Leopard Energy, Inc.

Leopard Energy, Inc., formerly known as Cyber Apps World Inc., has undergone significant changes in its business model and ownership structure over the past year. This review will delve into the company's 2024 10-K filing, highlighting key aspects of its business operations, financial performance...

Leopard Energy, Inc. 2024 Annual Report Review

Introduction

Leopard Energy, Inc., formerly known as Cyber Apps World Inc., has undergone significant changes in its business model and ownership structure over the past year. This review will delve into the company's 2024 10-K filing, highlighting key aspects of its business operations, financial performance, and potential risks. The analysis aims to provide investors with a comprehensive understanding of Leopard Energy's current position and future prospects.

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Business Overview

Leopard Energy, Inc. was originally incorporated in Nevada in 2002 and has transitioned through various business models. As of 2024, the company has shifted its focus to the energy sector, specifically targeting royalty interests in oil and gas production. This strategic pivot follows a change in control, with Zenith Energy Ltd. acquiring a significant stake in the company. Leopard Energy's primary asset is a 5% royalty interest in seven producing oil wells located in the Eagle Ford Shale, Lavaca County, Texas.

Recent Developments

In August 2023, Zenith Energy Ltd., a publicly held corporation based in Vancouver, acquired 100,000 Series A Preferred Shares, representing 99.87% of the voting power of Leopard Energy. This acquisition marked a significant shift in the company's strategic direction towards energy production and development opportunities in the U.S.

Financial Performance

Revenue and Expenses

For the fiscal year ended July 31, 2024, Leopard Energy reported revenues of $4,429, primarily from its royalty interest in the Eagle Ford Shale. This marks the company's first revenue generation in its new business model. However, the company incurred significant operating expenses totaling $287,168, resulting in an operating loss of $282,739.

Net Loss

Leopard Energy reported a net loss of $252,803 for the fiscal year, an increase from the $148,894 loss in the previous year. The losses are attributed to high general and administrative expenses, primarily professional services, which were covered by the controlling stockholder, Zenith Energy.

Cash Flow

The company's cash flow from operating activities was negative, with a net cash outflow of $154,323. This was offset by cash inflows from financing activities, primarily additional paid-in capital from Zenith Energy, amounting to $200,032.

Balance Sheet

As of July 31, 2024, Leopard Energy's balance sheet shows total assets of $45,712, with current liabilities of $243,346, resulting in a working capital deficit of $236,917. The company's financial position raises concerns about its ability to continue as a going concern without additional financing.

Risk Factors

Market Competition

The U.S. energy sector is highly competitive, with numerous firms possessing greater financial resources and longer operating histories than Leopard Energy. The company's ability to compete effectively remains uncertain.

Financial Viability

Leopard Energy's financial statements indicate substantial doubt about its ability to continue as a going concern. The company relies heavily on its controlling stockholder, Zenith Energy, for financial support, which may not be sustainable in the long term.

Internal Controls

The company identified material weaknesses in its internal controls over financial reporting, including inadequate segregation of duties and ineffective oversight by the board of directors. These weaknesses could lead to financial misstatements in the future.

Conclusion

Leopard Energy, Inc. is in the early stages of its transition into the energy sector, with its first revenue generation from royalty interests. However, the company faces significant financial challenges, including a substantial net loss and a working capital deficit. The reliance on Zenith Energy for financial support and the competitive nature of the energy market add to the risks.

Investors should approach Leopard Energy with caution, considering the company's current financial instability and the uncertainties surrounding its business model. While the strategic shift to the energy sector presents potential opportunities, the company's ability to capitalize on these opportunities remains to be seen.

Overall, Leopard Energy's 2024 10-K filing reflects a company in transition, with both potential and significant risks. Investors should weigh these factors carefully when considering an investment in Leopard Energy.

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