Laredo Oil's Net Loss Doubles Amidst Plummeting Revenue

Ticker: LRDC · Form: 10-Q · Filed: Oct 20, 2025 · CIK: 1442492

Sentiment: bearish

Topics: Oil & Gas Exploration, Small-Cap, Going Concern, Net Loss, Revenue Decline, High Debt, Energy Sector

TL;DR

**LRDC is bleeding cash with revenue collapsing, making it a high-risk bet for any investor.**

AI Summary

Laredo Oil, Inc. (LRDC) reported a significant increase in net loss for the three months ended August 31, 2025, reaching $(952,074) compared to $(469,252) for the same period in 2024, representing a 102.9% increase. Revenue declined sharply by 74.5%, from $6,048 in Q3 2024 to $1,543 in Q3 2025. Operating expenses rose to $693,261 from $670,359, driven primarily by an increase in general, selling, and administrative expenses to $561,807 from $464,219. Interest expense more than doubled to $(276,319) from $(133,643). The company's accumulated deficit grew to $(26,857,443) as of August 31, 2025, from $(25,905,369) at May 31, 2025. Total current liabilities increased to $13,842,300 from $12,909,540, while total assets saw a modest increase to $1,598,620 from $1,448,018. The company continues to face substantial doubt about its ability to continue as a going concern, citing routine losses and dependence on financing.

Why It Matters

Laredo Oil's deepening losses and declining revenue signal significant operational challenges, raising red flags for investors. The company's 'going concern' warning indicates a high risk of financial instability, potentially impacting its ability to fund future oil exploration and production, which is critical in the competitive energy sector. Employees face uncertainty regarding job security, and customers could see disruptions if the company's financial health deteriorates further. The broader market might view this as a cautionary tale for small-cap oil explorers struggling with capital intensity and market volatility.

Risk Assessment

Risk Level: high — The company explicitly states 'substantial doubt about the Company’s ability to continue as a going concern' due to routinely incurred losses and an accumulated deficit of $(26,857,443) as of August 31, 2025. Revenue plummeted by 74.5% to $1,543, while net loss more than doubled to $(952,074) for the three months ended August 31, 2025, compared to the prior year.

Analyst Insight

Investors should exercise extreme caution and consider divesting any holdings in LRDC. The 'going concern' warning, coupled with a 102.9% increase in net loss and a 74.5% drop in revenue, indicates severe financial distress and a high probability of further value erosion.

Financial Highlights

debt To Equity
N/A
revenue
$1,543
operating Margin
N/A
total Assets
$1,598,620
total Debt
N/A
net Income
$(952,074)
eps
N/A
gross Margin
N/A
cash Position
$416,900
revenue Growth
-74.5%

Revenue Breakdown

SegmentRevenueGrowth
Oil and Gas Sales$1,543-74.5%

Key Numbers

Key Players & Entities

FAQ

What was Laredo Oil's net loss for the quarter ended August 31, 2025?

Laredo Oil, Inc. reported a net loss of $(952,074) for the three months ended August 31, 2025. This represents a significant increase from the net loss of $(469,252) reported for the same period in 2024.

How did Laredo Oil's revenue change in the latest quarter?

Laredo Oil's revenue decreased substantially, falling to $1,543 for the three months ended August 31, 2025, from $6,048 in the comparable period of 2024. This marks a 74.5% decline in revenue.

Does Laredo Oil have a 'going concern' issue?

Yes, Laredo Oil, Inc. explicitly states in its filing that 'This situation raises substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance date of these consolidated financial statements' due to routinely incurred losses and an accumulated deficit.

What is Laredo Oil's accumulated deficit as of August 31, 2025?

As of August 31, 2025, Laredo Oil, Inc.'s accumulated deficit reached $(26,857,443). This is an increase from $(25,905,369) as of May 31, 2025.

What steps is Laredo Oil's management taking to address its financial challenges?

Laredo Oil's management is undertaking steps including controlling overhead and expenses, raising funds connected with specific well development, and raising funds through notes payable and convertible debt to expand property acquisitions and maintain operations.

How much cash and cash equivalents did Laredo Oil have at the end of the quarter?

As of August 31, 2025, Laredo Oil, Inc. had $416,900 in cash and cash equivalents and restricted cash. This is an increase from $277,367 at May 31, 2025.

What was the change in Laredo Oil's total current liabilities?

Laredo Oil's total current liabilities increased to $13,842,300 as of August 31, 2025, from $12,909,540 as of May 31, 2025.

What is Laredo Oil's primary business focus?

Laredo Oil, Inc. is an oil exploration and production company primarily engaged in the acquisition and exploration of mineral reserves. Its focus is on locating mature oil fields and recovering stranded oil using proprietary enhanced recovery methods like underground gravity drainage (UGD).

How many shares of common stock were outstanding for Laredo Oil as of October 15, 2025?

As of October 15, 2025, Laredo Oil, Inc. had 76,736,592 shares of common stock issued and outstanding.

What was Laredo Oil's interest expense for the three months ended August 31, 2025?

Laredo Oil, Inc. reported an interest expense, net, of $(276,319) for the three months ended August 31, 2025. This is a significant increase from $(133,643) for the same period in 2024.

Risk Factors

Industry Context

The oil and gas industry is subject to significant price volatility and regulatory scrutiny. Companies in this sector often face challenges related to exploration, production costs, and environmental compliance. Laredo Oil's performance suggests it is struggling to navigate these industry dynamics, particularly with its sharp revenue decline and increasing losses.

Regulatory Implications

As an oil and gas company, Laredo Oil is subject to various environmental, safety, and financial regulations. Compliance with these regulations can be costly and complex. Any changes in environmental policies or reporting requirements could further impact the company's financial condition and operational capabilities.

What Investors Should Do

  1. Review financing agreements and debt covenants to understand the terms and risks associated with the company's reliance on external funding.
  2. Analyze the sustainability of the company's operating model given the significant revenue decline and increasing losses.
  3. Assess the company's ability to secure additional financing to address its going concern issues and fund future operations.

Glossary

Accumulated Deficit
The total cumulative net losses of a company that have not been offset by net income or other gains since its inception. (Indicates the company's long-term profitability and financial health, showing a significant and growing deficit of $(26,857,443).)
Going Concern
A business's ability to continue operating for the foreseeable future without the threat of liquidation. (The company explicitly states substantial doubt exists about its ability to continue as a going concern, a critical warning for investors.)
Current Liabilities
Obligations that a company expects to settle within one year or its operating cycle, whichever is longer. (An increase to $13,842,300 suggests potential short-term financial strain or increased reliance on short-term funding.)

Year-Over-Year Comparison

Compared to the prior year period, Laredo Oil, Inc. has experienced a dramatic 74.5% decrease in revenue, falling to $1,543. This revenue drop has coincided with a more than doubling of the net loss to $(952,074), a 102.9% increase. Operating expenses have risen, driven by higher administrative costs, and interest expenses have also more than doubled, exacerbating the financial deterioration. The company continues to face substantial doubt regarding its going concern status, with an increasing accumulated deficit and current liabilities.

Filing Stats: 4,540 words · 18 min read · ~15 pages · Grade level 16.6 · Accepted 2025-10-20 17:30:19

Key Financial Figures

Filing Documents

Managements Discussion and Analysis of Financial Condition and Results of Operations

Managements Discussion and Analysis of Financial Condition and Results of Operations 21 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 26 Item 4.

Controls and Procedures

Controls and Procedures 26

OTHER INFORMATION

PART II OTHER INFORMATION Item 6. Exhibits 28

Signatures

Signatures 29 2 ITEM 1. FINANCIAL STATEMENTS The following unaudited condensed consolidated financial statements ("financial statements") have been prepared by Laredo Oil, Inc. (the "Company"), pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such SEC rules and regulations; nevertheless, the Company believes that the disclosures are adequate to make the information presented not misleading. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended May 31, 2025. These financial statements and the notes attached hereto should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K, which was filed with the SEC on September 15, 2025. In the opinion of the Company's management, all adjustments, including normal recurring adjustments necessary to present fairly the financial position of the Company as of August 31, 2025, and the results of its operations and cash flows for the three-month period then ended, have been included. The results of the Company's operations for the three-month period ended August 31, 2025 are not necessarily indicative of the results to be expected for the full year ending May 31, 2026. 3 Laredo Oil, Inc. Condensed Consolidated Balance Sheets August 31, 2025 (Unaudited) May 31, 2025 ASSETS Current Assets Cash and cash equivalents and restricted cash $ 416,900 277,367 Receivables – related party 28,155 - Prepaid expenses and other current assets 31,250 21,156 Total Current Assets 476,305 298,523 Property and Equipment Oil and gas acquisition and drilling costs 1,001,209 1,001,209 Property and equipment, net 101,106 108,

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