U.S. SECURITIES AND EXCHANGE

COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY~~AUGUST 2931, 2024

Commission File Number 333-153168

Laredo Oil, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

2021 Guadalupe Street, Ste. 260

Austin, Texas 78705

(Address of principal executive offices) (Zip code)

(512) 337-1199

(Registrant’s telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 last 90 days. Yes x No o

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

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 Non-accelerated Filer xo Smaller reporting company x Emerging growth company o

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 12b-2 or the Exchange Act). Yes o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 73,804,893 shares of common stock issued and outstanding as of October 15, 2024.

As of April 19, 2024, the registrant had 71,818,590 shares of common stock issued and outstanding.

PART I FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	3
	Balance Sheets as of February 29, 2024 (unaudited) and May 31, 2023	4
	Condensed Consolidated Balance Sheets as of August 31, 2024 (unaudited) and May 31, 2024	4
	Statements of Operations (unaudited)	5
	Condensed Consolidated Statements of Operations (unaudited) for the three months ended August 31, 2024 and 2023	5
	Statements of Changes in Stockholders’ Deficit (unaudited)	6
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit (unaudited) as of August 31, 2024 and 2023	6
	Statements of Cash Flows (unaudited)	7
	Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended August 31, 2024 and 2023	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2425
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2829
Item 4.	Controls and Procedures	2829
PART II OTHER INFORMATION
Item 6.	Exhibits	2831
Signatures		3032

ITEM 1. FINANCIAL STATEMENTS

The following unaudited condensed consolidated financial statements (“financial statements”) have been prepared by Laredo Oil, Inc. (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such SEC rules and regulations; nevertheless, the Company believes that the disclosures are adequate to make the information presented not misleading. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the ~~fiscal~~ year ended May 31, ~~2023~~2024. These financial statements and the notes attached hereto should be read in conjunction with the financial ~~statements~~ statements and notes included in the Company’s ~~Annual Report on~~ Form 10-K, which was filed with the SEC on September 1330, ~~2023~~2024. In the opinion of management of the Company, all adjustments, including normal recurring adjustments necessary to present fairly the financial position of ~~the~~Laredo ~~Company~~Oil, Inc. as of ~~February~~August 2931, 2024, and the results of its operations and cash flows for the three ~~and nine~~-month ~~periods~~ period then ended, have been included. The results of operations for the three ~~and nine~~-month ~~periods~~period ended ~~February~~August 2931, 2024 are not necessarily indicative of the results for the full year ending May 31, ~~2024~~2025.

Laredo Oil, Inc.

Condensed Consolidated Balance Sheets

	February 29,			May 31,
	August 31,			May 31,
	2024 (unaudited)			~~2023~~2024
ASSETS
Current Assets
Cash and cash equivalents ($1.9 million and $0 restricted from use at February 29, 2024 and May 31, 2023)	$	1,894,962		$	13,754
Cash and cash equivalents and restricted cash	$	1,935,310		$	1,990,189
Receivables – other		412,701			-
Receivables		4,114			8,346
Receivables – related party		-			1,779
Prepaid expenses and other current assets		89,841			19,941
Prepaid expenses and other current assets		17,692			36,549
Total Current Assets		2,029,265			2,018,476
Total Current Assets		2,325,355			52,082
Property and Equipment
Oil and gas acquisition and drilling costs		42,~~518~~475,~~896~~603			4610,~~547,740~~663
Property and equipment, net		~~193~~128,~~883~~697			~~209~~135,~~182~~499
Total Property and Equipment, net		42,~~712~~604,~~779~~300			4746,~~756,922~~162
Other assets		3040,000			3040,000
Equity method investment – Olfert		37,630			37,630
TOTAL ASSETS	$	4,673,565		$	2,804,638
Equity method investment – Cat Creek		157,185			249,493
TOTAL ASSETS	$	7,262,949		$	5,126,127
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	$	2,~~042~~560,~~301~~511		$	2,~~197~~542,~~975~~976
Accrued payroll liabilities		23,~~940~~364,~~061~~070			23,~~262~~165,~~450~~142
Accrued interest		~~380~~412,~~466~~547			~~210~~360,~~414~~848
Other payables		50,505			-
Deposit for well development		1,500,000			-
Deferred well development costs		34,~~785~~789,~~710~~327			14,~~799~~551,~~260~~577
Convertible debt, net of debt discount and debt issuance costs		~~949~~123,~~159~~894			~~839~~288,~~798~~622
Revolving note		1,060,061			~~933~~1,~~000~~060,061
Note payable – related party		292,099			292,099
Note payable – Alleghany, net of debt discount		617,934			617,934
Note payable, current portion		6764,~~073~~866			~~449~~66,~~624~~379
Total Current Liabilities		1214,~~185~~785,~~369~~309			912,~~602~~945,~~554~~638
Asset retirement obligation		72246,~~570~~277			67157,~~938~~394
Long-term note, net of current portion		~~903~~872,~~883~~358			~~536~~887,~~974~~733
Total Noncurrent Liabilities		~~976~~1,~~453~~118,635			~~604~~1,~~912~~045,127
TOTAL LIABILITIES		1315,~~161~~903,~~822~~944			1013,~~207~~990,~~466~~765
Commitments and Contingencies (Note 13)		-			-
Stockholders’ Deficit
Preferred stock: $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding		-			-
Common stock: $0.0001 par value; 120,000,000 shares authorized; 71,475,205 and 66,220,306 issued and outstanding as of February 29, 2024 and May 31, 2023		7,148			6,622
Common stock: $0.0001 par value; 120,000,000 shares authorized; 72,932,800 and 71,993,265 issued and outstanding as of August 31, 2024 and May 31, 2024		7,293			7,199
Additional paid in capital		11,~~313~~955,~~282~~075			911,~~990~~530,~~378~~169
Accumulated deficit		(1723,~~219~~192,~~303~~747	)		(1522,~~078~~723,~~339~~495	)
Total Stockholders’ Deficit		(511,~~898~~230,~~873~~379	)		(511,~~081~~186,~~339~~127	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	74,~~262~~673,~~949~~565		$	52,~~126~~804,~~127~~638

The accompanying notes are an integral part of these condensed consolidated financial statements.

Laredo Oil, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended			Three Months Ended			~~Nine Months Ended~~			~~Nine Months Ended~~
	February 29, 2024			February 28, 2023			February 29, 2024			February 28, 2023
	August 31, 2024			August 31, 2023 (Restated)
Revenue – related party and other	$	12,701		$	-		$	12,701		$	-
Revenue	$	6,048		$	-
Direct costs		-			-			-			-
Gross profit (loss)		126,~~701~~048			-			~~12,701~~			-
General, selling and administrative expenses		463,073			413,758			2,325,516			1,475,525
Lease operating expense		9,286
Consulting and professional services		100,000			176,412			361,515			667,298
General, selling and administrative expenses		464,219			1,174,961
Total Operating Expense		563,073			590,170			2,687,031			2,142,823
Consulting and professional services		196,854			174,618
Operating income (loss)		(550,372	)		(590,170	)		(2,674,330	)		(2,142,823	)
Total Operating expenses		670,359			1,349,579
Other income/(expense)
Operating loss		(664,311	)		(1,349,579	)
Other non-operating income		400,000			-			750,000			1,521
Other income (expense)
Income from employee retention credit		-			-			-			122,682
Other non-operating income		328,702			175,000
Gain on sale of asset		-			-			175,000			22,364
Gain on sale of assets		-			175,000
Equity method income (loss)		(81,175	)		(10,255	)		(92,309	)		(47,506	)
Interest expense, net		(133,643	)		(120,131	)
Interest income		945			-			945			-
Net loss	$	(469,252	)	$	(1,119,710	)
Interest expense		(105,807	)		(98,591	)		(300,270	)		(279,647	)
Net loss per share, basic and diluted	$	(0.01	)		(0.02	)
Net income (loss)	$	(336,409	)	$	(699,016	)	$	(2,140,964	)	$	(2,323,409	)
Weighted average number of basic and common shares outstanding		72,370,641			66,220,306
Net income (loss) per share, basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.03	)	$	(0.04	)
Weighted average number of common shares outstanding		71,432,162			57,255,381			68,420,230			56,209,677

The accompanying notes are an integral part of these condensed consolidated financial statements.

Laredo Oil, Inc. Condensed Consolidated Statements of Changes in Stockholders’ Deficit (Unaudited) For the three ~~and nine~~ months ended ~~February~~August 2931, 2024 and 2023

									Additional						Total
	Common Stock				Preferred Stock				Paid			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		in Capital			Deficit			Deficit
Balance as of May 31, 2023		66,220,306	$	6,622		-		-	$	9,990,378		$	(15,078,339	)	$	(5,081,339	)
Balance as of May 31, 2024		71,993,265	$	7,199		-		-	$	11,530,169		$	(22,723,495	)	$	(11,186,127	)
Sale and issuance of common stock		939,535		94		-		-		424,906			-			425,000
Net Loss		-		-		-		-		-			(469,252	)		(469,252	)
Balance as of August 31, 2024		72,932,800	$	7,293		-		-	$	11,955,075		$	(23,192,747	)	$	(11,230,379	)
									Additional						Total
	Common Stock				Preferred Stock				Paid			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		in Capital			Deficit			Deficit
Balance as of May 31, 2023 (Restated)		66,220,306	$	6,622		-		-	$	10,064,603		$	(19,856,196	)	$	(9,784,971	)
Stock based compensation		-		-		-		-		721,110			-			721,110
Net loss		-		-		-		-		-			(1,118,790	)		(1,118,790	)
Net Loss		-		-		-		-		-			(1,119,710	)		(1,119,710	)
Balance as of August 31, 2023		66,220,306	$	6,622		-		-	$	10,~~711~~785,~~488~~713		$	(1620,~~197~~975,~~129~~906	)	$	(510,~~479~~183,~~019~~571	)
Stock based compensation		-		-		-		-		235,142			-			235,142
Issuance of shares upon debt conversion		3,904,503		390		-		-		168,601			-			168,991
Net loss		-		-		-		-		-			(685,765	)		(685,765	)
Balance as of November 30, 2023		70,124,809	$	7,012		-		-	$	11,115,231		$	(16,882,894	)	$	(5,760,651	)
Stock based compensation		-		-		-		-		146,672			-			146,672
Issuance of shares upon debt conversion		1,350,396		136		-		-		51,379			-			51,515
Net loss		-		-		-		-		-			(336,409	)		(336,409	)
Balance as of February 29, 2024		71,475,205		7,148		-		-		11,313,282			(17,219,303	)		(5,898,873	)
For the three and nine months ended February 28, 2023
Balance as of May 31, 2022		54,514,765	$	5,451		-		-	$	9,179,088		$	(11,982,488	)	$	(2,797,949	)
Restricted stock issued to consultants		1,272,574		127		-		-		187,130			-			187,257
Stock based compensation		-		-		-		-		133,110			-			133,110
Cumulative effect of accounting changes (See Note 5)		-		-		-		-		(55,918	)		16,200			(39,718	)
Net loss		-		-		-		-		-			(874,625	)		(874,625	)
Balance as of August 31, 2022		55,787,339	$	5,578		-		-	$	9,443,410		$	(12,840,913	)	$	(3,391,925	)
Stock based compensation		-		-		-		-		9,625			-			9,625
Issuance of shares upon debt conversion		1,468,042		147		-		-		118,129			-			118,276
Net loss		-		-		-		-		-			(749,768	)		(749,768	)
Balance as of November 30, 2022		57,255,381	$	5,725		-		-	$	9,571,164		$	(13,590,681	)	$	(4,013,792	)
Stock based compensation		-		-		-		-		9,623			-			9,623
Net loss		-		-		-		-		-			(699,016	)		(699,016	)
Balance as of February 28, 2023		57,255,381	$	5,725		-		-		9,580,787			(14,289,697	)		(4,703,185	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Laredo Oil, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended			Nine Months Ended
	Three Months Ended			Three Months Ended
	February 29, 2024			February 28, 2023
	August 31, 2024			August 31, 2023 (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(2,140,964	)	$	(2,323,409	)
Net loss	$	(469,252	)	$	(1,119,710	)
Adjustments to Reconcile Net Income (Loss) to Net Cash used in Operating Activities
Stock based compensation expense		~~1,102,924~~-			~~152~~721,~~358~~110
Restricted stock expense		-			187,257
Depreciation expense		6,802			4,482
Depreciation expense		15,299			31,498
Accretion expense		-
Accretion expense		4,632			4,632
Amortization of debt discount		26,053			13,578
Amortization of debt discount		60,549			71,284
Gain on sale of assets		-			(175,000	)
Equity method loss (income)		92,309			47,506
Gain on sale of assets		(175,000	)		(22,364	)
Change in operating assets and liabilities
Receivables		~~(412~~4,~~701~~232	)		-1,779
Receivables from related party		1,779			-
Prepaid expenses and other current assets		(69,900	)		1,190
Prepaid expenses and other current assets		18,857			(6,360	)
Accounts payable and accrued liabilities		(1,470	)		157,467
Accounts payable and accrued liabilities		88,550			81,513
Accrued payroll		198,928			228,878
Accrued payroll		677,611			343,667
Accrued interest		51,699			68,162
Accrued interest		182,994			133,617
NET CASH USED IN OPERATING ACTIVITIES		(252,908	)		(98,064	)
NET CASH USED IN OPERATING ACTIVITIES		(483,161	)		(1,298,801	)
CASH FLOWS USED IN INVESTING ACTIVITIES
Proceeds from sale of assets		175,000			-
Acquisition of oil and gas assets		(1,757,052	)		(38,164	)
Investment in equity method investment		-			(18,438	)
NET CASH USED IN INVESTING ACTIVITIES		(1,757,052	)		(38,164	)
Investment in property, plant and equipment		-			(303	)
Investment in oil and gas acquisition and drilling costs		(164,876	)		(962,884	)
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES		10,124			(981,625	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of convertible debt		440,000			962,423
Proceeds from sale of common stock		375,000			-
Repayment of convertible debt		(~~179~~110,~~163~~555	)		(~~325~~59,~~630~~988	)
Proceeds from related party note payable		-			200,000
Proceeds from notes payable and revolving note		-			187,061
Proceeds from notes payable and revolving note		127,061			798,000
Repayment of bridge notes		(30,226	)		-
Proceeds from prefunded drilling costs		1237,~~986,450~~750			~~715,438~~-
PPP loan repayments		(20,103	)		(171,812	)
Proceeds from well development deposit		1,500,000			-
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		2,354,245			2,178,419
PPP loan repayments		(16,888	)		(1,648	)
Net increase (decrease) in cash and cash equivalents		1,881,208			(102,007	)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		1,955,081			125,425
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		13,754			109,183
Net decrease in cash and cash equivalents and restricted cash		(54,879	)		(10,803	)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	1,894,962		$	7,176
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		1,990,189			13,754
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	1,935,310		$	2,951
NONCASH INVESTING ACTIVITIES
Oil and gas acquisition and drilling costs in accounts payable		(193,720	)		591,965
Oil and gas acquisition costs in accounts payable		19,005			-
Interest paid		56,441			54,627
Initial asset retirement obligation asset and liability		88,883			-
Conversion of convertible debt		220,506			118,276
Issuance of common stock in exchange for note payable		50,000			-
Sale of assets in exchange for note payable repayment		-			136,479
Cash to be received for sale of fixed assets		-			175,000
Interest paid		25,430			14,642

The accompanying notes are an integral part of these condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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.” with authorized common stock of 90,000,000 shares at $0.0001 par value and authorized preferred stock of 10,000,000 shares at $0.0001 par value. On October 21, 2009, the ~~Company~~name was changed ~~its name~~ to “Laredo Oil, Inc.” During May 2023, the Company board of directors voted to increase the authorized common stock to 120,000,000 shares at $0.0001 which was confirmed by a majority of the shares then outstanding.

The Company is an oil exploration and production (“E&P”) company, primarily engaged in acquisition and exploration efforts for ~~to find~~ mineral ~~reserves on various~~ properties. From its inception in March 2008 through October 2009, the Company was primarily engaged in acquisition and exploration efforts for mineral properties. Beginning in October 2009, the Company shifted its focus to locating mature oil fields with the intention of acquiring those oil fields and recovering stranded oil using enhanced recovery methods. From June 14, 2011 to December 31, 2020, the Company was a management services company, managing the acquisition and operation of mature oil fields, focused on the recovery of “stranded” oil from those mature fields using enhanced oil recovery methods for its then sole customer, Stranded Oil Resources Corporation, or SORC, then a wholly owned subsidiary of Alleghany Corporation. The Company performed those services in exchange for a quarterly management fee and the reimbursement of its employee related expenses from SORC, which fees and reimbursements were effectively all of the Company’s revenues prior to the closing of the Securities Purchase Agreement with Alleghany described below. ~~Alleghany no longer pays the Company any management fees or reimbursement payments for the monthly expenses of its employees.~~

On December 31, 2020, the Company entered into a Securities Purchase Agreement with Alleghany Corporation. Under that agreement, the Company purchased all the issued and outstanding shares of SORC. Currently, there are no ongoing operations being conducted by SORC.

Under the Securities Purchase Agreement with Alleghany, the Company also entered into a Consulting Agreement, under which Alleghany paid the Company an aggregate of approximately $1.245 million during calendar year 2021 in exchange for providing Alleghany with one to three years of consulting services from certain of the Company’s employees, including Mark See, its Chief Executive Officer.

~~During~~As ~~the~~of ~~period~~August ~~from June 14, 2011 through December~~ 31, 2020, when the 2011 SORC Agreements were in effect, the Company’s management gained specialized know-how and operational experience in evaluating, acquiring, operating and developing oil and gas properties while implementing underground gravity drainage projects, or UGD. The Company also gained expertise designing, drilling and producing conventional oil wells. Based upon that gained knowledge, as of February 29, 2024, the Company has ~~identified and~~ acquired 45,766 gross acres and 38,153 net acres of mineral property interests in Montana. The Company drilled one exploratory well during May 2022, which has been shut-in pending gaining access to a saltwater disposal well allowing economically feasible water disposal. The Company plans to continue to develop the field, depending on funding.

In connection with securing this acreage in Montana, Lustre Oil Company LLC, a wholly owned subsidiary of the Company (“Lustre”), entered into an Acquisition and Participation Agreement (the “Erehwon APA”), and subsequent amendments, with Erehwon Oil & Gas, LLC and Laris Oil & Gas, LLC (collectively, “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, as the Operator named in the Erehwon APA, will acquire initial mineral leases and pay 100% of the costs and the split between Erehwon and Lustre will be 20%/80%. Under the 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 split between Erehwon and Lustre will be 10% to Erehwon and 90% to Lustre. After payout, the split will be 20% to Erehwon and 80% to Lustre. Any additional wells will be funded 100% by Lustre, with a 20% undivided working interest to Erehwon;. Royalty expense will consist of the sum of royalty interest to the landowner and an overriding royalty interest to two individuals (“Prospect Generators”), not to exceed 6% nor be less than 3%. For the first ten new wells and first ten recompletions, Prospect Generators will receive an amount equal to 5% of the cost of each completed and producing well.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS - continued

The Company and Lustre executed a Net Profits Interest Agreement, dated November 24, 2021 (the “NPI Agreement”), with Erehwon and Olfert No. 11-4 Holdings, LLC (“Olfert”) for the purpose of funding the first well, Olfert #11-4 (the “Well”), under the Erehwon APA. In connection with the NPI Agreement, the Company was credited with a contribution totaling $59,935 of well development costs, representing a 5.5% interest in Olfert as of May 31, 2022, based on the carrying value of assets contributed by the Company to Olfert. The total investment recorded by the Company was $19,435. The difference between the $59,935 contribution recorded at the Olfert level and the Investment recorded by the Company is due to the Company’s investment being recorded at the carrying value of the assets contributed. As the Company also currently serves as the manager of Olfert, it exercises significant influence. Accordingly, the amount paid by the Company was recorded as an equity method investment as of February 29, 2024. See further disclosures in Note 8.

On June 30, 2020, the Company entered into the Limited Liability Company Agreement (the “Cat Creek Agreement”) of Cat Creek Holdings, LLC (“Cat Creek”), a Montana limited liability company formed as a joint venture with Lipson Investments LLC (“Lipson”) and Viper Oil & Gas, LLC (“Viper”) for the purchase of certain oil and gas properties in the Cat Creek Field, located in Petroleum and Garfield Counties in the State of Montana (the “Cat Creek Properties”). In accordance with the Cat Creek Agreement, the Company invested $448,900 of cash in Cat Creek in exchange for 50% of the ownership interests in Cat Creek. Lipson and Viper each have a 25% ownership interest in Cat Creek in consideration of their respective investments of $224,450. Cat Creek is managed by a board of directors consisting of four directors, two of whom are designated by the Company.

Lustre and Erehwon entered into an Exploration and Development Agreement, dated July 18, 2023 (the “Development Agreement”), with Texakoma Exploration & Production Company (“Texakoma”), for the exploration and development of the “Lustre Field Prospect,” as described in the Development Agreement. Lustre and Erehwon are 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.

Under the terms of a Development Agreement, Texakoma agreed to pay Lustre and Erehwon (jointly, “LOC”), the following amounts: (i) $175,000 on or before July 21, 2023; and (ii) another $175,000 upon the “spudding” of the initial test well subject to rig availability. Upon the spudding of that test well, LOC was required to deliver to Texakoma a partial assignment of an 85% working interest in the oil and gas leases covering the first two initial drilling and spacing units. Under the Development Agreement the first payment was paid by Texakoma in August 2023 and the Company received the second payment of $175,000 in September 2023.

The two test wells ~~have~~were ~~been~~ successfully drilled and Texakoma ispaid ~~obligated to pay~~ 100% of the costs associated with the drilling and completion of the wells. Lustre ~~LOC~~and Erehwon jointly ~~holds~~have an undivided 15% working interest, carried through the tanks, in ~~the~~those two wells. ~~Texakoma~~In ~~has~~March ~~the option~~2024, Texakoma ~~but~~exercised ~~not~~its ~~the~~option ~~obligation,~~ to participate in the development of the remainder of the Lustre Field Prospect,. ~~which~~By ~~may~~exercising beits ~~exercised~~option, by Texakoma byagreed ~~giving~~to drill eight additional wells, with Lustre and Erehwon ~~written~~having ~~notice~~a of15% ~~its~~working ~~intent~~interest carried through the tanks, and to ~~participate~~pay ~~within~~Lustre $706,603 90spread ~~days~~over ~~after~~four months, for an 85% leasehold interest in the ~~completion~~next ~~rig~~eight ~~moves~~drill ~~off~~sites and a 50% leasehold interest in the ~~second~~balance ~~test~~of ~~well~~the ~~location~~Lustre Field Prospect acreage. As of May 31, 2024, Texakoma paid an additional $328,681 in accordance with the contract. The remaining amounts due were paid by the end of first quarter 2025. The working and net revenue interest in any wells drilled subsequent to the first ten wells will be shared by Texakoma and Lustre and Erehwon, jointly, on a 50:50 basis.

IfFollowing ~~Texakoma duly exercises its option, Texakoma agrees to drill eight additional wells, with LOC having a 15% working interest carried through~~ the tanks and pay LOC $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. The working and net revenue interest in any wells drilled subsequent to the first ten wells will be shared by Texakoma ~~and LOC on a 50:50 basis. Assuming the option exercise~~transaction, ~~the~~we ~~Company will~~ retain a 100% leasehold interest and full control of an additional 30,556 net mineral acres in northeastern Montana at the western edge of the Williston Basin.

In December 2023, we entered into a Participation Agreement, through Hell Creek Crude, LLC, our wholly owned subsidiary, Erehwon, and various accredited investors. The Participation Agreement provided us with $2,034,000 to acquire certain leases and to drill a development well in the Midfork Field in Montana. Several of the investors also hold $575,000 of our convertible debt, plus accrued interest of $73,317, which indebtedness is included as investments under the Participation Agreement.

Until the total of the $2,682,317 in cash, notes and accrued interest is repaid to the various investors under the terms of the Participation Agreement, the net working interest payments from the Participation Agreement will be split between the various investors and HCC and Erehwon, collectively on a 90%/10% basis. After the repayment to the investors, the split between the investors, on one hand, and HCC and Erehwon, on the other hand, will be on a 50%/50% basis. After the development well is drilled under the Participation Agreement, the investors will have the option to invest in up to two additional wells in the field.

NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Subsequent to the initial issuance of the Company’s 2023 financial statements on September 23, 2023, management reconsidered the estimate previously applied in its valuation of the Olfert 11-4 exploratory well drilled in the spring and summer of 2022. The well encountered salt-water in amounts making it uneconomical to operate due to the lack of a proximate salt-water disposal well and was shut-in during September 2022 pending gaining access to a closer disposal well. Two years later, the well remains shut-in as the Company has yet to economically solve the water disposal issue. Until a solution is found, the well is unevaluated and written down, although the Company continues to plan on developing the well if feasible. After experiencing continued losses in its equity method investment in Cat Creek Holdings, LLC, the Company has reconsidered its valuation of the entity and written it down to zero.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 12 – ~~ORGANIZATION~~RESTATEMENT ~~AND~~OF ~~DESCRIPTION~~PREVIOUSLY OFISSUED ~~BUSINESS~~FINANCIAL STATEMENTS - continued

InThe ~~December~~following ~~2023,~~table wesummarizes ~~entered~~the ~~into~~impacts aof Participation Agreement, through Hell Creek Crude LLC, our wholly owned subsidiary, Erehwon, and various accredited investors. The Participation Agreement provided us with $2,034,000 to acquire certain leases and to drill a development well in the ~~Midfork~~changes ~~Field~~ in ~~Montana.~~estimates ~~Several~~on of the ~~investors~~Company’s ~~also~~financial ~~hold~~statements ~~$575,000~~for ofthe ~~our~~period ~~convertible~~ended ~~debt~~August 31, ~~plus accrued interest of $73,317, which indebtedness is included as investments under the Participation Agreement.~~2023:

Condensed Consolidated Balance Sheet

	Impact of change of estimates
	As previously reported			Adjustments			As Restated August 31, 2023

Cash and cash equivalents and restricted cash	$	2,951		$	-		$	2,951
Receivables		175,000			-			175,000
Prepaid expenses and other current assets		35,359			-			35,359
Total Current Assets		213,310			-			213,310

Property and Equipment
Oil and gas acquisition and drilling costs		4,434,055			(4,089,201	)		344,854
Property and equipment, net		204,700			(55,754	)		148,946
Total Property and Equipment, net		4,638,755			(4,144,955	)		493,800

Other assets		30,000			-			30,000
Equity method investment – Olfert		37,630			(37,630	)		-
Equity method investment – Cat Creek		228,832			(228,832	)		-

TOTAL ASSETS	$	5,148,527		$	4,411,417		$	737,110

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	$	2,180,468		$	241,545		$	2,422,013
Accrued payroll liabilities		2,491,328			-			2,491,328
Accrued interest		278,576			-			278,576
Deferred well development costs		1,799,260			-			1,799,260
Convertible debt, net of debt discount and debt issuance costs		878,388			-			878,388
Revolving note		1,035,061			-			1,035,061
Note payable – related party		292,099			-			292,099
Note payable – Alleghany, net of debt discount		617,934			-			617,934
Note payable, current portion		528,568			-			528,568
Total Current Liabilities		10,101,682			241,545			10,343,227

Asset retirement obligation		69,482			51,590			121,072
Long-term note, net of current portion		456,382			-			456,382
Total Noncurrent Liabilities		525,864			51,590			577,454

TOTAL LIABILITIES		10,627,546			293,135			10,920,681

Commitments and Contingencies

Stockholders’ Deficit
Preferred stock: $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding		-			-			-
Common stock: $0.0001 par value; 120,000,000 shares authorized; 66,220,206 issued and outstanding as of August 31 and May 31, 2023	$	6,622			-		$	6,622
Additional paid in capital		10,711,488			74,225			10,785,713
Accumulated deficit		(16,197,129	)		(4,778,777	)		(20,975,906	)

Total Stockholders’ Deficit		(5,479,019	)		(4,704,552	)		(10,183,571	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	5,148,527		$	(4,411,417	)	$	737,110

~~Basic and Diluted Loss per Share~~10

~~Basic and~~NOTES ~~diluted~~TO ~~earnings/(loss)~~CONDENSED ~~per~~CONSOLIDATED ~~share~~FINANCIAL isSTATEMENTS ~~computed by dividing net income/~~(~~loss~~UNAUDITED) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings/(loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings/(loss) per share excludes all potential common shares if their effect is anti-dilutive. As the Company realized a net loss for the three- and nine-month periods ended February 29, 2024 and February 28, 2023, it did not include potentially dilutive securities in the calculation of diluted loss per share as their impact would have been anti-dilutive. Diluted earnings/(loss) per share is computed by dividing the net income (loss) by the weighted-average number of common and dilutive common equivalent shares outstanding during the period.

NOTE 2 – ~~GOING~~RESTATEMENT ~~CONCERN~~OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - continued

Condensed Consolidated Statements of Operations

	As previously reported			Adjustments			Quarter ended August 31, 2023 (Restated)
Revenue	$	-		$	-		$	-

Direct costs		-			-			-

Gross profit (loss)		-			-			-

General, selling and administrative expenses		1,177,124			(2,163	)		1,174,961
Consulting and professional services		174,618			-			174,618

Total Operating Expense		1,351,742			(2,163	)		1,349,579

Operating loss		(1,351,742	)		2,163			(1,349,579	)

Other income/(expense)
Other non-operating income		175,000			-			175,000
Gain on sale of assets		175,000			-			175,000
Equity method loss/impairment		(20,662	)		20,662			-
Interest expense, net		(96,386	)		(23,745	)		(120,131	)

Net loss	$	(1,118,790	)		(920	)	$	(1,119,710	)

Net loss per share, basic and diluted	$	(0.02	)				$	(0.02	)

Weighted average number of basic and diluted common shares outstanding		66,220,306						66,220,306

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - continued

Condensed Consolidated Statement of Cash Flows

							Quarter ended
	As previously reported			Adjustment			August 31, 2023 (Restated)

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,118,790	)		(920	)	$	(1,119,710	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Stock based compensation expense		721,110			-			721,110
Amortization of debt discount		13,578			-			13,578
Equity method investment loss/impairment		20,662			(20,662	)		-
Depreciation		5,100			(618	)		4,482
Accretion expense		1,544			(1,544	)		-
Gain on sale of assets		(175,000	)		-			(175,000	)
Changes in operating assets and liabilities:
Accounts receivable – related party		1,779			-			1,779
Prepaid expenses and other current assets		1,190			-			1,190
Accounts payable and accrued liabilities		158,405			(938	)		157,467
Accrued payroll liabilities		228,878			-			228,878
Accrued interest		68,162			-			68,162

NET CASH USED IN OPERATING ACTIVITIES		(73,382	)		(24,682	)		(98,064	)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment in oil and gas field acquisition and drilling costs		(62,846	)		24,682			(38,164	)
NET CASH USED IN INVESTING ACTIVITIES		(62,846	)		24,682			(38,164	)

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of convertible debt		(59,988	)		-			(59,988	)
Proceeds from notes payable and revolving note		187,061			-			187,061
PPP loan repayments		(1,648	)		-			(1,648	)

NET CASH PROVIDED BY FINANCING ACTIVITIES		125,425			-			125,425

Net change in cash and cash equivalents		(10,803	)		-			(10,803	)

Cash and cash equivalents at beginning of period		13,754			-			13,754

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	2,951			-		$	2,951

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest expense	$	14,642			-		$	14,642
Cash paid for income taxes	$	-			-		$	-

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Oil and gas acquisition costs in accounts payable	$	175,913		$	(175,913	)	$	-
Cash to be received for sale of fixed assets	$	-		$	175,000		$	175,000

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - continued


Condensed Consolidated Statement of Stockholders’ Deficit

														Total
	Common Stock				Preferred Stock				Additional		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Paid In Capital		Deficit			Deficit

Balance at August 31, 2023 -as previously reported		66,220,306		6,622		-		-		10,711,488		(16,197,129	)		(5,479,019	)

Gain on sale of related party asset		-		-		-		-		74,225		-			74,225

Net Loss adjustments		-		-		-		-		-		(4,778,777	)		(4,778,777	)

Balance at August 31, 2023 (Restated)		66,220,306	$	6,622		-	$	-	$	10,785,713	$	(20,975,906	)	$	(10,183,571	)

NOTE 3 – 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 (bc) 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.

1013

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 34 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates –- Management uses estimates and assumptions in preparing these consolidated ~~financial~~ 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. ~~The~~Based ~~Company~~on ~~has~~uncertain ~~elected to~~economic ~~record~~benefits ~~its~~in ~~portion of~~ the ~~equity~~future ~~method~~as ~~income~~evidenced ~~(loss)~~by ~~with~~several ayears ~~two~~of non-~~month~~profitable ~~lag. Accordingly~~results, the ~~financial~~Company ~~results~~impaired ~~for~~its ~~the~~investments ~~equity~~in ~~investment are~~Cat ~~reported~~Creek ~~through~~Holdings, LLC ~~December~~and ~~31,~~Olfert ~~2023~~No. No11-4 ~~impairments~~Holdings, ~~were~~LLC ~~recognized~~as ~~for~~of ~~the~~May ~~Company’s equity~~31, ~~method~~2023 ~~investment during the~~to ~~quarter~~reflect ~~ended~~no ~~February~~current ~~29, 2024~~value. ~~See Note 11.~~

~~Revenue~~Basic ~~recognition~~and –Diluted ~~The~~Loss ~~Company~~per ~~recognized~~Share - ~~revenue~~Basic inand ~~accordance~~diluted ~~with~~earnings/(loss) ~~ASC~~per ~~606,~~share ~~Revenue~~is ~~from~~computed ~~Contracts~~by ~~with~~dividing ~~Customers.~~net ~~The~~income/(loss) ~~Company’s~~available ~~current~~to ~~revenue~~common isstockholders ~~from~~by ~~sales~~the weighted average number of ~~oil~~common ~~and~~shares ~~gas~~outstanding ~~production~~during the period. ~~Revenue~~Diluted ~~from~~earnings/(loss) ~~oil~~per ~~and~~share gives ~~gas~~effect ~~production~~to isall ~~recognized~~dilutive ~~based~~potential oncommon ~~sales~~shares ~~date~~outstanding asduring ~~reported~~the period. Dilutive earnings/(loss) per share excludes all potential tocommon shares if their effect is anti-dilutive. As the Company byrealized a net loss for the ~~operators~~three-months orended ~~oil~~August 31, 2024 and ~~gas~~2023, it ~~production~~did ~~facilities~~not include potentially dilutive securities in ~~which~~the calculation of diluted loss per share as their impact would have been anti-dilutive. Diluted earnings/(loss) per share is computed by dividing the ~~company~~net ~~has~~income an(loss) ~~interest~~by the weighted-average number of common and dilutive common equivalent shares outstanding during the period.

~~Property~~Revenue ~~and~~recognition - ~~Equipment~~The –Company ~~The~~recognized ~~carrying~~revenue ~~value~~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 ~~Company’s~~purchaser. ~~property~~We ~~and~~consider ~~equipment~~the ~~represents~~transfer of control to have occurred when the ~~cost~~purchaser ~~incurred~~has the ability to ~~acquire~~direct the ~~property~~ use of and ~~equipment,~~obtain ~~net~~substantially all of ~~any~~the ~~impairments~~remaining benefits from the crude oil production. ~~For~~We ~~business~~record ~~combinations~~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, ~~property~~revenue from oil and ~~equipment~~gas ~~cost~~production is recognized based on sales date as reported to the ~~fair~~Company ~~values~~by at the ~~acquisition~~operators ~~date~~of oil production facilities in which the company has an interest.

~~Oil~~Cash and ~~Gas~~cash ~~Acquisition~~equivalents ~~Costs – Oil~~ and ~~gas~~restricted ~~acquisition~~cash - ~~and~~All ~~drilling~~highly ~~costs~~liquid ~~include expenditures representing~~ investments in ~~unproved~~with ~~and~~a ~~unevaluated~~maturity ~~properties~~of ~~and~~three ~~include~~months ~~non-producing leasehold, leasehold~~ or ~~drilling~~less ~~interest~~are ~~costs, and costs~~ considered to ~~drill one~~be ~~exploratory~~cash ~~well~~equivalents. ~~Exploratory~~There ~~drilling~~were ~~costs~~no ~~are~~cash ~~deferred~~equivalents ~~until~~as ~~the outcome~~ of ~~the~~August ~~well is known. If an exploratory well finds proved reserves~~31, ~~the~~2024 ~~deferred costs are transferred to the company’s Wells~~ and ~~Related~~May ~~Equipment and Facilities accounts. Absent proved reserves~~31, ~~the deferred costs of the well, net of salvage, are charged to expense~~2024. ~~All~~At ~~costs of wells drilled to develop proved reserves~~times, ~~along~~ ~~with all costs of equipment necessary to produce and handle~~ the ~~hydrocarbons, are capitalized even if a development well proves dry. Costs are reviewed to determine if impairment has occurred. The~~ Company ~~has~~maintains ~~incurred~~cash ~~oil and gas acquisition and drilling costs~~balances ~~totaling~~deposited ~~$4,518,896~~at ~~and~~its ~~$4,547,740~~financial asinstitution ofthat ~~February~~exceed ~~29,~~FDIC ~~2024~~insured ~~and May 31, 2023, respectively~~limits.

Schedule of Oil and Gas Acquisition and Drilling Cost

	February 29,		May 31,
	2024		2023
Intangible and tangible drilling costs	$	3,301,274	$	3,410,832
Acquisition costs		1,217,622		1,136,908
Oil and gas acquisition and drilling costs	$	4,518,896	$	4,547,740

NOTE 4 – CASH AND CASH EQUIVALENTS

Laredo entered a Participation Agreement in exchange for funding for well development costs. The contract requires that participants pay Hell Creek Crude LLC the contract price upon execution of the agreement. 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. If something changes, the Company may designate these funds for a substitute well. Under certain conditions, a portion of these funds may be required to be returned to a participant. The funds are used to satisfy the well development costs. Laredo 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. In the event that progress payments are made from these funds, they are recorded as Oil and Gas Acquisition Costs.

Also included in Restricted cash is $1,500,000 of investments 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 our over 30,000 acres of mineral rights located north of the Fort Peck Reservation at the western edge of the Williston Basin. The Company is in the process of raising $7.5 million to drill three exploratory wells by selling units of West Fork. If the Company is unsuccessful in raising the funds, monies will be returned to the investors.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES - continued

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same amounts shown in the statement of cash flows.

	February 29, 2024		May 31, 2023
	August 31, 2024		May 31, 2024
Cash and cash equivalents	$	2105,~~282~~577	$	13127,~~754~~126
Restricted cash		1,~~892~~829,~~680~~733		-1,863,063
Total	$	1,~~894~~935,~~962~~310	$	131,~~754~~990,189

~~Restricted~~Prepaid ~~cash~~expenses isand ~~recorded~~other ~~with~~current ~~respect~~assets - toPrepaid ~~the~~expenses ~~advance~~and ~~funding~~other ~~for~~current ~~well~~assets ~~development~~are inprimarily ~~accordance~~comprised ~~with~~of ~~the~~prepaid ~~Participation~~legal ~~Agreement.~~fees which ~~See~~are ~~Note~~recorded ~~1. These~~as ~~funds~~expense ~~are~~upon ~~restricted~~work ~~for~~performance, ~~use~~prepaid ~~for~~directors’ ~~the~~and ~~development~~officers’ ofinsurance ~~the~~which ~~first~~is ~~well~~recorded inand amortized to expense over the ~~Midfork~~12-month ~~field~~contract life and advance payments prior to work being performed.

11Property 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. During 2024, the Company disposed drilling equipment for $175,000 which had been previously impaired to $0.

The depreciation recorded for the quarters ended August 31, 2024 and 2023 was $6,802 and $4,482.

Schedule of Property and equipment, net

	August 31,		May 31,
	2024		2024
Vehicles and equipment	$	193,766	$	193,766
Less: Accumulated depreciation		65,069		58,267

Property and equipment, net	$	128,697	$	135,499

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.

Oil and Gas Acquisition 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. Unevaluated properties lease and bonus costs are capitalized while landman and legal cost of acquiring properties are expensed as incurred.

The Company has recorded oil and gas acquisition and drilling costs totaling $2,475,603 and $610,663 as of August 31, 2024 and May 31, 2024, respectively.

	August 31,		May 31,
	2024		2024
Intangible and tangible drilling costs	$	2,237,303	$	382,259
Lease acquisition costs		238,300		228,404

Oil and gas acquisition and drilling costs	$	2,475,603	$	610,663

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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES - continued

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.

NOTE 5 – RECENT AND ADOPTED ACCOUNTING STANDARDS

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 6 – ~~ACCOUNTING~~CASH ~~FOR ASSET RETIREMENT~~ AND ~~ENVIRONMENTAL~~CASH ~~OBLIGATIONS~~EQUIVALENTS

~~The~~Included ~~Company~~in ~~accounts~~Cash ~~for~~and ~~its asset~~Cash ~~retirement obligations~~Equivalents inis ~~accordance~~$1,500,000 ~~with~~of ~~Accounting~~investments ~~for Asset~~from ~~Retirement~~accredited ~~and~~investors ~~Environmental~~in our wholly-owned subsidiary West Fork Resources, ~~Obligations.~~LLC ~~This~~(“West ~~requires~~Fork”) ~~that~~which ~~legal~~was ~~obligations~~formed ~~associated~~to ~~with~~develop ~~the retirement~~ and find oil reserves in portions of ~~long-lived~~our ~~assets~~over be30,000 ~~recognized~~acres atof ~~fair~~mineral rights ~~value~~located ~~when~~north ~~incurred~~of ~~and~~the ~~capitalized~~Fort asPeck ~~part~~Reservation at the western edge of the ~~related~~Williston ~~long-lived asset~~Basin. ~~Over~~The ~~time,~~Company is in the ~~liability~~process isof ~~accreted~~raising $7.5 million to ~~its~~drill ~~present value~~three ~~each~~exploratory ~~period,~~wells ~~and~~by selling units of West Fork. If the ~~capitalized asset~~ Company is ~~depreciated~~unsuccessful ~~over~~in raising the ~~useful~~funds, ~~life~~monies ofwill be returned to the ~~long-lived asset~~investors.

InNOTE ~~the~~7—ACCOUNTING ~~absence~~FOR ofASSET ~~quoted~~RETIREMENT ~~market~~AND ~~prices,~~ENVIRONMENTAL the Company estimates the fair value of its 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.OBLIGATIONS

~~The~~We ~~Company’s~~account for our asset retirement ~~obligation~~obligations ~~was~~in ~~established~~accordance inwith ~~May~~Accounting ~~2022~~for Asset ~~when~~Retirement itand ~~commenced~~Environmental ~~drilling~~Obligations. This requires that legal obligations associated with the retirement of ~~Olfert#11~~long-4lived ~~well~~assets inbe recognized at fair value when incurred ~~the~~and ~~Lustre~~capitalized ~~oil~~as ~~field.~~part Onof ~~February~~the 29related long-lived asset. Over time, ~~2024~~the ~~and~~liability ~~May~~is ~~31,~~accreted ~~2023~~to its present value each period, and the capitalized asset is ~~retirement~~depreciated ~~obligation~~over ~~totaled~~the ~~$72,570~~useful ~~and~~life ~~$67,938,~~of ~~respectively~~the long-lived asset.

In the absence of quoted market prices, we estimate 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. Our estimated liability could change significantly if actual costs vary from assumptions or if governmental regulations change significantly.

The cash flow estimate for the asset retirement obligation is based upon the assumption of a 25-year expected life of the well, discounted using a credit-adjusted risk-free interest rate of 10%.

The Company’s asset ~~has~~retirement obligation ~~recorded~~was ~~accretion~~established ~~expense~~in ~~totaling~~July $12024,~~544~~ ~~and~~when ~~$4,632~~it incommenced ~~each~~drilling ofthe Reddig well in the Hell ~~three-~~Creek Crude oil field. The asset retirement obligation totaled $88,883 and ~~nine-month~~$0 ~~periods~~as ~~ending~~of ~~February~~August 2931, 2024 and ~~February~~May 2831, ~~2023~~2024, respectively.

NOTE 78 – ~~FAIR~~PAYROLL ~~VALUE MEASUREMENTS~~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 9 – DEFERRED WELL DEVELOPMENT COSTS AND DEPOSIT FOR WELL DEVELOPMENT

The Company records investor investments in individual oil wells as a liability totaling $4,789,327 and $4,551,577 at August 31, 2024 and May 31, 2024, 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 shows amounts invested in the Reddig 11-21 well located in Valley County, Montana.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 9 – DEFERRED WELL DEVELOPMENT COSTS AND DEPOSIT FOR WELL DEVELOPMENT - continued

The Company has recorded $1,500,000 advanced by accredited investors to West Fork as a Deposit for Well Development. These amounts will be returned to investors if the project is not funded in its entirety.

NOTE 10 – FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, 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.

~~The~~Laredo ~~Company~~ estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle ~~abandonment~~ 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 ~~the Company~~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 5, 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.

12NOTE 11 – RELATED PARTY TRANSACTIONS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 ~~April~~November 427, ~~2022~~2023, ~~Cat~~the ~~Creek~~Company entered into an Amended and Restated Demand Promissory Note, in(the ~~which~~“Demand Note”), and an Amended and Restated Membership Interest Pledge Agreement, (the “Lustre Pledge Agreement”) with the Company’s ~~has~~Chief anFinancial Officer. ~~equity~~Under ~~investment~~the Demand Note, ~~loaned~~the Company promises to pay on demand the principal sum of all disbursements made to the Company up to $~~136~~400,~~479~~000 plus interest accrued at aan ~~market~~annual rate of ~~interest~~10%. In As of August ~~2022~~31, ~~the~~2024, ~~Company repaid~~ the ~~principal~~aggregate amount of ~~the note~~advances, ~~and~~excluding accrued interest, was in$292,099. anThe ~~exchange~~Demand ~~for~~Note ~~property~~is secured by all of the Company’s interests in Lustre, ~~plant~~pursuant ~~and~~to ~~equipment~~the terms of the Lustre Pledge Agreement.

~~In accordance~~On ~~with~~July ~~the~~22, ~~NPI Agreement~~2024, ~~between~~Mr. ~~October~~Robert ~~2021~~Adamo ~~and~~advanced ~~August 2022~~$50,000 to ~~Olfert~~Lustre. ~~#11-4~~The ~~Holdings~~transaction ~~transferred~~is undocumented, but the funds ~~totaling~~were ~~$1,859,195~~ to ~~Lustre,~~ensure ~~the~~that ~~Company’s~~Lustre ~~wholly~~had ~~owned~~monies ~~subsidiary,~~available to ~~provide~~secure ~~funds~~a ~~for~~SWD well to support drilling ~~expenses~~activity ~~incurred~~in bythe Lustre ~~with~~oil ~~respect~~field. toThe ~~the development~~repayment ofterms ~~one~~are ~~well~~subject to negotiation.

~~On June~~Accrued ~~22,~~payables ~~2022,~~contain ~~the Company assigned the right to purchase up to 356~~$125,~~243 of the 500,~~000 ~~membership interests in Olfert #11-4 to the Company’s Chief Financial Officer (CFO”) in exchange~~ for ~~his~~each ~~payment~~ of ~~$356,243~~our oftwo ~~the~~outside ~~Company’s~~board ~~capital commitment to Olfert #11-4.~~members Onwho ~~August~~have ~~15,~~not ~~2022,~~been ~~the~~receiving ~~CFO~~current ~~purchased~~board ~~another 109,590 membership interests in the Olfert #11-4 well for $109,590 associated with a capital call to pay additional development costs~~stipends.

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 February 29, 2024, 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.17

NOTE 9 – NET PROFITS INTEREST AGREEMENT

In January 2022, the Company and Lustre executed the NPI Agreement with Erehwon and Olfert Holdings, to be effective as of November 24, 2021. The NPI Agreement was executed for the purpose of funding the Olfert Well under the Erehwon APA. The NPI Agreement grants Olfert Holdings an “Applicable Percentage” of available funds from the Olfert Well in exchange for Olfert Holdings funding development of the Olfert Well. The “Applicable Percentage” is defined in the NPI Agreement as 90% prior to Payout and 50% after Payout, with “Payout” being defined as the point in time when the aggregate of all Net Profits Interest payments made to Olfert Holdings under the NPI Agreement equals 105% of the well development costs. In January 2022, the Company entered into an Amended and Restated Limited Liability Company Operating Agreement of Olfert Holdings, dated to be effective as of November 2021 (the “Olfert Holdings Operating Agreement”). Pursuant to the Olfert Holdings Operating Agreement, the Company agreed to make a $500,000 capital contribution, out of a total of $1,500,000 to be raised by Olfert Holdings. During October and November of 2021, the Company received advance payments totaling $1.0 million from four investors, through Lustre, pursuant to the NPI Agreement. The Company was credited with $59,935 of well development costs as part of its capital contribution under the Olfert Holding Operating Agreement. In May 2022, a vendor made an in-kind capital contribution of $83,822 to Olfert Holdings in the form of services rendered. In June 2022, the Company’s Chief Financial Officer invested $356,243 in Olfert Holdings pursuant to the NPI Agreement. These three contributions fulfilled the Company’s initial capital contribution commitment under the Olfert Holdings Operating Agreement. On August 3, 2022, the Company, as Manager of Olfert Holdings, issued a capital call to the investors in Olfert Holdings for payment of an additional $461,440 to cover expenses that Lustre is obligated to pay pursuant to the NPI Agreement. As of February 29, 2024, the investors had paid $358,747 of that capital call. As of February 29, 2024, Lustre had incurred approximately $3,300,000 related to the development of the Olfert Well. The Olfert Well has exceeded its original budget, and there are certain construction costs that have not been satisfied. To pay the amounts owed, the Company issued another capital call to the investors in Olfert Holdings to pay an additional $1.7 million. The investors do not have an obligation to make further investments, and Olfert Holdings did not raise the requested additional amount from that capital call. Subsequently, several unpaid contractors have attached mechanic liens on the Olfert Well. Three creditors have filed a lawsuit for payment against Lustre, the operator of the Olfert Well in Montana. The Company believes that the Olfert Well is still economically viable, and it intends to attempt to raise sufficient additional capital for Olfert Holdings, complete the Olfert Well, and pay all amounts owed to contractors.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 912 – ~~NET~~STOCKHOLDERS’ ~~PROFITS INTEREST AGREEMENT - continued~~DEFICIT

In connection with the NPI Agreement, the Company was credited with a contribution totaling $59,935 of well development costs under an agreement with Olfert Holdings. The initial investment in Olfert Holdings recorded by the Company was $19,435. The difference between the $59,935 contribution recorded by Olfert Holdings and the $19,435 investment recorded by the Company is due to the Company’s investment being recorded at the carrying value of the assets contributed by the Company. In connection with the August 2022 capital call, the Company contributed an additional $18,438 to Olfert Holdings resulting in a 4.2% interest in Olfert Holdings as of February 29, 2024. As the Company currently serves as the manager of Olfert Holdings, the Company exercises significant influence over Olfert Holdings. Accordingly, the amount the Company paid to Olfert Holdings is recorded as an equity method investment as of February 29, 2024.

NOTE 10 – STOCKHOLDERS’ DEFICIT

Share Based Compensation

~~The~~No ~~Company made two~~ option grants towere ~~the~~made ~~Chief~~in ~~Executive Officer. One grant for~~ the ~~purchase~~first ofquarter ~~1,000,000 shares~~ of ~~Company’s common~~fiscal ~~stock~~year at2025, aended ~~price~~August of31, $02024.~~066~~ ~~per~~There ~~share~~were ~~was made on December 13~~21,100,000 ~~2023~~shares ~~and~~underlying ~~the second~~ option ~~grant~~grants ~~for~~as ~~the purchase~~ of 3August 31,~~925,000 shares~~ of2024 ~~Company’s~~and ~~common~~May ~~stock~~31, 2024 at a weighted average exercise price of $0.0608 per share ~~was made on November 27, 2023~~. ~~The options vested completely at time of grant.~~

~~The~~Option ~~Company made~~ grants ~~of options~~ for the purchase of 15,075,000 shares of ~~the Company’s~~ common stock, at a price of $0.06 per share, were made during the first quarter of fiscal year 2024. The grants were issued under the Laredo Oil, Inc. 2023 Equity Incentive Plan, ~~which~~once the plan became effective with the filing ~~of a Registration Statement~~ on Form S-8 ondated June 14, 2023. Except for an option togrant for the purchase of 1,100,000 shares of common stock, at a price of $0.38 per share, all ~~options~~ previously granted options to purchase common stock under the Laredo Oil, Inc. 2011 Equity Incentive Plan, totaling 4,825,000 shares, were ~~terminated~~canceled and ~~replaced~~reissued ~~by grants~~ under the new incentive plan.

Options to purchase 650,000 shares of common stock at a price of $0.19 per share were granted during the first quarter of fiscal year 2023. The options vested immediately and expire on June 2, 2032. Option grants for the purchase of 1,600,000 shares of common stock at a price of $0.074 per share were made during the first quarter of fiscal year 2022. The options vest monthly over three years beginning August 1, 2021 and expire on August 1, 2031. These options were canceled on June 29, 2023.

The Black-Scholes option pricing model is used to estimate the fair value of options granted under our stock incentive plan.

The grant date fair value of the stock option grants during the ~~nine~~three months ending ~~February~~August 2931, ~~2024 and February 28,~~ 2023 totaled $1721,~~006,156 and $123,487, respectively~~110. The weighted average assumptions used in calculating these values were based on the following:

Schedule of Fair Value Assumptions

	2024			2023
	2023
Risk-free interest rate	3.99%	~~4.07~~	%		~~1.85~~	%
Expected dividend yield	0%	0	%		0	%
Expected volatility	281.3%	~~281.3~~	%		~~314.9~~	%
Expected life of options	5.0 years	~~5.0 years~~			~~6.0 years~~

The risk-free interest rate is based on the U.S. Treasury yield curve 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 option. The Company uses the simplified method for determining the expected term of its stock options.

Share based compensation for stock option grants totaling $~~49,904~~0 and $9721,~~623~~110 ~~was~~is recorded in general, selling and administrative expense ~~during~~ during the three- months ended ~~February~~August 2931, 2024 and ~~February 28,~~ 2023 ~~and $1~~,~~006,156~~ ~~and $152,358 was recorded during the nine-months ended February 29, 2024 and February 28, 2023,~~ respectively.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10 – STOCKHOLDERS’ DEFICIT - continued

Restricted Stock

InDuring ~~May 2023~~ the ~~Company~~first ~~received~~fiscal ~~funds~~quarter ~~pursuant~~of to2025, athe ~~Stock~~Company ~~Purchase~~sold ~~Agreement with an accredited investor to purchase 6~~939,~~062,886~~535 ~~restricted~~ shares of common stock (the ~~Company’s~~“Shares”) ~~common~~to ~~stock~~accredited investors at aan ~~purchase~~average price of $0.~~0441~~4524 per share, ~~totaling~~for gross proceeds of $~~267~~425,~~319~~000. ~~The~~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, or (the ~~securities~~“Securities ~~laws of any state~~Act”), and ~~were~~may ~~issued~~not tobe ~~the~~offered ~~investor~~or sold in ~~reliance upon exemptions~~the United ~~from~~States absent ~~such~~ registration. ~~The~~or ~~investor~~an isapplicable ~~aware~~exemption offrom ~~the~~registration ~~provisions~~requirements ~~of Rule 144 promulgated~~ under the Securities Act.

The Company ~~entered~~granted ~~into~~no ashares ~~financial~~of ~~advisory~~restricted ~~agreement,~~stock ~~dated July 21, 2022 (the “Advisory Agreement”), pursuant to which the Company engaged Dawson James Securities, Inc. (“Dawson”) to render services~~ as acompensation ~~corporate~~during ~~finance consultant. The term of~~ the ~~Advisory~~first ~~Agreement~~quarter ~~is twelve months from the date~~ of ~~the~~fiscal ~~Advisory~~year ~~Agreement, unless terminated by either party with 30 days prior written notice to the other party, beginning 60 days following the date of the Advisory Agreement~~2024. Under the terms of the Advisory Agreement, Dawson will provide advice to the Company concerning business and financial planning, corporate organization and structure, private and public equity and debt financing, and such other matters as the parties may mutually agree.

As compensation to Dawson for the services provided under the Advisory Agreement, the Company is obligated to pay Dawson $30,000 per calendar quarter, with the first such payment being paid one day after the date of the execution of the Advisory Agreement, and each subsequent payment being due three months after the previous payment. The Company made the first $30,000 payment in July 2022. The Company also agreed to issue to Dawson 2,600,000 shares of the Company’s common stock, payable in four installments of (i) 1,000,000 shares issued within three business days after the date of the Advisory Agreement, (ii) 550,000 shares for the subsequent quarter, and (iii) 525,000 shares for each of the remaining two quarters of the term of the Advisory Agreement. The first 1,000,000 restricted shares were issued in July 2022. During the twelve months ending May 31, 2023, the Company recorded advisory service fees totaling $160,000 with respect to the 1,000,000 shares of the Company’s common stock issued pursuant to the Advisory Agreement. After the first $30,000 payment and issuance of 1,000,000 shares of common stock, the Advisory Agreement has been suspended indefinitely.

In April 2022, the Company entered into a consulting agreement with an individual for corporate structuring and strategic planning and compliance services. Pursuant to this agreement, the Company agreed to compensate the consultant with cash and restricted shares of the Company’s common stock, which shares vest equally over the 12-month term of the consulting agreement. During the twelve months ending May 31, 2022, the Company recorded $27,257 in professional fees with respect to the issuance of the first two tranches of 272,474 restricted shares. The consulting agreement was terminated in July 2022.

The Company granted no shares of restricted stock as compensation during the first half of fiscal year 2024.

Warrants

~~During~~No warrants were issued during the ~~third~~first quarters of fiscal ~~quarter~~years ~~ended~~2025 onor ~~February~~2024. 29At August 31, 2024 and May 31, 2024, the Company ~~issued~~had 1,000,000 warrants to purchase common stock at ~~a strike price of~~ $0.06 per share and 260,870 warrants to purchase common stock at ~~a strike price of~~ $0.23 per share. No warrants were issued during the first and second quarters of fiscal year 2024 or during the first three fiscal quarters of 2023. The grant date fair value of the stock warrants during the nine months ending February 29, 2024 totaled $96,768. The Black-Scholes option pricing model is used to estimate the fair value of warrants granted. The weighted average assumptions used in calculating these values included a 3.98% risk free interest rate, a 0% expected dividend yield, a 278.1% expected volatility and a 5 year expected life.

~~NOTE 11 – NOTES PAYABLE~~18

Convertible Debt

On December 29, 2023, the Company entered into a Securities Purchase Agreements with an accredited investor, pursuant to which the Company issued a convertible promissory note in the principal amount of $60,000, receiving $50,000 in net cash proceeds. The convertible promissory notes had an original issue discount of $5,500. An additional $5,000 of debt issue costs were deducted from the gross proceeds to the Company. The total of $10,500 recorded by the Company as debt discount is being amortized using the effective interest method through the maturity dates of the convertible promissory note. The convertible note is due one year from the date of issuance, accrues interest at 8% per annum (22% upon the occurrence of an event of default) and is convertible after 180 days into shares of the Company’s common stock at a discount of 25% to the average of the three lowest bid prices during the 15 trading days immediately preceding the conversion.

On November 27, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company issued a convertible promissory note in the principal amount of $66,000, receiving $55,000 in net cash proceeds. The convertible promissory note had an original issue discount of $6,000. Further $5,000 debt issue costs were deducted from the gross proceeds. The total of $11,000 recorded as debt discount is being amortized using the effective interest method through the maturity dates of the convertible promissory note. The convertible note is due in one year from the date of issuance, accrues interest at 8% per annum (22% upon the occurrence of an event of default) and is convertible after 180 days into shares of the Company’s common stock at a discount of 25% of the average of the three lowest trading prices during the 15 trading days immediately preceding the conversion.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1113 – NOTES PAYABLE ~~- continued~~

OnConvertible September 14, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company issued a convertible promissory note in the principal amount of $71,225, receiving $60,000 in net cash proceeds. The convertible promissory note had an original issue discount of $6,475. Further $4,750 debt issue costs were deducted from the gross proceeds. The total of $11,225 recorded as debt discount is being amortized using the effective interest method through the maturity dates of the convertible promissory note. The convertible note is due in one year from the date of issuance, accrues interest at 8% per annum (22% upon the occurrence of an event of default) and is convertible after 180 days into shares of the Company’s common stock at a discount of 25% of the average of the three lowest trading prices during the 15 trading days immediately preceding the conversion.Debt

InOn ~~March~~December 29, ~~April and May of~~ 2023, the Company entered into a Securities Purchase Agreements with an accredited investor, pursuant to which the Company issued ~~three~~a convertible promissory ~~notes~~note in the ~~aggregate~~ principal amount of $~~212~~60,~~025 (the “Convertible Notes”)~~500, receiving $~~180~~50,000 in net cash proceeds. The ~~Convertible~~convertible promissory ~~Notes~~notes had an original issue discount of $195,~~275~~500. ~~The~~An ~~Company~~additional ~~deducted~~ $125,~~750 in~~000 ~~additional~~of debt issue costs were deducted from the gross proceeds itto ~~received from~~ the ~~Convertible Notes~~Company. The ~~Company is amortizing a~~ total of $3210,~~025~~500 recorded by the Company as debt discount is being amortized using the effective interest method through the maturity dates of the ~~Convertible~~convertible ~~Notes~~promissory note. The ~~Convertible~~ ~~Notes~~convertible ~~are~~note is due in one year from the date of issuance, accrues ~~accrue~~ interest at 8% per annum (22% upon the occurrence of an event of default) and ~~are~~is convertible after 180 days ~~after issuance~~ into shares of the Company’s common stock at a discount of 25% ofto the average of the three lowest ~~trading~~bid prices during the 15 trading days immediately preceding the conversion. ~~During~~ ~~September~~On ~~2023,~~July ~~the Company repaid the $70~~1,~~125~~ ~~in principal and $2~~2024,~~805~~ ~~in accrued interest pursuant to a Convertible Note dated March 1, 2023. To satisfy~~ the ~~obligation, the~~ Company ~~issued~~repaid to the ~~noteholder~~note. ~~1,398,760~~The ~~shares~~repayment oftotaled ~~the Company’s common stock, at an average price of~~ $069,190.~~05214 per share. In November 2023~~12, ~~the~~comprised ~~Company~~of ~~repaid~~ $9360,~~675~~500 in principal and $28,~~387~~690.12 in related accrued interest ~~for payment of the note issued in April~~ and ~~partial~~ ~~payment~~prepayment ofpenalty ~~the note issued in May of 2023~~interest. AsThe ~~payment of the notes, the~~ Company ~~issued~~recorded to the ~~noteholder~~related ~~2,505,743~~deferred ~~shares~~debt ofdiscount and ~~the~~debt ~~Company’s~~issue ~~common stock at an average price of $0.03833 per share. In December 2023~~costs, ~~the~~totaling ~~Company repaid~~ $485,~~225 in principal and $3~~316,~~289~~ inas ~~accrued~~ interest ~~satisfying payment of the note issued in May~~expense. ~~As payment of the notes, the Company issued 1,350,396 shares of the Company’s common stock to the noteholder at an average price of $0.038147 per share. All of these notes have been repaid.~~

InOn November of27, ~~2022~~2023, the Company entered into a Securities Purchase ~~Agreements~~Agreement with ~~two~~an accredited ~~investors~~investor, pursuant to which the Company issued ~~two~~a convertible promissory ~~notes~~note in the ~~aggregate~~ principal amount of $~~140~~66,~~250 (the “Convertible Notes”)~~000, receiving $~~120~~55,000 in net cash proceeds. The ~~Convertible~~convertible promissory ~~Notes~~note had an original issue discount of $126,~~750~~000. ~~The~~Further, ~~Company deducted~~ $75,~~500 in additional~~000 debt issue costs ~~from~~were ~~the~~deducted ~~gross proceeds it received~~ from the ~~Convertible~~gross ~~Notes~~proceeds. The ~~Company is amortizing a~~ total of $2011,~~250~~000 recorded as debt discount is being amortized using the effective interest method through the maturity dates of the ~~Convertible~~convertible ~~Notes~~promissory note. The ~~Convertible~~convertible ~~Notes~~note ~~are~~is due in one year from the date of issuance, ~~accrue~~accrues interest at 8% per annum (22% upon the occurrence of an event of default) and ~~are~~is convertible ~~180~~ ~~days~~ after ~~issuance~~180 days into shares of the Company’s common stock at a discount of 25% of the average of the three lowest ~~trading~~ closing bid prices during the 15 trading days immediately preceding the conversion. In On May ~~2023~~28, 2024 and May 30, 2024, the ~~Company~~note ~~repaid~~was ~~$140~~converted into 174,~~250~~675 inshares ~~principal~~of ~~and~~the Company’s common stock at an average price of $~~27,410~~0.393 per share in ~~related~~full ~~accrued~~satisfaction ~~interest~~of ~~and~~the ~~prepayment~~note. ~~penalty~~No ~~interest~~gain ~~pursuant~~or toloss ~~the~~was ~~two~~recognized ~~separate~~from ~~Convertible~~the ~~Notes~~transaction.

InOn ~~October~~September ~~2022~~6, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company ~~issued~~ issued a convertible promissory note in the principal amount of $5571,~~000~~225, receiving $4560,000 in net cash proceeds. The convertible promissory note had an original issue discount of $56,~~000~~475. AnFurther ~~additional~~ $54,~~000 in~~750 debt issue costs were deducted from the gross proceeds ~~from the note~~. The total of $1011,~~000~~225 recorded as debt discount is being amortized using the effective interest method through the maturity dates of the convertible promissory note. The convertible note is due in one year ~~after~~from the date of issuance, accrues interest at 128% per annum (22% upon the occurrence of an event of default) and is convertible after 180 days into shares of the Company’s common stock at a discount of 3025% toof the average of the three lowest ~~trading~~ closing bid prices during the 15 trading days immediately preceding the conversion. ~~During April and May of 2023, the Company repaid~~ ~~the~~On ~~$55,000~~March ~~in principal and $10~~14,~~372~~ in2024 ~~related accrued interest~~ and ~~prepayment~~March ~~penalty interest. To satisfy the obligation~~15, ~~in addition to the interest payments~~2024, the ~~Company~~note ~~repaid~~was ~~$23,360~~converted ~~principal~~into ~~in cash and issued to the note holder 1~~343,~~000,000~~385 shares of the Company’s common stock at an average price of $0.~~03164~~21572 per share in full satisfaction of the note. No gain or loss was recognized from the transaction.

OnIn ~~September 6~~March, ~~2022~~April and May of 2023, the Company entered into a Securities Purchase ~~Agreement~~Agreements with an accredited investor, pursuant to which the Company issued athree convertible promissory ~~note~~notes in the aggregate principal amount of $97212,~~625,~~025 (the “Convertible Notes”), receiving $85180,000 in net cash proceeds. The ~~convertible promissory~~Convertible ~~note~~Notes had an original issue discount of $819,~~875,~~275. ~~and~~The Company deducted $312,750 in additional debt issue costs ~~were deducted~~ from the gross proceeds it received from the Convertible Notes. The Company is amortizing a total of $1232,~~625~~025 recorded as debt discount ~~is being amortized~~ using the effective interest method through the maturity dates of the ~~convertible promissory~~Convertible ~~note~~Notes. The Convertible ~~convertible~~Notes ~~promissory~~are ~~note is~~ due in one year from the date of issuance, ~~accrues~~accrue interest at 8% per annum (22% upon the occurrence of an event of default) and isare convertible ~~after~~ 180 days after issuance into shares of the Company’s common stock at a discount of 25% ~~from~~(30% for the April 2023 note) of the average of the three lowest ~~trading~~closing bid prices during the 15 trading days immediately preceding the conversion. During ~~March~~ ~~and~~September ~~April of~~ 2023, the Company ~~repaid~~converted the $9770,~~625~~125 in principal and $42,~~279~~805 in accrued interest pursuant to ~~the~~a Convertible Note bydated ~~issuing~~March 1, 2023. To satisfy the obligation, the Company issued to the noteholder 1,~~902~~398,~~039~~760 shares of the Company’s common stock, at an average price of $0.05214 per share. No gain or loss was recognized from the transaction. In November 2023, the Company converted $59,675 in principal and $2,387 in accrued interest for settlement of the note issued in April and also converted $34,000 as a partial principal settlement of the note issued in May of 2023. As settlement of the notes, the Company issued to the noteholder 2,505,743 shares of the Company’s common stock at an average price of $0.~~05358~~03833 per share. No gain or loss was recognized from the transaction. In December 2023, the Company converted an additional $48,225 in principal and $3,289 in accrued interest to stock satisfying payment of the note issued in May through issuance of 1,350,396 shares of the Company’s common stock to the noteholder at an average price of $0.038147 per share. No gain or loss was recognized from the transaction. All of these notes have been satisfied in full.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 11 – NOTES PAYABLE - continued

In October, November, December of 2021, and March, April and May of 2022, the Company entered into Securities Purchase Agreements with three accredited investors, pursuant to which the Company issued six convertible promissory notes in the aggregate principal amount of $608,575, receiving $527,500 in net cash proceeds (the “Convertible Notes”). Convertible Notes had an original issue discount of $58,575. Additional debt issue costs of $22,500 were deducted from the gross proceeds from the Convertible Notes. The Company is amortizing a total of $81,075 recorded as debt discount using the effective interest method through the maturity dates of the Convertible Notes. The Convertible Notes are due in one year from the date of issuance, accrue interest at 8% per annum (22% upon the occurrence of an event of default) and are convertible 180 days after issuance into shares of the Company’s common stock at a discount of 25% of the average of the three lowest trading prices during the 15 trading days immediately preceding the conversion. As of May 31, 2022, the Company determined the value associated with the beneficial conversion feature in connection with the issuance of the Convertible Notes resulted in a further increase in the debt discount of $55,918, which will be amortized using the effective interest method through the dates the notes are initially convertible. The additional debt discount was subsequently reversed during the first quarter of fiscal 2023 pursuant to the adoption of ASU 2020-06 as follows. During October and November 2022, the Company exchanged $114,125 of principal and $4,150 of accrued interest of the single Convertible Note entered into on April 14, 2022 for 1,468,042 shares of the Company’s common stock, at an average price of $0.0806 per share.

On September 2, 2022 the Company repaid the single Convertible Note entered into on March 1, 2022. The repayment totaled $64,088, comprised of $53,625 principal and $10,463 in related accrued interest and prepayment penalty interest. The Company recorded the related deferred debt discount and debt issue costs, totaling $4,371, as interest expense.

On June 27, 2022, the Company repaid the single Convertible Note entered into in December 2021. The repayment totaled $65,745, comprised of $55,000 in principal and $10,745 in related accrued interest and prepayment penalty interest. The Company recorded the related deferred debt discount and debt issue costs, totaling $4,435, as interest expense.

During April and May 2022, the Company repaid the Convertible Notes entered into in October and November 2021. The repayment for the remaining Convertible Notes totaled $136,479, comprised of $114,125 in principal and $22,354 in related accrued interest and prepayment penalty interest. The Company borrowed $136,479 from Cat Creek to repay these Convertible Notes.

The Convertible Note issued in November 2021 was repaid in an amount that totaled $85,469, comprised of $71,500 in principal and $13,969 in related accrued interest and prepayment penalty interest.

Upon the repayment of the October 2021 and November 2021 Convertible Notes, the Company recorded the related remaining outstanding debt discount and debt issue costs, totaling $12,388, as interest expense.

In August 2020, the FASB issued ASU 2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. This accounting standard update, which was adopted by the Company effective June 1, 2022, impacts the ongoing accounting of the convertible notes.

The Company adopted this standard using the modified retrospective method of transition and applied the guidance to transactions outstanding as of the beginning of the current fiscal year on June 1, 2022. Transactions that were settled (or expired) during prior reporting periods are unaffected. The cumulative effect of the change is recognized as an adjustment to the opening balance of retained earnings at the date of adoption. Due to the adoption of this accounting standard update under the modified retrospective method, prior periods were not restated. Upon adoption, the Company recorded a $16,200 cumulative-effect adjustment that increased the opening balance of retained earnings on the consolidated balance sheet due to the reduction in non-cash interest expense associated with the historical separation of debt and equity components for the Company’s Convertible Notes. The Company also recorded a $39,718 increase to convertible debt and a decrease to additional paid-in capital of $55,918 due to no longer separating the embedded conversion feature of the Convertible Notes. This adoption did not have a material impact on the Company’s consolidated statement of cash flows.

The Company has the right to prepay the Convertible Notes at any time during the first six months the Convertible Notes are outstanding at the rate of (a) 110% of the unpaid principal amount of such note plus interest, during the first 120 days the note is outstanding, and (b) 115% of the unpaid principal amount of such note plus interest between days 121 and 180 after the issuance date of the note. The Convertible Notes may not be prepaid after the 180^thday following the issuance date unless the applicable note holders agree to such repayment and such terms.

The Company agreed to reserve the number of shares of its common stock that may be issuable upon conversion of the Convertible Notes while the Convertible Notes are outstanding.

1719

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1113 – NOTES PAYABLE - continued

The Convertible Notes provide for standard and customary events of default, such as failing to timely make payments under the Convertible Notes when due, the failure of the Company to timely comply with the Securities Exchange Act of 1934 reporting requirements and the failure to maintain a listing on the OTC Markets. The Convertible Notes also contain customary positive and negative covenants. The Convertible Notes include penalties and damages payable to the noteholders in the event the Company does not comply with the terms of the Convertible Notes, including in the event the Company does not issue shares of common stock to the noteholders upon conversion of the Convertible Notes within the time periods set forth therein. Additionally, upon the occurrence of certain defaults, as described in the Convertible Notes, the Company is required to pay the noteholders liquidated damages in addition to the amount owed under the Convertible Notes (including in some cases up to 300% of the amount of the applicable Convertible Note).

At no time may the Convertible Notes be converted into shares of the Company’s common stock if such conversion would result in the noteholders and their affiliates owning shares representing in excess of 4.99% of the then outstanding shares of the Company’s common stock.

The proceeds from the Convertible Notes could be used by the Company for general corporate purposes.

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 will accrue 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. Interest on the Note is paid monthly.

12% Nine Month Promissory Note

On ~~February~~ May 22, 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 $6694,~~000~~ 580 receiving $5075,000 in net cash proceeds. The promissory note had an original issue discount of $1114,~~000~~580. In addition, $5,000 of debt issue costs were deducted from the gross proceeds to the Company. The promissory note is due ~~November~~February 3028, ~~2024~~2025 and is repaid with the first installment of $3652,~~960~~964.50 due ~~August~~November 30, 2024 and three equal monthly installments of $1217,~~320~~655 starting ~~September~~December 30, 2024. 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 3539% from the lowest closing bid price during the ten trading days immediately preceding the conversion date. As of August 31, 2024, the principal balance of the note was $94,580.

On February 22, 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 $66,000 receiving $50,000 in net cash proceeds. The promissory note had an original issue discount of $11,000. In addition, $5,000 of debt issue costs were deducted from the gross proceeds to the Company. The promissory note is due November 30, 2024 and is repaid with the first installment of $36,960 due August 30, 2024 and three equal monthly installments of $12,320 starting September 30, 2024. 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 39% from the lowest closing bid price during the ten trading days immediately preceding the conversion date. As of August 31, 2024 $36,960 was outstanding.

13% Nine Month Promissory Note

On December 11, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company issued a 13% promissory note in the principal amount of $74,750 receiving $60,000 in net cash proceeds. The promissory note had an original issue discount of $9,750. In addition, $5,000 of debt issue costs were deducted from the gross proceeds to the Company. The promissory note is due September 15, 2024 and is repaid in nine equal installments of $9,385.23 with the first payment due January 15, 2024. 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. The balance owed on May 31, 2024 was $37,540 and $46,926 was repaid during fiscal year 2024. On August 31, 2024, the last payment of $9,385 was outstanding.

15% Nine Month Promissory Note

On October 26, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company issued a promissory note in the principal amount of $97,750 and received $80,000 in net cash proceeds. The promissory note had an original issue discount of $12,750 and $5,000 in debt issue costs were deducted from the gross proceeds. The Company is amortizing the total of $17,750 recorded as debt discount using the effective interest method through the maturity dates of the convertible promissory note. The note is due nine months following the date of issuance and accrues interest at 15% per annum (22% upon the occurrence of an event of default). Accrued, unpaid interest and outstanding principal is due in nine equal monthly payments of $12,490.23, starting on November 30, 2023. 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. On August 31, 2024, the note was fully repaid.

1820

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1113 – NOTES PAYABLE - continued

12% One Year Promissory Notes

On ~~May~~January 205, ~~2022~~2023, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company ~~issued~~ issued a promissory note in the principal amount of $~~200~~197,~~200~~313, ~~and~~receiving ~~received~~ $~~175~~150,000 in net cash proceeds. ~~On January 5, 2023, the note was satisfied in full with a final payment of $67,266.~~ The ~~promissory~~convertible promissory note had an original issue discount of $21,450, and an additional $3,750 in debt issue costs were deducted from the gross proceeds. The ~~Company was amortizing the~~ total of $25,200 recorded as debt discount is being amortized using the effective interest method through the maturity ~~dates~~date of the convertible promissory note. The note ~~was~~is due one year following the date of issuance and ~~accrued~~accrues interest at 12% per annum (22% upon the occurrence of an event of default) and upon event of default are convertible at 75% of the lowest closing bid price during the 10 trading days immediately preceding the conversion. Accrued, unpaid interest and outstanding principal ~~was~~is due in ten equal monthly payments of $22,~~422~~099.4010, starting on ~~July~~February 15, ~~2022~~2023. InThe ~~the~~note ~~event~~and ofaccrued ~~default~~interest ~~(including~~were arepaid ~~missed payment),~~in ~~the~~full ~~note~~and ~~was convertible at~~ the ~~option~~note ofcanceled ~~the~~with ~~investor into shares of~~ the ~~Company’s~~last ~~common stock at a discount of 25%~~and ~~from~~final ~~the~~payment ~~lowest~~made ~~closing~~November ~~bid price during the ten trading days immediately preceding the conversion date~~2023.

On January 5, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company issued a promissory note in the principal amount of $197,313, receiving $150,000 in net cash proceeds. The convertible promissory note had an original issue discount of $21,450, and an additional $3,750 in debt issue costs were deducted from the gross proceeds. The total of $25,200 recorded as debt discount is being amortized using the effective interest method through the maturity date of the convertible promissory note. The note is due one year following the date of issuance and accrues interest at 12% per annum (22% upon the occurrence of an event of default). Accrued, unpaid interest and outstanding principal is due in ten equal monthly payments of $22,099.10, starting on February 15, 2023. 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 25% from the lowest closing bid price during the ten trading days immediately preceding the conversion date. The note and accrued interest were repaid in full and the note canceled with the last and final payment made November 2023.

Promissory Note

The Company entered into 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 August 31, 2024 and 2023 the $750,000 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.

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.

Secured Convertible Debt

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 notes are secured by the membership interest in Hell Creek Crude, LLC, a wholly owned subsidiary of the Company. Pursuant to this Note Purchase Agreement, during September, October and November 2022, the Company issued four promissory notes in the aggregate principal amount of $290,000 and accrued interest at 10% per annum, later increased to 12% per annum. In December 2022, January 2023 and February 2023, the Company issued three additional promissory notes totaling $250,000. During June 2023 and August 2023, the Company entered into an additional $85,000 of secured convertible promissory notes increasing the aggregate principal issued to $625,000. Under the Note Purchase Agreement, the Company may issue additional promissory notes, up to the $7,500,000 total principal amount. The promissory notes accrue interest on the outstanding principal sum at the rate of 12.0% per annum, payable quarterly starting September 30, 2023, and are 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. In January 2024, noteholders contributed $575,000 of their notes plus accrued interest of $73,~~204~~695 to the Participation Agreement pertaining to the three well drilling program in the Midfork Field in Montana (See Footnote 1). The notes ~~will~~were beexchanged ~~repaid~~for ~~from~~a ~~funds~~net working interest in the well and will participate in cash flows produced by the first well drilled. In the event of a dry hole, the notes will be reinstated at $648,204 and accrue interest on that amount thereafter. On July 1, 2024, a promissory note totaling $50,000 was extinguished and exchanged for 100,000 shares of Laredo common stock pursuant to a stock purchase agreement. As of August 31, 2024, no notes were outstanding.

~~Revolving Note~~21

On May 25, 2022, the Company entered into a Revolving Credit Note (the “Revolving Note”) with AEI Management, Inc. (“AEI”), with a maximum draw amount of $1,500,000.00. In May 2022 and June 2022, the Company borrowed $62,858 and $48,000, respectively, under the Revolving Note. The Revolving Note had a maturity date of May 1, 2023, or such later date as requested by the Company and agreed in writing by AEI in its sole discretion. On May 22, 2023, the Revolving Note principal of $110,858 and accrued interest of $19,510 was paid and the Revolving Note canceled.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1113 – NOTES PAYABLE - continued

Alleghany Notes

Schedule of Notes Payable – Related Party

	August 31,		May 31,
	2023		2023
	2024		2024
Total note payable – Alleghany	$	617,934	$	617,934
Less amounts classified as current		617,934		617,934
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 ~~February~~August 2931, 2024 and May 31, ~~2023~~2024, the Senior Consolidated Note is recorded as as current and remains outstanding.

Paycheck Protection Program Loan

Schedule of Paycheck Protection Program

	February 29,		May 31,
	August 31,		May 31,
	2024		~~2023~~2024
Total PPP Loan	$	~~970~~937,~~956~~224	$	~~986~~954,~~598~~112
Less amounts classified as current		6764,~~073~~866		~~449~~66,~~624~~379
PPP loan, excluding current portion	$	~~903~~872,~~883~~358	$	~~536~~887,~~974~~733

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 Flexibility Act also provides that if a borrower does not apply for forgiveness of a loan within 10 months after the last day of the measurement period (“covered period”), the PPP loan is no longer deferred and the borrower must begin paying principal and interest. In addition, the Flexibility Act extended the length of the covered period from eight weeks to 24 weeks from receipt of proceeds, while allowing borrowers that received PPP loans before June 5, 2020 to determine, at their sole discretion, a covered period of either 8 weeks or 24 weeks.

No interest or principal will be due during the deferral period, although interest will continue to accrue over this period. As of May 31, 2022, interest totaling $15,353 is recorded in accrued interest on the accompanying consolidated balance sheets. After the deferral period and after considering any loan forgiveness applicable to the Note, any remaining principal and accrued interest will be payable in substantially equal monthly installments over the remaining term of the Note.

2022

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1113 – NOTES PAYABLE - continued

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 as of ~~February~~May 2931, 2024, the Company owes $65,~~925~~264 with respect to the remaining balance on the first Note.

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~~.32~~ which includes interest. The Company made the first payment under the Plan in ~~December~~ 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~~ amount will be subject to collection activities by the Department of Treasury. The Company may also be subject to additional accrued ~~interest~~ interest and collection fees of 30% or more if it does not make the payments pursuant to the Plan. As of ~~February~~August 2931, 2024, the Company is current and compliant with the restructured payment plan. As of ~~February~~August 2931, 2024, the Company owes $~~964~~937,~~032~~224 with respect to the remaining ~~balance~~ balance on the Second Note.

NOTE 1214 – ~~EQUITY~~COMMITMENTS ~~METHOD~~AND ~~INVESTMENT~~CONTINGENCIES

~~Cat Creek Holdings~~Litigation

On ~~June~~March 3020, ~~2020~~2023, ~~Laredo~~Capex ~~Oil~~Oilfield Services, Inc. ~~entered~~(“Capex”) ~~into~~filed a ~~Limited~~lawsuit ~~Liability~~against ~~Company~~Lustre ~~Agreement~~in (the ~~“LLC~~Montana ~~Agreement”)~~Tenth ofJudicial District ~~Cat~~Court, ~~Creek~~Petroleum County, ~~a Montana~~demanding ~~limited~~payment ~~liability~~of ~~company~~$377,190 ~~formed~~plus asinterest aand ~~joint~~collection ~~venture~~costs for ~~the~~services ~~purchase~~provided ofby Capex to drill the ~~Cat~~Olfert ~~Creek~~11-4 ~~Properties~~well. InOn ~~accordance~~January ~~with~~29, ~~the LLC Agreement~~2024, the ~~Company~~court ~~invested~~issued ~~$448,900~~a ~~for~~Stipulated ~~50%~~Judgment ofand ~~the~~Order ~~ownership~~in ~~interests~~favor inof ~~Cat~~Capex ~~Creek~~for ~~using~~$354,267.29 plus ~~cash~~interest onin ~~hand.~~the ~~Each~~amount of ~~Lipson~~$79,224.89 ~~Investments LLC~~plus future accruing costs and ~~Viper~~interest ~~Oil~~of &18% ~~Gas,~~per ~~LLC,~~annum. ~~the~~The ~~other~~same ~~two~~day, ~~members~~Lustre ofentered into ~~Cat~~a ~~Creek,~~Payment ~~have~~Arrangement ~~ownership~~Plan ~~interests~~to inpay ~~Cat~~$5,000 ~~Creek~~per ofmonth ~~25%~~until inthe ~~consideration~~judgement ~~of their~~is ~~respective~~satisfied. ~~investments~~As of ~~$224~~August 31,~~450~~ ~~each.~~2024 ~~Cat~~and ~~Creek~~May is31, ~~managed~~2024, respectively, bythe aestimated ~~Board~~amounts ofdue ~~Directors~~to ~~consisting~~Capex oftotaling ~~four directors~~$428,952 ~~two~~and of$428,019 ~~which shall~~have bebeen ~~designated~~recorded byin ~~the~~accounts ~~Company~~payable.

On ~~July~~May 118, ~~2020~~2023, ~~Cat~~Capstar ~~Creek~~Drilling, ~~entered~~Inc.(“Capstar”) ~~into~~filed ana ~~Asset~~lawsuit ~~Purchase~~against ~~and~~Lustre ~~Sale~~in ~~Agreement (~~the ~~“Purchase~~Montana ~~Agreement”)~~Seventeenth ~~with~~Judicial ~~Carrell~~District Court, ~~Oil~~Valley ~~Company (“Seller”)~~County, demanding payment of $298,050 plus interest and collection costs for ~~the~~services ~~purchase~~provided ofby ~~the~~Capstar ~~Cat~~to ~~Creek~~drill ~~Properties~~the Olfert 11-4 well. On ~~September~~July 2118, ~~2020~~2024, ~~upon~~the ~~resolving~~court issued a ~~purchase~~Order ~~contingency~~to ~~under~~ Adopt Stipulation to Judgment in favor of Capstar in the ~~Cat~~sum ~~Creek~~of ~~Purchase~~$276,815 principal ~~Agreement~~balance, ~~Seller~~plus ~~received~~interest ~~consideration~~in the amount of $~~400~~49,~~000~~675, ~~taking~~plus ~~into~~court ~~effect~~costs ~~certain~~for ~~adjustments~~a ~~resulting~~total ~~from~~judgment ~~pre-~~of $326,650 with post judgment interest of 10% per annum. As of August 31, and ~~post-effective~~May ~~date~~31, ~~revenue~~2024, ~~expense~~respectively, the estimated amounts due to Capstar totaling $341,994 and ~~allocations~~$333,354 have been recorded in accounts payable.

~~Summarized~~On ~~Financial~~August ~~Information~~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. A trial date has been set for November 19, 2024 and Lustre intends to negotiate ongoing payment terms with Warren Well prior to that date. As of August 31, 2024 and May 31, 2024, respectively, the estimated amounts due to Warren Well totaling $201,439 and $196,679 have been recorded in accounts payable.

~~The~~On ~~following~~September ~~table~~16, ~~provides~~2024, ~~summarized~~Lustre ~~financial~~has ~~information~~acquired ~~for~~three ~~the~~saltwater ~~Company’s~~disposal ~~ownership~~wells ~~interest~~ in ~~Cat~~Valley ~~Creek~~County, ~~accounted~~Montana ~~for~~and ~~under the~~will ~~equity~~attempt ~~method for~~to dewater and bring the ~~February~~Olfert ~~29,~~11-4 ~~2024~~well ~~and~~into ~~February~~production ~~29,~~as ~~2023~~soon ~~periods~~as ~~presented~~practical and ~~has~~reimburse ~~been~~all ~~compiled~~unpaid ~~from~~vendors, ~~respective~~including ~~company financial statements~~Capex, ~~reflects~~Capstar ~~certain~~and ~~historical~~Warren ~~adjustments~~Well, from ~~and~~proceeds isfrom ~~reported~~such ~~on a two-month lag~~production.

Summarized Financial Information

Balance Sheet:	As of February 29, 2024		As of May 31, 2023
Current Assets	$	88,796	$	82,890
Non-current Assets		885,719		941,340
Total Assets	$	974,515	$	1,024,230
Current Liabilities	$	206,214	$	83,342
Non-current Liabilities		453,931		441,901
Shareholders’ equity		314,370		498,988
Total Liabilities and Shareholders’ Equity	$	974,515	$	1,024,230

Results of Operations:	Nine Months Ended February 29, 2024			Nine Months Ended February 28, 2023
Revenue	$	488,999		$	457,409
Gross Profit		60,338			401,299
Net Loss	$	(184,617	)	$	(74,502	)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 12 – EQUITY METHOD INVESTMENT - continued

Olfert 11-4 Holdings

The following table provides summarized financial information for the Company’s ownership interest in Olfert #11-4 Holding, which is accounted for under the equity method for the February 29, 2024 period presented and has been compiled from respective financial statements and reflects certain historical adjustments. Results of operations are excluded for periods prior to the acquisition. See Note 8 for further information.

Summarized Financial Information

Balance Sheet:	As of February 29, 2024
Current Assets	$	508
Non-current Assets		1,859,195
Total Assets	$	1,859,703
Accounts payable		5,750
Shareholders’ equity		1,853,593
Total Liabilities and Shareholders’ Equity	$	1,859,703

Results of Operations:	Nine Months Ended February 29, 2024
Revenue	$	0
Gross Profit		0
Net Loss	$	(0	)

NOTE 13 – COMMITMENTS AND CONTINGENCIES

On February 4, 2021, Lustre filed a lawsuit captioned Lustre Oil Company LLC and Erehwon Oil & Gas, LLC v. Anadarko Minerals, Inc. and A&S Mineral Development Co., LLC in the Montana Seventeenth Judicial District Court for Valley County to initiate a quiet title action confirming Lustre’s rights under certain mineral leases in Valley County, Montana. Lustre is also seeking damages with respect to actions taken by A&S Mineral Development Co., LLC to improperly produce oil on the property subject to Lustre’s mineral leases. On January 14, 2022, the District Court granted the defendants’ Motion to Dismiss without addressing the merits of Lustre’s quiet title action. Lustre appealed the decision to the Montana Supreme Court. On April 6, 2023, in a unanimous decision, the Montana Supreme Court reversed the District Court’s decision related to Lustre’s quiet title action and remanded the case to the District Court for further proceedings. On June 1, 2023, Lustre filed a First Amended Complaint with the District Court reopening the original suit with a different judge. On February 27, 2024, the Company announced that Lustre entered into a mutually agreeable Settlement Agreement between Lustre, Erehwon Oil & Gas, LLC (“Erehwon”), and A&S Minerals Development Company, LLC (“ASMD”), (the “Settlement Agreement”). The confidential Settlement Agreement contains an undisclosed cash amount and settles the quiet title dispute between the parties. 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 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 same well. 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 same well. Lustre intends to bring the Olfert 11 well into production as soon as possible and reimburse all unpaid vendors from proceeds from such production.

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 Securities Purchase Agreement ~~with Alleghany described above~~, ~~the~~Laredo ~~Company~~ agreed to pay to Alleghany a revenue royalty of 5.0% of the Company’s future revenues and net profits relating to oil, gas, gas liquids and all other hydrocarbons, subject to certain adjustments, for a period of seven years ending December 31, 2027. Further, due to the ~~Company’s~~ loan nonpayment prior to December 31, 2022, the revenue royalty, as defined in the ~~Securities~~ Purchase Agreement, increased from 5% to 6%.

In accordance with the Secured Promissory Note, ~~the~~Laredo ~~Company~~ agreed to pay ~~the Lender~~ a revenue royalty of 0.5% on consolidated revenue of ~~the~~Laredo ~~Company~~ arising from the direct production of oil and gas. The royalty period extends from June 1, 2022 through May 31, 2027.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 14 – SUBSEQUENT EVENTS

None.

~~ITEM 2.~~NOTES ~~MANAGEMENT’S~~TO ~~DISCUSSION~~CONDENSED ~~AND~~CONSOLIDATED ~~ANALYSIS OF~~ FINANCIAL ~~CONDITION~~STATEMENTS ~~AND RESULTS OF OPERATIONS~~(UNAUDITED)

~~This~~NOTE ~~report~~15 ~~contains~~– ~~forward-looking~~SUBSEQUENT statements that involve risk and uncertainties. We use words such as “anticipate”, “believe”, “plan”, “expect”, “future”, “intend”, and similar expressions to identify such forward-looking statements. Investors should be aware that all forward-looking statements contained within this filing are good faith estimates of our management as of the date of this filing. Our actual results could differ materially from those anticipated in these forward-looking statements.EVENTS

~~Impact~~On ofSeptember ~~COVID~~16, 2024, Lustre Oil Company, LLC acquired the Cranston salt-19water todisposal ~~our~~well ~~Business~~(“SWD”) and two additional shut-in wells that will be converted into SWD wells, all located in Valley County, Montana

~~The~~Between ~~long-term~~August ~~impacts~~31, of2024 ~~the global emergence of novel coronavirus 2019 (“COVID-19”) variants on our business are currently unknown. In an effort to protect the health~~ and ~~safety~~October ~~of our employees~~15, ~~we took proactive~~2024, ~~aggressive action from~~ the ~~earliest~~Company ~~signs~~has ofraised ~~the outbreak in China to adopt social distancing policies at our locations~~$375,000 ~~including~~through ~~working from home, limiting~~ the ~~number~~issuance of ~~employees attending meetings~~872,093 ~~reducing~~shares ~~the number~~ of ~~people~~the inCompany’s ~~our~~common stock ~~sites~~ at ~~any~~an ~~one~~average ~~time,~~price ~~and~~of ~~suspending employee travel~~$0.43 Weper ~~anticipate that the global health crisis caused by COVID-19 variants will continue to negatively impact business activity~~share.

We will continue to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and stakeholders, or as required by federal, state, or local authorities. It is not clear what potential effects any such alterations or modifications may have on our business, including the effects on our customers, employees, and prospects, or on our financial results for the remainder of fiscal year 2024.

Company Description and Operations

Prior Operations

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 enhanced recovery methods. From June 14, 2011 to December 31, 2020, we were a management services company, managing the acquisition and operation of mature oil fields, focused on the recovery of “stranded” oil from those mature fields using enhanced oil recovery methods for our then sole customer, Stranded Oil Resources Corporation, or SORC, a wholly owned subsidiary of Alleghany Corporation, or Alleghany. We performed those services in exchange for a quarterly management fee and reimbursement of our employee related expenses from SORC. Such fees and reimbursements were effectively all of our revenues prior 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%, subsequently adjusted to 6.0%, 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 not conducting any ongoing operations.

Under the Securities Purchase Agreement with Alleghany, we also entered into a Consulting Agreement, under which Alleghany paid us an aggregate amount of approximately $1.245 million during calendar year 2021 in exchange for our providing Alleghany with one to three years of consulting services from certain of our employees, including Mark See, our Chief Executive Officer. We no longer receive any management fees or reimbursement payments from Alleghany for the compensation of any of our employees.

Current Operations

Prior to December 31, 2020, 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. We began drilling an exploratory well in Montana during May 2022. That well, named the Olfert 11-4 well, has not yet been completed or put into production. More recently, we are continuing our efforts to complete the Olfert 11-4well and begin commercial production. We have also developed relationships with Texakoma Exploration and Production, LLC, or Texakoma, and Erehwon Oil & Gas, LLC, or Erehwon. designed to develop our acquired mineral property acreage. We also have raised $2,034,000 from accredited investors pursuant to a participation agreement to fund the development of up to three wells in the Midfork oil field in Montana. We are continually attempting to raise additional funds to develop our other mineral property interests we have purchased. We also have a 50% interest in the Cat Creek oil field, located in Montana. Our various projects and relationships are described in more detail below. Our ability to secure additional funding will determine whether we can achieve any future production for the acreage, and if we can secure such financing, the pace of field development.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ~~– continued~~

EXPLANATORY NOTE

This Quarterly Report on Form 10-Q (this “Form 10-Q”) of Laredo Oil, Inc., a Delaware corporation, (the “Company,” “we,” “our,” or “us”) for the quarter ended August 31, 2024, includes consolidated comparative financial statements and disclosures for the quarter ended August 31, 2023 which have been restated from the Form 10-Q previously filed for the quarter ended August 31, 2023 with the Securities and Exchange Commission (the “SEC”) on October 23, 2023 (the “2023 Original Filing”).

Reference Note 2 in the accompanying Notes to Financial Statements for detailed disclosure of items amended by this restatement.

Restatement of the Financial Statement for Fiscal Quarter Ended August 31, 2023

This Form 10-Q restates the 2023 Original Filing and related disclosures arising from an impairment analysis during the 2024 audit and the related reaudit of the Company’s fiscal year 2023 financial statements.

The reaudit requirement was authorized by the Company during the audit engagement for the year ended May 31, 2024. For the year ended May 31, 2024, a new auditing firm was engaged to replace the previous auditing firm, BF Borgers CPA PC (“Borgers”), who performed the audit in connection with the financial statements for the fiscal year ended May 31, 2023 included in the 2023 Original Filing.

During the 2024 audit that was in progress, on May 3, 2024 the SEC entered, and the Company became aware of, an order instituting settled administrative and cease-and-desist proceedings against Borgers, which order includes denying Borgers the privilege of appearing or practicing before the SEC as an accountant. The Company and its new auditing firm determined that the 2023 audit performed by Borgers should not be included in the 2024 filing, and the Company expanded its engagement with the new auditing firm to include a reaudit of the 2023 financial statements.

In the course of the 2023 reaudit, procedures were applied that led the Company and the new auditors to believe sufficient audit procedures were not performed by Borgers when auditing the 2023 financial statements.

For the year ended May 31, 2024, management applied accounting procedures to examine the need for an impairment adjustment to the carrying value of its unevaluated oil and natural gas properties. A triggering event related to the evaluation of the economic viability related to the Company’s Olfert 11-4 well on May 31, 2024 was noted. Although negotiation discussions with salt-water disposal well operators in the area have been in progress for over two years, there was no assurance that access would, in fact, be attained in a timely manner. Additionally, the value of the Company’s Cat Creek Holdings, LLC (“Cat Creek”) equity method investment was determined to have no continuing value. The conclusion reached was to impair 100% of the carrying value of the Company’s oil assets associated with the well and the remaining Cat Creek investment balance as of May 31, 2023. The new auditing firm recommends that this higher impairment is more in line with the standard practices within the oil and gas exploration industry during periods in which unevaluated oil wells and loss producing investments are recorded.

Given the combined auditing engagement for 2023 with the audit for 2024, the Company recorded an impairment adjustment as of May 31, 2023 and at May 31, 2024. As a result, our previously issued 2024 financial statements included in the Original Filing should no longer be relied upon.

Except for the changes relating to this impairment adjustment for 2023 and changes relating to asset adjustments, no other changes have been made to the consolidated financial statements for the year ended May 31, 2023. Reference Note 2 to the consolidated financial statements.

References to our website throughout this Form 10-Q are provided for convenience only and the content on our website does not constitute a part of, and shall not be deemed incorporated by reference into, this filing.

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, 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 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 Annual Report on Form 10-K, any exhibits to this Annual Report on Form 10-K and other public statements we make.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Business

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 enhanced recovery methods. From June 14, 2011 to December 31, 2020, we were a management services company, managing the acquisition and operation of mature oil fields, focused on the recovery of “stranded” oil from those mature fields using enhanced oil recovery methods for our then sole customer, Stranded Oil Resources Corporation, or SORC, a wholly owned subsidiary of Alleghany Corporation, or Alleghany. We performed those services in exchange for 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 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 not conducting any ongoing operations.

Prior to December 31, 2020, 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. We began drilling an exploratory well in Montana during May 2022. That well, named the Olfert 11-4 well, has not yet been completed or put into production. More recently, we are continuing our efforts to complete the Olfert 11-4 well and begin commercial production. We have also developed relationships with Texakoma Exploration and Production, LLC, or Texakoma, and Erehwon Oil & Gas, LLC, or Erehwon, designed to develop our acquired mineral property acreage. We also have raised $2,034,000 from accredited investors pursuant to a participation agreement to fund the development of up to three wells in the Midfork oil field in Montana. The first well, Reddig 11-21, has been drilled and is in the process of being put into production. We are continually attempting to raise additional funds to develop our other mineral property interests we have purchased. We also have a 50% interest in the Cat Creek oil field, located in Montana. Our various projects and relationships are described in more detail below. Our ability to secure additional funding will determine whether we can achieve any future production for the acreage, and if we can secure such financing, the pace of field development.

Relationship with Erehwon Oil & Gas, LLC

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 December 2023, we entered into a Participation Agreement, through Hell Creek Crude, LLC, our wholly owned subsidiary, (“HCC”), Erehwon, and various accredited investors. The Participation Agreement provided us with $2,034,000 to acquire certain leases and to drill a development well in the Midfork Field in Montana. Several of the investors also hold $575,000 of our convertible debt, plus accrued interest of $73,~~204~~317, which indebtedness is included as investments under the Participation Agreement.

Until the total of the $2,682,~~204~~317 in cash, notes and accrued interest is repaid to the various investors under the terms of the Participation Agreement, the net working interest payments from the Participation Agreement will be split between the various investors and HCC and Erehwon, collectively on a 90%/10% basis. After the repayment to the investors, the split between the investors, on one hand, and HCC and Erehwon, on the other hand, will be on a 50%/50% basis. After the development well is drilled under the Participation Agreement, the investors will have the option to invest in up to two additional wells in the field.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

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.

We also entered into the Olfert Holdings operating agreement, under which we agreed to make a capital contribution to Olfert Holdings in the amount of $500,000, out of a total of $1,500,000 of capital to be raised by Olfert Holdings. As of ~~February~~May 2931, 2024, we were credited with a contribution of $7859,~~373~~935 in market value of well development costs, representing a 4.4% interest in Olfert Holdings. Since then, other investors, including our ~~chief~~Chief ~~financial~~Financial ~~officer~~Officer, assumed and funded our remaining capital commitment under the Olfert Holdings operating agreement.

As part of our annual impairment analysis and in conjunction with our annual financial audit, we decided to take an accounting impairment charge to reduce the asset value of the Olfert 11-4 well to salvage value. Although we still are working to put the well into production, it has been two 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, we will continue to complete the well and bring it into production.

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.

Under the terms of athe Development Agreement, Texakoma agreed to pay Lustre and Erehwon, jointly, the following amounts: (i) $175,000 on or ~~before~~ before July 21, 2023; and (ii) another $175,000 upon the “spudding” of the initial test well subject to rig availability. Upon the spudding of that test well, Lustre and Erehwon were required to deliver to Texakoma a partial assignment of an 85% working interest in in the oil and gas leases covering the first two initial drilling and spacing units. The first payment under the Development Agreement ~~was~~ was paid by Texakoma at the end of August 2023, and the second $175,000 ~~second~~ payment on September 29, 2023.

The two test wells ~~have~~were ~~been~~ successfully drilled and Texakoma ispaid ~~obligated to pay~~ 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~~those two wells. In March 2024, ~~Texakoma~~ Texakoma exercised its option to participate in the development of the remainder of the Lustre Field Prospect. By exercising its option, ~~Texakoma~~ ~~has~~ Texakoma agreed to drill eight additional wells, with Lustre and Erehwon having a 15% working interest carried through the tanks, and to pay Lustre $706,603 spread over four months, 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 May 31, 2024, $377,901 of the contractual amount was settled. The remaining balance was paid as of August 1, 2024. The working and net revenue interest in any wells drilled subsequent to the first ten wells will be shared by Texakoma and Lustre and Erehwon, jointly, on a 50:50 basis. Following the Texakoma transaction, we will retain a 100% leasehold interest and full control of an additional 30,556 net mineral acres in northeastern Montana at the western edge of the Williston Basin.

25Additional Acreage North of the Fort Peck Reservation

We are in the process of raising $7.5 million to drill three exploratory wells by selling units of West Fork Resources, LLC. The purpose of the package is to prove up portions of our over 30,000 acres of mineral rights located north of the Fort Peck Reservation at the western edge of the Williston Basin.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

Liquidity and Capital Resources

~~Cat~~Wells ~~Creek~~associated ~~Holdings~~with ~~LLC~~the ~~Investment~~Texakoma agreement and the HCC well described above are being put into production pending operational completion of the Cranston saltwater disposal well. Until we receive adequate revenue from those wells, any cash needed for operations and oil field expansion and development will most likely come from the sale of our debt and equity securities. From May 31, 2024 through October 14, 2024, we have raised $800,000 from the sale of 1,811,628 shares of unregistered common stock.

OnOur ~~June~~cash ~~30,~~and ~~2020,~~cash weequivalents ~~entered~~and ~~into~~restricted ~~the~~cash ~~Limited~~at ~~Liability~~August ~~Company Agreement of Cat Creek Holdings LLC~~31, a2024 ~~Montana~~was ~~limited liability company~~$1, ~~with~~935,310. Our ~~Lipson~~total ~~Investments~~debt ~~LLC~~outstanding ~~and~~as ~~Viper~~of ~~Oil~~August ~~& Gas~~31, ~~LLC.~~2024 was ~~The~~$3,031,212, ~~limited~~including ~~liability~~(i) ~~company~~$617,934 ~~was~~owed ~~formed~~ to ~~purchase~~Alleghany, ~~certain~~which ~~oil~~is ~~and~~classified ~~gas~~as ~~properties in~~a ~~the~~current ~~Cat~~note ~~Creek~~payable, ~~Field~~and in(ii) ~~Petroleum~~$937,224 ~~County~~pursuant ~~and~~to notes ~~Garfield~~under ~~County in~~ the ~~State~~Paycheck ofProtection ~~Montana.~~Program, Onor ~~July 1~~PPP, ~~2020,~~of ~~Cat~~which ~~Creek~~we ~~Holdings~~have ~~entered~~classified ~~into an~~$872,358 ~~Asset~~as ~~Purchase~~long-term ~~and~~debt, ~~Sale~~net ~~Agreement~~of ~~with~~the ~~Carrell~~current ~~Oil~~portion totaling ~~Company~~$64,866, ~~under~~ which ~~Cat~~is ~~Creek~~classified ~~Holdings~~as ~~agreed~~a tocurrent ~~pay~~note ~~Carrell~~payable, ~~Oil~~(iii) $~~400~~123,~~000~~894 inshort ~~cash, subject~~term toconvertible ~~certain~~notes ~~revenue adjustments~~ and ~~expense~~bridge ~~and~~security ~~tax allocations~~, innet of ~~exchange~~deferred ~~for~~debt ~~the~~discount, ~~Cat~~(iv) ~~Creek~~a ~~Field properties. We invested~~ $~~448~~310,~~900 in~~061 ~~Cat~~revolving ~~Creek~~note ~~Holdings~~classified inas ~~exchange~~short-term, ~~for~~(v) a ~~50%~~$750,000 ~~ownership~~note ~~interest.~~payable ~~Lipson~~due ~~Investments~~to ~~LLC~~Cali ~~and~~Fields ~~Viper Oil & Gas,~~ LLC, ~~the other two members~~ ofclassified ~~Cat~~as ~~Creek Holdings~~short-term, ~~have~~and ~~ownership~~(vi) ~~interests~~a ~~of 25% each~~$292,099 ~~which~~note ~~they~~payable ~~received~~due ~~for~~to ~~their~~our ~~respective~~Chief ~~investments~~Financial ~~of $224~~Officer,~~450~~ inclassified ~~cash. We~~as ~~designate two of the four managers of Cat Creek Holdings~~short-term.

We anticipate that our agreement with Texakoma described above will produce revenue sufficient to cover our ongoing operating expenses, beginning later in the calendar year 2024. The two exploratory wells drilled by Texakoma have encountered promising levels of oil and have been put into production. Any sales of oil from those wells will be distributed in accordance with the Texakoma agreement on a monthly basis. Until we receive adequate funding from the Texakoma agreement described above, any cash needed for our operations and oil field expansion and development will most likely have to come from the sale of our debt and equity securities.

As an indicator of value for our Montana mineral assets, an independent petroleum engineering firm has provided us with a reserve report estimating proved undeveloped, probable undeveloped and contingent reserves, and forecasts of economics attributable to certain properties in the Western Williston Basin of Montana for oil interests acquired by Lustre. The report estimates that the Lustre reserves may generate cash flow with as much as $67 million in present value, discounted at a rate of 10%.

Currently, there is minimal financial activity at Hell Creek Crude as we await permitting and drilling rig availability.

In 2021, Lustre and Erehwon filed an action for quiet title in the State of Montana against Anadarko Minerals, Inc. and A&S Mineral Development Co, LLC. That action has been settled pursuant to a mutually acceptable settlement agreement.

Our cash and cash equivalents as of February 29, 2024 was $1,894,962. Our total debt outstanding as of February 29, 2024 was $3,890,209, including: (i) $617,934 owed to Alleghany, which is classified as a current note payable, and (ii) $970,956 pursuant to notes under the Paycheck Protection Program, or PPP, of which we have classified $903,883 as long-term debt, net of the current portion totaling $67,073, which is classified as a current note payable, (iii) $949,159 bridge financing and short term convertible notes, net of deferred debt discount, (iv) a $310,061 revolving note classified as short-term, (v) a $750,000 note payable due to Cali Fields LLC, classified as short-term, and (vi) a $292,099 note payable due to our Chief Financial Officer, classified as short-term.

Results of Operations

~~The Company~~During ~~recognized~~the ~~revenues~~first ~~totaling~~quarter ~~$12,701~~of ~~through~~fiscal ~~their~~year ~~interest~~2025 ~~in oil and gas sales for the three- and nine-month periods~~ ended ~~February~~August 2931, 2024~~. There are no similar revenues during the three- and nine-month periods ending February 28~~, ~~2023. During~~ the ~~nine~~Company ~~months ended~~recognized ~~February 29, 2024 and February 28, 2023, we incurred operating expenses of~~ $26,~~687,031~~048 ~~and $2,142,823, respectively. These expenses consisted~~ of ~~general~~revenue ~~operating~~from ~~expenses~~one ~~incurred in connection with the day-to-day operation~~ of ~~our business,~~ the ~~preparation~~three ~~and~~Texakoma ~~filing of~~wells ~~our~~being ~~required~~put ~~public~~into ~~reports and stock option compensation expense~~production. ~~The~~It ~~increase~~is ~~in expenses for the nine months ended February 29,~~expected ~~2024,~~that ~~as compared to~~ the ~~same~~wells ~~period~~will inexperience ~~2023,~~increased isproduction ~~primarily~~after ~~attributable to these payroll costs and stock-based compensation, offset by~~ a ~~decrease~~proximate inSWD ~~other~~well ~~professional~~becomes ~~fees including public relations and advisory services~~operational.

26During the three months ended August 31, 2024 and 2023, we incurred operating expenses of $670,359 and $1,349,579, respectively. These expenses consisted 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 and stock option compensation expense. The decrease in expenses for the three months ended August 31, 2024, as compared to the same period in 2023, is primarily attributable to stock-based compensation expenses, offset by a net increase in other professional fees including IT, legal and accounting services.

~~ITEM~~During 2the quarter ended August 31, 2024, we recognized other income related to the final two payments under the Texakoma Development Agreement. During ~~MANAGEMENT’S~~the ~~DISCUSSION~~quarter ~~AND~~ended ~~ANALYSIS~~August OF31, ~~FINANCIAL~~2023, ~~CONDITION~~we ~~AND~~recognized ~~RESULTS~~other OFincome ~~OPERATIONS~~and –expenses ~~continued~~comprised of $175,000 related to the sale of underground drilling equipment that formerly had been used in drilling operations in the Fredonia underground gravity drainage project and $175,000 related to the first payment as required under the Texakoma Development Agreement

During the nine months ended February 29, 2024, we recognized other income and expenses of $175,000 related to the sale of drilling equipment, $350,000 related to the first two payments required under the Texakoma Development Agreement, and a $92,309 equity method loss related to our Cat Creek equity investment. During the nine months ended February 29, 2023, we recognized other income and expenses comprised of (i) the $122,682 we received from the Employee Retention Credit established by the CARES Act, (ii) $47,506 in equity method loss related to our Cat Creek equity investment, and (iii) $23,885 in other income.

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.

~~OFF-BALANCE SHEET ARRANGEMENTS~~28

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk is confined to our cash equivalents. We invest in high-quality financial instruments, and we believe we are subject to limited credit risk. Due to the short-term nature of our cash, we do not believe that we have any material exposure to interest rate risk arising from our investments.

ITEM 4. CONTROLS AND PROCEDURES

(a) 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 necessarily 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 August 31, 2024, 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. This material weakness resulted in the restatement of the Company’s financial statements for the fiscal year ended August 31, 2024. In light of 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 Quarterly Report on Form 10-Q present 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. ~~Therefore,~~This itled 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.

(b) Changes in Internal Control Over Financial Reporting

None.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See NOTE 12 – COMMITMENTS AND CONTINGENCIES of PART 1, FINANCIAL STATEMENTS.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the first fiscal quarter of 2025 covered by this report, we sold 939,535 shares of common stock for $425,000 at an average price of $0.452 that were not registered under the Securities Act as described in NOTE 10, STOCKHOLDER’S EQUITY of PART 1, FINANCIAL STATEMENTS. Proceeds from the sales were used for general corporate purposes and payment of maturing debt.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. 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:

3.1	Certificate of Incorporation, included as Exhibit 3.1 in our Form S-1 filed August 25, 2008, File No. 333-153168 and incorporated herein by reference.
3.2	Certificate of Amendment of Certificate of Incorporation, included as Exhibit 10.1 to our Form 8-K filed October 22, 2009 and incorporated herein by reference.
3.3	Bylaws, included as Exhibit 3.2 in our S-1 filed August 25, 2008, File No. 333-153168 and incorporated herein by reference.
31.1	Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1	Certificate Pursuant to 18 U.S.C. Section 1350 signed by the Chief Executive Officer
32.2	Certificate Pursuant to 18 U.S.C. Section 1350 signed by the Chief Financial Officer
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)

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)

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LAREDO OIL, INC.

(Registrant)

Date: April 19, 2024	By:	/s/ Mark See
Date: October 21, 2024	By:	/s/ Mark See
		Mark See
		Chief Executive Officer and Chairman of the Board
Date: April 22, 2024	By:	/s/ Bradley E. Sparks
Date: October 21, 2024	By:	/s/ Bradley E. Sparks
		Bradley E. Sparks
		Chief Financial Officer, Treasurer and Director

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