NOTE 7 – COMMITMENTS AND CONTINGENCIES

Legal Matters

Class Action Settlement Recovery

On February 20, 2026, the Company received approximately $43,532 representing its distribution from a class action settlement involving BF Borgers CPA PC (“Borgers”), the Company’s former independent registered public accounting firm. The settlement, captioned Electronic Servitor Publication Network V BF Borgers, Case No. 2024CV030771 (the “Settlement”), was administered by CPT Group, Inc. as the court-appointed settlement administrator. The Company’s recovery was determined by the settlement administrator based on the Company’s status as a class member, and the settlement amount is reportable on Internal Revenue Service Form 1099-MISC.

Borgers served as the Company’s independent registered public accounting firm and audited the Company’s consolidated financial statements for the fiscal years ended October 31, 2023 and October 31, 2022. The Audit Committee of the Board of Directors of the Company (the “Board”) dismissed Borgers on May 6, 2024, as previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2024, following the Commission’s Rule 102(e) order entered against Borgers on May 3, 2024.

The settlement income is included in “Settlement income” within other income (expense), net in the unaudited condensed consolidated statements of operations for the three and nine months ended July 31, 2026. The Company does not anticipate any further recovery from this matter, and no related receivable or contingent gain has been recorded.

Settlement of Legal Fees

In connection with the March 2026 settlement of legal fees described in Note 9 – Stockholders’ Equity, the Company agreed to use commercially reasonable efforts to file a resale registration statement on Form S-3 within 20 days of the issuance date covering the 49,572 shares issued in the settlement, and to use commercially reasonable efforts to cause and maintain its effectiveness. On April 3, 2026, the Company filed a Registration Statement on Form S-3 (File No. 333-294870) registering the resale of these 49,572 shares of common stock, together with 101,431 shares of common stock previously issued to Novacor in the December 2025 Novacor Acquisition (see Note 5 – Oil and Natural Gas Properties). The Registration Statement was declared effective on April 13, 2026. The Settlement Agreement does not provide for cash penalties or other transfers of consideration in the event of any failure to file or maintain effectiveness, and accordingly no liability has been recognized.

From time to time, the Company may be subject to claims and legal proceedings arising in the ordinary course of business. Management currently believes that any potential liabilities arising from such matters will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. As of July 31, 2026, the Company was not involved in any material pending legal proceedings.

Unproved Property Leases

South Salinas Project

The Company holds various leases related to unproved properties in the South Salinas Project. Two leases with the same lessor remain active:

All additional South Salinas leases entered into during 2023 were abandoned during fiscal 2025 following an evaluation of economic and operational factors. No further obligations remain under the abandoned leases.

Property Leases Held by Production – Saskatchewan, Canada

In April 2025, the Company acquired oil and gas lease rights for four properties located in Saskatchewan, Canada. The leases total 320 net acres and are held by production. As of July 31, 2026, the Company remained in compliance with all lease terms. The Company made lease payments of $7,019 and $17,294 during the three and nine months ended July 31, 2026, respectively.

Board of Directors Compensation

Under a compensation plan approved on July 11, 2022, non-employee directors are entitled to an annual cash retainer of $50,000, plus an additional $10,000 per Board committee served. Effective June 1, 2026, the annual cash retainer increased to $57,500 and the committee fee increased to $11,500 per committee, reflecting a 15% increase in non-employee director cash compensation. Payments are made quarterly in arrears. For the three and nine months ended July 31, 2026, the Company recognized director compensation expense of $74,256 and $217,602, respectively, and for the three and nine months ended July 31, 2025, the Company recognized director compensation expense of $80,007 and $241,682, respectively.

Agreements with Advisors

Spartan Capital Securities, LLC

The Company previously entered into placement agent agreements with Spartan Capital Securities, LLC (“Spartan”) in connection with its IPO, subsequent private placements and its first ATM offering, which occurred in September 2024. Under these agreements, with respect to the IPO and subsequent private placements, Spartan received cash fees and warrants to purchase common stock, and cash fees only, with respect to the ATM offering. All warrants issued to Spartan remain outstanding as of July 31, 2026.

Ladenburg, Thalmann & Co. Inc.

On January 9, 2026, the Company entered into an ATM Agreement with Ladenburg as sales agent (the “Sales Agent”), pursuant to which the Company may offer and sell shares of its common stock from time to time through the Sales Agent. The Company concurrently filed a prospectus supplement covering the sale of shares having an initial aggregate offering price of up to $3,600,000, under its existing shelf Registration Statement on Form S-3 (File No. 333-281813), which became effective on September 10, 2024. Sales, if any, are made by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through the NYSE American.

Under the ATM Agreement, the Company designates the maximum number of shares and a minimum price for any sale and has no obligation to sell any shares. The Company or the Sales Agent may suspend or, upon written notice, terminate the ATM Agreement at any time in its sole discretion, and the ATM Agreement will automatically terminate upon the sale of all shares covered by the agreement. The Sales Agent is entitled to compensation of up to 3.0% of the gross proceeds from any shares sold under the ATM Agreement, and the Company has agreed to indemnify the Sales Agent against certain liabilities, including liabilities under the Securities Act, and to provide customary contribution.

On May 6, 2026, the Company filed Amendment No. 10 to the prospectus supplement reflecting that, based on the Company’s public float having exceeded $75 million as of April 14, 2026, the Company is no longer subject to the sales limitations under General Instruction I.B.6 of Form S-3. Following Amendment No. 10, the aggregate amount of common stock available for sale under the ATM Agreement was $65,000,000.

During the nine months ended July 31, 2026, the Company sold an aggregate of 3,860,043 shares of common stock under the ATM Agreement for total gross proceeds of approximately $26,994,847, resulting in net proceeds of approximately $26,020,227 after Sales Agent commissions of 3.0% of gross proceeds and other offering costs. The most recent sale under the ATM Agreement occurred on July 8, 2026.