Quarterly Report for Quarter Ending April 30, 2026 (Form 10-Q)

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

Forward-Looking Statements

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

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

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

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

General Overview

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

Results of Operations

Results of Operations for the Three Months Ended April 30, 2026 Compared to the Three Months Ended April 30, 2025

Revenue and Cost of Revenue

For the three months ended April 30, 2026, we recognized $8,382 of revenue and $6,706 of expense for a gross margin of $1,676. We began recognizing revenue from the sale of oil and natural gas from our investment in Lost Creek Acquisitions LLC (Note 4) during the fourth quarter of fiscal year 2025. We did not recognize any revenue for the three months ended April 30, 2025.

Officer compensation

Officer compensation was $7,500 and $7,200 for the three months ended April 30, 2026 and 2025, respectively, an increase of $300 or 4.2%. Officer's compensation is paid to our CFO and has increased since the prior period.

Consulting -related party

Consulting - related party services were $18,000 and $18,000 for the three months ended April 30, 2026 and 2025, respectively. Fees are paid to Noel Schaefer, Director, but are recorded as consulting fees.

Professional fees

Professional fees were $25,285 and $35,746 for the three months ended April 30, 2026 and 2025, respectively, a decrease of $10,461 or 29.3%. Professional fees generally consist of legal and audit expenses. The decrease is due to a decrease in legal fees.

General and administrative

General and administrative expenses were $3,221 and $3,680 for the three months ended April 30, 2026 and 2025, respectively, a decrease of $459 or 12.5%.

Other expenses

During the three months ended April 30, 2026 and 2025, we had total other expenses of $6,663 and $3,436, respectively. We had interest expense of $5,901 and we recognized an unrealized loss on the value of our Bitcoin asset of $762. In the prior period we had interest expense of $3,436. The increase in interest expense is in conjunction with an increase in our loan payable balance.

Net Loss

For the three months ended April 30, 2026, we had a net loss of $58,993 as compared to a net loss of $68,062 for the three months ended April 30, 2025, a decrease to our net loss of $9,069 or 13.3%. The decrease is due to the reasons discussed above.

Results of Operations for the Nine Months Ended April 30, 2026 Compared to the Nine Months Ended April 30, 2025

Revenue and Cost of Revenue

For the nine months ended April 30, 2026, we recognized $22,901 of revenue and $19,225 of expense for a gross margin of $3,676. We began recognizing revenue from the sale of oil and natural gas from our investment in Lost Creek Acquisitions LLC (Note 4) during the fourth quarter of fiscal year 2025. We did not recognize any revenue for the nine months ended April 30, 2025.

Officer compensation

Officer compensation was $31,000 and $20,400 for the nine months ended April 30, 2026 and 2025, respectively, an increase of $10,600 or 52%. Officer's compensation is paid to our CFO and has increased since the prior period. In addition, during the current period the Company granted 50,000 shares of common stock for services, for total non-cash expense of $8,700.

Director compensation

Director compensation was $17,400 and $0 for the nine months ended April 30, 2026 and 2025, respectively, On January 7, 2026, the Company granted 100,000 shares of common stock to Berhane Tewolde, Director, for services. The shares were valued at $0.174, the closing price on the date of grant, for total non-cash expense of $17,400.

Consulting -related party

Consulting - related party services were $54,000 and $56,650 for the nine months ended April 30, 2026 and 2025, respectively, a decrease of $2,650 or 4.7%. Fees are paid to Noel Schaefer, Director, but are recorded as consulting fees. In the prior period we also paid $1,250 to our former CEO.

Professional fees

Professional fees were $77,448 and $57,246 for the nine months ended April 30, 2026 and 2025, respectively, an increase of $20,202 or 35.3%. Professional fees generally consist of legal and audit expenses. The increase is due to an increase in legal fees.

General and administrative

General and administrative expenses were $37,914 and $41,331for the nine months ended April 30, 2026 and 2025, respectively, a decrease of $3,417 or 8.3%. In the current period we issued shares of common stock for services valued at $17,300. In the prior period we issued shares of common stock for services valued at $19,000.

Other expenses

During the nine months ended April 30, 2026 and 2025, we had total other expenses of $18,172. We had interest expense of $14,253 and we recognized an unrealized loss on the value of our Bitcoin asset of $3,919. In the prior period we had interest expense of $9,232. The increase in interest expense is in conjunction with an increase in our loan payable balance.

Net Loss

For the nine months ended April 30, 2026, we had a net loss of $232,258 as compared to a net loss of $184,859 for the nine months ended April 30, 2025, an increase to our net loss of $47,399 or 25.6%. The increase is due to the reasons discussed above.

Liquidity and Financial Condition

Operating Activities

Cash used by operating activities was $187,236 for the nine months ended April 30, 2026. Cash used for operating activities was $133,907 for the nine months ended April 30, 2025.

Investing Activities

Net cash used by investing activities was $42,139 for the nine months ended April 30, 2026, for the purchase of Bitcoin. During the nine months ended April 30, 2025, the Company used $12,500 for the purchase of oil and gas rights.

Financing Activities

Net cash provided by financing activities was $242,000 for the nine months ended April 30, 2026. We received $242,000 from related party loans. Net cash provided by financing activities was $125,000 for the nine months ended April 30, 2025. We received $90,000 from related party loans and $35,000 from the sale of common stock to our former directors.

We had the following loans outstanding as of April 30, 2026:

On April 16, 2017, the Company executed a promissory note for $15,000 with a third party. The note matures in two years and interest is set at $3,000 for the full two years. As of April 30, 2026, there is $15,000 and $12,000 of principal and accrued interest, respectively, due on this loan. This loan is currently in default.

On June 1, 2023, the Company issued a Promissory Note to Golden Sands Exploration Inc, for $85,000. The note bears interest at 6% and matures on June 1, 2026. Interest is to be paid quarterly with the first payment due on or before September 1, 2023. As of April 30, 2026, there is $85,000 and $850 of principal and accrued interest, respectively, due on this loan.

The Company has a line of credit ("LOC") with Mr. Miranda, a former director, for up to $500,000. The LOC bears interest at 5% to be paid quarterly and matures in five years. As of April 30, 2026, there is $377,000 and $11,368 of principal and accrued interest, respectively, due on the LOC.

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

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

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