10-K/A: Cyber App Solutions Corp. Files Amended 10-K, Corrects Auditor's Name

Cyber App Solutions Corp. has filed an amendment to its annual report to correct the spelling of the auditor's name, with no other changes to the original filing.

Summary

• Cyber App Solutions Corp. filed an amended 10-K to correct the spelling of the auditor's name, Whitley Penn LLP.
• The amendment does not reflect any events occurring after the original filing date of April 1, 2024.
• The company has updated certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes Oxley Act of 2002.
• The company is focused on the acquisition, exploration, development and production of helium and beverage grade carbon dioxide (CO2).
• The company's assets are concentrated in the St. Johns Field in Arizona.
• The company completed the installation of its first helium processing plant and commenced production in the third quarter of 2023.
• The first helium plant has a current processing capacity of approximately 4 million cubic feet per day of inlet gas, with plans to expand to 20 million cubic feet per day.
• Front-end engineering design (FEED) studies are underway for beverage grade CO2 plants, with plans to install multiple modular plants capable of processing up to 500 tons per day each of liquid CO2.
• The company is in discussions with multiple offtakers for both helium and liquid CO2.
• The company received notice of a potential $11.6 million grant from the U.S. Department of Energy for a Direct Air Capture (DAC) project.

Sentiment

Score: 3

Explanation: The document highlights significant financial risks, including operating losses, debt default, and going concern issues, overshadowing the positive aspects of production commencement and expansion plans. The overall sentiment is negative due to the company's precarious financial situation.

Positives

• The company has commenced helium production and generated its first revenues.
• The company is actively working on expanding its helium processing capacity.
• The company is developing plans for commercializing its CO2 reserves.
• The company has engaged with multiple plant equipment providers for CO2 plants.
• The company is in active discussions with potential offtakers for both helium and CO2.
• The company is part of a consortium selected for a potential $11.6 million grant from the U.S. Department of Energy for a Direct Air Capture (DAC) project.

Negatives

• The company has a history of operating losses and an accumulated deficit of $44,262,874 as of December 31, 2023.
• The company is significantly leveraged with a $16 million debt that is in default.
• The company has limited operating history and may not be able to successfully operate its business or execute its business plan.
• There is substantial doubt about the company's ability to continue as a going concern without additional financing.
• The company's stock price may be subject to substantial volatility due to limited public float and low trading volume.
• The company's internal controls over financial reporting are not sufficiently effective.

Risks

• The company is an early-stage company with limited proved reserves.
• The company needs additional capital to develop the St. Johns Field, pay debt obligations, and fund corporate overhead.
• The company is significantly leveraged and in default on its notes, which could result in a loss of assets.
• The company's operations are subject to risks associated with the exploration, development, and production of natural resources.
• The company's marketability of production is dependent on transportation means and other facilities it does not control.
• The company relies on independent experts and technical service providers over whom it may have limited control.
• The company's operations are subject to complex and stringent environmental laws and regulations.
• The company's helium and CO2 prices are subject to volatility.
• The company's stock price may be subject to substantial volatility.
• The company is an emerging growth company and the reduced disclosure requirements may make its stock less attractive to investors.

Future Outlook

The company plans to expand its helium processing capacity to 20 million cubic feet per day and install multiple CO2 plants capable of processing up to 500 tons per day each of liquid CO2. The company is also evaluating debt and equity financing strategies to fund these expansions.

Management Comments

• The Managing Member of Proton Green assumed the role of President, Chief Executive Officer and Director immediately following the Acquisition.
• Management believes the current market conditions for helium and CO2 puts our products in high demand.
• Management believes that the risks from cybersecurity threats have been effectively managed and contained.

Industry Context

The company operates in the helium and CO2 markets, which are experiencing high demand. The helium market is characterized by limited supply and growing demand from various industries. The CO2 market is also growing, driven by the food and beverage industry and other industrial applications. The company faces competition from major industrial gas companies and other producers.

Comparison to Industry Standards

• The company's helium production is competing with geological sources in North America, where ExxonMobil is the largest producer.
• The company's CO2 production is competing with ethanol producers in the United States.
• The company's helium reserves are considered significant compared to smaller regional producers in Canada.
• The company's CO2 production is targeting markets in the southwest and western United States, unlike ethanol producers who are mostly concentrated around the mid-continent.

Legal Proceedings

• The company is involved in a legal action where a potential lender is claiming a breach of contract seeking a $1,000,000 break-up fee.

Related Party Transactions

• The company had advisory consulting agreements with TPG Commercial Finance, an entity in which Jim Culver, a principal owner of either directly or indirectly more than 10% of the company's common stock, is the President/Owner and Leo W. Kerrigan, an individual that owns more than 10% of the company's common stock.
• The company received human resource services from an immediate family member of a named executive officer.
• The company received consulting services related strategic growth opportunities from Natural Resource Advisors, an entity in which the company's CEO Steven Looper owned a controlling interest.
• The company engaged Integrated Cryogenic Solutions, LLC for front-end engineering design studies for its initial beverage grade CO2 plant. Integrated Cryogenic Solutions, LLC is an innovative specialty engineering, procurement & manufacturing unit of Nikkiso Cryogenics Industries, an entity in which our board of director Peter J. Wagner serves as the CEO of Nikkiso Clean Energy & Industrial Gases Group.
• The company loaned $25,000 to VVC Resources, an entity in which Jim Culver, a principal owner of either directly or indirectly more than 10% of the company's common stock, is the President and CEO.
• The company has a co-tenancy arrangement with Pantheon Resources, Inc., an entity where the company's Chairman of the Board of Directors, David Hobbs, serves as Executive Chairman.

Stakeholder Impact

• Shareholders face significant risks due to the company's financial instability and potential dilution from future equity issuances.
• Employees may be affected by the company's financial challenges and potential restructuring.
• Customers may be impacted by the company's ability to deliver products due to financial constraints.
• Suppliers and creditors face risks due to the company's debt default and potential inability to meet obligations.

Next Steps

• The company plans to expand the capacity of its first helium plant.
• The company plans to install multiple modular CO2 plants.
• The company plans to complete negotiations for the U.S. Department of Energy grant.
• The company is evaluating debt and equity financing strategies to fund its expansion plans.

Key Dates

Keywords

helium, carbon dioxide, CO2, natural gas, exploration, production, St. Johns Field, carbon capture, energy, OTC Pink, reverse asset acquisition, debt, financing, drilling, processing plant