RELATED PARTY TRANSACTIONS

12 Months Ended

May 31, 2022

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 8 - RELATED PARTY TRANSACTIONS

Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition. FASB ASC 850, Related Party Disclosures (“FASB ASC 850”) requires that transactions with related parties that would make a difference in decision making shall be disclosed so that users of the consolidated financial statements can evaluate their significance. Related party transactions typically occur within the context of the following relationships:

● Affiliates of the entity;

● Entities for which investments in their equity securities is typically accounted for under the equity method by the investing entity;

● Trusts for the benefit of employees;

● Principal owners of the entity and members of their immediate families;

● Management of the entity and members of their immediate families.

● Other parties that can significantly influence the management or operating policies of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

Prior to the SORC Purchase Acquisition on December 31, 2020, SORC and Alleghany were considered related parties under FASB ASC 850. See Note 1. All management fee revenue reported by the Company for the period through December 31, 2020 is generated from charges to SORC.

Subsequent to the Company’s purchase of 100% of SORC’s stock on December 31, 2020, Alleghany and its subsidiaries are no longer a related party. See Note 9.

Cat Creek, the Company’s equity investment, loaned Laredo $136,479 at a market rate of interest on April 4, 2022. The note and accrued interest was repaid on August 30, 2022 in exchange for property, plant and equipment.

In accordance with the NPI Agreement, Olfert #11-4 Holdings transferred funds totaling $1,000,000 to Laredo’s wholly owned subsidiary, Lustre for purposes of providing a loan for drilling expenses incurred with respect to the development of one well.