Quarterly Report for Quarter Ending October 31, 2025 (Form 10-Q)

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

Forward-Looking Statements

This report on Form 10-Q contains certain forward-looking statements. All statements other than statements of historical fact are "forward-looking statements" for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs and the risk of declining revenues. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements. The following discusses our financial condition and results of operations based upon our unaudited financial statements which have been prepared in conformity with accounting principles generally accepted in the United States. It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Northern Minerals & Exploration Ltd., unless otherwise indicated.

General Overview

We are an emerging natural resource company operating in oil and gas production in central Texas and exploration for gold and silver in northern Nevada.

Results of Operations

Results of Operations for the Three Months Ended October 31, 2025 Compared to the Three Months Ended October 31, 2024

Revenue and Cost of Revenue

For the three months ended October 31, 2025, we recognized $5,065 of revenue and $4,956 of expense for a gross margin of $109. We began to recognized our first revenues from the sale of oil and natural gas from its investment in Lost Creek Acquisitions LLC (Note 4) during the fourth quarter of fiscal year 2025. We did not recognize any revenue for the three months ended October 31, 2024.

Officer compensation

Officer compensation was $7,200 and $6,600 for the three months ended October 31, 2025 and 2024, respectively. Officer's compensation is paid to our CFO and has increased $200 a month.

Consulting -related party

Consulting - related party services were $18,000 and $19,250 for the three months ended October 31, 2025 and 2024, respectively. Fees are paid to Noel Schaefer, Director, but are recorded as consulting fees. In the prior period we also paid $1,250 to our former CEO.

Professional fees

Professional fees were $30,619 and $16,000 for the three months ended October 31, 2025 and 2024, respectively, an increase of $14,619 or 91.4%. Professional fees generally consist of legal and audit expenses. The increase is due to an increase in legal fees.

General and administrative

General and administrative expenses were $3,717 and $32,752 for the three months ended October 31, 2025 and 2024, respectively, a decrease of $29,035 or 88.7%. In the prior period we issued shares of common stock for consulting services valued at $19,000. We also spent $9,500 on website development expenses that we did not incur in the current period.

Interest expense

During the three months ended October 31, 2025 and 2024, we had interest expense of $3,781 and $2,870, respectively, an increase of $921 or 32.2%. The increase is in conjunction with an increase in our loan payable balance.

Net Loss

For the three months ended October 31, 2025, we had a net loss of $63,208 as compared to a net loss of $77,462 for the three months ended October 31, 2024 a decrease to our net loss of $14,254 or 18.4%. The decrease is due to the reasons discussed above.

Liquidity and Financial Condition

Operating Activities

Cash used by operating activities was $57,789 for the three months ended October 31, 2025. Cash used for operating activities was $42,477 for the three months ended October 31, 2024.

Financing Activities

Net cash provided by financing activities was $62,000 for the three months ended October 31, 2025. We received $62,000 from related party loans. There was no financing activity in the prior period.

We had the following loans outstanding as of October 31, 2025:

On April 16, 2017, the Company executed a promissory note for $15,000 with a third party. The note matures in two years and interest is set at $3,000 for the full two years. As of October 31, 2025, there is $15,000 and $11,250 of principal and accrued interest, respectively, due on this loan. This loan is currently in default.

On June 1, 2023, the Company issued a Promissory Note to Golden Sands Exploration Inc, for $85,000. The note bears interest at 6% and matures on June 1, 2026. Interest is to be paid quarterly with the first payment due on or before September 1, 2023. As of October 31, 2025, there is $85,000 and $850 of principal and accrued interest, respectively, due on this loan.

The Company has a line of credit ("LOC") with Mr. Miranda, a former director, for up to $500,000. The LOC bears interest at 5% to be paid quarterly and matures in five years. As of October 31, 2025, there is $197,000 and $4,171 of principal and accrued interest, respectively, due on the LOC.

We will require additional funds to fund our budgeted expenses over the next twelve months. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our budgeted expenses.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

Refer to Note 2 of our financial statements contained elsewhere in this Form 10-Q for a summary of our critical accounting policies and recently adopted and issued accounting standards.