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

The future potential magnitude of another pandemic is currently still unknown. The continuation or amplification of this, another virus could affect the United States and global economy, that might affect prices and our business and operations, and the demand more broadly for oil and gas or could be further disruptions due to further political and direct and indirect conflicts with various countries causing further flare ups on the conflicts with IsrealIsrael in the Middle East.

Given that Company has had a low level of business operations, , we are highly dependent on our executive officers, employees, and contractors. Although we believe that we will be able to identify, engage and motivate qualified personnel, an inability to do so could adversely affect our ability to market, sell, and develop our products and services. Any difficulty in attracting and retaining key people could have an adverse effect on our business.

The Company’s Certificate of Incorporation and By-Laws include provisions that fully eliminate the personal liability of the directors of of the Company for monetary damages to the fullest extent possible under the laws of the State of Nevada or other applicable law. These provisions eliminate the liability of directors to the Company and its stockholders for monetary damages arising out of any violation of a director of his fiduciary duty of due care. Under Nevada law, however, such provisions do not eliminate the personal liability of a director for (i) breach of the director’s duty of loyalty, (ii) acts or omissions not in good faith or involving intentional misconduct or knowing violation of law, (iii) payment of dividends or repurchases of stock other than from lawfully available funds, or (iv) any transaction from which the director derived an improper benefit. These provisions do not affect a director’s liabilities under the federal securities laws or the recovery of damages by third parties.

IMPACT OF PANDEMIC, TARIFFS, UKRAINE, ISREAL,ISRAEL, AND MIDDLE EAST CONFLICTS ON OUR BUSINESS.

Our business and operations had been adversely affected by the pandemic in 2020. In 2021, as result of initial reopening of business activities in recovery from COVID-19, and the invasion of Ukraine by the Russian Federation in March 2022, and then in October 2023, the terrorist attack on IsrealIsrael and then the February 2026 conflict with Iran by Israel and the USA and the subsequent blockade of the Straits of Hormuz which flows thru over 20% of the worlds energy trade thus there has been a substantial volatility and uncertainty in oil and gas market prices. Now with a new US administration it was expected to be more favorable towards traditional energy sectorsector, but the recent tariffs could trigger a political trade war leading to possible supply disruption. However, we cannot predict the future and the exact impact it will have on energy services and commodity prices due to other similar outbreaks or a peaceful resolution to the wars/ other political conflicts that could cause a rapid decline in overall energy prices. Our financial condition and results of operations have been and are likely to continue to be affected by future pandemics and other political and war conflicts.

Like most companies, we have become increasingly dependent upon digital technologies, including information systems, infrastructure and cloud applications and services, to operate our businesses, to process and record financial and operating data, communicate with our business partners, analyze mine and mining information, estimate quantities of coal reserves, as well as other activities related to our businesses. Strategic targets, such as energy-related assets, may be at greater risk of future terrorist or cyber-attacks than other targets in the United States. Deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties, or cloud-based applications could lead to corruption or loss of our proprietary data and potentially sensitive data, delays in production or delivery, difficulty in completing and settling transactions, challenges in maintaining our books and records, environmental damage, communication interruptions, other operational disruptions and third-party liability. Our limited amount of insurance may not protect us against many typetypes of such occurrences. Consequently, it is possible that any of these occurrences, or a combination of them, could have a material adverse effect on our business, financial condition, results of operations and cash flows. Further, as cyber incidents continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cyber incidents.

The reserves associated with the report from Kurt Mire ,Mire, PE have been classified in accordance with the definitions of the Securities and Exchange Commission as found in Part 210 — Form and Content of and Requirements for Financial Statements, Securities Act of 1933, Securities Exchange Act of 1934, Public Utility Holding Company Act of 1935, Investment Company Act of 1940, Investment Advisers Act of 1940, and Energy Policy and Conservation Act of 1975, under Rules of General Application § 210.4-10 Financial accounting and reporting for oil and gas producing activities pursuant to the Federal securities laws and the Energy Policy and Conservation Act of 1975.

The Company generated revenues of $329,334$286,086 from oil and gas production sales during the year ended February 28, 2025,2026, compared to $329,610$329,334 during the year ended February 29,28, 2024.2025. The slight decrease in oil and gas sales revenues was primarily due to the decreaseless productive wells having maintenance issues resulting in lower oil and gas gas production in current year.

Lease operating expenses for the years ended February 28, 2025,2026, and February 29,28, 2024,2025, were $503,417$553,023 and $530,369,$511,246, respectively. We incurred lowerslightly higher lease operating expenses in 20252026 primarily because of lowerhigher costs of operations primarilyand aswell a result of the lower productionmaintenance in current year.

General and administrative expenses for the years ended February 28, 20252026 and February 29,28, 2024,2025, were $189,611$228,783 and $200,787,$189,611, respectively. The general and administrative expenses decreased slightlyincreased due to managementcosts implementingfrom costplugging controls.and abandoning four of the wells in current year.

For the years ended February 28, 2025,2026, and February 29,28, 2024,2025, the Company recorded interest expense of $143,205$117,151 and $126,962,$143,205, respectively. HigherLower interest expense was incurred in 20252026 due to additionallower debtrelated issuancesparty loans balance from the conversion of partial outstanding related party loans to related partiesequity in theNovember current year.2024.

Our operations resulted in a net loss in the amount of $561,574$661,431 for the year ended February 28, 2025,2026, compared to a net loss of $643,335$601,076 for the year ended February 29,28, 2024.2025. The decreaseincrease was primarily related to lowerrecognition oilof costs from plugging and gasabandoning four of the wells, and lower overall production during thein current fiscal year.

Net cash used in operating activities during the year ended February 28, 2025,2026, was $368,590,$440,251, compared to cash used in operating activities of $397,514$368,590 for the same period in 2024.2025. The decreaseincrease was primarily due to lowercosts oilfrom plugging and gasabandoning productionfour expense.of the wells in current year.

During the year ended February 28, 2026, and 2025, cash provided by financing activities was $400,000 related to proceeds from the Company’s related party loans. Net cash provided by financing activities during the year ended February 29, 2024, was $300,000, related to proceeds from the Company’s related party loans.

We have instituted various initiatives throughout the company as part of our business continuity programs, and we are working to mitigate risk when disruptions occur. The Russian conflict with Ukraine, Middle East turmoil and the Federal Reserve’s tightening of US monetary policy continue to evolve. Therefore, uncertainty around the availability and commodity prices of crude oil, the commodity prices and demand for our refined products, and the general business environment is expected to continue through 20252026 and beyond.

Comparison of the Three Months Ended NovemberMay 30,31, 2025,2026, with the Three Months Ended NovemberMay 30,31, 20242025

The Company generated revenues of $54,228$90,358 from oil and gas sales for the three months ended NovemberMay 30,31, 2025,2026, compared to $81,744$92,770 for the three three months ended NovemberMarch 30,31, 2024.2025. The decrease in revenues mainly came from a minor decrease in oil and gas production.

Operating expenses for the three months ended NovemberMay 30,31, 2025,2026, and 20242025 were $182,361299,534 and $188,536,$232,830, respectively. Our lease operating expenses decreased increased to $107,591 for the three-month period ended November 30, 2025, compared to $147,192$148,432 for the three-month period ended NovemberMay 30,31, 2024,2026, compared to $134,937 for the three-month period ended May 31, 2025, that was primarily related to lowerhigher variable lease operating expenses incurred during the current period. Our general and administrative expenses decreased increased to $16,826 $149,039 for the three-month period ended NovemberMay 30,31, 2025,2026, compared to $26,851$83,324 for the three-month period ended NovemberMarch 30,31, 2024,2025, primarily because of management’sincreased costsin cuttingprofessional efforts. The Company recognized plug and abandonment loss of $52,476 for the three-month period ended November 30, 2025 because of wells plugging related costs incurred versus none during the three-month period ended November 30, 204.fees. Our depletion, depreciation and accretion expense decreased by $9,025,$12,506, primarily related to aan decrease in accretion expense and depletion expenses recognized during the three-month ended NovemberMay 30,31, 20252026, thanthen the same period in 2024, resulting from lower production in the current period.2025.

For the three months ended NovemberMay 30,31, 2025,2026 and 2024,2025, the Company recorded interest expense of $30,044$33,142 and $49,669$27,348, respectively, related to outstanding outstanding debts.related party debt. The decreaseincrease in interest expense was theprimarily resultattributable ofto notes conversion that occurred in November 2024, resulting in lesshigher outstanding loans borrowings during the current quarter.

As of NovemberMay 30,31, 2025,2026, the Company had cash on-hand of $88,690.$33,863.

Net cash used in operating activities during the ninethree months ended NovemberMay 30,31, 2025,2026, was $396,937,$211,513, compared to cash used in operating activities of $275,254$98,239 for the same period in 2024.2025.

Net cash provided by financing activities for ninethree months ended NovemberMay 30,31, 2025,2026, and 20242025 was $400,000$200,000 and $300,000,$100,000, respectively.

The Company will require additional financing to support its operations and to pursue its acquisition program. As of NovemberMay 30,31, 2025,2026, the Company Company had availability of $1,000,000$800,000 on its existing credit line with JBB due to a recent increase of its availability from its Lender. If the Company requires additional financing beyond what is available under its existing credit line, it does not have any committed sources sources of financing at this time. If it is unable to obtain financing, it will have to reduce or curtail its operations and acquisition program. program. There is no assurance that it will be able to obtain financing in the future, and even if financing is available, it may not be on terms acceptable to the Company.

The condensed consolidated financial statements of the Company have been prepared on a going concern basis. As of NovemberMay 30,31, 2025,2026, the Company Company incurred a net loss of $477,474$242,318 and experienced recurring negative cash flows from operations. However, the Company believes that it has sufficient cash on hand and available funds from its credit line to fund its costs for such expenditures as well as other operating costs, for the 12-month period subsequent to the issuance of these condensed consolidated financial statements.

On May 26, 2025, the Company entered into another amendment of its Loan Note with JBB to increase the line of credit by an additional $500,000, for a total of $4,200,000$4,700,000 and extend the maturity date for the original note and line of credit to MarchSeptember 31,30, 2027.2026. On November 12, 2025, 2025, the company entered into another amendment of its Loan Note with JBB to increase the line of credit by an additional $500,000, for a total of $4,700,000.

DuringThe the nine months ended November 30, 2025, the loan agreement was amended on November 12, 2025, to increase available borrowing byto $1,000,000.$4,700,000. During the three months ended May 31, 2026, the JBB advanced $200,000 to fund the Company’s operations under the Loan Note. As of November 30,May 2025,31, 2026, the Company had availability of $1,000,000$800,000 on its existing credit line with JBB.

As of NovemberMay 30,31, 2025,2026, we did not have any off-balance sheet arrangements as defined in Item 303 (a)(4)(ii) of Regulation S-K promulgated under under the Securities Act of 1934.