UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form

FORM 10-Q


(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period endedJanuary October 31, 2013

¨


oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____


____________.

Commission file numbernumber: 333-152608


MMEX MINING CORPORATION
 (Exact name of registrant as specified in its charter)

Nevada26-1749145

MMEX RESOURCES CORPORATION

(Exact name of Issuer as specified in its charter)

Nevada

26-1749145

(State or other jurisdictionJurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

incorporation or organization)

Identification No.)

3616 Far West Blvd. #117-321

Austin, Texas 78731

855-880-0400

2626 Cole Avenue, Suite 600
Dallas, Texas75204

(Address of principal executive offices)offices, including zip code)

(Zip Code)Issuer’s telephone number, including area code)


Registrant’s telephone number, including area code (214) 880-0400

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x¨ No ox


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive DateData File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to submit and post such files). Yes o¨ No x


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

o

¨

Accelerated filer

o

¨

Non-accelerated filer

o

¨

Smaller reporting company

x

(Do not check if a smaller reporting company)

Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes o¨ No x

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨


The

Applicable only to corporate issuers:

Indicate the number of shares outstanding of Common Stock,each of the issuer’s classes of common stock, as of the latest practicable date. As of November 15, 2016, there were 426,568,410 shares of common stock, $0.001 par value, $0.01 per share, outstanding as of March 13, 2013 was 57,188,313.issued and outstanding.






MMEX MINING CORPORATION & SUBSIDIARIES
INDEX TO QUARTERLY REPORT
January 31, 2013

Part I.Financial Information 
 
Item 1.Unaudited Condensed Consolidated Financial Statements3
 

MMEX RESOURCES CORPORATION

TABLE OF CONTENTS

QUARTER ENDED OCTOBER 31, 2013

PART I – FINANCIAL INFORMATION

Unaudited Condensed Consolidated Balance Sheets

3
Item 1.

Financial Statements

3

Unaudited Condensed Consolidated Statements of Operations4
Unaudited Condensed Consolidated Statement of Stockholder’s Equity (Deficit)5
Unaudited Condensed Consolidated Statements of Cash Flows6
Notes to Unaudited Condensed Consolidated Financial Statements8
Item 2.

20

30
Item 3.

Quantitative and Qualitative Disclosures About Market Risk

24

35
Item 4.
Item 4T.

Controls and Procedures

24

36

Part II.

PART II – OTHER INFORMATION

Other Information

Item 1.

Legal Proceedings

26

37
Item 1A.

Risk Factors

26

Item 1A.Risk Factors37
Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

26

Item 3.37

Defaults Upon Senior Securities

26

Item 4.

Mine Safety Disclosures

26

Item 5.

Other Information

26

Item 6.

Exhibits

27

 
2
Item 3.Defaults upon Senior Securities37
 

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

The accompanying condensed consolidated financial statements of MMEX Resources Corporation and subsidiaries (the “Company”) are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

Operating results and cash flows for any interim period are not necessarily indicative of the results that may be expected for other interim periods or the full fiscal year. These condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended April 30, 2013 filed with the Securities and Exchange Commission (“SEC”).


Item 4.3
Mining Safety Disclosures37
Item 5.Other Information37
Item 6.Exhibits and Reports on Form 8-K38
Signatures39Table of Contents

2

ITEM 1.   UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MMEX MINING CORPORATION
(An Exploration Stage Company)
Consolidated Balance Sheets
  January 31,  April 30, 
  2013  2012 
Assets (Unaudited)  (Audited) 
       
Current assets:      
Cash $1,265  $163,673 
Prepaid Legal Fees  -   5,994 
Other assets - loan costs, current  20,000   10,000 
Total current assets  21,265   179,667 
         
Property and equipment, net  13,942   17,034 
         
Other assets:        
Deferred loan costs - long term  21,322   28,822 
Deposits  10,000   14,696 
Investment accounted for under equity method in property  7,006,722   7,287,705 
         
Total Assets $7,073,251  $7,527,924 
         
Liabilities and Stockholders' (Deficit)        
         
Current liabilities:        
Accounts payable $700,374  $419,486 
Accounts payable - related party  22,957   8,033 
Accrued expenses  523,627   536,603 
Accrued expenses - related party  706,964   446,274 
Due on investment in property  3,000,000   3,000,000 
Notes payable, currently in default  300,000   300,000 
Notes payable - related party  -   290,000 
Convertible notes, currently in default  75,000   75,000 
Convertible notes, net of discount of $272,680 and $103,619        
   at January 31, 2013 and April 30, 2012, respectively  1,617,329   558,181 
Convertible notes, net of discount of $5,528 and $0 at        
   January 31, 2013 and April 30, 2012, respectively - related party  23,272   - 
Convertible preferred stock, currently in default  137,500   137,500 
 Total current liabilities  7,107,023   5,771,077 
         
Long-term liabilities:        
Convertible notes, net of discount of $0 and $585,367        
at January 31, 2013 and April 30, 2012, respectively  -   1,064,633 
Preferred stock - mandatory redemption right, net of $824,930 and        
$959,424 discount at January 31, 2013 and April 30, 2012, respectively  175,070   40,418 
         
Total Liabilities  7,282,093   6,876,128 
         
Stockholders' (Deficit):        
Common stock, $0.001 par value, 200,000,000 shares authorized,        
55,988,313 and 45,269,055 shares issued and outstanding        
at January 31, 2013 and April 30, 2012, respectively  559,882   452,690 
Common stock payable  30,000   518,289 
Additional paid in capital  19,345,783   16,751,775 
Non-controlling interest  (303,045)  (290,241)
Accumulated (deficit) during the exploration stage  (19,841,462)  (16,780,717)
Total Stockholders' (Deficit)  (208,842)  651,796 
         
Total Liabilities and Stockholders' (Deficit) $7,073,251  $7,527,924 

MMEX RESOURCES CORPORATION

Condensed Consolidated Balance Sheets

 

 

October 31,
2013

 

 

April 30,
2013

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$195

 

 

$729

 

Deferred loan costs – short term

 

 

10,000

 

 

 

10,000

 

Total current assets

 

 

10,195

 

 

 

10,729

 

Property and equipment, net

 

 

10,189

 

 

 

12,692

 

 

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

Deferred loan costs – long term

 

 

13,822

 

 

 

18,822

 

Deposits

 

 

10,000

 

 

 

10,000

 

 

 

 

 

 

 

 

 

 

Total assets

 

$44,206

 

 

$52,243

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$655,881

 

 

$640,589

 

Accounts payable – related party

 

 

8,033

 

 

 

8,033

 

Accrued expenses

 

 

1,000,019

 

 

 

660,355

 

Accrued expenses – related party

 

 

965,492

 

 

 

706,004

 

Notes payable, currently in default

 

 

375,000

 

 

 

375,000

 

Convertible notes payable, net of discount of $11,525 and $208,250 at October 31, 2013 and April 30, 2013, respectively

 

 

2,133,475

 

 

 

1,936,750

 

Convertible notes payable – related party, net of discount of $235 and $3,674 at October 31, 2013 and April 30, 2013, respectively

 

 

81,910

 

 

 

23,830

 

Convertible preferred stock, currently in default

 

 

137,500

 

 

 

137,500

 

Total current liabilities

 

 

5,357,310

 

 

 

4,488,061

 

 

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Preferred stock – mandatory redemption right, net of discount of $732,518 and $798,362 at October 31, 2013 and April 30, 2013, respectively

 

 

267,482

 

 

 

201,638

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

5,624,792

 

 

 

4,689,699

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Common stock; $0.001 par value, 1,000,000,000 shares authorized, 57,188,313 shares issued and outstanding at October 31, 2013 and April 30, 2013

 

 

57,189

 

 

 

57,189

 

Common stock payable

 

 

90,000

 

 

 

90,000

 

Additional paid-in capital

 

 

20,215,284

 

 

 

20,215,284

 

Non-controlling interest

 

 

(361,997)

 

 

(361,324)

Accumulated (deficit)

 

 

(25,581,062)

 

 

(24,638,605)

Total stockholders’ deficit

 

 

(5,580,586)

 

 

(4,637,456)

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$44,206

 

 

$52,243

 

See accompanying notes to condensed consolidated financial statements.

3


MMEX MINING CORPORATION
(An Exploration Stage Company)4
Consolidated StatementsTable of Operations
Contents

              For the period 
  For the  For the  May 23, 2007(Inception) 
  three months ended  nine months ended   through 
  January 31,  January 31,  January 31, 
  2013  2012  2013  2012  2013 
Revenue:               
Revenues $-  $-  $-  $-  $10,000 
                     
Operating Expenses:                    
Exploration and development  -   -   -   1,894   3,207,262 
General and administrative  112,635   120,061   257,548   523,661   4,737,851 
Payroll and taxes  106,357   120,051   342,702   367,622   2,664,203 
Professional fees  140,798   110,237   680,757   274,899   4,914,544 
Impairment expense  -   -   -   932,454   2,762,454 
Depreciation and amortization  1,263   1,219   3,743   3,614   22,759 
Total operating expenses  361,053   351,568   1,284,750   2,104,144   18,309,073 
                     
Net operating (loss)  (361,053)  (351,568)  (1,284,750)  (2,104,144)  (18,299,073)
                     
Other income (expense):                    
Interest income  -   -   -   -   59 
Gain on disposition of property  -   -   -   -   2,592,023 
Loss on debt conversion  -   (53,453)  (441,960)  (53,453)  (462,345)
Loss on investment in property  (69,310)  -   (280,983)  -   (293,278)
Loss on disposal of fixed assets  -   -   -   (3,651)  (15,003)
Interest expense  (302,223)  (264,462)  (1,065,856)  (1,433,471)  (5,125,492)
Total other income (expense)  (371,533)  (317,915)  (1,788,799)  (1,490,575)  (3,304,036)
                     
Net (loss) before non-controlling interest  (732,586)  (669,483)  (3,073,549)  (3,594,719)  (21,603,109)
                     
Non-controlling interest in loss of consolidated subsidiaries
  3,371   19,619   12,804   98,624   1,761,647 
                     
Net (loss) $(729,215) $(649,864) $(3,060,745) $(3,496,095) $(19,841,462)
                     
Weighted average number of common shares outstanding - basic and fully diluted
  55,983,253   13,317,840   54,919,761   12,135,201     
                     
Net (loss) per share - basic  and fully diluted
 $(0.01) $(0.05) $(0.06) $(0.29)    

MMEX RESOURCES CORPORATION

Condensed Consolidated Statements of Operations
(Unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

October 31,

 

 

October 31,

 

 

 

2013

 

 

2012

 

 

2013

 

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

272,810

 

 

 

454,391

 

 

 

550,344

 

 

 

921,217

 

Depreciation and amortization

 

 

1,250

 

 

 

1,241

 

 

 

2,502

 

 

 

2,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

274,060

 

 

 

455,632

 

 

 

552,846

 

 

 

923,697

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(274,060)

 

 

(455,632)

 

 

(552,846)

 

 

(923,697)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(155,216)

 

 

(469,007)

 

 

(390,283)

 

 

(763,633)

Loss on debt conversion

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(441,960)

Loss on investment in property

 

 

-

 

 

 

(178,848)

 

 

-

 

 

 

(211,673)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(155,216)

 

 

(647,855)

 

 

(390,283)

 

 

(1,417,266)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(429,276)

 

 

(1,103,487)

 

 

(943,129)

 

 

(2,340,963)

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(429,276)

 

 

(1,103,487)

 

 

(943,129)

 

 

(2,340,963)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest in loss of consolidated subsidiaries

 

 

349

 

 

 

5,246

 

 

 

672

 

 

 

9,433

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to the Company

 

$(428,927)

 

$(1,098,241)

 

$(942,457)

 

$(2,331,530)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding – basic and diluted

 

 

57,188,313

 

 

 

55,049,962

 

 

 

57,188,313

 

 

 

54,388,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share – basic and diluted

 

$(0.01)

 

$(0.02)

 

$(0.02)

 

$(0.04)

See accompanying notes to condensed consolidated financial statements.

4


MMEX MINING CORPORATION
(An Exploration Stage Company)5
Contents

                    Total 
                    Stockholders Equity 
        Additional   Common     Non-  (deficit) and 
  Common Stock  Paid  Stock  Accumulated  controlling  Members' 
  Shares  Amount  In Capital  Payable  (Deficit)  Interests  Interests 
                      
Balance, May 23, 2007 (Inception)  5,000,000  $50,000  $(50,000) $-  $-  $-  $- 
                             
Acquisition of subsidiary, Carpenter Creek, LLC, 75% interest  -   -   -   -   -   69,411   69,411 
Note receivable issued as capital contributions from members  -   -   453,563   -   -   69,668   523,231 
Acquisition of subsidiary, Carpenter Creek, LLC, 2.5% interest  -   -   (65,208)  -   -   65,208   - 
Capital contributions from members  -   -   2,906,086   -   -   447,414   3,353,500 
Net (loss) for the period from May 23, 2007                            
(Inception) through  April 30, 2008  -   -   -   -   (3,327,375)  (638,912)  (3,966,287)
Balance, April 30, 2008  5,000,000  $50,000  $3,244,441  $-  $(3,327,375) $12,789  $(20,145)
                             
Capital contributions from members  -   -   2,762,446   -   -   468,735   3,231,181 
Net (loss) for the year ended April 30, 2009  -   -   -   -   (2,305,551)  (364,765)  (2,670,316)
Balance, April 30, 2009  5,000,000  $50,000  $6,006,887  $-  $(5,632,926) $116,759  $540,720 
                             
Acquisition of subsidiary, Carpenter Creek, LLC, 2.5% interest  -   -   (473,385)  -   -   (26,615)  (500,000)
Capital contributions from members  -   -   1,306,505   -   -   299,849   1,606,354 
Net (loss) for the year ended April 30, 2010  -   -   -   -   (1,506,729)  (392,033)  (1,898,762)
Balance, April 30, 2010  5,000,000  $50,000  $6,840,007  $-  $(7,139,655) $(2,040) $(251,688)
                             
Distribution of property, Snider Ranch property  -   -   -   -   -   (282,651)  (282,651)
Common stock issued for services  50,000   500   164,500   -   -   -   165,000 
Imputed interest on related party advances  -   -   1,650   -   -   -   1,650 
Effect of reverse acquisition merger  4,584,427   45,844   (131,676)  15,000   -   -   (70,832)
Capital contributions from shareholder  -   -   343,139   -   -   97,604   440,743 
Capital contributions from members  -   -   268,052   -   -   15,000   283,052 
Acquisition of subsidiary, Armadillo Holdings 1.88% interest  31,334   313   (22,839)  -   -   22,526   - 
Issuance of shares related to reverse merger  1,500,000   15,000   -   (15,000)  -   -   - 
Discount from the issuance of Notes allocated to warrants  -   -   1,034,900   -   -   -   1,034,900 
Discount from the issuance of Preferred Stock allocated to
warrants
  -   -   1,000,000   -   -   -   1,000,000 
Dividend payable  -   -   -   -   (10,685)  -   (10,685)
Issuance of subsidiary ownership interests beneficial
conversion feature
  -   -   (212,453)  -   -   212,453   - 
Net (loss) for the year ended April 30, 2011  -   -   -   -   (3,466,111)  (174,812)  (3,640,923)
Balance, April 30, 2011  11,165,761  $111,657  $9,285,280  $-  $(10,616,451) $(111,920) $(1,331,434)
                             
Rounding of shares on stock reverse  2   -   -   -   -   -   - 
Discount from the issuance of Notes allocated to warrants  -   -   602,051   -   -   -   602,051 
Financing fee for warrants issued as additional consideration  -   -   240,734   -   -   -   240,734 
Issuance of shares related to reverse merger  1,230,349   12,303   (15,000)  2,697   -   -   - 
Issuance of common stock for cash  26,983,938   269,839   4,711,678   225,000   -   -   5,206,517 
Conversion of convertible preferred stock to common stock  2,983,293   29,832   357,995   -   -   -   387,827 
Beneficial conversion feature on convertible note  -   -   610,182   -   -   -   610,182 
Conversion of debenture to common stock  2,059,625   20,598   772,068   290,592   -   -   1,083,258 
Options issued to employees and consultants  -   -   34,491   -   -   -   34,491 
Issuance of shares related to consulting agreements  846,087   8,461   152,296   -   -   -   160,757 
Net (loss) for the year ended April 30, 2012  -   -   -   -   (6,164,266)  (178,321)  (6,342,587)
Balance,April 30, 2012  45,269,055  $452,690  $16,751,775  $518,289  $(16,780,717) $(290,241) $651,796 
                             
Issuance of shares related to reverse merger  269,651   2,697   -   (2,697)  -   -   - 
Issuance of common stock for cash  1,375,000   13,750   261,250   (225,000)  -   -   50,000 
Beneficial conversion feature on convertible note          17,879   -   -   -   17,879 
Loss on modification of preferred shares conversion rate        302,694   -   -   -   - 
Conversion of accrued consulting fees to common stock  1,346,557   13,465   315,696   -   -   -   329,161 
Conversion of debenture to common stock  7,428,050   74,280   1,642,489   (290,592)  -   -   1,426,177 
Issuance of shares related to consulting agreements  300,000   3,000   54,000       -   -   57,000 
Stock payable related to note discount  -   -   -   30,000   -   -   30,000 
Net (loss) for the nine months ended January 31, 2013  -   -   -   -   (3,060,745)  (12,804)  (3,073,549)
Balance, January 31, 2013  55,988,313   559,882   19,345,783   30,000   (19,841,462)  (303,045)  (511,536)

MMEX RESOURCES CORPORATION

Condensed Consolidated Statements of Cash Flows
(Unaudited)

 

 

Six Months Ended
October 31,

 

 

 

2013

 

 

2012

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss attributable to the Company

 

$(942,457)

 

$(2,331,530)

Non-controlling interest in net loss

 

 

(672)

 

 

(9,433)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

2,502

 

 

 

2,480

 

Amortization of debt discount

 

 

266,008

 

 

 

676,153

 

Amortization of deferred loan costs

 

 

5,000

 

 

 

5,000

 

Loss on debt conversion

 

 

-

 

 

 

441,960

 

Loss on investment in property

 

 

-

 

 

 

211,673

 

Common stock issued for services

 

 

-

 

 

 

57,000

 

Decrease (increase) in assets:

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

-

 

 

 

5,994

 

Increase (decrease) in liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

 

15,292

 

 

 

227,491

 

Accrued expenses

 

 

599,152

 

 

 

383,407

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

(55,175)

 

 

(329,805)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

-

 

 

 

(650)

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

-

 

 

 

(650)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from convertible notes payable – related party

 

 

54,641

 

 

 

27,500

 

Proceeds from notes payable

 

 

-

 

 

 

100,000

 

Payments on convertible notes payable – related party

 

 

 -

 

 

 

(10,000)

Proceeds from issuance of common stock

 

 

 -

 

 

 

50,000

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

54,641

 

 

 

167,500

 

 

 

 

 

 

 

 

 

 

Net decrease in cash

 

 

(534)

 

 

(162,955)

Cash at the beginning of the period

 

 

729

 

 

 

163,673

 

 

 

 

 

 

 

 

 

 

Cash at the end of the period

 

$195

 

 

$718

 


Supplemental disclosure:

 

 

 

 

 

 

Interest paid

 

$-

 

 

$-

 

Income taxes paid

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Stock issued for conversion of debt

 

$-

 

 

$985,440

 

Stock issued for conversion of accrued compensation

 

 

-

 

 

 

329,162

 

Stock issued for common stock payable

 

 

-

 

 

 

518,289

 

Convertible debt beneficial conversion feature

 

 

-

 

 

 

17,305

 

See accompanying notes to condensed consolidated financial statements.

5


MMEX MINING CORPORATION
(An Exploration Stage Company)6
Consolidated StatementsTable of Cash Flows
Contents

     For the period from 
     May 23, 2007(Inception) 
  
For the nine months ended
January 31,
   through January 31, 
  2013  2012  2013 
Cash flows from operating activities         
Net (loss) $(3,060,745) $(3,496,095) $(19,841,462)
Non-controlling interest in net (loss)  (12,804)  (98,624)  (1,761,647)
Adjustments to reconcile net (loss) to net            
cash (used) provided by operating activities:            
Depreciation and amortization expense  3,743   3,614   22,758 
Loss on sale of assets  -   3,651   15,003 
Loss on investment  280,983   -   293,278 
Loss due to late payment penalty  -   -   1,200,000 
Common stock issued for services  57,000   -   417,248 
Imputed interest  -   -   1,650 
Amortization of debt discount  920,812   1,296,296   3,179,378 
Amortization of issuance costs  17,500   10,000   (23,823)
Loss on conversion of debt  441,960   53,453   462,345 
Impairment expense  -   932,454   2,762,454 
Financing fee on issuance of warrants  -   240,734   240,734 
Decrease (increase) in assets:            
Other assets  5,993   (7,500)  (7,500)
Employee receivable  -   (173,579)  (27,785)
Deposits  4,696   (4,696)  - 
Increase (decrease) in liabilities:            
Accounts payable  280,888   (65,012)  607,919 
Related party payable  14,924   (8,033)  143,196 
Accrued expenses  609,292   396,894   1,592,169 
Net cash (used) in operating activities  (435,758)  (916,443)  (10,724,085)
             
Cash flows from investing activities            
Proceeds from sale of Snider Ranch  -   -   1,130,602 
Proceeds from sale of Carpenter Creek - held in escrow  -   135,000   - 
Purchase of Hunza option  -   (932,454)  (7,062,454)
Purchase of fixed assets  (650)  (5,813)  (54,712)
Proceeds from sale of fixed assets  -   -   3,010 
Net cash (used) in investing activities  (650)  (803,267)  (5,983,554)
             
Cash flows from financing activities            
Capital contributions from members  -   -   8,023,387 
Acquisition of noncontrolling interest  -   -   (500,000)
Proceeds from debt, net of issuance costs  244,000   1,160,000   5,978,900 
Proceeds from issuance of preferred stock  -   360,000   1,360,000 
Proceeds from issuance of common stock  50,000   92,000   5,256,517 
Payments on notes payable  (20,000)  -   (3,409,900)
Net cash provided by financing activities  274,000   1,612,000   16,708,904 
             
Net increase (decrease) in cash  (162,408)  (107,710)  1,265 
Cash - beginning  163,673   118,059   - 
Cash - ending $1,265  $10,349  $1,265 
6

MMEX MINING CORPORATION
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
Supplemental disclosures:            
Interest paid $-  $-  $483,723 
Income taxes paid $-  $-  $- 
Non-cash investing and financing transactions:         
Note receivable issued as capital contributions $-  $-  $523,231 
Distribution of property, Snider Ranch $-  $-  $(282,651)
Effect of reverse acquisition merger $-  $-  $(70,832)
Conversion of minority interest into equity $-  $-  $(22,839)
Additional ownership interest in subsidiary $-  $-  $212,453 
Issuance of contingent consideration from merger $-  $-  $(15,000)
Stock issued for conversion of debt $(985,440) $-  $465,259 
Stock issued for conversion of accrued compensation $329,162  $-  $329,162 
Stock issued for common stock payable $518,289  $-  $518,289 
Preferred stock beneficial conversion feature $-  $-  $1,000,000 
Common stock beneficial conversion feature $17,879  $-  $627,488 
Purchase of Hunza option $-  $-  $3,000,000 
Debt discount on issuance of warrants $-  $314,216  $1,636,951 
Debt discount for common stock payable $30,000  $-  $30,000 
Convertible debenture issued by agreement $-  $-  $1,200,000 
See accompanying notes

MMEX RESOURCES CORPORATION

Notes to financial statements.

NoteCondensed Consolidated Financial Statements

Six Months Ended October 31, 2013
(Unaudited)

NOTE 1 – NatureBACKGROUND, ORGANIZATION AND BASIS OF PRESENTATION

MMEX Resources Corporation (the “Company” or “MMEX”) was formed in the State of BusinessNevada on May 19, 2005 as Inkie Entertainment Group, Inc. On April 6, 2016, the Company amended its articles of incorporation to change its name to MMEX Resources Corporation and Significant Accounting Policies


On May 25, 2011,to authorize the Company to issue up to 1,000,000,000 common shares and 10,000,000 preferred shares. The changes in the number of authorized shares of the Company have been given retroactive effect in the accompanying condensed consolidated financial statements. The Board of Directors approved a 1 for 10 reverse stock split of its common stock.  All referencesthe Company has made the decision to focus efforts on the oil, gas, refining and electric power business in the accompanying financial statements to the number of shares of common stockUnited States and loss per share have been retroactively restated to reflect the reverse stock split.

Basis of Presentation
Latin America.

The accompanying condensed consolidated financial statements include the accounts of the following entities, all of which the Company maintains control through a majority ownership:

Name of Entity


%

Form
of Entity

State of
Incorporation


Relationship

 Form ofState of

Name of Entity%EntityIncorporationRelationship

MMEX MiningResources Corporation (“MMEX”)

-

-

Corporation

Corporation

Nevada

Nevada

Parent

MCC Merger, Inc. (“MCCM”)

100%

100%

Corporation

Corporation

Delaware

Delaware

Holding SubSubsidiary

Maple Carpenter Creek Holdings, Inc. (“MCCH”)

100%

100%

Corporation

Corporation

Delaware

Delaware

Subsidiary

Maple Carpenter Creek, LLC ("(“MCC”)

80%

80%

LLC

LLC

Nevada

Nevada

Subsidiary

Carpenter Creek, LLC (“CC”)

95%

95%

LLC

LLC

Delaware

Delaware

Subsidiary

Armadillo Holdings Group Corp. (“AHGC”)

100%

100%

Corporation

Corporation

British Virgin Isl.Isles

Subsidiary

Armadillo Mining Corp. (“AMC”)

98.6%

98.6%

Corporation

Corporation

British Virgin Isl.Isles

Subsidiary


The condensed consolidated financial statements herein contain the operations of the above listed subsidiaries as of the dates and for the periods as indicated.

All significant inter-company transactions have been eliminated in the preparation of thesethe condensed consolidated financial statements. On September 21, 2010

These financial statements reflect all adjustments, consisting of normal recurring adjustments, which in the Company’s wholly-owned subsidiary, MCC Merger, Inc. (“Acquisition Sub”), formed previous to the merger, and Maple Carpenter Creek Holdings, Inc. (“The Target Company”) entered into an Agreement and Planopinion of Merger (the “Merger Agreement”). Under the Merger Agreement, as closed on September 23, 2010, Acquisition Sub merged with and into the Target Company, with the Target Company remaining as the surviving corporation and wholly-owned subsidiarymanagement are necessary for a fair presentation of the Company (the “Merger”).  Going forward, the Company will be a holding company parent of the Target Company, and the Company’s business operations following the Merger will be those of the Target Company.


information contained therein.

The Company has adopted a fiscal year end of April 30th.


The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 820, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in the Colombian peso. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

The30.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies followed by MMEX Mining Corporation are set forthdescribed in our Annual Report on Form 10-K for the Company’s financial statements that are a part of itsyear ended April 30, 2012, Form 10-K and should be read in conjunction2013 filed with the financial statements for the three and nine months ended January 31, 2013, contained herein.


The financial information included herein as of January 31, 2013, and for the three and nine month periods ended January 31, 2013 and 2012, has been presented without an audit, pursuant to accounting principles for the interim financial information generally accepted in the United States of America and the rules of the Securities and Exchange Commission.  The Company believes that the disclosures are adequate to make the information presented not misleading.  The information presented reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the period.

Organization
MMEX Mining Corporation (the Company or “MMEX”) was formed in the State of NevadaSEC on May 19, 2005 as Inkie Entertainment Group, Inc., for the purpose of engaging in the production, distribution and marketing of filmed entertainment products. On January 15, 2008, the Company changed its name to Quantum Information, Inc. In January 2009, the Company announced that it would transition out of the filmed entertainment products business and into the coal business. As part of that transition, on January 14, 2009, the Company sold all of its assets in exchange for the surrender to the Company of 400,000 shares of the Company’s common stock, and the assumption of all of the Company’s liabilities. The Company also changed its name to MGMT Energy, Inc. on FebruaryNovember 5, 2009 and to Management Energy, Inc. on May 28, 2009 to better reflect the Company’s business focus. On September 23, 2010, the Company, through a reverse merger, acquired 100% of the outstanding shares of Maple Carpenter Creek Holdings, Inc., (“MCCH”) a Delaware Corporation, organized on October 15, 2009 as a holding Company with an 80% interest in Maple Carpenter Creek, LLC (“MCC”), which in turn owns a 95% interest in the subsidiary, Carpenter Creek, LLC (“CC”), and a 100% interest in Armadillo Holdings Group Corp. (“AHGC”), which in turn owns a 98.6% interest in Armadillo Mining Corp. (“AMC”). On February 22, 2011, the Company amended its articles of incorporation to change the corporate name from Management Energy, Inc. to MMEX Mining Corporation.
8


Armadillo Group Holdings Corporation: As of the date of closing of the merger, AMC had exclusive options to acquire two metallurgical coal mines in the Cundinamarca province of Colombia: (i) Caparrapi is a permitted mine with minimum production and with a resource potential of 11 million metric tons; (ii) Yacopi has resource potential of 40 million metric tons. AMC has terminated the exclusive options for the Caparrapi and Yacopi mines. On January 20, 2011, AMC acquired an option to purchase a 50% interest in a permitted and operating mine Company in Colombia producing metallurgical coal, with a potential resource of 16 million tons to 90 million tons based on existing exploration resources reports.  The agreement required an exclusivity fee of $1,400,000 that was completed on March 22, 2011, and $5,000,000 to be deposited to an exploration fund to continue the financing of an exploration and drilling program.  On February 3, 2012 the parties to the Hunza Agreement executed and delivered an amendment thereto, which, among other things, provided that:
(a)  in order to exercise the option to acquire 50% of Hunza, AMCC would be required to complete the payment of exclusivity fees on or before February 29, 2012, including issuing on February 3, 2012 a $1,200,000 debenture convertible into 4,000,000 Common Shares to Black Stone Investment S.A. Black Stone Investment S.A. converted the March 2012 Debenture into 4,000,000 Common Shares in two tranches: (i) 1,794,000 Common Shares were issued on March 8, 2012; and (ii) 2,206,000 Common Shares were issued on May 1, 2012.
(b)  after exercise of the option, AMCC would be obligated to fund an additional $3,000,000 upon the earlier of May 1, 2013 and 90 calendar days after the delivery of a technical report in respect of the work program to be carried out on the Hunza Project (see “The Hunza Project - Recommendations”); and
(c)  AMCC would pledge one half of its interest in Hunza to secure any payment default by AMCC, which default would result in a reduction of the AMCC’s interest to 25% of Hunza.

Nature of Business
Our current strategy is to pursue various coal exploration projects in Colombia and expand to other minerals in other South American countries with development partners.
Exploration Stage Company
The Company is currently an exploration stage company. As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. The Company has incurred net losses of $19,841,462 and used net cash in operations of $10,724,085 for the period from inception (May 23, 2007) through January 31, 2013. An entity remains in the exploration stage until such time as proven or probable reserves have been established for its deposits. Upon the location of commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of contracting with geologists who sample and assess the mining viability of the Company’s claims.

Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its aforementioned subsidiaries. See Recently Issued Accounting Pronouncements (“ASC 810”) below for additional information on Non-controlling interests in Consolidated Financial Statements. All significant intercompany accounts and transactions have been eliminated in consolidation.

2015.

Use of estimates

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Property and equipment
Equipment is recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over the estimated useful life of the related asset as follows:
Furniture and fixtures 5 years
Machinery and equipment 7
5 years
Software and hardware 5 yearsTable of Contents
9

Maintenance and repairs will be charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement

Income or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gainLoss Per Share

Basic income or loss, if any, will be reflected in operations.


The Company will assess the recoverability of equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

Fair value of financial instruments
On January 1, 2011, the Company adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements. Beginning on January 1, 2011, the Company also applied the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and intangible assets. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.

Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect the Company's own assumptions about the inputs that market participants would use.
The following table presents assets and liabilities that are measured and recognized at fair value as of January 31, 2013 on a recurring and non-recurring basis:
DescriptionLevel 1Level 2Level 3Gains (Losses)
$-$-$-$-
The following table presents assets and liabilities that are measured and recognized at fair value as of April 30, 2012 on a recurring and non-recurring basis:
DescriptionLevel 1Level 2Level 3Gains (Losses)
$-$-$-$-
The Company’s financial instruments consist of cash and cash equivalents, equity investments, accounts payable, accrued liabilities and long-term debt. The estimated fair value of cash, accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments. The carrying value of equity investments and long-term debt also approximate their fair values since their terms are similar to those in the lending market for comparable loans with comparable risks. None of these instruments are held for trading purposes.

Advertising and promotion
All costs associated with advertising and promoting products are expensed as incurred. $3,620 and $0 were incurred for the nine months and three months ended January 31, 2013 and $1,880 and $805 were incurred for the nine months and three months ended January 31, 2012.

Income taxes
The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.
Basic and diluted loss per share
The basic net loss per common share is computedcalculated by dividing the net income or loss by the weighted average number of(available to common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis,stockholders) by the weighted average number of common shares outstanding plusfor the period. Diluted income or loss per share reflects the potential dilutive securities.dilution that could occur if securities or other contracts to issue common stock, such as stock options, warrants, convertible preferred stock and convertible debentures, were exercised or converted into common stock. For the periods presented,three months and six months ended October 31, 2013 and 2012, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
10


Stock-based compensation
The Company adopted FASB guidance on stock based compensation upon inception at April 23, 2009. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants

Therefore, basic loss per share is the same as diluted loss per share and the weighted average number of employee stock options, are to be recognized incommon shares outstanding was 57,188,313 for each of the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Forthree and six months ended October 31, 2013 and 55,049,962 and 54,388,016 for the periods presented, there were no share-based payments to employees.


In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or servicesthree months and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments.  For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts.  Prior periods presented are not required to be restated.  The Company adopted this standard upon inception on May 23, 2007 and applied the standard using the modified prospective method.  

six months ended October 31, 2012, respectively.

Issuance of Shares for Non-Cash Consideration

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of the standards issued by the FASB.Financial Accounting Standards Board (“FASB”). The measurement date for the fair value of the equity instruments issued is determined as the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.


Uncertain tax positions
Effective upon the Company’s fiscal year ended April 30, 2009, the Company adopted new standards for accounting for uncertainty in income taxes. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.
The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

Non-controlling interest
The Company accounts for non-controlling interest (“minority interest”) in accordance with ASC 810-10-45-18 through 21 which allows revenues, expenses, gains and losses, net income, or loss, and other comprehensive income to be reported

Reclassifications

Certain amounts in the condensed consolidated financial statements at the consolidated amounts, which include the amounts attributable to the owners of the parent and the non-controlling interest.  Net income or loss and comprehensive income or loss are attributed to the parent and the non-controlling interest.  Losses attributable to the parent and the non-controlling interest in a subsidiary may exceed their interests in the subsidiary’s equity.  The excess, and any further losses attributable to the parent and the non-controlling interest, shall be attributed to those interests.  That is, the non-controlling interest shall continue to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance.


Recently issued accounting pronouncements
In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.
11


In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles – Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim periodprior year periods have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expectedreclassified to have a material impact on our financial position or results of operations.

conform with the current year presentation.

Recently Issued Accounting Pronouncements

In December 2011, FASB issued ASU No. 2011-11, “Balance Sheet – Disclosures about Offsetting Assets and Liabilities” (ASU 2011-11) to enhance disclosure requirements relating to the offsetting of assets and liabilities on an entity's balance sheet. The update requires enhanced disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. The new disclosure requirements relating to this update are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. The update only requires additional disclosures, as such, we do not expect that the adoption of this standard will have a material impact on our results of operations, cash flows or financial condition.


In September 2011,February 2016, the FASB issued ASU No. 2011-08, “Intangibles – Goodwill2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and Other” (ASU 2011-08).a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU 2011-08 allows a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the two-step impairment test would be performed. ASU 2011-08 isare effective for annual and interim goodwill impairment tests performedpublic companies for fiscal years beginning after December 15, 2011,2018 and earlyare to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted.

The Company is currently unable to determine the impact on its consolidated financial statements of the adoption of this new accounting pronouncement.

In May 2011,March 2016, the FASB issued ASU No. 2016-09, "Stock Compensation (Topic 718)", which is intended to simplify several aspects of the accounting for share-based payment award transactions, including the income tax impacts, the classification on the statement of cash flows, and forfeitures. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, including interim periods. The Company is currently unable to determine the impact on its consolidated financial statements of the adoption of this new accounting pronouncement.


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In April 2015, the FASB issued ASU No. 2015-03, "Interest – Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs." To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public companies, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. The Company is currently unable to determine the impact on its consolidated financial statements of the adoption of this new accounting pronouncement.

In August 2014, the FASB issued Accounting Standards Update (ASU)(“ASU”) No. 2011-04, Fair Value Measurement (Topic 820)2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 310-40): AmendmentsDisclosure of Uncertainties about an Entity's Ability to Achieve Common Fair Value MeasurementContinue as a Going Concern.” The amendments in this Update provide guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and Disclosure Requirementsto provide related footnote disclosures. In doing so, the amendments are intended to reduce diversity in U.S. GAAPthe timing and IFRSs. This update clarifiescontent of footnote disclosures. The amendments are effective for the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This update is effective on a prospective basis for annual and interim reporting periods beginning on orperiod ending after December 15, 2011,2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has not determined the impact of the future adoption of the provisions of ASU No. 2014-15 on its consolidated financial statements.

Although there are several other new accounting pronouncements issued or proposed by the FASB, which for the Company is January 1, 2012.


Note 2has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its consolidated financial position or results of operations.

NOTE 3Going Concern


GOING CONCERN

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 $19,841,462$25,581,062 and a working capital deficit of $7,085,758$5,347,115 at JanuaryOctober 31, 2013, and have reported negative cash flows from operations since inception. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months, and we expect to have ongoing requirements for capital investment to implement our business plan. Finally, 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.


Since inception, our operations have primarily been funded through private debt and equity financing, as well as capital contributions by our subsidiaries’subsidiaries' partners, and 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, indicate that we may be unable 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’sCompany'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.

12


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Note 3

NOTE 4Related Party Transactions


Loans & Advances
RELATED PARTY TRANSACTIONS

During the period from May 1, 2009 through April 30, 2010,past few years, Tydus Richards, the former Chairman of our board of directors and shareholder, made certain payments totaling $71,700 on behalf of the Company. The Company has partially reimbursed Mr. Richards $8,700 on September 3, 2009for these advances. As of October 31, 2013 and the remaining balance of $63,000 was outstanding as of April 30, 2010. During the first and second quarter of the current fiscal year, Mr. Richards made additional payments totaling $7,633 on behalf of the Company. On May 12, 2010, the Company reimbursed an additional $39,000 of the balance and the2013, a remaining balance of $31,633 included in accrued expenses – related party remains outstanding.


On July 15, 2009, MCC entered into a loan agreement with an Irrevocable Trust, of which the Company’s CEO is the trustee. The unsecured promissory note, carried a 20% interest rate until maturity at July 15, 2010, at which time the principal interest (or $60,000), was compounded and extended under an amended agreement carrying a 10% interest that is being amortized over the extended life of the loan. The promissory note plus total accrued interest of $96,000 was paid in full on December 23, 2010.

On September 2, 2010 the Company’s subsidiary, Maple Carpenter Creek, LLC, a Nevada limited liability company entered into a distribution resolution and agreement to distribute the Snider Ranch investment property, carrying a value of $1,413,253 at the time of distribution, to its partners; Garb Holdings, LLC, AAM Investments, LLC, and Maple Resources Corporation. The Company’s Officers and Directors are majority owners of AAM Investments, LLC and Maple Resources Corporation.

On September 4, 2010, AAM Investments, LLC, and Maple Resources Corporation contributed their interest in Snider Ranch to MCCH.  The value of the contribution was $1,130,602.

Starting on October 13, 2010 and at various times through January 31, 2011, the Company’s Director Bruce N. Lemons advanced the Company a total of $25,800.  On February 1, 2011, the advance was converted into a promissory note that carried a 25% interest rate, matured on January 27, 2012 and was convertible into the Company’s common stock at the holders’ option at $0.10 per common share.  The promissory note plus interest of $32,250 was paid in full on March 23, 2011. In addition, the Company issued 32.250 warrants to purchase shares of the Company’s common stock at the time of repayment of the note equal to one warrant shares for every dollar value of the principal and interest, at an exercise price of $1.00 per share on or before three years from the repayment or conversion date.

On January 24, 2011, the Company entered into a securities purchase agreements with unaffiliated investors and with each of The Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO, an Irrevocable Trust, of which the Company’s CEO is the trustee, and BNL Family Partners of which one of the Company’s Directors, Bruce N. Lemons is a partner, for the issuance of a convertible debentures in the amount of $25,000.  The promissory notes carry a 25% interest rate, mature on January 27, 2012 and are convertible into the Company’s common stock at the holders’ option at $1.00 per common share. The holder may accelerate repayment of the note upon sale of the Carpenter Creek prospect.  In addition, the Company issued 562,500 warrants to purchase shares of the Company’s common stock at the time of repayment of the note equal to one warrant shares for every dollar value of the principal and interest, at an exercise price of $1.00 per share on or before three years from the repayment or conversion date.  These convertible debentures were issued to each of the affiliated investors at the same price as that paid by the unaffiliated investors in the private offering.  The promissory notes plus interest were paid in full on March 23, 2011.

On February 1, 2011, The Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO, converted $39,100 of advances into a promissory note that carried a 25% interest rate, matured on January 27, 2012 and was convertible into the Company’s common stock at the holders’ option at $1.00 per common share.  The promissory note plus interest of $48,875 was paid in full on March 23, 2011.  In addition, the Company issued 48,875 warrants to purchase shares of the Company’s common stock at the time of repayment of the note equal to one warrant shares for every dollar value of the principal and interest, at an exercise price of $1.00 per share on or before three years from the repayment or conversion date.

For the period from inception (May 23, 2007) through January 31, 2013, there has been contributions of capital from members of $7,696,652 and contributions of capital from shareholders of $343,139.

Employment, Directing & Consulting Agreements and Appointments

On September 4, 2010, MCCH entered into an employment agreement with the Company’sCompany's CEO, Jack W. HankHanks, for a two yeartwo-year term, automatically renewable for one yearone-year terms thereafter, at an annual compensation of $300,000 per year.  On December 15, 2011 the agreement was amended to provide for a 3 year term from September 4, 2010, automatically renewable for one year terms thereafter, at an annual compensation of $360,000 per year.

13


On September 4, 2010, MCCH entered into a consulting agreement with Bruce N. Lemons, one of the Company’s threeCompany's two directors, for a two yeartwo-year term, automatically renewable for one yearone-year terms thereafter, at an annual compensation of $170,000 per year. On December 15, 2011 the agreement was amended

Accrued expenses (see Note 6) to provide for a 3 year term from September 4, 2010, automatically renewable for one year terms thereafter.


In connection with the closingrelated parties totaled $965,492 and $706,004 as of October 31, 2013 and April 30, 2013, respectively.

Convertible notes payable – related party consisted of the merger with MCCH, our executive officers (David Walters, President and Matt Szot, Chief Financial Officer) and director (Mr. Walters) resigned, effective September 22, 2010, and we appointed designees of MCCH (Jack W. Hanks and Bruce N. Lemons) as the new directors, all effective as of September 23, 2010. The board also named Mr. Hanks as our new President and Chief Executive Officer.

following at:

 

 

October 31,
2013

 

 

April 30,
2013

 

 

 

 

 

 

 

 

Note payable to a BNL Family Partners, LLC, a related party, maturing September 30, 2013, with interest at 20%, convertible at the option of the holder into common shares of the Company at a fixed conversion price of $0.20 per share

 

$27,680

 

 

$5,400

 

 

 

 

 

 

 

 

 

 

Note payable to Delavega Trading Ltd., a related party, maturing September 30, 2013, with interest at 20%, convertible at the option of the holder into common shares of the Company at a fixed conversion price of $0.20 per share

 

 

20,600

 

 

 

15,600

 

 

 

 

 

 

 

 

 

 

Note payable to Delavega Trading Ltd., a related party, maturing December 17, 2013, with interest at 20%, convertible at the option of the holder into common shares of the Company at a fixed conversion price of $0.20 per share

 

 

6,500

 

 

 

6,500

 

 

 

 

 

 

 

 

 

 

Advances from Maple Gas Corporation, a related party

 

 

27,365

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total

 

 

82,145

 

 

 

27,500

 

 

 

 

 

 

 

 

 

 

Less discount

 

 

(235)

 

 

(3,670)

 

 

 

 

 

 

 

 

 

Net

 

$81,910

 

 

$23,830

 


Accrued Expenses
On September 15, 2012, Nabil Katabi (a related party), a Company director, per terms of his consulting agreement requested the conversion of $75,000 of consulting fees into shares of the Company stock.  The 465,525 Common Shares were issued during the three month period ended January 31, 2013.

On October 30, 2012, the Corporation issued 300,000 Common Shares at a price of $0.19 to Delavega Trading Ltd. (a related party), a company for which Nabil Katabi, a Company director, has a controlling interest, pursuant to terms of a consulting agreement dated February 1, 2012.

On November 2, 2012, the Corporation issued 465,525 Common Shares at an average price of $0.16 to Delavega Trading Ltd. (a related party), a company for which Nabil Katabi a Company director has a controlling interest, pursuant to extinguishments of accrued consulting fees. As the shares were issued under the terms of the consulting agreement, no gain or loss was recorded as part of the transaction.

Notes Payable
On March 18, 2011, the Company issued a $290,000 notes payable to Montana Coal Royalty, LLC in exchange for the relinquishment of a royalty agreement upon the sale of Carpenter Creek.  Montana Coal Royalty, LLC is owned equally by The Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO and AAM Investments, LLC which is owned principally by a trust for Mr. Lemons’ family, a director of the Company. On May 16, 2012, the Corporation issued 3,480,000 shares of the Company’s common stock to Montana Coal Royalty, LLC (a related party) pursuant to conversion of $323,640 of a note and accrued interest. Montana Coal Royalty, LLC is owned equally by AAM Investments, LLC and The Maple Gas Corporation. The Maple Gas Corporation is controlled by Mr. Jack Hanks, the CEO and a director of the Corporation. As the conversion took place at below the market price on the date of conversion, a loss of $441,960 was recorded.

Convertible Debentures
On August 1, 2012, the Company entered into a $10,000 convertible note agreement with
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BNL Family Partners (a related party); Mr. Bruce N. Lemons, a director of the Company, is a partner of BNL Family Partners.  The holder may accelerate repayment of the promissory note upon the Corporation raising additional capital of $150,000 and are convertible into Common Shares at the holder’s option at $0.20 per common share. In addition, the Corporation issued 10,000 warrants to purchase Common Shares at an exercise price of $0.30 per Common Share until August 1, 2015 valued at $994 on the issuance date. On August 21, 2012 the note was repaid in full.


On August 1, 2012, the Company entered into a $13,000 convertible note agreement with Delavega Trading Ltd. (a related party), an entity controlled by Nabil Katabi, a director of the Company. The August 1, 2012 debentures carry a 20% interest rate until maturity at September 30, 2013 and are convertible into Common Shares at the holder’s option at $0.20 per common share. The holders may accelerate repayment of the promissory notes upon the Corporation raising additional capital of $150,000. In addition, the Corporation issued 13,000 warrants to purchase Common Shares at an exercise price of $0.30 per Common Share until August 1, 2015 valued at $1,292 on the issuance date.
Convertible Notes

On September 15, 2012, the CompanyCorporation entered into a $4,500 convertible note agreement with BNL Family Partners, LLC.LLC, a related party. Mr. Bruce N. Lemons, a director of the Corporation, is a partner of BNL Family Partners. The debentures carrynote carries a 20% interest rate until maturity at September 30, 2013 and areis convertible into common shares of the Company at the holder’sholder's option at $0.20 per common share. The holdersholder may accelerate repayment of the promissory notes upon the CorporationCompany raising additional capital of $150,000. The computed interest of $900 was added to the balance of the note and recorded as additional debt discount. In addition, the CorporationCompany issued 4,500 warrants valued at $800 using the Black-Scholes option pricing model. The value of the warrants of $800 was recorded as an increase to purchase Common Sharesdebt discount and to additional paid-in capital. The warrants are exercisable at an exercise price of $0.30 per Common Sharecommon share until September 15, 20152015.

During the six months ended October 31, 2013, BNL Family Partners advanced the Company an additional $22,280.

Delavega Trading Ltd. Convertible Notes

On August 1, 2012, the Company entered into a $13,000 convertible note agreement with Delavega Trading Ltd., a related party. Mr. Nabil Katabi, a director of the Company, is a control person of Delavega Trading Ltd. The note carries a 20% interest rate until maturity at September 30, 2013 and is convertible into common shares of the Company at the holder's option at $0.20 per common share. The computed interest of $2,600 was added to the balance of the note and recorded as additional debt discount. In addition, the Company issued 13,000 warrants valued at $800 on$1,292 using the issuance date.


Black-Scholes option pricing model. The value of the warrants of $1,292 was recorded as an increase to debt discount and to additional paid-in capital. The warrants are exercisable at an exercise price of $0.30 per common share until August 1, 2015.

On December 17, 2012, the Company entered into a $6,500 convertible note agreement with Delavega Trading Ltd. (a related party), an entity controlled by Nabil Katabi, a director of the Company. The December 17, 2012 debentures carrynote carries a 20% interest rate until maturity at December 17, 2013 and areis convertible into Common Sharescommon shares of the Company at the holder’sholder's option at $0.20 per common share. The holders may accelerate repaymentcomputed interest of $1,300 was added to the balance of the promissory notes upon the Corporation raisingnote and recorded as additional capital of $150,000.debt discount. In addition, the CorporationCompany issued 6,500 warrants valued at $549 using the Black-Scholes oprtion pricing model. The value of the warrants of $549 was recorded as an increase to purchase Common Sharesdebt discount and to additional paid-in capital. The warrants are exercisable at an exercise price of $0.30 per Common Sharecommon share until December 17, 2015 valued at $549 on2015.

During the issuance date.

14


On January 4,six months ended October 31, 2013, Delavega Trading Ltd. advanced the Company entered into a $10,000 convertible note agreement with BNL Family Partners (a related party); Mr. Bruce N. Lemons, a director ofan additional $5,000.

Maple Gas Advances

During the Company, is a partner of BNL Family Partners.  The holder may accelerate repayment of the promissory note upon the Corporation raising additional capital of $150,000 and are convertible into Common Shares at the holder’s option at $0.20 per common share. In addition, the Corporation issued 10,000 warrants to purchase Common Shares at an exercise price of $0.30 per Common Share until January 4, 2016.  On January 10, 2013 the note was repaid in full.


Common stock issued related to M&A
On September 23, 2010 the Company issued a subscription payable for 15,000,000 shares of common stock pursuant to the merger with MCCH. The shares were valued at par value, resulting in a total subscription payable of $15,000 atsix months ended October 31, 2010.  On January 11, 2011, the Board of Directors cancelled the subscription payable.

On October 8, 2010 the Company issued 25,000,000 shares of common stock to The2013, Maple Gas Corporation, a whollyrelated party owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO pursuant to the merger with MCCH on September 23, 2010. The shares were valued at par value, resulting in a $25,000 adjustment to additional paid in capital in accordance with the accounting for reverse acquisition under ASC 805-10-40.

On October 8, 2010 the Company issued 25,000,000 shares of common stock to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, pursuant to the merger with MCCH on September 23, 2010. The shares were valued at par value, resulting in a $25,000 adjustment to additional paid in capital in accordance with the accounting for reverse acquisitions under ASC 805-10-40.

On January 11, 2011, the Board of Directors approved the issuance of the remaining 15,000,000 shares of merger consideration, agreed upon during the reverse merger, equally to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, and the Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO, Jack Hanks.

Pursuant to the merger on September 23, 2010, the Company awarded the owners of MCCH the right to receive 1,500,000 shares of common stock as contingent consideration.  The milestones are accelerated in the event the owners of MCCH are diluted below 30% in their ownership of the Company.  The milestones defined in the definitive merger agreement are as follows:

·  1,000,000 shares upon the closing of equity or debt financing that generates at least 2 million in net proceeds,
·  250,000 shares upon the successful generation of $250,000 in revenue from coal sales in any fiscal quarter,
·  250,000 shares upon the successful closing of additional equity or debt financing that will generate at least $2,000,000 in net proceeds.

On September 13, 2011, the Board of Directors determined that the first $2,000,000 milestone had been met and approved the issuance of 1,000,000 shares of merger consideration, equally to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, and the Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO, Jack Hanks.

On April 26, 2012, the Board of Directors determined that the remaining milestones and acceleration regarding the Merger Agreement had been reached and the Corporation issued the remaining 500,000 shares of merger consideration, equally to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, and the Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO, Jack Hanks.
Common stock issued for Conversions of Debt
On May 1, 2012, the Company issued 131,250 shares of common stock to DelaVega Trading Ltd. (a related party), an entity controlled by one of the Company’s Directors, Nabil Katabi, pursuant to conversion of a note and accrued interest of $43,750 at a price of $0.33 per share. Since the debt was converted at a lower price than under the terms of the note agreement, a loss on conversion of shares of $5,250 was reportedduring the fiscal year ended April 30, 2012.

On May 16, 2012, the Corporation issued 3,480,000 shares of the Company’s common stock to Montana Coal Royalty, LLC (a related party) pursuant to conversion of $323,640 of a note and accrued interest.  Montana Coal Royalty, LLC is owned equally by AAM Investments, LLC and The Maple Gas Corporation. The Maple Gas Corporation is controlled by Mr. Jack W. Hanks, the CEO and a director and officer of the Corporation. AsCompany, advanced the conversion took placeCompany a total of $27,365.

The debt discount resulting from interest and the value of warrants computed at below the market price on the date of conversion, a loss of $441,960 was recorded.

15


Common stock issued for Cash
On September 27, 2012, the Corporation issued 250,000 Common Shares at a price of $0.20 per share to Delavega Trading Ltd., (a related party) an entity controlled by oneinception of the Company’s Directors, Nabil Katabi, in exchange for an investment of $50,000. In addition,convertible notes payable – related party is amortized over the Corporation issued 250,000 Warrants at an exercise price of $0.30 per Common Share until September 27, 2015 valued at $49,468 on the date of issuance.

Common stock issued for Services
On October 30, 2012, the Corporation issued 300,000 Common Shares at a price of $0.19 to Delavega Trading Ltd. (a related party), an entity controlled by oneterm of the Company’s Directors, Nabil Katabi pursuantnotes as additional interest expense. During the three months ended October 31, 2013 and 2012, debt discount amortized to a consulting agreement dated February 2, 2012. Asinterest expense totaled $1,732 and $0, respectively. During the sharessix months ended October 31, 2013 and 2012, debt discount amortized to interest expense totaled $3,828 and $0, respectively.

The above convertible notes payable – related party were issued withinsubsequently forgiven, with the termsobligations contributed to capital – see Note 12.


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NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the consulting agreement, no gain or loss was recognized upon payment.


On April 26, 2012, the Company granted 250,000 shares of common stock to The Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO pursuant to the vesting of contingent consideration which was connected to the original issuance of Company common stock in connection with the acquisition of MCCH. The shares were valued at par value, resulting in a $2,500 adjustment to common stock payable in accordance with the accounting for reverse acquisition under ASC 805-10-40.  On April 26, 2012, 4,874 of these shares were issued, the remaining 245,126 shares were issued to DelaVega Trading Ltd. (a related party), an entity controlled by Nabil Katabi a company board member, on May 1, 2012.

On April 26, 2012, the Company issued 250,000 shares of common stock to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, pursuant to the vesting of contingent consideration which was connected to the original issuance of Company common stock in connection with the acquisition of MCCH.  The shares were valued at par value, resulting in a $2,500 adjustment to common stock payable in accordance with the accounting for reverse acquisition under ASC 805-10-40.   On April 26, 2012, 225,475 of these shares were issued, the remaining 24,525 shares were issued to DelaVega Trading Ltd. (a related party), an entity controlled by Nabil Katabi a company board member, on May 1, 2012.

Note 4 – Other Assets – Current

The current portion of Other Assets consists of the following:

  
January 31,
2013
  
April 30,
2012
 
Deferred Costs on Bridge Financing $20,000  $10,000 
  $20,000  $10,000 

Note 5 – Property and Equipment

Property and Equipment consists of the following:
  
January 31,
2013
  
April 30,
2012
 
Software and hardware $25,023  $24,373 
Less accumulated depreciation and amortization  (11,081)  (7,339)
  $13,942  $17,034 

following at:

 

 

October 31,
2013

 

 

April 30,
2013

 

 

 

 

 

 

 

 

Computer software and hardware

 

$25,023

 

 

$25,023

 

Less accumulated depreciation and amortization

 

 

(14,834)

 

 

(12,331)

 

 

 

 

 

 

 

 

 

 

 

$10,189

 

 

$12,692

 

Depreciation and amortization expense totaled $3,743$1,250 and $3,614$1,241 for the ninethree months ended JanuaryOctober 31, 2013 and 2012, respectively, and $1,263$2,502 and $1,219$2,480 for the threesix months ended JanuaryOctober 31, 2013 and 2012, respectively.

The Company disposed of $4,038 of fixed asset during the nine month period ended January 31, 2012 resulting in a loss on disposal of assets of $3,651.

Note 6 – Investment in Property

On July 30, 2008, Maple Resources Corporation (“MRC”), a related party via common control from the Company’s CEO, Jack Hanks, purchased the Snider Ranch in Musselshell and Yellowstone Counties, Montana for $1,615,000. Simultaneously, MCC and MRC executed an option agreement whereby MCC became responsible for all principal and interest payments on a $1,000,000 bank note payable issued in MRC’s name in connection with its acquisition of the Snider Ranch and all other payments made by MRC to acquire the Snider Ranch. MRC has agreed that upon successful repayment of the note, it will transfer the Snider Ranch title to MCC. MCC also has issued MRC a $0.08/ton royalty from all future production generated from the Snider Ranch prospect as consideration for MRC and Jack W. Hanks, personally, guaranteeing the loan.  The expected fair value of this royalty could not readily be determined, and as such, was not recognized. The value of the property was periodically measured for impairment and $201,747 of impairment charges were recognized during the year ended, April 30, 2010. On September 2, 2010, the option to purchase the Snider Ranch was distributed to the owners of MCC and recorded as a dividend in the amount of $1,413,253. In the merger with MMEX, MCC partners, The Maple Gas Corporation and AAM Investments, LLC assigned their rights under the option agreement to the Company. Subsequently, on December 21, 2010, Maple Resources Corporation sold the Snider Ranch property located in Yellowstone and Musselshell counties, Montana, to Great Northern Properties Limited Partnership, and the Company’s subsidiary relinquished its option right to acquire this property.
16


On January 20, 2011, AMC acquired an option to purchase a 50% interest in a permitted and operating mine company in Colombia, the Hunza lease, producing metallurgical coal, with a potential resource of 16 million tons to 90 million tons based on existing exploration resources reports.  The agreement required an exclusivity fee of $1,400,000 that was completed on March 22, 2011, and $5,000,000 to be deposited to an exploration fund to continue the financing of an exploration and drilling program.  On February 3, 2012 the Company executed and delivered an amendment to the Hunza option agreement which, among other items, provides that:

· In order to exercise the option to acquire 50% of Hunza, the Company would be required to complete the payment of exclusivity fees on or before February 29, 2012, including issuing a $1.2 million note convertible into 4,000,000 shares of the Company’s common stock.  On March 8, 2012, $538,200 of the note was converted into 1,794,000 shares of the Company’s common stock.

· After exercise of the option, the Company would be obligated to fund an additional $3.0 million upon the earlier of May 1, 2013 or 90 days after the completion of the technical resources report which will be commissioned by Hunza.

· The Company would pledge one half of its interest in Hunza to secure any payment default by the Company, which default would result in a reduction of the Company’s interest to 25% of Hunza.

As a result of the acquisition of the 50% interest in Hunza, the board of directors and operating committee of Hunza consist of four members in total: two members from the Company; namely, Jack Hanks (CEO) and Nabil Katabi (Director).  The other two members of the board of directors and operating committee are non-related party to MMEX and jointly own the other 50% interest in Hunza and are themselves, brothers, and therefore, related party to each other (the “Original Shareholders).  The Original Shareholders have the right to, in the occurrence of a deadlock between themselves and the two board members from the Company, repurchase the 50% ownership from the Company at its fair value.  The Company does not have primary control over the Original Shareholders or Hunza.

On March 8, 2012, the final exclusivity payment of $3,600,000 was made with an additional $700,000 payment to the exploration fund, for a total of $2,015,559 contributed to the exploration fund, the Hunza purchase was completed.

During the course of fiscal years ended April 30, 2012 and 2011, impairments of $932,343 and $1,830,000 were taken due to the fact that it was uncertain whether or not the Company would be able to purchase the option to own 50% of Hunza.  During the fourth quarter of the fiscal year ended April 30, 2012, the Company did obtain the option with the final payment of $3,600,000 of cash and exercised it with the final payment of $700,000.  In addition, the Company obtained a valuation report from an independent contractor, as well as a feasibility report, indicating that production and exploration of Hunza is probable and economical. The Company considered whether impairment of the payments made during the fourth quarter was necessary, but determined that based upon the information contained within the two reports received, that the investment bears value to the Company that exceeded the cash amounts paid during the fourth quarter, in addition to the future cash payment of $3,000,000 expected to be paid within the next twelve months.

The Company has capitalized the $3,600,000 exclusivity payment, $3,000,000 payable due, and the $700,000 exploration fund payments as investment in the property and will report income and loss from the investment by the equity method of accounting.
17

The following table reflects the income statements for the nine month ended January 31, 2013 and the four month period ended April 30, 2012, for the Hunza equity investment:
  
January 31,
2013
  
April 30,
2012
 
  (Unaudited)  (Unaudited) 
       
Revenue $7,574  $- 
Cost of goods sold  (25,851)  - 
Gross Profit (loss) $(18,277) $- 
Operating expenses  (631,488)  (279,137)
Operating income (loss) $(649,765) $(279,137)
Other income (expense)  42,842   (101)
Loss before taxes $(606,923) $(558,375)
Income tax benefit  44,957   20,670 
Net loss for the period $(561,966) $(537,705)

The Company’s proportionate share of losses totaled $280,983 and $0 for the nine months ended January 31, 2013 and 2012, respectively, and $69,310 and $0 for the three months ended January 31, 2013 and 2012, respectively, in relation to the acquired asset above.
The following table reflects the balance sheet for the period ended January 31, 2013 compared to the period ended April 30, 2012, for the Hunza equity investment:
  
January 31,
2013
  
April 30,
2012
 
  (Unaudited)  (Unaudited) 
Assets      
   Cash and Cash Equivalents $1,058,768  $1,567,251 
   Loans and Advances  164,042   33,278 
   Tangible Assets  -   1,276 
   Property and Equipment  20,845   22,972 
   Intangible Assets  82,980   157,998 
   Deferred Charges  1,689   59,548 
Total Assets $1,328,324  $1,842,323 
         
Liabilities and Shareholders' Equity        
   Accounts Payable $31,095  $45,380 
   Taxes Payable  5,665   4,779 
   Other Liabilities  74,479   75,744 
   Shareholders' Equity  1,217,085   1,716,420 
Total Liabilities and Shareholders' Equity $1,328,324  $1,842,323 

Note

NOTE 6 – ACCRUED EXPENSES

Accrued expenses consisted of the following at:

 

 

October 31,
2013

 

 

April 30,
2013

 

 

 

 

 

 

 

 

Accrued payroll

 

$521,629

 

 

$278,923

 

Accrued consulting

 

 

815,681

 

 

 

577,983

 

Accrued dividend

 

 

260,685

 

 

 

210,685

 

Accrued interest

 

 

304,831

 

 

 

236,083

 

Other

 

 

62,685

 

 

 

62,685

 

 

 

 

 

 

 

 

 

 

 

 

$1,965,511

 

 

$1,366,359

 

NOTE 7 – NOTES PAYABLE

Notes payable, currently in default, consist of the following at:

 

 

October 31,
2013

 

 

April 30,
2013

 

 

 

 

 

 

 

 

Note payable to an unrelated party, maturing July 15, 2010, with interest at 10%

 

$300,000

 

 

$300,000

 

Note payable to an unrelated party, maturing December 31, 2010, with interest at 10%

 

 

25,000

 

 

 

25,000

 

Note payable to an unrelated party, maturing January 27, 2012, with interest at 25%

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

$375,000

 

 

$375,000

 


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Accrued Expenses


As of Januaryinterest payable on notes payable, currently in default, totaled $173,352 and $152,727 at October 31, 2013 and April 30, 2012 accrued expenses included the following:
  
January 31,
2013
  
April 30,
2012
 
Accrued Lease Expenses $62,541  $62,541 
Accrued Payroll, Officers  237,101   117,543 
Accrued Payroll, Employees  30,842   - 
Accrued Consulting  550,531   548,145 
Accrued Dividend  185,685   110,685 
Accrued Interest  163,891   143,963 
  $1,230,591  $982,877 
18

Note 8 – Long-term Debt
Long-term debt were as follows at:
  
January 31,
2013
  
April 30,
2012
 
Issued by MMEX Mining Corporation:      
  Dosdall Investment - 10%, due 12/31/10, currently in default $50,000  $50,000 
  Blackstone Investment Corp. - 6%, due 3/1/17  -   558,181 
  William Gross (preferred shares convertible) - 10%, due 3/18/16  175,070   40,418 
  William Gross (common shares convertible) - 10%, due 7/31/13  1,413,464   1,064,633 
  William Gross - 20%, due 10/31/13  98,856   - 
  Herbert Villalonga (common shares convertible) - 22%, due 3/1/13  105,000     
  Montana Coal Royalty - 10%, due 3/18/12, related party  -   290,000 
  BNL Family Partners, LLC (convertible)- 20%, due 10/30/13, related party  3,730   - 
  Delavega Trading Ltd (convertible)- 20%, due 9/30/13, related party  13,385   - 
  Delavega Trading Ltd (convertible)- 20%, due 12/17/13, related party  6,157   - 
Issued by subsidiaries of the Company:        
  AMC (preferred stock) - 10%, due 6/30/12  137,500   137,500 
  Hawn Financial - 25%, due 1/27/12, currently in default  25,000   25,000 
  Atlantic Coal PLC - 10%. On demand, currently in default  300,000   300,000 
Total debt issued by the Company and subsidiaries  2,328,162   2,465,732 
  Less current maturities  (2,153,092)  (1,360,681)
Total long-term debt $175,070  $1,105,051 

Notes Payable-Third Party,2013, respectively.

Convertible notes payable, currently in default,

In November of 2009 the Company entered into a $300,000 note agreement which carried a 10% interest rate due on July 15, 2010.  Accrued interest of $115,486 and $92,986 was outstanding at January 31, 2013 and April 30, 2012, respectively.  This note is currently in default.

Notes Payable-Related Party
On March 18, 2011, the Company issued a $290,000 related party promissory note due and payable on March 18, 2012.  The note carried a 10% interest rate.  On May 16, 2012, the Corporation issued 3,480,000 shares consist of the Company’s common stockfollowing at:

 

 

October 31,
2013

 

 

April 30,
2013

 

 

 

 

 

 

 

 

Note payable to an accredited investor, maturing July 31, 2013, with interest at 10%, convertible at the option of the holder into common shares of the Company at a fixed conversion price of $0.20 per share, secured with 2,995,000 common shares of the Company

 

$

1,650,000

 

 

$

1,650,000

 

 

 

 

 

 

 

 

 

 

Note payable to an accredited investor, maturing October 31, 2013, with interest at 20%, convertible at the option of the holder into common shares of the Company at a fixed conversion price of $0.20 per share

 

 

120,000

 

 

 

120,000

 

 

 

 

 

 

 

 

 

 

Note payable to an accredited investor, maturing February 1, 2014, with interest at 20%, convertible upon default at the option of the holder into common shares of the Company at a fixed conversion price of $0.20 per share

 

 

180,000

 

 

 

180,000

 

 

 

 

 

 

 

 

 

 

Note payable to an accredited investor, maturing March 1, 2013, with interest at 1.87% per month, secured with 900,000 common shares of the Company owned by the president and CEO of the Company

 

 

120,000

 

 

 

120,000

 

 

 

 

 

 

 

 

 

 

Note payable to an unrelated party, maturing March 18, 2014, with interest at 10%

 

 

75,000

 

 

 

75,000

 

 

 

 

 

 

 

 

 

 

Total

 

 

2,145,000

 

 

 

2,145,000

 

 

 

 

 

 

 

 

 

 

Less discount

 

 

(11,525)

 

 

(208,250)

 

 

 

 

 

 

 

 

 

Net

 

$2,133,475

 

 

$1,936,750

 

On April 25, 2012, four prior convertible notes payable to Montana Coal Royalty, LLC pursuant to conversion of $323,640 of the note and accrued interest; the fair value of these shares ($0.22 per share) on May 16, 2012, was $765,600, which when compared to the obligations fulfilled of $323,640, resulted in a loss on conversion of $441,960 as the note and interest were converted outside of the terms of the agreement.  Montana Coal Royalty, LLC is owned equally by AAM Investments, LLC and The Maple Gas Corporation. The Maple Gas Corporation is controlled by Mr. Jack Hanks, the CEO and a director of the Corporation.


Convertible Notes-Third Party, currently in default
On March 8, 2010, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company soldwere combined into a $50,000 convertible note in a private placement transaction. In the transaction, the Company received proceeds of $35,000 and the investor also paid $15,000 of consulting expense on behalf of the Company.new $1,500,000 note. The convertible note was due and payable on DecemberJuly 31, 2010 with an interest rate of 10% per annum.2013. The note is convertiblebears interest at the option of the holder into our common stock at a fixed conversion price of $3.70, subject to adjustment for stock splits and combinations.  Accrued interest of $14,485 and $10,735 was outstanding at January 31, 2013 and April 30, 2012 respectively.  As of January 31, 2013 this note is in default.

On January 28, 2011 and February 1, 2011, the Company closed a Convertible Note Agreement totaling $514,900 in principal amount of 25% Convertible Note (the “Notes”)10% due on the first anniversary of the date of the Note, to a group of institutional and high net worth investors.  The Notes are convertible into the Company’s common stock at the holders’ option at $1.00 per common share. The holder may accelerate repayment of the Note upon sale of the Carpenter Creek prospect.  In addition, the Company issued 643,625 warrants to purchase shares of the Company’s common stock at an exercise price of $1.00 per share on or before three years from the repayment or conversion date.  All but $25,000 of the promissory notes plus interest were paid in full on March 23, 2011.  As of January 31, 2013 the remaining $25,000 was in default.  Accrued interest of $12,513 and $7,825 was outstanding at January 31, 2013 and April 30, 2012 respectively.

The Company allocated the proceeds from the issuance of the Notes to the warrants and the Notes based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $514,900 was recorded as an increase in additional paid-in capital and was limited to the note balance.  The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one-year term of the Notes as additional interest expense.  Upon repayment of the notes on March 23, 2011, $514,900 of the loan discount was taken as an interest expense.
19


Convertible Notes-Third Party
On January 13, 2012, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $100,000 note in a private placement transaction. The note is due and payable on January 12, 2013, carries a 25% interest rate due in full at issuance. The computed interest of $25,000 was added to the balance of the note and recorded as additional debt discount.  The note is secured with 330,000 of the Company's common stock.  In addition, the Company issued 125,000 warrants to purchase shares of the Company’s common stock at an exercise price of $.075 per share on or before three years from the issuance date.

The Company allocated the proceeds from the issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $19,817 was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one year term of the Note as additional interest expense.  During the nine months ended January 31, 2013, $14,049 was recorded as amortization of the debt discount into interest expense. The Company recorded the intrinsic value of the beneficial conversion of $80,183 as debt discount and will amortize the discount over the original one year term of the Note.

On April 25, 2012, the holder of the above note elected to convert their note and accrued interest into 625,000 common shares under the same terms as provided to investors in the March 2, 2012 private placement. In addition, the Company issued 625,000 warrants to purchase shares of the Company’s common stock at an exercise price of $0.30 per share on or before three years from the issuance date. Since the debt was converted at a higher price than under the terms of the note agreement, a gain on conversion of shares of $250,000 was reported.  The Company allocated the proceeds from the issuance of the shares to the warrants and the shares on their fair market values at the date of conversion using the Black-Scholes model.  The value assigned to the warrants of $148,215 was recorded as a reduction in the gain realized on the conversion of the shares and an increase in additional paid-in capital.  In addition, the beneficial conversion feature of $80,183 was fully expensed on April 25, 2012 due to the conversion of the note into common shares.

On March 1, 2012, the Company issued a $1,200,000 convertible debenture as part of an amendment to its acquisition of the Hunza mine.  The note is due and payable on March 1, 2017 and carries a 6% interest rate.  The note is convertible at the option of the holder into our common stock at a fixed conversion price of $0.30.  On March 8, 2012 $538,200 of the note was converted into 1,794,000 of the Company's common stock.  On May 1, 2012, the remaining $661,800 balance of the $1,200,000 convertible note was converted into 2,206,000 shares of the Company’s common stock. No gain or loss was recognized on the conversions as they were within the terms of the convertible debenture.

The Company recorded the intrinsic value of the beneficial conversion of $200,000 as debt discount and was to be amortized over the life of the convertible debenture or as conversions occurred.  As a result of the conversion of part of the convertible debenture, $89,700 of the beneficial conversion debt discount was recognized as expense on March 8, 2012, with the remaining $103,619 being expensed on May 1, 2012 when the remaining debt was converted.

On January 2, 2013, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $120,000 note in a private placement transaction. The note is due and payable on March 1, 2013, carries a 1.87% per month interest rate due and payable on March 1, 2013 and included 300,000 shares of the Company’s common stock. If the note is not paid by March 1, 2013, the interest rate is increased by an additional 30% annually.  The note is secured with 900,000 of the Company's common stock which were pledged and owned by Jack Hanks, the Company’s President and CEO.  The 300,000 shares were valued at $0.10 per share, the closing price of the Company stock on January 2, 2013, and recorded as a $30,000 increase to discount on notes payable and an increase in common stock payable.  The discount will be amortized over the term of the note.

Convertible Debentures – Third Party - PPM Notes
On April 25, 2011 and May 7, 2011, the Company closed a note purchase agreement with various investors pursuant to which the Company sold an aggregate of $680,000 notes in a private placement transaction (PPM Notes).  The PPM Notes are due and payable on or before October 14, 2011 and carry a 25% interest rate due in full at issuance.   The computed interest of $170,000 was added to the balance of the PPM Notes and recorded as debt discount which will be taken as interest expense over the life of the notes.  The PPM Notes are convertible upon default at the option of the holder into our common stock at a fixed conversion price of $0.40, subject to adjustment for stock splits and combinations.  In addition, the Company issued 1,062,500 warrants to purchase shares of the Company’s common stock at an exercise price of $0.80 per share on or before three years from the issuance date.

20

The Company allocated the proceeds from the issuance of the PPM Notes to the warrants and the notes based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $680,000 was recorded as an increase in additional paid-in capital and was limited to the note balance. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original six-month term of the notes as additional interest expense.

On October 14, 2011, $106,250 of the PPM Notes plus interest was converted into common stock.  As consideration for the extension of the balance of the remaining notes, the Company issued 989,188 warrants to purchase shares of the Company’s common stock at an exercise price of $0.20 per share on or before April 25, 2014.  The warrants were valued at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $195,646 was recorded as an increase in additional paid-in capital.  The assignment of a value to the warrants resulted in a financing fee being recorded for the same amount.

On February 17, 2012, $43,750 of the PPM Notes plus interest was converted into common stock within the terms of the agreement; therefore, no gain or loss was recorded as result of this conversion.

On April 24, 2012, $325,000 of the PPM Notes plus interest was converted into common stock. Loss on conversion of the debentures of $46,842 was recorded.

On April 25, 2012, the remaining $375,000 of principal and interest of the PPM Notes was consolidated with various other notes held by the same investor and reissued as a new note.  See PPM Note #2 below.  The debt discounts associated with the interest were fully amortized on that date.

Convertible Debentures – Third Party – PPM Note #2
On September 9, 2011, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $300,000 note in a private placement transaction. The note is due and payable on September 19, 2012, carries a 25% interest rate due in full at issuance. The computed interest of $75,000 was added to the balance of the note and recorded as additional debt discount.  The note is secured with 1,000,000 of the Company's common stock.  In addition, the Company issued 375,000 warrants to purchase shares of the Company’s common stock at an exercise price of $0.16 per share on or before three years from the issuance date.

The Company allocated the proceeds from the issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $55,934 was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one year term of the Note as additional interest expense.

On October 28, 2011, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $500,000 note in a private placement transaction. The note is due and payable on October 31, 2012, carries a 25% interest rate due in full at issuance. The computed interest of $125,000 was added to the balance of the note and recorded as additional debt discount.  The note is secured with 1,665,000 of the Company's common stock.  In addition, the Company issued 625,000 warrants to purchase shares of the Company’s common stock at an exercise price of $.16 per share on or before three years from the issuance date.

The Company allocated the proceeds from the issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $124,400 was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one year term of the Note as additional interest expense.
On December 8, 2011, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $100,000 note in a private placement transaction. The Company is required to redeem the note on that date which is the earlier of: (i) the closing of any Company equity financing in excess of $2,250,000 or (ii) December 8, 2012 at a payment equal to $125,000.  The Company at its option may elect to redeem the note at such payment amount on any earlier date. In addition to redemption of the note, the Company agreed to redeem an additional amount of debt owed to the investor in the amount of $100,000 in principal and $25,000 in fees out of additional funding from any financing. Such funding shall be applied to the $500,000 note dated October 28, 2011 issued by the Company to the investor. The note is secured with 330,000 shares of the Company's common stock.  In addition, the Company issued 125,000 warrants to purchase shares of the Company’s common stock at an exercise price of $0.20 per share on or before three years from the issuance date.

21

The Company allocated the proceeds from the issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $28,369 was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one year term of the Note as additional interest expense.

On April 25, 2012, the notes dated September 9, 2011, October 28, 2011 and December 8, 2011 and $375,000 from the April 25, 2011 PPM Notes offering were consolidated into a new $1,500,000 note (PPM Note #2).  The PPM Note #2 is due and payable on October 31, 2013, carries an additional 10% interest rate due in full at maturity. The computed interest of $150,000 was added to the balance of the note and recorded as additional debt discount. The note is convertible at the option of the holder into ourshares of the Company’s common stock at a fixed conversion price of $0.20 subject to adjustment for stock splits and combinations.per share. The note is secured with 2,995,000was subsequently transferred to a related party and converted to common shares of the Company's common stock.

The Company recorded the intrinsic value of the beneficial conversion of $330,000 as debt discount and will amortize the discount over the original fifteen month term of the Note.  During the nine months ended January 31, 2013, $163,096 was recorded as amortization of the debt discount into interest expense.

– see Note 12.

On August 15, 2012, the CorporationCompany entered into a $100,000 convertible note agreement with an unrelated party.accredited investor. The debenturenote is subject to a 20% placement fee payable to the holder irrespective of the date redeemed, matures on October 31, 2013 and is convertible into common shares at the holder’s option of the holder into shares of the Company’s common stock at a fixed conversion price of $0.20 per Common Share. Pursuant to the agreement, the Corporation also (i) amended the conversion rate of the March 2011 Series A Preferred Stock (“Preferred Stock”) from $0.40 to $0.20 per Common Share, (ii) amended the maturity date of the April 2012 Debenture from July 31, 2013 to October 31, 2013, (iii) amended the exercise price of the Warrant agreement of April 2011 to purchase 468,750 Common Shares from $0.80 to $0.20, and (iv) issued 120,000 Warrants, to the holder of the August 15, 2012 Debenture, with an exercise price of $0.30 per Common Share until August 15, 2015 valued at $14,232.share. The note is currently in default. The computed interest of $20,000 was added to the balance of the note and recorded as additional debt discount.


As a result of In addition, the August 15, 2012 amendment of the Preferred Stock exercise price, $300,000 of additional paid in capital was recognized as an additional interest expense in conjunction with the proceeds received from the note agreement.  As a result of the August 25, 2012 amendment to the exercise price of the warrant agreement, $2,694 of additional paid in capital was recognized as an additional interest expense in conjunction with the proceeds received from the note agreement.

The Company allocated the proceeds from the issuance of the note to theissued 120,000 warrants and the note based on their fair market valuesvalued at the date of issuance$14,232 using the Black-Scholes option pricing model. The value assigned toof the warrants of $14,232 was recorded as an increase into debt discount and to additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one year term of the Note as additional interest expense. During the nine months ended January 31, 2013, $5,442 was recorded as amortization of the debt discount into interest expense.
Convertible Notes-Related Party
On August 1, 2012, the Corporation entered into a $10,000 convertible note agreement with BNL Family Partners, Mr. Bruce N. Lemons, a director of the Corporation, is a partner of BNL Family Partners, The debentures are convertible into common shares at the holder’s option at $0.20 per common share. The holders may accelerate repayment of the promissory notes upon the Corporation raising additional capital of $150,000. In addition, the Corporation issued 10,000 warrantsexercisable at an exercise price of $0.30 per common share until August 1, 2015 valued at $994.  On August 21, 2012, the Corporation repaid the $10,000 debenture.
15, 2015. The Company allocated the proceeds from the issuancenote was subsequently transferred to a related party and converted to common shares of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $994 was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one year term of theCompany – see Note as additional interest expense.  During the nine months ended January 31,12.


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Table of Contents

On February 1, 2013, $428 was recorded as amortization of the debt discount into interest expense.

On August 1, 2012, the Company entered into a $13,000$150,000 convertible note agreement with Delavega Trading Ltd., Mr. Nabil Katabi, a directoran unrelated party. The note was due and payable on February 1, 2014, and carries an interest rate of 20%. The note is convertible upon default at the option of the Corporation, isholder into shares of the Company’s common stock at a control personfixed conversion price of Delavega Trading Ltd. The debenture carries a 20% interest rate until maturity at September 30, 2013 and is convertible into common shares at the holder’s option at $0.20 per common share. The computed interest of $2,600$30,000 was added to the balance of the note and recorded as additional debt discount. DuringIn addition, the nine months ended January 31, 2013, $1,120Company issued 150,000 warrants valued at $16,103 using the Black-Scholes option pricing model. The value of the warrants of $16,103 was recorded as amortization of thean increase to debt discount into interest expense. In addition, the Corporation issued 13,000 Warrantsand to additional paid-in capital. The warrants are exercisable at an exercise price of $0.30$0.20 per Common Share until Augustcommon share on or before three years from the repayment or conversion date. The note was subsequently transferred to a related party and converted to common shares of the Company – see Note 12.

On January 2, 2013, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $120,000 note in a private placement transaction. The note was due and payable on March 1, 20152013, is currently in default and carries a monthly interest rate of 1.87%. The note purchase agreement included the issuance of 300,000 shares of the Company’s common stock. The note is secured with 900,000 shares of the Company’s common stock owned by Jack Hanks, the Company’s President and CEO. The 300,000 shares were valued at $1,292.


22

$0.10 per share, the closing price of the Company’s common stock on January 2, 2013, and recorded as a $30,000 increase to debt discount and an increase to common stock payable.

The Company allocated the proceeds from the issuance of the notenotes to the warrants when applicable and to the notenotes based on their estimated fair market values at the date of issuance using the Black-Scholes option pricing model. The debt discount resulting from interest and the value assigned toof warrants computed at the warrantsinception of $1,292 was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will benotes payable is amortized over the original one year term of the Notenotes as additional interest expense. During the ninethree months ended JanuaryOctober 31, 2013 $557 was recorded as amortization of theand 2012, debt discount intoamortized to interest expense.

On September 15, 2012,expense totaled $56,269 and $129,934, respectively. During the Corporation entered into a $4,500 convertible note agreement with BNL Family Partners, LLC.  Mr. Bruce N. Lemons, a director of the Corporation, is a partner of BNL Family Partners.  The debentures carry a 20% interest rate until maturity at September 30,six months ended October 31, 2013 and are convertible into common shares at the holder’s option at $0.20 per common share. The holders may accelerate repayment of the promissory notes upon the Corporation raising additional capital of $150,000. The computed interest of $900 was added to the balance of the note and recorded as additional debt discount. During the nine months ended January 31, 2013, $327 was recorded as amortization of the2012, debt discount intoamortized to interest expense. In addition, the Corporation issued 4,500 Warrants at an exercise price of $0.30 per Common Share until September 15, 2015 valued at $800.

The Company allocated the proceeds from the issuance of the note to the warrantsexpense totaled $196,724 and the note based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $800 was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one year term of the Note as additional interest expense. During the nine months ended January 31, 2013, $269 was recorded as amortization of the debt discount into interest expense.

On December 17, 2012, the Company entered into a $6,500 convertible note agreement with Delavega Trading Ltd., Mr. Nabil Katabi, a director of the Corporation, is a control person of Delavega Trading Ltd. The debenture carries a 20% interest rate until maturity at December 17, 2013 and is convertible into common shares at the holder’s option at $0.20 per common share. The computed interest of $1,300 was added to the balance of the note and recorded as additional debt discount.  During the nine months ended January 31, 2012, $160 was recorded as amortization of the debt discount into interest expense. In addition, the Corporation issued 6,500 Warrants at an exercise price of $0.30 per Common Share until December 17, 2015 valued at $549.

The Company allocated the proceeds from the issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $549 was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one year term of the Note as additional interest expense. During the nine months ended January 31, 2013, $71 was recorded as amortization of the debt discount into interest expense.

On January 4, 2013, the Company entered into a $10,000 convertible note agreement with BNL Family Partners (a related party); Mr. Bruce N. Lemons, a director of the Company, is a partner of BNL Family Partners.  The holder may accelerate repayment of the promissory note upon the Corporation raising additional capital of $150,000 and are convertible into Common Shares at the holder’s option at $0.20 per Common Share. In addition, the Corporation issued 10,000 warrants to purchase Common Shares at an exercise price of $0.30 per Common Share until January 4, 2016 On January 10, 2013 the note was repaid in full.

The Company allocated the proceeds from the issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes model.  The value assigned to the warrants of $780 was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the original one year term of the Note as additional interest expense. During the nine months ended January 31, 2013, $376 was recorded as amortization of the debt discount into interest expense.

Convertible $375,758, respectively.

NOTE 8 – CONVERTIBLE PREFERRED STOCK

Preferred Stock-Third Party

Stock – Mandatory Redemption Right

On March 22, 2011 the Company issued 1,000,000 shares of Series A Preferred Stock (the “Preferred Stock”) to an unrelated party in exchange for an investment of $1,000,000. The shares may be converted into the Company’s common shares at $0.40 per common share. The Preferred Stock carry a 10% cumulative dividend and have a mandatory redemption feature on the earlier of March 1, 2016 or on a change of control transaction. The Company is required to redeem the shares at a liquidation value of $1.00 per share plus any accrued and unpaid dividends. Due to the mandatory redemption feature, the Company recorded the investment as a liability under ASC Subtopic 480-10.


23

The Company recorded the intrinsic value of the beneficial conversion of $1,000,000 as debt discount and will amortize the discount through the mandatory redemption feature date of March 1, 2016. During the ninethree months ended JanuaryOctober 31, 2013 and 2012, $134,652 and $16,764 respectively, was recorded as amortization of the debt discount intoto interest expense.expense totaled $35,245 and $135,508, respectively. During the six months ended October 31, 2013 and 2012, amortization of debt discount to interest expense totaled $65,845 and $227,065, respectively. The investment is collateralized with a security interest in 2,500,000 MMEX Mining Corporationshares of the Company’s common stock shares.


stock.

Loan costs of $50,000 incurred on the issuance of the Preferred Stock were recorded as deferred loan costs and will be amortized by the effective interest method. The Company recorded amortization on loan costs in the amount of $7,500$2,500 for both nine month periodseach of the three months ended JanuaryOctober 31, 2013 and 2012 respectively and $2,500$5,000 for both three month periodseach of the six months ended JanuaryOctober 31, 2013 and 2012, respectively.2012. Unpaid dividends payable were $185,685 at January 31, 2013 on the Preferred Stock.

Stock totaled $260,685 and $210,685 at October 31, 2013 and April 30, 2013, respectively.


14
Table of Contents

On August 15, 2012, the companyCompany amended the Preferred Stock agreement and lowered the conversion rate provided from $0.40 per common share to $0.20 per common share. The amendment generated a $302,694 fair value adjustment that was recorded as additional interest and increased additional paid in capital.


The Preferred Stock and related accrued dividends were subsequently transferred to a related party and converted into common shares of the Company – see Note 12.

Convertible Preferred Stock-Third Party, currentlyStock, Currently in default

Default

On June 30, 2011, the Company issued 360,000 shares of Armadillo Mining Corporation Preferred Stock to five unrelated parties in exchange for an investment of $360,000. The Preferred Stock carry a 25% cumulative dividend and have a mandatory redemption feature on December 31, 2011 at a price of $1.25 per share. In addition, the Company issued 360,000 warrants to purchase shares of the Company’s common stock at an exercise price of $0.60 per share on or before three years from the repayment or conversion date.


On January 6, 2012, three unrelated parties converted their Preferred Stock and accrued dividends of $312,500 into 2,983,293 shares of MMEX Mining Corporationthe Company’s common stock at a price of $.10475 per share. As the conversion took place at below the market price and not within the terms of the agreement on the date of conversion; thus,conversion, a loss of $75,328 was recorded.


As of October 31, 2013 and April 30, 2013, the remaining face value of the Preferred Stock was $137,500. Accrued dividends on the Preferred Stock totaled $110,196 and $75,539 as of October 31, 2013 and April 30, 2013, respectively.

The Company recorded total interest expense, which includes amortization of debt discountsdiscount on convertiblecertain debt fromdescribed above, on debt in the amount of $931,897totaling $155,216 and $1,433,471$469,007 for the ninethree months ended JanuaryOctober 31, 2013 and 2012, respectively, and $168,264totaling $390,283 and $264,462$763,633 for the threesix months ended JanuaryOctober 31, 2013 and 2012, respectively.


Note

NOTE 9 – ChangesSTOCKHOLDERS’ DEFICIT

Authorized Shares

Pursuant to an amendment to its articles of incorporation (Note 12), the Company increased its authorized shares to 1,000,000,000 common shares and 10,000,000 preferred shares. The increase in Stockholders’ Equity (Deficit)


On May 25, 2011,authorized shares has been given retroactive effect in the Board of Directors approved a 1accompanying condensed consolidated financial statements for 10 reverse stock splitall periods presented.

Stock Issuances

During the six months ended October 31, 2013, the Company did not issue any shares of its common or preferred stock.  All references in


15
Table of Contents

Stock Options

On March 7, 2012, three directors of the accompanying financial statements to the numberCompany (the "Optionees") received a total of shares of2,000,000 unvested stock options exercisable at $0.35 per share for common stock of the Company: after service of one year, 50% will be vested, and loss per share have been retroactively restated to reflectafter service of the reverse stock split.


second year the remaining 50% will become vested; with an actual term of ten years from the date of grant. The Company is authorizeddid not grant any stock options during the six months ended October 31, 2013.

The Company uses the Black-Scholes option pricing model to issue up to 200,000,000 sharesestimate the grant date fair value of its $0.001 parstock options, which value common stock. There were 55,988,313 shares issued and outstanding at January 31, 2013.


Foris amortized to stock-based compensation expense over the vesting period from inception (May 23, 2007) through Januaryof the options. No stock-based compensation expense was recorded during the three months or six months ended October 31, 2013 there has been contributions of capital from members of $7,696,652 and contributions of capital from shareholders of $343,139.

Common2012 related to stock issued commensurate with the merger with MCCH
On September 23, 2010 the Company issued a subscription payable for 1,500,000 shares of commonoption grants. Unrecognized stock pursuant to the merger with MCCH. The shares were valued at par value, resulting in a total subscription payable of $15,000option expense at October 31, 2010. On January 11, 2011,2013 was $229,942.

A summary of stock option activity during the Board of Directors, through a Unanimous Written Consent of the Board of Directors issued the remaining shares in accordance with the merger agreement.   six months ended October 31, 2013 is presented below:

 

 

Shares

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Remaining Contractual Life (Years)

 

 

 

 

 

 

 

 

 

 

 

Outstanding, April 30, 2013

 

 

2,000,000

 

 

$0.35

 

 

 

9.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

-

 

 

 

-

 

 

 

 

 

Canceled / Expired

 

 

-

 

 

 

-

 

 

 

 

 

Exercised

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding, October 31, 2013

 

 

2,000,000

 

 

$0.35

 

 

 

8.35

 

Warrants

The Company reversed the subscription payable resulting in a $15,000 adjustmenthas issued warrants to additional paid in capital.


On October 8, 2010 the Company issued 2,500,000 shares of common stock The Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO pursuant to the merger with MCCH on September 23, 2010. The sharesnon-employees for either debt discounts or stock-based compensation. These warrants generally vested upon grant and were valued at par value, resulting in a $25,000 adjustment to additional paid in capital in accordance with the accounting for reverse acquisition under ASC 805-10-40.

On October 8, 2010 the Company issued 2,500,000 shares of common stock to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, pursuant to the merger with MCCH on September 23, 2010. The shares were valued at par value, resulting in a $25,000 adjustment to additional paid in capital in accordance with the accounting for reverse acquisitions under ASC 805-10-40.

24

Merger Agreement Common Stock issued subsequent to the merger date with MCCH
On December 22, 2010 the Company issued 31,334 shares to Steve Eppig in exchange for Mr. Eppig’s 1.88% interest in the equity of its Armadillo Holdings Group Corporation subsidiary.  The shares were valued at the value of the minority interest held in Armadillo Holding Group Corporation through January 31, 2011 which was $22,526.

On January 12, 2011 the Company issued 750,000 shares of common stock The Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO pursuant to the termination and rescission of the DEIC agreement.  The shares were valued at par value, resulting in a $7,500 adjustment to common stock payable in accordance with the accounting for reverse acquisition under ASC 805-10-40.

On January 12, 2011 the Company issued 750,000 shares of common stock to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, pursuant to the termination and rescission of the DEIC agreement.  The shares were valued at par value, resulting in a $7,500 adjustment to common stock payable in accordance with the accounting for reverse acquisitions under ASC 805-10-40.

On September 13, 2011 the Company issued 500,000 shares of common stock to The Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO pursuant to the vesting of contingent consideration which was connected to the original issuance of Company common stock in connection with the acquisition of MCCH. The shares were valued at par value, resulting in a $5,000 adjustment to common stock payable in accordance with the accounting for reverse acquisition under ASC 805-10-40.

On September 13, 2011 the Company issued 500,000 shares of common stock to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, pursuant to the vesting of contingent consideration which was connected to the original issuance of Company common stock in connection with the acquisition of MCCH.  The shares were valued at par value, resulting in a $5,000 adjustment to common stock payable in accordance with the accounting for reverse acquisition under ASC 805-10-40.

On April 26, 2012, the Company granted 250,000 shares of common stock to The Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO pursuant to the vesting of contingent consideration which was connected to the original issuance of Company common stock in connection with the acquisition of MCCH. The shares were valued at par value, resulting in a $2,500 adjustment to common stock payable in accordance with the accounting for reverse acquisition under ASC 805-10-40.  On April 26, 2012, 4,874 of these shares were issued, the remaining 245,126 shares were issued to DelaVega Trading Ltd. (a related party), an entity controlled by Nabil Katabi a company board member, on May 1, 2012.

On April 26, 2012, the Company issued 250,000 shares of common stock to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, pursuant to the vesting of contingent consideration which was connected to the original issuance of Company common stock in connection with the acquisition of MCCH.  The shares were valued at par value, resulting in a $2,500 adjustment to common stock payable in accordance with the accounting for reverse acquisition under ASC 805-10-40.   On April 26, 2012, 225,475 of these shares were issued, the remaining 24,525 shares were issued to DelaVega Trading Ltd. (a related party), an entity controlled by Nabil Katabi a company board member, on May 1, 2012.

Common Stock issued for Cash
On August 28, 2011, the Company sold 200,000 shares of MMEX Mining Corporation common stock to an unrelated party in exchange for an investment of $32,000.

On October 4, 2011, the Company sold 312,500 shares of MMEX Mining Corporation common stock to an unrelated party in exchange for an investment of $50,000.

On December 8, 2011, the Company sold 50,000 shares of MMEX Mining Corporation common stock to an unrelated party in exchange for an investment of $10,000.

On March 2, 2012, the Company completed a private placement of units to South American investors (the “March 2012 Private Placement”). Each unit consisted of one Common Share and one Common Share purchase warrant and was issued at $0.20 per unit. The Corporation received gross proceeds of $5,509,288. Of the total 27,546,438 common shares due associated with the private placement, the Company was only able to issue 26,421,438 by April 30, 2012; the remaining 1,125,000 common shares were issued after an increased was approved to the Company’s authorized share count. In conjunction with the private placement, an unrelated party received 300,000 common shares at a price of $0.20 as compensation for services. Each warrant entitles the holder to acquire one common share at a price of $0.30 per Common Share for a period of three years.

The Company computed the proceeds from the issuance of the common shares to the warrants and the shares based on their fair market values at the date of issuance using the Black-Scholes option pricing model. The value assigned toNo warrants were issued during the warrantssix months ended October 31, 2013.


16
Table of Contents

A summary of $9,546,249warrant activity during the six months ended October 31, 2013 is provided for footnote purposes only.


25

On May 1, 2012, the Corporation issued 500,000presented below:

 

 

Shares

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Remaining Contractual Life (Years)

 

 

Outstanding, April 30, 2013

 

 

32,865,345

 

 

$0.33

 

 

 

2.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

-

 

 

 

-

 

 

 

 

 

Canceled / Expired

 

 

-

 

 

 

-

 

 

 

 

 

Exercised

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding, October 31, 2013

 

 

32,865,345

 

 

$0.33

 

 

 

1.92

 

Common Stock Reserved

At October 31, 2013, 49,350,984 shares of the Company’s common stock at $0.20 per share to an unrelated party pursuant to the terms provided in the March 2, 2012 private placement. These shares had already been paid for by the unrelated party and were represented by a common stock payable as of April 30, 2012.  The subsequent issuance of common shares during May 2012 resulted in a decrease to the common stock payable and an increase to common stock and additional paid in capital.


On May 16, 2012, the Corporation issued 375,000 shares of the Company’s common stock at $0.20 per share to an unrelated party pursuant to the terms provided in the March 2, 2012 private placement. These shares had already been paid for by the unrelated party and were represented by a common stock payable as of April 30, 2012.  The subsequent issuance of common shares during May 2012 resulted in a decrease to the common stock payable and an increase to common stock.

On June 15, 2012, the Corporation issued 250,000 shares of the Company’s common stock at $0.20 per share to an unrelated party pursuant to the terms of the March 2, 2012 private placement.  These shares had already been paid for with cash by the unrelated party and were represented by a common stock payable as of April 30, 2012.  The subsequent issuance of common shares during May 2012 resulted in a decrease to the common stock payable and an increase to common stock.

On September 27, 2012, the Corporation issued 250,000 Common Shares at a price of $0.20 per share to Delavega Trading Ltd.(a related party), a company for which Nabil Katabi a Company director has a controlling interest, in exchange for an investment of $50,000. In addition, the Corporation issued 250,000 Warrants at an exercise price of $0.30 per Common Share until September 27, 2015 valued at $49,468 as the issuance date.

Common Stock issued for Debt Conversion
On October 19, 2011, an unrelated party converted their promissory note and accrued interest of $62,500 into 156,250 shares of MMEX Mining Corporation common stock at a price of $0.40 per share. As the value of the stock at the closing price on that date was equal to the value of the debt extinguished, no gain or loss was recognized.

On January 6, 2012, three unrelated parties converted their promissory notes and accrued interest of $312,500 into 2,983,293 shares of MMEX Mining Corporation common stock at a price of $0.10 per share. As the conversion took place at below the market price on the date of conversion, a loss of $75,328 was recorded.

On February 17, 2012, 109,375 shares of MMEX Mining Corporation common stock at a price of $0.40 per share were issued as a result of a conversion of $43,750 of debt and interest which had been requested on October 19, 2012 in accordance with the terms of the debt agreement; therefore, no gain or loss was recognized.

On March 8, 2012, $538,200 of the $1,200,000 convertible note issued in conjunction with the Hunza amendment was converted into 1,794,000 shares of the Company’s common stock at a price of $.30 per share.  No gain or loss was recognized on this conversion as the note was converted within the terms of the agreement.

On May 1, 2012, the Company issued 131,250 shares of common stock to DelaVega Trading Ltd., an entity controlled by one of the Company’s Directors, Nabil Katabi, pursuant to conversion of a note and accrued interest of $43,750 at a price of $0.33 per share. Since the debt was converted at a lower price than under the terms of the note agreement, a loss on conversion of shares of $5,250 was reportedduring the fiscal year ended April 30, 2012.

On May 1, 2012, the Corporation issued 625,000 shares of the Company’s common stock at a price of $0.20 per share upon the conversion of $125,000 convertible debenture.  Since the debt was converted at a higher price than under the terms of the note agreement, a gain on conversion of shares of $250,000 was reported during the fiscal year ended April 30, 2012.  The Company allocated the proceeds from the issuance of the shares to the warrants and the shares on their fair market values at the date of conversion (April 25, 2012) using the Black-Scholes model.  The value assigned to the warrants of $148,215 was recorded as a reduction in the gain realized on the conversion of the shares and an increase in additional paid-in capital.  In addition, the beneficial conversion feature of $80,183 was fully expensed on April 25, 2012 due to the conversion of the note into common shares. The subsequent issuance of common shares during May 2012 resulted in a decrease to the common stock payable and an increase to common stock.

On May 1, 2012, the remaining $661,800 of the $1,200,000 convertible note issued in conjunction with the Hunza amendment was converted into 2,206,000 shares of the Company’s common stock at a price of $0.30 per share.  No gain or loss was recognized on this conversion as the note was converted within the terms of the agreement.

26

On May 16, 2012, the Corporation issued 3,480,000 shares of the Company’s common stock at $0.10 per share to Montana Coal Royalty, LLC pursuant to conversion of $323,640 of a note and interest.  Montana Coal Royalty, LLC is owned equally by AAM Investments, LLC and The Maple Gas Corporation. The Maple Gas Corporation is controlled by Mr. Jack Hanks, the CEO and a director of the Corporation.  As the conversion took place at below the market price on the date of conversion, a loss of $441,960 was recorded.

On May 16, 2012, the Corporation issued 385,800 shares of the Company’s common stock at $0.33 per share to an unrelated party, in exchange for conversion of a total of $125,000 notes and interest. Since the debt was converted at a lower price than under the terms of the note agreement, a loss on conversion of shares of $17,592 was reportedduring the fiscal year ended April 30, 2012.

On May 16, 2012, the Corporation issued 600,000 shares of the Company’s common stock at $0.33 per share to an unrelated party, in exchange for conversion of a total of $200,000 notes and interest. Since the debt was converted at a lower price than under the terms of the note agreement, a loss on conversion of shares of $24,000 was reportedduring the fiscal year ended April 30, 2012.

Common Stock issued for Services
On October 12, 2010 the Company granted 50,000 shares of restricted common stock to a consultant for public relations services provided. The total fair value of the common stock was $165,000 based on the closing price of the Company’s common stock on the date of grant.

On February 17, 2012 the Company granted 546,087 shares of restricted common stock to a consultant for consulting services provided. The total fair value of the common stock was $103,757 based on the closing price of the Company’s common stock on the date of grant.

On October 30, 2012, the Corporation issued 300,000 Common Shares at a price of $0.19 to Delavega Trading Ltd. (a related party), a company for which Nabil Katabi a Company director has a controlling interest, pursuant to terms of a consulting agreement dated February 2, 2012.

Common Stock issued for Conversion of Accrued Consulting Fees
On June 5, 2012, the Corporation issued a total of 881,032 shares of the Company’s common stock, 144,932 at $0.23 per share and 736,100 at $0.30 per share, to an unrelated party pursuant to a consulting agreement which was already part of third party accrued compensation.  This amount had been expensed in the fiscal year ended April 30, 2012.  As the accrued compensation was converted in accordance with the signed written agreement, no gain or loss was recognized, as this was a non-cash transaction.

On November 2, 2012, the Corporation issued 465,525 Common Shares at an average price of $0.16 to Delavega Trading Ltd., a company for which Nabil Katabi a Company director has a controlling interest, pursuant to extinguishments of accrued consulting fees. As the accrued compensation was converted in accordance with the signed written agreement; therefore, no gain or loss was recognized.

Common stock reserved
At January 31, 2013, 49,604,983 shares of common stock were reservedreserved: 16,485,639 for debt conversion purposes and 33,119,34432,865,345 for issuance of warrants outstanding.

Common stock payable
On January 2, 2013, 300,000 Common Shares are to be issued as additional consideration for the $120,000 convertible note issued to an unrelated investor. The share consideration was recorded as a $30,000 discount on the note payable and an increase to common stock payable based upon the fair value of the shares on the date the note was issued.

Preferred Stock
On March 18, 2011 the Board of Directors authorized 2,000,000 shares of $.001 par value Series A Preferred Stock.  The shares carry a 10% cumulative dividend, a $1.00 liquidation value, and may be converted into common shares at $0.20 per common share.  The Preferred Stock has a mandatory redemption feature on such date that is the earlier of March 1, 2016 or upon a change of control transaction.

27

outstanding warrants.

Note

NOTE 10 – Non-controlling Interests

NON-CONTROLLING INTERESTS

On September 23, 2010, the Company, through a reverse merger, acquired 100% of the outstanding shares of Maple Carpenter Creek Holdings, Inc., (“MCCH”("MCCH"), a holding Company, with an 80% interest in Maple Carpenter Creek, LLC (“MCC”("MCC"), which in turn owned a 95% interest in the subsidiary, Carpenter Creek, LLC (“CC”("CC"), and a 98.12% interest in Armadillo Holdings Group Corp. (“AHGC”("AHGC"), which in turn owned an 80% interest in Armadillo Mining Corp. (“AMC”("AMC"). The non-controlling interest of 1.88% in AHGC was acquired by MCCH on December 21, 2010 in exchange for 31,334 shares of MMEXthe Company’s common stock resulting in 100% ownership of AHGC. On March 22, 2011, AHGC acquired a 14.6% of AMC and on April 30, 2012, an additional 4% interest for a total of 98.6% based upon agreement with the minority interest holder to reduce their interest based upon proportionate share of additional capital contributed to AMC.As of January 31, 2013, non-controlling interests held an approximate 1.4% residual interest in AMC and 20% interest in MCC and 5% interest in CC.


Non-controlling interest balances were as follows:
  
January 31,
2013
  
April 30,
2012
 
       
Balances at the beginning of the period  290,241   111,920 
Losses due to minority interest in subsidiaries:        
   MCCH (13.66%)  3,073   6,596 
   CC (5%)  1,125   812 
   AMC (1.4%)  8,606   170,913 
Balances at the end of the period  303,045   290,241 

Note

NOTE 11 – Commitments and Contingencies


Merger Agreement
Pursuant to the merger on September 23, 2010, the Company awarded the owners of MCCH the right to receive 1,500,000 shares of common stock as contingent consideration.  The milestones are accelerated in the event the owners of MCCH are diluted below 30% in their ownership of the Company.  The milestones defined in the definitive merger agreement are as follows:

·1,000,000 shares upon the closing of equity or debt financing that generates at least 2 million in net proceeds,
·250,000 shares upon the successful generation of $250,000 in revenue from coal sales in any fiscal quarter,
·250,000 shares upon the successful closing of additional equity or debt financing that will generate at least $2,000,000 in net proceeds.

On September 13, 2011, the Board of Directors, through a Unanimous Written Consent of the Board of Directors, declared that the milestone to distribute 1,000,000 shares of the 1,500,000 contingent consideration had vested leaving a balance of 500,000 shares of common stock as contingent consideration.

On April 26, 2012, the Board of Directors determined that the remaining milestones and acceleration regarding the Merger Agreement had been reached and the Corporation issued the remaining 500,000 shares of merger consideration, equally to AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, and the Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO, Jack Hanks.

28

After exercise of the Hunza option, the Company is obligated to fund an additional $3.0 million upon the earlier of May 1, 2013 or 90 days after the completion of the technical resources report which will be commissioned by Hunza. The Company pledged one half of its interest in Hunza as collateral; therefore, any payment default by the Company will result in a reduction of the Company’s interest to 25% of Hunza.

COMMITMENTS AND CONTINGENCIES

Legal

There were no legal proceedings against the Company.

Operating Lease Commitments

The Company acquired the Bolzer Lease pursuant to a September 23, 2010 merger. Subsequently, notice of termination on this lease effective April 26, 2010 was provided by previous management. The Company has recorded an accrued expense for the minimum lease payment of $62,541 for the January 2010 payment.

Note

NOTE 12 – Subsequent Events


On February 14, 2013, the Company issued 300,000 Common Shares to an unrelated third party as part of the January 2, 2013 convertible note agreement.

On February 14, 2013, the Company issued 225,000 of the Company’s common stock to each of The Maple Gas Corporation, a wholly owned subsidiary of Maple Resources Corporation, which is 100% owned by the Company’s CEO, Jack Hanks, AAM Investments, LLC, affiliated with one of the Company’s Directors, Bruce N. Lemons, Delavega Trading Ltd, a company for which Nabil Katabi a Company director has a controlling interest, for a total of 675,000 shares, as compensation for their collateralization of the January 16, 2013 convertible note.

On February 14, 2013, the Company issued an unrelated third party, 225,000 shares of the Company’s common stock as compensation for their collateralization of a Company convertible note.

SUBSEQUENT EVENTS

In accordance with ASC 855-10, all subsequent events have been reported through the filing date as set forth below.


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Convertible Notes Payable – Related Parties

On April 30, 2014, the Company converted a note payable to and additional advances from BNL Family Partners, a related party (see Note 4), into a single $48,130 convertible note agreement with BNL Family Partners. The holder may accelerate repayment of the promissory note upon the Corporation raising additional capital of $1,000,000. The holder may also convert the note into common shares of the Company at the holder's option at $0.025 per Common Share. As the conversion option is above the value of the stock on the date of conversion, no beneficial conversion feature was recorded with this note.

On April 30, 2014, the Company converted the notes payable and associated accrued interest to and additional advances from Delavega Trading Ltd., a related party (see Note 4), into a single $27,100 convertible note agreement with Delavega Trading Ltd. The holder may accelerate repayment of the promissory note upon the Company raising additional capital of $1,000,000. The holder may also convert the note into common shares of the Company at the holder's option at $0.025 per Common Share. As the conversion option was above the value of the stock on the date of conversion, no beneficial conversion feature was recorded with this note.

During the year ended April 30, 2014, Maple Gas Corporation, a related party owned by Mr. Jack W. Hanks, a director and officer of the Company, advanced funds or incurred expenses on behalf of the Company. On April 30, 2014, the Company entered into a $39,337 convertible note agreement with Maple Gas Corporation for the total advances to that date.

The holder may accelerate repayment of the promissory note upon the Company raising additional capital of $1,000,000. The holder may also convert the note into common shares of the Company at the holder's option at $0.025 per common share. As the conversion option was above the value of the stock on the date of conversion, no beneficial conversion feature was recorded with this note.

In May 2015, these related parties agreed to forgive the above indebtedness, and the reduction of the notes payable and related accrued interest payable was recorded as a contribution to capital.

Transfer of Coal Assets

As of April 30, 2014, the Company had interests in coal prospects in Colombia, South America. As of May 18, 2015, the Board of Directors of the Company approved a transfer its coal assets in Colombia to a trust for the benefit of its existing shareholders with an effective date as of April 13, 2016. The shareholders of the Company have the same allocated share ownership interests in the trust that they had in the Company as of the effective date of the transfer, which is as of April 13, 2016. In addition, the shareholders of the Company have the same ownership interests in the Company subject to the dilution by the acquisition of Maple Structure Holdings, LLC of the purchase of the Preferred Shares and selected debt of the Company, and then the subsequent conversion of those Instruments into equity in the Company at US$0.01 per share. That conversion results in a substantial dilution of existing shareholders including majority shareholder ownership. See below for details of the dilution.

Amendment of Articles of Incorporation

As of April 6, 2016, the Company amended its articles of incorporation to change its corporate name from MMEX Mining Corporation to MMEX Resources Corporation and to increase its authorized shares to 1,000,000,000 common shares and 10,000,000 preferred shares.


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Transfer and Conversion of Preferred Shares

On October 7, 2015, The Company transferred 1,000,000 Preferred Shares from William D. Gross to Maple Structure Holdings, LLC, a related party controlled by Mr. Jack W. Hanks, a director and officer of the Company.

On November 10, 2015, Maple Structure Holdings converted the 1,000,000 Preferred Shares with a book value of $1,000,000 and accrued dividends of $232,837 into 123,283,700 common shares of the Company at $0.01 per share. The issuance of the common shares to Maple Structure Holdings was approved by the Company’s Board of Directors Resolution dated May 18, 2015.

On November 11, 2015, Maple Structure Holdings transferred a total of 70,890,440 shares to the following entities: (i) AAM Investments, LLC- 27,546,375 shares; (ii) The Maple Gas Corporation- 28,091,350 shares; and (iii) Delavega Trading LTD- 15,252,715 shares. All of the foregoing entities are related parties to the Directors of the Company.

Transfer and Conversion of Notes Payable in Default

On October 9, 2014, the convertible notes payable in default of $1,650,000, $120,000 and $180,000 (Note 7) were assigned to The Maple Gas Corporation, a related party. On May 2, 2016, The Maple Gas Corporation converted the notes into 195,000,000 common shares of the Company at $0.01 per share. The issuance of the common shares to Maple Structure Holdings was approved by the Company’s Board of Directors Resolution dated May 18, 2015.

The common shares were issued to the following entities: (i) Maple Structure Holdings-82,875,000 shares; (ii) The Maple Gas Corporation-44,431,151 shares; Enzamora LTD-24,124,688 shares; and BNL Family Trust-43,569,160 shares. All of the foregoing entities are related parties to the Directors of the Company.

Subsequent Financings

As the Company continues to expand its business and implement its business strategy, its current monthly cash flow requirements will exceed its near term cash flow from operations. In order to fund its development costs, the Company initiated in fiscal year 2016 a private placement to qualified investors for cash and services. Through the date of the filing of this report, $122,142 cash and $60,000 in services had been received, including $52,142 cash from related parties, for a total of 15,153,824 common shares of the Company and a total of 18,039,413 warrants. The warrants entitle the investors to purchase common shares at an exercise price of $0.01 per share for a 5-year period. The private placement is ongoing and only a portion of the common shares of the Company and warrants have been issued. On July 12, 2016, 1,096,397 shares of the Company’s common stock were issued to one of the investors.

Settlement Agreement and Stipulation

On October 28, 2016, MMEX Resources Corporation (the “Company) entered into a Settlement Agreement and Stipulation (the “Settlement Agreement”) with Rockwell Capital Partners, Inc. (“RCP”). Pursuant to the Settlement Agreement, as amended, RCP has purchased certain outstanding payables between the Company and designated vendors totaling $109,391 (the “Payables” or “Claims”) and will exchange the portion of such Payables assigned for a Settlement Amount payable in common shares of the Company.

In settlement of the Claims, the Company shall issue and deliver to RCP, in one or more tranches as necessary, shares of the Company’s common stock (“Common Stock”), subject to adjustment and ownership limitations as set forth in the Settlement Agreement, sufficient to satisfy the Claims amount at a 50% discount to market based on the market price during the valuation period as defined in the Settlement Agreement. The Company also issued 7,000,000 shares of Common Stock as a settlement fee on October 31, 2016.

On October 28, 2016, a circuit court in Florida issued an order confirming the fairness of the terms of the Settlement Agreement within the meaning of exemption from registration provided by Section 3(a) (10) of the Securities Act of 1933.

The Company issued the following shares of its Common Stock to RCP in settlement of Claims: 10,000,000 shares on November 3, 2016, 15,000,000 shares on November 4, 2016 and 18,000,000 shares on November 10, 2016.

Other Subsequent Events

As of April 13, 2016 the Company assigned AMC to an irrevocable trust (the " MMEX Trust"), whose beneficiaries are the existing shareholders of the Company. AMC through the MMEX Trust controls the Colombia Hunza coal interest previously owned by the Company.

As of June 29,



2016, the Board of Directors executed a Board Resolution that the Directors of the Company may be two directors pursuant to the By-Laws of the Company. As of June 29, 2016, Nabil Katabi resigned as a director of the Company.

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In this Quarterly Report on Form 10-Q, unless the context requires otherwise, “we,” “us” and “our” refer to MMEX Mining Corporation, a Nevada corporation.  The following2 Management’s Discussion and Analysis of Financial Condition and Results of Operation provide informationOperations

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 believeare 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 relevantclassified as a penny stock within the meaning of Rule 3a51-1 of the Exchange Act. A penny stock is generally defined to an assessment and understandingbe any equity security that has a market price (as defined in Rule 3a51-1) of our financial condition and results of operations.  less than $5.00 per share, subject to certain exceptions.

The following discussion should be read in conjunction with our financial statements andthe Condensed Consolidated Financial Statements, including the notes thereto included with this Quarterly Report on Form 10-Q, and all our other filings, including Current Reports on Form 8-K, filed with the Securities and Exchange Commission (“SEC”thereto.

Overview

As of October 31, 2013, MMEX Resources Corporation (the “Company”) through the date of this report.


Forward Looking Statements

This Quarterly Report on Form 10-Q includes both historical and forward-looking statements, which include information relating to future events, future financial performance, strategies, expectations, competitive environment and regulations.  Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.  Such statements are intended to operate as “forward-looking statements” of the kind permitted by the Private Securities Litigation Reform Act of 1995, incorporated in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  That legislation protects such predictive statements by creating a “safe harbor” from liability in the event that a particular prediction does not turn out as anticipated. Forward-looking statements should not be read as a guarantee of future performance or results and will probably not be accurate indications of when such performance or results will be achieved.  Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.  You should review carefully the section entitled “Risk Factors” beginning on page 8 of our Annual Report on Form 10-K for a discussion of certain of the risks that could cause our actual results to differ from those expressed or suggested by the forward-looking statements.
The inclusion of the forward-looking statements should not be regarded as a representation by us, or any other person, that such forward-looking statements will be achieved.  You should be aware that any forward-looking statement made by us in this Quarterly Report on Form 10-Q, or elsewhere, speaks only as of the date on which we make it. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise.  In light of the foregoing, readers are cautioned not to place undue reliance on the forward-looking statements contained in this Quarterly Report on Form 10-Q.

Overview and Outlook

On May 25, 2011, the Board of Directors approved a 1 for 10 reverse stock split of its common stock.  All references in the accompanying financial statements to the number of shares of common stock and loss per share have been retroactively restated to reflect the reverse stock split.

MMEX Mining Corporation hashad interests in coal prospects in the United States andColombia, South America. We are currently consideredAs of May 18, 2015, the Company’s Board of Directors approved the transfer its coal assets in Colombia to be an exploration stage corporation because we are engageda trust for the benefit of its existing shareholders. The shareholders of the Company have the same pro-rata ownership interests in the search for coal deposits and are not engagedtrust that they had in the exploitationCompany as of a coal deposit.  We will bethe date of the transfer which is as of April 11, 2016. In addition, the shareholders of the Company have the same ownership interests in in the exploration stage until we discover commercially viable coal deposits. In an exploration stage company, management devotes most of its activities to acquiring and exploring mineral properties.

On January 20, 2011 the Company executed an exclusive option agreement to purchase a 50% interest in C.I. Hunza Coal, Ltd. (Hunza), a Colombian limited liability corporation that holds various mining interests in Colombia.

On February 3, 2012 the Company executed and delivered an amendmentsubject to the Hunza option agreement which, among other items, provides that:
·  In order to exercise the option to acquire 50% of Hunza, the Company would be required to complete the payment of exclusivity fees on or before February 29, 2012, including issuing a $1.2 million note convertible into 4,000,000 shares of the Company’s common stock.
·  After exercise of the option, the Company would be obligated to fund an additional $3.0 million upon the earlier of May 1, 2013 or 90 days after the completion of the technical resources report which will be commissioneddilution by Hunza.
·  The Company would pledge one half of its interest in Hunza to secure any payment default by the Company, which default would result in a reduction of the Company’s interest to 25% of Hunza.

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On March 7, 2012, the Company completed the acquisition of the Hunza mine and will begin the process of evaluating its future drilling program.

In 2012, the primary operational activities of Hunza have been initiating the community relations activities in advanceMaple Structured Holdings, LLC of the commencementpurchase of the work program to be carried out on the Hunza Project as recommended in the Technical Report.  These activities involved working with the local community leaders to understand the needspreferred shares and selected debt of the communities in proximity toCompany, and then the Hunza Project. In 2012, Hunza also initiated a transportation and logistics feasibility study for marketingsubsequent conversion of coal, an updatethose Instruments into equity of the initial mine plan andCompany at $0.01 per share followed by the assignment by Maple Structure Holdings, LLC of shares to related parties. That conversion resulted in a marketing study for metallurgical coal. With respect tosubstantial dilution of existing shareholders, including majority shareholder ownership.

The Company’s Board of Directors have made the drilling program, negotiations are underway with the sub-contractor to finalize and to mobilize the drilling operations. Hunza has also engaged a Colombian underground mining operator to develop a complete pre-feasibility and feasibility mining plan for the mine development on the Hunza Project with a Small Scale Mining Plan for extraction of up 240,000 tons per year and a Large Scale Mining Plan providing for the increase in the production to 2,400,000 tons per year over the course of seven years.  Additionally, in January and February 2012, Hunza obtained environmental and mining permits allowing for the production of up to 2,400,000 tons per year.  No mining activities have taken place on the Hunza Project in 2012.


Going forward, we plandecision to focus the companyCompany efforts in acquiring metallurgical coal assetsinto the oil, gas, refining and electric power business in the country of ColombiaU.S. and other Latin America countries.

Mineral Reserve Estimates

Hunza Project:  On March 7, 2012America. The principal reasons are the Company completed its agreement to purchase a 50% interest in C.I. Hunza Coal, Ltd. (Hunza), a Colombian limited liability corporation that holds various mining concessions in the Boyacá Province of east-central Colombia. following:

·The Company’s principal shareholders and directors are also principals in a privately held U.S. oil and gas company, Maple Resources Corporation based in Austin, Texas.

·The Company’s management team has over 30 years of experience in natural resource project development and project financing in North and South America and in the U.K.

·The Company’s directors and principal shareholders with oil, gas, refining and electric power experience will bring this expertise into the Company.


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The coal prospects in the Hunza concessions are mid-volatility metallurgical or coking coal. We have commissioned a technical report in accordance with National Instrument (NI) 43-101 specifications.  Based on the report, the in-place coal tonnage estimate for the property is in the range of 45 to 50 million metric tons. The Company is undertaking a drilling program and   until the drilling has been performed and the results analyzed, the estimates presented herein cannot be categorized as estimates of a coal resource under the standards of the 43-101 guidelines.


Development Strategy

The Corporation’s currentnew development strategy is to focus on the acquisition, development and financing of metallurgical coal assets in Colombiaoil, gas, refining and iron ore in Peru.
As MMEX continues to expand its business and implement its business strategy, its current monthly cash flow requirements will exceed its near term cash flow from operations. In order to fund the acquisition of AMCC’s 50% ownership in Hunza and its 18-month exploration program at the Hunza Project, on March 7, 2012, the Corporation completed a private placement of Common Shares to qualified South American investors for gross proceeds of approximately US$5.6 million.
Notwithstanding this recent private placement, there can be no assurance that the Corporation will be able to generate sufficient cash from operations in future periods to satisfy its capital requirements. Therefore, the Corporation will have to continue to rely on external financing activities, including the sale of equity securities, to satisfy capital requirements for the foreseeable future. Equity financings of the type the Corporation has been required to pursue are dilutive to shareholders and may adversely impact the market price of the Common Shares. However, the Corporation has no commitments for borrowings or additional sales of equity, the precise terms upon which it may be able to attract additional funding is not known at this time, and there can be no assurance that it will be successful in consummating any such future financing transactions on terms satisfactory to MMEX.

Merger with Maple Carpenter Creek Holdings, Inc

On September 21, 2010, MMEX Mining Corporation, Inc entered into a merger agreement with Maple Carpenter Creek Holdings, Inc. (“MCCH”).  MCCH is engaged in the development of both thermal and metallurgical coalelectric power projects in the U.S.Texas, Peru and Colombia.  Under the terms of the merger agreement, MCCH merged with a wholly owned subsidiary of MMEX Mining Corporationother countries in exchange for the issuance of 6,500,000 shares of MMEX Mining Corporation common stock to the owners of MCCH, of which 5,000,000 shares were issued on October 8, 2010Central and 1,500,000 shares were presented as common stock payable.  On January 11, 2011, the Board of Directors, through a Unanimous Written Consent of the Board of Directors issued the remaining 1,500,000 in accordance with the merger agreement.  The Company reversed the subscription payable resulting in a $15,000 adjustment to common stock payable. The owners of MCCH also were granted the right to receive an additional 1,500,000 shares of common stock as contingent consideration to vest on certain milestones defined in the definitive merger agreement.  On September 13, 2011, the Board of Directors, through a Unanimous Written Consent of the Board of Directors issued 1,000,000 shares of the contingent consideration.

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Latin America.

As we continue to expand our business and implement our business strategy, our current monthly cash flow requirements will exceed our near term cash flow from operations. Our available cash resources and anticipated cash flow from operations are insufficient to satisfy our anticipated costs associated with new project development. There can be no assurance that we will be able to generate sufficient cash from operations in future periods to satisfy our capital requirements. Therefore, we will have to continue to rely on external financing activities, including the sale of our equity securities, to satisfy our capital requirements for the foreseeable future. Due, in part, to our lack of historical earnings, our prior success in attracting additional funding has been limited to transactions in which our equity is used as currency. In light of the availability of this type of financing, and the lack of alternative proposals, our board of directors has determined that the continued use of our equity for these purposes may be necessary if we are to sustain operations. Equity financings of the type we have been required to pursue are dilutive to our stockholders and may adversely impact the market price for our shares. However, we have no commitments for borrowings or additional sales of equity, the precise terms upon which we may be able to attract additional funding is not known at this time, and there can be no assurance that we will be successful in consummating any such future financing transactions on terms satisfactory to us, or at all.


Critical Accounting Policies and Significant Judgments and Estimates

The Securities and Exchange Commission ("SEC") issued disclosure guidance for "critical accounting policies." The SEC defines "critical accounting policies" as those that require the application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.  Our significant accounting policies are described in the Notes to these financial statements.

Results of Operations


Revenues:

Revenues

We are currently in the exploration stage and have not yet begun to generate revenues.


General and administrative:

General

Operating Expenses

Our selling, general and administrative expenses were $257,548 for the nine months ended January 31, 2013 compareddecreased $181,581 to $523,661 for the nine month ended January 31, 2012, a decrease of $266,113. General and administrative expenses were $112,635$272,810 for the three months ended JanuaryOctober 31, 2013 compared to $120,061from $454,391 for the three monthmonths ended JanuaryOctober 31, 2012, a decrease of $7,426.and decreased $370,873 to $550,344 for the six months ended October 31, 2013 from $921,217 for the six months ended October 31, 2012. The decrease is due to focusreduced payroll and professional fees as we have focused on our acquisition ofnew development strategy.

Depreciation and Amortization Expense

Our depreciation and administrative expenses are not material to our Colombian mining activity.

Payrolloperations and taxes:

Payrollremained fairly constant. Depreciation and taxes expense was $342,702 for the nine month period ended January 31, 2013 compared to $367,622 for the nine month period ended January 31, 2012, a decrease of $24,920.  Payrolladministrative expenses were $1,250 and taxes expense was $106,357$1,241 for the three month periodmonths ended January 31, 2013 compared to $120,051 for the three month period ended January 31, 2012, a decrease of $13,694.  The decrease is due to reduction of employees over prior year.

Professional fees:

Professional fees expense was $680,757 for the nine month period ended January 31, 2013 compared to $274,899 for the nine month period ended January 31, 2012, an increase of $405,858. Professional fees expense was $140,798 for the three month period ended January 31, 2013 compared to $110,237 for the three month period ended January 31, 2012, an increase of $30,561. The increase was due to increased consulting services to support international operations.

Impairment expenses:

Impairment expense was $0 for the nine month period ended January 31, 2013 compared to $932,454 for the nine month period ended January 31, 2012, a decrease of $932,454.  Impairment expense was $0 for both three month periods ended JanuaryOctober 31, 2013 and 2012, respectively.  The decrease was due to the reclassification of exploration costs to those of proven properties.

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Depreciationrespectively, and amortization:

Depreciation$2,502 and amortization expense was $3,743$2,480 for the nine month periodsix months ended JanuaryOctober 31, 2013 comparedand 2012, respectively.

Other Income (Expense)

Our interest expense decreased $313,791 to $3,614 for the nine month period ended January 31, 2012, an increase of $129. Depreciation and amortization expense was $1,263$155,216 for the three month periodmonths ended JanuaryOctober 31, 2013 compared to $1,219from $469,007 for the three month periodmonths ended JanuaryOctober 31, 2012, anand decreased $373,350 to $390,283 for the six months ended October 31, 2013 from $763,633 for the six months ended October 31, 2012. During the current year, we continued to increase of $44. The increase is dueour convertible notes payable to related parties; however, the increased interest expense attributable to the addition of depreciable equipment in the current fiscal year.


Net operating loss:

Net operating loss for the nine month period ended January 31, 2013new debt was $1,284,750 or $0.02 per share comparedoffset by decreased interest expense attributable to a net operating loss of $2,104,144 for the nine month period ended January 31, 2012, or $0.17 per share, a decrease of $819,394. Net operating loss for the three month period ended January 31, 2013 was $361,053 or $0.01 per share comparedprior years' debt resulting from debt discount being fully amortized to a net operating loss of $351,568 for the three month period ended January 31, 2012, or $0.03 per share, an increase of $9,485. The net operating loss decreased for the nine month period ended January 31, 2013 compared to the nine month period ended January 31, 2012 is primarily due to decreased exploration costs of proven properties.  The increase in the three month period ended January 31, 2013 compared to the January 31, 2012 period is due to increased professional fees.
interest expense.


Other expense:

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We reported a loss on debt conversion of $441,960 for the nine month periodsix months ended JanuaryOctober 31, 2013 and $53,4532012, but did not report either a gain or loss on debt conversion for the periodthree months or six months ended JanuaryOctober 31, 2012.  The2013.

We reported a loss on investment in property of $178,848 and $211,673 for the three months and six months ended October 31, 2012, respectively, representing our proportionate share of losses from the Hunza lease. We recorded a full impairment of the investment in property in the January 31,fourth quarter of the fiscal year ended April 30, 2013 period was due to the conversion of $323,640 debt whenfact that the fair value ofColumbian government suspended the common stock exchanged was $765,600 based on the closing price on the date of grant and theHunza project’s mining permits. Therefore, no loss in the January 31, 2012 period was due to the conversion of $356,250 debt when the fair value of the common stock exchanged was $409,703 based on the closing price on the date of grant.


We also reported loss of $280,983 on investment ofin property for the nine month period ended January 31, 2013 and $0 for the nine month period ended January 31, 2012.  This reflects the Company’s 50% interest in Hunza’s loss for the period ended January 31, 2013.  Wewas reported loss of $69,310 for the three month periodmonths and six months ended January 31. 2013 and $0October 31, 2013.

Net Loss

As a result of the above, our net loss decreased to $429,276 for the three month periodmonths ended January 31. 2012.


We reported interest expense of $1,065,856 for the nine month period ended JanuaryOctober 31, 2013 compared to $1,433,473 for the nine month period ended January 31, 2012, a decrease of $367,615.  We reported interest expense of $302,223from $1,103,487 for the three month periodmonths ended JanuaryOctober 31, 2012, and decreased to $943,129 for the six months ended October 31, 2013 compared to $264,461from $2,340,963 for the three month periodsix months ended JanuaryOctober 31, 2013, an increase2012.

Non-Controlling Interest in Loss of $37,761.  The year to date decrease was due to a reduction in outstanding debt due to conversions to equity.


Consolidated Subsidiaries

Non-controlling interests in loss of consolidated subsidiaries:


Non-controlling interestsinterest in loss of consolidated subsidiaries represented approximately $12,804 and $98,624 of the total losses for the nine month period ended January 31, 2013 and 2012, respectively, a decrease of $85,820. Non-controlling interests in loss of consolidated subsidiaries represented approximately $3,371 and $19,619 of the total lossesdecreased to $349 for the three month periodmonths ended JanuaryOctober 31, 2013 and 2012, respectively, a decrease of $16,248. The decrease was due to reduced losses in the subsidiaries with non-controlling interests and due to the acquisition of additional interest, 94.6% to 98.6%, in the company’s AMC subsidiary.

Net loss:

We recorded a net loss of $3,060,745 or $0.06 per share, for the nine month period ended January 31, 2013, compared to a net loss of $3,496,095, or $0.29 per share for the nine month period ended January 31, 2012.  We recorded a net loss of $729,215 or $0.01 per share,from $5,246 for the three month periodmonths ended JanuaryOctober 31, 2012, and decreased to $672 for the six months ended October 31, 2013 comparedfrom $9,433 for the six months ended October 31, 2012.

Net Loss Attributable to a netthe Company

Net loss of $649,864, or $0.05 per shareattributable to the Company decreased to $428,927 for the three month periodmonths ended JanuaryOctober 31, 2012. Net losses2013 from $1,098,241 for the three months ended October 31, 2012, and decreased into $942,457 for the year to date period primarily as a result of our decreased impairment expenses as we completedsix months ended October 31, 2013 from $2,331,530 for the acquisition of our mineral interests.


six months ended October 31, 2012.

Liquidity and Capital Resources


Introduction

As of October 31, 2013, we had current assets of $10,195 and current liabilities of $5,357,310, resulting in a working capital deficit of $5,347,115. In addition, we had a total stockholders’ deficit of $5,580,586 at October 31, 2013.

During the six months ended October 31, 2013, because of our operating losses, we did not generate positive operating cash flows. As a result, we have significant short-term cash needs. Our principal source of operating capital has been provided from private sales of our common stock, preferred stock, partnership capital contributions, and debt financing. At January 31, 2013, we had a negative working capital position of $7,085,758.


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On January 28, 2011 and February 1, 2011, pursuant to Section 4(2) of

During the Securities Act and Regulation D thereunder, we completed the closing of 1-year Convertible Note to a group of high net worth investors for an aggregate of $514,900.  The notes carried a 25% interest rate, maturity on the first anniversary date of the note and are convertible into the Company’s common stock at the holders’ option at $1.00 per common share. In addition, the Company issued warrants to purchase shares of the Company’s common stock at the time of repayment or conversion of the note equal to ten warrant shares for every dollar value of the principal and interest, at an exercise price of $1.00 per share on or before three years from the repayment or conversion date.  $489,900 of these debentures were paid in full on March 23, 2011.


On March 22, 2011 the Company issued 1,000,000 shares of Series A Preferred Stock (the“Preferred Stock”) to an unrelated party in exchange for an investment of $1,000,000.  The shares may be converted into the Company’s common shares at $0.40 per common share.  The Preferred Stock carry a 10% cumulative dividend, that is being reported as interest due to the classification of the preferred stock, and have a mandatory redemption feature on the earlier of March 1, 2016 or on a change of control transaction.  The investment is collateralized with a security interest in 2,500,000 MMEX Mining Corporation common stock shares.

On April 25, 2011, the Company closed a note purchase agreement with various investors pursuant to which the Company sold an aggregate of $520,000 notes in a private placement transaction.  The notes are due and payable on or before October 14, 2011 and carry a 25% interest rate.   The computed interest of $130,000 was added to the balance of the note.  The note is convertible upon default at the option of the holder into our common stock at a fixed conversion price of $0.40, subject to adjustment for stock splits and combinations.  In addition, the Company issued 1,062,500 warrants to purchase shares of the Company’s common stock at an exercise price of $.80 per share on or before three years from the repayment or conversion date. On October 14, 2011, $62,500 of the notes plus interest were converted into common stock, the remaining $743,750 of notes and interest were extended to April, 14, 2012.  As consideration for the extension, the Company issued 989,188 warrants to purchase shares of the Company’s common stock at an exercise price of $.20 per share on or before April 25, 2014.

On May 9, 2011, the Company closed a note purchase agreement with various investors pursuant to which the Company sold an aggregate of $160,000 notes in a private placement transaction.  The notes are due and payable on or before October 14, 2011 and carry a 25% interest rate.   The note is convertible upon default at the option of the holder into our common stock at a fixed conversion price of $0.40, subject to adjustment for stock splits and combinations.  In addition, the Company issued 250,000 warrants to purchase shares of the Company’s common stock at an exercise price of $.80 per share on or before three years from the repayment or conversion date.

On June 30, 2011 and August 8, 2011, the Company issued 360,000 shares of Armadillo Mining Corporation Preferred Stock to five unrelated parties in exchange for an investment of $360,000.  The Preferred Stock carry a 25% cumulative dividend and have a mandatory redemption feature on December 31, 2011 at a price of $1.25 per share.  In addition, the Company issued 360,000 warrants to purchase shares of the Company’s common stock at an exercise price of $0.60 per share on or before three years from the repayment or conversion date.  On January 17, 2012, $312,500 of these notes plus interest were converted into common stock, the remaining $171,875 of notes and interest were extended to June 30, 2012.  As consideration for the extension, the Company issued 484,375 warrants to purchase shares of the Company’s common stock at an exercise price of $.2095 per share on or before December 31, 2014.

On September 9, 2011, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $300,000 note in a private placement transaction. The note is due and payable on September 19, 2012, carry a 25% interest rate due in full at issuance. The computed interest of $75,000 was added to the balance of the note and recorded as additional debt discount.  The note is secured with 1,000,000 of the Company's common stock.

On October 28, 2011, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $500,000 note in a private placement transaction. The note is due and payable on October 31, 2012, carry a 25% interest rate due in full at issuance. The computed interest of $125,000 was added to the balance of the note and recorded as additional debt discount.  The note is secured with 1,665,000 of the Company's common stock.

On December 8, 2011, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $100,000 note in a private placement transaction. The note is due and payable on December 8, 2012, carry a 25% interest rate due in full at issuance. The computed interest of $25,000 was added to the balance of the note and recorded as additional debt discount.  The note is secured with 330,000 of the Company's common stock.

On January 13, 2012, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $100,000 note in a private placement transaction. The note is due and payable on January 13, 2013, carry a 25% interest rate due in full at issuance. The computed interest of $25,000 was added to the balance of the note and recorded as additional debt discount.  The note is convertible upon default at the option of the holder into our common stock at a fixed conversion price of $0.075, subject to adjustment for stock splits and combinations. The note is secured with 1,666,667 of the Company's common stock.

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On March 7, 2012, the Company completed a private placement of units to South American investors, with each unit consisting of one share of our common stock and one common share purchase warrant.  We received gross proceeds of US$5,534,288 at an issue price of US$0.20 per unit.  Each warrant entitles the holder to acquire an additional common share at a price of US$0.30 per share for a period of three years.

On August 15, 2012, the Company entered into a $100,000 convertible note agreement with an unrelated party. The debentures carry a 20% interest rate until maturity atsix months ended October 31, 2013, and arefinancing of $54,641 was provided by short-term convertible into Common Shares at the holder’s option at $0.20 per Common Share. The note is convertible upon default at the option of the holder into our common stock atnotes payable to a fixed conversion price of $0.20, subject to adjustment for stock splits and combinations.
related party.


On January 16, 2013, the Company closed a note purchase agreement with an accredited investor pursuant to which the Company sold a $120,000 note in a private placement transaction. The note is due and payable on March 1, 2013, carries a 1.87% per month interest rate due and payable on March 1, 2013 and included 300,000 shares of the Company’s common stock. If the note is not paid by March 1, 2013, the interest rate is increased by an additional 30% annually.  The note is secured with 900,000 of the Company's common stock which were pledged and owned by Jack Hanks, the Company’s President and CEO.

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As we attempt to expand exploration activities and develop our international operations, we expect to continue to experience net negative cash flows from operations in amounts not now determinable, and will be required to obtain additional financing to fund operations through common stock offerings, preferred stock offerings, and debt borrowings to the extent necessary to provide working capital. We have and expect to continue to have substantial capital expenditure and working capital needs. We do not now have funds sufficient to fund our operations at their current level for the next twelve months. We need to raise additional cash to fund our operations and implement our business plan. We expect that the additional financing will (if available) take the form of a private placement of equity, although we may be constrained to obtain additional debt financing in lieu thereof. We are maintaining an on-going effort to locate sources of additional funding, without which we will not be able to remain a viable entity. No financing arrangements are currently under contract, and there are no assurances that we will be able to obtain adequate financing. If we are able to obtain the financing required to remain in business, eventually achieving operating profits will require commencement of operations to generate revenues or drastically reducing expenses from their current levels or both. If we are able to obtain the required financing to remain in business, future operating results depend upon a number of factors that are outside of our control.


Sources and Uses of Cash

We used net cash of $55,175 in operating activities for the six months ended October 31, 2013 as a result of our net loss attributable to the Company of $942,457 and non-controlling interest in net loss of $672, partially offset by non-cash expenses totaling $273,510 and increases in accounts payable of $15,292 and accrued expenses of $599,152.

By comparison, we used net cash of $329,805 in operating activities for the six months ended October 31, 2012 as a result of our net loss attributable to the Company of $2,331,530 and non-controlling interest in net loss of $9,433, partially offset by non-cash expenses totaling $1,394,266, a decrease in prepaid expenses of $5,994 and increases in accounts payable of $227,491 and accrued expenses of $383,407.

Net cash used in investing activities was $650 for the six months ended October 31, 2012, comprised of purchase of property and equipment. We had no net cash provided by or used in investing activities for the six months ended October 31, 2013.

We had net cash provided by financing activities of $54,641 for the six months ended October 31, 2013, comprised of proceeds from convertible notes payable – related party. Net cash provided by financing activities for the six months ended October 31, 2012 was $167,500, comprised of proceeds from convertible notes payable – related party of $27,500, proceeds from notes payable of $100,000 and proceeds from issuance of common stock of $50,000, partially offset by payments on convertible notes payable – related party of $10,000.

Off-Balance Sheet Arrangements


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a 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.


Future Obligations


Management projects working capital needs to be approximately $6,000,000 overuncertain and this will depend on future projects to be developed by the next twelve months to complete its acquisition of current mining contracts,Company. The corporate overhead requirements are uncertain also at this time and continue as a reporting company.will depend on the project pipeline flow. With Armadillo Mining Corporation now subject to its own trust arrangement, the Company will not be responsible for any more costs or obligations for Armadillo Mining Corporation or the Colombia coal operations of Hunza. Management believes that current cash and cash equivalents will not be sufficient to meet these anticipated capital requirements.  Such projections have been based on remaining contractual requirements and general overhead.or corporate overhead requirements under this new business plan. We will be forced to raise additional capital through the issuance of new shares, the exercise of outstanding warrants, or reduce our current overhead. However, any projections of future cash needs and cash flows are subject to substantial uncertainty.


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Critical Accounting Policies

For further information on our significant accounting policies see the notes to our condensed consolidated financial statements included in this filing and in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission. There have been no changes to our significant accounting policies. The following describes the general application of accounting principles that impact our interim condensed consolidated financial statements.

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 wouldbase our estimates on historical experience and on various other assumptions that are believed to be required to renegotiate our current contracts until such time as necessary fundsreasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are secured.


not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.


Not3 Quantitative and Qualitative Disclosures About Market Risk

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


35


4 Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures


Our Chief Executive Officer

We carried out an evaluation, under the supervision and Chief Financial Officer, Jack W. Hanks, has evaluatedwith the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defineddefined) in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended)Rules 13a – 15(c) and 15d – 15(e). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered byin this report.  Based on the evaluation, Mr. Hanks concluded thatreport, our disclosure controls and procedures arewere not effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC filings and ensuringensure that information required to be disclosed by us in the reports we file or submitfiled under the Securities Exchange Act of 1934 (“Securities Exchange Act”) is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our chiefprincipal executive officer and principal financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, 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. To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our condensed consolidated financial statements included in this quarterly report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the following reasons:

periods presented.


·  
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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 October 31, 2013. 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. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:

The Company·As of October 31, 2013, we did not maintain effective controls over the control environment. Specifically, the Board of Directors does not currently have anany independent board of directors ormembers and no director qualifies as an audit committee or adequate segregationfinancial expert as defined in Item 407(d)(5)(ii) of duties;Regulation S-B. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

·  All

·As of our financial reporting is carried out by our financial consultant;
·  We doOctober 31, 2013, we did not have an independent body to oversee our internalmaintain effective controls over financial reportingstatement disclosure. Specifically, controls were not designed and lack segregation of duties duein place to the limited nature and resources of the Company.ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

We plan to rectify

Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of October 31, 2013, based on the criteria established in "Internal Control-Integrated Framework" issued by implementing an independent board of directors and hiring additional accounting personnel once we have additional resources to do so.


the COSO.

(b) Changes in Internal Control Overover Financial Reporting


There werewas no changeschange in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during our most recent fiscal quarterthe period covered by this report that havehas materially affected, or areis reasonably likely to materially affect, our internal control over financial reporting.


36




There were no1 Legal Proceedings

We are not a party to or otherwise involved in any legal proceedingsproceedings.

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against the Company.


us are not expected to have a material adverse effect on our financial position or results of operations.


Not1A Risk Factors

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


this Item.



2 Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended October 31, 2013, we had no unregistered sales of equity securities:



3 Defaults Upon Senior Securities

There is no information required to be disclosed by this Item.



4 Mine Safety Disclosures

There is no information required to be disclosed by this Item.

5 Other Information

There is no information required to be disclosed by this Item.


None

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6 Exhibits

Exhibit Number

31.1*

Exhibit Description
31.1  

Certification ofby Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)

32.1

32.1*

Certification Pursuantby Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuantadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**

XBRL Instance Document

101.SCH**

XBRL Taxonomy Extension Schema Document

101.CAL**

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**

XBRL Taxonomy Extension Label Linkbase Document

101.PRE**

XBRL Taxonomy Extension Presentation Linkbase Document

__________
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

________

*

Filed herewith.

**

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability.


38

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



MMEX Mining Corporation.

Resources Corporation

(Registrant)

Dated: November 15, 2016

By:

Date: March 18, 2013By:

/s/ Jack W. Hanks

Jack W. Hanks

Chief Executive Officer (Principal Executive Officer),
President and Chief ExecutiveFinancial Officer
(Principal Financial and Accounting Officer)

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