Norris Industries, Inc.

Norris Industries, Inc. is a small exploration and production oil and natural gas company incorporated in Nevada on February 19, 2014, with headquarters in Weatherford, Texas, that focuses on the development, production, and maintenance of its existing crude oil and natural gas properties in Texas. The Company holds approximately 3,612 total gross acres in leaseholds across various regions of North Central and North East Texas, with principal operating properties in the Ellenberger formation in Coleman County, and in Jack County and Palo-Pinto County, Texas. The Company’s business model centers on acquiring and developing mature smaller oil fields with potential for Enhanced Oil Recovery methods, and it plans to operate most of its acreage to maintain control over capital expenditure planning and cost reduction. The Company underwent a change of control in July 2017 when Patrick Norris and his affiliate JBB Partners acquired majority ownership and have since provided loans and equity funding for oil and gas mineral rights purchases and operational expenses.

The Company’s revenue is derived entirely from exploration and production activities, with oil sold primarily to wholesalers and natural gas sold to interstate and intrastate pipelines, end-users, and marketers. The Company has established business relationships with BML, Transport Oil, and Lion Oil Trading & Transportation for oil sales and WTG Jameson for gas sales. As of February 28, 2026, the Company’s estimated gross proved oil and natural gas reserves, as prepared by independent reserve engineering firm Kurt Mire, PE, using SEC prices of $63.54 per barrel of oil and $3.80 per MMBTU for Henry Hub gas, totaled 33,800 barrels of oil and 132,000 Mcf of natural gas net to the Company. The Company’s proved reserves are classified as proved developed producing, proved developed non-producing behind pipe, and proved developed non-producing shut-in, with total future revenue estimated at $2,657,500 and discounted cash flows at 10% of $386,800.

During fiscal year 2026, the Company generated revenues of $286,086 from oil and gas production sales, compared to $329,334 in the prior year, with the decrease attributed to less productive wells having maintenance issues resulting in lower production. The Company recorded a net loss of $661,431 for the year ended February 28, 2026, compared to a net loss of $601,076 for the prior year, with the increase primarily related to recognition of costs from plugging and abandoning four wells and lower overall production. Lease operating expenses were $553,023 for fiscal 2026 versus $511,246 in fiscal 2025, while general and administrative expenses were $228,783 compared to $189,611, with the increase due to costs from plugging and abandoning four wells.

The Company’s financial statements have been prepared on a going concern basis, and as of February 28, 2026, the Company had cash of $45,376 and negative working capital of $158,987. The Company has an availability of $1,000,000 on its existing credit line with JBB Partners, Inc., an entity owned and controlled by Patrick Norris, the Company’s Chief Executive Officer and principal shareholder. During fiscal year 2026, the Company accessed $400,000 in funding from its credit line and incurred cash losses of $440,251 from operating activities.

The Company’s operational plans during fiscal year 2026 involved a period of assessment and work-over of its existing wells, and it continues to selectively look for oil and gas reserve concessions with existing production. The Company has completed several exploration and acquisition projects, including the Bend Arch Lion 1A JV in Coleman County with four gross oil and gas wells, the Bend Arch Lion 1B JV with six gross oil and gas wells, the Marshall Walden JV in Kilgore City with six gross oil and gas wells and two injection wells, and the Stuart Leases of Jack County and Palo-Pinto County with twenty gross oil and gas wells.

Management’s discussion indicates that the Company plans to focus its limited resources on its existing leaseholds in the future, with the near- to medium-term objective of focusing on existing fields and selectively considering larger-reserve oil and gas properties with low production to acquire at reasonable cost and then implement effective Enhanced Oil Recovery methods to improve current revenues and assets. For long-term cash flow enhancement, the Company is in the process of identifying other oil-field related and non-oilfield niche enterprises to consider for bolt-on or diversified acquisition targets to grow Company revenues. The Company’s long-term objective is to increase shareholder value by growing reserves, production and cash flow.

The Company anticipates that it may not be able to cover operating costs and will have to take cost cutting measures and seek continued operational financing, citing the impact of prior pandemic containment measures, the Russian Federation invasion of Ukraine, the Hamas terrorist attack on Israel, and the subsequent conflict with Iran that has created further instability in the Middle East and disrupted global energy supplies. The Company states that energy prices have risen sharply, but it is unable to predict exact supply and demand balances that will cause energy prices to be highly volatile and thus affect revenues into the near future.

Regarding capital allocation, the Company intends to finance capital expenditures primarily through cash flows from operations, bank borrowings, and public and private equity and debt offerings. The Company’s principal capital and exploration expenditures during the next fiscal year are expected to relate to selected well workovers on its Jack and Palo Pinto County acreages. The Company expects to seek additional capital from one or more sources via restricted private placement sales of equity and debt securities if required, but notes there can be no assurance that it would be able to secure necessary capital on acceptable terms or at all.

The Company’s majority shareholder expects, but is not legally obligated, to provide funding for the Company’s capital expenditure program for fiscal year 2027, which may be provided in the form of loans, issuance of equity or other means. The Company believes it has sufficient cash on hand and available funds from its line of credit to fund costs for selected well workovers and other operating costs for the 12-month period subsequent to issuance of the consolidated financial statements.

The Company’s leasehold acquisition strategy is to pursue long-term contracts that allow it to maintain flexible development plans and avoid short-term obligations to drill wells. The Company plans to operate most of its acreage, giving it greater control over the planning of capital expenditures, execution and cost reduction, and allowing it to adjust capital spending based on drilling results and the economic environment.

The Company’s sales strategy in relation to spot pricing will be to produce less when the sales price is lower and produce more when the sales price is higher, and to maintain the lowest production cost by aiming to have inventory as low as possible, in some instances virtually zero.

The Company faces material risks including its limited operating history as it was formed on February 19, 2014, and has had limited business operations upon which an evaluation can be based. The Company has incurred continuing losses since 2016, including a loss of approximately $661,000 for the fiscal year ended February 28, 2026, and during that year accessed $400,000 in funding while incurring cash losses of approximately $440,000 from operating activities. The Company’s financial statements have been prepared on a going concern basis, and as of February 28, 2026, the Company had availability of $1,000,000 on its existing credit line with JBB Partners, Inc., an entity owned and controlled by the Chief Executive Officer who is not legally obligated to fund operations. The Company is subject to risks from the COVID-19 pandemic, the Russian Federation invasion of Ukraine, the Hamas terrorist attack on Israel, and the subsequent conflict with Iran and blockade of the Straits of Hormuz, which have caused substantial volatility and uncertainty in oil and gas market prices. The Company also faces risks from potential changes in the legal and regulatory environment, including potential new federal regulations on hydraulic fracturing, and from the hazards inherent in drilling, production, and transportation of crude oil and natural gas, including well blowouts, explosions, pipeline ruptures, fires, and surface or ground water contamination.

Management’s tone in the annual report is cautious and forward-looking, emphasizing the Company’s focus on improving existing fields and selectively pursuing acquisition opportunities while acknowledging significant macroeconomic and geopolitical uncertainties. The Company states that it will continue to conserve capital to focus on smaller oil and natural gas properties in West, Central West, East and South Texas, aiming to increase revenues via acquisition, and will also try to improve existing production revenues of its various properties through re-entries and EOR methods. The two or three strategic priorities emphasized are: developing and growing hydrocarbon acreage positions using outside development expertise, proactively managing the property portfolio to identify and divest non-core assets, and maintaining access to capital to execute the growth plan.