10-K: Leopard Energy Swings to Profit Amid Energy Sector Pivot

Leopard Energy, Inc. reported a net profit of $31,835 for the fiscal year ended July 31, 2025, marking a significant turnaround from a prior year loss, driven by reduced expenses and initial royalty revenues from its new energy focus.

Summary

• Leopard Energy, Inc. (formerly Cyber Apps World Inc.) has shifted its business focus from mobile applications to acquiring U.S. energy production and development opportunities following a change in control in August 2023.
• The Company reported a net profit of $31,835 for the fiscal year ended July 31, 2025, a substantial improvement from a net loss of $252,803 in the prior year.
• Revenues from its 5% royalty interest in seven producing oil wells in the Eagle Ford Shale, Texas, increased to $5,974 in 2025 from $4,429 in 2024.
• General and administrative expenses significantly decreased by $222,246 to $64,922 in 2025, primarily due to reduced consulting and legal fees related to the business transfer and a non-recurring SEC investigation.
• Zenith Energy Ltd., the controlling stockholder, has provided approximately $388,008 in capital through payments made on behalf of the Company and $45,000 in cash since August 2023.
• The Company continues to face substantial doubt about its ability to continue as a going concern, with an accumulated deficit of $11,693,115 and a working capital deficit of $122,814 as of July 31, 2025.

Sentiment

Score: 3

Explanation: Despite reporting a net profit for the fiscal year, the Company faces significant challenges, including a substantial accumulated deficit, a working capital deficit, and material weaknesses in internal controls, raising serious doubts about its long-term viability. The current revenue from its new energy business is minimal, indicating a very early stage of development with high reliance on external financing.

Positives

• Achieved a net profit of $31,835 for the fiscal year ended July 31, 2025, a significant turnaround from a $252,803 net loss in the previous year.
• Experienced a substantial reduction in general and administrative expenses, decreasing by $222,246 to $64,922 in 2025, primarily due to the completion of the business transfer process and non-recurrence of certain legal and consulting fees.
• Increased revenues from its royalty interest in the Eagle Ford Shale to $5,974 in 2025 from $4,429 in 2024.
• Received ongoing financial support from its controlling stockholder, Zenith Energy Ltd., which has provided $388,008 in capital and $45,000 in cash since August 2023.
• Reduced its accumulated deficit from $11,724,950 in 2024 to $11,693,115 in 2025.
• Net cash used in operating activities decreased from $154,323 in 2024 to $76,579 in 2025.

Negatives

• Continues to operate with a significant accumulated deficit of $11,693,115 as of July 31, 2025.
• Has a working capital deficit of $122,814 as of July 31, 2025, raising substantial doubt about its ability to continue as a going concern.
• Revenues of $5,974 are very low for an energy company, indicating minimal operational scale in its new business focus.
• Identified material weaknesses in internal control over financial reporting, including a lack of a functioning audit committee, independent directors, inadequate segregation of duties, and ineffective controls over period-end financial disclosure and reporting.
• Executive officers and directors (Zenith Energy, Luca Benedetto, Ippolito Cattaneo, Dario Sodero) filed Section 16(a) Forms 3 late due to administrative oversights.
• The market for its common stock is limited, quoted on the Pink tier, with no assurance of a regular trading market developing.

Risks

• The Company's ability to continue operations as a going concern is dependent on raising additional capital and ultimately generating profitable operations, given its accumulated deficit of $11,693,115 and working capital deficit of $122,814 as of July 31, 2025.
• There is no guarantee that the Company will be successful in arranging additional financing on acceptable terms, as its ability to raise capital is affected by market trends and uncertainties beyond its control.
• The U.S. market for acquiring energy production and development opportunities is highly competitive, with many firms having longer operating histories and greater financial resources.
• The Company relies on Zenith Energy Ltd. for continued financing and expansion into the energy sector, which is pending Zenith's receipt of additional financing.
• Material weaknesses in internal control over financial reporting, including a lack of a functioning audit committee and independent directors, could lead to material misstatements in future financial statements.
• There is currently only a limited trading market for the Company's common stock, and no assurance can be given that a regular trading market will ever develop.

Future Outlook

The Company intends to complete additional acquisitions of energy production and development opportunities in the U.S. in the near future. Zenith Energy, the controlling stockholder, has indicated its intention to continue financing the Company and its expansion into the energy sector, including acquiring additional royalties and/or ownership interests, pending the receipt of additional financing. Management plans to finance operations through the sale of equity or other investments for the foreseeable future.

Management Comments

• We believe that we can compete effectively based upon the energy sector experience of our executive officers and our controlling stockholders, although no assurance can be given in this regard.
• Management believes it is more likely than not that the Company can meet its obligations as they become due within one year from the reporting date and can continue as a going concern.

Industry Context

Leopard Energy's pivot to U.S. energy production and development opportunities places it in a highly competitive market. Many established firms possess longer operating histories and greater financial resources. The Company aims to leverage the energy sector experience of its executive officers and controlling stockholder, Zenith Energy, to compete. This move aligns with broader trends of smaller players seeking niche opportunities or royalty interests in mature basins like the Eagle Ford Shale, often backed by larger entities or family offices.

Comparison to Industry Standards

• The Company's current revenue of $5,974 from its royalty interest is extremely modest compared to established energy producers. For instance, a small independent oil and gas producer typically generates millions to tens of millions in quarterly revenue, far exceeding Leopard Energy's annual figures.
• The scale of the Company's current acquisition (a 5% royalty in seven producing oil wells) is very small when compared to typical royalty trusts or larger independent operators who often hold interests across hundreds or thousands of wells, generating substantial cash flows.
• The Company's reliance on its controlling shareholder, Zenith Energy, for ongoing financing is common for early-stage or turnaround companies but is not typical for a self-sustaining, publicly traded energy company with established operations.
• The identified material weaknesses in internal controls, particularly the lack of an independent audit committee, fall below standard corporate governance practices expected of publicly listed companies, regardless of size.

Management Changes

Corporate Governance

Legal Proceedings

• No knowledge of any material, active or pending proceeding against the Company or its subsidiaries.
• Not involved as a plaintiff or defendant in any material proceeding or pending litigation.

Related Party Transactions

• Zenith Energy Ltd., the controlling stockholder, provided approximately $388,008 in capital in the form of payments made on behalf of the Company and $45,000 in paid-in capital in cash since August 2023.
• Zenith Energy has indicated its intention to continue to finance the Company and its expansion into the energy sector, to acquire additional royalties and/or ownership interest, pending the receipt of additional financing.
• All expenses for the years ended July 31, 2025, and 2024, were paid by Zenith Energy, who renounced its credit.

Stakeholder Impact

• Shareholders: The shift to a net profit and reduced accumulated deficit could be seen positively, but the ongoing going concern risk and minimal revenue from the new business pose significant concerns. The lack of a regular trading market limits liquidity.
• Employees: The Company has no employees other than executive officers, relying on consultants, which may limit long-term employment opportunities.
• Creditors: The working capital deficit and going concern warning indicate elevated risk for creditors, although Zenith Energy's ongoing financial support mitigates some immediate concerns.
• Management: New management team is in place, aligned with the controlling shareholder's energy focus, but faces challenges in scaling the business and addressing internal control weaknesses.

Next Steps

• Complete additional acquisitions of energy production and development opportunities in the U.S.
• Zenith Energy intends to continue financing the Company and its expansion into the energy sector, pending its own additional financing.
• Management plans to raise additional capital through the sale of equity or debt securities to fund operations and acquisitions.

Key Dates

Recommendation

Despite a reported net profit for the fiscal year, the Company's fundamental financial health remains precarious, evidenced by a substantial accumulated deficit and a working capital deficit, which raise significant going concern doubts. The revenue generated from its new energy business is extremely low, indicating a lack of meaningful operational scale. Furthermore, the identified material weaknesses in internal controls and corporate governance, including the absence of an independent audit committee, signal high operational and financial reporting risks. While the controlling shareholder's financial support is crucial, the Company's long-term viability and ability to generate sustainable, significant returns without substantial further capital raises and operational improvements are highly questionable. The limited trading market also presents liquidity challenges for investors.

Keywords

Energy Production, Oil and Gas, Royalty Interest, Eagle Ford Shale, SEC Filing, 10-K, Financial Results, Zenith Energy, Going Concern, Corporate Governance, Internal Controls, Nevada Corporation