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:

On November 27, 2023, the Company entered into an Amended and Restated Demand Promissory Note, (the “Demand Note”), and an Amended and Restated Membership Interest Pledge Agreement, (the “Lustre Pledge Agreement”) with the Company’s Chief Financial Officer. Under the Demand Note, the Company promises to pay on demand the principal sum of all disbursements made to the Company up to $400,000 plus interest accrued at an annual rate of 10%. As of May 31, 2026, the aggregate amount of advances, excluding accrued interest, was $292,099. The Demand Note is secured by all of the Company’s interests in Lustre, pursuant to the terms of the Lustre Pledge Agreement.

In March 2026 and October 2025, Amalfi Investment Services LLLP, owned by Mr. Robert Adamo, an accredited investor, purchased 1,000,000 and 1,500,000 restricted shares of the Company’s common stock at a purchase price of $0.50 and $0.43 per share totaling $500,000 and $645,000, respectively. In May 2023 the Company received funds pursuant to a Stock Purchase Agreement with Mr. Adamo to purchase 6,062,886 restricted shares of the Company’s common stock, at a purchase price of $0.0441 per share, totaling $267,320. As a result of these investments, Mr. Adamo now holds greater than 10% of the Company’s outstanding shares. Prior to becoming a shareholder, in November 2022, Mr. Adamo invested $100,000 pursuant to the Secured Convertible Debt under the terms as disclosed in Note 12 and is an investor in the Reddig 11-21 well. Including his original investment and capital calls, Mr. Adamo invested a total of $510,800 into the Reddig 11-21 well.

On November 15, 2025, B&B Oil acquired 100% of the membership interest of Hell Creek Crude, LLC, or HCC, from Laredo for consideration of 50% of future distributions to B&B Oil. The transaction is recorded in discontinued operations, the net liabilities totaling $272,892 have been eliminated and recorded in additional paid in capital.

As part of the aforementioned acquisition, HCC entered into a consulting agreement with Laredo whereby HCC would reimburse expenses associated with drilling and developing conventional oil wells. Since HCC has no full-time employees, B&B Oil Company, HCC’s operator has requested and Laredo has agreed for their employees to devote a percentage of their time to HCC. In accordance with that agreement, Laredo invoiced HCC $569,000 for expenses incurred subsequent to November 15, 2025. This amount is estimated to be recognized through 2026 associated with services performed related to well site selection, drilling, development and completion costs associated with 6 wells HCC has planned for development. As of May 31, 2026, approximately $306,000 has been recognized in payroll expense. The remaining deferred income related to this agreement totaling $263,000 and is included in Accounts payable and accrued liabilities is expected to be recognized over the remainder of calendar year 2026. At this point, no additional payments are expected to be owed or repaid.

Prior to the aforementioned acquisition, B&B Oil LLC (“B&B”), for which Mr. Adamo is a principal owner, reimbursed HCC $71,681 for a sonic log that is used for its 3D seismic studies. HCC acquired the information while purchasing seismic data for the Midfork field. The principal owners of B&B have provided fundraising assistance related to the Reddig 11-21 well. During the year ending May 31, 2026, B&B reimbursed Laredo for shared service expenses related to office expenses and one employee. In addition, B&B requested a transformer to be purchased. As a result, HCC received reimbursements for these activities through November 15, 2025. As of May 31, 2026, HCC owes Laredo an additional $37,500 related to cash advances to HCC to pay vendors. This amount is recorded as a related party receivable.

We were unable to raise $7.5 million to drill the planned three exploratory wells by selling units of West Fork Resources, LLC. Preliminary development operations such as acquiring seismic data, site selection, and permitting was started, as investors for $750,000 of the $2.25 million funds initially raised elected to commence drilling operations during fiscal year 2025. Upon request, the remaining $1.5 million was returned to the investors. During fiscal year 2026, invested funds totaling $643,225 were transferred to Hell Creek Crude LLC operated by B&B Oil, LLC for 5 membership interest units, amounting to 3% ownership in a $20.6 million oil and gas project. There will be no additional development in West Fork Resources, LLC for the foreseeable future. The membership interest units are recorded as an investment in related party entity. The remaining $110,525 West Fork oil and gas assets were written off to impairment expense as of May 31, 2026.

As of May 31, 2026, Mr. Adamo, owns or controls approximately 9.2 million shares of the Company’s common stock, comprised of the shares purchased in March 2026, October 2025 and in May 2023 as well as 600,000 shares previously purchased, and holds greater than 10% of the Company’s outstanding shares. On July 22, 2024, Mr. Adamo advanced $50,000 to Lustre, which amount is recorded in accounts payable -related party as of May 31, 2026. The advance transaction is undocumented but expected to be repaid. The repayment terms are subject to negotiation. Mr. Adamo agreed to using $10,000 of the advance to fund a portion of the Cranston SWD purchase. The remaining funds advanced by Mr. Adamo have been used to satisfy general corporate purposes as of May 31, 2026.

Accounts payables contain $137,500 for each of our two outside board members who receive quarterly board stipends. In addition, as of May 31, 2026 Laredo has recorded accounts payable to the CFO, CEO and other employees for expense reports totaling $1,010, $12,683 and $4,075, respectively.