Laredo Oil, Inc 10-K/A for FY2026
Laredo Oil, Inc. (LRDC)
About this 10-K/A
Laredo Oil, Inc filed this 10-K/A on September 30, 2026, covering the fiscal year ended May 31, 2026 (FY2026).
Headline figures
Fiscal year ended May 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3141
- down 66.7% from $9423 a year earlier
- Net loss
- $7.97M
- compared with a net loss of $3.18M a year earlier
- Diluted EPS
- -$0.10
- compared with -$0.04 a year earlier
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to _________
Commission
file number:
| (Exact name of Registrant as Specified in its Charter) |
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
| (Address of principal executive offices) (Zip Code) |
| ( |
| (Registrant’s telephone number, including area code) |
| Securities registered pursuant to Section 12(b) of the Act: |
| None |
| Securities registered pursuant to Section 12(g) of the Act: |
| None |
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o
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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 registrant
was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | Accelerated filer | o |
| x | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12-b of the Act). Yes o
On November 30, 2025, the last business day of
the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s outstanding
shares of common equity held by non-affiliates of the registrant was $
As of September 14, 2026, there were shares of the registrant’s common stock outstanding.
Documents Incorporated by Reference: None.
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EXPLANATORY NOTE
The purpose of this amendment on Form 10-K/A to Laredo Oil, Inc.’s Annual Report on Form 10-K for the period ended May 31, 2026, filed with the Securities and Exchange Commission on September 14, 2026 is solely to furnish the Inline eXtensible Business Reporting Language (iXBRL) data under Exhibit 101 and 104 to the Form 10-K in accordance with Rule 405 of Regulation S-T.
No other changes have been made to the Form 10-K. This Amendment No. 1 to the Form 10-K speaks as of the original filing date of the Form 10-K, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-K.
LAREDO OIL, INC.
TABLE OF CONTENTS
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Forward-Looking Statements
From time to time, we may provide information, whether orally or in writing, including certain statements in this Annual Report on Form 10-K (this “Form 10-K”), which are deemed to be “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Litigation Reform Act”). These forward-looking statements and other information included in this Form 10-K are based on our beliefs as well as assumptions made by us using information currently available.
The words “believe,” “plan,” “expect,” “intend,” “anticipate,” “estimate,” “may,” “will,” “should” and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended or using other similar expressions. We do not intend to update these forward-looking statements, except as required by law.
In accordance with the provisions of the Litigation Reform Act, we are making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated by the forward-looking statements contained in this Form 10-K, any exhibits to this Form 10-K and other public statements we make.
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PART I
Item 1. Business
We were incorporated under the laws of the State of Delaware on March 31, 2008 under the name of “Laredo Mining, Inc.” As of that date, we had 90,000,000 authorized shares of common stock at $0.0001 par value and 10,000,000 authorized shares of preferred stock at $0.0001 par value. On October 21, 2009 our name was changed to “Laredo Oil, Inc.” During May of 2023, our board of directors voted to increase the authorized shares of our common stock to 120,000,000 shares at $0.0001 par value, which increase was approved by the holders of a majority of the shares of our common stock then outstanding.
We are an oil exploration and production company, primarily engaged in acquisition and exploration efforts to find mineral reserves on various properties. From our inception in March 2008 through October 2009, we were primarily engaged in acquisition and exploration efforts for mineral properties. Beginning in October 2009, we shifted our focus to locating mature oil fields with the intention of acquiring those oil fields and recovering “stranded” oil reserves using proprietary enhanced recovery methods known as underground gravity drainage, or UGD. UGD opportunities are global in nature and we pursue projects internationally.
The original UGD method uses conventional mining processes to establish a drilling chamber underneath an existing oil field from which closely spaced wellbores are drilled directionally up into the reservoir, using residual radial pressure and gravity to then drain the targeted reservoir through the wellbores. As we gained experience through practical application of the processes involved in oil recovery, we have developed and evaluated variations of the UGD concept. We believe that the UGD method is applicable to mature oil fields that have very specific geological and reservoir characteristics. We have done extensive research and have identified oil fields within the United States and globally that we believe are applicable for UGD recovery methods. Our primary business and focus is now to pursue and recover stranded oil from selected mature fields as necessary funds become available.
We believe the costs of implementing the UGD method are significantly lower than those presently experienced by other commonly used Enhanced Oil Recovery (“EOR”) methods. We also estimate that we can materially increase the field oil production rate from prior periods and recover amounts of oil equal to or greater than amounts previously recovered from selected mature fields. We intend to implement the UGD method in oil fields with a minimum of 25 million barrels of estimated recoverable oil.
When we acquire a targeted oil field, we will continue to operate the producing field and expect to generate revenue from doing so. Once we have developed the underground chamber and the UGD method is prepared for operation, we will cap the conventional wells and begin UGD production. We believe the effect of such operations should result in minimal disruption of oil production from our field investments.
On June 14, 2011, we entered into several exclusive licensing and management agreements with Stranded Oil Resources Corporation, or SORC, a wholly owned subsidiary of Alleghany Corporation, or Alleghany. to manage the acquisition and operation of mature oil fields in Kansas, Wyoming and Louisiana, focused on the recovery of “stranded” oil from those mature fields primarily using UGD. We performed those management services in exchange for a carried interest in SORC, a quarterly management fee and reimbursement from SORC for our employee-related expenses. Such fees and reimbursements were effectively all of our revenues prior to our acquisition of SORC pursuant to the closing of the Securities Purchase Agreement with Alleghany described below.
On December 31, 2020, we entered into a Securities Purchase Agreement with Alleghany. Under that agreement, we purchased all of the issued and outstanding shares of SORC. As consideration for the SORC shares, we paid Alleghany $72,678 in cash and agreed to pay Alleghany a seven-year royalty of 5.0% of our future revenues and net profits from our oil, gas, gas liquids and all other hydrocarbon operations, subject to certain adjustments. Currently, SORC is a wholly owned subsidiary of Laredo and is not conducting any ongoing operations. All intellectual property generated by SORC prior to December 31, 2020, transferred with the stock purchase.
Secondary to pursuing UGD projects is drilling conventional oil wells in Montana. Prior to purchasing the shares of SORC, while implementing UGD projects for Allegheny, we gained specialized know-how, intellectual property and operational experience in evaluating, acquiring, operating and developing oil and gas properties, as well as expertise in designing, drilling and producing conventional oil wells. Based upon that know-how, we identified and acquired 45,246 gross acres, and 37,932 net acres, of mineral property interests in the State of Montana in the Lustre and Midfork fields and the West Fork area. To develop our acquired mineral property acreage, we established relationships with several organizations and investment groups, including the following entities: (1) Olfert 11-4 Holdings, LLC, (2) Texakoma Exploration and Production, LLC, or Texakoma, (3) Erehwon Oil & Gas, LLC, or Erehwon, (4) an independent investor group through Hell Creek Crude LLC, or HCC, and (5) West Fork Resources, LLC, or WFR. As of May 31, 2026, we and Texakoma have drilled five wells in the Lustre and Midfork fields. None of these wells have been economically successful due primarily to encountering excess water due to lack of 3D seismic information to which we now have access. Although we are continually attempting to raise additional funds to develop our other mineral property interests that we have purchased in the area, our priority is seeking UGD projects globally and have abandoned most of the leased mineral property interests acquired. We also disposed of our ownership in Hell Creek Crude LLC on November 15, 2025 and have terminated any further drilling projects in the area. As of September 14, 2026, we have 2,945 net acres of mineral property interests located in Montana.
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We also have a 50% interest in the Cat Creek oil field, located west of our mineral rights described above, which is recorded with no value on our financial statements.
Competition
Our operating results are largely impacted by competition from other exploration and production companies in all areas of operation, including the acquisition of mature fields. Our competitors include large, well-established companies with substantially more capital resources than us.
Oil and Gas Price Volatility
For the last two years beginning on June 1, 2024, market prices for oil and gas have fluctuated broadly as oil and gas prices remain volatile.
Operating Hazards and Uninsured Risks
Oil and gas drilling activities are subject to many risks, including, but not limited to, the risk that those activities will not produce commercially viable oil and gas reserves. The cost and timing of drilling, completing and operating wells is often uncertain and drilling operations may be curtailed, delayed or canceled as a result of numerous factors, including low oil and gas prices, title problems, reservoir characteristics, weather conditions, equipment failures, delays imposed by project participants, compliance with governmental requirements, shortages or delays in the delivery of equipment and services and increases in the cost for such equipment and services. Our future oil recovery activities may not be successful. If so, such failure may have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our operations are subject to hazards and risks inherent in drilling for and producing and transporting petroleum products, including fires, natural disasters, explosions, encountering formations with abnormal pressures, blowouts, craterings, and pipeline ruptures and spills. Any of these events may result in the loss of hydrocarbons, environmental pollution, personal injury claims and other damage to our properties and those of others. We maintain insurance against some, but not all, of the risks described above. In particular, the insurance we maintain does not cover claims relating to failure of title to oil leases, loss of surface equipment at well locations, business interruption, loss of revenue due to low commodity prices or loss of revenues due to well failure. The occurrence of any such event that is not covered, or not fully covered, by insurance that we maintain or may acquire, could have a material adverse effect on our operations.
Governmental Regulation
Oil and natural gas exploration, production, transportation and marketing activities are subject to extensive laws, rules and regulations promulgated by federal and state legislatures and agencies, including but not limited to the Mine Safety and Health Administration, or MSHA, the Federal Energy Regulatory Commission, or FERC, the Environmental Protection Agency, or EPA, the Bureau of Land Management, BLM, and various other federal or state regulatory agencies. Our failure to comply with any such laws, rules and regulations may result in substantial penalties, including the delay or prohibition of our operations. The legislative and regulatory burden on the oil industry described above increases our cost of doing business.
State regulatory agencies, as well as the federal government when we operate on federal or Indian lands, require permits for drilling operations, drilling bonds and reports, and impose other requirements relating to the exploration and production of oil and gas. There are also statutes or regulations addressing conservation matters, including provisions for the unitization or pooling of oil and natural gas properties, the establishment of maximum rates of production from wells and the regulation of spacing, plugging and abandonment of such wells. In each jurisdiction, we may need exceptions to some applicable regulations requiring regulatory approval. All of these matters could affect our operations.
Environmental Matters
The oil industry is subject to extensive and changing federal, state and local laws and regulations relating to environmental protection, including the generation, storage, handling, emission, transportation and discharge of materials into the environment, as well as safety and health. The recent trend in environmental legislation and regulation is generally toward stricter standards, and this trend is likely to continue. These laws and regulations may require a permit or other authorization before construction or drilling commences, and for certain other activities, limit or prohibit access, seismic acquisition, construction, drilling and other activities on certain lands lying within wilderness and other protected areas, impose substantial liabilities for pollution resulting from its operations, and require the reclamation of certain lands.
The permits that are required for oil and gas operations are subject to revocation, modification and renewal by issuing authorities.
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Federal regulations require certain owners or operators of facilities that store or otherwise handle petroleum products to prepare and implement spill prevention, control countermeasures and response plans relating to the possible discharge of oil into surface waters. The Oil Pollution Act of 1990, or OPA, contains numerous requirements relating to the prevention of and response to oil spills into waters of the United States. For onshore and offshore facilities that may affect waters of the United States, the OPA requires the operator to demonstrate the financial ability to respond to discharges. Regulations are currently being developed under federal and state laws concerning oil pollution prevention and other matters that may impose additional regulatory burdens on participants in the oil and gas industry. In addition, the Clean Water Act and analogous state laws require permits to be obtained to authorize discharge into surface waters or to construct facilities in wetland areas. The Clean Air Act of 1970 and its subsequent amendments impose permit requirements and necessitate certain restrictions on point source emissions of volatile organic carbons (nitrogen oxides and sulfur dioxide) and particulates with respect to certain of our operations. The EPA and designated state agencies have in place regulations concerning discharges of storm water runoff and stationary sources of air emissions. These programs require covered facilities to obtain individual permits, participate in a covered group or seek coverage under an EPA general permit. A number of agencies, including but not limited to MSHA, the EPA, the BLM, and similar state commissions, have adopted regulatory guidance in consideration of the operational limitations on oil and gas facilities and their potential to emit pollutants.
Facilities
Our principal executive office is located at 2021 Guadalupe Street, Ste. 260, Austin, Texas 78705.
Personnel
As of May 31, 2026, we had seven full-time employees and no part-time employees.
Website Access
We make available on our web site our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and all amendments to those reports, as soon as reasonably practicable after we file such reports electronically with the Securities and Exchange Commission. Information on our website is not included as part of this report.
Item 1A. Risk Factors
Not Applicable
Item 1B. Unresolved Staff Comments
Not Applicable
Item 1C. Cybersecurity
We
are committed to maintaining the highest standards of cybersecurity to protect our data, intellectual property, and customer information
from cyber threats. As part of this commitment, we leverage a sophisticated cybersecurity framework that integrates the robust capabilities
of the Microsoft cloud ecosystem.
The Microsoft cloud ecosystem, including Microsoft 365, Azure, SharePoint Online, Microsoft Defender, and Microsoft InTune, forms the backbone of our cybersecurity infrastructure. These platforms offer advanced security features such as data encryption in transit and at rest, network security controls, identity and access management, and threat protection capabilities. Microsoft’s constant investment in cybersecurity research and development ensures that we benefit from cutting-edge security technologies and practices.
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Item 2. Properties
We currently have limited mineral leases and related mineral interests remaining in Montana. We are the operator of the Olfert 11-4 well located in the Lustre field. The Reddig 11-21 well and related interests were disposed of in connection with the Hell Creek Crude, LLC transaction and are no longer operated by the Company. The Olfert 11-4 well is currently shut in and is not producing.
Item 3. Legal Proceedings
On March 20, 2023, Capex Oilfield Services, Inc. (“Capex”) filed a lawsuit against Lustre in the Montana Tenth Judicial District Court, Petroleum County, demanding payment of $377,190, plus interest and collection costs for services provided by Capex to drill the Olfert 11-4 well. On January 29, 2024, the court issued a Stipulated Judgment and Order in favor of Capex for $354,267.29 plus interest in the amount of $79,224.89 and future accruing costs and interest of 18% per annum. On the same day, Lustre entered into a payment arrangement plan to pay Capex $5,000 per month until the judgement is satisfied. Payments are ongoing.
On May 18, 2023, Capstar Drilling, Inc.(“Capstar”) filed a lawsuit against Lustre in the Montana Seventeenth Judicial District Court, Valley County, demanding payment of $298,050, plus interest and collection costs, for services provided by Capstar to drill the Olfert 11-4 well. On July 18, 2024, the court issued an Order to Adopt Stipulation to Judgment in favor of Capstar in the sum of $276,815 principal balance, plus interest in the amount of $49,675 and court costs for a total judgment of $326,650 with post judgment interest of 10% per annum.
On August 29, 2023, Warren Well Service, Inc. (“Warren Well”) filed a lawsuit against Lustre in the Montana Seventeenth Judicial District Court, Valley County, demanding payment of $164,235, plus interest and collection costs for services provided by Warren Well to drill the Olfert 11-4 well. On March 31, 2025, Lustre agreed in mediation to pay $750 per month until all outstanding amounts owed to Warren Well are satisfied. Payments are on going.
On January 14, 2024 Nine Downhole Technologies, LLC aka Nine Energy Service (“Nine Downhole”) filed a complaint against Lustre in the Montana Tenth Judicial District Court, Petroleum County, demanding payment plus accrued interest until the debt is paid in full. On June 1, 2025, Nine Downhole’s Motion for a summary disposition was granted in the amount of $41,842 together with costs and any post judgment interest until amount is paid in full.
Except as set forth above, we are not currently involved in any other legal proceedings, and we are not aware of any other pending or potential legal actions.
Item 4. Mine Safety Disclosures
Not Applicable
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is currently traded under the symbol LRDC on the over-the-counter market and is quoted on the Pink Sheets, which is not recognized by the Securities and Exchange Commission, or the SEC, as a stock exchange for reporting purposes.
Since our stock began trading on the Pink Sheets on November 5, 2009, there has been a limited trading market for our common stock. The following table presents the range of high and low bid information for our common equity for each full quarterly period within the two most recent fiscal years.
Laredo Oil, Inc. High/Low Market Bid Prices ($)
| Fiscal
Q1: Jun 2025 — Aug 2025 |
Fiscal
Q2: Sep 2025 — Nov 2025 |
Fiscal
Q3: Dec 2025 — Feb 2026 |
Fiscal
Q4: Mar 2026 — May 2026 | |||||
| High Bid | .40 | .73 | .905 | .89 | ||||
| Low Bid | .1973 | .22 | .605 | .6901 | ||||
| Fiscal
Q1: Jun 2024 — Aug 2024 |
Fiscal
Q2: Sep 2024 — Nov 2024 |
Fiscal
Q3: Dec 2024 — Feb 2025 |
Fiscal
Q4: Mar 2025 — May 2025 | |||||
| High Bid | 0.70 | 0.47 | 0.43 | 0.4101 | ||||
| Low Bid | 0.24 | 0.3557 | 0.26 | 0.2557 |
Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation. The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a suitably written statement.
These disclosure requirements may have the effect of reducing trading activity in the secondary market for our stock if it becomes subject to these penny stock rules. Therefore, if our common stock becomes subject to the penny stock rules, stockholders may have difficulty selling those securities.
Holders
As of September 14, 2026, we had 85,595,558 shares of common stock issued and outstanding, and there were 62 holders of record and more than 700 beneficial holders of our common stock, including those who own their shares through their brokers in “street name.”
Dividends
We have not paid any dividends on our common stock since our inception. Our board of directors does not anticipate that it will declare dividends on our common stock in the foreseeable future.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
As of May 31, 2026, our cash and cash equivalents and restricted cash balance was $420,676. Our total debt outstanding as of May 31, 2026 was $3,573,056, including (i) $617,934 owed to Alleghany is in default and is classified as a current note payable as the original maturity date of December 31, 2023 has passed, and (ii) $825,701 pursuant to notes under the Paycheck Protection Program, or PPP, of which we have classified $763,352 as long-term debt, net of the current portion totaling $62,349, which is classified as a current note payable, (iii) $202,261 short term bridge notes, net of deferred debt discount, (iv) a $310,061 revolving note classified as short-term, (v) a $750,000 note payable to Cali Fields LLC is in default and is classified as short-term as the original maturity date of December 31, 2023 has passed, (vi) a $292,099 note payable due to our Chief Financial Officer, classified as short-term and (vii) $575,000 convertible debt contributed for net working interest.
As of May 31, 2025, our cash and cash equivalents and restricted cash balance was $249,409. Our total debt outstanding as of May 31, 2025 was $3,966,351, including (i) $617,934 owed to Alleghany, which is classified as a current note payable as the original maturity date of December 31, 2023 has passed, and (ii) $887,430 pursuant to notes under the Paycheck Protection Program, or PPP, of which we have classified $825,701 as long-term debt, net of the current portion totaling $61,729, which is classified as a current note payable, (iii) $352,478 short term bridge notes, net of deferred debt discount, (iv) a $310,061 revolving note classified as short-term, (v) a $750,000 note payable to Cali Fields LLC, classified as short-term as the original maturity date of December 31, 2023 has passed, (vi) a $181,349 promissory note, net of deferred debt discount classified as short-term, (vii) a $292,099 note payable due to our Chief Financial Officer, classified as short-term and (viii) $575,000 convertible debt contributed for net working interest.
We have continued financing our business with a combination of stock sales and issuances of debt securities, as described above. During fiscal year 2026, we sold 9,056,415 shares of our common stock to accredited investors at an average price of $0.455 per share for gross proceeds of $4,157,669. There were no finder’s fees related to the sales of the shares described above. The issued shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the Securities Act.
During fiscal 2026, we are seeing increased interest from multiple investors/funds and oil field ownership interests in our UGD methods, both nationally and internationally. We believe this interest is due to a change in the climate for U.S. based energy projects. We believe that this change in the financial markets has made it easier for us to raise equity related funds, and we expect this to continue for the foreseeable future.
Results of Operations
We recognized revenues and direct costs totaling $3,141 and $9,423, respectively through our interest in oil and gas sales for the year ended May 31, 2026 and 2025. During the years ending May 31, 2026 and 2025, we incurred operating expenses from continuing operations of $7,049,571 and $2,596,797, respectively. These expenses consisted primarily of general operating expenses incurred in connection with the day-to-day operation of our business, the preparation and filing of our required public reports, stock option compensation expense. In addition, lease operating expenses and impairment expenses are included in total operating expenses. The increase in expenses for the year ended May 31, 2026, as compared to the same period in 2025, is primarily attributable to $1.1 million, $308,000 and $146,000 increases in legal, public relations and travel expenses, respectively related to pursuing UGD opportunities internationally, a $2.1 million increase in stock-based compensation, and a $591,919 loss on conversion related to the issuance of stock in exchange for debt repayments. Further, as of May 31, 2026 there is a $348,393 long-term asset impairment loss primarily comprised of $232,774 expired property leases and $110,525 oil and gas assets no longer utilized as compared to the $21,716 impairment loss from continuing operations during the year ending May 31, 2025.
We recognized a net loss from discontinued operations totaling $52,340 and $733,284 for the years ending May 31, 2026 and 2025, respectively related to the sale of Hell Creek Crude effective November 15, 2025.
During fiscal 2026, we focused our efforts on developing our UGD business model which requires substantial investment to acquire access to, and to develop oil and gas properties for production.
Underground Gravity Drainage (UGD)
During fiscal year 2026, the environment and interest for UGD has increased, driven by the continued production decline of older depressurized oil fields. We are actively pursuing UGD international opportunities in Argentina, Mexico, the Middle East and Northern Africa region (“MENA”), Romania, Albania and Azerbaijan by engaging in conversations with government officials industry participants who have responsibility for domestic oil production. During fiscal year 2026, we met with officials from the United States Embassy located in Mexico City and conducted a visit to several MENA countries prior to the conflict in the region between the United State and Iran. Additionally, we visited both Romania and Albania and presently are conducting due diligence discussions and visits with industry participants in Argentina and Mexico.
No agreements have been consummated as of the filing date of this report. Discussions are ongoing.
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Domestically in the United States, we are in the process of raising funds to develop possible oil fields in Texas that are compatible with the UGD oil recovery method. There is no assurance that we will be successful in our efforts.
Conventional Drilling Operations
Relationship with Erehwon Oil & Gas, LLC
In connection with securing this acreage in Montana, Lustre Oil Company LLC, our wholly owned subsidiary (“Lustre”), entered into an Acquisition and Participation Agreement (the “Erehwon APA”) and subsequent amendments with Erehwon Oil & Gas, LLC (“Erehwon”) to acquire oil and gas interests and drill, complete, re-enter, re-complete, sidetrack, and equip wells in Valley County, Daniels County and Roosevelt County, Montana. The amended Erehwon APA specifies calculations for royalty interests and working interests for the first ten well completions and first ten well recompletions and for all additional wells and recompletions thereafter. Lustre will acquire mineral leases and pay 100% of the costs and the split between Erehwon and Lustre will be 20%/80%. Under the amended Erehwon APA, Lustre will fund 100% of the construction costs of the first ten wells and first ten completions. Until payout, as defined, is attained, the distribution split between Erehwon and Lustre will be 10%/90%, thereafter, 20%/80%. Any additional wells will be funded 80% by Lustre and 20% by Erehwon.
Royalty expenses for these wells will consist of a royalty interest to the landowner and an overriding royalty interest of between 3% and 6% to two individuals who generated the prospects. Those individuals will also receive an amount equal to 5% of the cost of the first ten new wells we complete and the first ten completed recompletions.
Hell Creek Crude, LLC Midfork Field Production Well
In January 2024, we entered into a Participation Agreement, through our wholly owned subsidiary, Hell Creek Crude, LLC (“HCC”), Erehwon, and various accredited investors. The Participation Agreement provided us with over $2.8 million to acquire certain leases and to drill a development well in the Midfork Field in Montana. Several of the investors also held $575,000 in principal amount of our convertible debt, plus accrued interest of $73,317, which indebtedness was included as investments under the Participation Agreement. Until final disposition of the well and notes is determined, the Company reclassified the notes and accrued interest as debt and accrued interest on May 31, 2025. These notes continue to accrue interest subsequent to the transfer to debt resulting in accrued interest totaling $142,695 as of May 31, 2026.
Drilling of the development well was completed in the Spring of 2025. After additional perforations and acidizing the well were performed, the well produced limited oil accompanied with water levels that makes it uneconomical to operate and was shut in.
In November, B&B Oil, LLC purchased 100% of the HCC membership units from us for consideration of a carried interest sharing 50% of any future distributions to B&B. As of November 15, 2025, we have no controlling interest or liabilities associated with HCC.
Olfert 11-4 Montana Well
In January 2022, we executed a Net Profits Interest Agreement with Erehwon and Olfert No. 11-4 Holdings, LLC, or Olfert Holdings, for the purpose of funding the first well, named Olfert #11-4, under the Acquisition and Participation Agreement described above. In exchange for Olfert Holdings’ funding of the development of Olfert #11-4, Olfert Holdings receives 90% of amounts resulting from Olfert #11-4 prior to “Payout” and 50% after “Payout.” The Net Profits Interest Agreement defines “Payout” as the point in time when the aggregate of all ‘Net Profits Interest’ payments made to Olfert Holdings under the agreement equals 105% of the total well development costs.
The well was drilled in the first half of calendar 2023 and encountered excessive amounts of salt water. Although we still are working to put the well into production, it has been three years since the well was shut-in pending gaining access to a proximate salt-water disposal well making the well economically viable. Although the asset carrying value of the well has been reduced to zero, we will continue to evaluate the well with the plan to bring it into production if economical.
Development Agreement with Texakoma Exploration and Production, LLC
Effective July 18, 2023, Lustre and Erehwon entered into an Exploration and Development Agreement (the “Development Agreement”), with Texakoma. The Development Agreement provides for the exploration and development of the “Lustre Field Prospect” described in the Development Agreement. Lustre and Erehwon are also parties to an existing Acquisition and Participation Agreement, under which those parties agreed to acquire certain oil and gas interests, and drill, complete, re-enter, re-complete, sidetrack, and equip wells, in certain counties in Montana.
10
Under the Development Agreement, three wells were successfully drilled and Texakoma paid 100% of the costs associated with the drilling and completion of the wells. Lustre and Erehwon, jointly, have an undivided 15% working interest, carried through the tanks, in the wells. In March 2024, Texakoma exercised its option to participate in the development of the remainder of the Lustre Field Prospect. By exercising its option, Texakoma agreed to drill eight additional wells, with Lustre and Erehwon having a 15% working interest carried through the tanks, and paid Lustre $706,603 for an 85% leasehold interest in the next eight drill sites and a 50% leasehold interest in the balance of the Lustre Field Prospect acreage. As of August 1, 2024, Texakoma had paid the balance. The working and net revenue interest in any future wells drilled subsequent to the first ten wells will be shared by Texakoma and Lustre and Erehwon, jointly, on a 50:50 basis.
As of May 31, 2026, the oil production levels from the three drilled wells were not sufficient to maintain operation and the wells have been shut in pending evaluation and possibly more perforations. Development of the additional eight wells is paused evaluating oil prices and additional field information.
Additional Acreage North of the Fort Peck Reservation
We were unable to raise $7.5 million to drill the planned three exploratory wells by selling units of West Fork Resources, LLC. Preliminary development operations such as acquiring seismic data, site selection, and permitting was started, as $750,000 of the $2.25 million funds initially raised elected to commence drilling operations during fiscal year 2025. Upon request, the remaining $1.5 million was returned to the investors. Unspent funds were transferred to Hell Creek Crude LLC for working interest units and there will be no additional development in West Fork Resources, LLC for the foreseeable future. The membership interest units are recorded as an investment in related party entity.
Recently Issued Accounting Pronouncements
Refer to Note 3 of the Notes to Consolidated financial statements for a discussion of recently issued accounting pronouncements.
Critical Accounting Policies and Estimates
The process of preparing consolidated financial statements requires that we make estimates and assumptions that affect the reported amounts of liabilities and stockholders’ equity/(deficit) at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these consolidated financial statements include estimates related to the valuation of stock-based compensation and asset retirement obligation. Changes in the status of certain facts or circumstances could result in a material change to the estimates used in the preparation of the consolidated financial statements and actual results could differ from the estimates and assumptions.
Going Concern
These consolidated financial statements have been prepared on a going concern basis. We have routinely incurred losses since inception, resulting in an accumulated deficit. We have recently received loans from accredited investors to fund our operations. There is no assurance that such financing will be available in the future to meet our operating needs. This situation raises substantial doubt about our ability to continue as a going concern within the one-year period after the issuance date of the consolidated financial statements included in this report.
Our management has undertaken steps to improve operations, with the goal of sustaining operations for the next twelve months and beyond. These steps include an ongoing effort to raise funds through the issuance of debt to fund our well development program and maintain operations. We have attracted and retained key personnel with significant experience in the industry. At the same time, in an effort to control costs, we have required a number of our personnel to multi-task and cover a wider range of responsibilities in an effort to restrict the growth of our headcount. There can be no assurance that we can successfully accomplish these steps, and it is uncertain that we will achieve a profitable level of operations and obtain additional financing. We cannot assure you that any additional financing will be available to us on satisfactory terms and conditions, if at all.
The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of us to continue as a going concern.
Off Balance Sheet Arrangements
We do not currently have any off-balance sheet arrangements or other such unrecorded obligations, and we have not guaranteed the debt of any other party.
11
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are not required to provide the information required by this Item as we are a “smaller reporting company,” as defined in Rule 229.10(f)(1)
Item 8. Consolidated Financial Statements and Supplementary Data
Our consolidated financial statements required by this item are included on pages immediately following the Index to Consolidated Financial Statements appearing on page F-1.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, or the SEC. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives, and management is required to use its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are not effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for timely decisions regarding required disclosure because of a material weakness in our control over financial reporting. 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. Specifically, the Company’s management has concluded that as of May 31, 2026, we had no full-time employees with the requisite expertise in the key functional areas of finance and accounting. As a result, there is a lack of proper segregation of duties necessary to ensure that all transactions are accounted for accurately and in a timely manner. Considering this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Annual Report on Form 10-K presents fairly in all material respects our financial position, results of operations and cash flows for the periods presented.
Our small size and limited resources have prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties. Further we have limited specific oil and gas accounting personnel in our accounting department due to our small size, lack of resources and limited technical accountants on staff. This led to material adjustments to oil and gas investment and asset impairment evaluations. It is difficult for us to effectively segregate accounting duties and have proper financial reporting, which creates a material weakness in internal controls. This lack of segregation of duties and limited personnel leads management to conclude that our financial reporting disclosure controls and procedures are not effective to give reasonable assurance that the information required to be disclosed in reports that we file under the Exchange Act is recorded, processed, summarized and reported as and when required.
12
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the framework in Internal Controls – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control – Integrated Framework, our management concluded that our internal controls over financial reporting were not effective as of May 31, 2026 because of a material weakness in our control over financial reporting. Specifically, our management has concluded that our small size and limited resources have prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties. Further we have limited specific oil and gas accounting personnel in our accounting department due to our small size, lack of resources and limited technical accountants on staff. This led to material adjustments to oil and gas investment and asset impairment evaluations. It is difficult for us to effectively segregate accounting duties and have proper financial reporting, which creates a material weakness in our internal controls over financial reporting.
As we grow, we are working on further improving our segregation of duties and level of supervision.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to SEC rules adopted in conformity with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) that occurred during the year ended May 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The following table sets forth as of September 14, 2026, the name, age, and position of each of our executive officers and directors, and the term of office of each of our executive officers and directors.
| Name | Age | Position Held | Term
as Director or Officer Since | |||
| Donald Beckham | 66 | Independent Director | March 1, 2011 | |||
| Michael H. Price | 78 | Independent Director | August 3, 2012 | |||
| Mark See | 65 | Chief Executive Officer and Chairman | October 16, 2009 | |||
| Bradley E. Sparks | 79 | Chief Financial Officer, Treasurer and Director | March 1, 2011 |
Each of our directors serves for a term of three years, until his successor is elected at our annual stockholders’ meeting, and is qualified, subject to removal by our stockholders. Each officer serves at the pleasure of the Board of Directors.
Set forth below is certain biographical information regarding each of our executive officers and directors.
DONALD BECKHAM has served as a director since March 1, 2011. Since July 2015, he has been a Partner with Copestone Energy Partners, LLC. In 1993 he founded Beckham Resources, Inc. (“BRI”) which for the past 20 years has been a licensed, bonded and insured operator in good standing with the Railroad Commission of Texas. Through BRI, Mr. Beckham has drilled and operated fields for his own account. His expertise is in the acquisition, exploitation, exploration and production enhancement of mature oil and gas fields through which he has been able to enhance production by compressor optimization, pump design, work-over programs, stimulation techniques and identifying new pay zones. BRI has operated wells in the following fields: Hull, Liberty, Aransas Pass, McCampbell, Mission River, Garcitas Creek, Sour Lake, Batson, Barton Ranch and Dayton. Prior to BRI, Mr. Beckham was the chief operations manager for Houston Oil Fields Corporation (“HOFCO”) where he began his career. There he was responsible for drilling, production and field operations and managed approximately 100 people including engineers, geologists, land men, pumpers, and other contract personnel, as well as state and federal environmental and regulatory functions. He managed an annual capital budget of approximately $30 million and operated approximately 100 wells. HOFCO drilled about 20 wells per annum and performed approximately 30 recompletions and work over operations each year. HOFCO owned interests in about 10 key fields principally in Texas, and company-managed production was approximately 1,000 bpd of crude oil and 10 mm cfd of natural gas. Fields that he managed were as follows: Manvell, Cold Springs, Shepherd, Turtle Bay, Red Fish Bay, Dickinson, Refugio, Lost Lake, Liberty and Abbeville. Mr. Beckham is a petroleum engineer and 1984 graduate of Mississippi State University.
MICHAEL H. PRICE, has served as a director since August 1, 2012 and has over 40 years of senior financial and petroleum experience in the global oil and gas industry. He has been a principal in Octagon Energy Advisors, a Houston based energy investment advisory firm, from 2002 to the present. The firm advises financial institutions and institutional investors participating in energy investments. Since 2008, he has been a Managing Director at ING Capital which provides debt financing to domestic exploration and production companies. From 1998 through 2002, Mr. Price was the Chief Financial Officer of Forman Petroleum Corporation. Before that, Mr. Price was Managing Director at Chase Manhattan Bank for fifteen years where he was in charge of technical support for Chase’s worldwide energy merchant banking activities. In his early career, he worked as a consulting principal on domestic petroleum engineering and landowner matters, and gained extensive international experience working with major oil companies in a variety of operating positions. He holds a BS and MS from Illinois Institute of Technology, an MBA from the University of Chicago, a M.Sc. from the London School of Economics, and a MS in Petroleum Engineering from Tulane University.
MARK SEE has been our Chief Executive Officer and Chairman of the Board of Directors since October 16, 2009. He has over 30 years of experience in tunneling, natural resources and the petroleum industries. He was the founder and founding CEO of Rock Well Petroleum, a private oil & gas company from January 2005 until December 2008 and worked from then until October 2009 forming Laredo Oil. Mr. See was also President of Oil Recovery Enhancement LLC in Bozeman, Montana, a private oil company. He was selected as one of the top 25 Engineers in North America by the Engineering News Record for his innovations in the petroleum industry. He is a member of the Society of Mining Engineers and the Society of Petroleum Engineers.
BRADLEY E. SPARKS is our Chief Financial Officer and Treasurer and has been a director since March 1, 2011. Before joining us in October 2009, Mr. Sparks was the Chief Executive Officer, President and a Director of Visualant, Inc. Prior to joining Visualant, he was the Chief Financial Officer of WatchGuard Technologies, Inc. from 2005 to 2006. Before joining WatchGuard, he was the founder and managing director of Sunburst Growth Ventures, LLC, a private investment firm specializing in emerging-growth companies. Previously, he founded Pointer Communications and served as Chief Financial Officer for several telecommunications and internet companies, including eSpire Communications, Inc., Digex, Inc., Omnipoint Corporation, and WAM!NET. He also served as Vice President and Treasurer of MCI Communications from 1988-1993 and as Vice President and Controller from 1993-1995. Before his tenure at MCI, Mr. Sparks held various financial management positions at Ryder System, Inc. Mr. Sparks currently serves on the Board of Directors of Comrise. Mr. Sparks graduated from the United States Military Academy at West Point in 1969 and is a former Army Captain in the Signal Corps. He received a Master of Science in Management degree from the Sloan School of Management at the Massachusetts Institute of Technology in 1975 and is a member of the AICPA.
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To the knowledge of our management, during the past ten years, no present or former director, executive officer or person nominated to become a director, or an executive officer of the Company has:
| (1) | filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by the court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filings; |
| (2) | was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| (3) | was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting, the following activities: |
| (i) | acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
| (ii) | engaging in any type of business practice; or |
| (iii) | engaging in any activities in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; |
| (4) | was the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activities; |
| (5) | was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been subsequently reversed, suspended, or vacated; |
| (6) | was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; |
| (7) | was the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: |
| (i) | Any federal or state securities or commodities law or regulation; or |
| (ii) | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or |
| (iii) | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| (8) | was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Section 16(a) Beneficial Ownership Reporting Compliance
During the fiscal year ended May 31, 2026, we had no class of equity securities registered pursuant to Section 12 of the Securities Exchange Act of 1934. Accordingly, no reports were required to be filed pursuant to Section 16(a) with respect to our officers, directors, and beneficial holders of more than ten percent of any class of equity securities.
Code of Ethics
Our Code of Ethics is included herein by reference to Exhibit 14.1 to this Annual Report on Form 10-K and can be found on our web site at www.laredo-oil.com.
15
Item 11. Executive Compensation
Compensation Summary for Executive Officers
The following table sets forth compensation paid or accrued by us for the last two years ended May 31, 2026 and 2025 with regard to individuals who served as the Principal Executive Officer, the Principal Financial Officer and for executive officers receiving compensation in excess of $100,000 during these fiscal periods.
| Name and Principal Position | Fiscal Year | Salary($) | Bonus($) | Option Awards($) |
All
Other Compensation($) |
Total($) | ||||||||||||||||
| Mark See (1) | 2026 | 525,000 | - | - | - | 525,000 | ||||||||||||||||
| Chief Executive Officer and Chairman of the Board | 2025 | 525,000 | - | - | - | 525,000 | ||||||||||||||||
| Bradley E. Sparks (2) | 2026 | 415,000 | - | 271,167 | - | 686,167 | ||||||||||||||||
| Chief Financial Officer, Treasurer and Director | 2025 | 415,000 | - | - | - | 415,000 | ||||||||||||||||
| (1) | In fiscal year 2026, Mr. See’s salary includes $290,349 in cash payments and $234,651 of deferred compensation. In fiscal year 2025, Mr. See’s salary included $244,607 in cash payments, and $280,393 for deferred compensation. As of May 31, 2026, Mr. See has cumulative deferred compensation of $979,286, which includes accrued employer payroll taxes totaling $87,734. |
| (2) | The amounts shown in 2026 include $207,181 of salary paid in cash and $207,819 in deferred compensation. In fiscal 2026, Mr. Sparks received options to purchase 1,000,000 shares of common stock at a fair value of $271,167. In fiscal 2025, Mr. Sparks’ salary includes $171,906 of cash payments and $243,094 of deferred compensation. As of May 31, 2026, Mr. Sparks has cumulative deferred compensation of $2,601,011, which includes accrued employer payroll taxes totaling $235,164. |
Named Executive Officers Compensation and Termination of Employment Provisions
Mark See Pursuant to a letter agreement dated October 16, 2009, and subsequently amended, between us and Mr. See, we pay Mr. See an annual base salary of $495,000 (which, together with previously approved allowances for Mr. See equaling $30,000, is an aggregate of $525,000 per year). If Mr. See is terminated by us without “Cause” (as such term is defined in the letter agreement) or if Mr. See terminates his employment with us for “Good Reason” (as such term is defined in his change in control agreement), we will pay severance to Mr. See equal to 100% of his then-current annualized base salary, and any bonuses earned, paid out on a pro rata basis over our regular payroll schedule over the two-year period following the effective date of such termination, provided that if such termination occurs within 12 months after a Change of Control, such two-year period shall be increased to a three-year period. In addition, Mr. See will continue to receive all applicable benefits under our standard benefits plans currently available to other senior executives, for a period not to exceed 24 months following the termination of his employment.
In November and December 2023, our Board of Directors awarded Mr. See fully vested options to purchase 4,925,000 shares of our common stock at $0.066 per share. These were issued to augment and replace earlier option grants that had expired. The options expire in November and December 2033.
As of May 31, 2026, Mr. See has $979,286 of deferred compensation, including $87,734 estimated employer payroll taxes owed under his contract, which is the cumulative difference between his contract salary and the actual cash compensation he has received thereunder through May 31, 2026.
Bradley Sparks Pursuant to a letter agreement dated October 20, 2009, as amended, we pay Mr. Sparks an annual base salary of $385,000 (which, together with previously approved annual payments for Mr. Sparks equaling $30,000, is an aggregate of $415,000 per year). If Mr. Sparks is terminated by us without “Cause” (as such term is defined in the letter agreement) or if Mr. Sparks terminates his employment with us for “Good Reason” (as such term is defined in the change in letter agreement),, we will pay Mr. Sparks severance equal to 100% of his then-current annualized base salary, and any bonuses earned, paid out on a pro rata basis over our regular payroll schedule over the two-year period following the effective date of such termination; provided, however, that if such termination occurs within 12 months after a Change of Control, such two-year period is increased to a three-year period. In addition, Mr. Sparks will continue to receive all applicable benefits under our standard benefits plans currently available to other senior executives, for a period not to exceed 24 months following the termination of employment.
In October 2025, our Board of Directors awarded Mr. Sparks fully vested option to purchase 1,000,000 shares of our common stock at $0.28 per share. The options expire on October 26, 2035. In June 2023, our Board of Directors awarded Mr. Sparks fully vested options to purchase 6,500,000 shares of our common stock at $0.06 per share. The award comprised a vested options award to purchase 5,000,000 shares and an award to purchase 1,500,000 shares to replace an award dated May 28, 2022 to purchase 1,500,000 shares which was canceled. The options expire on June 23, 2033.
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As of May 31, 2026, we owe Mr. Sparks $2,601,011 of cumulative deferred compensation, including $235,164 estimated employer payroll taxes pursuant to his letter agreement with us with respect to his compensation for his employment. The amount owed under his contract is the cumulative difference between the amount of compensation we owe Mr. Sparks under his contract salary and the actual cash compensation he has received under his agreement with us.
Outstanding equity awards as of May 31, 2026:
| (a) Name and Principal Position |
(b) Number of Securities Underlying Unexercised Options Exercisable |
(e) Option Exercise Price ($) |
(f) Option Expiration Date | |||||||
| Bradley
E. Sparks CFO, Treasurer & Director |
6,500,000
|
0.06
|
June 23, 2033
| |||||||
| 1,000,000 | 0.28 | October 26, 2035 | ||||||||
| Mark
See CEO and Board Chairman |
4,925,000 | 0.066 | Nov & Dec 2033 | |||||||
In September 2025, we approved the Laredo Oil, Inc 2025 Equity Incentive Plan authorizing the number of shares available for issuance thereunder to an aggregate of 10,000,000 shares. The plan will expire ten years after inception.
On May 19, 2023, we approved the Laredo Oil, Inc. 2023 Equity Incentive Plan. The Equity Incentive Plan was filed with the Securities and Exchange Commission on Form S-8 on June 14, 2023 authorizing the number of shares available for issuance thereunder to an aggregate of 20,000,000 shares. The plan will expire ten years after inception, or on May 19, 2033.
In February 2011, we approved the Laredo Oil, Inc. 2011 Equity Incentive Plan. The Equity Incentive Plan was filed with the Securities and Exchange Commission on Form S-8 on November 8, 2011, and was amended in December 2014 to increase the number of shares available for issuance thereunder to an aggregate of 15,000,000 shares. The plan expired in February 2021 and had one grant still in effect for 1,100,000 shares at an exercise price of $0.38 per share, which expired on January 2, 2025.
Director Compensation
| (a) Name |
(b) Fees Earned or Paid in Cash ($) |
(c) Stock Awards ($) |
(d) Option Awards ($) |
(j) Total ($) |
||||||||||||
| Donald Beckham | 50,000 | - | 406,750 | 456,750 | ||||||||||||
| Michael H. Price | 50,000 | - | 406,750 | 456,750 | ||||||||||||
Historically, the compensation for each non-employee member of our Board of Directors has been as follows: quarterly cash payment of $12,500 payable mid-quarters in arrears, and 500,000 shares of restricted common stock vesting in three equal installments over three years. We also reimburse directors for all reasonable expenses associated with attendance at meetings of our Board of Directors. During the second quarter of fiscal year 2022, we suspended cash payments to directors. During fiscal years 2023 and 2024, no cash payments to directors were made, but were accrued for future payment. Quarterly payments to directors started again during fiscal 2025. On October 27, 2025, we granted fully vested options to purchase 1,500,000 shares to each of Mr. Beckham and Mr. Price at a strike price of $0.28 per common share. On June 23, 2023, we granted fully vested options to purchase 1,500,000 shares of our common stock to each of Mr. Beckham and Mr. Price and simultaneously cancelled the 500,000 option grants to each dated May 28, 2022. Since they are executive officers, Messrs. See and Sparks receive no additional compensation for serving on the Board of Directors.
17
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of September 14, 2026, the name and address and the number of shares of the Company’s common stock, with a par value of $0.0001 per share, held of record or beneficially by each person who held of record, or was known by the Company to own beneficially, more than 5% of the issued and outstanding shares of the Company’s common stock, and the name and shareholdings of each executive officer, director and of all officers and directors as a group.
| Name
and Address of Beneficial Owner |
Nature
of Ownership (1) |
Amount
of Beneficial Ownership (1) |
Percent of Class | |||||||
| Bedford
Holdings, LLC 44 Polo Drive Big Horn, WY 82833 |
Direct | 12,829,269 | 12.3 | % | ||||||
| Darlington,
LLC (2) P.O. Box 723 Big Horn, WY 82833 |
Direct | 5,423,138 | 5.2 | % | ||||||
| Mark
See (3) 2021 Guadalupe Street, Suite 260 Austin, Texas 78705 |
Direct | 36,021,676 | 34.6 | % | ||||||
| Bradley
E. Sparks (4) 2021 Guadalupe Street, Suite 260 Austin, Texas 78705 |
Direct | 10,324,857 | 9.9 | % | ||||||
| Robert
Adamo 2021 Guadalupe Street, Suite 260 Austin, Texas 78705 |
Direct | 9,142,886 | 8.8 | % | ||||||
| Donald
Beckham (5) 2021 Guadalupe Street, Suite 260 Austin, Texas 78705 |
Direct | 3,550,000 | 3.4 | % | ||||||
| Michael
H. Price (6) 2021 Guadalupe Street, Suite 260 Austin, Texas 78705 |
Direct | 3,550,000 | 3.4 | % | ||||||
| All
Directors and Officers as a Group (4 persons) |
Direct | 53,446,533 | 51.4 | % | ||||||
| (1) | All shares owned directly are owned beneficially and of record, and such stockholder has sole voting, investment and dispositive power, unless otherwise noted. Amounts of beneficial ownership include all options to purchase common stock expected to be vested within 60 days after the filing date of this Annual Report on Form 10-K. |
| (2) | These shares are owned by the spouse of Mr. See, and Mr. See has a proxy from Mrs. See to vote the shares. |
| (3) | Includes 12,829,269 shares owned by Mr. See through Bedford Holdings, LLC, 5,423,138 shares owned by Mrs. See through Darlington, LLC, and fully vested options to purchase 4,925,000 shares of common stock at $0.066 per share. |
| (4) | Includes fully vested options to purchase 6,500,000 shares of common stock at $0.06 per share and 1,000,000 shares at $0.28 per share. |
| (5) | Includes fully vested options to purchase 1,500,000 shares of common stock at $0.06 per share and 1,500,000 shares at $0.28 per share. |
| (6) | Includes fully vested options to purchase 1,500,000 shares of common stock at $0.06 per share and 1,500,000 shares at $0.28 per share |
18
Securities authorized for issuance under equity compensation plans
The following table provides information as of May 31, 2026 concerning the issuance of equity securities with respect to compensation plans under which our equity securities are authorized for issuance.
Equity Compensation Plan Information
| Plan category | Number
of securities to be issued upon exercise of outstanding options, warrants and rights (a) |
Weighted
–average exercise price of outstanding options, warrants and rights ($) (b) |
Number
of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) |
|||||||||
| 2023
Equity compensation plans approved by security holders (1) |
20,000,000 | 0.06 | 0 | (2) | ||||||||
| 2025 Equity compensation plan approved by security holders (3) | 9,725,000 | 0.28 | 275,000 | (4) | ||||||||
| Total | 29,725,000 | 0.133 | 275,000 | |||||||||
| (1) | Effective May 19, 2023, the holders of a majority of the shares of our common stock took action by written consent to approve our 2023 Equity Incentive Plan, or the “2023 Plan.” Stockholders then owning an aggregate of 31,096,676 shares, or 59.8% of the then issued and outstanding shares of our Common Stock, approved the matter. The 2023 Plan and corresponding agreements are exhibits to our Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 14, 2023. The 2023 Plan reserved 20,000,000 shares of our common stock for issuance to eligible recipients. |
| (2) | During fiscal year 2024, we granted options to purchase 20,000,000 shares of common stock to employees and contractors. The aforementioned options were issued under the 2023 Equity Incentive Plan, which authorized 20,000,000 shares of our common stock reserved for issuance for directors, employees and contractors. |
| (3) | Effective September 12, 2025, the holders of a majority of the shares of our common stock took action by written consent to approve our 2025 Equity Incentive Plan, or the “2025 Plan.” Stockholders then owning an aggregate of 40,584,419 shares, or 54.2% of the then issued and outstanding shares of our Common Stock, approved the matter. The 2025 Plan reserved 10,000,000 shares of our common stock for issuance to eligible recipients. |
| (4) | During fiscal year 2026, we granted options to purchase 9,725,000 shares of common stock to employees and contractors. The aforementioned options were issued under the 2025 Equity Incentive Plan, which authorized 10,000,000 shares of our common stock reserved for issuance for directors, employees and contractors. |
Item 13. Certain Relationships and Related Transactions, and Director Independence
Transactions with Management and Others
As Officers and Directors are related parties, see Items 10, 11 and 12 which disclose option grants and executive compensation and beneficial ownership.
On June 22, 2022, we assigned to our Chief Financial Officer, or CFO, the right to purchase up to 356,243 of the 500,000 membership interests in Olfert #11-4 in exchange for our CFO’s payment of $356,243 of our capital commitment to Olfert #11-4. On August 15, 2022, our CFO purchased an additional 109,590 membership interests in Olfert #11-4 in exchange for a payment of $109,590 by our CFO. The Olfert 11-4 well has been shut-in pending economical disposal of salt water encountered.
On October 26, 2022, we borrowed $150,000 from our CFO pursuant to a demand note bearing an annual interest rate of 10%. The note is secured by a pledge of all of the interests in our wholly owned subsidiary Lustre Oil Company LLC. In February 2023, our CFO made several advances to us, totaling $50,000. On March 15, 2023, we received an additional loan of $30,000 from our CFO. During April and May of 2023, our CFO advanced another $62,099. The total amount of these advances aggregate to $292,099. The October 26, 2022 note and the aforementioned advances, totaling $292,099, were incorporated into a $400,000 note dated November 27, 2023. On May 18, 2026, an interest payment of $98,041 was paid to our CFO and on June 8, 2026, a principal payment of $80,000 was repaid, bringing the outstanding balance on the note to $212,099.
19
Director Independence.
Both Mr. Price and Mr. Beckham serve as “independent” directors based on the definition of independence in the listing standards of NASDAQ Marketplace Rule 4200(a)(15).
Item 14. Principal Accounting Fees and Services
(1) Audit Fees
The aggregate fees billed by the independent accountants for each of the last two fiscal years for professional services for the audit of the Company’s annual consolidated financial statements and the review of consolidated financial statements included in the Company’s Form 10-Q and services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements for those fiscal years were $149,000 for the fiscal year ended May 31, 2026 and $216,000 for the fiscal year ended May 31, 2025.
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under paragraph (1) above was $0.
(3) Tax Fees
The aggregate fees billed in each of the last two fiscal years ending May 31, 2026 and 2025 for professional services rendered by the principal accountants for tax compliance, tax advice, and tax planning was $30,225 and $29.785, respectively.
(4) All Other Fees
During the last two fiscal years ending May 31, 2026 and 2025, respectively there were $0 fees charged by the principal accountants other than those disclosed in (1), (2) and (3) above.
(5) Audit Committee’s Pre-approval Policies and Procedures
The Audit Committee pre-approves the engagement with the independent auditor. It meets four times annually and reviews consolidated financial statements with the independent auditor. Additionally, the Audit Committee meets in executive session with the independent auditor at the conclusion of those meetings.
20
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) (1) Consolidated Financial Statements. See Index to Consolidated Financial Statements on page F-1.
(a) (2) Financial Statement Schedules
The following financial statement schedules are included as part of this report:
None.
(a) (3) Exhibits
The exhibits required to be filed herewith by Item 601 of Regulation S-K, as described in the following index of exhibits, are attached hereto unless otherwise indicated as being incorporated herein by reference, as follows:
21
22
| 31.1 | Certification by Chief Executive Officer pursuant to Rule 13a-14(a). |
| 31.2 | Certification by Chief Financial Officer pursuant to Rule 13a-14(a). |
| 32.1 | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 32.2 | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document) |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
23
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LAREDO OIL, INC. | ||||
| (the “Registrant”) | ||||
| Date: September 29, 2026 | By: | /s/ Mark See | ||
| Mark See | ||||
| Chief Executive Officer and Chairman of the Board | ||||
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Date: September 29, 2026 | By: | /s/ Mark See | |
| Mark See | |||
| Chief Executive Officer and Chairman of the Board | |||
| (Principal Executive Officer) | |||
| Date: September 29, 2026 | By: | /s/ Bradley E. Sparks | |
| Bradley E. Sparks | |||
| Chief
Financial Officer, Treasurer and Director (Principal Financial and Accounting Officer) |
|||
| Date: September 29, 2026 | By: | /s/ Donald Beckham | |
| Donald Beckham | |||
| Director | |||
| Date: September 29, 2026 | By: | /s/ Michael H. Price | |
| Michael H. Price | |||
| Director |
24
LAREDO OIL, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of Laredo Oil, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Laredo Oil, Inc. (the Company) as of May 31, 2026 and 2025, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended May 31, 2026, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the two-year period ended May 31, 2026, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has yet to achieve profitable operations, has negative cash flows from operating activities, and is dependent upon future issuances of equity or other financing to fund ongoing operations, all of which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Oil and gas properties
As discussed in Note 4 to the financial statements, the Company capitalizes certain oil and gas acquisition and drilling costs in unproved and unevaluated properties.
Auditing management’s evaluation of unproved and unevaluated properties can require significant judgement given the fact that the Company uses management’s estimates on future development plans, which are difficult to substantiate.
To evaluate the appropriateness of management’s development plans, we evaluated the key factors and assumptions used to develop the development plans for unproved and unevaluated oil and gas properties, as well as, management’s disclosure in determining that they are reasonable in relation to the financial statements taken as a whole.
/s/
We have served as the Company’s auditor since 2024.
September 14, 2026
F-2
| Laredo Oil, Inc. |
| Consolidated Balance Sheets |
| May 31, 2026 | May 31, 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents and restricted cash | $ | |||||||
| Receivables - related party | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Assets of discontinued operations | ||||||||
| Total Current Assets | ||||||||
| Property and Equipment | ||||||||
| Oil and gas acquisition and drilling costs | ||||||||
| Property and equipment, net | ||||||||
| Total Property and Equipment, net | ||||||||
| Investment in entity – related party | ||||||||
| Other assets | ||||||||
| Non-current assets of discontinued operations | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable and accrued liabilities – related party | ||||||||
| Accrued payroll liabilities | ||||||||
| Accrued interest | ||||||||
| Deferred well development costs | ||||||||
| Convertible debt contributed for net working interest | ||||||||
| Bridge securities, net of debt discount | ||||||||
| Promissory note, net of debt discount | ||||||||
| Revolving note | ||||||||
| Note payable – related party | ||||||||
| Note payable – Alleghany, net of debt discount | ||||||||
| Note payable, current portion | ||||||||
| Liabilities of discontinued operations | ||||||||
| Total Current Liabilities | ||||||||
| Asset retirement obligation | ||||||||
| Long-term note, net of current portion | ||||||||
| Liabilities of discontinued operations | ||||||||
| Total Noncurrent Liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and Contingencies (Note 13) | ||||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock: $ par value; shares authorized; issued and outstanding | ||||||||
| Common stock: $ par value; and shares authorized; and issued and outstanding as of May 31, 2026 and 2025, respectively | ||||||||
| Additional paid in capital | ||||||||
| Subscription paid in advance | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-3
| Laredo Oil, Inc. |
| Consolidated Statements of Operations |
| Year Ended May 31, 2026 | Year Ended May 31, 2025 | |||||||
| Revenue | $ | |||||||
| Gross profit (loss) | ||||||||
| Lease Operating Expense | ||||||||
| General, selling and administrative expenses | ||||||||
| Consulting and professional services | ||||||||
| Impairment expense | ||||||||
| Total Operating Expense | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income/(expense) | ||||||||
| Other non-operating income | ||||||||
| Gain on sale of assets | ||||||||
| Interest expense, net | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | $ | ( | ) | |||
| Net loss from discontinued operations | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Net loss per share | ||||||||
| Net loss per share from continuing operations, basic and diluted | ( | ) | $ | ( | ) | |||
| Net loss per share from discontinued operations, basic and diluted | ( | ) | ( | ) | ||||
| Net loss per share, basic and diluted | ( | ) | ( | ) | ||||
| Weighted average number of basic and diluted common shares outstanding | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
| Laredo Oil, Inc. |
| Consolidated Statement of Stockholders’ Deficit |
| For the Years Ended May 31, 2026 and 2025 |
| Common Stock | Preferred Stock | Additional Paid | Subscription | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | In Capital | Paid in Advance | Deficit | Deficit | |||||||||||||||||||||||||
| Balance at May 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Sale of shares for cash | - | |||||||||||||||||||||||||||||||
| Issuance of common stock in exchange for note payable retirement | - | |||||||||||||||||||||||||||||||
| Gain on investment in oil and gas properties – related party | - | - | ||||||||||||||||||||||||||||||
| Issuance of warrants | - | - | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at May 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Common Stock | Preferred Stock | Additional Paid | Subscription | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | In Capital | Paid in Advance | Deficit | Deficit | |||||||||||||||||||||||||
| Balance at May 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Sale of shares | - | ( | ) | |||||||||||||||||||||||||||||
| Issuance of common stock in exchange for debt retirement | - | |||||||||||||||||||||||||||||||
| Warrants exercised in exchange for debt retirement | - | |||||||||||||||||||||||||||||||
| Warrant exercise for cash | - | |||||||||||||||||||||||||||||||
| Issuance of stock for service | - | |||||||||||||||||||||||||||||||
| Relative fair value of warrants issued with debt | - | - | ||||||||||||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||||||
| Sale of interest in Hell Creek Crude , LLC | - | - | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at May 31, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
| Laredo Oil, Inc. |
| Consolidated Statements of Cash Flows |
| Year Ended | Year Ended | |||||||
| May 31, 2026 | May 31, 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss from continuing operations | ( | ) | $ | ( | ) | |||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||||||||
| Stock based compensation expense | ||||||||
| Issuance of stock in exchange for service | ||||||||
| Amortization of debt discount | ||||||||
| Impairment of equity investment | ||||||||
| Impairment of long-term assets | ||||||||
| Depreciation expense | ||||||||
| Net loss on discontinued operations | ||||||||
| Loss on disposal of assets | ||||||||
| Loss on conversion | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | ||||||||
| Receivables from related party | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Bond | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Accrued payroll | ( | ) | ||||||
| Accrued interest | ||||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Investment in equity method investment | ( | ) | ||||||
| Cash paid for acquisition of oil and gas assets | ( | ) | ||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from sale of common stock | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Repayment of convertible debt | ( | ) | ||||||
| Proceeds from promissory notes | ||||||||
| Repayment of promissory notes | ( | ) | ||||||
| Proceeds from bridge notes | ||||||||
| Repayment of bridge notes | ( | ) | ( | ) | ||||
| PPP loan repayments | ( | ) | ( | ) | ||||
| Proceeds from prefunded drilling costs | ||||||||
| Repayment of prefunded drilling costs | ( | ) | ( | ) | ||||
| CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | ||||||||
| Net increase/(decrease) in cash and cash equivalents from continuing operations | ||||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Net cash provided by/(used in) discontinued operations | ||||||||
| Cash provided by operating activities | ||||||||
| Cash used for investing activities | ( | ) | ||||||
| Cash used in financing activities | ||||||||
| Net cash provided by/(used in) discontinued operations | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ | |||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid for interest expense | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Oil and gas acquisition costs in accounts payable | $ | $ | ||||||
| Transfer of oil and gas assets to investment in entity – related party | $ | $ | ||||||
| Gain on sale of membership interest in HCC – related party | $ | $ | ||||||
| Relative fair value of warrants granted with debt | $ | $ | ||||||
| Gain on investment in oil and gas properties – related party | $ | $ | ||||||
| Initial asset retirement obligation and related liability | $ | $ | ||||||
| Reclassification of contingent liability to convertible debt | $ | $ | ||||||
| Exercise of warrant in exchange for debt and related interest repayment | $ | $ | ||||||
| Sale of stock in exchange for debt and related interest repayment | $ | $ | ||||||
| Issuance of common stock in exchange for note payable | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
The accompanying consolidated financial statements have been prepared by the management of Laredo Oil, Inc. (“the Company”).
The Company was incorporated under the laws of the State of Delaware on March 31, 2008 under the name of “Laredo Mining, Inc.” As of that date, the Company had authorized shares of common stock at $ par value and authorized shares of preferred stock at $ par value. On October 21, 2009 the name of the Company was changed to “Laredo Oil, Inc.” During May of 2023, the Company’s board of directors voted to increase the authorized shares of common stock to shares at $ par value, which increase was approved by the holders of a majority of the shares of common stock then outstanding.
We are an oil exploration and production company, primarily engaged in acquisition and exploration efforts to find mineral reserves on various properties. From our inception in March 2008 through October 2009, we were primarily engaged in acquisition and exploration efforts for mineral properties. Beginning in October 2009, we shifted our focus to locating mature oil fields with the intention of acquiring those oil fields and recovering stranded oil reserves using proprietary enhanced recovery methods known as underground gravity drainage, or UGD.
The original UGD method uses conventional mining processes to establish a drilling chamber underneath an existing oil field from where closely spaced wellbores are intended to be drilled directionally up into the reservoir, using residual radial pressure and gravity to then drain the targeted reservoir through the wellbores. As the Company gained experience through practical application of the processes involved in oil recovery, variants of the UGD concept have been developed and evaluated. The UGD method is applicable to mature oil fields that have very specific geological characteristics. The Company has done extensive research and has identified oil fields within the United States and globally that it believes are qualified for UGD recovery methods. The Company primary business and focus is to pursue and recover stranded oil from selected mature fields chosen from this group as funds become available.
We believe the costs of implementing the UGD method are radically lower than those presently experienced by commonly used Enhanced Oil Recovery (“EOR”) methods. We also estimate that we can materially increase the field oil production rate from prior periods and recover amounts of oil equal to or greater than amounts previously recovered from the mature fields selected. The Company intends to seek oil fields with a minimum of 25 million barrels of estimated recoverable oil.
When the Company acquires a targeted oil field, we will continue to operate the producing field and expect to generate revenue and profit from doing so. Once the development of the underground chamber and the UGD method is prepared for operation, the conventional wells will be capped and UGD production begun. The effect of such operations should result in minimal disruption of oil production from our field investments.
On June 14, 2011, we entered into several exclusive licensing and management agreements with Stranded Oil Resources Corporation, or SORC, a wholly owned subsidiary of Alleghany Corporation, or Alleghany. to manage the acquisition and operation of mature oil fields in Kansas, Wyoming and Louisiana, focused on the recovery of “stranded” oil from those mature fields primarily using UGD. We performed those services in exchange for a carried interest in SORC, a quarterly management fee and reimbursement from SORC of our employee-related expenses. Such fees and reimbursements were effectively all of our revenues prior to our acquisition of SORC via the closing of the Securities Purchase Agreement with Alleghany described below. During the nearly 10-year relationship with Alleghany, we continued to develop our UGD technology while enhancing our intellectual property and know-how.
On December 31, 2020, we entered into a Securities Purchase Agreement with Alleghany. Under that agreement, we purchased all of the issued and outstanding shares of SORC. As consideration for the SORC shares, we paid Alleghany $72,678 in cash and agreed to pay Alleghany a seven-year royalty of 5.0% of our future revenues and net profits from our oil, gas, gas liquids and all other hydrocarbon operations, subject to certain adjustments. Currently, SORC is a wholly owned subsidiary of Laredo and is not conducting any ongoing operations.
Prior to purchasing the shares of SORC, while implementing underground gravity drainage, or UGD, projects for Allegheny, we gained specialized know-how and operational experience in evaluating, acquiring, operating and developing oil and gas properties, as well as expertise in designing, drilling and producing conventional oil wells. Based upon that know-how, we identified and acquired 45,246 gross acres, and 37,932 net acres, of mineral property interests in the State of Montana in the Lustre and Midfork fields and the West Fork area. As of May 31, 2026, five wells have been drilled in the Lustre and Midfork fields. None have been economically successful due primarily to encountering excess water. Further, as of May 31, 2026, the majority of the leases acquired have expired or been released, and the Company does not intend to renew them.
The Company formed a Texas registered entity on November 19, 2025, named Laredo Mex, LLC, to manage any future operations located in Mexico. To date, no transactions have been incurred by this entity, but dialogue continues with potential Mexican partners.
The Company also has a 50% interest in the Cat Creek oil field, located west of the Company’s mineral rights described above.
F-7
NOTE 2 – GOING CONCERN
These consolidated financial statements have been prepared on a going concern basis. The Company has routinely incurred losses since inception, resulting in an accumulated deficit, and historically was dependent on one customer for its revenue. There is no assurance that in the future any financing will be available to meet the Company’s needs. This situation raises substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance date of these consolidated financial statements.
The Company’s management has undertaken steps as part of a plan to improve operations with the goal of sustaining operations for the next twelve months and beyond. These steps include an ongoing effort to (a) controlling overhead and expenses; (b) raising funds connected with specific well development; and (c) raising funds through notes payable and convertible debt to expand and fund property acquisitions exploration and development as well as maintaining operations. The Company has worked to attract and retain key personnel with significant experience in the industry. At the same time, to control costs, the Company has required several of its personnel to multi-task and cover a wider range of responsibilities to manage the Company’s headcount. There can be no assurance that the Company can successfully accomplish these steps and it is uncertain that the Company will achieve a profitable level of operations and obtain additional financing. There can be no assurance that any additional financing will be available to the Company on satisfactory terms and conditions, if at all.
The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates - Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.
Principles of Consolidation - The accompanying consolidated financial statements include the accounts of Laredo Oil and its subsidiaries after elimination of intercompany balances and transactions.
Equity Method Investment - Investments classified as equity method consist of investments in companies in which the Company can exercise significant influence but not control. Under the equity method of accounting, the investment is initially recorded at cost, then the Company’s proportional share of investee’s underlying net income or loss is recorded as a component of “other income” with a corresponding increase or decrease to the carrying value of the investment. Distributions received from the investee reduce the Company’s carrying value of the investment. These investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable.
During the year ended May 31, 2026, the Company’s equity investment, Cat Creek Holdings, LLC (CCH), issued a $20,000 capital call to Laredo to help fund operational expenses. As CCH has remained unprofitable, Laredo recorded a $5,094 impairment of this additional investment, offset by a $14,906 eliminated payable to CCH.
Revenue recognition - The Company recognized revenue in accordance with ASC 606, Revenue from Contracts with Customers. Crude oil revenue is recognized when we have transferred control of crude oil production to the purchaser. We consider the transfer of control to have occurred when the purchaser has the ability to direct the use of, and obtain substantially all of the remaining benefits from the crude oil production. We record revenues based on an estimate of the volumes delivered at estimated prices as determined by the applicable sales agreement. We estimate our sales volumes based on company-measured volume readings. We then adjust our crude oil sales in subsequent periods based on the data received from our purchasers that reflects actual volumes delivered and prices received. We receive payment for sales one to two months after actual delivery has occurred. The differences in sales estimates and actual sales are recorded one to two months later. Where the Company is not the operator, revenue from oil and gas production is recognized based on sales date as reported to the Company by the operators of oil production facilities in which the company has an interest.
Cash and cash equivalents and restricted cash - All highly liquid investments with a maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of May 31, 2026 and 2025. At times, the Company maintains cash balances deposited at its financial institution that exceed FDIC insured limits.
F-8
The Company entered into a Participation Agreement in exchange for funding well development costs. The contract requires that participants pay Hell Creek Crude LLC the contract price upon execution of the agreement. The participants participate pro rata in the ownership of the net working interest in any wells drilled. The funds received in advance of the drilling of a well from a working interest participant are held for the expressed purpose of drilling, completing and equipping a well. The Company classifies these funds prior to commencement of well development as restricted cash based on guidance codified as under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 230-10-50-8. When payments are made from these funds, they are recorded by the Company as Oil and Gas Acquisition Costs.
The restricted cash balance has been reduced to zero from the investments received from accredited investors in our wholly-owned subsidiary, West Fork Resources, LLC (“West Fork”), which was formed to develop and find oil reserves in portions of the West Fork area located north of the Fort Peck Reservation at the western edge of the Williston Basin. Due to the length of time the Company experienced raising funds, some investors received a refund of $1.2 million of their invested amounts. The Company has used the remaining invested funds, totaling $750,000, to initiate the West Fork well-development project. Effective January 1, 2026, the Company exchanged $643,225 invested with a drilling company for 5 Class A membership units in Hell Creek Crude, LLC as part of a $20.6 million drilling project in the Midfork area managed by B&B Oil LLC, a related party. These assets are reclassified and recorded as an investment in a related party entity.
The following table provides a reconciliation of the Company’s cash, cash equivalents, and restricted cash reported within the consolidated balance sheet that sum to the same amounts shown in the statement of cash flows.
Schedule of Cash, Cash Equivalent and Restricted Cash
| May 31, 2026 | May 31, 2025 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| TOTAL | $ | $ | ||||||
Prepaid expenses and other current assets - Prepaid expenses and other current assets are primarily comprised of prepaid legal fees which are recorded as expense upon work performance and prepaid directors’ and officers’ insurance which is recorded and amortized to expense over the 12-month contract life.
Property and equipment - The carrying value of the Company’s property and equipment represents the cost incurred to acquire the property and equipment, net of any impairments. For business combinations, property and equipment cost is based on the fair values at the acquisition date. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives of five to seven years are used for vehicles and machinery. Realization of the carrying value of property and equipment is reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets are determined to be impaired if a forecast of undiscounted estimated future net operating cash flows directly related to the asset, including disposal value, if any, is less than the carrying amount of the asset. If any asset is determined to be impaired, the loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. Repairs and maintenance costs are expensed in the period incurred.
The depreciation recorded for the year ended May 31, 2026 and 2025 was $40,811 and $29,879.
| May 31, | May 31, | |||||||
| 2026 | 2025 | |||||||
| Vehicles and equipment | $ | |||||||
| Less: Accumulated depreciation | ||||||||
| Property and equipment, net | $ | |||||||
F-9
Oil and gas acquisition and drilling costs - Oil and gas acquisition and drilling costs include expenditures representing investments in unproved and unevaluated properties and include non-producing leasehold, leasehold or drilling interest costs, and costs to drill one exploratory well. Exploratory drilling costs are deferred until the outcome of the well is known. If an exploratory well finds proved reserves, the deferred costs are transferred to the company’s Wells and Related Equipment and Facilities accounts. Costs are reviewed annually to determine if impairment has occurred. As a result of the uncertainty surrounding successful well completion and the availability of future funding to develop our acquired mineral rights, we are not providing disclosures until we have proved reserves requiring such disclosures. In conjunction with the Texakoma agreement, three wells have been drilled but are unevaluated pending successful and economical disposal of water encroachment encountered. As they currently are not producing economical volumes of crude oil and in the absence of a reserve report identifying proved reserves, the Company has impaired those investments as of May 31, 2024. Similarly, the Midfork Well has not produced economical volumes and has been shut-in prior to May 31, 2025. Under the Participation Agreement, the Midfork oil and gas acquisition and drilling costs incurred have been offset against the deferred well development costs. In the year ending May 31, 2025, an impairment totaling $653,874 has been recorded primarily in connection with costs associated with the Midfork Well. On November 15, 2025, the Company’s subsidiary Hell Creek Crude, LLC was sold to B&B Oil, LLC, a related party. As of May 31, 2026, oil and gas assets and lease acquisition costs totaling $343,299 comprised of $232,774 expired property leases and $110,525 other oil and gas assets with no current plans for utilization have been impaired. The remaining oil and gas assets held by the West Fork subsidiary totaling $643,225 have been utilized to invest in a minority interest in Hell Creek Crude, LLC sold to B&B Oil, LLC and has been reclassified to Investment in related party entity. Unevaluated properties lease and bonus costs are capitalized while landman and legal cost of acquiring properties are expensed as incurred.
Subsequent to the impairment, the Company has recorded oil and gas acquisition and drilling costs totaling $0 and $1,001,209 as of May 31, 2026 and 2025, respectively.
| May 31, | May 31, | |||||||
| 2026 | 2025 | |||||||
| Intangible and tangible drilling costs | $ | $ | ||||||
| Lease acquisition costs | ||||||||
| Oil and gas acquisition and drilling costs | $ | $ | ||||||
Asset retirement obligations - The Company records a liability for Asset Retirement Obligations (“AROs”) associated with its oil and gas wells when the legal obligation arises. The corresponding cost is capitalized as an asset and included in the carrying amount of oil and gas properties and is depleted over the useful life of the properties. Subsequently, the ARO liability is accreted to its then-present value.
Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement.
Debt issue costs - Costs incurred in connection with the issuance of long-term debt are presented as a direct deduction from the carrying value of the related debt and amortized over the term of the related debt.
Fair value of financial instruments - Fair value is defined as the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories:
| ● | Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities in active markets and have the highest priority. |
| ● | Level 2 – Inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly or indirectly. |
| ● | Level 3 – Unobservable inputs for the financial asset or liability and have the lowest priority. |
The carrying value of cash, accounts receivable, other current assets, accounts payable, accrued liabilities, as reflected in the consolidated balance sheets, approximate fair value, due to the short-term maturity of these instruments. The carrying value of notes payable approximates their fair value due to immaterial changes in market interest rates and the Company’s credit risk since issuance of the instruments or due to their short-term nature.
F-10
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity - Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction should be determined at the earlier of performance commitment date or performance completion date.
Income taxes - The Company accounts for income taxes by the asset and liability method in accordance with FASB ASC 740, Income Taxes. Under this method, current income taxes are recognized for the estimated income taxes payable for the current year. Deferred income tax assets and liabilities are recognized in the current year for temporary differences between the tax and accounting bases of assets and liabilities as well as for the benefit of losses available to be carried forward to future years for tax purposes that are likely to be realized. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized.
In addition, the Company utilizes the two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties accrued on unrecognized tax benefits within general and administrative expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in general and administrative expenses in the period that such determination is made.
Reclassifications - Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net loss, working capital or equity previously reported.
Recently issued accounting pronouncements - The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 4 – ACCOUNTING FOR ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS
The Company accounts for its asset retirement obligations in accordance with Accounting for Asset Retirement and Environmental Obligations. This requires that legal obligations associated with the retirement of long-lived assets be recognized at fair value when incurred and capitalized as part of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized asset is depreciated over the useful life of the long-lived asset.
In the absence of quoted market prices, the Company estimates the fair value of our asset retirement obligations using present value techniques, in which estimates of future cash flows associated with retirement activities are discounted using a credit-adjusted risk-free rate. The Company’s estimated liability could change significantly if actual costs vary from assumptions or if governmental regulations change significantly.
As of May 31, 2024 the Company’s asset retirement obligations were recorded in connection with the Olfert 11-4 well as well as the working interest in the Texacoma wells. The Company established an additional asset retirement obligation in July 2024, when it commenced drilling the Reddig well in the Hell Creek Crude oil field. At that time, the initial asset retirement obligation asset and related liability were recorded at the net present value totaling $88,883 utilizing the Company’s cash flow estimate based on the assumption a 25-year expected life of the well discounted using a credit-adjusted risk-free interest rate of 4%. When the Reddig well was shut-in, the Company revalued the estimated asset retirement obligation. The revalued asset retirement obligation asset totaling $127,698, net of depreciation was written off to impairment expense. The revised asset retirement was calculated utilizing the Company’s updated cash flow estimate assumption of a 2-year expected life of the well, inflation rate of 2.7%, discounted using a credit-adjusted risk-free interest rate of 4%. The asset retirement obligation for HCC was assumed by B&B Oil in the membership sale transaction.
F-11
The asset retirement obligation for all wells totaled $157,394 as of both May 31, 2026 and 2025. The asset retirement obligation for HCC well totaling $127,698 is included in the liabilities of discontinued operations as of May 31, 2025.
| May 31, 2026 | May 31, 2025 | |||||||
| Olfert 11-4 well | $ | $ | ||||||
| Reddig 11-21 well, discontinued operations | ||||||||
| Texakoma wells (15% net working interest) | ||||||||
| Total | $ | $ | ||||||
NOTE 5 – PAYROLL LIABILITIES
The Company has accrued payroll liabilities to record amounts owed under employee contracts but not paid when due. The Company has been cash constrained for most of its existence and has asked key officers to defer portions of salary until Company cash flows improve or there is a liquidity event. Cash amounts paid are subtracted from contractual obligations and the remaining amounts due are recorded as payroll liabilities. Both the Company’s CEO and CFO have agreed to defer salaries owed under their contracts and are recorded as payroll liabilities.
NOTE 6 – DEFERRED WELL DEVELOPMENT COSTS
The Company records investor investments in individual oil wells as a liability totaling $2,549,260 and $2,799,260 as of May 31, 2026 and 2025, respectively. Several agreements involving net working interests stipulate that a high percentage of oil revenue is distributed to investors until the original investment is recovered. As well related cash is distributed to investors, the liability balance declines proportionally until the original investment is recovered. Thereafter, most contracts specify that the distribution ratio reverts to a 50/50 split. The balance recorded as of May 31, 2026 shows $1,799,260 invested in the Olfert 11-4 well. The Reddig well commenced production during fiscal 2025. Due to uneconomical production, the well was shut in prior to May 31, 2025. As the operator under the participation agreement, the $2,835,500 investment received from investors for the Reddig 11-21 well is offset with related oil and gas assets. In connection with the Reddig well shut in, $648,317 has been reclassified from deferred well development costs to convertible debt contributed for net working interest and the related accrued interest. Both Olfert 11-4 and Reddig 11-21 are located in Valley County, Montana. On November 15, 2025, Hell Creek Crude LLC, the operator of Reddig 11-21, was purchased by B&B Oil, LLC and recorded as discontinued operations.
The Company recorded $2,250,000 advanced by accredited investors to West Fork as a Deposit for Well Development. Prior to May 31, 2026, certain West Fork investors requested funds to be refunded and were repaid $1,500,000 since the project had not yet been funded in its entirety. The remaining $750,000 West Fork Deposit for Well Development was redeployed as a $643,225 purchase of membership units in Hell Creek Crude, LLC as of May 31, 2026. The remaining West Fork oil and gas assets totaling $110,525 have been impaired as of May 31, 2026 and are included in impairment expense disclosed in the Consolidated Statement of Operations. See Note 8.
NOTE 7 – FAIR VALUE MEASUREMENTS
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The estimated fair value of oil and gas properties and the asset retirement obligation incurred in the drilling of oil and gas wells or assumed in the acquisitions of additional oil and gas working interests are based on an estimated discount cash flow model and market assumptions. The significant Level 3 assumptions used in the calculation of estimated discounted cash flow model include future commodity prices, projections of estimated quantities of oil and gas reserves, expectations for timing and amount of future development, operating and asset retirement costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates. See Note 3 for additional information regarding oil and gas property acquisitions.
Laredo estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Laredo’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. Asset retirement obligation fair value measurements in the current period were Level 3 fair value measurements. As further described in Note 4, the Company recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. Asset retirement obligations are not measured at fair value subsequent to initial recognition.
F-12
NOTE 8 – RELATED PARTY TRANSACTIONS
Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition. FASB ASC 850, Related Party Disclosures (“FASB ASC 850”) requires that transactions with related parties that would make a difference in decision making shall be disclosed so that users of the consolidated financial statements can evaluate their significance. Related party transactions typically occur within the context of the following relationships:
| ● | Affiliates of the entity; |
| ● | Entities for which investments in their equity securities is typically accounted for under the equity method by the investing entity; |
| ● | Trusts for the benefit of employees; |
| ● | Principal owners of the entity and members of their immediate families; |
| ● | Management of the entity and members of their immediate families. |
| ● | Other parties that can significantly influence the management or operating policies of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. |
On November 27, 2023, the Company entered into an Amended and Restated Demand Promissory Note, (the “Demand Note”), and an Amended and Restated Membership Interest Pledge Agreement, (the “Lustre Pledge Agreement”) with the Company’s Chief Financial Officer. Under the Demand Note, the Company promises to pay on demand the principal sum of all disbursements made to the Company up to $400,000 plus interest accrued at an annual rate of 10%. As of May 31, 2026, the aggregate amount of advances, excluding accrued interest, was $292,099. The Demand Note is secured by all of the Company’s interests in Lustre, pursuant to the terms of the Lustre Pledge Agreement.
In March 2026 and October 2025, Amalfi Investment Services LLLP, owned by Mr. Robert Adamo, an accredited investor, purchased 1,000,000 and 1,500,000 restricted shares of the Company’s common stock at a purchase price of $0.50 and $0.43 per share totaling $500,000 and $645,000, respectively. In May 2023 the Company received funds pursuant to a Stock Purchase Agreement with Mr. Adamo to purchase 6,062,886 restricted shares of the Company’s common stock, at a purchase price of $0.0441 per share, totaling $267,320. As a result of these investments, Mr. Adamo now holds greater than 10% of the Company’s outstanding shares. Prior to becoming a shareholder, in November 2022, Mr. Adamo invested $100,000 pursuant to the Secured Convertible Debt under the terms as disclosed in Note 12 and is an investor in the Reddig 11-21 well. Including his original investment and capital calls, Mr. Adamo invested a total of $510,800 into the Reddig 11-21 well.
On November 15, 2025, B&B Oil acquired 100% of the membership interest of Hell Creek Crude, LLC, or HCC, from Laredo for consideration of 50% of future distributions to B&B Oil. The transaction is recorded in discontinued operations, the net liabilities totaling $272,892 have been eliminated and recorded in additional paid in capital.
As part of the aforementioned acquisition, HCC entered into a consulting agreement with Laredo whereby HCC would reimburse expenses associated with drilling and developing conventional oil wells. Since HCC has no full-time employees, B&B Oil Company, HCC’s operator has requested and Laredo has agreed for their employees to devote a percentage of their time to HCC. In accordance with that agreement, Laredo invoiced HCC $569,000 for expenses incurred subsequent to November 15, 2025. This amount is estimated to be recognized through 2026 associated with services performed related to well site selection, drilling, development and completion costs associated with 6 wells HCC has planned for development. As of May 31, 2026, approximately $306,000 has been recognized in payroll expense. The remaining deferred income related to this agreement totaling $263,000 and is included in Accounts payable and accrued liabilities is expected to be recognized over the remainder of calendar year 2026. At this point, no additional payments are expected to be owed or repaid.
Prior to the aforementioned acquisition, B&B Oil LLC (“B&B”), for which Mr. Adamo is a principal owner, reimbursed HCC $71,681 for a sonic log that is used for its 3D seismic studies. HCC acquired the information while purchasing seismic data for the Midfork field. The principal owners of B&B have provided fundraising assistance related to the Reddig 11-21 well. During the year ending May 31, 2026, B&B reimbursed Laredo for shared service expenses related to office expenses and one employee. In addition, B&B requested a transformer to be purchased. As a result, HCC received reimbursements for these activities through November 15, 2025. As of May 31, 2026, HCC owes Laredo an additional $37,500 related to cash advances to HCC to pay vendors. This amount is recorded as a related party receivable.
F-13
We were unable to raise $7.5 million to drill the planned three exploratory wells by selling units of West Fork Resources, LLC. Preliminary development operations such as acquiring seismic data, site selection, and permitting was started, as investors for $750,000 of the $2.25 million funds initially raised elected to commence drilling operations during fiscal year 2025. Upon request, the remaining $1.5 million was returned to the investors. During fiscal year 2026, invested funds totaling $643,225 were transferred to Hell Creek Crude LLC operated by B&B Oil, LLC for 5 membership interest units, amounting to 3% ownership in a $20.6 million oil and gas project. There will be no additional development in West Fork Resources, LLC for the foreseeable future. The membership interest units are recorded as an investment in related party entity. The remaining $110,525 West Fork oil and gas assets were written off to impairment expense as of May 31, 2026.
As of May 31, 2026, Mr. Adamo, owns or controls approximately 9.2 million shares of the Company’s common stock, comprised of the shares purchased in March 2026, October 2025 and in May 2023 as well as 600,000 shares previously purchased, and holds greater than 10% of the Company’s outstanding shares. On July 22, 2024, Mr. Adamo advanced $50,000 to Lustre, which amount is recorded in accounts payable -related party as of May 31, 2026. The advance transaction is undocumented but expected to be repaid. The repayment terms are subject to negotiation. Mr. Adamo agreed to using $10,000 of the advance to fund a portion of the Cranston SWD purchase. The remaining funds advanced by Mr. Adamo have been used to satisfy general corporate purposes as of May 31, 2026.
Accounts
payables contain $137,500 for each of our two outside board members who receive quarterly board stipends. In addition, as of May 31,
2026 Laredo has recorded accounts payable to the CFO, CEO and other employees for expense reports totaling $
NOTE 9 – STOCKHOLDERS’ DEFICIT
Share Based Compensation
As of May 31, 2026 and 2025, there were 2,055,555 and zero unvested and unrecognized shares, respectively.
Schedule of Stock Option Granted
| Number of Shares | Weighted Average Exercise Price | |||||||
| Balance, May 31, 2024 | $ | |||||||
| Options granted and assumed | ||||||||
| Options expired | ( | ) | ||||||
| Options cancelled, forfeited | ||||||||
| Options exercised | - | - | ||||||
| Balance, May 31, 2025 | $ | |||||||
| Options granted and assumed | ||||||||
| Options expired | ||||||||
| Options cancelled, forfeited | ||||||||
| Options exercised | - | - | ||||||
| Balance, May 31, 2026 | $ | |||||||
The Company granted options for the purchase of 9,725,000 shares of the Company’s common stock at a price of $0.28 per share during the second quarter of fiscal year 2026. Options to purchase common stock totaling 7,475,000 vested immediately on the grant date, options to purchase 1,000,000 shares of common stock vest monthly over three years and the final 1,250,000 options to purchase shares of common stock contingently vest upon achieving certain requirements. There were 20,000,000 shares underlying the Company’s outstanding options granted during fiscal year ending May 31, 2023, at a weighted average exercise price of $0.06 per share.
The Company made no option grants in fiscal year 2025.
The Black-Scholes option pricing model is used to estimate the fair value of options granted under our stock incentive plan.
Schedule of Fair Value Assumptions
| 2026 | |||
| Risk-free interest rate | |||
| Expected dividend yield | |||
| Expected volatility | |||
| Expected life of options | 5.1 years |
The risk-free interest rate is based upon the U.S. Treasury interest rate in effect at the time of grant for a bond with a similar term. The Company does not anticipate declaring dividends in the foreseeable future. Volatility is estimated based on the historical share prices over the same period as the expected life of the stock options. The Company uses the simplified method for determining the expected term of its stock options.
F-14
The Company recorded share-based compensation for stock option grants totaling $2,080,412 in general, selling and administrative expense during the fiscal year ended May 31, 2026.
All stock options are exercisable upon vesting. As of May 31, 2026 and 2025, respectively there were 27,669,445 and 20,000,000 vested options outstanding at a weighted average exercise price of $0.12 and $0.06, respectively.
Restricted Stock
During the fourth fiscal quarter ended May 31, 2026, the Company entered stock purchase agreements with various accredited investors and received $2,238,615 in cash or debt exchange for the issuance of 4,477,231 shares of common stock at $0.50 per share. A financial advisory firm received 416,667 shares of common stock for services rendered worth $100,000.
During the third fiscal quarter of 2026, the Company entered a stock purchase agreement with an accredited investor and received $125,000 for the issuance of 290,697 shares of common stock at $0.43 per share. The Company also sold 232,558 shares of common stock to another accredited investor at $0.43 per share who deposited $100,000 with the Company.
During the second fiscal quarter of 2026, the Company issued 2,464,650 shares of common stock to accredited investors at $0.43 per share who deposited $1,059,800 with the Company.
During the first fiscal quarter of 2026, the Company issued 116,279 shares of common stock to an accredited investor who deposited $50,000 with the Company on September 5, 2024. These shares were issued in June 2025 after the applicable stock purchase agreement was executed.
During fiscal year 2025, the Company sold 2,894,490 shares of common stock to accredited investors at an average price of $0.437 per share for gross proceeds of $1,265,200. As of May 31, 2025, proceeds totaling $50,000 were recorded as stock payable as the 116,279 related shares of common stock have not been issued. There were no finder’s fees related to the sales of the shares. The Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the Securities Act.
Warrants
Schedule of Warrant Outstanding
| Outstanding Warrants | Weighted Average Exercise Price | |||||||
| Balance, May 31, 2024 | $ | |||||||
| Warrants issued to purchase common stock | ||||||||
| Warrants expired | - | |||||||
| Warrants cancelled, forfeited | - | |||||||
| Warrants exercised | - | |||||||
| Balance, May 31, 2025 | $ | |||||||
| Warrants issued to purchase common stock | ||||||||
| Warrants expired | - | |||||||
| Warrants cancelled, forfeited | - | |||||||
| Warrants exercised | ( | ) | ||||||
| Balance, May 31, 2026 | $ | |||||||
During the fourth fiscal quarter of 2026, the Company issued warrants to purchase 308,139 shares of its common stock at a weighted average exercise price of $0.83 per share, associated with public relations and fundraising services. The grant date fair value of the issued stock warrants issued during the quarter ending May 31, 2026 totaled $206,870. The Black Scholes option pricing model was used to estimate the fair value of the warrants granted. The weighted average assumptions used in calculating the estimated fair value included a 3.69% risk free interest rate, a 0% expected dividend yield, a 148% expected volatility and a 4.4-year expected life.
F-15
During the second fiscal quarter of 2026, the Company issued warrants to purchase 85,700 shares of its common stock at $0.43 per share, associated with the sale of $85,700 in principal amount of Subordinated Promissory Notes The grant date fair value of the issued stock warrants issued during the quarter ending November 30, 2025 totaled $25,034. The Black Scholes option pricing model was used to estimate the fair value of the warrants granted. The weighted average assumptions used in calculating the estimated fair value included a 3.54% risk free interest rate, a 0% expected dividend yield, a 129% expected volatility and a 2-year expected life.
During the first fiscal quarter of 2026, the Company issued warrants to purchase 1,189,300 shares of its common stock, at $0.43 per share, associated with the sale of $1,189,300 in principal amount of Subordinated Promissory Notes. The grant date fair value of the issued stock warrants during the quarter ending August 31, 2025 totaled $220,340. The Black Scholes option pricing model was used to estimate the fair value of the warrants granted. The weighted average assumptions used in calculating the estimated fair value included a 3.95% risk free interest rate, a 0% expected dividend yield, a 142% expected volatility and a 2-year expected life.
As of May 31, 2025, warrants to purchase 200,000 shares of common stock at a strike price of $0.43 per share were issued with the placement of a $200,000 short-term demand note bearing interest at 12% per annum. The grant date fair value of the stock warrants during the year ending May 31, 2025 totaled $21,835. The Black-Scholes option pricing model is used to estimate the fair value of warrants granted. The weighted average assumptions used in calculating the estimated fair value included a 4.0% risk free interest rate, a 0% expected dividend yield, a 95.6% expected volatility and a 2 year expected life. See Note 13.
During fiscal year ending May 31, 2026, 1,462,357 shares of common stock were issued upon exercise of warrants cashless basis in exchange for repayment of debt totaling $628,814. An additional 12,643 shares of common stock were issued upon exercise of warrants for a payment of $5,436.
NOTE 10 – NOTES PAYABLE
12% Bridge Note
On May 15, 2026, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company issued a 12% bridge note in the principal amount of $238,050 receiving $200,000 in net cash proceeds. The promissory note had an original issue discount of $31,050. In addition, $7,000 of debt issue costs were deducted from the gross proceeds to the Company. The bridge note is due May 15, 2027, and is repaid with the first installment of $133,308 due November 15, 2026 and six equal monthly installments of $22,218 starting December 15, 2026. In the event of default (including a missed payment), the note is convertible at the option of the investor into shares of the Company’s common stock at a discount of 35% from the lowest closing bid price during the ten trading days immediately preceding the conversion date. As of May 31, 2026, the Company no accrued interest is recorded and payments of principal and interest are current.
Secured Convertible Debt Contributed as Consideration for Participation Agreement
The Company entered into a Note Purchase Agreement dated September 23, 2022 (the “Note Purchase Agreement”), for the issuance of secured convertible promissory notes in the aggregate principal amount of up to $7,500,000. The promissory notes accrued interest on the outstanding principal sum at the rate of 12.0% per annum, payable quarterly starting September 30, 2023, and were convertible into the Company’s common stock at a conversion price of $1.00 per share. The notes issued under the Note Purchase Agreement have a maturity date of September 30, 2025. Effective January 19, 2024, $575,000 in principal amount of notes, and $73,317 of accrued interest, were contributed as part of a Participation Agreement funding the Reddig 11-21 oil well located in the Midfork field in Valley County, Montana. The notes were exchanged for a net working interest in the well, with the caveat that they would be deemed to be reinstated in full in the event the well was completed as a dry hole. In early 2025, the well was completed, became operational, and produced limited amounts of oil. Although the well was not a dry hole, it was uneconomical to operate and was shut in at the end of May 2025. Until final disposition of the well and notes is determined, the Company is reclassifying the notes and accrued interest as debt and accrued interest on the May 31, 2025 and 2026 Consolidated Balance Sheets. During the fiscal year May 31, 2026, the Company recorded additional interest expense on the notes resulting in accrued interest totaling $142,695.
12% Short Term Demand Note
The Company issued a short term note with a principal sum of $200,000 to an accredited investor on May 20, 2025. During the first half of fiscal 2026, the Company issued additional similar notes in the principal amount $1,275,000, respectively, with the same terms. The notes bear simple interest on the unpaid principal balance at a rate equal to 12% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days from the date of the notes until the principal amount and all interest accrued thereon and all other amounts owed hereunder are paid. The unpaid Principal Amount, together with any unpaid accrued interest and all other amounts owed hereunder, shall be due and payable upon written demand by the majority of the note holders at any time after November 21, 2025. In connection with these notes, the Company issued warrants to purchase 1,475,000 shares of its common stock at an exercise price of $0.43. The relative fair value of the warrants, totaling $19,685 and $224,402, recorded in fiscal 2025 and fiscal 2026, respectively was recorded as deferred debt discount and additional paid in capital, which is amortized over the term of the loan. During the fiscal year ending May 31, 2026, $77,700 of the note balance and related accrued interest were repaid in cash. In May 2026, note holders exercised 1,475,000 warrants to repay $634,250 of the outstanding note balances. In order to settle the remaining note balances, the note holders and accredited investors, entered into Common Stock Purchase Agreements under the Security Purchase Offering in exchange for repayment of the remaining note balance totaling $734,986 and accrued interest totaling $115,027.
F-16
12% Ten Month Bridge Notes
On April 10, 2025, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company issued a 12% bridge note in the principal amount of $40,250, receiving $35,000 in net cash proceeds, reflecting an original issue discount of $5,250. The bridge note is due February 15, 2026 and is repaid with the first installment of $22,540 due October 15, 2025 and four equal monthly installments of $5,635 starting November 15, 2025. In the event of default (including a missed payment), the note is convertible at the option of the investor into shares of the Company’s common stock at a discount of 35% from the lowest closing bid price during the ten trading days immediately preceding the conversion date. As of May 31, 2026, the Company recorded accrued interest totaling $0, and the note has been repaid.
On February 10, 2025, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company issued a 12% bridge note in the principal amount of $146,160, receiving $120,000 in net cash proceeds. The promissory note had an original issue discount of $20,160. In addition, $6,000 of debt issue costs were deducted from the gross proceeds to the Company. The bridge note is due December 15, 2025 and is repaid with the first installment of $81,849 due August 15, 2025 and four equal monthly installments of $20,462 starting September 15, 2025. In the event of default (including a missed payment), the note is convertible at the option of the investor into shares of the Company’s common stock at a discount of 35% from the lowest closing bid price during the ten trading days immediately preceding the conversion date. As of May 31, 2026, the accrued interest balance is zero, and the note has been repaid.
On December 17, 2024, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company issued a 12% bridge note in the principal amount of $64,960, receiving $50,000 in net cash proceeds. The bridge note had an original issue discount of $8,960. In addition, $6,000 of debt issue costs were deducted from the gross proceeds to the Company. The bridge note is due October 15, 2025 and is repaid with the first installment of $36,377 due June 15, 2025 and four equal monthly installments of $9,094 starting July 15, 2025. In the event of default (including a missed payment), the note is convertible at the option of the investor into shares of the Company’s common stock at a discount of 35% from the lowest closing bid price during the ten trading days immediately preceding the conversion date. As of May 31, 2026, the accrued interest balance is zero, and the note has been repaid.
12% Ten Month Promissory Note
On April 10, 2025, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company issued a 12% promissory note in the principal amount of $82,800, receiving $65,000 in net cash proceeds. The promissory note had an original issue discount of $10,800. In addition, $7,000 of debt issue costs were deducted from the gross proceeds to the Company. The note is due on February 15, 2026 and is repaid in ten equal monthly payments of $9,273.60, commencing on May 15, 2025. In the event of default (including a missed payment), the note is convertible at the option of the investor into shares of the Company’s common stock at a discount of 35% from the lowest closing bid price during the ten trading days immediately preceding the conversion date. As of May 31, 2026, the Company recorded accrued interest totaling $0, and the note has been repaid.
On December 2, 2024, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company issued a 12% promissory note in the principal amount of $138,000, receiving $114,000 in net cash proceeds. The promissory note had an original issue discount of $18,000. In addition, $6,000 of debt issue costs were deducted from the gross proceeds to the Company. The note was due on October 15, 2025, and is repaid in ten equal monthly payments of $15,456 commencing on January 15, 2025. In the event of default (including a missed payment), the note is convertible at the option of the investor into shares of the Company’s common stock at a discount of 35% from the lowest closing bid price during the ten trading days immediately preceding the conversion date. As of May 31, 2026, the Company recorded accrued interest totaling $0 and the note has been repaid.
10% Secured Promissory Demand Note
On November 27, 2023, the Company entered into an Amended and Restated Demand Promissory Note, (the “Demand Note”), and an Amended and Restated Membership Interest Pledge Agreement, (the “Lustre Pledge Agreement”) with the Company’s Chief Financial Officer. Under the Demand Note, the Company promises to pay on demand the principal sum of all disbursements made to the Company up to $400,000, plus interest accrued at an annual rate of 10%. As of May 31, 2026, the aggregate amount of advances, excluding accrued interest, was $292,099. The Demand Note is secured by all of the Company’s interests in Lustre, pursuant to the terms of the Lustre Pledge Agreement. In May 2026, the Company paid $98,041 to reduce accrued interest on Demand Note. The accrued interest balance amounted to $1,280 as of May 31, 2026.
12% Secured Promissory Note
On March 23, 2023, an individual accredited investor paid the Company the aggregate amount of $100,000 for a Secured Promissory Note (the “Note”). The Note accrues interest on the outstanding principal sum at the rate of 12.0% per annum, and has a maturity date of March 23, 2024. Interest will be due and payable monthly in arrears. The Note is secured by certain equipment owned by the Company pursuant to a Security Agreement with the lender. On May 23, 2023, the Note was increased by $83,000 to an aggregate principal amount of $183,000. During June, July and August, 2023, the investor contributed an additional $102,061 under the Note, bringing the aggregate principal amount to $285,061. On November 24, 2023, the investor added another $25,000 to the Note bringing the total principal outstanding to $310,061. The note remains outstanding and the Company is paying interest of $3,101 monthly and is current as of May 31, 2026.
F-17
Secured Promissory Note
The Company issued a Secured Promissory Note, dated June 28, 2022 (the “Secured Note”), with the initial principal amount of $750,000. The Secured Note is payable to Cali Fields LLC (the “Lender”). The Secured Note accrues interest on the outstanding principal sum at the rate of 15.0% per annum. The Company may prepay the Secured Note in whole or in part, without penalty, with any such payment being applied first to any accrued and unpaid interest, and then to the principal amount. The Secured Note has a maturity date of December 31, 2023. As of May 31, 2026 the note is recorded as current and outstanding. Starting on January 1, 2024, the Company is accruing interest at the rate of 18.0% per annum. The accrued interest balance amounted to $396,397 as of May 31, 2026. On July 2, 2025, the Company paid $100,000 to reduce accrued interest on the Secured Note.
As partial consideration for the Lender’s advance of the principal amount of the Secured Note, the Company agreed to pay the Lender a quarterly revenue royalty equal to 0.5% of the consolidated revenue of the Company and its consolidated subsidiaries from the production of oil, gas, gas liquids and all other hydrocarbons, recognized by the Company during the most recent calendar quarter during the “Royalty Period,” from June 1, 2022 through May 31, 2027.
The Secured Note is secured by the Company’s fifty percent (50%) interest in Cat Creek.
Alleghany Notes
Schedule of Notes Payable – Related Party
| May 31, | May 31, | |||||||
| 2026 | 2025 | |||||||
| Total note payable – Alleghany | $ | 617,934 | $ | 617,934 | ||||
| Less amounts classified as current | ||||||||
| Note payable – Alleghany, net of current portion | $ | |||||||
During the fiscal year ended May 31, 2011, the Company entered into two Loan Agreements with Alleghany Capital for a combined available borrowing limit of $350,000. The notes accrued interest on the outstanding principal of $350,000 at the rate of 6% per annum, with an amended due date of December 31, 2020.
In connection with the SORC Purchase Transaction, the notes were amended, restated and consolidated into one note including all accrued interest through December 31, 2020, for a total of $631,434 (the “Senior Consolidated Note”) with a maturity date of June 30, 2022. The Senior Consolidated Note requires any stock issuances for cash be utilized to pay down the outstanding loan balance unless written consent is obtained from Alleghany. As part of the SORC Purchase Agreement, the Company agreed to secure repayment of the Senior Consolidated Note with certain equipment and to reduce the note balance with any proceeds received from any sales of such equipment. During the five months ending May 31, 2021, the Company repaid $13,500 of the Senior Consolidated Note upon the sale of certain equipment. The note bore no interest until January 1, 2022 whereupon the interest rate increased to 5% per annum through maturity. Principal with all accrued and unpaid interest is due at maturity. In connection with the SORC acquisition purchase price allocation, the Company recorded a debt discount totaling $30,068 in recognition of imputed interest on the Senior Consolidated Note, to be amortized over the first year of the note term. The debt discount has been fully amortized as of December 31, 2021. In August 2022, the Company entered an amendment to the Senior Consolidated Note whereby the maturity date of the loan was extended to December 31, 2023 in exchange for an interest rate to 8% per annum commencing July 1, 2022. Further, the revenue royalty as defined in the Purchase Agreement increased from 5% to 6% as the loan was not paid prior to December 31, 2022. As of May 31, 2026 and May 31, 2025, the Senior Consolidated Note is recorded as current and remains outstanding.
Paycheck Protection Program Loan
Schedule of Paycheck Protection Program
| May 31, | May 31, | |||||||
| 2026 | 2025 | |||||||
| Total PPP Loan | $ | $ | ||||||
| Less amounts classified as current | ||||||||
| PPP loan, excluding current portion | $ | $ | ||||||
F-18
On April 28, 2020, the Company entered into a Note (the “Note”) with IBERIABANK for $1,233,656 pursuant to the terms of the Paycheck Protection Program (“PPP”) authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (“CARES Act”) In June 2020, the Flexibility Act which amended the CARES Act was signed into law. Pursuant to the Flexibility Act, the Note continues to accrue interest on the outstanding principal sum at the rate of 1% per annum. In addition, the initial two-year Note term has been extended to five years through mutual agreement with IBERIABANK as allowed under Flexibility Act provisions.
In February 2021, the Company drew an additional $1,233,655 under the PPP Second Draw Loans, bringing the total principal borrowed to $2,467,311. The additional draw is under the same terms and conditions as the first PPP loan.
The Company did not provide any collateral or guarantees for the loan, nor did the Company pay any facility charge to obtain the loan. The Note provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects. The Company may prepay the Note at any time without payment of any penalty or premium.
The Company applied for forgiveness of the first PPP note and in July 2021 received notice that $1,209,809 of the $1,233,656 note payable balance has been forgiven. The portion of the loan forgiven has been recorded as income from the extinguishment of its loan obligation as of the date when the Company is legally released from being the primary obligor in accordance with ASC 405-20-40-1. Monthly payments commenced on September 1, 2021 and all principal and interest on the first Note was fully repaid in fiscal year ending May 31, 2025.
In April 2022, the Company applied for partial forgiveness of the PPP Second Draw Loan and received notice that $67,487 of the principal and related interest balance has been forgiven and is recorded as income from the extinguishment of the loan obligation. Monthly payments of $26,752 commenced on June 3, 2022. The Company was in arrears on payments on the second PPP Note and on December 5, 2023 entered into a Payment Plan arrangement for the PPP Second Draw Loan. Under the terms of the Plan, the Company agreed to pay the SBA the principal amount of $979,178 and 180 monthly payments of $5,860 which includes interest. The Company made the first payment under the Plan in December 2023. If the Company does not make the payments described in the Plan pursuant to the terms of the Plan, the entire remaining amount will be subject to collection activities by the Department of Treasury. The Company may also be subject to additional accrued interest and collection fees of 30% or more if it does not make the payments pursuant to the Plan. As of May 31, 2026, the Company is current and compliant with the restructured payment plan. As of May 31, 2026 and 2025, the Company owes $825,701 and $887.430, respectively regarding the remaining balance on the Second Note.
NOTE 11 – DISCONTINUED OPERATIONS
On November 15, 2025, B&B Oil acquired 100% of the membership interest of Hell Creek Crude, LLC, or HCC, from Laredo for consideration of 50% of future distributions to B&B Oil. The transaction is recorded in discontinued operations, the net liabilities totaling $272,892 have been eliminated and recorded in additional paid in capital.
The assets and liabilities associated with discontinued operations were as follows for May 31, 2026, and 2025:
Schedule of Discontinued Operations
| May 31, 2026 | May 31, 2025 | |||||||
| ASSETS OF DISCONTINUED OPERATIONS | ||||||||
| Current Assets of Discontinued Operations | ||||||||
| Cash and cash equivalents and restricted cash | $ | $ | ||||||
| Total Current Assets of Discontinued Operations | ||||||||
| Other assets | ||||||||
| TOTAL ASSETS OF DISCONTINUED OPERATIONS | $ | $ | ||||||
| LIABILITIES OF DISCONTINUED OPERATIONS | ||||||||
| Current Liabilities of Discontinued Operations | ||||||||
| Accounts payable | $ | $ | ||||||
| Total Current Liabilities of Discontinued Operations | ||||||||
| Asset retirement obligation | $ | $ | ||||||
| Total Noncurrent Liabilities of Discontinued Operations | $ | |||||||
| TOTAL LIABILITIES OF DISCONTINUED OPERATIONS | $ | $ | ||||||
F-19
The following table summarizes the Company’s loss from discontinued operations for the years ended May 31, 2026 and 2025:
| Year Ended May 31, 2026 | Year Ended May 31, 2025 | |||||||
| Revenue | $ | $ | ||||||
| Direct costs | ||||||||
| Gross profit (loss) | ||||||||
| Lease operating expense | ||||||||
| General, selling and administrative expenses | ||||||||
| Consulting and professional services | ||||||||
| Impairment | ||||||||
| Total Operating Expense from Discontinued Operations | ||||||||
| Operating loss from discontinued operations | ( | ) | ( | ) | ||||
| Other income/(expense) | ||||||||
| Interest income/(expense) | ( | ) | ||||||
| Net loss from discontinued operations | $ | ( | ) | $ | ( | ) | ||
NOTE 12 – PROVISION FOR INCOME TAXES
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Per the authoritative literature when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period.
The Company has not taken any tax positions that, if challenged, would have a material effect on the consolidated financial statements for the twelve-months ended May 31, 2026 and 2025. The Company’s tax returns for the fiscal years ended May 31, 2018 through 2025 remain subject to examination by the tax authorities.
The components of the Company’s deferred tax asset as of May 31, 2026 and 2025 are as follows:
Schedule of Company’s deferred tax
| 2026 | 2025 | |||||||
| Net operating loss | $ | $ | ||||||
| Stock compensation | ||||||||
| Impairment loss | ||||||||
| Deferred compensation | ||||||||
| Other | ( | ) | ||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax asset | $ | $ | ||||||
A reconciliation of income taxes computed at the statutory rate to the income tax amount recorded is as follows:
| 2026 | 2025 | |||||||
| Tax at statutory rate (21%) | $ | ( | ) | $ | ( | ) | ||
| Effect of non-taxable and non-deductible permanent differences | ||||||||
| Effect of change in statutory tax rate | ||||||||
| Other | ||||||||
| Increase/(decrease) in valuation allowance | ||||||||
| Net deferred tax asset | $ | $ | ||||||
F-20
The net federal operating loss carry forward will expire between 2031 and 2045. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.
NOTE 13 – COMMITMENTS AND CONTINGENCIES
Leases
No office leases currently extend beyond one year. Rent expense amounted to $1,172 and $1,032 for each of the years ending May 31, 2026 and 2025.
Litigation
On March 20, 2023, Capex Oilfield Services, Inc. (“Capex”) filed a lawsuit against Lustre in the Montana Tenth Judicial District Court, Petroleum County, demanding payment of $377,190 plus interest and collection costs for services provided by Capex to drill the Olfert 11-4 well. On January 29, 2024, the court issued a Stipulated Judgment and Order in favor of Capex for $354,267.29 plus interest in the amount of $79,225 plus future accruing costs and interest of 18% per annum. The same day, Lustre entered into a Payment Arrangement Plan to pay $5,000 per month until the judgement is satisfied. As of May 31, 2026 and 2025, respectively, the estimated amounts due to Capex totaling $441,513 and $418,569 have been recorded in accounts payable.
On May 18, 2023, Capstar Drilling, Inc.(“Capstar”) filed a lawsuit against Lustre in the Montana Seventeenth Judicial District Court, Valley County, demanding payment of $298,050 plus interest and collection costs for services provided by Capstar to drill the Olfert 11-4 well. On July 18, 2024, the court issued a Order to Adopt Stipulation to Judgment in favor of Capstar in the sum of $276,815 principal balance, plus interest in the amount of $49,675, plus court costs for a total judgment of $326,650 with post judgment interest of 10% per annum. As of May 31, 2026, and 2025, respectively, the estimated amounts due to Capstar totaling $359,537 and $365,489 have been recorded in accounts payable.
On August 29, 2023, Warren Well Service, Inc. (“Warren Well”) filed a lawsuit against Lustre in the Montana Seventeenth Judicial District Court, Valley County, demanding payment of $164,235 plus interest and collection costs for services provided by Warren Well to drill the Olfert 11-4 well. As of May 31, 2025, the case was settled for the $164,235 balance plus accrued interest of 10% per year and the Company agreed to pay Warren Well $750 per month. Lustre made some of the agreed payments, but a judgment was entered on August 31, 2026, for $155,235 and accrued interest of $78,469. Interest will continue to accrue at 10%. As of May 31, 2026 and 2025, respectively, the estimated amounts due to Warren Well totaling $226,750 and $213,114 have been recorded in accounts payable.
On January 14, 2024 Nine Downhole Technologies, LLC aka Nine Energy Service (“Nine Downhole”) filed a complaint against Lustre in the Montana Tenth Judicial District Court, Petroleum County, demanding payment plus accrued interest until the debt is paid in full. On June 1, 2025, Nine Downhole’s Motion for a summary disposition was granted in the amount of $41,842 together with costs and any post judgment interest until amount is paid in full. As of May 31, 2026 and 2025, $46,039 and $38,447 has been recorded in accounts payable.
Except as set forth above, the Company is not currently involved in any other legal proceedings, and it is not aware of any other pending or potential legal actions.
Revenue Royalty
In accordance with the Secured Note, the Company agreed to pay the Lender a revenue royalty of 0.5% on consolidated revenue of the Company arising from the direct production of oil and gas. The royalty period extends from June 1, 2022 through May 31, 2027.
NOTE 14 – SEGMENT INFORMATION
The Company operates as a single reporting segment engaged in acquisition and exploration efforts to find and develop oil reserves. The Chief Operating Decision Makers are the Company’s Chief Executive Officer and its Chief Financial Officer, who together (the “CODM”) evaluate company performance based on the consolidated financial statements prepared in accordance with GAAP included herein. Although the Company owns and manages multiple oil properties, the CODM does not evaluate individual properties as separate operating segments.
The CODM conducts quarterly financial reviews focusing on the Consolidated Statement of Operations, Balance Sheets and Statements of Cash Flows beginning on page F-3 of this report. Investment decisions, including the selection of leased mineral rights acreage and development, are made based on expected return on investment.
NOTE 15 – SUBSEQUENT EVENTS
Subsequent to May 31, 2026, the Company issued shares to various accredited investors who deposited $550,500 with the Company. These shares were issued after stock purchase agreements were executed and funds received.
On June 20, 2026, shares of restricted common stock were issued to a financial advisor for services rendered.
On
June 8, 2026, the Company paid $
On August 8, 2026, the Company sold a Bridge Note to an accredited investor in the total principal amount of $172,500.
F-21
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES EXCHANGE ACT OF 1934
RULE 13a-14(a) OR 15d-14(a)
I, Mark See, Chief Executive Officer of Laredo Oil, Inc., certify that:
| 1. | I have reviewed this annual report on Form 10-K/A for the of Laredo Oil, Inc., the registrant; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: September 29, 2026 | |
| /s/ Mark See | |
| Mark See | |
| Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECURITIES EXCHANGE ACT OF 1934
RULE 13a-14(a) OR 15d-14(a)
I, Bradley E. Sparks, Chief Financial Officer and Treasurer of Laredo Oil, Inc., certify that:
| 1. | I have reviewed this annual report on Form 10-K/A for the of Laredo Oil, Inc., the registrant; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: September 29, 2026 | |
| /s/ Bradley E. Sparks | |
| Bradley E. Sparks | |
| Chief Financial Officer and Treasurer | |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Laredo Oil, Inc. on Form 10-K/A for the year ended May 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark See, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Mark See | |
| Mark See | |
| Chief Executive Officer | |
| Date: September 29, 2026 | |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Laredo Oil, Inc. on Form 10-K/A for the year ended May 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bradley E. Sparks, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Bradley E. Sparks | |
| Bradley E. Sparks | |
| Chief Financial Officer and Treasurer | |
| Date: September 29, 2026 | |