Cover
Cover - shares | 6 Months Ended | |
Nov. 30, 2021 | Jan. 14, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --05-31 | |
Entity File Number | 333-153168 | |
Entity Registrant Name | Laredo Oil, Inc. | |
Entity Central Index Key | 0001442492 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 2021 Guadalupe Street | |
Entity Address, Address Line Two | Ste. 260 | |
Entity Address, City or Town | Austin, Texas 78705 | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78705 | |
City Area Code | (512) | |
Local Phone Number | 337-1199 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,514,765 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Nov. 30, 2021 | May 31, 2021 |
Current Assets | ||
Cash and cash equivalents ($1.0 million and $0 restricted from use at November 30, 2021 and May 31, 2021, respectively) | $ 1,329,858 | $ 1,196,650 |
Receivables | 28,847 | 168,522 |
Receivables – related party | 54,667 | |
Prepaid expenses and other current assets | 156,582 | 267,150 |
Total Current Assets | 1,569,954 | 1,632,322 |
Property and Equipment | ||
Oil and gas acquisition costs | 662,075 | 389,480 |
Property and equipment, net | 379,817 | 419,723 |
Total Property and Equipment, net | 1,041,892 | 809,203 |
Other assets | 10,000 | |
TOTAL ASSETS | 2,962,720 | 2,770,808 |
Current Liabilities | ||
Accounts payable | 87,852 | 267,643 |
Accrued payroll liabilities | 1,608,157 | 1,559,283 |
Accrued interest | 12,736 | 17,491 |
Deferred management fee revenue | 95,373 | 95,373 |
Refundable advance from pending contract | 1,000,000 | |
Convertible debt, net of debt discount and debt issuance costs | 165,202 | |
Note payable – Alleghany, net of debt discount | 615,381 | |
Note payable, current portion | 157,843 | 1,220,825 |
Total Current Liabilities | 3,742,544 | 3,160,615 |
Long-term note payable – Alleghany | 600,305 | |
Long-term note, net of current portion | 1,098,040 | 1,246,486 |
Total Noncurrent Liabilities | 1,098,040 | 1,846,791 |
TOTAL LIABILITIES | 4,840,584 | 5,007,406 |
Stockholders Deficit | ||
Preferred stock: $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding | ||
Common stock: $0.0001 par value; 90,000,000 shares authorized; 54,514,765 issued and outstanding as of November 30 and May 31, respectively | 5,451 | 5,451 |
Additional paid in capital | 8,857,746 | 8,844,592 |
Accumulated deficit | (10,741,061) | (11,086,641) |
Total Stockholders Deficit | (1,877,864) | (2,236,598) |
TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT | 2,962,720 | 2,770,808 |
Olfert [Member] | ||
Property and Equipment | ||
Equity method investment – Cat Creek | 19,435 | |
Cat Creek [Member] | ||
Property and Equipment | ||
Equity method investment – Cat Creek | $ 321,439 | $ 329,283 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Nov. 30, 2021 | May 31, 2021 |
Statement of Financial Position [Abstract] | ||
Restricted Cash and Cash Equivalents, Current | $ 1,000,000 | $ 0 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 90,000,000 | 90,000,000 |
Common Stock, Shares, Issued | 54,514,765 | 54,514,765 |
Common Stock, Shares, Outstanding | 54,514,765 | 54,514,765 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2021 | Nov. 30, 2020 | Nov. 30, 2021 | Nov. 30, 2020 | |
Income Statement [Abstract] | ||||
Management fee revenue – related party and other | $ 286,118 | $ 1,247,554 | $ 572,236 | $ 2,923,541 |
Direct costs | 573,890 | 1,262,837 | 1,165,019 | 2,981,701 |
Gross profit (loss) | (287,772) | (15,283) | (592,783) | (58,160) |
General, selling and administrative expenses | 105,794 | 25,046 | 165,134 | 44,043 |
Consulting and professional services | 109,682 | 109,376 | 215,297 | 230,134 |
Total Operating Expense | 215,476 | 134,422 | 380,431 | 274,177 |
Operating income (loss) | (503,248) | (149,705) | (973,214) | (332,337) |
Other income/(expense) | ||||
Other non-operating income | 131,153 | |||
Income from PPP loan forgiveness | 1,224,908 | |||
Equity method income (loss) | (18,691) | (63,624) | (7,844) | (63,624) |
Interest expense | (17,057) | (14,168) | (29,423) | (26,366) |
Net income (loss) | $ (538,996) | $ (227,497) | $ 345,580 | $ (422,327) |
Net income (loss) per share, basic and diluted | $ (0.01) | $ 0 | $ 0.01 | $ (0.01) |
Weighted average number of common shares outstanding | 54,514,765 | 54,514,765 | 54,514,765 | 54,514,765 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Deficit (Equity) (Unaudited) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at May. 31, 2020 | $ 5,451 | $ 8,844,592 | $ (10,718,405) | $ (1,868,362) | |
Beginning balance, Shares at May. 31, 2020 | 54,514,765 | ||||
Net Loss | (194,830) | (194,830) | |||
Ending balance, value at Aug. 31, 2020 | $ 5,451 | 8,844,592 | (10,913,235) | (2,063,192) | |
Ending balance, Shares at Aug. 31, 2020 | 54,514,765 | ||||
Beginning balance, value at May. 31, 2020 | $ 5,451 | 8,844,592 | (10,718,405) | (1,868,362) | |
Beginning balance, Shares at May. 31, 2020 | 54,514,765 | ||||
Stock based compensation | |||||
Net Loss | (422,327) | ||||
Ending balance, value at Nov. 30, 2020 | $ 5,451 | 8,844,592 | (11,140,732) | (2,290,689) | |
Ending balance, Shares at Nov. 30, 2020 | 54,514,765 | ||||
Beginning balance, value at Aug. 31, 2020 | $ 5,451 | 8,844,592 | (10,913,235) | (2,063,192) | |
Beginning balance, Shares at Aug. 31, 2020 | 54,514,765 | ||||
Net Loss | (227,497) | (227,497) | |||
Ending balance, value at Nov. 30, 2020 | $ 5,451 | 8,844,592 | (11,140,732) | (2,290,689) | |
Ending balance, Shares at Nov. 30, 2020 | 54,514,765 | ||||
Beginning balance, value at May. 31, 2021 | $ 5,451 | 8,844,592 | (11,086,641) | (2,236,598) | |
Beginning balance, Shares at May. 31, 2021 | 54,514,765 | ||||
Stock based compensation | 3,288 | 3,288 | |||
Net Loss | 884,576 | 884,576 | |||
Ending balance, value at Aug. 31, 2021 | $ 5,451 | 8,847,880 | (10,202,065) | (1,348,734) | |
Ending balance, Shares at Aug. 31, 2021 | 54,514,765 | ||||
Beginning balance, value at May. 31, 2021 | $ 5,451 | 8,844,592 | (11,086,641) | (2,236,598) | |
Beginning balance, Shares at May. 31, 2021 | 54,514,765 | ||||
Stock based compensation | 13,154 | ||||
Net Loss | 345,580 | ||||
Ending balance, value at Nov. 30, 2021 | $ 5,451 | 8,857,746 | (10,741,061) | (1,877,864) | |
Ending balance, Shares at Nov. 30, 2021 | 54,514,765 | ||||
Beginning balance, value at Aug. 31, 2021 | $ 5,451 | 8,847,880 | (10,202,065) | (1,348,734) | |
Beginning balance, Shares at Aug. 31, 2021 | 54,514,765 | ||||
Stock based compensation | 9,866 | 9,866 | |||
Net Loss | (538,996) | (538,996) | |||
Ending balance, value at Nov. 30, 2021 | $ 5,451 | $ 8,857,746 | $ (10,741,061) | $ (1,877,864) | |
Ending balance, Shares at Nov. 30, 2021 | 54,514,765 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Nov. 30, 2021 | Nov. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 345,580 | $ (422,327) |
Adjustments to Reconcile Net Income (Loss) to Net Cash used in Operating Activities | ||
Stock based compensation expense | 13,154 | |
Depreciation expense | 27,906 | |
Income from PPP loan forgiveness | (1,224,908) | |
Amortization of debt discount | 19,028 | |
Equity method (income)/loss | 7,844 | 63,624 |
Change in assets and liabilities | ||
Decrease in receivables | 139,675 | 7,601 |
Increase in receivables from related party | (54,667) | |
Decrease in prepaid expenses and other current assets | 110,568 | 47,179 |
Increase in other assets | (10,000) | |
(Decrease)/increase in accounts payable and accrued liabilities | (179,791) | 261,111 |
Increase in accrued payroll | 48,874 | |
Increase in accrued interest | 10,344 | |
NET CASH USED IN OPERATING ACTIVITIES | (746,393) | (42,812) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment in equity method investment | (448,900) | |
Acquisition of oil and gas assets | (280,030) | |
NET CASH USED IN INVESTING ACTIVITIES | (280,030) | (448,900) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from convertible debt | 161,250 | |
Proceeds from prefunded drilling costs | 1,000,000 | |
PPP loan repayments | (1,619) | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,159,631 | |
Net change in cash and cash equivalents | 133,208 | (491,712) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,196,650 | 1,532,511 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 1,329,858 | 1,040,799 |
NONCASH INVESTING ACTIVITIES | ||
Oil and gas acquisition costs in accounts payable | $ 40,533 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Nov. 30, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS The accompanying condensed consolidated financial statements have been prepared by management of Laredo Oil, Inc. (the Company). In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of and for the periods presented have been made. The Company was incorporated under the laws of the State of Delaware on March 31, 2008 under the name of Laredo Mining, Inc. with authorized common stock of 90,000,000 0.0001 10,000,000 0.0001 Laredo Oil, Inc. (the Company) is an oil exploration and production (E&P) company primarily engaged in acquisition and exploration efforts for mineral properties. From June 14, 2011 to December 31, 2020, the Company was a management services company managing the acquisition and conventional operation of mature oil fields and the further recovery of stranded oil from those fields using enhanced oil recovery (EOR) methods for its sole customer, Stranded Oil Resources Corporation (SORC), a wholly owned subsidiary of Alleghany Corporation (Alleghany). From its inception through October 2009, the Company was primarily engaged in acquisition and exploration efforts for mineral properties. After a change in control in October 2009, the Company shifted its focus to locating mature oil fields with the intention of acquiring those oil fields and recovering stranded oil using EOR methods. The Company was unable to raise the capital required to purchase any suitable oil fields. On June 14, 2011, the Company entered into several agreements with SORC to seek recovery of stranded crude oil from mature, declining oil fields by using the EOR method known as Underground Gravity Drainage (UGD). Such agreements consisted of a license agreement between the Company and SORC (the SORC License Agreement), a license agreement between the Company and Mark See, the Companys Chairman and Chief Executive Officer (CEO) (the MS-Company License Agreement), an Additional Interests Grant Agreement between the Company and SORC, a Management Services Agreement between the Company and SORC (the MSA), a Finders Fee Agreement between the Company and SORC (the Finders Fee Agreement), and a Stockholders Agreement (the Stockholders Agreement) among the Company, SORC and Alleghany Capital Corporation, a subsidiary of Alleghany (Alleghany Capital), each of which were dated June 14, 2011 (collectively, the 2011 SORC Agreements). The 2011 SORC Agreements stipulated that the Company and Mark See will provide to SORC, management services and expertise through exclusive, perpetual license agreements and the MSA with SORC. As consideration for the licenses to SORC, the Company will receive an interest in SORCs net profits as defined in the Agreements (the Royalty). The MSA outlines that the Company will provide the services of various employees (Service Employees), including Mark See, in exchange for monthly and quarterly management service fees. The monthly management service fees provide funding for the salaries, benefit costs, and FICA taxes for the Service Employees identified in the MSA. SORC remits payment for the monthly management fees in advance and is payable on the first day of each calendar month. The quarterly management fee totals $137,500 and was paid on the first day of each calendar quarter, with the last payment being received October 1, 2020. In addition, prior to December 31, 2020, SORC reimbursed the Company for monthly expenses incurred by Service Employees in connection with their rendition of services under the MSA. The Company could also submit written requests to SORC for additional funding for payment of the Companys operating costs and expenses, which SORC, in its sole and absolute discretion, determined whether or not to fund. NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS - continued As consideration for the licenses to SORC, the Company was to receive an interest in SORC net profits as defined in the SORC License Agreement (the SORC License Agreement). Under the SORC License Agreement, the Company agreed that a portion of the Royalty equal to at least 2.25% of the net profits (Incentive Royalty) be used to fund a long-term incentive plan for the benefit of its employees, as determined by the Companys board of directors. On October 11, 2012, the Laredo Royalty Incentive Plan (the Plan) was approved and adopted by the Board and the Incentive Royalty was assigned to the Plan. As a result of the Securities Purchase Agreement dated December 31, 2020, (the SORC Purchase Agreement), there are no longer any Incentive Royalties payable pursuant to the Plan and no Royalties will be paid to the Company by SORC in the future. Pursuant to the SORC Purchase Agreement, by and among the Company, Alleghany, SORC, and SORC Holdings LLC, a wholly-owned subsidiary of the Company (SORC Holdings), SORC Holdings purchased all of the issued and outstanding shares of SORC stock (the SORC Shares) in a transaction that closed on December 31, 2020 (the SORC Purchase Transaction). As consideration for the SORC Shares, SORC Holdings paid Alleghany $72,678 (comprised of $55,000 purchase price plus a $17,678 working capital adjustment calculated in accordance with the SORC Purchase Agreement), and the Company agreed to pay Alleghany a revenue royalty of 5.0% of the Companys future revenues and net profits relating to oil, gas, gas liquids and all other hydrocarbons, subject to certain adjustments, for a period of seven years after the closing. The SORC Purchase Agreement provides for customary adjustments to the purchase price based on the effective date of December 31, 2020. In connection with the SORC Purchase Transaction, the 2011 SORC Agreements were terminated effective as of December 31, 2020. Further, pursuant to the SORC Purchase Agreement, the Company and Alleghany entered into a Consulting Agreement dated as of December 31, 2020 (the Alleghany Consulting Agreement), pursuant to which Alleghany agreed to pay an aggregate of approximately $1.245 million during calendar year 2021 in consideration of the Company causing certain individuals, including Mark See, the Companys Chief Executive Officer and Chairman, and Chris Lindsey, the Companys General Counsel and Secretary, to provide consulting services to Alleghany (for a period of three years for Mr. See and one year for Mr. Lindsey). The Company believes that the SORC Purchase Transaction was advantageous as it simplified in a timely manner the unwinding of the 2011 SORC Agreements and allowed the Company to acquire vehicles and oil field assets that can be utilized in future oil recovery projects. As the Company now owns SORC and the 2011 SORC Agreements have been terminated, the Company no longer receives any payments from SORC (including any Royalty payable by SORC to the Company) outlined in the 2011 SORC Agreements. As a result, except for the payments to the Company in 2021 under the Alleghany Consulting Agreement, the Company will no longer receive management fee revenue from Alleghany or reimbursement from Alleghany for the monthly expenses of its employees, which fees and reimbursements were effectively all of the Companys revenues prior to the closing of the SORC Purchase Transaction. During the period from June 14, 2011 through December 31, 2020, Company management gained specialized know-how and operational experience in evaluating, acquiring, operating and developing oil and gas properties while implementing UGD projects, as well as gaining expertise designing, drilling and producing conventional oil wells. Based upon the knowledge gained, the Company has identified and acquired 28,376 gross acres and 24,369 net acres of mineral property interests in Montana. The Company has received a reserve report from an independent petroleum engineering firm estimating the interests of proved undeveloped, probable undeveloped and contingent reserves, and forecasts of economics attributable to 27 wells in the initial target area. Within the area encompassed by the reserve report, 10 drilling locations have been identified with the intention to drill an initial development well early in calendar year 2022 and, if that well yields anticipated results, the Company plans to continue to develop the field thereafter. Each well is planned to have an 80-acre footprint, so the first 10 wells would affect only 800 acres, or less than 2 percent of the leased acreage. The success of the first development well and the ability to secure further funding will drive future plans and at this point there is nothing concrete that can be planned out. In connection with securing this acreage in Montana, Lustre Oil Company LLC, a wholly-owned subsidiary of the Company (Lustre), entered into an Acquisition and Participation Agreement (Erewhon APA) with Erehwon Oil & Gas, LLC (Erewhon) to acquire oil and gas interests and drill, complete, re-enter, re-complete, sidetrack, and equip wells in Valley County, Daniels County and Roosevelt County, Montana. The Erewhon APA specifies calculations for royalty interests and working interests for the first 10 well completions and first 10 well recompletions and for all additional wells and recompletions thereafter. Lustre will acquire initial mineral leases and pay 100% of the costs with a cap of $500,000. When the cap is exceeded, Erehwon will have the option to acquire a 10% working interest (WI) in a lease by paying 10% of any lease acquisition cost, resulting in Lustre paying 90% of the lease costs, on a lease by lease basis. Until amounts paid to complete the first 10 new wells and first 10 recompletions are repaid (Payback), the WI split between Erehwon and Lustre is 10%/90%. Thereafter, the split between Erewhon and Lustre is 20%/80%. Additional wells and recompletions will have a WI split equal to their respective working interest in the leases. This will be 10% Erehwon and 90% Lustre unless Erehwon exercises its option to increase its WI by 10 percent points to 20%/80%, as described above. Under the Erewhon APA, Lustre will fund 100% of the construction costs of the first 10 wells and first 10 completions. Additional wells will be funded 80% by Lustre and 20% by Erehwon; provided, that Erehwon has the option to pay 10% of the cost to increase its WI to 20%. Royalty expense will consist of the sum of royalty interest to the land owner and an overriding royalty interest to two individuals (Prospect Generators) not to exceed 6% nor be less than 3%. For the first 10 new wells and first 10 recompletions, the Prospect Generators will receive an amount equal to 5% of the cost of each completed producing well. NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS - continued On June 30, 2020, the Company entered into the Limited Liability Company Agreement (the LLC Agreement) of Cat Creek Holdings LLC (Cat Creek), a Montana limited liability company formed as a joint venture with Lipson Investments LLC (Lipson) and Viper Oil & Gas, LLC (Viper) for the purchase of certain oil and gas properties in the Cat Creek Field in Petroleum and Garfield Counties in the State of Montana (the Cat Creek Properties). Cat Creek entered into an Asset Purchase and Sale Agreement (the Cat Creek Purchase Agreement) with Carrell Oil Company (Carrell Oil) on July 1, 2020 for the purchase of the Cat Creek Properties from Seller. Upon closing under the Cat Creek Purchase Agreement, Carrell received consideration of $400,000, subject to certain adjustments resulting from pre- and post-effective date revenue, expense and tax allocations. In accordance with the LLC Agreement, the Company invested $448,900 in Cat Creek Holdings, LLC (Cat Creek) for 50% of the ownership interests in Cat Creek using cash on hand. Each of Lipson Investments LLC and Viper Oil & Gas, LLC, the other two members of Cat Creek, have ownership interests in Cat Creek of 25% in consideration of their respective investments of $224,450. Cat Creek will be managed by a Board of Directors consisting of four directors, two of which shall be designated by the Company. Basic and Diluted Loss per Share The Companys basic earnings per share (EPS) amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period. For the six-month period ended November 30, 2021, all options and warrants potentially convertible into common equivalent shares are considered antidilutive and have been excluded in the calculation of diluted earnings per share. As the Company realized a net loss for the three-month period ended November 30, 2021 and the three- and six-month periods ended November 30, 2020, no potentially dilutive securities were included in the calculation of diluted loss per share as their impact would have been anti-dilutive. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common and dilutive common equivalent shares outstanding during the period. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Nov. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2 – GOING CONCERN These consolidated financial statements have been prepared on a going concern basis. The Company has routinely incurred losses since inception, resulting in an accumulated deficit, and historically has been dependent on one customer for its revenue. Further the Company has negative working capital as of November 30, 2021 and May 31, 2021. The Company entered into the 2011 SORC Agreements to fund operations and to provide working capital. However, as a result of the SORC Purchase Transaction, except for payments made to Laredo in 2021 under the Alleghany Consulting Agreement, Alleghany will no longer fund operations or provide working capital to the Company or SORC. There is no assurance that in the future such financing will be available to meet the Companys needs. This situation raises substantial doubt about the Companys ability to continue as a going concern within one year of the issuance date of the consolidated financial statements. Management has undertaken steps as part of a plan to improve operations with the goal of sustaining operations for the next twelve months and beyond. These steps include controlling overhead and expenses. In that regard, the Company has worked to attract and retain key personnel with significant experience in the industry to enhance the quality and breadth of the services it provides. At the same time, in an effort to control costs, the Company has required a number of its personnel to multi-task and cover a wider range of responsibilities in an effort to restrict the growth of the Companys headcount. There can be no assurance that the Company can successfully accomplish these steps and it is uncertain that the Company will achieve a profitable level of operations and obtain additional financing. There can be no assurance that any additional financing will be available to the Company on satisfactory terms and conditions, if at all. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Nov. 30, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation Equity Method Investment Related Party Receivables Property and Equipment Oil and Gas Acquisition Costs |
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS | 6 Months Ended |
Nov. 30, 2021 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS | NOTE 4 – CASH AND CASH EQUIVALENTS The carrying value of cash and cash equivalents November 30, 2021 May 31, 2021 Cash and cash equivalents $ 329,858 $ 1,196,650 Restricted cash 1,000,000 - Cash and cash equivalents, net $ 1,329,858 $ 1,196,650 Restricted cash is recorded with respect to the refundable advance from pending contract. See Note 11. These funds are restricted for use for the development of the first well in the Lustre field. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Nov. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 5 – REVENUE RECOGNITION Monthly Management Fee The Company generated monthly management revenues from fees for labor and benefit costs in accordance with the 2011 SORC Agreements. The Company recognizes revenue for these services in the month the labor and benefits are received by the customer. As a result, the Company records deferred revenue for services that have not been provided. Monthly management fee revenues of $ 1,110,054 2,648,541 Quarterly Management Fee While the 2011 SORC Agreements were in place with Alleghany during calendar year 2020, the Company generated management fee revenue of $137,500 each quarter, payable in advance. The Company recognized that revenue over the applicable quarter on a straight-line basis. Quarterly management fees recognized for the three and six months ended November 30, 2020, respectively were $ 137,500 275,000 Other Revenue The Company and Alleghany have entered into the Alleghany Consulting Agreement (see Note 1), where Alleghany is obligated to pay the Company a total of $1,144,471, in quarterly payments beginning January 1, 2021, in consideration for making certain individuals available for their advice, assistance and support in connection with the oil and gas industry and any questions, issues or matters arising from Alleghanys previous ownership of SORC. Two individuals are committed for a one-year period ending December 31, 2021, and one individual is committed for a three-year period ending December 31, 2023. The Companys management believes that any work necessary under this obligation will in fact be completed by December 31, 2021 and is recognizing revenue on a monthly basis over the year ended December 31, 2021. Accordingly, $ 286,118 572,236 |
RECENT AND ADOPTED ACCOUNTING S
RECENT AND ADOPTED ACCOUNTING STANDARDS | 6 Months Ended |
Nov. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT AND ADOPTED ACCOUNTING STANDARDS | NOTE 6 – RECENT AND ADOPTED ACCOUNTING STANDARDS The Company has reviewed recently issued accounting standards and plans to adopt those that are applicable to it. It does not expect the adoption of those standards to have a material impact on its financial position, results of operations, or cash flows. |
ACQUISITION OF SORC
ACQUISITION OF SORC | 6 Months Ended |
Nov. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION OF SORC | NOTE 7 – ACQUISITION OF SORC Purchase Price Allocation Effective December 31, 2020, the Company acquired a 100% equity interest in SORC (see Note 1). We have accounted for the acquisition of SORC as a business combination using the acquisition method. The preliminary allocations of the purchase price with less than a year of ownership are subject to revisions as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The revisions may Financial Information Pursuant to Topic 2, section 2010 of the SEC financial reporting manual, the Company evaluated the business combination. Prior to the acquisition by the Company, SORC sold all operating assets, terminated all employees and no longer maintained any of the business processes that previously existed. As a result, historical consolidated financial statements are not considered relevant to the ongoing operations and are not required. In accordance with the SORC Purchase Agreement, Laredo agreed to pay to Alleghany a revenue royalty of 5.0% of the Companys future revenues and net profits relating to oil, gas, gas liquids and all other hydrocarbons, subject to certain adjustments, for a period of seven years after the closing. The Company has not attributed a value to this potential liability in the preliminary purchase price allocation as eligible revenues or net profits do not currently exist and are not estimable. In connection with the acquisition, the Company received tangible assets which had previously been written off by the Seller. This previous reduction in asset values in combination with the Sellers desire to close the transaction on an accelerated basis enabled the Company to obtain the assets at a lower price resulting in the recognition of a bargain purchase gain. For the quarter ended November 30, 2021, SORC recognized no revenues and $ 15,075 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Nov. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS The Companys financial instruments as defined by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825-10-50, Financial Instruments, Based on the borrowing rates currently available to the Company for loans with similar terms and maturities, the fair value of long-term notes payable approximates the carrying value. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Nov. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 – RELATED PARTY TRANSACTIONS Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition. FASB ASC 850, Related Party Disclosures ● Affiliates of the entity; ● Entities for which investments in their equity securities is typically accounted for under the equity method by the investing entity; ● Trusts for the benefit of employees; ● Principal owners of the entity and members of their immediate families; ● Management of the entity and members of their immediate families. ● Other parties that can significantly influence the management or operating policies of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Prior to the SORC Purchase Transaction on December 31, 2020, SORC and Alleghany were considered related parties under FASB ASC 850. See Note 1. All management fee revenue reported by the Company for the year ended May 31, 2020 and the following seven months through December 31, 2020 is generated from charges to SORC. Subsequent to the Companys purchase of 100% of SORCs stock on December 31, 2020, Alleghany and its subsidiaries are no longer a related party. |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 6 Months Ended |
Nov. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ DEFICIT | NOTE 10 – STOCKHOLDERS DEFICIT Share Based Compensation The Black-Scholes option pricing model is used to estimate the fair value of options granted under our stock incentive plan. Share based compensation for stock option grants totaling $ 9,866 13,154 Stock Options No option grants were made during the second quarter of fiscal year 2022. Option grants for the purchase of 1,600,000 0.074 118,387 6.0 years 315% 0.95% Restricted Stock No restricted stock was granted during the first and second quarters of fiscal years 2022 or 2021. Warrants No warrants were issued during the first and second quarters of fiscal years 2022 or 2021. The 5,374,501 warrants previously outstanding expired June 14, 2021 and are no longer exercisable. |
REFUNDABLE ADVANCE FROM PENDING
REFUNDABLE ADVANCE FROM PENDING CONTRACT | 6 Months Ended |
Nov. 30, 2021 | |
Refundable Advance From Pending Contract | |
REFUNDABLE ADVANCE FROM PENDING CONTRACT | NOTE 11 – REFUNDABLE ADVANCE FROM PENDING CONTRACT During October and November 2021, through the Companys wholly owned subsidiary, Lustre Holdings, Laredo received advance payments totaling $1.0 million from four investors pursuant to a draft net profits interest (NPI) agreement with the purpose of funding the first well. Through November 30, 2021, the Company has incurred approximately $65,000 in costs related to the development of the first well; however, the Company is awaiting required permitting procedures. The funds will be refunded to the investors if the well is not developed. These payments have been presented as restricted cash as of November 30, 2021 as the funds cannot be expended until the NPI agreement is finalized. The NPI agreement was executed in January 2022, see Note 16 - Subsequent Events. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Nov. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 12 – NOTES PAYABLE Convertible Debt In October and November 2021, Laredo entered into Securities Purchase Agreements with two accredited investors, pursuant to which the Company issued two convertible promissory notes in the principal amount of $ 185,625 161,250 16,875 7,500 24,375 The Company has the right to prepay the Convertible Notes at any time during the first six months the note is outstanding at the rate of (a) 110% of the unpaid principal amount of the note plus interest, during the first 120 days the note is outstanding, and (b) 115% of the unpaid principal amount of the note plus interest between days 121 and 180 after the issuance date of the note. The Convertible Notes may not be prepaid after the 180 th The Company agreed to reserve a number of shares of its common stock which may be issuable upon conversion of the Convertible Notes at all times. The Convertible Notes provide for standard and customary events of default such as failing to timely make payments under the Convertible Notes when due, the failure of the Company to timely comply with the Securities Exchange Act of 1934, as amended, reporting requirements and the failure to maintain a listing on the OTC Markets. The Convertible Notes also contains customary positive and negative covenants. The Convertible Notes include penalties and damages payable to the noteholders in the event we do not comply with the terms of such note, including in the event we do not issue shares of common stock to the noteholders upon conversion of the notes within the time periods set forth therein. Additionally, upon the occurrence of certain defaults, as described in the Convertible Notes, we are required to pay the noteholders liquidated damages in addition to the amount owed under the Convertible Notes (including in some cases up to 300% of the amount of the note). At no time may the Convertible Notes be converted into shares of Laredo common stock if such conversion would result in the note holders and their affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of Laredo common stock. The proceeds from the Convertible Notes can be used by the Company for general corporate purposes. Alleghany Notes During the fiscal year ended May 31, 2011, the Company entered into two Loan Agreements with Alleghany Capital for a combined available borrowing limit of $ 350,000 In connection with the SORC Purchase Transaction, the notes were amended, restated and consolidated into one note including all accrued interest through December 31, 2020, the date of the transaction, for a total of $631,434 (the Senior Consolidated Note) with a maturity date of June 30, 2022. The Senior Consolidated Note requires any stock issuances for cash be utilized to pay down the outstanding loan balance unless written consent is obtained from Alleghany. As part of the SORC Purchase Transaction, the Company agreed to secure repayment of the Senior Consolidated Note with certain equipment and to reduce the note balance with any proceeds received from any sales of such equipment. The note bears no interest until January 1, 2022 whereupon the interest rate increases to 5% per annum through maturity. Principal with all accrued and unpaid interest is due at maturity. In connection with the SORC acquisition purchase price allocation, the Company recorded a debt discount totaling $30,068 in recognition of imputed interest on the Senior Consolidated Note, to be amortized over the first year of the note term. The Senior Consolidated Note totaling $615,381 is recorded as a current note payable, net of debt discount as of November 30, 2021. Paycheck Protection Program Loan November 30, May 31, 2021 2021 Total PPP Loan $ 1,255,883 $ 2,467,311 Less amounts classified as current 157,843 1,220,825 PPP loan, excluding current portion $ 1,098,040 $ 1,246,486 On April 28, 2020, the Company entered into a Note (the Note) with IBERIA BANK for $1,233,656 pursuant to the terms of the Paycheck Protection Program (PPP) authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (CARES Act). In June 2020, the Flexibility Act which amended the CARES Act was signed into law. Pursuant to the Flexibility Act, the Note continues to accrue interest on the outstanding principal sum at the rate of 1% per annum. In addition, the initial two-year Note term has been extended to five years through mutual agreement with IBERIA BANK as allowed under Flexibility Act provisions. In February, 2021, the Company drew an additional $1,233,655 under the PPP Second Draw Loans, bringing the total principal borrowed to $2,467,311. The additional draw is under the same terms and conditions as the first PPP loan. The Flexibility Act also provides that if a borrower does not apply for forgiveness of a loan within 10 months after the last day of the measurement period (covered period), the PPP loan is no longer deferred and the borrower must begin paying principal and interest. In addition, the Flexibility Act extended the length of the covered period from eight weeks to 24 weeks from receipt of proceeds, while allowing borrowers that received PPP loans before June 5, 2020 to determine, at their sole discretion, a covered period of either 8 weeks or 24 weeks. No interest or principal will be due during the deferral period, although interest will continue to accrue over this period. As of November 30, 2021, interest totaling $10,261 is recorded in accrued interest on the accompanying balance sheets. After the deferral period and after taking into account any loan forgiveness applicable to the Note, any remaining principal and accrued interest will be payable in substantially equal monthly installments over the remaining term of the Note. The Company did not provide any collateral or guarantees for the loan, nor did the Company pay any facility charge to obtain the loan. The Note provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects. The Company may prepay the Note at any time without payment of any penalty or premium. The Company applied for forgiveness of the first PPP note and in July 2021 received notice that $1,209,809 of the $1,233,656 note payable balance has been forgiven along with the $15,099 related accrued interest through that date. As of May 31, 2021 both PPP Notes have been recorded as debt. During the quarter ended November 30, 2021, the portion of the loan forgiven has been recorded as income from PPP loan forgiveness as the Company has been legally released from being the primary obligor in accordance with ASC 405-20-40-1. Monthly payments commence on September 1, 2021 with respect to the remaining $23,847 balance on the first Note. At this time, the Company has not yet applied for or received loan forgiveness on the PPP Second Draw Loan. No assurance can be given that the Company will obtain forgiveness of the loan, in whole or in part. Similar to the first PPP Note, any forgiveness on the PPP Second Draw Loan will be treated as income from the extinguishment of its loan obligation when it is legally released from being the primary obligor in accordance with ASC 405-20-40-1. |
EMPLOYEE SEPARATIONS
EMPLOYEE SEPARATIONS | 6 Months Ended |
Nov. 30, 2021 | |
Postemployment Benefits [Abstract] | |
EMPLOYEE SEPARATIONS | NOTE 13 – EMPLOYEE SEPARATIONS The Company establishes obligations for expected termination benefits provided under existing agreements with a former or inactive employee after employment but before retirement. These benefits generally include severance payments and medical continuation coverage. During the six months ending November 30, 2020, the Company continued to reduce expenses in response to the impact of the COVID-19 pandemic. The Company incurred severance and related charges totaling $ 222,023 |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 6 Months Ended |
Nov. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | NOTE 14 – EQUITY METHOD INVESTMENTS On June 30, 2020, Laredo entered into a Limited Liability Company Agreement (the LLC Agreement) of Cat Creek, a Montana limited liability company formed as a joint venture for the purchase of certain oil and gas properties in the Cat Creek Field in Petroleum and Garfield Counties in the State of Montana (the Cat Creek Properties). In accordance with the LLC Agreement, Laredo invested $ 448,900 Cat Creek entered into an Asset Purchase and Sale Agreement (the Purchase Agreement) with Carrell Oil Company (Seller) on July 1, 2020 for the purchase of the Cat Creek Properties from Seller. On September 21, 2020, upon resolving the purchase contingency under the Purchase Agreement, the Seller received consideration of $400,000, taking into effect certain adjustments resulting from pre- and post-effective date revenue, expense, and allocations. Summarized Financial Information The following table provides summarized financial information for the Companys ownership interest in Cat Creek accounted for under the equity method for the November 30, 2021 period presented and has been compiled from respective company financial statements, reflects certain historical adjustments, and is reported on a two-month lag. Results of operations are excluded for periods prior to acquisition. Summarized Financial Information Balance Sheet: As of November 30, 2021 Current Assets $ 312,488 Non-current Assets 567,387 Total Assets $ 879,875 Current Liabilities $ 170,128 Non-current Liabilities 66,869 Shareholders equity 642,878 Total Liabilities and Shareholders Equity $ 879,875 Results of Operations: Three Months Three Months Six Months Six Months Revenue $ 181,628 $ 300,885 $ 329,309 $ 300,885 Gross Profit 81,217 147,060 169,850 147,060 Net Income (Loss) $ (37,382 ) $ (127,247 ) $ (15,689 ) $ (127,247 ) See Note 16 – Subsequent Events with respect to the Companys $19,435 equity method investment in Olfert. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Nov. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 – COMMITMENTS AND CONTINGENCIES On February 4, 2021, a case captioned Lustre Oil Company LLC and Erewhon Oil & Gas, LLC v. Anadarko Minerals, Inc. and A&S Mineral Development Co., LLC Except as set forth above, we are not currently involved in any other legal proceedings and we are not aware of any other pending or potential legal actions. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Nov. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS In January 2022, the Company and Lustre executed a Net Profits Interest Agreement effective as of October 2021 (NPI Agreement) with Erewhon and Olfert No. 11-4 Holdings, LLC (Olfert Holdings) for the purpose of funding the first well, Olfert #11-4, (the Well) under the Erewhon Acquisition and Participation Agreement (APA). The NPI Agreement grants Olfert Holdings a flow of an Applicable Percentage of available funds from the Well in exchange for Olfert Holdings funding its development. The Applicable Percentage under the NPI Agreement is 90% prior to Payout and 50% after Payout, where Payout means the point in time when the aggregate of all Net Profits Interest payments made to Olfert Holdings under the NPI Agreement equals 105% of the well development costs. In January 2022, the Company entered into an Amended and Restated Limited Liability Company Operating Agreement of Olfert Holdings dated effective as of November 2022 (the Olfert Holdings Operating Agreement). Pursuant to the Olfert Holdings Operating Agreement, the Company has agreed to make a capital contribution to Olfert Holdings in the amount of $500,000 out of the aggregate $1,500,000 of capital raised by Olfert Holdings. Pursuant to the Olfert Holdings Operating Agreement, the Company was credited an amount equal to $ 59,935 In connection with the NPI Agreement, the Company was credited a contribution totaling $59,935 of well development costs as determined per agreement with Olfert on behalf of Olfert Holding representing a 5.5% interest in the entity as of November 30, 2021. The total investment recorded by Laredo was $19,435 as of November 30, 2021 based on the carrying value of assets contributed to Olfert. The difference between the $59,935 contribution recorded at the Olfert level and the investment recorded by Laredo is due to the investment at Laredo being recorded at the carrying value of the assets contributed. As Laredo also currently serves as the manager of Olfert, the Company exercises significant influence. Accordingly the amount paid is recorded as an equity method investment as of November 30, 2021. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Nov. 30, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
Equity Method Investment | Equity Method Investment |
Related Party Receivables | Related Party Receivables |
Property and Equipment | Property and Equipment |
Oil and Gas Acquisition Costs | Oil and Gas Acquisition Costs |
CASH AND CASH EQUIVALENTS (Tabl
CASH AND CASH EQUIVALENTS (Tables) | 6 Months Ended |
Nov. 30, 2021 | |
Cash and Cash Equivalents [Abstract] | |
carrying value of cash and cash equivalents | The carrying value of cash and cash equivalents |
CASH AND CASH EQUIVALENTS | November 30, 2021 May 31, 2021 Cash and cash equivalents $ 329,858 $ 1,196,650 Restricted cash 1,000,000 - Cash and cash equivalents, net $ 1,329,858 $ 1,196,650 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Nov. 30, 2021 | |
Debt Disclosure [Abstract] | |
Paycheck Protection Program Loan | Paycheck Protection Program Loan |
NOTES PAYABLE | November 30, May 31, 2021 2021 Total PPP Loan $ 1,255,883 $ 2,467,311 Less amounts classified as current 157,843 1,220,825 PPP loan, excluding current portion $ 1,098,040 $ 1,246,486 |
EQUITY METHOD INVESTMENTS (Tabl
EQUITY METHOD INVESTMENTS (Tables) | 6 Months Ended |
Nov. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Financial Information | Summarized Financial Information Balance Sheet: As of November 30, 2021 Current Assets $ 312,488 Non-current Assets 567,387 Total Assets $ 879,875 Current Liabilities $ 170,128 Non-current Liabilities 66,869 Shareholders equity 642,878 Total Liabilities and Shareholders Equity $ 879,875 Results of Operations: Three Months Three Months Six Months Six Months Revenue $ 181,628 $ 300,885 $ 329,309 $ 300,885 Gross Profit 81,217 147,060 169,850 147,060 Net Income (Loss) $ (37,382 ) $ (127,247 ) $ (15,689 ) $ (127,247 ) |
[custom:DisclosureEquityMethodInvestmentDetailsAbstract] | Balance Sheet: As of November 30, 2021 Current Assets $ 312,488 Non-current Assets 567,387 Total Assets $ 879,875 Current Liabilities $ 170,128 Non-current Liabilities 66,869 Shareholders equity 642,878 Total Liabilities and Shareholders Equity $ 879,875 Results of Operations: Three Months Three Months Six Months Six Months Revenue $ 181,628 $ 300,885 $ 329,309 $ 300,885 Gross Profit 81,217 147,060 169,850 147,060 Net Income (Loss) $ (37,382 ) $ (127,247 ) $ (15,689 ) $ (127,247 ) |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - $ / shares | Nov. 30, 2021 | May 31, 2021 | Mar. 31, 2008 |
Accounting Policies [Abstract] | |||
Common Stock, Shares Authorized | 90,000,000 | 90,000,000 | 90,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
CASH AND CASH EQUIVALENTS (Deta
CASH AND CASH EQUIVALENTS (Details) - USD ($) | Nov. 30, 2021 | May 31, 2021 | Nov. 30, 2020 | May 31, 2020 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 329,858 | $ 1,196,650 | ||
Restricted cash | 1,000,000 | 0 | ||
Cash and cash equivalents, net | $ 1,329,858 | $ 1,196,650 | $ 1,040,799 | $ 1,532,511 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2021 | Nov. 30, 2020 | Nov. 30, 2021 | Nov. 30, 2020 | |
Product Information [Line Items] | ||||
Revenues | $ 286,118 | $ 1,247,554 | $ 572,236 | $ 2,923,541 |
Monthly Management Fee [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 1,110,054 | 2,648,541 | ||
Quarterly Management Fee [Member] | ||||
Product Information [Line Items] | ||||
Revenues | $ 137,500 | $ 275,000 | ||
Other Revenues [Member] | ||||
Product Information [Line Items] | ||||
Revenues | $ 286,118 | $ 572,236 |
ACQUISITION OF SORC (Details Na
ACQUISITION OF SORC (Details Narrative) | 3 Months Ended |
Nov. 30, 2021USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Interest Expense, Debt | $ 15,075 |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Nov. 30, 2021 | Aug. 31, 2021 | Nov. 30, 2021 | Nov. 30, 2020 | |
Equity [Abstract] | |||||
Share-based Payment Arrangement, Noncash Expense | $ 9,866 | $ 3,288 | $ 13,154 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 1,600,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.074 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 118,387 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 315.00% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.95% |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Nov. 30, 2021 | May 31, 2021 |
Debt Disclosure [Abstract] | ||
Total PPP Loan | $ 1,255,883 | $ 2,467,311 |
Less amounts classified as current | 157,843 | 1,220,825 |
PPP loan, excluding current portion | $ 1,098,040 | $ 1,246,486 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 2 Months Ended | 6 Months Ended | ||
Nov. 30, 2021 | Nov. 30, 2021 | Nov. 30, 2020 | May 30, 2011 | |
Short-term Debt [Line Items] | ||||
Proceeds from Convertible Debt | $ 161,250 | |||
Amortization of Debt Discount (Premium) | 19,028 | |||
Alleghany Capital [Member] | ||||
Short-term Debt [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 350,000 | |||
Convertible Debt [Member] | ||||
Short-term Debt [Line Items] | ||||
Debt Instrument, Face Amount | $ 185,625 | $ 185,625 | ||
Proceeds from Convertible Debt | 161,250 | |||
Amortization of Debt Discount (Premium) | 16,875 | |||
Debt Issuance Cost | 7,500 | |||
Amortization of Debt Issuance Costs and Discounts | $ 24,375 |
EMPLOYEE SEPARATIONS (Details N
EMPLOYEE SEPARATIONS (Details Narrative) | 6 Months Ended |
Nov. 30, 2021USD ($) | |
Postemployment Benefits [Abstract] | |
Severance Costs | $ 222,023 |
EQUITY METHOD INVESTMENT (Detai
EQUITY METHOD INVESTMENT (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Nov. 30, 2021 | Aug. 31, 2021 | Nov. 30, 2020 | Aug. 31, 2020 | Nov. 30, 2021 | Nov. 30, 2020 | May 31, 2021 | May 31, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Current Assets | $ 1,569,954 | $ 1,569,954 | $ 1,632,322 | |||||
Total Assets | 2,962,720 | 2,962,720 | 2,770,808 | |||||
Current Liabilities | 3,742,544 | 3,742,544 | 3,160,615 | |||||
Non-current Liabilities | 1,098,040 | 1,098,040 | 1,846,791 | |||||
Shareholders equity | (1,877,864) | $ (1,348,734) | $ (2,290,689) | $ (2,063,192) | (1,877,864) | $ (2,290,689) | (2,236,598) | $ (1,868,362) |
Total Liabilities and Shareholders Equity | 2,962,720 | 2,962,720 | $ 2,770,808 | |||||
Revenue | 286,118 | 1,247,554 | 572,236 | 2,923,541 | ||||
Gross Profit | (287,772) | (15,283) | (592,783) | (58,160) | ||||
Net Income (Loss) | (538,996) | $ 884,576 | (227,497) | $ (194,830) | 345,580 | (422,327) | ||
Cat Creek [Member] | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Current Assets | 312,488 | 312,488 | ||||||
Non-current Assets | 567,387 | 567,387 | ||||||
Total Assets | 879,875 | 879,875 | ||||||
Current Liabilities | 170,128 | 170,128 | ||||||
Non-current Liabilities | 66,869 | 66,869 | ||||||
Shareholders equity | 642,878 | 642,878 | ||||||
Total Liabilities and Shareholders Equity | 879,875 | 879,875 | ||||||
Revenue | 181,628 | 300,885 | 329,309 | 300,885 | ||||
Gross Profit | 81,217 | 147,060 | 169,850 | 147,060 | ||||
Net Income (Loss) | $ (37,382) | $ (127,247) | $ (15,689) | $ (127,247) |
EQUITY METHOD INVESTMENTS (Deta
EQUITY METHOD INVESTMENTS (Details Narrative) - Cat Creek [Member] | Jun. 30, 2020USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Business Combination, Control Obtained Description | In accordance with the LLC Agreement, Laredo invested $448,900 in Cat Creek for 50% of the ownership interests in Cat Creek using cash on hand. Each of Lipson Investments LLC and Viper Oil & Gas, LLC, the other two members of Cat Creek, have ownership interests in Cat Creek of 25% in consideration of their respective investments of $224,450. |
Amount Invested | $ 448,900 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 1 Months Ended |
Jan. 31, 2022USD ($) | |
Subsequent Event [Member] | Olfert Holdings Operating Agreement [Member] | |
Subsequent Event [Line Items] | |
Costs Incurred, Development Costs | $ 59,935 |