Laredo Oil Stalls on Production, Faces Mounting Legal Judgments

TL;DR

**LRDC is a speculative bet on unproven tech with no revenue and mounting debt; avoid until they prove commercial viability.**

AI Summary

Laredo Oil, Inc. (LRDC) reported no revenue for the fiscal year ended May 31, 2025, continuing its focus on oil exploration and production, specifically targeting stranded oil reserves using its proprietary Underground Gravity Drainage (UGD) method. The company holds 45,766 gross acres and 38,153 net acres of mineral property interests in Montana, including the Lustre and Midfork fields. LRDC acquired Stranded Oil Resources Corporation (SORC) in December 2020 for $72,678 in cash and a seven-year royalty of 5.0% of future revenues, but SORC is currently not conducting ongoing operations. The company drilled five wells in the Lustre and Midfork fields with Texakoma Exploration and Production, LLC, but these were not economically successful due to excess water. LRDC is actively attempting to raise additional funds to develop its mineral property interests. Legal proceedings include a $354,267.29 judgment against its subsidiary Lustre Oil Company, LLC, in favor of Capex Oilfield Services, Inc., with an 18% annual interest, and a $326,650 judgment in favor of Capstar Drilling, Inc., both related to drilling the Olfert 11-4 well.

Why It Matters

Laredo Oil's continued lack of revenue and significant legal judgments, totaling over $680,000, highlight severe operational and financial challenges for investors. The company's reliance on unproven UGD technology and its inability to secure sufficient funding for development in Montana, despite holding substantial acreage, raises questions about its long-term viability. In a competitive oil and gas market dominated by well-capitalized players, LRDC's struggles to achieve commercial production and its ongoing legal battles could deter potential investors and partners, impacting its ability to compete and grow.

Risk Assessment

Risk Level: high — Laredo Oil, Inc. faces high risk due to its complete lack of revenue for the fiscal year ended May 31, 2025, and significant legal judgments totaling $354,267.29 plus 18% interest to Capex Oilfield Services, Inc., and $326,650 to Capstar Drilling, Inc. The company's ability to secure additional funding is critical for future production, and its five drilled wells in Montana were not economically successful, indicating substantial operational hurdles.

Analyst Insight

Investors should exercise extreme caution and consider avoiding LRDC stock given its zero revenue, significant legal liabilities, and unproven commercial success of its UGD method. Await clear evidence of successful commercial production and a stable financial position before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

N/A

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $0 — Revenue (for the fiscal year ended May 31, 2025, indicating no commercial production)
• $17.1 million — Market value of common equity held by non-affiliates (as of November 30, 2024)
• 74,887,755 — Shares of common stock outstanding (as of August 29, 2025)
• 45,766 — Gross acres of mineral property interests (held in Montana)
• 38,153 — Net acres of mineral property interests (held in Montana)
• $72,678 — Cash paid for SORC acquisition (on December 31, 2020)
• 5.0% — Royalty rate to Alleghany (on future revenues for seven years post-SORC acquisition)
• $354,267.29 — Judgment against Lustre Oil Company, LLC (in favor of Capex Oilfield Services, Inc., with 18% annual interest)
• $326,650 — Judgment against Lustre Oil Company, LLC (in favor of Capstar Drilling, Inc.)
• 5 — Full-time employees (as of May 31, 2025)

Key Players & Entities

• Laredo Oil, Inc. (company) — registrant
• Stranded Oil Resources Corporation (company) — wholly owned subsidiary
• Alleghany Corporation (company) — former parent of SORC
• Texakoma Exploration and Production, LLC (company) — drilling partner
• Lustre Oil Company, LLC (company) — subsidiary facing lawsuits
• Capex Oilfield Services, Inc. (company) — plaintiff in lawsuit against Lustre
• Capstar Drilling, Inc. (company) — plaintiff in lawsuit against Lustre
• Montana Supreme Court (regulator) — reversed District Court decision
• Anadarko Minerals, Inc. (company) — defendant in quiet title action
• A&S Mineral Development Co., LLC (company) — defendant in quiet title action and settlement party

FAQ

Risk Factors

• Significant Legal Judgments [high — financial]: Lustre Oil Company, LLC, a subsidiary, faces two significant judgments totaling $680,917.29 plus 18% annual interest, related to the Olfert 11-4 well drilling. These liabilities could materially impact the company's financial condition.
• Unsuccessful Well Drilling [medium — operational]: Five wells drilled in the Lustre and Midfork fields with Texakoma Exploration and Production, LLC were not economically successful due to excess water. This indicates potential issues with the company's exploration and production methods or geological assessments.
• Need for Additional Funding [high — financial]: The company is actively attempting to raise additional funds to develop its mineral property interests. Failure to secure adequate financing could halt or significantly delay development plans.
• Reliance on Proprietary UGD Method [medium — operational]: The company's strategy relies heavily on its proprietary Underground Gravity Drainage (UGD) method for extracting stranded oil reserves. The success of this method is critical and unproven at a commercial scale.
• Acquisition of Non-Operating Subsidiary [low — legal]: The acquisition of Stranded Oil Resources Corporation (SORC) for $72,678 cash and a 5.0% royalty was made when SORC was not conducting ongoing operations. The value and future contribution of this acquisition remain uncertain.

Industry Context

The oil and gas exploration and production sector is capital-intensive and subject to volatile commodity prices. Companies focusing on niche extraction methods like Laredo Oil's UGD face the challenge of proving their technology's economic viability against established conventional methods. The industry is also increasingly focused on efficiency and environmental considerations.

Regulatory Implications

As an oil and gas exploration company, Laredo Oil is subject to various federal, state, and local regulations concerning drilling, environmental protection, and resource management. Compliance with these regulations is essential and can involve significant costs and operational constraints.

What Investors Should Do

1. Monitor fundraising efforts
2. Evaluate UGD technology viability
3. Assess resolution of legal judgments

Key Dates

• 2020-12-31: Acquisition of Stranded Oil Resources Corporation (SORC) — Expanded mineral property interests, though SORC is not currently operational.
• 2025-05-31: Fiscal Year End — Reported $0 revenue, highlighting the lack of commercial production.
• 2024-11-30: Market value of common equity determination — Indicated a market value of $17.1 million for common equity held by non-affiliates.
• 2025-08-29: Shares of common stock outstanding determination — Reported 74,887,755 shares of common stock outstanding.

Glossary

Underground Gravity Drainage (UGD)

A proprietary method used by Laredo Oil, Inc. to extract stranded oil reserves from underground reservoirs. (This is the core technology the company is relying on for future production and revenue generation.)

Stranded Oil Reserves

Oil deposits that are difficult or uneconomical to extract using conventional methods. (Laredo Oil's business model is specifically focused on accessing these types of reserves.)

Mineral Property Interests

Rights to explore for and extract minerals, including oil and gas, from a specific area of land. (Represents the company's primary assets, totaling 45,766 gross acres and 38,153 net acres in Montana.)

Gross Acres

The total acreage in which the company has an interest, regardless of the percentage of that interest. (Indicates the overall land footprint of the company's exploration efforts.)

Net Acres

The company's proportional interest in the acreage, calculated by multiplying gross acres by the ownership percentage. (Represents the actual land area the company controls for its operations.)

Year-Over-Year Comparison

The fiscal year ended May 31, 2025, shows no revenue, a continuation from previous periods where commercial production was not yet established. The company's focus remains on exploration and securing financing, with no significant changes in operational status or financial performance reported in terms of revenue generation. New risks related to significant legal judgments have emerged, increasing the financial and legal challenges.

Key Financial Figures

• $0.0001 — 00 authorized shares of common stock at $0.0001 par value and 10,000,000 authorized sha
• $72,678 — for the SORC shares, we paid Alleghany $72,678 in cash and agreed to pay Alleghany a s
• $70 — for oil and gas have fluctuated in the $70-85 per barrel range. However, oil and g
• $377,190 — Petroleum County, demanding payment of $377,190, plus interest and collection costs for
• $354,267.29 — udgment and Order in favor of Capex for $354,267.29 plus interest in the amount of $79,224.
• $79,224.89 — 4,267.29 plus interest in the amount of $79,224.89 and future accruing costs and interest
• $5,000 — a payment arrangement plan to pay Capex $5,000 per month until the judgement is satisf
• $298,050 — rt, Valley County, demanding payment of $298,050, plus interest and collection costs, fo
• $276,815 — gment in favor of Capstar in the sum of $276,815 principal balance, plus interest in the
• $49,675 — balance, plus interest in the amount of $49,675 and court costs for a total judgment of
• $326,650 — and court costs for a total judgment of $326,650 with post judgment interest of 10% per
• $164,235 — rt, Valley County, demanding payment of $164,235, plus interest and collection costs for
• $750 — 2025, Lustre agreed in mediation to pay $750 per month until all outstanding amounts
• $41,842 — isposition was granted in the amount of $41,842 together with costs and any post judgme
• $5 — ty securities with a price of less than $5.00, other than securities registered on

Filing Documents

• lrdc-10k.htm (10-K) — 1113KB
• lrdc-ex31_1.htm (EX-31.1) — 11KB
• lrdc-ex31_2.htm (EX-31.2) — 11KB
• lrdc-ex32_1.htm (EX-32.1) — 4KB
• lrdc-ex32_2.htm (EX-32.2) — 4KB
• la001_v1.jpg (GRAPHIC) — 5KB
• la002_v1.jpg (GRAPHIC) — 11KB
• 0001199835-25-000313.txt ( ) — 4084KB
• lrdc-20250531.xsd (EX-101.SCH) — 31KB
• lrdc-20250531_cal.xml (EX-101.CAL) — 49KB
• lrdc-20250531_def.xml (EX-101.DEF) — 47KB
• lrdc-20250531_lab.xml (EX-101.LAB) — 217KB
• lrdc-20250531_pre.xml (EX-101.PRE) — 169KB
• lrdc-10k_htm.xml (XML) — 499KB

Risk Factors

Item 1A. Risk Factors 6

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 6

Cybersecurity

Item 1C. Cybersecurity 6

Properties

Item 2. Properties 7

Legal Proceedings

Item 3. Legal Proceedings 7

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 7 Part II

Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 8

Managements Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations 9

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 12

Consolidated Financial Statements and Supplementary Data

Item 8. Consolidated Financial Statements and Supplementary Data 12

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 12

Controls and Procedures

Item 9A. Controls and Procedures 12

Other Information

Item 9B. Other Information 13 Part III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 14

Executive Compensation

Item 11. Executive Compensation 16

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 18

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 19

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 19 Part IV

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules 21

Signatures

Signatures 24 2 Forward-Looking From time to time, we may provide information, whether orally or in writing, including certain statements in this Annual Report on Form 10-K (this 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 included in this Form 10-K 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 Form 10-K, any exhibits to this Form 10-K and other public 3 PART I Item 1. Business We were incorporated under the laws of the State of Delaware on March 31, 2008 under the name of Laredo Mining, Inc. As of that date, we had 90,000,000 authorized shares of common stock at $0.0001 par value and 10,000,000 authorized shares of preferred stock at $0.0001 par value. On October 21, 2009 our name was changed to Laredo Oil, Inc.

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View this 10-K filing on SEC EDGAR