Analyst Summary
- MMEX Resources Corp. is facing a liquidity crisis with no cash on hand as of January 31, 2025.
- The company has not generated any revenue and continues to incur significant net losses.
- Current liabilities have significantly increased, exacerbating the working capital deficit.
- The accumulated deficit continues to grow, reflecting ongoing losses.
- The company is burning cash from its operations and relies entirely on financing activities to stay afloat.
- Management acknowledges the going concern uncertainty.
- A significant portion of the company’s liabilities are to related parties, raising concerns about potential conflicts of interest and the terms of these transactions.
- The company has defaulted on several notes payable and convertible notes payable.
- The company has increased its authorized shares reserves to 35 billion shares and to place into reserves for Sabby conversions, 10 billion shares.
- ROA increased by 26.71% from -195.04% to -142.95%.
- ROE decreased by 46.96% from 53.46% to 28.36%.
- EPS remained at -$0.0001.
- Current Ratio increased by 21.25% from 0.00080 to 0.00097.
- Quick Ratio increased by 21.25% from 0.00080 to 0.00097.
- Cash Ratio decreased by 100% from 0.00018 to 0.
- Debt-to-Equity Ratio decreased by 5.97% from -1.274 to -1.198.
- Debt-to-Assets Ratio increased by 29.89% from 4.65 to 6.04.
- Interest Coverage Ratio decreased by 14.46% from 3.32 to 2.84.
- Asset Turnover remained at 0.
- Net Income Growth decreased by 28.48%.
Opportunities and Risks
- Opportunity: Potential development of clean fuels infrastructure projects.
- Opportunity: Planning discussions with a super major oil company for a Blue Hydrogen to Power Project.
- Risk: Substantial doubt about the company’s ability to continue as a going concern.
- Risk: Reliance on related party transactions raises concerns about potential conflicts of interest.
- Risk: Defaults on debt obligations.
- Risk: Dependence on obtaining necessary capital for planning, construction, and start-up costs.
Potential Implications
Company Performance
- Continued losses and negative cash flow will likely hinder the company’s ability to execute its business plan.
- The company’s ability to secure funding for its projects is uncertain.
- The company’s long-term viability is questionable without significant revenue generation or external funding.
Stock Price
- The high risk of insolvency and continued losses could lead to a decline in the company’s stock price.
- Dilution from increased authorized shares could further depress the stock price.
- Negative investor sentiment due to the company’s financial difficulties could negatively impact the stock price.
MMEX Resources Corp – Form 10-Q Analysis – Q3 2025
Executive Summary
This report analyzes MMEX Resources Corp’s Form 10-Q for the quarter ended January 31, 2025. The company continues to face significant financial challenges, including a substantial working capital deficit and a history of operating losses, raising substantial doubt about its ability to continue as a going concern. The company has no revenues and relies heavily on related party debt financing. The reliance on debt, particularly from related parties, and the continued losses suggest a high-risk investment. Recommendation: **Sell**.
Company Overview
MMEX Resources Corporation is a smaller reporting company focused on developing clean fuels infrastructure projects powered by renewable energy. Their primary projects include a planned ultra-clean transportation fuels refinery and a Blue Hydrogen to Power project. The company has not yet generated any revenue.
Detailed Analysis
Financial Statement Analysis
Balance Sheet
| Metric |
January 31, 2025 (Unaudited) |
April 30, 2024 |
Change |
| Cash |
$ – |
$ 898 |
-$898 |
| Total Current Assets |
$ 6,000 |
$ 3,898 |
$2,102 |
| Total Assets |
$ 1,020,113 |
$ 1,045,307 |
-$25,194 |
| Total Current Liabilities |
$ 6,161,764 |
$ 4,859,061 |
$1,302,703 |
| Total Liabilities |
$ 6,161,764 |
$ 4,859,061 |
$1,302,703 |
| Accumulated Deficit |
$(82,379,615) |
$(80,921,391) |
-$1,458,224 |
| Total Stockholders’ Deficit |
$(5,141,651) |
$(3,813,754) |
-$1,327,897 |
- Liquidity Crisis: The company has no cash on hand as of January 31, 2025.
- Increased Liabilities: Current liabilities have significantly increased, exacerbating the working capital deficit.
- Growing Deficit: The accumulated deficit continues to grow, reflecting ongoing losses.
Statement of Operations
| Metric |
Three Months Ended January 31, 2025 |
Three Months Ended January 31, 2024 |
Nine Months Ended January 31, 2025 |
Nine Months Ended January 31, 2024 |
| Revenues |
$ – |
$ – |
$ – |
$ – |
| General and Administrative Expenses |
$ 334,166 |
$ 313,937 |
$ 1,042,866 |
$ 950,150 |
| Net Income (Loss) |
$(531,555) |
$(418,668) |
$(1,458,224) |
$(2,038,801) |
| Net Income (Loss) per Common Share – Basic and Diluted |
$(0.0001) |
$(0.00) |
$(0.0001) |
$(0.00) |
- No Revenue: The company has not generated any revenue.
- Persistent Losses: The company continues to incur significant net losses.
- Minimal Improvement: While the nine-month loss is smaller in 2025 than 2024, the lack of revenue and continued expenses are concerning.
Statement of Cash Flows
| Metric |
Nine Months Ended January 31, 2025 |
Nine Months Ended January 31, 2024 |
| Net Cash Used in Operating Activities |
$(386,105) |
$(372,856) |
| Net Cash Used in Investing Activities |
$ – |
$ – |
| Net Cash Provided by Financing Activities |
$ 385,207 |
$ 362,493 |
| Net Increase (Decrease) in Cash |
$(898) |
$(10,363) |
- Negative Operating Cash Flow: The company is burning cash from its operations.
- Reliance on Financing: The company relies entirely on financing activities to stay afloat.
Management’s Discussion and Analysis (MD&A) Insights
- Management acknowledges the going concern uncertainty.
- The company is focused on developing clean fuels infrastructure projects.
- The company is in planning discussions with a super major oil company for a Blue Hydrogen to Power Project.
- The company is dependent on obtaining the necessary capital for planning, construction and start-up costs.
Red Flags & Uncommon Metrics
- Going Concern: The auditor’s opinion and management’s discussion highlight substantial doubt about the company’s ability to continue as a going concern.
- Related Party Transactions: A significant portion of the company’s liabilities are to related parties, raising concerns about potential conflicts of interest and the terms of these transactions.
- Defaults on Debt: The company has defaulted on several notes payable and convertible notes payable.
- Increasing Authorized Shares: The company has increased its authorized shares reserves to 35 billion shares and to place into reserves for Sabby conversions, 10 billion shares.
Conclusion & Actionable Insights
MMEX Resources Corp. faces significant financial challenges. The lack of revenue, persistent losses, negative operating cash flow, reliance on debt financing (especially from related parties), and going concern uncertainty make this a high-risk investment. The company’s future hinges on securing substantial capital, which is not guaranteed.
Recommendation: **Sell**. Investors should avoid or exit positions in MMEX due to the high risk of further losses and potential insolvency.
Financial Analysis of MMEX Resources Corporation
1. Commentary
MMEX Resources Corporation faces significant financial challenges. The company continues to operate with substantial net losses and negative cash flow from operations. A concerning reliance on debt financing, particularly from related parties, to sustain operations is evident. The company’s liabilities significantly exceed its assets, resulting in a negative stockholders’ deficit, raising concerns about its long-term viability.
2. Financial Ratio and Metric Analysis
Profitability
Gross Profit Margin
Metric: N/A (Revenues are zero)
Trend: N/A
Industry: N/A
Operating Profit Margin
Metric: (Loss from Operations) / Revenues = N/A (Revenues are zero)
Trend: N/A
Industry: N/A
Net Profit Margin
Metric: (Net Loss) / Revenues = N/A (Revenues are zero)
Trend: N/A
Industry: N/A
Return on Assets (ROA)
Metric: Net Loss / Total Assets
Metric: For the nine months ended January 31, 2025: (-1,458,224) / 1,020,113 = -142.95%
Metric: For the nine months ended January 31, 2024: (-2,038,801) / 1,045,307 = -195.04%
Trend: ROA increased by 26.71%
Industry: Negative ROA is significantly below industry average for oil and gas companies, which typically aim for a positive ROA.
Return on Equity (ROE)
Metric: Net Loss / Total Stockholders’ Deficit
Metric: For the nine months ended January 31, 2025: (-1,458,224) / (-5,141,651) = 28.36%
Metric: For the nine months ended January 31, 2024: (-2,038,801) / (-3,813,754) = 53.46%
Trend: ROE decreased by 46.96%
Industry: Given the negative equity, ROE is not a meaningful metric. A healthy company would aim for a positive ROE.
Earnings Per Share (EPS) – Basic and Diluted
Metric: Net Loss Attributable to Common Shareholders / Weighted Average Number of Common Shares Outstanding
Metric: For the three months ended January 31, 2025: (-531,555) / 10,213,773,002 = -$0.0001
Metric: For the three months ended January 31, 2024: (-418,668) / 8,263,536,025 = -$0.00
Metric: For the nine months ended January 31, 2025: (-1,458,224) / 9,793,994,537 = -$0.0001
Metric: For the nine months ended January 31, 2024: (-2,038,801) / 6,507,122,563 = -$0.00
Trend: EPS remained at -$0.0001
Industry: Negative EPS is unfavorable and indicates the company is not generating profit for its shareholders.
Liquidity
Current Ratio
Metric: Current Assets / Current Liabilities
Metric: January 31, 2025: 6,000 / 6,161,764 = 0.00097
Metric: April 30, 2024: 3,898 / 4,859,061 = 0.00080
Trend: Current Ratio increased by 21.25%
Industry: A current ratio significantly below 1 indicates a high risk of liquidity issues. The industry standard is generally above 1.
Quick Ratio (Acid-Test Ratio)
Metric: (Current Assets – Inventory) / Current Liabilities
Metric: Assuming inventory is zero: January 31, 2025: 6,000 / 6,161,764 = 0.00097
Metric: Assuming inventory is zero: April 30, 2024: 3,898 / 4,859,061 = 0.00080
Trend: Quick Ratio increased by 21.25%
Industry: A quick ratio significantly below 1 indicates a high risk of liquidity issues. The industry standard is generally around 1.
Cash Ratio
Metric: Cash / Current Liabilities
Metric: January 31, 2025: 0 / 6,161,764 = 0
Metric: April 30, 2024: 898 / 4,859,061 = 0.00018
Trend: Cash Ratio decreased by 100%
Industry: A very low cash ratio indicates a high reliance on other current assets or external financing to meet short-term obligations.
Solvency/Leverage
Debt-to-Equity Ratio
Metric: Total Liabilities / Total Stockholders’ Equity
Metric: January 31, 2025: 6,161,764 / (-5,141,651) = -1.198
Metric: April 30, 2024: 4,859,061 / (-3,813,754) = -1.274
Trend: Debt-to-Equity Ratio decreased by 5.97%
Industry: The negative equity makes this ratio difficult to interpret. A high positive ratio typically indicates high financial risk.
Debt-to-Assets Ratio
Metric: Total Liabilities / Total Assets
Metric: January 31, 2025: 6,161,764 / 1,020,113 = 6.04
Metric: April 30, 2024: 4,859,061 / 1,045,307 = 4.65
Trend: Debt-to-Assets Ratio increased by 29.89%
Industry: A very high ratio indicates that the company’s assets are primarily financed by debt, signaling high financial risk.
Interest Coverage Ratio (Times Interest Earned)
Metric: Earnings Before Interest and Taxes (EBIT) / Interest Expense
Metric: For the nine months ended January 31, 2025: EBIT = Loss from operations = (-1,075,592) / Interest Expense (-378,384) = 2.84
Metric: For the nine months ended January 31, 2024: EBIT = Loss from operations = (-988,818) / Interest Expense (-297,833) = 3.32
Trend: Interest Coverage Ratio decreased by 14.46%
Industry: An interest coverage ratio below 1 suggests the company is struggling to cover its interest payments with its operating income.
Activity/Efficiency
Note: Given the lack of revenue and the nature of the company, inventory turnover, DSO, and DPO are not applicable.
Asset Turnover
Metric: Revenue / Total Assets
Metric: For the nine months ended January 31, 2025: 0 / 1,020,113 = 0
Metric: For the nine months ended January 31, 2024: 0 / 1,045,307 = 0
Trend: Asset Turnover remained at 0
Industry: A low asset turnover ratio suggests the company is not efficiently utilizing its assets to generate revenue.
Valuation
Note: Valuation ratios are difficult to calculate meaningfully due to the lack of earnings and revenue.
Price-to-Earnings Ratio (P/E)
Metric: Stock Price / EPS
Metric: Stock Price = $0.00
Metric: EPS = -$0.0001
Metric: P/E = N/A
Trend: N/A
Industry: N/A
Price-to-Book Ratio (P/B)
Metric: Market Cap / Book Value of Equity
Metric: Book Value of Equity = ($5,141,651)
Metric: Market Cap = $0.00 * 11,340,977,507 = $0
Metric: P/B = N/A
Trend: N/A
Industry: N/A
Price-to-Sales Ratio (P/S)
Metric: Market Cap / Revenue
Metric: Revenue = $0
Metric: Market Cap = $0.00 * 11,340,977,507 = $0
Metric: P/S = N/A
Trend: N/A
Industry: N/A
Enterprise Value to EBITDA (EV/EBITDA)
Metric: (Market Cap + Total Debt – Cash) / EBITDA
Metric: Market Cap = $0.00 * 11,340,977,507 = $0
Metric: Total Debt = 6,161,764
Metric: Cash = 0
Metric: EBITDA = Net Income + Interest + Taxes + Depreciation and Amortization = (-1,458,224) + (-378,384) + 0 + 27,296 = (-1,809,312)
Metric: EV/EBITDA = (0 + 6,161,764 – 0) / (-1,809,312) = -3.41
Trend: N/A
Industry: N/A
Growth Rates
Revenue Growth
Metric: (Current Period Revenue – Prior Period Revenue) / Prior Period Revenue
Metric: For the nine months ended January 31, 2025: (0 – 0) / 0 = N/A
Trend: N/A
Industry: N/A
Net Income Growth
Metric: (Current Period Net Income – Prior Period Net Income) / Prior Period Net Income
Metric: For the nine months ended January 31, 2025: ((-1,458,224) – (-2,038,801)) / (-2,038,801) = -28.48%
Trend: Net Income Growth decreased by 28.48%
Industry: N/A
EPS Growth
Metric: (Current Period EPS – Prior Period EPS) / Prior Period EPS
Metric: For the nine months ended January 31, 2025: ((-0.0001) – (-0.00)) / (-0.00) = N/A
Trend: N/A
Industry: N/A
Other Relevant Metrics
The company relies heavily on related party transactions, particularly for debt financing. This raises concerns about potential conflicts of interest and the terms of these transactions. Many notes payable are in default, indicating an inability to meet debt obligations. The issuance of warrants in connection with debt financing further dilutes shareholder value.
⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️