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

On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. The significant outbreak of COVID-19 has resulted in a widespread health crisis that is adversely affecting the economies and financial markets worldwide, including the business which we operate and own. Market decline and volatility in connection with a pandemic could also also materially and adversely affect any future potential acquisitions. If the disruptions or other matters of global concern such as occurred occurred with COVID should reocurrreoccur or continue for an extensive period of time, our operations may be materially adversely affected.

On June 13, 2024, the Company entered into a promissory note with 1800 Diagonal Lending in the aggregate principal amount of $126,000 (the “June 2024 Note”). The note bears interest at 10%, with an Original Issue Discount of $21,000 plus an additional $5,000 to pay for transaction fees of the lender, matures on March 15, 2025. Pursuant to the terms of the Note, the outstanding principal and accrued interest on the Note shall be paid in 4 set monthly cash payments beginning six months from the effective date. The note may be prepaid with no penalty. The note allows an event of default which may be convertible into shares of the Company’s common stock as set forth therein. At any time following an event of default, the note is convertible into shares of the Company’s common stock at a price of 65% of the lowest weighted average market price of the Company’s common stock during the 10 trading days prior to conversion. During the year ended January 31, 2025, the Company repaid $58,080 of principal on the note. As of January 31, 2025, the note balance was $18,274, net of $2,846 discount. During the year ended January 31, 2025, the Company repaid $21,120 of principal on the note. As of January 31, 2026, the note balance was $0.

On August 28, 2024, the Company entered into a promissory note with 1800 Diagonal Lending in the aggregate principal amount of $67,200 (the “August 2024 Note”). The note bears interest at 10%, with an Original Issue Discount of $11,200 plus an additional $6,000 to pay for transaction fees of the lender, matures on May 30, 2025. Pursuant to the terms of the Note, the outstanding principal and accrued interest on the Note shall be paid in 4 set monthly cash payments beginning six months from the effective date. The note may be prepaid with no penalty. The note allows an event of default which may be convertible into shares of the Company’s common stock as set forth therein. At any time following an event of default, the note is convertible into shares of the Company’s common stock at a price of 65% of the lowest weighted average market price of the Company’s common stock during the 10 trading days prior to conversion. As of January 31, 2025, note balance was $59,757, net of $7,443 discount. During the year ended January 31, 2026, the Company repaid $49,280 of principal and converted $24,640 of principal and interest on the note. As of January 31, 2026, note balance was $0.

On October 22, 2024, the Company entered into a promissory note with 1800 Diagonal Lending in the aggregate principal amount of $97,200 (the “October 2024 Note”). The note bears interest at 10%, with an Original Issue Discount of $16,200 plus an additional $6,000 to pay for transaction fees of the lender, matures on July 30, 2025. Pursuant to the terms of the Note, the outstanding principal and accrued interest on the Note shall be paid in 4 set monthly cash payments beginning six months from the effective date. The note may be prepaid with no penalty. The note allows an event of default which may be convertible into shares of the Company’s common stock as set forth therein. At any time following an event of default, the note is convertible into shares of the Company’s common stock at a price of 65% of the lowest weighted average market price of the Company’s common stock during the 10 trading days prior to conversion. As of January 31, 2025, note balance was $82,979, net of $14,221 discount. . During the year ended January 31, 2026, the Company repaid $53,640 of principal and converted $53,460 of principal and interest on the note. As of January 31, 2026, note balance was 0.

On December 2, 2024, the Company entered into a promissory note with 1800 Diagonal Lending in the aggregate principal amount of $67,200 (the “December 2024 Note”). The note bears interest at 10%, with an Original Issue Discount of $11,200 plus an additional $6,000 to pay for transaction fees of the lender, matures on May 30, 2025. Pursuant to the terms of the Note, the outstanding principal and accrued interest on the Note shall be paid in 4 set monthly cash payments beginning six months from the effective date. The note may be prepaid with no penalty. The note allows an event of default which may be convertible into shares of the Company’s common stock as set forth therein. At any time following an event of default, the note is convertible into shares of the Company’s common stock at a price of 65% of the lowest weighted average market price of the Company’s common stock during the 10 trading days prior to conversion. As of January 31, 2025, note balance was $53,596, net of $13,604 discount. During the year ended January 31, 2026, the Company converted $78,420 of principal and interest on the note. As of January 31, 2026, note balance was $0.

On June 22, 2020, the Company received loan proceeds of $32,300 (net of $100 loan fee) under the SBA’s Economic Injury Disaster Loan program (“EIDL”). The EIDL loan, dated June 16, 2020, bears interest at 3.75%, has a 30-year term, and is due in monthly installments of $158 beginning 12.5.2022.June 16, 2021 (extended to June 18, 2023).

The note principal balance of the EIDL note totalstotaled $32,400, includingwith accrued interest of $2,729,$2,193 and is included in long-term debt as of January 31, 2025.2026 and 2025, respectively.

As of January 31, 2025,2026, the notes payable, net balance was $32,400, which include term long notes payable of $32,400 and current portion of notes payable of $0, with accrued interest of $2,729.$2,193. As of January 31, 2024,2025, the notenotes principalpayable, net balance totaledwas $32,400, which include term long notes payable of $32,400 and current portion of notes payable of $0, with accrued interest of $2,729, and is included in long-term debt.$2,729.

Since we have not generated any revenue, there is substantial doubt regarding our ability to continue as a going concern in connection with our consolidated financial statements for the fiscal years ended January 31, 20252026 and 2024.2025. Our accumulated deficit on January 31, 2025,2026, was approximately $59$61 million and thea net incomeloss from operations for the fiscal year ended January 31, 20252026 was $2,122,189.$1,243,521. All of our exploration exploration costs are expensed as incurred.

Certain capitalized terms used below but not otherwise defined, are defined in, and shall be read along with the meanings given to such terms in, the notes to the unaudited consolidated financial statements of the Company for the quarters ended AprilJuly 30,31, 2026 and 2025, above.

On March 15,2021,15, 2021, we announced the release of more rock chip assay results from the Red Rock Canyon area located within the Hay Mountain Mountain Project. 28 samples were submitted to the ALS/USA Inc. Tucson location with results returned to us on February 6, 2021. This set of samples are within and outside of the original study area and expand on the October 2020 geochemical sampling undertaken on MEP land within our Red Rock Canyon holdings.

Results of Operations for the Three-Month Periods Ended AprilJuly 30,31, 2026 and 2025

We had a net loss of $114,995$289,301 for the three months ended AprilJuly 30,31, 2026, compared to a net loss of $336,132$218,712 for the three months ended July April 30,31, 2025. The change in net loss was primarily due to a change in derivative liability and loss on settlement of liabilities which were offset by an increase interest expense related to convertible notes payable and amortization of debt discount associated with the derivative liability.

During the three months ended AprilJuly 30,31, 2026, we had ana increasedecrease of $50,417$20,630 in geological and geophysical expense compared to the three months ended AprilJuly 30,31, 2025, due primarily to an increasea decrease in geological and filing fees for the three-month period. During the three months ended AprilJuly 30,31, 2026, we had a decreasean increase of $14,868$9,096 in salaries and benefit expense compared to the three months ended AprilJuly 30, 31, 2025, due to aincreased $15,277 employee retention credit receivedwages during the current period. During the three months ended AprilJuly 30,31, 2026, we had a decrease of $1,788$26,084 in professional services compared to the three months ended AprilJuly 30,31, 2025. We had aan decreaseincrease in general and administrative expenses of $15,340$24,042 during the three months ended AprilJuly 30,31, 2026, as compared to the three months ended AprilJuly 30,31, 2025, which was primarily due to toan aincrease decreasetravel inand stockfiling compensation.expenses. We had a change in other expenses of $239,558$84,165 during the three months ended AprilJuly 30,31, 2026, as compared to the three months ended AprilJuly 30,31, 2025, which was primarily due to a change in derivative liability and loss on settlement settlement of liabilities which were offset by an increase interest expense related to convertible notes payable and amortization of debt debt discount associated with the derivative liability.

We had cash and cash equivalents in the amount of $65,191$42,272 as of AprilJuly 30,31, 2026. We had a working capital deficit of $502,365$505,055 as of AprilJuly 31, 30, 2026. We used cash in operating activities of $234,268$409,486 for the threesix months ended AprilJuly 30,31, 2026.

On March 5, 2026, the Company entered into a convertible promissory note with EFRAT Investments Opportunities Fund, LLC in the aggregate principal amount of $110,000 (the “March 2026 Note”). The note bears interest at 8%, with an Original Issue Discount of $10,000, matures on March 5, 2027, and is convertible after 180 days into shares of the Company’s common stock at a price of 75% of the average of the three lowest closing bid prices of the Company’s common stock during the 10 trading days prior to conversion. As of AprilJuly 30,31, 2026, note balance was $101,534,$104,055, net of $8,466$5,945 discount.

On April 17, 2026, the Company entered into a convertible promissory note with 1800 Diagonal Lending LLC in the aggregate principal amount of $73,700 (the “April 2026 Note”). The note bears interest at 8%, with an Original Issue Discount of $6,700 plus an additional $7,000 to pay for transaction fees to the lender, matures on January 15, 2027, and is convertible after 180 days into shares of the Company’s common stock at a price of 75% of the average of the three lowest closing bid prices of the Company’s common stock during the 10 trading days prior to conversion. As of AprilJuly 30,31, 2026, note balance was $60,747,$65,331, net of $12,953$8,369 discount.

Net cash used in operating activities was $234,268$409,486 and $159,200$345,546 for the threesix months ended AprilJuly 30,31, 2026 and 2025, respectively, and mainly included payments made for geological and geophysical costs, compensation, and professional fees to our consultants, attorneys and accountants.

Net cash provided by financing activities was $22,500$174,799 for the threesix months ended AprilJuly 30,31, 2026, related to the proceeds convertible promissory notes which were offset by the repayments of convertible notes. Net cash provided by financing activities was $206,122$638,127 for the threesix months months ended AprilJuly 30,31, 2025, related to the proceeds from issuance of common stock and warrants, convertible promissory notes and notes payable, payable, related party, which were offset by the repayments of convertible notes, notes payable, related party and advances, related party.