MMEX 10-K & 10-Q changes, risk factors and insider trading

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 threetwo 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.

Our general and administrative expenses increaseddecreased $139,580$150,663 to $1,245,085 for the year ended April 30, 2026 from $1,395,748 for the year ended April 30, 2025 from $1,256,168 for the year ended April 30, 2024.2025. The increasedecrease resulted from a combination of higherlower consultant fee costs offset by lowerslightly higher legal fees..fees.

Our project costs decreasedincreased $6,421$74,818 to $80,248 for the year ended April 30, 2026 from $5,430 for the year ended April 30, 2025 from $11,851 for the year ended April 30, 2024.2025. 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, 2025,2026, the decreaseincrease in project costs was becausedue weto did not haveincreased funding available to invest in our projects during the current year.

Our interest expense increaseddecreased $120,898$207,650 to $254,022 for the year ended April 30, 2026 from $461,672 for the year ended April 30, 2025 from $340,774 for the year ended April 30, 2024.2025. The increasedecrease is attributed to newprior debt agreements andyear debt issued with debt discounts being fully amortized to interest expense and debt and accrued interest converted into common stock during the prior year ended April 30, 2025.

We reported a loss on extinguishment of debt of $400,214$297,552 for the year ended April 30, 20252026 compared to a$400,214 loss on extinguishment of debt of $819,346 for the year ended April 30, 2024.2025. 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.

As a result of the deemednon-controlling dividend,interest in the Company’s subsidiaries, our net loss attributed to common shareholders was $2,299,458$1,908,820 and $8,194,086$2,299,458 for the years ended April 30, 20252026 and 2024,2025, respectively.

We used net cash of $380,107$506,813 in operating activities for the year ended April 30, 20252026 as a result of our net loss of $2,299,458,$1,913,301, our non-cash losses of $400,214, our increasedecrease in accounts payable of $212,287,$14,685, and our increase in accounts payable and accrued expenses – related parties of $757,331,$853,517, our increase in accrued expenses of $247,058,$250,027, our increase in non-cash expenses totaling $302,961$406,119 and our decreaseincrease in prepaid expenses and other current assets of $500.$88,490.

Net cash provided by financing activities was $383,788$714,577 for the year ended April 30, 2025,2026, comprised of proceeds from notes payable – related parties of $429,776 and$219,570, proceeds from convertible notes payable – related parties of $1,300$7,990, partiallyand proceeds from the sale of non-controlling interests of $500,000 offset by repayments of notes payable of $15,728 and repayments of notes payable – related parties of $31,560.$12,983.

By comparison, net cash provided by financing activities was $483,527$383,788 for the year ended April 30, 2024,2025, 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$429,776 and proceeds from convertible notes payable – related parties of $50,000$1,300 partially offset by repayments of convertible notes payable of $158,790, repayments of notes payable of $13,685$15,728 and repayments of notes payable – related parties of $7,198.$31,560.

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

The Company has teamed with Polaris Engineering to develop an ultra-clean transportation fuels refinery,refinery complex, up to 11,60060,000 barrelbarrels per day federate crude oil refining facility at our Pecos County, Texas site.sites. The planned product slate will consist ofbe transportation grade finished products, including zero sulfur 87° gasoline, ultra-low sulfur dieseldiesel. and low-sulfur fuel oil. In addition, to finished products, theThe 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.sites. 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, alsowill allowedallow for faster permitting which we obtainedplan to obtain for this facility from the Texas Commission on Environmental QualityQuality. onOn FebruaryJuly 18,24, 2022.2026, the TCEQ issued the permit for the first 30,000 barrel per day complex.

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 gasgas. in Phase 1. In Phase 2 weWe plan to convert the natural gas into hydrogen utilizing a major international company’s reformer technology, with the existing gas turbines modifiedable 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 datapower center or dispatchedoff-taker 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 UltraClean Refining 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 termsterms.

We expense the direct costs incurred on our projects, including acquisition of rights, planning, design and permitting. The levels of spending on our projects will vary from period to period based on availability of financing. We had noOur project costs have decreased to $0 for the three months ended JanuaryJuly 31, 2026 and January 31, 2025. Our project costs increased tofrom $60,500 for the ninethree months ended January 31, 2026 from $5,430 for the nine months ended JanuaryJuly 31, 2025. The increasedecrease is a result of timing of costs on our Cordillera Solar project during the ninethree months ended JanuaryJuly 31, 20262025 versus the Trans Permian H2Hubno project costs during the ninethree months ended JanuaryJuly 31, 2025.2026.

Our depreciation and amortization expense results from the depreciation of office and computer equipment, land improvements and amortization of land easements and totaled to $9,099$9,694 and $9,097 for the three months ended January 31, 2026 and 2025, respectively and totaled $27,296 for the nine months ended JanuaryJuly 31, 2026 and 2025, respectively.

Our interest expense includes interest accrued on debt, amortization of debt discount and penalties assessed on debt. Interest expense totaled $58,112$66,847 and $204,055$67,602 for the three months ended January 31, 2026 and 2025, respectively and totaled $183,401 and $378,384 for the nine months ended JanuaryJuly 31, 2026 and 2025, respectively. The decrease in interest expense is due to new non-related party notes payable and related party notes payable in the current period, as a result of borrowing funds to assist with cash flows, containing provisions in lieu of interest. Additionally, the debt also resulted inless amortization of debt discount to interest expense incurred in the period.current period as a result of no new loan agreements entered into in the current period as compared to the same period of the prior year. In addition, as a result of settlements of debt, the Company recognized a gain on settlement of debt of $161,937 during the current period as compared to none in the same period of the prior year.

As a result of the above, we reported net income (loss) of $(349,850854,294) and $(531,555436,139) for the three months ended January 31, 2026 and 2025, respectively and ($1,150,687) and ($1,458,224) for the nine months ended JanuaryJuly 31, 2026 and 2025, respectively.

As of JanuaryJuly 31, 2026, we had current assets of $14,712,$2,362,364, comprised of cash and prepaid expenses, and current liabilities of $5,708,027,$5,752,035, resulting in a working capital deficit of $5,693,315.$3,389,671.

Our sources and uses of cash for the ninethree months ended JanuaryJuly 31, 2026 and 2025 were as follows:

We used net cash of $144,982$1,548,280 in operating activities for the ninethree months ended JanuaryJuly 31, 2026 as a result of our net loss of $1,150,687,$854,294, ana $161,937 gain on settlement of debt, a $615,371 increase in prepaid expensesexpense, and a decrease of $9,784,$27,850 in accrued expenses offset by non-cash net expense totaling $95,415,$14,598, and increases in accounts payable, accrued expenses, and accounts payable and accrued expenses - related party of $920,074.$96,574.

We used net cash of $386,105$8,900 in operating activities for the ninethree months ended JanuaryJuly 31, 2025 as a result of our net loss of $1,458,224,$436,139, anoffset increaseby a decrease in prepaid expenses of $3,000, offset by$500, non-cash net expense totaling $262,157,$70,866, and increases in accounts payable, accrued expenses, and accounts payable and accrued expenses - related party of $812,962.$355,873.

NetWe used net cash usedof $11,929 in investing activities for the ninethree months ended JanuaryJuly 31, 2026 andas 2025a wasresulting $0.of purchasing computers.

Net cash provided by financing activities for the ninethree months ended JanuaryJuly 31, 20252026 was $385,207,$3,002,869, comprised of overdraft advance of $53, proceeds from notesthe payable – related partiessale of $429,776,non-controlling interests of $3,800,000 offset by repayments of notes payable of $13,062$61,140, andrepayments repaymentof convertible notes payable of $268,955, repayments of notes payable – related parties and convertible notes payable – related parties of $31,560.$467,036.

For further information on our significant accounting policies see the notes to our consolidated financial statements included in ourthis Annual Report on Form 10-K for the year ended April 30, 20252026 filed with the SEC and Note 2 to our condensed consolidated financial statements included in this quarterly report. There were no material changes to our significant accounting policies during the ninethree months ended JanuaryJuly 31, 2026.2026 and there are no policies we deem to be critical accounting policies.