S-1: Cyber App Solutions Corp. Files for Resale of 3.3 Million Shares Following Preferred Stock Issuance

Cyber App Solutions Corp. is registering for the resale of up to 3,305,788 shares of common stock issuable upon conversion of Series A Preferred Stock.

Summary

• Cyber App Solutions Corp., a growth-driven industrial gas exploration and production company, has filed a registration statement for the offer and resale of up to 3,305,788 shares of its common stock.
• These shares are issuable upon the conversion of 8,000 shares of Series A Convertible Preferred Stock that were issued to selling stockholders in a private placement that closed on August 8, 2024.
• The company will not receive any proceeds from the sale of these shares by the selling stockholders.
• The company's common stock is listed on the OTC Pink Open Markets under the symbol CYRB, with the last reported sale price on July 12, 2024, at $4.99 per share.
• The company is a smaller reporting company and an emerging growth company, which allows it to comply with certain reduced public company reporting requirements.
• The company recently entered into a Forbearance Agreement with Kips Bay and Cyber One, agreeing to issue shares and make cash payments to settle outstanding convertible promissory notes.

Sentiment

Score: 3

Explanation: The document presents a mixed picture, with some positive developments like the Forbearance Agreement and potential for future growth, but overshadowed by significant financial challenges and operational issues.

Positives

• The company has secured a Forbearance Agreement with Kips Bay and Cyber One to settle outstanding convertible promissory notes.
• The company is actively working to develop its helium and CO2 resources in the St. Johns Field.
• The company is part of a consortium selected for a U.S. Department of Energy grant to develop a Southwest Regional Direct Air Capture (DAC) Hub.

Negatives

• The company has a history of operating losses and an accumulated deficit.
• There is substantial doubt about the company's ability to continue as a going concern without additional financing.
• The company is significantly leveraged and in default on its 2023 Convertible Notes.
• The company's pilot helium plant has not reached steady state production and was idled in June 2024.
• The company is subject to operating covenants that could adversely affect its business.

Risks

• The company is an early-stage company with limited proved helium and CO2 reserves.
• The company may not generate sufficient revenues to support its operations or become profitable.
• The company has limited experience in the acquisition, exploration, development, and production of helium and CO2.
• The company needs additional capital to develop the St. Johns Field, pay debt obligations, and fund corporate overhead.
• The company's competitors include larger, better-financed, and more experienced companies.
• The company's focus on developing and operating in the St. Johns Field exposes it to greater risks than are generally encountered in well-developed fields.
• The marketability of the company's production is dependent upon transportation means and other facilities, which it does not control.
• The company is increasingly dependent on information technology, and disruptions, failures, or security breaches could have a material adverse effect on its operations.
• The price of the company's common stock may be subject to substantial volatility, and stockholders may lose all or a substantial part of their investment.
• Sales of a significant number of shares of the company's common stock in the public markets could depress the market price of the common stock.

Future Outlook

The company plans to expand the capacity of its helium processing plant and develop its CO2 reserves, relying on external financing and long-term sales agreements.

Industry Context

The company operates in the competitive helium and CO2 markets, facing competition from larger industrial gas companies and ethanol producers.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards.
• It mentions competitors like ExxonMobil in helium production and ethanol producers in CO2, but lacks detailed benchmarking against their performance or financial metrics.

Legal Proceedings

• The company is involved in a legal dispute with a potential lender seeking a $1,000,000 break-up fee.
• The company is also a defendant in a lawsuit filed by Alpha Carta, Ltd., alleging breach of promissory notes and seeking in excess of $30,000,000.

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.
• The company received human resource services from an immediate family member of a named executive officer.
• The company engaged Integrated Cryogenic Solutions, LLC for front-end engineering design studies for its initial beverage grade CO2 plant, an entity in which our board of director Peter J. Wagner serves as the CEO of Nikkiso Clean Energy & Industrial Gases Group.
• In September 2022, 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.
• In October 2023, the Board approved a co-tenancy arrangement whereby we expanded the leased space in our Houston office and share the expanded space with Pantheon Resources, Inc., an entity where our Chairman of the Board of Directors, David Hobbs, serves as Executive Chairman.

Stakeholder Impact

• Shareholders face the risk of dilution from the issuance of additional shares.
• Shareholders face the risk of losing their investment due to the company's financial difficulties.
• Employees may be affected by the company's ability to continue operations.
• Creditors face the risk of non-payment due to the company's financial difficulties.

Next Steps

• The company plans to issue additional shares of its Series A Preferred Stock under the Series A Preferred Stock Purchase Agreement.
• The company is analyzing the production and processing performance and plans to expand the capacity of its first helium processing plant to 20 million cubic feet per day of inlet gas.
• The company is also focused on the commercialization of its CO2 reserves and front-end engineering design (FEED) studies are underway for beverage grade CO2 plants.

Key Dates

Keywords

common stock, helium, CO2, preferred stock, convertible, St. Johns Field, Cyber App Solutions, resale, offering, private placement, production, exploration, development, OTC Pink, CYRB