Norris Industries' Losses Widen Amid Rising G&A, Cash Dwindles

TL;DR

**NRIS is bleeding cash and relying on related-party debt; steer clear unless you're a high-risk speculator.**

AI Summary

Norris Industries, Inc. (NRIS) reported a net loss of $319,297 for the six months ended August 31, 2025, an increase from a net loss of $286,893 for the same period in 2024. Total revenues from oil and gas sales remained relatively flat at $177,158 for the six months ended August 31, 2025, compared to $177,274 in the prior year. Operating expenses increased significantly, with general and administrative expenses rising to $162,182 for the six months ended August 31, 2025, from $103,936 in 2024, a 56% increase. The company's cash balance decreased to $40,323 as of August 31, 2025, from $85,627 at February 28, 2025, and it reported negative working capital of approximately $75,000. A convertible note payable to a related party, JBB, increased to $3,500,000 from $3,300,000, with an additional $500,000 made available on the credit line. The company continues to operate as a going concern but acknowledges ongoing losses since 2016 and the need for potential future capital raises through private placement sales of equity and debt securities.

Why It Matters

Norris Industries' widening net losses and declining cash position signal significant financial instability, making it a high-risk investment. The company's reliance on related-party debt from JBB and the need for future capital raises through private placements could dilute existing shareholders and indicate a struggle to attract external, arms-length financing. For employees, continued operational losses raise concerns about job security, while customers might face uncertainty regarding long-term service stability. In a competitive oil and gas market, NRIS's inability to generate consistent profits or positive cash flow puts it at a severe disadvantage against more robust players, highlighting its precarious market position.

Risk Assessment

Risk Level: high — Norris Industries has incurred continuing losses since 2016, including a net loss of $319,297 for the six months ended August 31, 2025. The company reported negative working capital of approximately $75,000 and a cash balance of only $40,323 as of August 31, 2025, down from $85,627 at February 28, 2025, indicating severe liquidity issues and a going concern risk.

Analyst Insight

Investors should avoid Norris Industries (NRIS) given its consistent losses, negative working capital, and reliance on related-party financing. The company's inability to generate positive cash flow from operations suggests fundamental business challenges that are unlikely to resolve in the near term. Consider companies with strong balance sheets and positive cash flow in the energy sector instead.

Financial Highlights

debt To Equity

N/A

revenue

$177,158

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-$319,297

eps

$0.00

gross Margin

N/A

cash Position

$40,323

revenue Growth

0.06%

Revenue Breakdown

Key Numbers

• $319,297 — Net Loss (for the six months ended August 31, 2025, increased from $286,893 in 2024)
• $177,158 — Total Revenues (for the six months ended August 31, 2025, flat compared to $177,274 in 2024)
• $162,182 — General and Administrative Expenses (for the six months ended August 31, 2025, up 56% from $103,936 in 2024)
• $40,323 — Cash Balance (as of August 31, 2025, down from $85,627 at February 28, 2025)
• $75,000 — Negative Working Capital (as of August 31, 2025)
• $3,500,000 — Convertible Note Payable - Related Party (as of August 31, 2025, increased from $3,300,000 at February 28, 2025)
• $245,000 — Cash Losses from Operating Activities (for the six months ended August 31, 2025)
• 108,245,688 — Common Shares Outstanding (as of September 15, 2025)
• $0.00 — Net Loss Per Common Share (for the six months ended August 31, 2025)
• $56,038 — Interest Expense (for the six months ended August 31, 2025)

Key Players & Entities

• Norris Industries, Inc. (company) — registrant
• JBB (company) — related party lender
• Norris Petroleum, Inc. (company) — Texas registered subsidiary
• International Western Oil (company) — office landlord
• Odyssey Enterprises LLC (company) — seller of oil and gas property
• SEC (regulator) — Securities and Exchange Commission
• FDIC (regulator) — Federal Deposit Insurance Corporation
• Nevada (location) — state of incorporation
• Texas (location) — primary operating state
• Weatherford (location) — principal executive offices

FAQ

Risk Factors

• Ongoing Operating Losses and Cash Burn [high — financial]: The company has incurred net losses for six months ended August 31, 2025 ($319,297) and continues to operate with negative working capital of approximately $75,000. This persistent cash burn necessitates future capital raises.
• Dependence on Related Party Financing [high — financial]: The convertible note payable to related party JBB increased to $3,500,000. The company's ability to continue operations is significantly tied to this financing arrangement and the availability of additional credit.
• Declining Cash Reserves [medium — financial]: The cash balance has fallen from $85,627 at February 28, 2025, to $40,323 as of August 31, 2025, a decrease of over 50%. This reduction in liquidity poses a short-term operational risk.
• Significant Increase in G&A Expenses [medium — operational]: General and administrative expenses surged by 56% to $162,182 for the six months ended August 31, 2025, from $103,936 in the prior year. This increase outpaces revenue growth and erodes profitability.
• Going Concern Uncertainty [high — financial]: Despite management's assertions, the company acknowledges ongoing losses since 2016 and the need for future capital raises. This raises substantial doubt about its ability to continue as a going concern.

Industry Context

The oil and gas industry is capital-intensive and subject to volatile commodity prices. Companies often face significant regulatory hurdles and environmental concerns. Norris Industries appears to be a small player with limited revenue, struggling to achieve profitability amidst these industry challenges.

Regulatory Implications

As an oil and gas company, Norris Industries is subject to various environmental regulations, safety standards, and reporting requirements. Compliance with these regulations can be costly and complex, and failure to comply can result in fines and legal action.

What Investors Should Do

1. Monitor G&A expense trends closely; the recent 56% increase requires justification and a clear path to reduction.
2. Evaluate the sustainability of the company's operations given the persistent net losses and negative working capital.
3. Assess the terms and potential dilution impact of the convertible note payable to JBB, especially in light of ongoing capital needs.
4. Scrutinize management's strategy for future capital raises and their likelihood of success in the current market environment.

Glossary

Working Capital

The difference between a company's current assets and current liabilities. Positive working capital indicates a company can meet its short-term obligations. (Norris Industries has negative working capital of approximately $75,000, indicating a potential short-term liquidity issue.)

Going Concern

An accounting assumption that a business will continue to operate for the foreseeable future. If there is substantial doubt, it must be disclosed. (Norris Industries acknowledges ongoing losses and the need for future capital raises, raising substantial doubt about its ability to continue as a going concern.)

Convertible Note Payable

A debt instrument that can be converted into a predetermined amount of the issuer's equity at certain times. (Norris Industries has a significant convertible note payable to a related party, JBB, totaling $3,500,000, which impacts its capital structure and future equity dilution.)

General and Administrative Expenses (G&A)

Costs incurred for the overall management and administration of a business, not directly tied to production or sales. (A 56% increase in G&A expenses to $162,182 for the six months ended August 31, 2025, is a significant concern, negatively impacting the company's bottom line.)

Year-Over-Year Comparison

For the six months ended August 31, 2025, Norris Industries reported a net loss of $319,297, an increase from $286,893 in the prior year, while revenues remained virtually flat at $177,158. A significant concern is the 56% surge in general and administrative expenses to $162,182, which is a primary driver of the widening net loss. The company's cash position has also deteriorated, falling to $40,323 from $85,627, and it now faces negative working capital.

Filing Documents

• form10-q.htm (10-Q) — 673KB
• ex31-1.htm (EX-31.1) — 16KB
• ex31-2.htm (EX-31.2) — 17KB
• ex32-1.htm (EX-32.1) — 9KB
• ex32-2.htm (EX-32.2) — 9KB
• 0001493152-25-017989.txt ( ) — 2763KB
• nris-20250831.xsd (EX-101.SCH) — 19KB
• nris-20250831_cal.xml (EX-101.CAL) — 28KB
• nris-20250831_def.xml (EX-101.DEF) — 72KB
• nris-20250831_lab.xml (EX-101.LAB) — 168KB
• nris-20250831_pre.xml (EX-101.PRE) — 128KB
• form10-q_htm.xml (XML) — 316KB

Financial Statements (unaudited)

Financial Statements (unaudited) Consolidated Balance Sheets F-1 Consolidated F-2 Consolidated F-3 Consolidated F-4 Notes to Consolidated Financial Statements F-5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 3 Item 3. Quantitative and Qualitative Disclosures About Market Risk 8 Item 4. Controls and Procedures 8 PART II - OTHER INFORMATION Item 1. Legal Proceedings 9 Item 1A. Risk Factors 9 Item 2. Unregistered Sales of Equity Securities 9 Item 3. Defaults Upon Senior Securities 9 Item 4. Mine Safety Disclosures 9 Item 5. Other Information 9 Item 6. Exhibits 9

SIGNATURES

SIGNATURES 10 2 NORRIS INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS AUGUST 31, 2025 AND FEBRUARY 28, 2025 August 31, 2025 February 28, 2025 (unaudited) ASSETS Current Assets Cash $ 40,323 $ 85,627 Account receivable - oil & gas 15,010 27,223 Total Current Assets 55,333 112,850 Oil and Gas Property - Full Cost Method Properties subject to amortization 3,218,232 3,243,322 Less: accumulated depletion and impairment ( 3,019,419 ) ( 2,995,837 ) Total Oil and Gas Property, net 198,813 247,485 Total Assets $ 254,146 $ 360,335 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable and accrued expenses $ 129,820 $ 126,355 Total Current Liabilities 129,820 126,355 Convertible note payable - related party 3,500,000 3,300,000 Accounts payable and accrued expenses - related parties-long term 695,570 639,532 Asset retirement obligations 354,588 400,983 Total Liabilities 4,679,978 4,466,870 Commitments and Contingencies (see Note 6) - - Stockholders' Deficit Preferred stock, $ 0.001 par value per share 20,000,000 shares authorized - - Series A Convertible Preferred stock, $ 0.001 par value per share 1,000,000 shares authorized; 1,000,000 shares issued and outstanding; liquidation preference of $ 2,250,000 1,000 1,000 Preferred stock, value 1,000 1,000 Common stock, $ 0.001 par value per share, 150,000,000 shares authorized; 108,245,688 shares issued and outstanding 108,246 108,246 Additional paid-in capital 7,658,050 7,658,050 Accumulated deficit ( 12,193,128 ) ( 11,873,831 ) Total Stockholder's Deficit ( 4,425,832 ) ( 4,106,535 ) Total Liabilities and Stockholders' Deficit $ 254,146 $ 360,335 The accompanying notes are an integral part of these interim unaudited consolidated financial statements. F-1 NORRIS INDUSTRIES, INC. CONSOLIDATED FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 2025 AND 2024 (UNAUDITED) 1

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