for the period ended Apr 30, 2025

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 Resources Corporation.

MMEX is focused on the development, financing, construction, and operation of clean fuels infrastructure projects powered by renewable energy. MMEX has formed special purpose limited liability companies to implement its planned projects.

Pecos Clean Fuels & Transport, LLC

The Company has teamed with Polaris Engineering to develop an ultra-clean transportation fuels refinery, up to 11,600 barrel per day federate crude oil refining facility at our Pecos County, Texas site. The planned product slate will consist of transportation grade finished products, including zero sulfur 87° gasoline, ultra-low sulfur diesel and low-sulfur fuel oil. In addition, to finished products, the Ultra Fuel® configuration has expected criteria pollutant emissions that are on the order of 95% lower than those of a traditional refinery in the US Gulf Coast. A companion project planned by MMEX, is a Blue Hydrogen project, converting natural gas to hydrogen to produce power and if implemented will provide the refinery with hydrogen for fuel gas and thus eliminate CO2 emissions. The Ultra Fuels® configuration, with capex and technical details completed in the Front-End Load-2 (“FEL-2”) engineering package, features modular design features to take advantage of proximity to Permian Basin fuel markets and to 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-frame and more rapid implementation. The modular concept with reduced footprint, as well as lower emissions, also allowed for faster permitting which we obtained for this facility from the Texas Commission on Environmental Quality on February 18, 2022.

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Trans Permian H2Hub, LLC

The Company is in planning discussions with a super major oil company (the “Super Major”) to utilize its natural gas in the Permian Basin to develop a Natural Gas to Power Project at the Company’s Pecos County, Texas site. The Project plans to utilize a portion of the Super Major’s significant natural gas production and transportation from the Permian in gas turbines and generators in a combined cycle configuration to produce electric power with 100% natural gas in Phase 1. In Phase 2 we plan to convert the natural gas into hydrogen utilizing a major international company’s reformer technology, with the existing gas turbines modified to utilize initially 75% hydrogen and 25% natural gas to generate electric power. The produced electric power in both Phases may be dispatched to a data center or dispatched to ERCOT Far West, the Texas power regional pricing and trading hub, or both. The project design also includes a CO2 capture and production facility with the CO2 marketed to another Super Major oil company. The Project plans to utilize wind and solar power as its source of energy. Additionally, the Project plans to utilize its hydrogen production as fuel gas for the Pecos Clean Fuels & Transport refinery project, and this fuel gas will generate zero CO2 emissions from the refinery.

Completion of these 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

Our Pecos Clean Fuels project already has a construction permit from the TCEQ and does not require an operation permit. Although we do not believe our planned natural gas and hydrogen power 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”) construction and operation permits for the Trans Permian Projects. We expect to employ carbon capture with the blue hydrogen in Phase 2 and have under discussion with a super major oil company the sequestration of the CO2 for EOR, which already has the requisite permits.

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.

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Employees

As of April 30, 2025, 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.

Because the Company has not yet commenced revenue producing activities, cybersecurity threats have not materially affected, and are not reasonably likely to affect, the Company. Accordingly, the Company has not yet implemented any cybersecurity plans or made any evaluation of potential cybersecurity threats. The occurrence of cyber-incidents, or a deficiency in our cybersecurity or in those of any of our third-party service providers could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information and systems, or damage to our business relationships or reputation, all of which could negatively impact our business and results of operations. There can be no assurance that the Company’s third-party vendors’ and service providers’ cybersecurity risk management processes, including their policies, controls or procedures, will be effective in protecting the Company’s systems and information.

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 1,081.45 acres in Pecos County, Texas that are the sites for our planned clean fuels and hydrogen projects.

Sabby Volatility Warrant Master Fund, Ltd. (“Sabby”) commenced litigation against us in a New York State Court, alleging the Company’s breach of contract, fraud, and failure to maintain and deliver shares under the convertible note previously issued by the Company to Sabby. Sabby also holds the Company’s Series B Preferred Stock and substantial warrants to purchase shares of our Common Stock. During September 2023, the court granted Sabby’s request for an order (i) granting specific performance of Sabby’s past and future requests for conversion, (ii) enjoining the Company from issuing shares of its Common Stock until it has complied with the order and (iii) directing the Company’s transfer agent to take all actions necessary to enforce the order, including reserving shares issuable upon Sabby’s conversion of its outstanding note payable.

Sabby subsequently sought and obtained a default order of contempt, entered on October 20, 2023, which among other matters cited the Company’s failure to transfer shares without restriction and to reserve a sufficient number of shares of Common Stock to honor Sabby’s potential conversions of its convertible note, Series B Preferred Stock and warrants. Upon the Company’s motion to vacate the contempt order, the court vacated the contempt order on December 5, 2023.

On May 6, 2024, Sabby filed for an order of contempt against the Company for not complying with the Court’s Order issued September 13, 2023. The Company agreed in a Stipulation Resolving Motion for Contempt filed on June 10, 2024 with Sabby to increase its authorized shares reserves to 35 billion shares and to place into reserves for Sabby conversions, 10 billion shares. On July 17, 2024, the Parties agreed to a Stipulation withdrawing the Motion for Contempt. The litigation has entered the discovery phase pursuant to the court’s orders.

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 three special purpose entities of the Company - one to transition from legacy refining transportation fuels by producing them as ultra clean fuels with carbon capture, a second which plans to produce electric power from natural gas in Phase 1 and to implement in Phase 2 utilization of the natural gas to produce hydrogen and power. The planned projects are designed to be powered by solar and wind renewable energy. We continue to review implementation of our clean fuels technology internationally.

Through April 30, 2025, we have had no revenues and have reported continuing losses from operations.

Results of Operations

We recorded a net loss of $2,299,458 or $(0.0002) per share, for fiscal year ended April 30, 2025, compared to a net loss of $8,194,086 or $(0.0011) per share, for the fiscal year ended April 30, 2024. 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.

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General and Administrative Expenses

Our general and administrative expenses increased $139,580 to $1,395,748 for the year ended April 30, 2025 from $1,256,168 for the year ended April 30, 2024. The increase resulted from a combination of higher consultant fee costs offset by lower legal fees..

Project Costs

Our project costs decreased $6,421 to $5,430 for the year ended April 30, 2025 from $11,851 for the year ended April 30, 2024. 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, 2025, 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 were unchanged at $36,394 for the years ended April 30, 2025 and 2024 respectively. The expense results from the depreciation of land improvements and amortization of land easements.

Other Income (Expense)

Our interest expense increased $120,898 to $461,672 for the year ended April 30, 2025 from $340,774 for the year ended April 30, 2024. The increase is attributed to new debt agreements and debt issued with debt discounts being amortized to interest expense during the year ended April 30, 2025.

We reported a loss on extinguishment of debt of $400,214 for the year ended April 30, 2025 compared to a loss on extinguishment of debt of $819,346 for the year ended April 30, 2024. The gain/loss 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.

Net Income (Loss)

As a result of the above, we reported net losses of $2,299,458 and $2,464,533 for the years ended April 30, 2025 and 2024, respectively.

Deemed Dividend

During the year ended April 30, 2024 the conversion price of our Series B preferred stock was reduced from $0.05 to $0.000058 per share, which resulted in the recognition of a deemed dividend of $5,729,553 during the year ended April 30, 2024 in order to account for the change in fair value of the Series B preferred stock. During the year ended April 30, 2025 the conversion price of our Series B preferred stock remained at $0.000058, therefore no deemed dividend was recorded for the year ended April 30, 2025.

Net Income (Loss) Attributable to Common Shareholders

As a result of the deemed dividend, our net loss attributed to common shareholders was $2,299,458 and $8,194,086 for the years ended April 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

Working Capital

As of April 30, 2025, we had current assets of $8,079, comprised of cash of $4,579 and prepaid expenses and other current assets of $3,500, and current liabilities of $4,795,043, resulting in a working capital deficit of $4,786,964.

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Sources and Uses of Cash

Our sources and uses of cash for the years ended April 30, 2025 and 2024 were as follows:

We used net cash of $380,107 in operating activities for the year ended April 30, 2025 as a result of our net loss of $2,299,458, our non-cash losses of $400,214, our increase in accounts payable of $212,287, and our increase in accounts payable and accrued expenses – related parties of $757,331, our increase in accrued expenses of $247,058, our increase in non-cash expenses totaling $302,961 and our decrease in prepaid expenses and other current assets of $500.

In comparison, we used net cash of $492,992 in operating activities for the year ended April 30, 2024 as a result of our net loss of $2,464,533, our non-cash losses of $819,346, our increase in accounts payable of $107,745, and our increase in accounts payable and accrued expenses – related parties of $769,583, our increase in accrued expenses of $66,914, our increase in non-cash expenses totaling $186,953 and our decrease in prepaid expenses and other current assets of $21,000.

We had no cash used in investing activities for the years ended April 30, 2025 and 2024, respectively.

Net cash provided by financing activities was $383,788 for the year ended April 30, 2025, comprised of proceeds from notes payable – related parties of $429,776 and proceeds from convertible notes payable – related parties of $1,300 partially offset by repayments of notes payable of $15,728 and repayments of notes payable – related parties of $31,560.

By comparison, net cash provided by financing activities was $483,527 for the year ended April 30, 2024, comprised of proceeds from notes payable of $395,000, proceeds from notes payable – related parties of $108,200, proceeds from convertible notes payable of $110,00 and proceeds from convertible notes payable – related parties of $50,000 partially offset by repayments of convertible notes payable of $158,790, repayments of notes payable of $13,685 and repayments of notes payable – related parties of $7,198.

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 $83,220,849 and a total stockholders’ deficit of $5,982,885 at April 30, 2025, and have reported negative cash flows from operations since inception. In addition, as of April 30, 2025 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.

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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, 2025 and there are no policies we deem to be critical accounting policies.

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, 2025, 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, 2025. 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, 2025, 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, 2025, 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.

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.