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Zenith Energy Earnings Release 2026
8200_rns_2026-05-31_3db214fa-8c32-4e52-bd81-437baf2cb035.pdf
Earnings Release
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Zenith Energy Ltd.
Unaudited Preliminary Financial Results
For the Year Ended March 31, 2026
ZENITH ENERGY
ZENITH ENERGY LTD.
UNAUDITED PRELIMINARY CONSOLIDATED FINANCIAL RESULTS
YEAR ENDED MARCH 31, 2026
Zenith Energy Ltd. Unaudited Preliminary Financial Results For the Year Ended March 31, 2026
CEO STATEMENT
Dear Shareholders,
The period under review has been characterised by substantial operational, corporate and legal developments across all principal areas of the Company's business. Zenith has continued to expand its renewable energy platform in Italy, advance the permitting of two nationally significant uranium exploration projects through its long-established Italian subsidiary, and progress two major arbitration proceedings against the Republic of Tunisia towards decisive stages. These developments, together with the Company's lean operational structure and diversified portfolio of energy assets and investments, position Zenith favourably as it enters the 2026/27 financial year.
The Board believes that the Company is approaching a potentially transformational period in its development. The continued expansion of the Company's solar development portfolio, the proposed spin-out of its uranium exploration business through Reveille Resources Plc, and the advancement of the ICSID arbitration proceedings, in which the Group's wholly owned subsidiaries are pursuing claims quantified at approximately US$572.65 million, each represent significant potential value drivers. Collectively, these initiatives provide multiple pathways to value creation and have the potential to materially enhance shareholder value over the coming years.
Solar Development and BESS Strategy
During the period, the Company completed several acquisitions of solar energy development projects across the Liguria, Lazio, Puglia, and Piedmont regions of Italy. These transactions have strengthened Zenith's cluster-based development strategy in regions with favourable irradiation profiles and permitting characteristics.
As of 31 March 2026, the Company's total solar development portfolio stood at 173.5 MWp. Following the acquisition announced on 27 April 2026, the portfolio increased to 183.5 MWp and continues to progress towards the Company's 200 MWp development portfolio target.
The Company continues to place material emphasis on the integration of Battery Energy Storage Systems (BESS) within its development portfolio. BESS integration is expected to enhance system flexibility, improve grid stabilisation, and support the long-term commercial value of Zenith's renewable energy assets.
With a substantial development portfolio now established, the Company's next strategic objective is the construction or acquisition of a near-ready-to-build solar asset. Achieving this milestone will demonstrate Zenith's ability to generate recurring revenues, secure project financing, and validate the bankability of its development platform.
In parallel, the Company intends to selectively divest portions of its development portfolio, thereby crystallising value, enhancing liquidity, and supporting the commencement of construction on selected projects.
To further support transparency and provide stakeholders with an independent assessment of the portfolio's value, Zenith has commissioned an external valuation of its solar development portfolio, reflecting the significant progress achieved since early 2025.
Uranium Exploration Applications in Italy
On 11 November 2025, Canoel Italia S.p.A. ("Canoel Italia"), the Company's fully controlled Italian subsidiary with more than a decade of operational experience in producing natural gas and electricity in Italy, submitted two applications for exploration permits covering the Val Vedello and Novazza uranium deposits located in the
Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
Lombardy Region. These deposits represent Italy's largest known uranium mineralisation.
Both exploration permit applications have been formally accepted by the competent regional authorities, marking the successful completion of the initial phase of the authorisation process.
For the Novazza project, a comprehensive Environmental Impact Assessment (VIA) was submitted to the Ministry for Environment and Energy Security (MASE) in April 2026, representing the final regulatory requirement prior to the issuance of the exploration licence. Subject to regulatory review, approval is anticipated within approximately six to nine months of submission.
For the Val Vedello project, the Company has obtained an extension until 15 July 2026 for the submission of the VIA documentation, following delays in accessing the site due to adverse weather conditions.
The Val Vedello and Novazza uranium deposits represent the largest known historical uranium resource base in Italy. Historical exploration activities undertaken by AGIP Nucleare S.p.A. and its operating subsidiary SOMIREN between 1959 and 1983 identified an estimated aggregate resource of approximately 15 million lbs of $\mathrm{U}_3\mathrm{O}_8$ . Historical exploration results indicate grades ranging between approximately $0.08\%$ and $0.10\%$ $\mathrm{U}_3\mathrm{O}_8$ (800–1,000 ppm $\mathrm{U}_3\mathrm{O}_8$ ).
Historical exploration programmes included geological mapping, radiometric surveys, drilling campaigns, underground development and resource evaluation. The geological, mining and resource evaluation work underpinning these historical estimates was undertaken by AGIP Nucleare and SOMIREN. While public institutions, including CNEN, contributed to the broader development of Italy's nuclear sector, the exploration, underground development and resource delineation activities at Val Vedello and Novazza were conducted by AGIP Nucleare and its operating subsidiary.
Both projects benefit from extensive underground infrastructure established during the historical exploration phase, including tunnels, adits and associated mining works, which are expected to materially reduce future capital expenditure requirements and support an accelerated pathway towards renewed exploration activities. Uranium occupies a unique position within the global energy sector. As a critical fuel for nuclear power generation and an increasingly important component of energy security and decarbonisation strategies, uranium assets are typically evaluated by a specialised investor audience. This investor base includes uranium-focused institutional investors, specialist natural resources funds, nuclear energy funds, critical minerals investors and other market participants seeking targeted exposure to the nuclear fuel cycle.
In recognition of these characteristics, the Company's uranium licences and associated operations were transferred to Futuro Energetico Italiano S.r.l. ("FEI"), a wholly owned subsidiary established specifically to manage and advance the Group's uranium portfolio.
Subsequent to the reporting period, the Company announced the proposed spin-out of FEI through Reveille Resources Plc, a dedicated uranium-focused company established to pursue the development of FEI's uranium assets and seek admission to trading on the Aquis Stock Exchange Growth Market in London. The proposed transaction is intended to create a standalone listed uranium vehicle, providing access to uranium-focused institutional investors and sector-specific capital markets that may not typically invest in diversified energy companies.
The Board believes that the creation of a dedicated uranium-focused listed company will enhance strategic focus, improve visibility within the uranium sector and maximise the potential for value recognition as FEI advances the Val Vedello and Novazza projects.
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
International Arbitration Proceedings Against the Republic of Tunisia
The Company is currently engaged in two separate arbitration proceedings against the Republic of Tunisia, both of which progressed materially during the reporting period.
The first matter, commonly referred to as "ICC-2", was initiated by the Company's wholly owned subsidiary, Canadian North Africa Oil & Gas Limited ("CNAOG"), in relation to the Sidi El Kilani concession. The claims advanced in the arbitration amounted to approximately US$130 million. Following the issuance of the arbitral award, CNAOG commenced annulment proceedings before the Swiss Federal Supreme Court.
The second matter is an investment treaty arbitration commenced by the Company's wholly owned UK subsidiaries under the auspices of the International Centre for Settlement of Investment Disputes ("ICSID") in Washington, D.C., pursuant to the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Tunisia for the Promotion and Protection of Investments. The claimants' damages in the ICSID proceedings have been quantified at approximately US$572.65 million.
Collectively, the claims pursued by the Company's wholly owned subsidiaries exceed US$700 million. The Board considers these proceedings to be of strategic and financial significance to the Group and remains committed to supporting the vigorous pursuit of all available legal remedies in connection with the claims advanced against the Republic of Tunisia.
ICC-2 Arbitration – Unfavourable Award and Annulment Application
As previously disclosed, the Company's wholly owned subsidiary, CNAOG, received an unfavourable award in the ICC-2 arbitration concerning the Sidi El Kilani ("SLK") Concession.
Following receipt of the award, CNAOG undertook a detailed review of the proceedings and identified evidence of previously undisclosed connections between two members of the ICC-2 Arbitral Tribunal, including its Chair, and the Republic of Tunisia, together with a series of procedural irregularities arising during the conduct of the arbitration and reflected in the arbitral award.
On this basis, CNAOG filed an application to annul the award before the Swiss Federal Supreme Court. The annulment application has been formally admitted, and all required procedural fees have been paid, including court fees of CHF 200,000 (approximately EUR 215,000 or NOK 2.5 million). Based on legal advice received by the Company, decisions on annulment applications before the Swiss Federal Supreme Court are typically rendered within approximately six to nine months.
The ICC-2 arbitration relates to the termination of the SLK Concession in Tunisia. Independent expert assessments commissioned by CNAOG support claims with an estimated value of approximately US$130 million.
ICSID Arbitration – Final Submissions Filed, Revised Claim Amount, and Procedural Distinctions
The Company's wholly owned subsidiaries have filed their final submissions in the arbitration proceedings commenced against the Republic of Tunisia under the 1989 Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Tunisia for the Promotion and Protection of Investments (the "UK-Tunisia Bilateral Investment Treaty" or "BIT"). The final hearing was held in April 2026 at the headquarters of the International Centre for Settlement of Investment
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
Disputes ("ICSID") in Washington, D.C., marking the conclusion of the evidentiary phase of the proceedings.
To support the quantification of damages, the Company appointed TWCOG LLP, a specialist advisory firm with extensive experience in the valuation of claims arising from disputes in the international energy sector. TWCOG worked in conjunction with Chapman Hydrogen and Petroleum Engineering Ltd., the Company's independent reserves evaluator, in preparing the damages assessment presented to the Tribunal.
Following a comprehensive reassessment of the Company's claims, the total damages sought in the ICSID proceedings have been quantified at approximately US$572.65 million. The claim relates to multiple breaches of the UK-Tunisia Bilateral Investment Treaty and concerns the expropriation, impairment and loss of value of the Claimants' investments in Tunisia.
The Claimants are represented by a highly experienced international arbitration team comprising Clay Arbitration, Charles Russell Speechlys LLP, 16 Law, and Essex Court Chambers.
Clay Arbitration is led by Professor Thomas Clay, founder of the firm and one of the foremost practitioners and academics in the field of international arbitration. Professor Clay has acted as chair, sole arbitrator, co-arbitrator and counsel in numerous proceedings conducted under the ICC, ICSID, UNCITRAL and other major arbitral frameworks and is widely recognised as a leading authority on international arbitration and dispute resolution.
Charles Russell Speechlys LLP is represented by Maître Simon Le Wita, Partner in the firm's Paris office and a specialist in complex international litigation and arbitration, with extensive experience acting in high-value cross-border disputes and investor-state proceedings.
In preparation for the final hearing, the legal team was further strengthened by the involvement of Mr Charles Michel, former Prime Minister of Belgium and former President of the European Council, whose experience at the highest levels of European and international affairs provides additional strategic insight in matters involving sovereign states, public policy and international governance.
The Claimants are also advised by Maître Julie Spinelli, a recognised arbitration specialist and partner at 16 Law, together with Mr Ben Juratowitch KC and Mr Matthieu Grégoire of Essex Court Chambers. Mr Juratowitch KC is internationally recognised as one of the leading practitioners in public international law and investor-state arbitration, having acted as counsel and advocate in numerous landmark treaty disputes. Mr Grégoire has extensive experience in international arbitration and public international law, including proceedings involving sovereign states, treaty claims and complex cross-border disputes.
Collectively, the Claimants' legal and advisory team brings exceptional experience in investment treaty arbitration, sovereign disputes and proceedings conducted under the ICSID framework, having acted in numerous high-profile disputes involving states, state-owned entities and multinational corporations.
The ICSID proceedings are entirely separate from, and independent of, the ICC-2 arbitration. The arbitration is conducted under the ICSID Convention and administered by ICSID, a member of the World Bank Group. The proceedings involve a distinct legal framework, separate causes of action, different procedural rules and an independently constituted tribunal.
The Company considers the ICSID arbitration to be a matter of highly significant strategic and financial importance, reflecting the scale of the damages suffered by the Claimants as a result of the measures adopted by the Republic of Tunisia against their investments. The claims arise from a period characterised by elevated international oil prices during which producing assets were prevented from generating their full economic
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Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
value and crude oil volumes attributable to the Claimants were not received, resulting in substantial financial losses.
The Board notes that the Company has already achieved a successful outcome in the ICC-1 arbitration against Entreprise Tunisienne d'Activités Pétrolières ("ETAP"), Tunisia's national oil company. In December 2024, the ICC Tribunal awarded approximately US$9.7 million in favour of the Company's wholly owned subsidiary, Ecumed Petroleum Zarzis Ltd. ("EPZ"), comprising principal amounts, accrued interest, legal costs and arbitration costs. The award is final, enforceable and continues to accrue compound interest until full payment is received, thereby increasing the amount recoverable by the Company over time.
The Board considers the ICC-1 award to be an important validation of the Company's position in relation to disputes arising from its operations in Tunisia. While the ICSID proceedings are legally and procedurally distinct, they arise from the same broader pattern of conduct that has resulted in significant losses and impairment of the Company's investments in Tunisia.
The Board remains fully committed to the successful prosecution of the claims advanced by the Group's wholly owned subsidiaries through to a final determination by the Tribunal. With damages quantified at approximately US$572.65 million, the ICSID arbitration represents the most significant legal proceeding involving the Group and one of the most significant potential value realisation opportunities available to the Group and its shareholders.
Over a number of years, the Group invested substantial financial and human resources in Tunisia in support of its exploration, development and production activities. Through the ICSID proceedings, the Company seeks recovery of the value lost through the expropriation and impairment of those investments, together with the damages arising from breaches of the protections afforded under the UK-Tunisia Bilateral Investment Treaty.
During the financial year ended 31 March 2026, the Group launched a series of bond exchange invitation offers in respect of its outstanding Euro Medium Term Note ("EMTN") Programme. The objective of these transactions is to simplify the Group's debt maturity profile, consolidate multiple maturities and align the majority of outstanding debt instruments to a common maturity date in 2029.
The exchange offers were communicated to noteholders through Euroclear and Clearstream in accordance with the customary procedures applicable to the relevant debt securities and their respective settlement systems, and in compliance with the applicable requirements of the Vienna MTF of the Vienna Stock Exchange, on which the Company's EMTN Programme is listed. The first exchange offer relating to a USD-denominated EMTN received near-unanimous acceptance from participating noteholders, demonstrating continued investor support for the Company's long-term financing strategy. Based on the level of participation achieved to date and ongoing engagement with noteholders, the Company expects that the remaining exchange offers will also receive strong support.
As at the date of these Preliminary Unaudited Financial Results, bond exchange invitation offers remain ongoing in respect of the following EMTN securities:
| ISIN | Currency | Original Maturity Date |
|---|---|---|
| XS2736390712 | USD | 2 January 2026 |
| XS2796492812 | GBP | 26 March 2026 |
| XS2796492655 | USD | 26 March 2026 |
| XS2796492572 | EUR | 26 March 2026 |
| XS2478298909 | EUR | 9 May 2026 |
| XS2478299030 | GBP | 9 May 2026 |
| XS2478299113 | USD | 9 May 2026 |
Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
The Board believes that the successful implementation of the bond exchange programme will further strengthen the Company's financial position by extending debt maturities, reducing near-term refinancing requirements and providing the flexibility required to execute the next phase of the Company's strategy.
This includes the enforcement and monetisation of the ICC-1 arbitration award, which continues to accrue compound interest until full recovery, the potential realisation of value from selected non-core assets, and the continued pursuit of redress in respect of the substantial claims advanced by the Company's subsidiaries against the Republic of Tunisia. In parallel, the Company intends to continue expanding its solar development portfolio, with a focus on advancing selected projects into the construction phase, commencing energy generation activities and establishing a long-term recurring revenue base.
The Board believes that these initiatives, together with the optimisation of the Group's capital structure through the ongoing bond exchange programme, position the Company to pursue its strategic objectives while enhancing financial resilience and supporting long-term value creation for shareholders.
In closing, the Company enters the 2026/27 financial year with considerable momentum across its core strategic initiatives. Zenith has established a substantial renewable energy development portfolio approaching its 200 MWp target, advanced Italy's largest known historical uranium resource base through the progression of the Val Vedello and Novazza permit applications and achieved significant milestones in its ongoing arbitration proceedings against the Republic of Tunisia.
The Board believes that the combination of a growing renewable energy platform, exposure to potentially transformational arbitration outcomes, and the proposed development of a dedicated uranium-focused vehicle through Reveille Resources Plc provides the Company with a unique and diversified value proposition. These initiatives are complemented by ongoing efforts to optimise the Group's capital structure, monetise selected assets and claims, and establish long-term recurring revenue streams through energy generation activities.
Supported by a lean operational structure, an experienced management team and a clear strategic roadmap, Zenith is well positioned to pursue the next phase of its development and unlock value across its diversified portfolio of energy assets and investments.
The Board believes that the Group benefits from a number of potentially significant value catalysts. These include the advancement of the ICSID arbitration proceedings, in which the Group's wholly owned subsidiaries are pursuing claims quantified at approximately US$572.65 million; the continued expansion and maturation of the Company's solar development portfolio towards construction and electricity generation; and the progression of its uranium exploration assets in Italy through the proposed spin-out into Reveille Resources Plc.
The Board further believes that the proposed creation of a dedicated uranium-focused listed vehicle provides an opportunity to realise value from assets that may be more appropriately recognised and valued within the specialist uranium and critical minerals investment sector. This is particularly relevant at a time when uranium market fundamentals are attracting significant investor attention, driven by increasing concerns regarding long-term supply security, constrained project development and growing strategic interest in domestic European mineral resources.
Taken together, these initiatives provide Zenith with exposure to multiple avenues of value creation and position the Group to capitalise on opportunities across the renewable energy, uranium and broader energy sectors, while continuing to pursue the recovery of substantial value associated with its investments in Tunisia.
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
On behalf of the Board, I would like to thank our shareholders, bondholders, business partners and advisers for their continued support, confidence and commitment to the Company.
Sincerely,
Andrea Cattaneo
Chief Executive Officer
May 31, 2026
Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
Operational and financial highlights
Production activities
During the financial year ended March 31, 2026:
a) The Group generated revenues from oil and natural gas of CAD$ 2,334k (2025 - CAD$ 2,147k)
b) Inventory consists of CAD$ 2,468k (2025 - 2,412k) related to 11,871 barrels of crude oil that has been produced but not yet sold in Tunisia.
c) The Company sold 178,778 thousand cubic feet of natural gas ("Mcf") of natural gas from its Italian assets, as compared to 185,080 mcf of natural gas in the 2025 similar period.
d) The Company sold 12,121 Megawatt-hour ("MWh") of electricity from its Italian assets, as compared to 11,321 MWh of electricity in the 2025 similar period.
Corporate Developments
Zenith received final approval for the admission of its Swedish Depository Receipts ("SDRs") to trading on Spotlight Stock Market, with trading commencing on 7 October 2025. The admission broadened the Company's access to Scandinavian capital markets, enhanced its visibility among Nordic investors and reflected sustained interest from its growing regional shareholder base.
In closing, the Company entered the 2026/27 financial year with a significantly expanded renewable energy development portfolio, advanced uranium exploration permit applications in respect of Italy's largest known historical uranium deposits, established oil, gas and electricity-producing assets in Italy and the United States, and substantial progress in its international arbitration proceedings against the Republic of Tunisia. Supported by a lean operational structure, a diversified portfolio of energy assets and a clear strategic roadmap, Zenith is well positioned to pursue the next phase of its development and unlock value across its renewable energy, uranium, oil and gas, and arbitration-related assets.
Financing activities
During the financial year ended 31 March 2026, the Company announced that it had completed private placements in the United Kingdom (the "UK Financing"), and in Norway (the "Norwegian Financing", collectively, the "Financings").
The Financings attracted the participation of existing institutional investors, as well certain Directors, raising a combined net total of CAD$14.593m (March 31, 2025 - CAD$14.977m) to finance the Group's reconfigured development strategies, resulting in the issue of 182,308,373 new Ordinary Shares (March 31, 2025 - 195,328,553), as detailed in the financial statements and as per the below table:
| Number of Shares | Amount CAD$'000 | |
|---|---|---|
| Balance – March 31, 2025 | 466,873,954 | 81,201 |
| Unit private placement proceeds | 171,547,215 | 15,187 |
| Exercise of warrants | 10,761,158 | 420 |
| Issue costs | (1,013) | |
| Total for the year | 182,308,373 | 14,594 |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
| Balance – March 31, 2026 | 649,182,327 | 95,795 |
|---|---|---|
Following the issue of the New Common Shares, the Company had 649,182,327 common shares in issue and admitted to trading on the Euronext Growth of the Oslo Stock Exchange, on the Main Market of the London Stock Exchange and on the Spotlight Stock Market Stockholm.
Furthermore, to fund the acquisition of assets, and their development, to avoid an excessive dilution of its share capital, the Company issued unsecured, multi-currency (GBP, Euro, CHF and USD) Medium Term Notes at par value (the "Notes"), admitted to trading on the Third Market (MTF) of the Vienna Stock Exchange ("Wiener Borse AG") and bearing interest payable semi-annually.
The issue of the Notes is aligned with the Group's strategy of diversifying its financing towards non-equity dilutive funding to support its successful development.
Financial results
The Group recorded a loss after tax of CAD$19.9 million and total comprehensive income of CAD$8.1 million for the year ended 31 March 2026, compared to a profit after tax of CAD$1.1 million and a total comprehensive loss of CAD$3.1 million for the year ended 31 March 2025.
The reported loss after tax primarily reflects a number of significant non-recurring items incurred during the year, including costs associated with the Company's arbitration proceedings against the Republic of Tunisia and non-cash expenses relating to the fair value measurement of share options issued during the period. In addition, the Group recorded foreign exchange movements arising from the translation of assets and liabilities denominated in currencies other than the Canadian dollar.
Total comprehensive income for the year was positively impacted by the independent valuation of the Company's solar development portfolio, reflecting the significant progress achieved in expanding and advancing its renewable energy assets. The Board believes that the comprehensive result provides a more representative reflection of the underlying value created during the year through the growth of the Group's strategic asset base.
Finance expense for the year was CAD$8,122k (2025 - CAD$8,370k).
Cash balances of CAD$2,067k (2025 - CAD$3,199k) were held at the end of the financial year.
The Group production costs for the year were CAD$1,437k, compared to CAD$ CAD$1,701k in 2025 and the General and Administrative costs for the year were CAD$14,189k, compared to CAD$6,478k in 2025.
Total equity attributable to the ordinary shareholders of the Group was CAD$89,692k as of March 31, 2026, (2025 - CAD$65,629k).
Business strategy
As of the date of this report, the Company is a diversified international energy company with activities spanning electricity generation and development, renewable energy, oil and gas production and development, and uranium exploration. The Company continues to advance a strategy focused on the development of energy assets, the creation of long-term recurring revenues, and the realisation of value from its broader portfolio of investments and claims.
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Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
The Group’s principal assets are held through:
(i) its wholly owned subsidiary, Compagnie Du Desert Ltd (“CDD”), which holds a 100% interest in the El Bibane and Robbana concessions in Tunisia;
(ii) Canoel Italia S.p.A. (in which the Company has a 98.64% shareholding), which holds various working interests in 13 onshore exploration and production properties in Italy and serves as the Group's principal operating subsidiary in the country;
(iii) Wesolar S.r.l. (in which the Company has a 99% shareholding), which holds the photovoltaic assets in Italy, and
(iv) Leopard Energy (previously known as CYAP) (in which the Company has a 99.87% shareholding) which holds a working interest in an oilfield producing assets in the USA.
The Company's strategy is to build a diversified international energy platform through the development and acquisition of energy assets capable of generating long-term shareholder value. In pursuing this objective, the Company seeks to:
(i) expand its renewable energy portfolio through the development and selective acquisition of solar power generation projects;
(ii) advance selected energy projects into the construction and production phases with the objective of establishing recurring revenues from electricity generation;
(iii) progress the exploration and development of strategic uranium assets in Italy through its subsidiary Futuro Energetico Italiano S.r.l. and the proposed Reveille Resources Plc transaction;
(iv) maximise value from its existing portfolio of oil and gas assets through disciplined capital allocation, asset optimisation and selective divestment opportunities;
(v) pursue the enforcement and monetisation of arbitration awards and legal claims arising from the Company's historical investments, including its proceedings against the Republic of Tunisia;
(vi) maintain a lean operational structure and a flexible capital framework capable of supporting growth initiatives while preserving financial discipline;
(vii) identify and evaluate strategic opportunities across the broader energy sector where the Company believes it can create value through development expertise, project execution and efficient capital deployment; and
(viii) enhance shareholder value through a balanced portfolio of energy assets, strategic investments and value realisation opportunities across multiple energy sectors.
Events subsequent to the year end
Details of events subsequent to the year-end are set out in note 18.
Going concern
In assessing the appropriateness of the going concern basis of accounting, the Directors have considered the Group's current financial position, cash flow forecasts, anticipated sources of funding and the principal strategic initiatives available to the Group.
The Directors' assessment has included a review of forecast operating and capital expenditure requirements, the ongoing bond exchange programme and associated debt restructuring initiatives, the Group's ability to raise additional capital where required, and the potential monetisation of assets and investments. The assessment has also taken into consideration the enforcement and recovery of the ICC-1 arbitration award
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Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
obtained against Enterprise Tunisienne d'Activités Pétrolières ("ETAP") in December 2024, which continues to accrue compound interest until full satisfaction, as well as the potential value realisation associated with the Group's broader portfolio of arbitration claims against the Republic of Tunisia.
Subsequent to the reporting period, the Company announced that terms had been agreed for the sale of its drilling rig, which had previously been publicly marketed for disposal. Pursuant to the agreed transaction terms, the purchaser has committed to pay a non-refundable deposit and to complete the acquisition in accordance with the agreed timetable. The Directors have taken this post-balance sheet development into consideration in their assessment of the Group's liquidity and financial flexibility and believe that completion of the transaction will further strengthen the Group's financial position.
The assessment has also taken into consideration the continued development of the Group's renewable energy portfolio, including the advancement of solar projects towards construction and future electricity generation, the proposed spin-out of the Group's uranium assets through Reveille Resources Plc, and the ongoing optimisation of the Group's capital structure through the extension of debt maturities under the bond exchange programme.
Having considered these matters, together with the Group's ability to raise additional funding and realise value from its portfolio of assets and investments, the Directors have formed the judgement that there is a reasonable expectation that the Group will have access to adequate financial resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the consolidated financial statements.
Further details regarding the assumptions applied and conclusions reached in relation to the going concern assessment are set out in Note 2 to the consolidated financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Financial year ended | |||
|---|---|---|---|
| March 31, 2026 | March 31, 2025 | ||
| Continuing operations | Notes | CAD$'000 | CAD$'000 |
| Revenue | 15 | 2,334 | 2,147 |
| Cost of sales | |||
| Production costs | (1,437) | (1,701) | |
| Depletion and depreciation | 8 | (383) | (366) |
| Gross profit | 514 | 80 | |
| Administrative expenses | 5 | (14,189) | (6,478) |
| Operating profit/(loss) | (13,675) | (6,398) | |
| Other gains and losses | 14 | 1,969 | 15,857 |
| Finance expense | 7 | (8,122) | (8,370) |
| Profit/(loss) for the year before taxation | (19,828) | 1,089 | |
| Taxation | (95) | - |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
| Profit/(loss) for the year from continuing operations attributable to owners of the parent | (19,923) | 1,089 | |
|---|---|---|---|
| Other comprehensive income | |||
| Items that may be subsequently reclassified to profit or loss: | |||
| Exchange differences on translating foreign operations, net of tax | (1,533) | (4,140) | |
| Solar asset revaluation | 8 | 29,529 | |
| Other comprehensive profit/(loss) for the year, net of tax | 8,073 | (4,140) | |
| Total comprehensive profit/(loss) for the year attributable to owners of the parent | 8,073 | (3,051) | |
| Earnings per share | 13 | CAD$ | CAD$ |
| Profit for the year – basic | (0.0350) | 0.0033 | |
| Profit for the year – diluted | (0.0277) | 0.0033 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| Financial year ended | |||
|---|---|---|---|
| March 31, 2026 | March 31, 2025 | ||
| ASSETS | Notes | CAD$’000 | CAD$’000 |
| Non-current assets | |||
| Property, plant and equipment | 8 | 167,822 | 134,496 |
| 167,822 | 134,496 | ||
| Current assets | |||
| Assets held for sale | 8 | 5,476 | 5,476 |
| Inventory | 2,468 | 2,412 | |
| Trade and other receivables | 19,782 | 19,132 | |
| Cash and cash equivalents | 2,067 | 3,199 | |
| 29,793 | 30,219 | ||
| TOTAL ASSETS | 197,615 | 164,715 | |
| EQUITY AND LIABILITIES | |||
| Equity attributable to equity holders of the parent | |||
| Share capital | 9 | 95,794 | 81,201 |
| Share warrants & option reserve | 10 | 6,337 | 6,922 |
| Contributed surplus | 9,555 | 7,573 |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
| Revaluation surplus reserve | 8 | 29,529 | - |
|---|---|---|---|
| Retained earnings | (51,523) | (30,067) | |
| Total equity | 89,692 | 65,629 | |
| Non-current liabilities | |||
| Loans | 11 | 537 | 647 |
| Non-convertible bonds | 12 | 48,486 | 33,530 |
| Deferred consideration payable | 15,409 | 15,409 | |
| Deferred tax liabilities | 2,398 | 2,398 | |
| Decommissioning provision | 23,478 | 22,454 | |
| Provision | 1,675 | 1,637 | |
| Total non-current liabilities | 91,983 | 76,075 | |
| Current Liabilities | |||
| Trade and other payables | 10,883 | 8,474 | |
| Loans | 11 | 4,840 | 2,619 |
| Non-convertible bonds | 12 | - | 11,701 |
| Deferred consideration payable | 217 | 217 | |
| Total current liabilities | 15,940 | 23,011 | |
| TOTAL EQUITY AND LIABILITIES | 197,615 | 164,715 | |
| Consolidated Statement of Changes in Equity | Share capital | Warrants and share option reserve | Contributed surplus |
| --- | --- | --- | --- |
| CAD$'000 | CAD$'000 | CAD$'000 | |
| Balance as at 1 April 2024 | 66,224 | 3,381 | 7,389 |
| Income/(loss) | - | - | - |
| Other comprehensive income | - | - | - |
| Total comprehensive income | - | - | - |
| Share issue net of costs - private placement | 14,977 | - | - |
| Value of warrants issued | - | 585 | - |
| Value of options issued | - | 3,140 | - |
| Fair value of options expired | - | (103) | 103 |
| Warrants expired | - | (81) | 81 |
| Total transactions with owners recognised directly in equity | 14,977 | 3,541 | 184 |
| Balance as at 31 March 2025 | 81,201 | 6,922 | 7,573 |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
| Income/(loss) | - | - | - | - | (19,923) | 9,606 |
|---|---|---|---|---|---|---|
| Other comprehensive income | - | - | - | 29,529 | (1,533) | (1,533) |
| Total comprehensive income | - | - | - | 29,529 | (21,456) | 8,073 |
| Share issue net of costs - private placement | 14,173 | - | - | - | - | 14,173 |
| Value of options issued | - | 1,397 | - | - | - | 1,397 |
| Excercise of warrants | 420 | (800) | 800 | - | - | 420 |
| Fair value of options expired | - | (1,182) | 1,182 | - | - | - |
| Total transactions with owners recognised directly in equity | 14,593 | (585) | 1,982 | - | - | 15,990 |
| Balance as at 31 March 2026 | 95,794 | 6,337 | 9,555 | 29,529 | (51,523) | 89,692 |
| Reserve | Description and purpose | |||||
| --- | --- | |||||
| Share capital | Amount subscribed for share capital | |||||
| Share warrants & option reserve | Relates to increase in equity for services received – equity settled share transactions | |||||
| Contributed surplus | Expired share options and warrants issued in previous years | |||||
| Revaluation surplus reserve | Revaluation of the Solar asset, as better detailed at note 8 | |||||
| Retained earnings | Cumulative net gains and losses recognised in the consolidated statement of comprehensive income. |
15
Zenith Energy Ltd.
Unaudited Preliminary Financial Results
For the Year Ended March 31, 2026
| CONSOLIDATED STATEMENT OF CASH FLOWS | Financial year ended | ||
|---|---|---|---|
| March 31, 2026 | March 31, 2025 | ||
| OPERATING ACTIVITIES | Notes | CAD$'000 | CAD$'000 |
| Profit/(loss) for the year before taxation | (19,828) | 1,089 | |
| Options/warrants charge | 10 | 1,397 | 3,725 |
| Foreign exchange | 5 | (3,544) | (8,209) |
| Depletion and depreciation | 8 | 383 | 366 |
| Accretion/(depletion) of decommissioning provision | 7 | 439 | (2,238) |
| Finance expense | 7 | 7,683 | 7,954 |
| Taxation | (95) | - | |
| Change in working capital | 1,742 | (13,653) | |
| Net cash generated/(used) in operating activities | (11,823) | (10,966) | |
| INVESTING ACTIVITIES | |||
| Purchase of property, plant and equipment | 8 | (1,414) | (417) |
| Disposal of property, plant and equipment | 10 | - | 1,661 |
| Net cash generated from / (used in) investing activities | (1,414) | 1,244 | |
| FINANCING ACTIVITIES | |||
| Proceeds from issue of shares, net of transaction costs | 9 | 14,174 | 14,977 |
| Proceeds from exercise of options/warrants | 9 | 420 | - |
| Finance Expense | 7 | (7,030) | (6,976) |
| Repayments of loans | 11 | (2,722) | (1,267) |
| Proceeds from loans | 11 | 4,010 | 1,984 |
| Proceeds from issue of bonds | 12 | 4,313 | 4,354 |
| Repayment of bonds | 12 | (1,058) | (358) |
| Net cash generated from financing activities | 12,105 | 12,714 | |
| Net (decrease)/increase in cash and cash equivalents | (1,132) | 2,992 | |
| Cash and cash equivalents at beginning of year | 3,199 | 207 | |
| Cash and cash equivalents at end of year | 2,067 | 3,199 |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
| Financial year ended | |||
|---|---|---|---|
| March 31, 2026 | March 31, 2025 | ||
| ASSETS | CAD$'000 | CAD$'000 | |
| Non-current assets | |||
| Property, plant and equipment | 8 | 30,375 | - |
| Investments in Subsidiaries | 3 | 1,053 | 720 |
| 31,428 | 720 | ||
| Current assets | |||
| Trade and other receivables | 170,868 | 169,895 | |
| Cash and cash equivalents | 1,513 | 3,146 | |
| 172,381 | 173,041 | ||
| TOTAL ASSETS | 203,809 | 173,761 | |
| EQUITY AND LIABILITIES | |||
| Equity attributable to equity holders of the parent | |||
| Share capital | 9 | 95,794 | 81,201 |
| Share warrants & option reserve | 10 | 6,337 | 6,922 |
| Contributed surplus | 9,555 | 7,573 | |
| Revaluation surplus reserve | 8 | 29,529 | - |
| Retained earnings | 2,380 | 25,422 | |
| Total equity | 143,595 | 121,118 | |
| Non-current liabilities | |||
| Loans | 11 | - | - |
| Non-convertible bonds | 12 | 48,486 | 33,530 |
| Total non-current liabilities | 48,486 | 33,530 | |
| Current Liabilities | |||
| Trade and other payables | 6,937 | 4,794 | |
| Loans | 11 | 4,791 | 2,618 |
| Non-convertible bonds | 12 | - | 11,701 |
| Total current liabilities | 11,728 | 19,113 | |
| TOTAL EQUITY AND LIABILITIES | 203,809 | 173,761 |
The Company has not presented separate parent company financial statements as part of these consolidated financial statements. The parent company's loss for the year ended 31 March 2026 was CAD$23,042k (2025: loss of CAD$9,342k).
17
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
PARENT COMPANY
Attributable to owners of the parent
| STATEMENT OF CHANGES IN EQUITY | Share capital | Share warrants & option reserve | Contributed surplus | Revaluation surplus reserve | Retained earnings | Total |
|---|---|---|---|---|---|---|
| Balance as at March 31, 2024 | 66,224 | 3,381 | 7,389 | - | 34,764 | 111,758 |
| Income/(loss) | - | - | - | - | (9,342) | (9,342) |
| Other comprehensive income | - | - | - | - | - | - |
| Total comprehensive income | (9,342) | (9,342) | ||||
| Share issue net of costs – debt settlement | 14,087 | - | - | - | - | 14,087 |
| Share issue net of costs - private placement | 890 | - | - | - | - | 890 |
| Warrants issued | - | 585 | - | - | - | 585 |
| Option issued | - | 3,140 | - | - | - | 3,140 |
| Fair value of options expired | - | (103) | 103 | - | - | |
| Warrants expired | - | (81) | 81 | - | - | |
| Total transactions with owners recognised directly in equity | 14,977 | 3,541 | 184 | 18,702 | ||
| Balance as at March 31, 2025 | 81,201 | 6,922 | 7,573 | 25,422 | 121,118 | |
| Income/(loss) | - | - | - | (23,042) | (23,042) | |
| Other comprehensive income | - | - | - | 29,529 | - | 29,529 |
| Total comprehensive income | 29,529 | (23,042) | 6,487 | |||
| Share issue net of costs - private placement | 14,173 | - | - | 14,173 | ||
| Warrants exercised | 420 | (800) | 800 | - | 420 | |
| Warrants issued | - | - | - | - | ||
| Option issued | - | 1,397 | - | - | 1,397 | |
| Fair value of options expired | - | (1,182) | 1,182 | - | ||
| Total transactions with owners recognised directly in equity | 14,593 | (585) | 1,982 | 15,990 | ||
| Balance as at March 31, 2026 | 95,794 | 6,337 | 9,555 | 29,529 | 2,380 | 143,595 |
| Reserve | Description and purpose | |||||
| --- | --- | |||||
| Share capital | Amount subscribed for share capital | |||||
| Share warrants & option reserve | Relates to increase in equity for services received – equity settled share transactions | |||||
| Contributed surplus | Expired share options and warrants issued in previous years | |||||
| Revaluation surplus reserve | Revaluation of the Solar asset, as better detailed at note 8 | |||||
| Retained earnings | Cumulative net gains and losses recognised in the consolidated statement of comprehensive income. |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
PARENT COMPANY
STATEMENT OF CASH FLOWS
| STATEMENT OF CASH FLOWS | Financial year ended | ||
|---|---|---|---|
| March 31, 2026 | March 31, 2025 | ||
| OPERATING ACTIVITIES | Notes | CAD$'000 | CAD$'000 |
| Profit/(Loss) for the year before taxation | (23,042) | (9,342) | |
| Options/warrants charge | 10 | 1,397 | 3,725 |
| Foreign exchange | 150 | 1,094 | |
| Depletion and depreciation | 8 | - | 2 |
| Finance expense | 7 | 7,638 | 7,487 |
| Taxation | - | - | |
| Change in working capital | 6 | 1,170 | (12,869) |
| Net cash generated/(used) in operating activities | (12,687) | (9,903) | |
| INVESTING ACTIVITIES | |||
| Acquisition of subsidiary undertaking | (333) | - | |
| Purchase/revaluation of property, plant and equipment | 10 | (846) | - |
| Net cash used in investing activities | (1,179) | - | |
| FINANCING ACTIVITIES | |||
| Proceeds from issue of shares, net of transaction costs | 14,173 | 14,977 | |
| Proceeds from exercise of options/warrants | 420 | - | |
| Finance expense | 7 | (6,986) | (6,511) |
| Repayments of loans | 11 | (2,591) | (1,267) |
| Proceeds from loans | 11 | 3,963 | 1,803 |
| Proceeds from issue of bonds | 12 | 4,313 | 4,355 |
| Repayment of bonds | 12 | (1,059) | (358) |
| Net cash generated from financing activities | 12,233 | 12,999 | |
| Net (decrease)/increase in cash and cash equivalents | (1,633) | 3,096 | |
| Cash and cash equivalents at beginning of year | 3,146 | 50 | |
| Cash and cash equivalents at end of year | 1,513 | 3,146 |
Zenith Energy Ltd.
Unaudited Preliminary Financial Results
For the Year Ended March 31, 2026
Notes to the financial statements
1. Corporate and Group information
The consolidated financial statements of Zenith Energy Ltd. and its subsidiaries (collectively, the "Group") have been prepared on the basis set out below.
Zenith Energy Ltd. ("Zenith" or the "Group") was incorporated pursuant to the provisions of the British Columbia Business Corporations Act on September 20, 2007, and is domiciled in Canada. The address of the Group's registered office is 20th Floor, 250 Howe Street, Vancouver, BC. VC6 3R8, Canada and its business address is 15th Floor, 850 - 2nd Street S.W., Calgary, Alberta T2P 0R8, Canada. The Group's primary business activity is the international development of oil and gas production and development assets.
The Company's website is: www.zenithenergy.ca.
Zenith is a public company listed on the Main Market of the London Stock Exchange under the ticker "ZEN", with its entire common share capital admitted to trading on the Euronext Growth Oslo under the ticker "ZENA" and the Spotlight Stock Market Stockholm under the ticker "ZENA SDR".
2. Basis of preparation
The consolidated financial statements presented in this document have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
The financial statements have been prepared under the historical cost convention except for financial instruments which are measured at fair value through profit or loss. The financial statements are presented in Canadian Dollars (CAD$) and have been rounded to the nearest thousand (CAD$'000) except where otherwise indicated.
The Board has reviewed the accounting policies set out below, which have been applied consistently, and considers them to be the most appropriate to the Group's business activities.
Presentation and functional currency
The presentation currency of the Group is the Canadian dollar ("CAD$").
Functional currency is the currency of the primary economic environment in which a company operates. The functional currencies of the Group's subsidiaries are: United States ("US$") dollars for the subsidiaries in Tunisia, Dubai and British Virgin Islands, Euros ("EUR") for the subsidiary in Italy, Sterling ("GBP") for the subsidiary in the United Kingdom, Swiss Francs ("CHF") for the subsidiary in Switzerland and Norwegian Krone ("NOK") for the subsidiary in Norway.
The functional currency is determined by the Directors after consideration of a number of relevant factors, including the currency in which Group entities primarily generate and expend cash, the currency that principally influences revenues and costs, and the currency in which business transactions and financing activities are normally denominated.
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
All of the transactions that are not in the functional currency are treated as foreign and indicate currency transactions.
The factors that have determined the adoption of the CAD$ as presentation currency include:
- mainly affects the prices at which the goods or services are consolidated;
- Canada is the country whose regulations, market conditions and competitive forces mainly affect the pricing policy of the entity;
- influences the costs and expenses of the entity;
- the funds are usually generated in that currency; and
- the receipts from operating activities are retained in that currency.
Going concern
These financial statements have been prepared on a going concern basis which presumes that the Group will continue its operations in the normal course of business for the foreseeable future. In assessing whether going concern assumption is appropriate, the Directors have taken into account all relevant available information about the current and future position of the Group. As part of their assessment, the Directors have also taken into account the ability to raise additional funding whilst maintaining sufficient cash resources to meet all commitments.
The Directors have reviewed the cash flow forecasts prepared by management up to and including August 2027, which are prepared on the basis that the Group continues to hold title to the Tunisian and Italian oil and gas asset and which takes into account the fund raises completed post year end, as well as loan and bond repayments which fall due within 12 months of the date of the signing of the financial statements. The cashflow forecasts also include the investments in respect of the proposed acquisitions in the United States and Italy, provision about the cashing of the ICC 1 result announced in December 2024, provisions about its claim in Congo against SMP Energies (hereafter "SMP", formerly Société de Maintenance Pétrolière - SMP) the rig contractor that performed drilling services in wells TLP-103 and TLP-103C of the Tilapia oilfield during 2018-2019, and the various legal proceedings against the Republic of Tunisia.
The Group believes that these financial commitments will be covered by a combination of funding generated by operations, funds raised post year end, funds to be received from the arbitrations in Paris, as well as further planned fund raises within the going concern period. The Directors believe that the planned fund raises via the various sources of capital available to the Group will be successful. The Group's ability to raise funds has been demonstrated in the year ended March 31, 2026.
The Directors, having made due and careful enquiry and having considered the Group's current financial position, forecast cash flows, available financing arrangements and strategic initiatives, are of the opinion that the Group has adequate working capital to meet its obligations and execute its business plan over the next 12 months.
Accordingly, the Directors have concluded that there is a reasonable expectation that the Group will have access to adequate financial resources to continue in operational existence for the foreseeable future. In reaching this conclusion, the Directors have taken into consideration, inter alia, the ongoing bond exchange programme, the enforcement and recovery of the ICC-1 arbitration award, the proposed sale of the Group's drilling rig, the continued development of the Group's solar energy portfolio and the Group's ability to raise additional capital where required.
As a result, the Directors have adopted the going concern basis of accounting in the preparation of these consolidated financial statements.
21
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
3. Significant accounting policies
Consolidation
The following entities have been consolidated within the Group's financial statements:
| Name | Country of incorporation and place of business | Proportion of ownership interest | Principal activity | Reporting period |
|---|---|---|---|---|
| Canoel Italia S.p.A. (1) | Italy | 98.6% | Gas, electricity and condensate production | January - December |
| Ingenieria Petrolera del Rio de la Plata S.r.l. | Argentina | 100% | Inactive | January - December |
| Zenith Suisse SA | Switzerland | 100% | Group support and administrative services | January - December |
| Compagnie du Desert Holdings Ltd (3) | United Kingdom | 100% | Holding Company | January - December |
| Compagnie du Desert Ltd (2) | United Kingdom | 100% on behalf of Compagnie du Desert Holdings Ltd | Holding Company | January - December |
| Ecumed Petroleum Tunisia Ltd | Tunisia | 100% on behalf of Compagnie du Desert Ltd | Oil production | January - December |
| Leopard Energy, Inc (formerly Cyber Apps World Inc.) (3) | United States | 99.87% | Oil Production | August - July |
| Wesolar S.r.l. (4) | Italy | 99% | Solar electricity production and development | January - December |
| Futuro Energetico Italiano S.r.l. (5) | Italy | 99% | Uranium Exploration and Development | January - December |
(1) Zenith Energy Ltd. has $100\%$ control over Canoel Italia S.p.A. The Group granted $1.4\%$ to a former Director, in order to limit the risk of any liability to that entity. Therefore, no non-controlling interest arises from the consolidation of this subsidiary.
(2) On April 30, 2021, the Company announced that Compagnie Du Desert Ltd ("CDD"), its recently incorporated fully owned subsidiary, has entered into a share purchase agreement ("SPA") with Candax Energy Limited ("Candax") for the acquisition of a 100 percent interest in Candax's fully owned subsidiary in Barbados, Ecumed Petroleum Tunisia Ltd ("EPT") (the "Acquisitions"), which holds a $100\%$ interest in the El Bibane and Robbana concessions in Tunisia.
(3) On August 29, 2023, the Company announced that it had acquired control of Leopard Energy, Inc.
Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
(formerly Cyber Apps World Inc.) ("CYAP") by way of a Securities Purchase Agreement ("SPA") signed with Janbella Group LLC ("Seller").
- Zenith has acquired 100,000 Series A Preferred Shares in CYAP from the Seller, representing $99.87\%$ of its current total voting rights.
- The purchase price agreed under the terms of the SPA is US$398,319.97 in cash (the "Consideration").
- CYAP is listed on the US OTC Markets' Pink Open Market segment under the ticker "CYAP".
(4) Zenith Energy Ltd. has $100\%$ control over Wesolar S.r.l. The Group granted $1\%$ to a third-party, in order to limit the risk of any liability to that entity. Therefore, no non-controlling interest arises from the consolidation of this subsidiary.
(5) Zenith Energy Ltd. has $100\%$ control over Futuro Energetico Italiano S.r.l. The Group granted $1\%$ to a third party, in order to limit the risk of any liability to that entity. Therefore, no non-controlling interest arises from the consolidation of this subsidiary.
Subsidiaries are entities over which the Group has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Adjustments are made to the results of subsidiaries to bring the accounting policies used by them, with those used by the Group.
Intercompany balances and transactions are eliminated on consolidation, and any unrealized income and expenses arising from intercompany transactions are eliminated in preparing the consolidated financial statements.
The reporting dates of Zenith Suisse SA, Futuro Energetico Italiano S.r.l., Wesolar S.r.l. and Canoel Italia S.p.A. differ from that of the Company as these entities prepare their statutory financial statements in accordance with local reporting requirements and financial reporting calendars.
The remaining subsidiaries also have financial year-ends that differ from the Group's reporting date, reflecting historical reporting periods that existed prior to their acquisition by the Group. These reporting dates have not been amended to align with the Group's financial reporting calendar as the Directors consider that the administrative costs and operational burden associated with such changes would outweigh the benefits of alignment.
The following entities have not been consolidated within the Group's financial statements because they are considered to be immaterial to the Group:
| Name | Country of incorporation and place of business | Proportion of ownership interest | Principal activity |
|---|---|---|---|
| Leonardo Energy Consulting S.r.l. | Genova, Italy | 48% | Dormant |
| Zenith Energy Netherlands BV | Netherlands | 100% | Dormant |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
The following entities have been written off, in consideration of the divestments of the Company in the country (Republic of the Congo) or due to the Arbitrations currently in progress:
| Name | Country of incorporation and place of business | Proportion of ownership interest | Principal activity | Reporting period |
|---|---|---|---|---|
| Anglo African Oil & Gas Congo S.A.S. | Republic of the Congo | 100% | Oil production | January - December |
| Zenith Energy África Holdings | United Kingdom | 100% | Holding Company | January - December |
| Zenith Energy África Ltd | United Kingdom | 100% on behalf of Zenith Energy Holdings | Holding Company | January - December |
| Ecumed Petroleum Zarzis Ltd | Tunisia | 100% on behalf of Zenith Energy Africa Ltd | Oil production | January - December |
| Zenith Overseas Assets Holdings Ltd | United Kingdom | 100% | Holding Company | January - December |
| Zenith Overseas Assets Ltd | United Kingdom | 100% on behalf of Zenith Overseas Assets Holdings Ltd | Holding Company | January - December |
| Canadian North Africa Oil & Gas Ltd | Tunisia | 100% on behalf of Zenith Overseas Assets Ltd | Oil production | January - December |
| Zenith Energy Congo SA | Republic of the Congo | 100% | Oil production | January - December |
| Zenith Aran Oil Company Limited | British Virgin Islands | 100% | Inactive | January - December |
| Zena Drilling Limited | Incorporated in UAE Place of business: Azerbaijan | 100% | Oil and gas drilling | January - December |
Property, plant and equipment (PPE)
Property, plant and equipment are measured using either the cost model or the revaluation model, depending on the class of assets. Classes of assets are determined based on the nature and use of the underlying assets.
Development and production expenditures
Development and production ("D&P") assets include costs incurred in developing commercial reserves and bringing them into production. Items of property and equipment, including D&P assets, are carried at cost less accumulated depletion and depreciation and accumulated impairment losses.
24
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
When significant parts of D&P assets have different useful lives, they are accounted for as separate items (major components).
Gains and losses on disposal of D&P assets are determined by comparing the proceeds of disposal with the carrying amount of the item and are recognised in profit or loss.
Solar photovoltaic assets (new class)
During the financial year ended 31 March 2026, the Group invested in a new class of photovoltaic assets comprising solar development projects in Italy. These investments form part of the Group's strategy of building a renewable energy portfolio through the acquisition and development of solar projects, with the objective of advancing selected projects to construction and electricity generation while retaining flexibility to realise value through selective asset disposals.
Solar photovoltaic assets comprise development-stage projects, including land rights, grid connection rights, planning permissions, environmental studies and other directly attributable acquisition and development costs eligible for capitalisation. Given the distinct characteristics, risk profile, development cycle and valuation methodology associated with these assets, the Group has classified solar development projects as a separate class of property, plant and equipment.
The Group has elected to apply the revaluation model to this class of assets. Following initial recognition at cost, solar photovoltaic assets are measured at fair value, determined using discounted cash flow methodologies that reflect the expected economics of the underlying projects. Management believes that the revaluation model provides more relevant and reliable information to users of the financial statements than the historical cost model, given the development-stage nature of the assets and the significant value creation that can occur during the permitting and development process.
Revaluation gains are recognised in other comprehensive income and accumulated in equity within a revaluation surplus reserve, except to the extent that they reverse a previous revaluation decrease recognised in profit or loss. The Group utilises both internal and external valuation methodologies in determining fair value and adopts a prudent approach by recognising the lower of the values derived from the respective valuation models.
Business combinations
The acquisition method of accounting is used to account for acquisitions of subsidiaries and assets that meet the definition of a business under IFRS. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, and liabilities incurred or assumed at the date of exchange. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration agreement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at fair value at the acquisition date. The excess of the cost of acquisition over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recorded as goodwill. If the cost of an acquisition is less than the fair value of the net assets of the subsidiary acquired, a bargain purchase gain is recognised immediately in the consolidated statement of comprehensive income.
Transaction costs that are incurred in connection with a business combination other than those associated with the issue of debt or equity instruments are expensed as incurred.
Intercompany balances and transactions are eliminated on consolidation, and any unrealised income
25
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
and expenses arising from intercompany transactions are eliminated in preparing the consolidated financial statements.
Subsequent costs
Costs incurred subsequent to the determination of technical feasibility and commercial viability, costs of replacing parts of property and equipment and workovers of property and equipment are recognised only if they increase the economic benefits of the assets to which they relate. All other expenditures are recognised in profit or loss when incurred. The carrying amounts of previous inspections or any replaced or sold components are derecognized. The costs of day-to-day servicing of an item of property and equipment are recognised in profit or loss as incurred.
Depletion and depreciation
The net book value of producing assets is depleted on a field-by-field basis using the unit of production method with reference to the ratio of production in the year to the related proved and probable reserves, as determined by an independent reserve engineer, taking into account estimated future development costs necessary to bring those reserves into production. For purposes of these calculations, relative volumes of natural gas production and reserves are converted at the energy equivalent conversion rate of six thousand cubic feet of natural gas to one barrel of crude oil.
Impairment
At the end of each reporting period, the Group reviews the D&P assets for circumstances that indicate the assets may be impaired. Assets are grouped together into cash-generating units ("CGUs") for the purpose of impairment testing.
If any such indication of impairment exists, the Group makes an estimate of its recoverable amount. A CGUs recoverable amount is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Value in use is generally computed by reference to the present value of future cash flows expected to be derived from the production of proved and probable reserves.
Fair value less costs to sell is determined as the amount that would be obtained from the sale of a CGU in an arm's length transaction between knowledgeable and willing parties. The fair value less cost to sell of D&P assets is generally determined as the net present value of the estimated future cash flows expected to arise from the continued use of the CGU, including any expansion prospects, and its eventual disposal, using assumptions that an independent market participant may take into account.
These cash flows are discounted by an appropriate discount rate which would be applied by such a market participant to arrive at a net present value of the CGU. When the recoverable amount is less than the carrying amount, the asset or CGU is impaired. For impairment losses identified on a CGU, the loss is allocated on a pro rata basis to the assets within the CGU. The impairment loss is recognised as an expense in profit or loss.
At the end of each subsequent reporting period, these impairments are assessed for indicators of reversal.
Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss have been recognised for the asset or CGU in prior periods.
A reversal of an impairment loss is recognised in profit or loss.
26
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
Decommissioning provision
The Group recognizes a decommissioning obligation in the period in which a well is drilled or acquired, and a reasonable estimate of the future costs associated with removal, site restoration and asset retirement can be made. The estimated decommissioning provision is recorded with a corresponding increase in the carrying amount of the related cost centre.
Decommissioning provisions are measured at the present value of management’s best estimate of the expenditures required to settle the present obligation at the statement of financial position date. Subsequent to the initial measurement, the provision is adjusted at the end of each period to reflect the unwinding of discount and changes in the estimated future cash flows underlying the obligation. The increase in the provision due to the unwinding of discount is recognised as finance expenses. Actual costs incurred upon settlement of the decommissioning obligations are charged against the provision to the extent the provision was established.
Cash and cash equivalents
Cash and cash equivalents consist of cash deposits in bank accounts and cash in hand.
Inventory
Inventory consists of crude oil which is recorded at the lower of cost and net realisable value. The cost of producing crude oil is accounted on a weighted average basis. This cost includes all costs incurred in the normal course of business in bringing each product to its present location and condition. The cost of crude oil is the producing cost, including royalties. Net realisable value of crude oil and refined products is based on estimated selling price in the ordinary course of business less any expected selling costs.
Financial instruments
Financial assets and financial liabilities are recognized in the Group’s statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortized cost using the effective interest method:
- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Despite the foregoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset:
- the Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and
- the Group may irrevocably designate a debt investment that meets the amortized cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
Impairment of financial assets
The Group applies the expected credit loss model to financial assets measured at amortized cost or at fair value through other comprehensive income. There are no financial assets other than trade receivables.
De-recognition of financial assets
The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Group’s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments.
Financial liabilities
All financial liabilities are measured subsequently at amortised cost using the effective interest method.
Compound financial instruments
28
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
Compound financial instruments include convertible notes which can be converted into a fixed number of common shares for a fixed amount of consideration. The compound financial instrument is bifurcated and recorded with a liability and equity component. The liability component is initially recognised as the fair value of the liability without the conversion feature, which is calculated using inputs that fall within level 1 of the fair value hierarchy of IFRS 13. The equity component is recognised as the difference between the fair value of the convertible debt and the fair value of the liability component.
Transaction costs are proportionately allocated between the components. Subsequently, the liability component is measured at amortised cost using the effective interest method and accretes up to the principal balance at maturity.
The equity component is not re-measured after initial recognition. Upon conversion, the liability component is reclassified to equity and no gain or loss is recognised. If the number of common shares to which the loan can be converted is not fixed, then the loan is recorded as a liability with no debt / equity split.
De-recognition of financial liabilities
The Group removes a financial liability (or a part of a financial liability) from its statement of financial position when, and only when, it is extinguished-i.e., when the obligation specified in the contract is discharged or cancelled or expires.
Amortized cost and effective interest method
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are credit-impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss allowance.
Interest income is recognized using the effective interest method for debt instruments measured subsequently at amortized cost. For financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit impaired. For financial assets that have subsequently become credit-impaired, interest income is recognized by applying the effective interest rate to the amortized cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognized by applying the effective interest rate to the gross carrying amount of the financial asset.
The Group's financial assets were classified as financial assets measured subsequently at amortized cost. The Group's financial liabilities were classified as financial liabilities measured subsequently at
29
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
amortized cost. The Group does not choose to classify any financial liabilities as measured at fair value through profit or loss.
Share capital
Share capital is classified as equity if it is non-redeemable, and any dividends are discretionary or redeemable but only at the Group's option. Dividends on share capital classified as equity are recognised as distributions within equity. Non-equity share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders or if dividend payments are not discretionary. Dividends thereon are recognised in the consolidated income statement as a financial expense.
Incremental costs directly attributable to the issue of common shares are recognised as a deduction from equity.
Share-based payments
The cost of providing share-based payments to employees is charged to the statement of comprehensive income (or treated as a share issue cost) over the vesting period of the related share options or share allocations. The cost is based on the fair values of the options, which is determined using the Black Scholes method. The value of the charge is adjusted to reflect expected and actual level of vesting. Charges are not adjusted for market related conditions that are not achieved. Where equity instruments are granted to persons other than Directors or employees the consolidated statement of comprehensive income is charged with the fair value of the related goods or services received.
Earnings per share
The Group presents basic and diluted earnings per share for its common shares. Basic earnings per share amounts are calculated by dividing the profit or loss attributable to common shareholders of the Group by the weighted average number of common shares outstanding during the period. Diluted earnings per share amounts are determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted, for the effects of all dilutive potential common shares.
Revenue from contracts with customers
The Group enters into contracts for the sale of oil and gas. Revenue is recognised when the price is determinable, the product has been delivered in accordance with the terms of the contract, the significant risks and rewards or ownership have been transferred to the customer and collection of the sales price is reasonably assured. The performance obligation is identified to be the delivery of oil and gas to the customer, and the transaction price is allocated to the amount of oil and gas delivered. These criteria for performance obligation are assessed to have occurred once the product has been delivered to the customer.
Foreign currency translation
Foreign currency transactions are translated into the respective functional currencies of the Group and its subsidiaries using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of comprehensive income.
The financial results and position of foreign operations whose functional currency is different from the presentation currency are translated as follows:
- Assets and liabilities are translated at period-end exchange rates prevailing at that reporting date; and,
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
- Income and expenses are translated at average exchange rates for the period.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s exchange difference on translating foreign operations on the statement of comprehensive income and are reported as a separate component of shareholders’ equity. These differences are recognised in profit or loss in the period in which the operation is disposed.
Accounting policy for Provisions, contingent assets and liabilities
Contingent liabilities and contingent assets are not recognised in the Statement of Financial Position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.
Finance expense
Finance expense is comprised of interest on debt, accretion of the decommissioning obligation, accretion of convertible notes and other miscellaneous interest charges.
Taxation
Income tax expense is comprised of current and deferred tax and is recognised in profit or loss except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.
Deferred tax is recorded, using the asset and liability method, on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. However, deferred tax is not recorded on taxable temporary differences arising on the initial recognition of goodwill or on the initial recognition of assets and liabilities in a transaction other than a business combination that affect neither accounting nor taxable profit or loss. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognized deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
31
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
Interest-Bearing Loans and Borrowings
Interest-bearing loans and borrowings are initially recognised at fair value, which equates to the value of proceeds received net of any directly attributable arrangement costs. Subsequent to initial recognition these borrowings are stated at amortised cost using the effective interest rate method.
4. Critical accounting estimates and judgements
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions about the future. The relating accounting estimates will by definition, seldom equal to related achieved result. The estimates and judgements that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:
Going concern
Management have prepared the financial statements on a going concern basis of accounting which, as stated in note 2, is dependent on the group being able to raise additional funding as required. This is considered to be a critical accounting judgement.
Property, plant and equipment
Management reviews the Group’s property, plant and equipment annually for impairment indicators.
The determination of recoverable amounts in any resulting impairment test requires judgement around key assumptions. Key assumptions in the impairment models include those related to prices that are based on forward curves and long-term corporate assumptions thereafter, discount rates, that are risked to reflect conditions specific to individual assets, future costs, both capital and operating that are based on management’s estimates having regard to past experience and the known characteristics of the individual assets, reserves and future production, which are discussed further on note 8. The carrying value of property, plant and equipment as of March 31, 2026, was CAD$ 167,822k (2025 – CAD$134,496k).
Proved and probable reserves and contingent resources
The volume of proved and probable oil and gas reserves is an estimate that affects the unit of production depreciation of producing oil and gas property, plant and equipment as well as being a significant estimate affecting decommissioning provisions, impairment calculations and the valuation of oil and gas properties in business combinations. Contingent resources affect the valuation of exploration and exploration assets acquired in business combinations and the estimation of the recoverable value of those assets in impairment tests.
Proved and probable reserves and contingent resources are estimated using standard recognised evaluation techniques. Estimates are reviewed at least annually and are regularly estimated by independent consultants. Future development costs are estimated taking into account the level of development required to produce the reserves by reference to operators, where applicable, and internal engineers.
The Group’s reserves are evaluated and reported on by independent reserve engineers at least annually. The engineers issue a Competent Person’s Report (“CPR”), and the latest version was issued in July 2025 in relation to the Group’s Italian and Congolese assets. Reserve estimation is based on a variety of factors including engineering data, geological and geophysical data, projected future rates of production,
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
commodity pricing and timing of future expenditures, all of which are subject to significant judgement and interpretation.
Decommissioning costs
Most of these decommissioning events are many years in the future and the precise requirements that will have to be met when the removal event occurs are uncertain. Decommissioning technologies and costs are constantly changing, as well as political, environmental, safety and public expectations.
The estimated cost of decommissioning at the end of the producing lives of fields is reviewed periodically and is based on forecast price levels and technology at the Statement of Financial Position date. Provision is made for the estimated cost at the Statement of Financial Position date, using a discounted cash flow methodology and a risk-free rate of return. The carrying value of the decommissioning costs as of March 31, 2026, is CAD$23,478k (2025 – CAD$22,454k).
Impairment of investments in subsidiaries and non-financial assets
The Group conducts impairment reviews of investments in subsidiaries and non-financial assets whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable or tests for impairment annually in accordance with the relevant accounting standards. Determining whether an asset is impaired requires an estimation of the recoverable amount, which requires the Group to estimate the value in use which based on future cash flows and a suitable discount rate in order to calculate the present value. Where the actual future cash flows are less than expected, an impairment loss may arise. During the year, after reviewing the business environment as well as the Group's strategies and past performance of its cash-generating units, management concluded that there was impairment for plant and equipment in Tunisia. Management believes that any reasonably possible changes in the assumptions used in the impairment reviews would not affect management's view on impairment at current year end.
Classification of PPE – solar photovoltaic assets
The Group has identified solar photovoltaic assets as a separate class of property, plant and equipment due to their distinct nature and valuation characteristics. The Group has applied the revaluation model to this class, while other classes of PPE continue to be measured using the cost model.
This judgement reflects the dynamic valuation of solar assets and the availability of reliable fair value information.
Although certain projects may be sold in the future, the Group retains the ability to operate all assets at the reporting date and has not committed to disposal. Accordingly, the assets are not classified as inventory or held for sale.
33
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
5. Administrative expenses
During the year ended 31 March 2026, General and Administrative expenses amounted to CAD$14,189k (2025 – CAD$6,478k). The increase was primarily attributable to higher consultancy and professional fees, increased administrative and personnel costs, greater travel expenditure, and foreign exchange losses arising from the retranslation of assets and liabilities denominated in foreign currencies.
In addition, the Group incurred CAD$12,267k (2025 – CAD$10,890k) of non-recurring expenses relating to its arbitration proceedings against the Republic of Tunisia. These costs principally comprise legal, expert, advisory and other professional fees incurred in connection with the Group's ongoing international arbitration claims.
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Financial Year ended March 31, | Financial Year ended March 31, | |||
| 2026 | 2025 | 2026 | 2025 | |
| CAD$'000 | CAD$'000 | CAD$'000 | CAD$'000 | |
| Auditors remuneration - audit fees | 220 | 270 | 174 | 185 |
| Accounting and bookkeeping | 118 | 102 | 118 | 102 |
| Other professional fees | 2,817 | 1,161 | 2,820 | 867 |
| Office | 158 | 438 | 131 | 369 |
| Administrative expenses | 330 | 138 | 292 | 771 |
| Foreign exchange (gain)/loss | (3,353) | (8,157) | 99 | 1,382 |
| Salaries | 1,292 | 1,107 | 1,038 | 883 |
| Travel | 340 | 529 | 340 | 505 |
| General and administrative expenses | 1,922 | (4,412) | 5,012 | 5,064 |
| Non-recurring expenses | ||||
| Bond issue costs | 8 | 180 | 8 | 180 |
| Listing costs (Norway and UK) | 2,798 | 620 | 2,798 | 620 |
| Negotiation costs for acquisitions | 129 | 1,767 | 129 | 1,761 |
| Arbitration costs | 7,935 | 4,598 | 7,935 | 4,598 |
| Share based payments | 1,397 | 3,725 | 1,397 | 3,725 |
| Total non-recurring expenses | 12,267 | 10,890 | 12,267 | 10,884 |
| Total general and administrative expenses | 14,189 | 6,478 | 17,279 | 15,948 |
6. Change in working capital
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Year ended March 31, | Year ended March 31, | |||
| 2026 | 2025 | 2026 | 2026 | |
| CAD$'000 | CAD$'000 | CAD$'000 | CAD$'000 | |
| Trade and other receivables | (629) | (16,466) | (917) | (15,551) |
| Inventory | (56) | (381) | - | - |
| Prepaid expenses | (21) | 115 | (56) | 25 |
| Trade and other payables | 2,448 | 3,079 | 2,143 | 2,657 |
| Total change in working capital | 1,742 | (13,653) | 1,170 | (12,869) |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
- Finance expense
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Financial Year ended March 31, | Financial Year ended March 31, | |||
| 2026 | 2025 | 2026 | 2025 | |
| CAD$'000 | CAD$'000 | CAD$'000 | CAD$'000 | |
| Interest expense | 6,780 | 2,510 | 6,735 | 5,444 |
| Accretion of decommissioning provision | 439 | 416 | - | - |
| Finance expenses | 903 | 5,444 | 903 | 2,043 |
| Net finance expense | 8,122 | 8,370 | 7,638 | 7,487 |
- Property, plant and equipment
| D&P Assets GROUP | D&P Assets COMPANY | |
|---|---|---|
| CAD$'000 | CAD$'000 | |
| Carrying amount at April 1, 2024 | 134,460 | - |
| Additions | 417 | - |
| Disposals | (1,661) | - |
| Reclassification to assets held for sale | (5,476) | - |
| Depletion and depreciation | (366) | - |
| Foreign exchange differences | 7,122 | - |
| Carrying amount at March 31, 2025 | 134,496 | - |
| D&P Assets GROUP | D&P Assets COMPANY | |
| --- | --- | --- |
| CAD$'000 | CAD$'000 | |
| Carrying amount at April 1, 2025 | 134,496 | - |
| Additions | 1,414 | 846 |
| Solar photovoltaic assets revaluation | 29,529 | 29,529 |
| Depletion and depreciation | (383) | - |
| Foreign exchange differences | 2,766 | - |
| Carrying amount at March 31, 2026 | 167,822 | 30,375 |
Impairment test for property, plant and equipment
As at 31 March 2026, the Group reviewed the carrying value of its property, plant and equipment to determine whether any indicators of impairment existed.
Following a strategic review of the Group's asset portfolio, including the Company's intention to divest its activities in the Republic of Congo and the ongoing arbitration proceedings relating to its former investments in Tunisia through Ecumed Petroleum Zarzis Ltd. and Canadian North Africa Oil & Gas Limited, the Board determined that the carrying value of the assets associated with these entities should be fully impaired.
In assessing impairment, the Group considers the recoverable amount of its oil and gas assets, being the higher of fair value less costs of disposal ("FVLCD") and value in use. Given the absence of readily available market prices for the Group's oil and gas properties, FVLCD is generally determined using discounted cash flow ("DCF") methodologies based on estimated future cash flows and assumptions that would be adopted by a market participant.
Value in use reflects only those cash flows expected to be generated from an asset in its current condition, whereas FVLCD may incorporate expenditure and development activities that a market
Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
participant would reasonably undertake to enhance productive capacity and optimise future cash flows. Accordingly, where appropriate, the Group determines recoverable amount using an FVLCD approach supported by DCF analysis.
As a result of the assessment performed during the year, the Board concluded that a full impairment of the assets associated with its Congo and Tunisia operations was appropriate.
The DCF was derived by estimating discounted after-tax cash flows for each CGU based on estimates that a typical market participant would use in valuing such assets. The impairment tests compared the recoverable amount of the respective CGUs noted below to the respective carrying values of their associated assets. The estimates of FVLCD meet the definition of level three fair value measurements as they are determined from unobservable inputs.
Assets held for sale
During the year, management committed to sell a drilling rig held within Canoel Italia S.p.A. The asset was previously used in oil and gas operations but is no longer required for ongoing activities. In line with IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations, the asset has been classified as held for sale as at 31 March 2026.
The drilling rig has been actively marketed for sale through a public listing. The sale is expected to be completed within 12/18 months. The drilling rig is available for immediate sale in its current condition and meets all the criteria for classification as held for sale.
The rig was last independently valued by an external valuer during the prior year. No further changes in fair value less costs to sell were identified during the current year. The asset continues to be measured at the lower of its carrying amount and fair value less costs to sell. No impairment loss or reversal of a previous impairment has been recognised in the period.
In accordance with IFRS 5, depreciation of the asset ceased from the date of classification.
As result, the drilling rig was reclassified as a current asset for CAD$5,476k.
Solar photovoltaic assets (new class)
Revaluation gains are recognised in other comprehensive income and accumulated in equity within a revaluation reserve for CAD$29,529k. The Group uses both internal and external valuation techniques and adopts a conservative approach by recognising the lower valuation derived from internal models.
Italian Cash Generating Gas Unit
Key assumptions:
- Production profiles: these were based on the latest available information from management.
- Capital and operating costs: these were based on the current operating and capital costs in Italy.
- Gas price: An average 2026 gas price of $11.60/Mscf based on information from the World Bank European gas price forecast and information provided by management.
- Discount rate: The estimated fair value less costs to sell of the Italian CGU was based on 10% (2025 – 10%). This was based on a Weighted Average Cost of Capital analysis consistent with that used in previous impairment reviews.
36
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
Tunisia Cash Generating Unit
During the previous financial year, the Group determined that the assets relating to Ecumed Petroleum Zarzis Ltd. ("EPZ") (Ezzaouia Concession) and Canadian North Africa Oil & Gas Limited ("CNAOG") (Sidi El Kilani Concession) should be fully impaired due to the circumstances giving rise to the international arbitration proceedings commenced against the Republic of Tunisia.
As a result, an impairment charge of CAD$16,603k was recognised in the consolidated statement of profit and loss for the year ended 31 March 2024.
Subsequently, the Company commissioned an independent Competent Person's Report ("CPR") in respect of the Robbana and El Bibane concessions in Tunisia, held through Ecumed Petroleum Tunisia Ltd., in accordance with the requirements of the Canadian Oil and Gas Evaluation ("COGE") Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.
The CPR confirmed the presence of significant reserves and resources attributable to the concessions and did not identify any requirement for a further impairment of the associated assets. The Board considers the CPR to provide independent technical validation of the underlying value of these concessions and their contribution to the Company's broader claims against the Republic of Tunisia. Further details of the reserves and resources identified in the CPR are available on the Company's website at www.zenithenergy.ca.
9. Share capital
Zenith is authorised to issue an unlimited number of Common Shares without par value. During the financial year ended 31 March 2026, the Company issued 182,308,373 Common Shares (2025 – 195,328,553), all of which were fully paid. Each Common Share carries the right to vote at meetings of shareholders and the right to participate in any dividends declared by the Company.
The Company is also authorised to issue an unlimited number of preferred shares issuable in series, none of which were outstanding as at 31 March 2026. The Board of Directors is authorised to determine, by resolution, the rights, privileges, restrictions and conditions attaching to each series of preferred shares.
As at 31 March 2026, the Company had 649,182,327 Common Shares in issue and carrying voting rights (2025 – 466,873,954). The Common Shares are admitted to trading on the Main Market of the London Stock Exchange, the Euronext Growth Market of Oslo Børs and Spotlight Stock Market Sweden.
| Description | Number of common shares | Amount CAD $'000 |
|---|---|---|
| Balance - 31 March 2025 | 466,873,954 | 81,201 |
| Non-brokered unit private placement (i) | 10,397,000 | 1,653 |
| Non-brokered unit private placement (ii) | 15,953,508 | 4,204 |
| share issue cost | - 25 | |
| Exercise of warrants (iii) | 10,761,158 | 420 |
| Spotlight Admission placement (iv) | 44,304,602 | 2,950 |
| share issue cost | (660) | |
| Non-brokered unit private placement (v) | 100,892,105 | 6,380 |
| share issue cost | - 328 | |
| Balance - 31 March 2026 | 649,182,327 | 95,795 |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
i) On May 2, 2025, the Company announced the completion of a private placement in Norway (the "Placement").
The Placement raised an aggregate total amount of approximately US$1,200,000 (equivalent to approx. NOK 12,476,000 or GBP 896,600), resulting in the issuance of a total of 10,397,000 new common shares ("New Common Shares").
The Placing was completed at a price of NOK 1.20 per New Common Share.
ii) On May 29, 2025, the Company announced the completion of a private placement in the United Kingdom (the "UK Financing") and in Norway (the "Norwegian Financing").
The Company raised an aggregate total amount of approximately £2,257,000 (equivalent to approx. NOK 31,000,000), resulting in the issuance of a total of 15,953,508 new common shares ("New Common Shares").
Norwegian Financing
Zenith issued a total of 14,574,198 common shares of no-par value in the capital of the Company in connection with the Norwegian Financing (the "Norwegian Financing Common Shares") to raise gross proceeds of NOK 28,201,000 (approximately £2,057,000).
UK Financing
Zenith issued a total of 1,379,310 common shares of no-par value in the capital of the Company in connection with the UK Financing (the "UK Financing Common Shares") to raise gross proceeds of £200,000 (approximately NOK 2,799,000).
Issue Price
The Norwegian Financing was completed at a price of NOK 1.9350 per Norwegian Financing Common Share.
The UK Financing was completed at a price of £0.1450.
iii) On August 3, 2025, the Company announced that certain investors, including a Non-Executive Director of the Company, had exercised warrants to acquire new common shares in the capital of the Company (the "Warrant Exercise").
The Warrant Exercise raised an aggregate total amount of approximately US$308,000 (equivalent to approx. NOK 3,120,000 or GBP 228,000), resulting in the issuance of a total of 10,761,158 new common shares (the "Warrant Shares").
The warrant exercise price, as detailed in the regulatory news announcement dated October 28, 2024, is NOK 0.29 per Warrant Share.
The Warrant Shares rank pari-passu in all respects with the existing common shares of the Company.
iv) On September 30, 2025, the Company received final approval for admission to trading of the Company's Swedish Depository Receipts ("SDRs") on Spotlight Stock Market in Sweden. Trading commenced on October 7, 2025.
Zenith issued a total of 44,304,602 common shares of no-par value in the capital of the Company in connection with the SDRs issuance to raise gross proceeds of SEK 19,907,071 (approximately £1,578,000).
v) On 8 December 2025, the Company announced the completion of a private placement of Common Shares with a long-term institutional investor in the United Kingdom (the "UK Financing") and a private placement with institutional investors in Norway (the "Norwegian Financing"). In connection with the Financings, the Company also issued broker shares in lieu of
38
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
cash settlement for certain services provided in connection with the transaction (the "Broker Shares").
The Financings raised aggregate gross proceeds of approximately £3,658,500 (equivalent to approximately NOK 49,034,000), resulting in the issuance of 100,892,105 new Common Shares. This comprised the issuance of 84,157,162 Common Shares pursuant to the Norwegian Financing, raising gross proceeds of approximately NOK 41,525,000 (approximately £3,096,000), 13,513,514 Common Shares pursuant to the UK Financing, raising gross proceeds of approximately £450,000 (approximately NOK 6,000,000), and 3,221,429 Broker Shares issued in lieu of cash fees with an aggregate value of approximately NOK 1,502,000 (approximately £112,500).
The proceeds of the Financings were allocated towards the advancement of the Company's applications for exploration permits in respect of the Val Vedello and Novazza uranium deposits in Italy, the development and construction of the Company's initial solar production assets in the Puglia region of Italy, additional legal and advisory costs associated with the Company's ICSID arbitration proceedings against the Republic of Tunisia, and general working capital purposes.
Norwegian Financing
Zenith issued a total of 84,157,162 Common Shares to raise gross proceeds of approximately NOK 41,525,000 (approximately £3,096,000).
UK Financing
Zenith issued a total of 13,513,514 Common Shares to raise gross proceeds of approximately £450,000 (approximately NOK 6,000,000).
Issue Price
The Norwegian Financing was completed at a price of NOK 0.4662 per New Norwegian Financing Common Share, and the UK Financing was completed at a price of £0.0333 per UK Financing Common Share.
Broker Shares
The Company allotted 3,221,429 new Common Shares ("Broker Shares"), in lieu of cash settlement for services provided to Zenith in connection with the Financings for a total value of 1,502,000 NOK (equivalent to approx. £112,500).
39
Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
- Warrants and options
| Number of options | Number of warrants | Weighted average exercise price CAD$ | Amount CAD$'000 | |
|---|---|---|---|---|
| Balance – March 31, 2024 | 18,088,293 | 14,116,154 | 0.30 | 3,381 |
| Warrants issued | - | 95,000,000 | 0,04 | 585 |
| Warrants expired | - | (1,359,311) | 0,22 | (81) |
| Options issued | 27,183,142 | - | 0,16 | 3,140 |
| Options forfeited | (700,000) | - | 0,30 | (103) |
| Balance – March 31, 2025 | 44,571,435 | 107,756,843 | 0.05 | 6,922 |
| Warrants exercised | - | (10,761,158) | 0.04 | (66) |
| Warrants expired | - | (12,756,843) | 0.12 | (734) |
| Options issued | 29,031,131 | - | 0,06 | 1,397 |
| Options expired | (8,684,331) | - | 0,30 | (1,182) |
| Balance – March 31, 2026 | 64,918,235 | 84,238,842 | 0.08 | 6,337 |
WARRANTS
During the year ended March 31, 2026, the Company issued Nil warrants (2025 – 95,000,000), and 12,756,843 (2025 – 1,359,311) warrants expired. All the warrants were in the money as of March 31, 2026.
The expiry of 12,756,843 warrants was recognized in the contributed surplus amount of Equity section.
As of March 31, 2026, the Group had 84,238,842 (2024 – 107,756,843) warrants outstanding (relating to 96,995,685 shares) and exercisable at a weighted average exercise price of CAD$0.04 per share with a weighted average life remaining of 0.58 years.
| Issue date | Number of options | Exercise price | Expiry date | |
|---|---|---|---|---|
| Warrants | 28-Feb-23 | 11,367,954 | $0,10 | 28-Feb-26 |
| Warrants | 28-Feb-23 | 1,388,889 | $0,10 | 28-Feb-26 |
| Warrants | 28-Oct-24 | 95,000,000 | $0.04 | 28-Oct-26 |
| Total warrants as of 31 March 2025 | 107,756,843 | |||
| Issue date | Number of options | Exercise price | Expiry date | |
| Warrants | 28-Oct-24 | 84,238,842 | $0.04 | 28-Oct-26 |
| Total warrants as of 31 March 2026 | 84,238,842 |
The fair value of the warrants was calculated using the Black-Scholes pricing model calculations based on the following significant assumptions:
Risk-free interest rate $0.50\% - 0.70\%$
Expected volatility 75-100%
Expected life 3 years
Dividends Nil
Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
STOCK OPTIONS
| Grant Date | March 31, 2026 | March 31, 2025 | Expiry Date | ||
|---|---|---|---|---|---|
| Number of options | Exercise price per unit CAD$ | Number of options | Exercise price per unit CAD$ | ||
| December 2020 | - | - | 4,142,857 | 0.30 | December 2025 |
| January 2021 | - | - | 4,541,478 | 0.30 | January 2026 |
| 13 May 2021 | 3,257,108 | 0.20 | 3,257,108 | 0.20 | May 2026 |
| 06 September 2021 | 1,388,223 | 0.20 | 1,388,223 | 0.20 | September 2026 |
| 31 January 2022 | 4,058,628 | 0.20 | 4,058,628 | 0.20 | January 2027 |
| 20 February 2025 | 27,183,142 | 0.16 | 27,183,142 | 0.16 | February 2030 |
| 26 January 2026 | 29,031,131 | 0.06 | - | - | 26 January 2031 |
| TOTAL | 64,918,235 | 0.12 | 44,571,436 | 0.13 |
During the year ended March 31, 2026, the Company issued 29,031,131 stock options (2024 – 27,183,142), the options exercised were Nil (2025 - Nil) and 8,684,331 (2025 – 700,000) stock options were forfeited.
As of March 31, 2026, the Group had 64,918,235 (2024 – 44,571,436) stock options outstanding (relating to 64,918,235 new common shares).
There were 29,031,131 options in the money as of March 31, 2026 (2025 – Nil).
The Group maintains a stock option plan (the "Plan") for the benefit of its directors, employees and consultants. The maximum number of Common Shares issuable under the Plan is limited to 10% of the Company's issued and outstanding Common Shares at the date of grant.
Options granted under the Plan vest immediately upon grant, at which point the related share-based payment expense is recognised in the consolidated statement of profit or loss and comprehensive income in accordance with IFRS 2, Share-based Payment.
Unless otherwise determined by the Board of Directors, options granted under the Plan expire five years from the date of grant.
The table below represent the movement of the options during the FY 2026, and the comparative period 2025:
| Number of options | |
|---|---|
| Balance – March 31, 2024 | 18,088,294 |
| Options issued | 27,183,142 |
| Options forfeited | (700,000) |
| Balance – March 31, 2025 | 44,571,435 |
| Options issued | 29,031,131 |
| Options forfeited | (8,684,331) |
| Balance – March 31, 2026 | 64,918,235 |
Forfeiture of options
During the year ended March 31, 2026, 8,684,331 (2025 – 700,000) stock options were forfeited.
Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
The forfeiture of 8,684,331 (2025 – 700,000) options during the period was recognised in the contributed surplus amount of the Equity section for CAD$1,397k (2025 – CAD$103k).
As of March 31, 2026, the Group had 64,918,235 stock options outstanding (relating to 64,918,235 shares) and exercisable at a weighted average exercise price of CAD$0.12 per share with a weighted average life remaining of 2.32 years.
The fair value of the options was calculated using the Black-Scholes pricing model calculations based on the following significant assumptions:
Risk-free interest rate 0.50% - 0.70%
Expected volatility 100%
Expected life 5 years
Dividends Nil
- Loans
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Financial year ended March 31, | Financial year ended March 31, | |||
| 2026 | 2025 | 2026 | 2025 | |
| CAD$'000 | CAD$'000 | CAD$'000 | CAD$'000 | |
| Loan payable - current | 4,840 | 2,619 | 4,791 | 2,618 |
| Loan payable - non-current | 537 | 647 | - | - |
| Total | 5,377 | 3,266 | 4,791 | 2,618 |
| GROUP | COMPANY | |||
| Financial year ended March 31, | Financial year ended March 31, | |||
| 2026 | 2025 | 2026 | 2025 | |
| Loans – current | CAD$'000 | CAD$'000 | CAD$'000 | CAD$'000 |
| As at 1 April | 2,619 | 1,870 | 2,618 | 1,870 |
| Loan receipt | 4,010 | 1,803 | 3,963 | 1,802 |
| Interest | 653 | 214 | 653 | 214 |
| Repayment | (2,591) | (1,267) | (2,591) | (1,267) |
| Foreign exchange | 149 | (1) | 148 | (1) |
| As at March 31 | 4,840 | 2,619 | 4,791 | 2,618 |
| GROUP | COMPANY | |||
| Financial year ended March 31, | Financial year ended March 31, | |||
| 2026 | 2025 | 2026 | 2025 | |
| Loans – non current | CAD$'000 | CAD$'000 | CAD$'000 | CAD$'000 |
| As at 1 April | 647 | 438 | - | - |
| Loan receipt | - | 181 | - | - |
| Loan repayment | (131) | - | - | - |
| Foreign exchange | 21 | 28 | - | - |
| As at March 31 | 537 | 647 | - | - |
a) Loan in Italy Euro 300,000
In January 2024, the Group obtained a Euro 300,000 (CAD$438,339) loan from ReteFidi Liguria. The loan is unsecured, and bears interest at 9% per annum and the final repayment is due in January 2029. As at March 31, 2026, the outstanding balance was Euro 227,636 (CAD$363,642)
Zenith Energy Ltd. Unaudited Preliminary Consolidated Financial Results For the Year Ended March 31, 2026
b) Loan in Italy Euro 139,500
In December 2024, the Group entered into a loan agreement with Crédit Agricole for €139,500 (CAD$216k). The loan is unsecured, bears interest at a rate of 4.648% per annum and matures in December 2029.
As at 31 March 2026, the outstanding principal balance amounted to €107,170 (CAD$171k).
c) Loan Euro 1,550,000
In 2023, the Company entered into a convertible loan agreement for an aggregate principal amount of €1,550,000. The loan is non-interest bearing and includes conversion rights that may be exercised upon the occurrence of certain specified conditions, allowing the outstanding amount to be converted into Common Shares of the Company.
As at 31 March 2026, the outstanding balance of the convertible loan amounted to CAD$1,412k.
d) Loan USD 260,000
In September 2024, the Group obtained a USD 260,000 (CAD$372,125) loan from a private Lender. The loan is unsecured and bears no interest. As of 31 March 2026, the loan principal was outstanding for USD 260,000 (CAD$372,125). The loan was scheduled for repayment for December 2026.
e) Loan USD 2,000,000
On 2 May 2025, the Company entered into a convertible loan agreement for an aggregate principal amount of US$2,000,000. The loan accrued interest at a rate of 20% per annum and included conversion rights that could be exercised upon the occurrence of certain specified conditions, allowing the outstanding amount to be converted into Common Shares of the Company.
As at 31 March 2026, the outstanding balance of the convertible loan, including accrued interest, amounted to CAD$3,057k.
Subsequent to the reporting period, the convertible loan was repaid in full and no amounts remain outstanding.
- Non-convertible bonds
| | GROUP
Financial year ended March 31, | | COMPANY
Financial year ended March 31, | |
| --- | --- | --- | --- | --- |
| | 2026 | 2025 | 2026 | 2025 |
| Non-convertible bonds | CAD$'000 | CAD$'000 | CAD$'000 | CAD$'000 |
| Current | - | 11,701 | - | 11,701 |
| Non-current | 48,486 | 33,530 | 48,486 | 33,530 |
| Total | 48,486 | 45,231 | 48,486 | 45,231 |
| | GROUP
Financial year ended March 31, | | COMPANY
Financial year ended March 31, | |
| | 2026 | 2025 | 2025 | 2024 |
| Non-convertible bonds | CAD$'000 | CAD$'000 | CAD$'000 | CAD$'000 |
| Balance – April 1 | 45,231 | 39,376 | 45,231 | 39,376 |
| Loan notes | 4,313 | 4,354 | 4,313 | 4,354 |
| Interest | - | 764 | - | 764 |
| Repayment of bonds | (1,058) | (358) | (1,058) | (358) |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
| Foreign exchange | - | 1,095 | - | 1,095 |
|---|---|---|---|---|
| Total | 48,486 | 45,231 | 48,486 | 45,231 |
Loan Notes
To fund the acquisition and development of assets, while seeking to minimise shareholder dilution, the Company has issued unsecured, multi-currency (GBP, EUR, CHF and USD) Euro Medium Term Notes (the "Notes") at par value. The Notes are admitted to trading on the Third Market (MTF) of the Vienna Stock Exchange (Wiener Börse AG) and bear interest payable on a semi-annual basis.
The Group has launched a number of bond exchange invitation offers to holders of the Notes with the objective of simplifying its debt maturity profile and aligning the majority of outstanding maturities to 2029.
The issuance of the Notes forms part of the Group's strategy of diversifying its sources of funding through non-equity financing instruments, thereby supporting the development of its business while limiting dilution to existing shareholders.
The Company has utilised the EMTN Programme to support the acquisition, development and advancement of its energy assets and investments, primarily in Italy and the United States. The Vienna Stock Exchange was selected as the listing venue due to its established debt capital markets platform, efficient listing process and competitive admission and maintenance costs.
During the year, the Company announced that it had paid in full the semi-annual interest due in respect of the Notes in accordance with their terms and conditions.
13. Earnings per share
| March 31,2026 CAD$'000 | March 31,2025 CAD$'000 | |
|---|---|---|
| Profit/(loss) from continuing operations | (19,923) | 1,089 |
| Basic weighted average number of shares | 569,903 | 327,797 |
| Potential dilutive effect on shares issuable under warrants | 84,238 | n/a |
| Potential diluted weighted average number of shares | 64,918 | n/a |
| Net earnings per share – basic | $ (0,0350) | $ 0.0033 |
| Net earnings per share – diluted | $ (0,0277) | $ 0.0033 |
14. Other gains and losses
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Financial year ended March 31, | Financial year ended March 31, | |||
| Other gains and losses | 2026 | 2025 | 2026 | 2025 |
| CAD$'000 | CAD$'000 | CAD$'000 | CAD$'000 | |
| Proceeds from arbitration | 1,969 | 15,857 | 1,969 | 15,857 |
| 1,969 | 15,857 | 1,969 | 15,857 |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
15. Revenue
| Other operating income | GROUP | COMPANY | ||
|---|---|---|---|---|
| Financial year ended March 31, | Financial year ended March 31, | |||
| 2026 CAD$'000 | 2025 CAD$'000 | 2026 CAD$'000 | 2025 CAD$'000 | |
| Electricity | 2,166 | 1,972 | - | - |
| Gas | 161 | 165 | - | - |
| Oil | 7 | 10 | - | - |
| 2,334 | 2,147 | - | - |
16. Operating segments
The Group operates across multiple energy-related activities, including renewable energy development, electricity generation, oil and gas exploration and production, and uranium exploration. For management and reporting purposes, the Group's operating activities are reviewed on a geographic basis by the Board of Directors, which acts as the chief operating decision maker.
Geographical areas are used to identify the Group's reportable segments. A geographic segment is considered a reportable segment when its activities are regularly reviewed by the Board of Directors and discrete financial information is available.
The Group has three reportable segments which are as follows:
- Italy, which commenced gas operations following the acquisition of assets in June 2013;
- Tunisia, which was acquired during the 2021 FY.
- Other, which includes corporate assets and the operations in the Canadian, USA, Swiss and Argentinian entities.
| YEAR 2025 | Italy
CAD$000 | Tunisia
CAD$000 | Other
CAD$000 | Total
CAD$000 |
| --- | --- | --- | --- | --- |
| Property and equipment | 12,153 | 127,763 | 56 | 139,972 |
| Other assets | 1,132 | 4,180 | 19,431 | 24,743 |
| Total liabilities | 13,843 | 32,264 | 52,980 | 99,087 |
| Capital Expenditures | 417 | - | - | 417 |
| Revenue | 2,136 | | 11 | 2,147 |
| Operating and transportation | (1,064) | (637) | - | (1,701) |
| General and Administrative | (715) | 1,847 | (7,610) | (6,478) |
| Depletion and depreciation | (290) | (28) | (48) | (366) |
| Other income | | | 14,385 | 14,385 |
| Finance and other expenses | (416) | 1,005 | (7,487) | (6,898) |
| Taxation | - | - | - | - |
| Segment loss | (349) | 2,187 | (749) | 1,089 |
| YEAR 2026 | Italy
CAD$000 | Tunisia
CAD$000 | Other
CAD$000 | Total
CAD$000 |
| --- | --- | --- | --- | --- |
| Property and equipment | 12,455 | 130,130 | 25,237 | 167,822 |
| Other assets | 1,450 | 4,439 | 23,904 | 29,793 |
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
| Total liabilities | 14,768 | 32,780 | 60,375 | 107,923 |
|---|---|---|---|---|
| Capital Expenditures | 285 | - | 30,656 | 30,941 |
| Revenue | 2,306 | - | 28 | 2,334 |
| Operating and transportation | (1,256) | (181) | - | (1,437) |
| General and Administrative | (497) | 8,587 | (22,279) | (14,189) |
| Depletion and depreciation | (383) | - | - | (383) |
| Other income | 1,969 | 1,969 | ||
| Finance and other expenses | (484) | - | (7,638) | (8,122) |
| Taxation | - | - | (95) | (95) |
| Segment loss | (314) | 8,406 | (28,015) | (19,923) |
The following customers combined have 10% or more of the Group’s revenue:
| 2026 | 2025 | |
|---|---|---|
| CAD$000 | CAD$000 | |
| Customer A | 2,145 | 1,972 |
17. Controlling party
At as of the end of the financial year ending March 31, 2026, the Directors do not consider there to be a controlling party.
18. Events subsequent to the year-end
On 14 April 2026, the Company announced that the Republic of Tunisia had formally recognised that the Robbana and El Bibane production concessions (the "Concessions") are held by Zenith's wholly owned subsidiary, Ecumed Petroleum Tunisia Ltd. ("EPT").
In addition, the Republic of Tunisia confirmed in writing that approximately 3,987 barrels of oil produced from the Concessions are fully owned by EPT. These volumes relate to oil produced since 2022 that has remained unsold as a consequence of actions and restrictions imposed by Tunisian authorities, preventing EPT from monetising its production and generating revenues from the Concessions.
At an assumed oil price of US$100 per barrel, the recognised oil inventory has an estimated gross value of approximately US$400,000. In addition, as previously announced on 27 November 2025, approximately 8,000 barrels of oil remain in storage at the Robbana field, representing an estimated gross value of approximately US$800,000 based on the same pricing assumptions. In aggregate, these volumes represent a potential gross value of approximately US$1.2 million.
The Company's receipt of formal written confirmation regarding both ownership of the Concessions and title to the produced oil represents a significant development in the context of the ongoing arbitration proceedings against the Republic of Tunisia. The confirmation follows previous disputes concerning the storage, handling and sale of oil produced from the Concessions, including the sale of 3,987 barrels of oil transferred to MARETAP for which no proceeds were remitted to EPT.
The Company's claimant subsidiaries continue to pursue all available legal remedies through the ICSID arbitration proceedings in order to protect their rights and seek compensation for losses suffered as a result of the obstruction of their operations, the expropriation and impairment of their investments, and breaches
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
of the protections afforded under the UK–Tunisia Bilateral Investment Treaty.
The Company also reports that the Robbana production concession has been subject to extensive vandalism and theft, resulting in the site remaining non-operational for a period of at least one year.
Critical equipment has been removed, damaged or vandalised, resulting in significant deterioration of the site's infrastructure and preventing the resumption of meaningful production activities. The extent of the damage is such that a substantial rehabilitation programme will be required before operations can recommence.
The Company considers these developments to have materially increased the losses suffered by its subsidiaries and to constitute a further impairment of the value of their investments in Tunisia.
On 16 April 2026, the Company provided an update regarding its applications for exploration permits covering the Val Vedello deposit in the Province of Sondrio ("Val Vedello") and the Novazza deposit in the Province of Bergamo ("Novazza"), which together represent the largest known historical uranium resource base in Italy.
Further to the Company's announcement of 11 November 2025, Futuro Energetico Italiano S.r.l. ("FEI"), the Company's wholly owned Italian subsidiary established to hold and develop the Val Vedello and Novazza uranium projects, submitted a comprehensive Environmental Impact Assessment ("EIA") (Valutazione di Impatto Ambientale or "VIA") to the Italian Ministry for Environment and Energy Security ("MASE") in respect of the Novazza project.
Following submission of the VIA documentation, a dedicated technical review commission (Commissione Tecnica VIA) will evaluate the application in accordance with applicable Italian and European Union environmental regulations. The completion of the VIA process represents the final principal regulatory requirement prior to the granting of the Novazza exploration permit. Subject to regulatory review, approval is anticipated within approximately six to nine months from the date of submission.
In respect of the Val Vedello project, FEI has obtained an extension until 15 July 2026 for the submission of the VIA documentation following delays in accessing the project area caused by adverse weather conditions.
On April 23, 2026, the Company announced the acquisition of a 5 MWp photovoltaic development project located in Puglia, Italy. The project covers approximately 5 hectares of land situated in an area classified as suitable for solar photovoltaic development under the applicable regulatory framework. The Company intends to develop a solar photovoltaic plant with an expected installed capacity of approximately 5 MWp. The total consideration for the acquisition is EUR 575,000, payable upon securing all required permits and achieving Ready-to-Build status.
On April 27, 2026, the Company announced the acquisition of two additional solar development projects located in Puglia, Italy, each with an expected installed capacity of 2.5 MWp. Following completion of these acquisitions, the Company's solar development portfolio increased to 183.5 MWp, compared to the 173.5 MWp portfolio independently valued as at March 31, 2026. The independent valuation assigned a total value of EUR 54.7 million to the portfolio.
On April 28, 2026, the Company completed private placements with institutional investors in the United Kingdom and Norway, raising aggregate gross proceeds of approximately £3.08 million through the issuance of 44,609,603 new Common Shares. In addition, the Company completed a debt settlement through the issuance of 20,964,527 Common Shares in settlement of liabilities with an aggregate value of approximately NOK18.2 million. Following admission of the new shares, the Company's issued share capital increased to 714,756,457 Common Shares.
47
Zenith Energy Ltd.
Unaudited Preliminary Consolidated Financial Results
For the Year Ended March 31, 2026
On April 28, 2026, the Company also entered into a new unsecured convertible loan facility for an aggregate amount of up to £2.0 million. The facility bears interest at 5% per annum and matures on April 27, 2027. The proceeds are intended to support the Company's arbitration activities, renewable energy development projects, uranium exploration initiatives and general working capital requirements.
On 30 April 2026, the Company announced the progression of the proposed spin-out of its Italian uranium exploration business through Reveille Resources Limited, a uranium-focused exploration company. The transaction is intended to provide a dedicated listed vehicle through which the Company's uranium exploration activities can be advanced and funded.
Futuro Energetico Italiano S.r.l. ("FEI"), which has submitted applications for exploration permits covering the Val Vedello and Novazza uranium deposits in the Lombardy region of Italy, is proposed to be transferred to Reveille on a no-profit, no-loss basis reflecting expenditure incurred to date. Zenith has also agreed to invest £200,000 in Reveille. In addition, Zenith is expected to be reimbursed in Reveille ordinary shares for costs incurred in connection with the uranium permit applications and related technical, regulatory and project development work undertaken in respect of the Lombardy uranium projects, amounting to approximately £350,000.
48