NMEX Narrows Loss to $63K, Boosts Revenue Amid Going Concern Doubts

TL;DR

**NMEX is a highly speculative bet, still burning cash and relying on related-party loans, making it a hard pass for serious investors.**

AI Summary

NORTHERN MINERALS & EXPLORATION LTD. (NMEX) reported a net loss of $63,208 for the three months ended October 31, 2025, an improvement from the $77,462 net loss in the same period of 2024. The company generated revenue of $5,065 in Q1 2026, a significant increase from zero revenue in Q1 2025, primarily from oil and natural gas sales. Gross margin stood at $109. Operating expenses decreased to $59,536 from $74,602 year-over-year, driven by a reduction in general and administrative expenses from $32,752 to $3,717. However, professional fees increased from $16,000 to $30,619. Cash at the end of the period increased to $8,270 from $4,059 at July 31, 2025, largely due to $62,000 in proceeds from a related-party note payable. The company continues to operate with a significant accumulated deficit of $3,985,003 as of October 31, 2025, and a total stockholders' deficit of $286,556, raising substantial doubt about its ability to continue as a going concern.

Why It Matters

For investors, NMEX's continued 'going concern' warning is a critical red flag, indicating significant financial instability despite a slight reduction in net loss. The company's reliance on related-party loans for cash flow and its minimal revenue of $5,065 from oil and gas sales suggest a highly speculative investment. Employees face uncertainty regarding job security given the company's precarious financial state. Customers of its oil and gas operations might see limited impact in the short term, but long-term operational viability is questionable. Competitively, NMEX remains a very small player in the natural resource sector, struggling to achieve profitability and scale, making it vulnerable to larger, more established firms.

Risk Assessment

Risk Level: high — The company explicitly states a 'going concern' warning, citing minimal revenue of $5,065 and $57,789 cash used in operating activities for the quarter ended October 31, 2025. Its accumulated deficit stands at $3,985,003, and total liabilities of $457,522 significantly outweigh total assets of $170,966, indicating severe financial distress.

Analyst Insight

Investors should exercise extreme caution and likely avoid NMEX given the explicit going concern warning, substantial accumulated deficit, and reliance on related-party financing. The minimal revenue and continued operating losses suggest a high-risk, speculative investment with a low probability of long-term success.

Financial Highlights

debt To Equity

N/A

revenue

$5,065

operating Margin

-1173.2%

total Assets

$170,966

total Debt

$457,522

net Income

-$63,208

eps

N/A

gross Margin

2.1%

cash Position

$8,270

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $63,208 — Net Loss (Decreased from $77,462 in the prior year period.)
• $5,065 — Revenue (Generated from oil and natural gas sales, up from $0 in Q1 2025.)
• $8,270 — Cash (As of October 31, 2025, increased from $4,059 at July 31, 2025.)
• $57,789 — Cash Used in Operating Activities (For the three months ended October 31, 2025.)
• $3,985,003 — Accumulated Deficit (As of October 31, 2025, indicating significant historical losses.)
• $286,556 — Total Stockholders' Deficit (As of October 31, 2025, worsened from $223,348 at July 31, 2025.)
• $62,000 — Proceeds from Note Payable – Related Party (Primary source of cash provided by financing activities.)
• 111,238,932 — Common Shares Outstanding (As of December 15, 2025.)
• $457,522 — Total Liabilities (As of October 31, 2025, significantly exceeding total assets.)
• $170,966 — Total Assets (As of October 31, 2025.)

Key Players & Entities

• NORTHERN MINERALS & EXPLORATION LTD. (company) — registrant
• Kathis Energy LLC (company) — wholly owned subsidiary
• ENMEX LLC (company) — wholly owned subsidiary
• Lost Creek Acquisitions LLC (company) — investment source for oil and natural gas revenue
• FINRA (regulator) — approved name change
• Pemer Bacalar (company) — joint venture negotiation partner
• Nevada (person) — state of incorporation
• Oklahoma (person) — location of oil and gas wells
• Texas (person) — location of oil and gas operations

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company has a significant accumulated deficit of $3,985,003 as of October 31, 2025, and a total stockholders' deficit of $286,556. This raises substantial doubt about its ability to continue as a going concern.
• High Liabilities Relative to Assets [high — financial]: Total liabilities stand at $457,522 as of October 31, 2025, significantly exceeding total assets of $170,966. This indicates a precarious financial position.
• Dependence on Related Party Financing [medium — operational]: The increase in cash to $8,270 was largely due to $62,000 in proceeds from a related-party note payable. This highlights a reliance on related parties for funding.
• Volatile Operating Expenses [medium — operational]: While total operating expenses decreased to $59,536 from $74,602, driven by a reduction in general and administrative expenses, professional fees increased significantly from $16,000 to $30,619.

Industry Context

The oil and gas exploration and production sector is capital-intensive and subject to volatile commodity prices. Companies in this industry face significant exploration risks, regulatory hurdles, and environmental concerns. NMEX appears to be in the early stages of operations, generating minimal revenue from oil and gas sales, and is heavily reliant on financing.

Regulatory Implications

As an exploration company, NMEX is subject to environmental regulations and permitting requirements related to its oil and gas properties. Compliance with these regulations can be costly and time-consuming. Any changes in environmental policy or enforcement could impact the company's operations and financial performance.

What Investors Should Do

1. Monitor related-party transactions closely.
2. Evaluate the sustainability of new revenue streams.
3. Assess the company's ability to secure further funding.

Key Dates

• 2025-10-31: End of Q1 2026 reporting period — Marks the end of the period for which financial results are reported, showing a reduced net loss and new revenue generation.
• 2025-07-31: End of Q4 2025 (Audited) — Provides a comparison point for the balance sheet, showing an increase in cash and total assets.

Glossary

Accumulated deficit

The total cumulative net losses of a company since its inception, minus any net profits. (Indicates the company's history of unprofitability, with a significant deficit of $3,985,003 as of October 31, 2025.)

Stockholders' Deficit

Occurs when a company's total liabilities exceed its total assets, resulting in a negative net worth for shareholders. (NMEX has a stockholders' deficit of $286,556 as of October 31, 2025, highlighting its negative equity position.)

Going Concern

An assumption that a company will continue to operate for the foreseeable future, typically at least 12 months. (The company's financial condition raises substantial doubt about its ability to continue as a going concern.)

Related Party

A person or entity that has the ability to control or significantly influence the operating decisions of another entity. (The company received $62,000 in proceeds from a related-party note payable, indicating financial dependence on such parties.)

Year-Over-Year Comparison

Compared to the prior year period, NORTHERN MINERALS & EXPLORATION LTD. has shown a reduction in net loss from $77,462 to $63,208 for the three months ended October 31, 2025. A significant positive change is the generation of $5,065 in revenue, compared to zero in the prior year, primarily from oil and gas sales. Operating expenses have decreased, largely due to lower general and administrative costs, although professional fees have risen. The company's cash position has improved, mainly due to related-party financing, but the overall financial health remains precarious with a growing stockholders' deficit.

Filing Documents

• nmex20251031_10q.htm (10-Q) — 402KB
• ex_896793.htm (EX-31.1) — 13KB
• ex_896794.htm (EX-31.2) — 13KB
• ex_896795.htm (EX-32.1) — 7KB
• 0001437749-25-037820.txt ( ) — 2407KB
• nmex-20251031.xsd (EX-101.SCH) — 23KB
• nmex-20251031_def.xml (EX-101.DEF) — 174KB
• nmex-20251031_lab.xml (EX-101.LAB) — 158KB
• nmex-20251031_pre.xml (EX-101.PRE) — 190KB
• nmex-20251031_cal.xml (EX-101.CAL) — 19KB
• nmex20251031_10q_htm.xml (XML) — 172KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION 3

Financial Statements

Item 1. Financial Statements 3

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 14

Controls and Procedures

Item 4. Controls and Procedures 14

– OTHER INFORMATION

PART II – OTHER INFORMATION 14

Legal Proceedings

Item 1. Legal Proceedings 14

Risk Factors

Item 1A. Risk Factors 14

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 14

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 14

Other Information

Item 5. Other Information 15

Exhibits

Item 6. Exhibits 15

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements NORTHERN MINERALS & EXPLORATION LTD. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidated Balance Sheets as of October 31, 2025 (Unaudited) and July 31, 2025 (Audited) 4 Condensed Consolidated Statements of Operations for the Three Months ended October 31, 2025 and 2024 (Unaudited) 5 Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the Three Months ended October 31, 2025 and 2024 (Unaudited) 6 Condensed Consolidated Statements of Cash Flows for the Three Months ended October 31, 2025 and 2024 (Unaudited) 7 Notes to Condensed Consolidated Financial Statements (Unaudited) 8 3 NORTHERN MINERALS & EXPLORATION LTD. CONDENSED CONSOLIDATED BALANCE SHEETS October 31, July 31, 2025 2025 (Unaudited) (Audited) ASSETS Current Assets: Cash $ 8,270 $ 4,059 Accounts receivable 11,240 6,750 Total Current Assets 19,510 10,809 Other Assets: Oil and gas properties 151,456 151,456 Total other assets 151,456 151,456 TOTAL ASSETS $ 170,966 $ 162,265 LIABILITIES AND STOCKHOLDERS ' DEFICIT Current Liabilities: Accounts payable $ 82,525 $ 45,422 Accounts payable – related party 22,500 12,000 Accrued liabilities 29,597 15,527 Accrued compensation 2,400 — Loans payable - current 38,500 38,500 Total Current Liabilities 175,522 111,449 Long Term Liabilities: Other payables — 33,664 Accounts payable – related party — 20,500 Loan payable – related party 197,000 135,000 Loan payable – long term 85,000 85,000 TOTAL LIABILITIES 457,522 385,613 Commitments and Contingencies Stockholders' Deficit: Preferred stock, $ 0.001 par value, 50,000,000 shares authorized; no shares issued — — Common stock, $ 0.001 par value, 250,000,000 shares authorized; 111,238,932 and 107,238,932 shares issued and outstanding as of October 31, 2025 and July 31, 2025, respectively 111,239 107,239 Common stock to be issued

View Full Filing

View this 10-Q filing on SEC EDGAR