10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2023.

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 000-55695

Norris Industries, Inc.

(Exact name of registrant as specified in its charter)

Nevada	46-5034746
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

102 Palo Pinto St, Suite B Weatherford, Texas	76086
(Address of principal executive offices)	(Zip Code)

(855) 809-6900

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Securities registered pursuant to Section 12(g) of the Act:

Title of each class	Trading Symbol(s)	Name of eah exchange on which registered
Common Stock, $.01 Par Value	NRIS	OTCMKTS

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 10, 2023, the registrant had 90,883,013 shares of common stock issued and outstanding.

NORRIS INDUSTRIES, INC.

TABLE OF CONTENTS

FORM 10-Q REPORT

May 31, 2023

		Page Number
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets	F-1
	Consolidated Statement of Operations	F-2
	Consolidated Changes in Shareholders Deficit	F-3
	Consolidated Statement of Cash Flows	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	8
Item 1A.	Risk Factors	8
Item 2.	Unregistered Sales of Equity Securities	8
Item 3.	Defaults Upon Senior Securities	8
Item 4.	Mine Safety Disclosures	8
Item 5.	Other Information	8
Item 6.	Exhibits	9
SIGNATURES		10

2

NORRIS INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

MAY 31, 2023 AND FEBRUARY 28, 2023

(UNAUDITED)

	May 31, 2023			February 28, 2023
ASSETS
Current Assets
Cash	$	43,673		$	151,731
Account receivable - oil & gas		32,328			24,151
Total Current Assets		76,001			175,882
Oil and Gas Property - Full Cost Method
Properties subject to amortization		3,003,042			3,006,271
Less: accumulated depletion and impairment		(2,853,631	)		(2,844,022	)
Total Oil and Gas Property, net		149,411			162,249
Total Assets	$	225,412		$	338,131
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued expenses	$	166,518		$	125,647
Total Current Liabilities		166,518			125,647
Convertible note payable - related party		3,900,000			3,900,000
Accounts payable and accrued expenses - related parties		487,630			456,879
Asset retirement obligations		143,242			146,245
Total Liabilities		4,697,390			4,628,771
Commitments and Contingencies		-			-
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
Common stock, $0.001 par value per share, 150,000,000 shares authorized; 90,883,013 shares issued and outstanding		90,883			90,883
Additional paid-in capital		6,286,399			6,286,399
Accumulated deficit		(10,850,260	)		(10,668,922	)
Total Stockholder’s Deficit		(4,471,978	)		(4,290,640	)
Total Liabilities and Stockholders’ Deficit	$	225,412		$	338,131

The accompanying notes are an integral part of these interim unaudited consolidated financial statements.

F-1

NORRIS INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MAY 31, 2023 AND 2022

(UNAUDITED)

	2023			2022
Revenues
Oil and gas sales	$	81,352			152,641
Total Revenues		81,352			152,641
Operating Expenses
Lease operating expenses		138,972			164,450
General and administrative expenses		83,132			84,134
Depletion, depreciation and accretion		9,835			16,297
Total Operating Expenses		231,939			264,881
Loss from Operations		(150,587	)		(112,240	)
Other Expenses
Interest expense		30,751			28,482
Total Other Expense		30,751			28,482
Net Loss	$	(181,338	)		(140,722	)
Net loss per common share - basic and diluted	$	(0.02	)		(0.00	)
Weighted average number of common shares outstanding - basic and diluted		90,883,013			90,883,013

The accompanying notes are an integral part of these interim unaudited consolidated financial statements.

F-2

NORRIS INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MAY 31, 2023

(UNAUDITED)

	Series A Convertible Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance, February 28, 2023		1,000,000	$	1,000		90,883,013	$	90,883	$	6,286,399	$	(10,668,922	)	$	(4,290,640	)
Net loss		-		-		-		-		-		(181,338	)		(181,338	)
Balance, May 31, 2023		1,000,000	$	1,000		90,883,013	$	90,883	$	6,286,399	$	(10,850,260	)	$	(4,471,978	)

The accompanying notes are an integral part of these interim unaudited consolidated financial statements.

F-3

NORRIS INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MAY 31, 2023 AND 2022

(UNAUDITED)

	2023			2022
Cash Flow from Operating Activities
Net loss	$	(181,338	)	$	(140,722	)
Adjustments to reconcile net loss to net cash from operating activities:
Depletion, depreciation and accretion		9,835			16,297
Changes in operating assets and liabilities:
Accounts receivable - oil & gas		(8,177	)		11,461
Accounts payable and accrued expenses		40,871			(372	)
Accounts payable and accrued expenses - related parties		30,751			28,482
Net Cash Used in Operating Activities		(108,058	)		(84,854	)
Net Decrease in Cash		(108,058	)		(84,854	)
Cash – beginning of period		151,731			139,569
Cash – end of period	$	43,673		$	54,715
Noncash Investing and Financing Activities
Change in estimate of asset retirement obligations	$	3,229		$	9,424

The accompanying notes are an integral part of these interim unaudited consolidated financial statements.

F-4

NORRIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 – Organization, Nature of Operations and Summary of Significant Accounting Policies

Norris Industries, Inc. (“NRIS” or the “Company”), was incorporated on February 19, 2014, as a Nevada corporation. The Company was formed to conduct operations in the oil and gas industry. The Company’s principal operating properties are in the Ellenberger formation in Coleman County, and in Jack County and Palo-Pinto County. Texas. The Company’s production operations are all located in the State of Texas.

On April 25, 2018, the Company incorporated a Texas registered subsidiary, Norris Petroleum, Inc., as an operating entity.

Basis of Presentation

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form 10-K for the year ended February 28, 2023. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The Company’s consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and entities in which the Company has a controlling financial interest. All significant inter-company accounts and transactions have been eliminated in consolidation.

Liquidity and Capital Considerations

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the issuance date of these consolidated financial statements.

The timeline and potential magnitude of Ukraine-Russia war and its impact on the Company’s future operations is currently unknown. The Company has incurred continuing losses since 2016, including a loss of $504,980 and $181,338 for the fiscal year ended February 28, 2023, and the three-month ended May 31, 2023, respectively. During the three months ended May 31, 2023, the Company incurred cash losses of approximately $108,000 from its operating activities. As of May 31, 2023, the Company had a cash balance of approximately $44,000 and negative working capital of approximately $91,000.

The Company’s principal capital and exploration expenditures during next fiscal year are expected to relate to selected well workovers on its Jack and Palo Pinto County acreages. The Company believes that it has sufficient cash on hand and available funds from its credit line to fund its costs for such expenditures as well as other operating costs, for the 12-month period subsequent to issuance of these financial statements.

In the event that the Company requires additional capital to fund higher operational losses or oil and gas property lease purchases for fiscal year ending February 28, 2024, the Company expects to seek additional capital from one or more sources via restricted private placement sales of equity and debt securities. If the Company requires additional financing beyond what is available under its existing credit line, it expects to secure additional borrowing capacity from JBB.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expense during the period. Actual results could differ from those estimates.

F-5

Risks and Uncertainties

The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating an emerging business, including the potential risk of business failure.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of the year or less to be cash equivalents. The Company has not experienced any losses on its deposits of cash and cash equivalents.

Oil and Gas Properties, Full Cost Method

The Company follows the full cost method of accounting for its oil gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil wells and administrative costs directly attributable to those activities and asset retirement costs. Disposition of oil properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil and gas, in which case the gain or loss is recognized in the statement of operations.

Depletion and depreciation of proved oil properties are calculated on the units-of-production method based upon estimates of proved reserves. Such calculations include the estimated future costs to develop proved reserves. Costs of unproved properties are not included in the costs subject to depletion. These costs are assessed periodically for impairment.

At the end of each quarter, the unamortized cost of oil and gas properties, net of related deferred income taxes, is limited to the sum of the estimated future after-tax net revenues from proved properties, after giving effect to cash flow hedge positions, discounted at 10%, and the lower of cost or fair value of unproved properties, adjusted for related income tax effects. Costs in excess of the present value of estimated future net revenues are charged to impairment expense. This limitation is known as the “ceiling test,” and is based on SEC rules for the full cost oil and gas accounting method.

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic No. 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

Uncertain Tax Positions

The Company evaluates uncertain tax positions to recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Those tax positions failing to qualify for initial recognition are recognized in the first interim period in which they meet the more likely than not standard or are resolved through negotiation or litigation with the taxing authority, or upon expiration of the statute of limitations. De-recognition of a tax position that was previously recognized occurs when an entity subsequently determines that a tax position no longer meets the more likely than not threshold of being sustained.

Revenue Recognition

The Company’s revenue is comprised entirely of revenue from exploration and production activities. The Company’s oil is sold primarily to wholesalers and others that sell product to end use customers. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, various end-users, local distribution companies, and natural-gas marketers. NGLs are sold primarily to various end-users. Payment is generally received from the customer in the month following delivery.

F-6

Contracts with customers have varying terms, including spot sales or month-to-month contracts, or contracts with a finite term, where the production from a well or group of wells is sold to one or more customers. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs.

Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues. The Company does not hedge nor forward sell any of its current production via derivative financial contracts.

Net Loss per Common Share

Basic net loss per common share amounts are computed by dividing the net loss available to Norris Industries, Inc. shareholders by the weighted average number of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive. The following table summarizes the common stock equivalents excluded from the calculation of diluted net loss per common share as the inclusion of these shares would be anti-dilutive for the three months ended May 31, 2023, and 2022:

	2023		2022
Series A Convertible Preferred Stock		66,666,667		66,666,667
Convertible debt		24,750,000		21,000,000
Total common shares to be issued		91,416,667		87,666,667

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk include cash deposits placed with financial institutions. The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (“FDIC”). At May 31, 2023, $0 of the Company’s cash balances was uninsured. The Company has not experienced any losses on such accounts.

Recent Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. The Company adopted the ASU No. 2016-13 in this quarter; and the adoption has no impacts to the accompanying consolidated financial statements.

Note 2 – Revenues from Contracts with Customers

Disaggregation of Revenues from Contracts with Customers

The following table disaggregates revenue by significant product types for the three months ended May 31, 2023 and 2022:

	2023		2022
Oil sales	$	109,547	$	53,269
Natural gas sales		43,094		28,083
Total	$	152,641	$	81,352

F-7

There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of May 31, 2023 and February 28, 2023.

Note 3 – Oil and Gas Properties

The following table summarizes the Company’s oil and gas activities by classification for the three months ended May 31, 2023:

	February 28, 2023			Additions			Change in Estimates			May 31, 2023
Oil and gas properties, subject to depletion	$	2,930,237		$	-		$	-		$	2,930,237
Asset retirement costs		76,034			-			(3,229	)		72,805
Accumulated depletion and depreciation		(2,844,022	)		(9,609	)		-			(2,853,631	)
Total oil and gas assets	$	162,249			(9,609	)	$	(3,229	)	$	149,411

The depletion and depreciation recorded for production on proved properties for the three months ended May 31, 2023 and 2022, amounted to $9,609 and $7,338, respectively. During the three months ended May 31, 2023 and 2022, there were no ceiling test write-downs of the Company’s oil and gas properties.

Note 4 – Asset Retirement Obligations

The following table summarizes the change in the Company’s asset retirement obligations during the three months ended May 31, 2023:

Asset retirement obligations as of February 28, 2023	$	146,245
Additions		226
Current year revision of previous estimates		(3,229)
Accretion adjustment during the three months ended May 31, 2023		-
Asset retirement obligations as of May 31, 2023	$	143,242

During the three months ended May 31, 2023 and 2022, the Company recognized accretion expense of $226 and $8,959, respectively.

Note 5 – Related Party Transactions

Promissory Note to JBB

On December 28, 2017, the Company borrowed $1,550,000 from JBB to complete the purchases of a series of oil and gas leases (the “Loan Note”). The loan has an interest rate of 3% per annum, a maturity date of December 28, 2018 and is secured by all assets of the Company. The loan is convertible to the Company’s common stock at the conversion rate of $0.20 per share.

On June 26, 2018, the Company and JBB entered into a modification of the existing Loan Note, to add provisions to permit the Company to obtain additional advances under the Loan Note up to a maximum of $1,000,000. The Company may request an advance in increments of $100,000 no more frequently than every 30 days, provided that (i) it provides a description of the use of proceeds for the advance reasonably acceptable to JBB, and (ii) the Company is not otherwise in default of the Loan Note. The original loan amount and the advances are secured by all the assets of the Company and are convertible into common stock of the Company at the rate of $0.20 per common share, subject to adjustment for any reverse and forward stock splits. The Loan Note may be repaid at any time, without penalty, however, any advance that is repaid before maturity may not be re-borrowed as a further advance.

F-8

On May 21, 2019, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note to September 30, 2020.

On June 13, 2019, JBB lent the Company $250,000 under a secured promissory note. The funds were used to acquire the remaining working interest in the Marshall Walden oil and gas property from Odyssey Enterprises LLC. The loan has an interest rate of 5% per annum, a maturity date of June 30, 2022, and is secured by all assets of the Company. The loan is convertible into the Company’s common stock at a conversion rate of $0.20 per common share.

On October 1, 2019, the Company entered into another amendment of its Loan Note with JBB to increase the line of credit by an additional $500,000, for a total of $1,500,000, and extend the maturity date for the original note and line of credit to December 31, 2020.

On May 29, 2020, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note to September 30, 2021.

On December 22, 2020, the Company entered into an extension agreement with JBB to extend the maturity of all its outstanding indebtedness under credit line and Loan Note to May 31, 2022.

On May 1, 2021, the Company entered into a new funding agreement with a maturity date of May 31, 2022 and an interest rate of five percent annual percentage rate (5% APR) with JBB for a further $1 million drawable in $100,000 increments at the discretion of JBB to cover the Company’s current and projected working capital requirements in near-term. The loan is convertible into common stock of the Company at the rate of $0.08 per share, subject to adjustment for any reverse and forward stock splits.

On May 5, 2023, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note to September 30, 2024.

During the three months ended May 31, 2023, there were no additional funds advanced to the Company under the Loan Note. As of May 31, 2023, the Company had availability of $300,000 on its existing credit line with JBB.

The Company recognized interest expense of $30,751 and $28,482 for the three months ended May 31, 2023 and 2022, respectively. Accrued interest as of February 28, 2023 and May 31, 2023 was $456,879 and $487,630, respectively, and is due at maturity of the Loan Note Outstanding borrowings under notes payable to JBB totaled $3,900,000 as of February 28, 2023 and May 31, 2023.

Note 6 – Commitments and Contingencies

Office Lease

In September 2018, the Company moved to the offices of International Western Oil (“IWO”) in Weatherford, TX that is being rented on a month-to-month sublease basis at rate of $950 per month from IWO. During the three months ended May 31, 2023, the Company incurred $2,850 of rent expense under this lease that is included in lease operating expenses on the statement of operations.

Leasehold Drilling Commitments

The Company’s oil and gas leasehold acreage is subject to expiration of leases if the Company does not drill and hold such acreage by production or otherwise exercises options to extend such leases, if available, in exchange for payment of additional cash consideration. In the King County, Texas lease acreage, 640 acres were due to expire in June 2021; and the Company chose not to extend this lease.

Note 7 - Subsequent Event

In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date these consolidated financial statements were issued.

F-9

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

Cautionary Notice Regarding Forward Looking Statements

The information contained in this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those indicated in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although the Company’s management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

This filing contains a number of forward-looking statements which reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events or developments which management expects or anticipates will or may occur in the future, and non-historical information are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” and variations of those words and similar expressions identify forward-looking statements. The foregoing are not the exclusive means of identifying forward looking statements, and their absence does not mean that a statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements.

Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Factors which could cause or contribute to such differences include, but are not limited to, the risks discussed in our Annual Report on Form 10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Overview

Norris Industries, Inc. (the “Company”, “we”, or “us”) is an oil and natural gas company that focuses on the acquisition, development, and exploration of crude oil and natural gas properties in Texas. As of March 1, 2023 the SEC Non-Escalated Analysis of Estimated Proved Reserve of our various leases in Jack County and Palo-Pinto County, the Ratliff leases, the Marshall-Walden, and the Bend Arch Lion 1A and Bend Arch Lion 1B leaseholds, is a total of 29 Mbbl in oil net reserves, plus 150 MMcf in natural gas net reserves being out of total of BOE equivalent of 54 Mbbl in gross reserves, which is down from prior year by 322 Mbbl due to reduction of expected production as result of well workover issues.

For near- to medium-term cash flow enhancement, the Company will plan to focus on existing fields and to selectively consider larger-reserve oil and gas properties with low production to acquire at reasonable cost and then implement effective Enhanced Oil Recovery (“EOR”) methods to improve its current revenues and assets. For long-term cash flow enhancement, the Company plans to identify other oil-field related, and niche enterprises to consider for bolt on, or diversified acquisition targets to grow Company revenues. This may be with use of capital partners to buyout via the Company’s strategic joint venture partnerships, and to raise outside capital to fund any potential future acquisition.

The Company’s long-term objective is to increase shareholder value by growing reserves, production, and cash flow. As a result, we may seek to identify and consider acquisition opportunities of oilfield services companies and other non-oilfield companies that align with our operational plan to implement a diversified growth strategy.

3

Notwithstanding the above stated objectives, the ramification of the pandemic containment measures and consequent disruptions to the United States and world economies do to COVID-19 viral outbreaks had an adverse impact on the overall business of the Company and the industry in which it operates. The demand for oil and gas has impacted all producers as commodity prices of oil and gas has increased substantially but so has inflation resulting in higher costs for materials, equipment, personnel and service providers. In addition, in early 2022 the industry faced added complications as a result of the Russian Federation invasion of Ukraine. As a result, energy prices have risen; however, we are unable to predict exact supply and demand balances that will cause energy prices to be highly volatile and thus affect our revenues in the near future. Therefore, we anticipate that we may not be able to cover operating costs and will have to take cost cutting measures and seek continued operational financing.

Our Business Strategy

We are a small Exploration and Production (“E&P”) oil and natural gas company that focuses on the acquisition, development, and exploration of crude oil and natural gas properties in Texas. The Company is currently managed by business and oil and gas exploration veterans who specialize in the oil and gas acquisition and exploration markets of the Central West Texas region. The Company’s goal is to tap into the high potential leases of the Central West Texas region of the United States, aiming to unlock its potential, specifically in the prolific Bend Arch-Fort Worth region. This area is approximately 120 miles long and 40 miles wide running from Archer County, Texas in the north to Brown County, Texas in the south. The Company is also looking at other acquisition opportunities in the Permian Basin, West Texas, East Texas and South Texas region.

Management believes that focusing on the development of existing small producing fields is one of the key differentiators of the Company. Oil and natural gas reserve development is a technologically oriented industry. Management believes that the use of current generally available technology has greatly increased the success rate of finding commercial oil or natural gas deposits. In this context, success means the ability to make an oil/gas well that produces a commercialized quantity of hydrocarbons.

4

We plan to execute the following business strategies:

Develop and Grow Our Hydrocarbon Resource Acreage Positions Using Outside Development Expertise. We plan to continue to seek and acquire niche assets in hydrocarbon-rich resource plays to improve our asset quality and expand our drilling inventory. We plan to leverage our management team’s expertise and apply the latest available EOR technologies to economically develop our existing property portfolio in Central West and East Texas in addition to any assets in other regions we may acquire. We operate the majority of our acreage, thus giving us certain control over the planning of capital expenditures, execution and cost reduction. Our operational plan allows us to adjust our capital spending based on drilling results and the economic environment. As a small producer, we regionally evaluate industry drilling results to implement simple yet effective operating practices which may increase our initial production rates, ultimate recovery factors and rate of return on invested capital.

The Company’s long-term objective is to increase shareholder value by growing reserves, production, and cash flow. As result we may seek to identify and consider acquisition opportunities of oilfield services companies and other non-oilfield companies to implement a diversified growth strategy.

Our management’s time in the petroleum markets and our ability to contract experienced geology expertise, allows us to identify and secure acreage with potential reserves. Management believes that the Company’s near prospects as a public company could become attractive as a potential merger candidate for acquisition of a private enterprise.

Our Competitive Strengths

Management believes that we have a number of competitive strengths that will allow us to successfully execute our business strategies:

Simple Capital Structure. We have a simple capital structure and de-risked inventory of quality locations with what we believe is upside potential to take advantage of the current recovery of oil prices to acquire potential production at reasonable cost. Management believes there are opportunities for profits to be made now that oil prices appear to have stabilized and if they continue to gradually rise higher.

Moderate Risk Exploration Practice. Unlike many major oil companies that often drill very deep wells with a high degree of risk, we focus on shallow well exploration (sub 5,000 feet) that is less expensive and has lower risk factors. The basis for management’s belief that the wells that can be drilled in the prospective leases will have the capacity to produce a reasonable amount of hydrocarbon and due to our recent studies of the general areas where we are prospecting the projects. That is our most important exploration practice.

Under The Radar Asset Base. Management believes our local West Texas E&P team has a special talent in acquiring local “prime time” hydrocarbon land leases with sub-300 barrels of oil per day (“bopd”) wells that have large hydrocarbon reserves. Management believes that these “under the radar” prospective leases have multi-year drilling inventory and reasonable production history with high upside potential and not readily accessible to the public for auctions, thus adding to our competitive advantage on these “under the radar” opportunities. It is because management also believes that these highly valuable leases are not economically justifiable for the major oil and gas companies in the region because such companies need the wells they drill to produce at least 300 barrels (“Bbls”) of oil per day per well.

Technologies

Oil and natural gas reserve development is a technologically oriented industry; many techniques developed by the industry are now used in other industries, including the space program. Management believes that technological innovations have made it possible for the oil and natural gas industry to furnish the fuels that power the world economy. Management also believes that technology has greatly increased the success rate of finding commercial oil or natural gas deposits. In this context, success rate means the ability to make an oil/gas well that can produce a commercialized quantity of hydrocarbon.

At NRIS, we focus on core basic field EOR management practices and contract outside experts to provide us the understanding of complex mineralogy in shale reservoirs to better determine zones prone to fracture stimulation. This technology can suggest where to frack by providing us with available data to deliver us a greater chance of success. Our field engineers, geologists and petrophysicists work together for better drilling decisions.

5

Sales Strategy

Our 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. To maintain the lowest production cost, we will aim to have our inventory be as low as possible, in some instances virtually zero. Our E&P core team has business relationships with BML, Transport Oil, and Lion Oil Trading & Transportation, for oil sales and WTG Jameson for gas sales. The Company entered into production agreements with BML, Lion Oil and WTG Jameson so that, as our tier 1 buyer, they can handle pick-up and sales of our crude oil stock to refineries and gas via local gas pipelines.

As such, crude oil will be picked up from our leases as needed during the calendar month. At the end of the month the crude total sales will be tallied by lease and the 30-day average of the daily closing of oil will be tabulated. On or about the 25th of the following month the proceeds checks’ will be issued to the financial parties of record.

Operational Plans

Overall, we seek to acquire on a selective basis, oil and gas reserve concessions with existing production. To maintain our operations and complete any acquisitions we intend to raise capital via equity or debt, be this from our control owner, or other third-party financing sources, including the capital markets. The Company is still in the process of assessing the wells it holds, or recently acquired and is reviewing its options.

As result of market and financial condition the Company will likely take a pause on any near-term drilling activity. If the Company does review any acquisitions, it will follow model which is based on a concept that has been proven in the past to be an effective and successful path of development for many other well- known E&P players:

a)	The financed acquisition of mature smaller oil fields that have potential for instituting EOR incremental production processes; and
b)	Develop strategic partnerships with existing operators to share production increases garnered through the implementation of this EOR plan.

The Company has plans to limit its operating budget for current wells to basic maintenance and has not determined whether to spend for any new drill programs in the near future.

Results of Operations

Comparison of the Three Months Ended May 31, 2023 with the Three Months Ended May 31, 2022

Revenues

The Company generated revenues of $81,352 from oil and gas sales for the three months ended May 31, 2023, compared to $152,641 for the three months ended May 31, 2022. The decrease in revenues came from a decrease in the market price, and decrease in the production volume of the Company’s oil and gas assets.

Operating Expenses

Operating expenses for the three months ended May 31, 2023 and 2022 were $231,939 and $264,881, respectively. Our lease operating expenses decreased to $138,972 for the three-month period ended May 31, 2023, compared to $164,450 for the three-month period ended May 31, 2022, that was primarily related to lower variable operating expenses as a result of the lower production during the current period. Our general and administrative expense decreased slightly to $83,132 for the three-month period ended May 31, 2023, compared to $84,134 for the three-month period ended May 31, 2022, primarily because of implemented cost cutting measures. Our depletion, depreciation and accretion expense decreased by $6,462, primarily related to a decrease in accretion expenses recognized during the three-month ended May 31, 2023 than the same period in 2022, resulting from lower estimates asset retirement obligations.

6

Other Income (Expense)

For the three months ended May 31, 2023 and 2022, the Company recorded interest expense of $30,751 and $28,482 related to outstanding debts. The increase in interest expense was the result of additional draws from the line of credit.

Net Loss

We had a net loss in the amount of $181,338 for the three months ended May 31, 2023, compared to a net loss of $140,722 for the three months ended May 31, 2022. The increase in losses was primarily related to the decrease in the market price of the Company’s oil and gas, which resulting lower revenue recognized in this quarter.

Liquidity and Capital Resources

As of May 31, 2023, the Company had cash on-hand of $43,673.

Net cash used by operating activities during the three months ended May 31, 2023 was $108,058, compared to cash used in operating activities of $84,854 for the same period in 2022.

Net cash provided by financing and investing activities for three months ended May 31, 2023 and 2022 was $0.

The Company will require additional financing to support its operations and to pursue its acquisition program. As of May 31, 2023, the Company had availability of $300,000 on its existing credit line with JBB. If the Company requires additional financing beyond what is available under its existing credit line, it expects to secure additional borrowing capacity from JBB.

To date, the funding during the past three fiscal years to support operations and facilitate some acquisitions has been provided by the largest shareholder of the Company. This individual does not have any legal obligation to continue to provide funding to the Company. Yet the majority owner has indicated a willingness, and provided some assurances, to selectively review and determine added funding for certain low risk initiatives on those oil and gas wells in which the Company has either a 100% or a majority working interest in order to increase its existing production. Our majority shareholder expects, but is not legally obligated, to provide funding for the Company’s capital expenditure program for fiscal year 2024. Such funding may be provided in the form of loans, issuance of equity or other means.

The consolidated financial statements of the Company have been prepared on a going concern basis. The Company will either have to increase its operating revenues to a point to be able to cover its operating expenses or obtain funding from other investors or lenders. There is no assurance that the Company will be able to increase its revenues or obtain funding. The Company believes that it will experience revenue disruption and declines as a result of the COVID-19 pandemic and the government response thereto as well as the war and general political instability in Europe due to Russian Federation invasion of Ukraine. If it is not able to do so, it will have to adjust operations or cease operations. There is no assurance that the Company will be able to continue its operations. In such instances, investors will suffer a loss in the value of their investment in the Company.

On May 2, 2023, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note and promissory note agreement to September 30, 2024.

Off-Balance Sheet Arrangements

As of May 31, 2023, we did not have any off-balance sheet arrangements as defined in Item 303 (a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

7

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities and Exchange Act of 1934, as amended (“Exchange Act”) is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, which in our case is the same individual. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of May 31, 2023 (the “Evaluation Date”). Based upon the evaluation of our disclosure controls and procedures as of the Evaluation Date, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective because of the identification of material weaknesses in our internal control over financial reporting that were disclosed in Item 9A. Controls and Procedures in our 2022 annual report on Form 10-K in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended May 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

You should carefully consider the risk factors in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 15, 2023 (the “2022 10-K”), together with all of the other information included in this report, before investing in our common stock. Those risks and uncertainties encompass many of the risks that could affect our business and the value of our stock. Not all risks and uncertainties are described. Risks that we do not know about could occur and issues we now view as minor could become more important. If any of these risks actually occur, our business, financial condition or results of operations could be materially and adversely affected. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Item 2. Unregistered Sales of Equity Securities

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

8

Item 6. Exhibits.

Exhibit Number	Exhibit Title
31.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2+	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS *	Inline XBRL Instance Document
101.SCH *	Inline XBRL Taxonomy Schema
101.CAL *	Inline XBRL Taxonomy Calculation Linkbase
101.DEF *	Inline XBRL Taxonomy Definition Linkbase
101.LAB *	Inline XBRL Taxonomy Label Linkbase
101.PRE *	Inline XBRL Taxonomy Presentation Linkbase
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

+ In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.

9

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Norris Industries, Inc.
Date: July 14, 2023	By:	/s/ Patrick L. Norris
		Patrick L. Norris
		Chief Executive Officer, Chief Financial Officer (Principal Executive Office, Principal Financial and Principal Accounting Officer) and Chairman of Board
Date: July 14, 2023	By:	/s/ Ross Henry Ramsey
		Ross Henry Ramsey
		President of the Oil and Gas Division and Director

10

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Patrick L. Norris, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Norris Industries, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. I have disclosed, based on my most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

	Norris Industries, Inc.
Date: July 14, 2023	By:	/s/ Patrick L. Norris
		Chief Executive Officer, Chief Financial Officer (Principal Executive Office, Principal Financial and Principal Accounting Officer) and Chairman of Board

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Patrick L. Norris, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Norris Industries, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. I have disclosed, based on my most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

	Norris Industries, Inc.
Date: July 14, 2023	By:	/s/ Patrick L. Norris
		Patrick L. Norris
		Chief Executive Officer, Chief Financial Officer (Principal Executive Office, Principal Financial and Principal Accounting Officer) and Chairman of Board

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Norris Industries, Inc. (the “Company”), on Form 10-Q for the period ended May 31, 2023, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Patrick L. Norris, Principal Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the period ended May 31, 2023, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934: and
(2)	The information contained in such Quarterly Report on Form 10-Q for the period ended May 31, 2023, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 14, 2023	By:	/s/ Patrick L. Norris
		Patrick L. Norris
		Chief Executive Officer, Chief Financial Officer (Principal Executive Office, Principal Financial and Principal Accounting Officer) and Chairman of Board

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Norris Industries, Inc. (the “Company”), on Form 10-Q for the period ended May 31, 2023, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Patrick L. Norris, Principal Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the period ended May 31, 2023, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934: and
(2)	The information contained in such Quarterly Report on Form 10-Q for the period ended May 31, 2023, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 14, 2023	By:	/s/ Patrick L. Norris
		Patrick L. Norris
		Chief Executive Officer, Chief Financial Officer (Principal Executive Office, Principal Financial and Principal Accounting Officer) and Chairman of Board

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover - shares	3 Months Ended
	May 31, 2023	Jul. 10, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	May 31, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--02-28
Entity File Number	000-55695
Entity Registrant Name	Norris Industries, Inc.
Entity Central Index Key	0001603793
Entity Tax Identification Number	46-5034746
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	102 Palo Pinto St
Entity Address, Address Line Two	Suite B
Entity Address, City or Town	Weatherford
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	76086
City Area Code	(855)
Local Phone Number	809-6900
Trading Symbol	NRIS
Title of 12(g) Security	Common Stock, $.01 Par Value
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		90,883,013

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	May 31, 2023	Feb. 28, 2023
Current Assets
Cash	$ 43,673	$ 151,731
Account receivable - oil & gas	32,328	24,151
Total Current Assets	76,001	175,882
Oil and Gas Property - Full Cost Method
Properties subject to amortization	3,003,042	3,006,271
Less: accumulated depletion and impairment	(2,853,631)	(2,844,022)
Total Oil and Gas Property, net	149,411	162,249
Total Assets	225,412	338,131
Current Liabilities
Accounts payable and accrued expenses	166,518	125,647
Total Current Liabilities	166,518	125,647
Convertible note payable - related party	$ 3,900,000	$ 3,900,000
Notes Payable, Noncurrent, Related and Nonrelated Party Status [Extensible Enumeration]	Related Party [Member]	Related Party [Member]
Accounts payable and accrued expenses - related parties	$ 487,630	$ 456,879
Asset retirement obligations	143,242	146,245
Total Liabilities	4,697,390	4,628,771
Commitments and Contingencies
Stockholders’ Deficit
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
Common stock, $0.001 par value per share, 150,000,000 shares authorized; 90,883,013 shares issued and outstanding	90,883	90,883
Additional paid-in capital	6,286,399	6,286,399
Accumulated deficit	(10,850,260)	(10,668,922)
Total Stockholder’s Deficit	(4,471,978)	(4,290,640)
Total Liabilities and Stockholders’ Deficit	225,412	338,131
Series A Convertible Preferred Stock [Member]
Stockholders’ Deficit
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

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	May 31, 2023	Feb. 28, 2023
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	90,883,013	90,883,013
Common stock, shares outstanding	90,883,013	90,883,013
Series A Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	1,000,000	1,000,000
Preferred stock, shares outstanding	1,000,000	1,000,000
Preferred stock, liquidation preference	$ 2,250,000	$ 2,250,000

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	May 31, 2023	May 31, 2022
Revenues
Total Revenues	$ 81,352	$ 152,641
Operating Expenses
Lease operating expenses	138,972	164,450
General and administrative expenses	83,132	84,134
Depletion, depreciation and accretion	9,835	16,297
Total Operating Expenses	231,939	264,881
Loss from Operations	(150,587)	(112,240)
Other Expenses
Interest expense	30,751	28,482
Total Other Expense	30,751	28,482
Net Loss	$ (181,338)	$ (140,722)
Net loss per common share - basic and diluted	$ (0.02)	$ (0.00)
Weighted average number of common shares outstanding - basic and diluted	90,883,013	90,883,013
Oil and Gas [Member]
Revenues
Total Revenues	$ 81,352	$ 152,641

XML

Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - 3 months ended May 31, 2023 - USD ($)	Preferred Stock [Member] Series A Convertible Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance, value at Feb. 28, 2023	$ 1,000	$ 90,883	$ 6,286,399	$ (10,668,922)	$ (4,290,640)
Balance, shares at Feb. 28, 2023	1,000,000	90,883,013
Net loss				(181,338)	(181,338)
Balance, value at May. 31, 2023	$ 1,000	$ 90,883	$ 6,286,399	$ (10,850,260)	$ (4,471,978)
Balance, shares at May. 31, 2023	1,000,000	90,883,013

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	May 31, 2023	May 31, 2022
Cash Flow from Operating Activities
Net loss	$ (181,338)	$ (140,722)
Adjustments to reconcile net loss to net cash from operating activities:
Depletion, depreciation and accretion	9,835	16,297
Changes in operating assets and liabilities:
Accounts receivable - oil & gas	(8,177)	11,461
Accounts payable and accrued expenses	40,871	(372)
Accounts payable and accrued expenses - related parties	30,751	28,482
Net Cash Used in Operating Activities	(108,058)	(84,854)
Net Decrease in Cash	(108,058)	(84,854)
Cash – beginning of period	151,731	139,569
Cash – end of period	43,673	54,715
Noncash Investing and Financing Activities
Change in estimate of asset retirement obligations	$ 3,229	$ 9,424

XML

Organization, Nature of Operations and Summary of Significant Accounting Policies

3 Months Ended

May 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Nature of Operations and Summary of Significant Accounting Policies

Note 1 – Organization, Nature of Operations and Summary of Significant Accounting Policies

Norris Industries, Inc. (“NRIS” or the “Company”), was incorporated on February 19, 2014, as a Nevada corporation. The Company was formed to conduct operations in the oil and gas industry. The Company’s principal operating properties are in the Ellenberger formation in Coleman County, and in Jack County and Palo-Pinto County. Texas. The Company’s production operations are all located in the State of Texas.

On April 25, 2018, the Company incorporated a Texas registered subsidiary, Norris Petroleum, Inc., as an operating entity.

Basis of Presentation

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form 10-K for the year ended February 28, 2023. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The Company’s consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and entities in which the Company has a controlling financial interest. All significant inter-company accounts and transactions have been eliminated in consolidation.

Liquidity and Capital Considerations

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the issuance date of these consolidated financial statements.

The timeline and potential magnitude of Ukraine-Russia war and its impact on the Company’s future operations is currently unknown. The Company has incurred continuing losses since 2016, including a loss of $504,980 and $181,338 for the fiscal year ended February 28, 2023, and the three-month ended May 31, 2023, respectively. During the three months ended May 31, 2023, the Company incurred cash losses of approximately $108,000 from its operating activities. As of May 31, 2023, the Company had a cash balance of approximately $44,000 and negative working capital of approximately $91,000.

The Company’s principal capital and exploration expenditures during next fiscal year are expected to relate to selected well workovers on its Jack and Palo Pinto County acreages. The Company believes that it has sufficient cash on hand and available funds from its credit line to fund its costs for such expenditures as well as other operating costs, for the 12-month period subsequent to issuance of these financial statements.

In the event that the Company requires additional capital to fund higher operational losses or oil and gas property lease purchases for fiscal year ending February 28, 2024, the Company expects to seek additional capital from one or more sources via restricted private placement sales of equity and debt securities. If the Company requires additional financing beyond what is available under its existing credit line, it expects to secure additional borrowing capacity from JBB.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expense during the period. Actual results could differ from those estimates.

Risks and Uncertainties

The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating an emerging business, including the potential risk of business failure.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of the year or less to be cash equivalents. The Company has not experienced any losses on its deposits of cash and cash equivalents.

Oil and Gas Properties, Full Cost Method

The Company follows the full cost method of accounting for its oil gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil wells and administrative costs directly attributable to those activities and asset retirement costs. Disposition of oil properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil and gas, in which case the gain or loss is recognized in the statement of operations.

Depletion and depreciation of proved oil properties are calculated on the units-of-production method based upon estimates of proved reserves. Such calculations include the estimated future costs to develop proved reserves. Costs of unproved properties are not included in the costs subject to depletion. These costs are assessed periodically for impairment.

At the end of each quarter, the unamortized cost of oil and gas properties, net of related deferred income taxes, is limited to the sum of the estimated future after-tax net revenues from proved properties, after giving effect to cash flow hedge positions, discounted at 10%, and the lower of cost or fair value of unproved properties, adjusted for related income tax effects. Costs in excess of the present value of estimated future net revenues are charged to impairment expense. This limitation is known as the “ceiling test,” and is based on SEC rules for the full cost oil and gas accounting method.

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic No. 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

Uncertain Tax Positions

The Company evaluates uncertain tax positions to recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Those tax positions failing to qualify for initial recognition are recognized in the first interim period in which they meet the more likely than not standard or are resolved through negotiation or litigation with the taxing authority, or upon expiration of the statute of limitations. De-recognition of a tax position that was previously recognized occurs when an entity subsequently determines that a tax position no longer meets the more likely than not threshold of being sustained.

Revenue Recognition

The Company’s revenue is comprised entirely of revenue from exploration and production activities. The Company’s oil is sold primarily to wholesalers and others that sell product to end use customers. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, various end-users, local distribution companies, and natural-gas marketers. NGLs are sold primarily to various end-users. Payment is generally received from the customer in the month following delivery.

Contracts with customers have varying terms, including spot sales or month-to-month contracts, or contracts with a finite term, where the production from a well or group of wells is sold to one or more customers. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs.

Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues. The Company does not hedge nor forward sell any of its current production via derivative financial contracts.

Net Loss per Common Share

Basic net loss per common share amounts are computed by dividing the net loss available to Norris Industries, Inc. shareholders by the weighted average number of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive. The following table summarizes the common stock equivalents excluded from the calculation of diluted net loss per common share as the inclusion of these shares would be anti-dilutive for the three months ended May 31, 2023, and 2022:

	2023		2022
Series A Convertible Preferred Stock		66,666,667		66,666,667
Convertible debt		24,750,000		21,000,000
Total common shares to be issued		91,416,667		87,666,667

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk include cash deposits placed with financial institutions. The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (“FDIC”). At May 31, 2023, $0 of the Company’s cash balances was uninsured. The Company has not experienced any losses on such accounts.

Recent Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. The Company adopted the ASU No. 2016-13 in this quarter; and the adoption has no impacts to the accompanying consolidated financial statements.

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Revenues from Contracts with Customers

3 Months Ended

May 31, 2023

Revenue from Contract with Customer [Abstract]

Revenues from Contracts with Customers

Note 2 – Revenues from Contracts with Customers

Disaggregation of Revenues from Contracts with Customers

The following table disaggregates revenue by significant product types for the three months ended May 31, 2023 and 2022:

	2023		2022
Oil sales	$	109,547	$	53,269
Natural gas sales		43,094		28,083
Total	$	152,641	$	81,352

There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of May 31, 2023 and February 28, 2023.

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Oil and Gas Properties

3 Months Ended

May 31, 2023

Extractive Industries [Abstract]

Oil and Gas Properties

Note 3 – Oil and Gas Properties

The following table summarizes the Company’s oil and gas activities by classification for the three months ended May 31, 2023:

	February 28, 2023			Additions			Change in Estimates			May 31, 2023
Oil and gas properties, subject to depletion	$	2,930,237		$	-		$	-		$	2,930,237
Asset retirement costs		76,034			-			(3,229	)		72,805
Accumulated depletion and depreciation		(2,844,022	)		(9,609	)		-			(2,853,631	)
Total oil and gas assets	$	162,249			(9,609	)	$	(3,229	)	$	149,411

The depletion and depreciation recorded for production on proved properties for the three months ended May 31, 2023 and 2022, amounted to $9,609 and $7,338, respectively. During the three months ended May 31, 2023 and 2022, there were no ceiling test write-downs of the Company’s oil and gas properties.

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Asset Retirement Obligations

3 Months Ended

May 31, 2023

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

Note 4 – Asset Retirement Obligations

The following table summarizes the change in the Company’s asset retirement obligations during the three months ended May 31, 2023:

Asset retirement obligations as of February 28, 2023	$	146,245
Additions		226
Current year revision of previous estimates		(3,229)
Accretion adjustment during the three months ended May 31, 2023		-
Asset retirement obligations as of May 31, 2023	$	143,242

During the three months ended May 31, 2023 and 2022, the Company recognized accretion expense of $226 and $8,959, respectively.

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Related Party Transactions

3 Months Ended

May 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Note 5 – Related Party Transactions

Promissory Note to JBB

On December 28, 2017, the Company borrowed $1,550,000 from JBB to complete the purchases of a series of oil and gas leases (the “Loan Note”). The loan has an interest rate of 3% per annum, a maturity date of December 28, 2018 and is secured by all assets of the Company. The loan is convertible to the Company’s common stock at the conversion rate of $0.20 per share.

On June 26, 2018, the Company and JBB entered into a modification of the existing Loan Note, to add provisions to permit the Company to obtain additional advances under the Loan Note up to a maximum of $1,000,000. The Company may request an advance in increments of $100,000 no more frequently than every 30 days, provided that (i) it provides a description of the use of proceeds for the advance reasonably acceptable to JBB, and (ii) the Company is not otherwise in default of the Loan Note. The original loan amount and the advances are secured by all the assets of the Company and are convertible into common stock of the Company at the rate of $0.20 per common share, subject to adjustment for any reverse and forward stock splits. The Loan Note may be repaid at any time, without penalty, however, any advance that is repaid before maturity may not be re-borrowed as a further advance.

On May 21, 2019, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note to September 30, 2020.

On June 13, 2019, JBB lent the Company $250,000 under a secured promissory note. The funds were used to acquire the remaining working interest in the Marshall Walden oil and gas property from Odyssey Enterprises LLC. The loan has an interest rate of 5% per annum, a maturity date of June 30, 2022, and is secured by all assets of the Company. The loan is convertible into the Company’s common stock at a conversion rate of $0.20 per common share.

On October 1, 2019, the Company entered into another amendment of its Loan Note with JBB to increase the line of credit by an additional $500,000, for a total of $1,500,000, and extend the maturity date for the original note and line of credit to December 31, 2020.

On May 29, 2020, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note to September 30, 2021.

On December 22, 2020, the Company entered into an extension agreement with JBB to extend the maturity of all its outstanding indebtedness under credit line and Loan Note to May 31, 2022.

On May 1, 2021, the Company entered into a new funding agreement with a maturity date of May 31, 2022 and an interest rate of five percent annual percentage rate (5% APR) with JBB for a further $1 million drawable in $100,000 increments at the discretion of JBB to cover the Company’s current and projected working capital requirements in near-term. The loan is convertible into common stock of the Company at the rate of $0.08 per share, subject to adjustment for any reverse and forward stock splits.

On May 5, 2023, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note to September 30, 2024.

During the three months ended May 31, 2023, there were no additional funds advanced to the Company under the Loan Note. As of May 31, 2023, the Company had availability of $300,000 on its existing credit line with JBB.

The Company recognized interest expense of $30,751 and $28,482 for the three months ended May 31, 2023 and 2022, respectively. Accrued interest as of February 28, 2023 and May 31, 2023 was $456,879 and $487,630, respectively, and is due at maturity of the Loan Note Outstanding borrowings under notes payable to JBB totaled $3,900,000 as of February 28, 2023 and May 31, 2023.

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Commitments and Contingencies

3 Months Ended

May 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 6 – Commitments and Contingencies

Office Lease

In September 2018, the Company moved to the offices of International Western Oil (“IWO”) in Weatherford, TX that is being rented on a month-to-month sublease basis at rate of $950 per month from IWO. During the three months ended May 31, 2023, the Company incurred $2,850 of rent expense under this lease that is included in lease operating expenses on the statement of operations.

Leasehold Drilling Commitments

The Company’s oil and gas leasehold acreage is subject to expiration of leases if the Company does not drill and hold such acreage by production or otherwise exercises options to extend such leases, if available, in exchange for payment of additional cash consideration. In the King County, Texas lease acreage, 640 acres were due to expire in June 2021; and the Company chose not to extend this lease.

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Subsequent Event

3 Months Ended

May 31, 2023

Subsequent Events [Abstract]

Subsequent Event

Note 7 - Subsequent Event

In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date these consolidated financial statements were issued.

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Organization, Nature of Operations and Summary of Significant Accounting Policies (Policies)

3 Months Ended

May 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form 10-K for the year ended February 28, 2023. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The Company’s consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and entities in which the Company has a controlling financial interest. All significant inter-company accounts and transactions have been eliminated in consolidation.

Liquidity and Capital Considerations

Liquidity and Capital Considerations

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the issuance date of these consolidated financial statements.

The timeline and potential magnitude of Ukraine-Russia war and its impact on the Company’s future operations is currently unknown. The Company has incurred continuing losses since 2016, including a loss of $504,980 and $181,338 for the fiscal year ended February 28, 2023, and the three-month ended May 31, 2023, respectively. During the three months ended May 31, 2023, the Company incurred cash losses of approximately $108,000 from its operating activities. As of May 31, 2023, the Company had a cash balance of approximately $44,000 and negative working capital of approximately $91,000.

The Company’s principal capital and exploration expenditures during next fiscal year are expected to relate to selected well workovers on its Jack and Palo Pinto County acreages. The Company believes that it has sufficient cash on hand and available funds from its credit line to fund its costs for such expenditures as well as other operating costs, for the 12-month period subsequent to issuance of these financial statements.

In the event that the Company requires additional capital to fund higher operational losses or oil and gas property lease purchases for fiscal year ending February 28, 2024, the Company expects to seek additional capital from one or more sources via restricted private placement sales of equity and debt securities. If the Company requires additional financing beyond what is available under its existing credit line, it expects to secure additional borrowing capacity from JBB.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expense during the period. Actual results could differ from those estimates.

Risks and Uncertainties

Risks and Uncertainties

The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating an emerging business, including the potential risk of business failure.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of the year or less to be cash equivalents. The Company has not experienced any losses on its deposits of cash and cash equivalents.

Oil and Gas Properties, Full Cost Method

Oil and Gas Properties, Full Cost Method

The Company follows the full cost method of accounting for its oil gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil wells and administrative costs directly attributable to those activities and asset retirement costs. Disposition of oil properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil and gas, in which case the gain or loss is recognized in the statement of operations.

Depletion and depreciation of proved oil properties are calculated on the units-of-production method based upon estimates of proved reserves. Such calculations include the estimated future costs to develop proved reserves. Costs of unproved properties are not included in the costs subject to depletion. These costs are assessed periodically for impairment.

At the end of each quarter, the unamortized cost of oil and gas properties, net of related deferred income taxes, is limited to the sum of the estimated future after-tax net revenues from proved properties, after giving effect to cash flow hedge positions, discounted at 10%, and the lower of cost or fair value of unproved properties, adjusted for related income tax effects. Costs in excess of the present value of estimated future net revenues are charged to impairment expense. This limitation is known as the “ceiling test,” and is based on SEC rules for the full cost oil and gas accounting method.

Income Taxes

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic No. 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

Uncertain Tax Positions

Uncertain Tax Positions

The Company evaluates uncertain tax positions to recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Those tax positions failing to qualify for initial recognition are recognized in the first interim period in which they meet the more likely than not standard or are resolved through negotiation or litigation with the taxing authority, or upon expiration of the statute of limitations. De-recognition of a tax position that was previously recognized occurs when an entity subsequently determines that a tax position no longer meets the more likely than not threshold of being sustained.

Revenue Recognition

Revenue Recognition

The Company’s revenue is comprised entirely of revenue from exploration and production activities. The Company’s oil is sold primarily to wholesalers and others that sell product to end use customers. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, various end-users, local distribution companies, and natural-gas marketers. NGLs are sold primarily to various end-users. Payment is generally received from the customer in the month following delivery.

Contracts with customers have varying terms, including spot sales or month-to-month contracts, or contracts with a finite term, where the production from a well or group of wells is sold to one or more customers. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs.

Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues. The Company does not hedge nor forward sell any of its current production via derivative financial contracts.

Net Loss per Common Share

Net Loss per Common Share

Basic net loss per common share amounts are computed by dividing the net loss available to Norris Industries, Inc. shareholders by the weighted average number of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive. The following table summarizes the common stock equivalents excluded from the calculation of diluted net loss per common share as the inclusion of these shares would be anti-dilutive for the three months ended May 31, 2023, and 2022:

	2023		2022
Series A Convertible Preferred Stock		66,666,667		66,666,667
Convertible debt		24,750,000		21,000,000
Total common shares to be issued		91,416,667		87,666,667

Concentrations of Credit Risk

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk include cash deposits placed with financial institutions. The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (“FDIC”). At May 31, 2023, $0 of the Company’s cash balances was uninsured. The Company has not experienced any losses on such accounts.

Recent Issued Accounting Pronouncements

Recent Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. The Company adopted the ASU No. 2016-13 in this quarter; and the adoption has no impacts to the accompanying consolidated financial statements.

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Organization, Nature of Operations and Summary of Significant Accounting Policies (Tables)

3 Months Ended

May 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Antidilitive Securities Excluded from Computation of Earning Per Shares

	2023		2022
Series A Convertible Preferred Stock		66,666,667		66,666,667
Convertible debt		24,750,000		21,000,000
Total common shares to be issued		91,416,667		87,666,667

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Revenues from Contracts with Customers (Tables)

3 Months Ended

May 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table disaggregates revenue by significant product types for the three months ended May 31, 2023 and 2022:

	2023		2022
Oil sales	$	109,547	$	53,269
Natural gas sales		43,094		28,083
Total	$	152,641	$	81,352

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Oil and Gas Properties (Tables)

3 Months Ended

May 31, 2023

Extractive Industries [Abstract]

Summary of Oil and Gas Activities

The following table summarizes the Company’s oil and gas activities by classification for the three months ended May 31, 2023:

	February 28, 2023			Additions			Change in Estimates			May 31, 2023
Oil and gas properties, subject to depletion	$	2,930,237		$	-		$	-		$	2,930,237
Asset retirement costs		76,034			-			(3,229	)		72,805
Accumulated depletion and depreciation		(2,844,022	)		(9,609	)		-			(2,853,631	)
Total oil and gas assets	$	162,249			(9,609	)	$	(3,229	)	$	149,411

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Asset Retirement Obligations (Tables)

3 Months Ended

May 31, 2023

Asset Retirement Obligation Disclosure [Abstract]

Schedule of Asset Retirement Obligations

The following table summarizes the change in the Company’s asset retirement obligations during the three months ended May 31, 2023:

Asset retirement obligations as of February 28, 2023	$	146,245
Additions		226
Current year revision of previous estimates		(3,229)
Accretion adjustment during the three months ended May 31, 2023		-
Asset retirement obligations as of May 31, 2023	$	143,242

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Schedule of Antidilitive Securities Excluded from Computation of Earning Per Shares (Details) - shares	3 Months Ended
	May 31, 2023	May 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total common shares to be issued	91,416,667	87,666,667
Series A Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total common shares to be issued	66,666,667	66,666,667
Convertible Debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total common shares to be issued	24,750,000	21,000,000

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Organization, Nature of Operations and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	May 31, 2023	May 31, 2022	Feb. 28, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net income loss available to common stock holders	$ 181,338		$ 504,980
Net cash provided by operating activities	108,058	$ 84,854
Cash	44,000
Negative working capital	91,000
Cash, FDIC insured amount	$ 0

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Schedule of Disaggregation of Revenue (Details) - USD ($)	3 Months Ended
	May 31, 2023	May 31, 2022
Reserve Quantities [Line Items]
Total	$ 152,641	$ 81,352
Oil [Member]
Reserve Quantities [Line Items]
Total	109,547	53,269
Natural Gas [Member]
Reserve Quantities [Line Items]
Total	$ 43,094	$ 28,083

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Summary of Oil and Gas Activities (Details)	3 Months Ended
	May 31, 2023 USD ($)
Property, Plant and Equipment [Line Items]
Oil and gas properties, subject to depletion	$ 2,930,237
Oil and gas properties, subject to depletion, additions
Oil and gas properties, subject to depletion, change in estimates
Oil and gas properties, subject to amortization	2,930,237
Asset retirement costs	76,034
Asset retirement costs, addtions
Asset retirement costs, change in estimates	(3,229)
Asset retirement costs	72,805
Accumulated depletion	(2,844,022)
Accumulated depletion, additions	(9,609)
Accumulated depletion	(2,853,631)
Total oil and gas assets	162,249
Total oil and gas assets, additions	(9,609)
Total oil and gas assets	(3,229)
Total acquisition, development and exploration costs	149,411
Dispositions [Member]
Property, Plant and Equipment [Line Items]
Accumulated depletion, change in estimates

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Oil and Gas Properties (Details Narrative) - USD ($)	3 Months Ended
	May 31, 2023	May 31, 2022
Extractive Industries [Abstract]
Depletion recorded for production on proved properties	$ 9,609	$ 7,338

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Schedule of Asset Retirement Obligations (Details)	3 Months Ended
	May 31, 2023 USD ($)
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligations as of February 28, 2022	$ 146,245
Additions	226
Current year revision of previous estimates	(3,229)
Accretion adjustment during the six months ended August 31, 2022
Asset retirement obligations as of August 31, 2022	$ 143,242

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Asset Retirement Obligations (Details Narrative) - USD ($)	3 Months Ended
	May 31, 2023	May 31, 2022
Asset Retirement Obligation Disclosure [Abstract]
Accretion expense	$ 226	$ 8,959

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Related Party Transactions (Details Narrative) - USD ($)											3 Months Ended
	May 05, 2023	May 01, 2021	May 01, 2021	Dec. 22, 2020	May 29, 2020	Oct. 01, 2019	Jun. 13, 2019	May 21, 2019	Jun. 26, 2018	Dec. 28, 2017	May 31, 2023	May 31, 2022	Feb. 28, 2023
Financing Receivable, Modified [Line Items]
Interest expense											$ 30,751	$ 28,482
Accrued interest											487,630		$ 456,879
Notes payable, outstanding											3,900,000		$ 3,900,000
JBB Partners Inc [Member]
Financing Receivable, Modified [Line Items]
Loan bears interest rate		5.00%	5.00%
Loan maturity date			May 31, 2022
Debt conversion price per share		$ 0.08	$ 0.08
Maximum of amount permitted to obtain advances		$ 1,000,000	$ 1,000,000
Increments of line of credit						$ 500,000
Proceeds from advances		$ 100,000
Line of credit borrowing capacity total						$ 1,500,000
Repayments of related party debt											0
Availability of existing credit line											$ 300,000
Promissory Note [Member] | JBB Partners Inc [Member]
Financing Receivable, Modified [Line Items]
Proceed from loan payable										$ 1,550,000
Loan bears interest rate										3.00%
Loan maturity date										Dec. 28, 2018
Debt conversion price per share										$ 0.20
Promissory Note [Member] | JBB Partners Inc [Member] | Modification of Existing Loan [Member]
Financing Receivable, Modified [Line Items]
Debt conversion price per share									$ 0.20
Maximum of amount permitted to obtain advances									$ 1,000,000
Increments of line of credit									$ 100,000
Loan Note [Member] | JBB Partners Inc [Member]
Financing Receivable, Modified [Line Items]
Debt maturity date description	the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan			the Company entered into an extension agreement with JBB to extend the maturity of all its outstanding indebtedness under credit line and Loan	the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan			the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan
Loan Note [Member] | JBB Partners Inc [Member] | Extended Maturity [Member]
Financing Receivable, Modified [Line Items]
Loan maturity date	Sep. 30, 2024			May 31, 2022	Sep. 30, 2021			Sep. 30, 2020
Secured Promissory Note [Member] | Odyssey Enterprises LLC [Member]
Financing Receivable, Modified [Line Items]
Loan bears interest rate							5.00%
Loan maturity date							Jun. 30, 2022
Debt conversion price per share							$ 0.20
Proceeds from advances							$ 250,000

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Commitments and Contingencies (Details Narrative) - USD ($)		3 Months Ended
	Sep. 01, 2018	May 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Payments for rent	$ 950	$ 2,850
Lease description		In the King County, Texas lease acreage, 640 acres were due to expire in June 2021