Revenue and Financial Performance - Revenue from power generation units and parts increased to $6,742,182 for Q3 2023, up from $3,278,966 in Q3 2022, representing a 106% growth[30] - Total revenue for the nine months ended September 30, 2023, was $24,407,583, compared to $18,666,268 in the same period of 2022, a 31% increase[30] - Revenue from power generation units and parts for the nine months ended September 30, 2023, was $14,502,388, compared to $6,913,093 for the same period in 2022[30] - Service and repairs revenue for the nine months ended September 30, 2023, was $9,199,965, compared to $8,086,449 for the same period in 2022[30] - Oil and gas sales revenue for the nine months ended September 30, 2023, was $705,230, compared to $3,666,726 for the same period in 2022[30] - Simson-Maxwell's revenue from power generation units for the three months ended September 30, 2023, was $4,849,415, a significant increase from $2,082,218 in the same period in 2022[83] - Simson-Maxwell's total revenue from units and parts for the nine months ended September 30, 2023, was $14,502,388, compared to $6,913,093 in the same period in 2022[83] - Simson-Maxwell's service and repairs revenue for the nine months ended September 30, 2023, was $9,199,965, up from $8,086,449 in the same period in 2022[83] - The company's total revenue for the nine months ended September 30, 2023, was $23,702,353, compared to $14,999,542 in the same period in 2022[83] - Oil revenues for September 2023 were $213,609, a decrease from $337,665 in September 2022, while total oil revenues for 2023 reached $604,870 compared to $1,956,461 in 2022[107] - Natural gas and natural gas liquids revenues for September 2023 were $14,615, a significant improvement from a loss of $235,479 in September 2022, with total revenues for 2023 at $978,971[107] - Well operations revenues for September 2023 were $5,600, down from $15,668 in September 2022, but total revenues for 2023 increased to $731,294[107] - Total power generation revenues for September 2023 were $233,824, up from $117,854 in September 2022, with total revenues for 2023 reaching $3,666,726[107] - The Company's total revenue for the nine months ended September 30, 2023 was $18,666,268, with $14,999,542 from the Power Generation segment and $3,666,726 from the Oil and Gas segment[168] Operating Expenses and Costs - Total operating expenses for Q3 2023 were $10,131,070, compared to $6,160,706 in Q3 2022, a 64% increase[30] - Cost of goods sold for the nine months ended September 30, 2023, was $16,256,686, up from $9,871,239 in the same period of 2022, a 65% increase[30] - General and administrative expenses for the nine months ended September 30, 2023, were $10,064,707, compared to $11,208,417 in the same period of 2022, a 10% decrease[30] - Operating expenses for the nine months ended September 30, 2023, were $24,407,583, compared to $18,666,268 for the same period in 2022[30] - Lease operating costs for the nine months ended September 30, 2023, were $534,123, compared to $1,429,847 for the same period in 2022[30] - Total operating expenses for the nine months ended September 30, 2023, were $27,621,176, compared to $25,558,367 for the same period in 2022[43] - The Company's total operating expenses for the nine months ended September 30, 2023 were $25,558,367, resulting in a loss from operations of $6,892,099[168] Net Loss and Comprehensive Loss - Net loss for the nine months ended September 30, 2023, was $25,272,428, compared to a net loss of $25,206,073 in the same period of 2022[32] - The Merger resulted in a net loss of $22,364,088 for the three months ended September 30, 2023[43] - Total comprehensive loss for the three months ended September 30, 2023, was $22,352,701[43] - The company recorded a net loss of $25,272,428 for the nine months ended September 30, 2023, compared to a net loss of $14,695,711 for the same period in 2022[52] - Net loss for the period was $(25,272,428)[32] - Net loss for the nine months ended September 30, 2023, was $25,272,428, compared to $14,695,711 for the same period in 2022[43] - The company reported a loss from operations of $3,213,593 for the period, with total operating expenses of $27,621,176[141] Cash Flow and Financing Activities - Net cash provided by financing activities for the nine months ended September 30, 2023, was $3,012,047, compared to a net cash used of $2,760,347 in the same period of 2022[32] - Cash and cash equivalents at the end of Q3 2023 were $1,432,599, down from $4,902,157 at the end of Q3 2022[32] - Net cash provided by financing activities was $3,012,047, compared to a net cash used in financing activities of $(2,760,347) in the previous period[32] - Cash, end of period decreased to $1,432,599 from $4,902,157 in the previous period[32] - Issuance of shares on conversion of debt amounted to $3,832,273[32] - Net cash used in operating activities for the nine months ended September 30, 2023, was $4,961,874, compared to $2,108,542 for the same period in 2022[43] - Cash paid for interest was $421,754[32] Stockholders' Equity and Debt - Total stockholders' equity as of September 30, 2023, was $29,189,192, compared to $15,365,315 as of December 31, 2022[32] - The company issued $3,832,273 worth of shares on conversion of debt during the nine months ended September 30, 2023[32] - As of September 30, 2023, the company had stockholders' equity of $29,189,192 and long-term debt of $38,849,855[52] - The company's working capital deficiency as of September 30, 2023, was $9,451,778, primarily due to Simson-Maxwell's bank credit facility drawings of $4,324,791[52] - The company's long-term debt includes a $26,315,789 note payable to Discover Growth Fund, with an interest rate of 3.25%[124] - The total long-term debt, net of current portion and debt discount, was $38,849,855 as of September 30, 2023[102] - Principal maturities of long-term debt for 2027 amount to $46,818,858, with a net value of $36,292,978 after unamortized discount[102] Mergers and Acquisitions - The Merger was completed on August 1, 2023, with Viking surviving as a wholly owned subsidiary of Camber[45] - Camber issued approximately 49,290,152 shares of Camber Common Stock, representing 59.99% of the outstanding shares post-Merger[35] - Camber reserved approximately 88,647,137 additional shares for potential conversions and exercises related to preferred stock and convertible notes[35] - The Merger is treated as a reverse acquisition, with Viking as the acquirer, and consolidated financial statements reflect Viking's results up to the Merger date and combined results from August 1, 2023, to September 30, 2023[175] - Viking acquired 60.5% of Simson-Maxwell Ltd. for $7,958,159 in cash on August 6, 2021[48] - Viking acquired a 51% ownership interest in Viking Ozone, Viking Sentinel, and Viking Protection in early 2022[53] - Viking acquired 51% of Viking Ozone for 8,333,333 shares of common stock, with a fair value of approximately $2,000,000[118] - Viking acquired 51% of Viking Sentinel for 416,667 shares of common stock, with a total consideration of $233,334[118] - The total consideration for the acquisition of Viking Sentinel was $5,373,223, including $4,433,334 in stock and $939,889 in contingent consideration[119] - Camber Energy completed the merger with Viking Energy Group, Inc. on August 1, 2023, with Viking surviving as a wholly owned subsidiary[45] - Camber Energy holds a majority interest in entities with intellectual property rights to proprietary Medical and Bio-Hazard Waste Treatment systems and Electric Transmission and Distribution Open Conductor Detection Systems[47] Goodwill and Intangible Assets - Goodwill impairment for the nine months ended September 30, 2023, amounted to $14,486,745[43] - The company's goodwill impairment for the nine months ended September 30, 2023, was $14,486,745[52] - The company's intangible assets related to the ESG Clean Energy license and Simson-Maxwell customer relationships are being amortized over 16 and 10 years, respectively[60] - The ESG Clean Energy License intangible asset was valued at $5,000,000 as of September 30, 2023, with accumulated amortization of $653,755[94] - The company paid $500,000 and issued 6,942,691 shares of common stock to ESG as part of the royalty payments for the ESG Clean Energy License[92] - The company's intangible assets include customer relationships and brand from Simson-Maxwell, though specific values were not disclosed[94] - The company recognized amortization expense of $230,886 for the nine months ended September 30, 2023, with estimated future amortization expense of $304,465 per year for the next five years[23] - The company allocated $1,677,453 to Customer Relationships and $2,230,673 to the Simson-Maxwell Brand as part of the purchase price of Simson-Maxwell[23] Derivative Liabilities and Stock Issuance - The company's derivative liabilities for Series C Preferred Stock and Convertible Debt resulted in total losses of $5,803,791 for the nine months ended September 30, 2023[55] - The company recorded a derivative liability of $3,319,210 as of September 30, 2023[127] - The Series C Preferred Stock has a beneficial ownership limitation preventing any holder from converting into common stock if it would result in owning more than 9.99% of the company's outstanding common stock[132] - The company issued a total of 93,876,128 shares of common stock during the nine months ended September 30, 2023, including 8,525,782 shares from the conversion of Series C Preferred Stock and 19,251,650 true-up shares related to prior conversions of Series C Preferred Stock[129] - The Series C Preferred Stock contains an embedded derivative liability related to the Conversion Premium and potential True-Up shares, with fair value estimated using a binomial pricing model[184] - The fair value of the Series C Preferred Stock derivative liability is estimated using a binomial pricing model, considering the remaining Measurement Period, share price, and historical volatility of the company's common stock[151] - As of September 30, 2023, the company estimates that 6,701,867 shares of common stock would be required to satisfy the conversion of 30 outstanding shares of Series C Preferred Stock, based on an estimated low VWAP[159] - The company could be required to issue an additional 27,913,399 true-up shares as of September 30, 2023, due to the extended Measurement Period and declining stock price following prior conversions of 240 shares of Series C Preferred Stock[159] - The Series C Preferred Stock holders are entitled to cumulative dividends of 24.95% per annum, adjustable up to 34.95% if a Trigger Event occurs, with seven years of dividends due upon redemption, conversion, or maturity[155] - The Series G Preferred Stock, created on December 30, 2021, has a face value of $10,000 per share and accrues cumulative dividends at a rate of 10.0% per annum, payable upon redemption, conversion, or as declared by the board of directors[159] - The Series G Preferred Stock ranks senior to the company's common stock but junior to the Series C Preferred Stock and all existing and future indebtedness of the company[159] - The company issued 28,092 shares of new Series A Preferred Stock on August 1, 2023, in exchange for 28,092 outstanding shares of old Series C Preferred Stock, with each share convertible into 890 shares of Camber Common Stock[154] - The Company issued 475 shares of new Series H Preferred Stock in exchange for 475 outstanding shares of old Series E Preferred Stock, with each share having a face value of $10,000[161] - The Company redeemed 5,272 shares of Series G Preferred Stock in 2022, reducing the outstanding shares from 10,544 to 5,272[160] Legal and Regulatory Matters - The company faced a Class Action Complaint related to a short report, which was dismissed with prejudice on October 25, 2023[16] - A Shareholder Derivative Complaint remains pending, with a Special Litigation Committee formed to investigate allegations, and the outcome remains uncertain[16] - The Company does not currently maintain controls and procedures to ensure timely disclosure of required information under the Exchange Act[15] Inventory and Asset Management - The company's inventory as of September 30, 2023, was valued at $9,533,284, down from $10,276,662 at the end of 2022[56] - The company's inventory valuation method includes adjusting for obsolete and slow-moving items at the end of each reporting period[77] - The company sold oil and gas assets for $3,590,000 in cash, resulting in a loss of $8,961,705[50][51] - The company recorded a loss on disposal of oil and gas properties of $8,961,705 in 2022[72] - The company added $1,475,000 to oil and gas properties during the three months ended September 30, 2023, related to the merger with Camber[92] - The company's proved reserve estimates are based on U.S. SEC guidelines, with future net cash flows calculated using the unweighted arithmetic average of the prior 12-month commodity prices[180] - Proved developed producing oil and gas properties, net, increased to $2,409,745 as of September 30, 2023, from $1,069,113 at December 31, 2022[114] - Undeveloped and non-producing oil and gas properties, net, decreased to $186,102 as of September 30, 2023, from $216,805 at December 31, 2022[114] Leases and Operating Expenses - Total lease payments due over the next five years amount to $1,201,563 for 2024, $749,506 for 2025, $431,130 for 2026, $412,047 for 2027, and $990,426 for 2028 and thereafter[139] - Operating lease expense for Simson-Maxwell was $918,655 for the nine months ended September 30, 2023, down from $1,106,220 in the same period in 2022[164] - The Company's subsidiary, Petrodome, entered into a 66-month lease for 4,147 square feet of office space in Houston, Texas, with an annual base rent of $22.00 per square foot, escalating by $0.50 per foot each year[163] - The Company's operating lease expense for Petrodome's office space was $72,287 for the nine months ended September 30, 2023[163] - The Company's right-of-use assets and operating lease liabilities for Simson-Maxwell were $5,845,810, with a present value discount rate of 3.45% for premises and 7.5% for vehicles and equipment[163] Related Party Transactions - The Company's total notes payable to related parties as of September 30, 2023, was $975,744[123] - The Company's net due to related parties as of September 30, 2023, was $(300,948), compared to $(301,941) as of December 31, 2022[146] - The Company paid $310,000 in fees to AGD Advisory Group, Inc. for professional services during the nine months ended September 30, 2023[121] - The Company paid $190,000 in fees to 1508586 Alberta Ltd. for professional services during the nine months ended September 30, 2023[121] Other Financial Metrics - The company's change in fair value of derivative liability was $5.80 million for the nine months ended September 30, 2023[52] - The company's loss on extinguishment of debt was $605,507 for the nine months ended September 30, 2023[52] - The company's amortization of debt discount was $873,776 for the nine months ended September 30, 2023[52] - The company's depreciation, depletion, and amortization was $698,061 for the nine months ended September 30, 2023[52] - The company recorded a loss on the extinguishment of debt of $154,763 during the three-month period ended

41 From time to time, the Company may be involved in litigation relating to claims arising out of commercial operations in the normal course of business. As of June 30, 2023, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of operations. The defendants deny the allegations contained in the Class Action Complaint and Houston Complaint and have engaged Baker Botts L.L.P. to defend the actions. ITEM 1A. RISK FACTORS The Company issued a to ...

On the Dividend Maturity Date, the Corporation may redeem any or all shares of Series G Preferred Stock by paying Holder, in registered or unregistered shares of common stock valued at an amount per share equal to 100% of the Liquidation Value for the shares redeemed, and the Corporation will use its best efforts to register such shares. 28 Warrants | --- | --- | --- | --- | --- | --- | --- | |-------------|-------|-------|-------------|-----------------------|-------|------------| | Outstanding | | | Price ...

Play. A set of known or postulated oil and/or natural gas accumulations sharing similar geologic, geographic and temporal properties, such as source rock, migration pathways, timing, trapping mechanism and hydrocarbon type. Probable reserves. Additional reserves that are less certain to be recognized than proved reserves but which, in sum with proved reserves, are as likely as not to be recovered. Properties. Natural gas and oil wells, production and related equipment and facilities and natural gas, oil or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______. Commission file number: 000-29219 CAMBER ENERGY, INC. (Exact name of registrant as specified in its charter) Nevada 20-2660243 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______. Commission file number: 000-29219 CAMBER ENERGY, INC. (Exact name of registrant as specified in its charter) Nevada 20-2660243 (State or other jurisdiction of i ...

10-Q 1 cei_10q.htm FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______. Commission file number: 000-29219 CAMBER ENERGY, INC. (Exact name of registrant as specified in its charter) Nevada 20-2660243 (St ...

10-K 1 cei_10k.htm FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _______ to ___________ Commission File Number:001-32508 CAMBER ENERGY, INC. (Exact name of registrant as specified in its charter) | ...

[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This part presents Camber Energy, Inc.'s unaudited consolidated financial statements and management's discussion and analysis for the periods presented [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Camber Energy, Inc.'s unaudited consolidated financial statements, including balance sheets, statements of operations, cash flows, and changes in stockholders' equity, along with detailed notes explaining significant accounting policies, investments, debt, derivative liabilities, and subsequent events [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) Provides a snapshot of the company's assets, liabilities, and stockholders' deficit at specific reporting dates **Consolidated Balance Sheet Highlights (Unaudited):** | Metric | September 30, 2021 | December 31, 2020 | | :----------------------- | :----------------- | :------------------ | | Total Assets | $32,779,361 | $16,815,251 | | Total Liabilities | $198,311,310 | $113,094,761 | | Derivative Liability | $174,864,402 | $93,981,234 | | Stockholders' Deficit | $(165,531,949) | $(102,225,562) | [Consolidated Statements of Operations](index=2&type=section&id=Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income or loss over specific reporting periods **Consolidated Statements of Operations Highlights (Unaudited):** | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Oil and Gas Sales | $103,191 | $57,458 | $266,082 | $180,046 | | Total Operating Expenses | $1,023,497 | $885,100 | $4,271,528 | $3,239,340 | | Loss from Operations | $(920,306) | $(827,642) | $(4,005,446) | $(3,059,294) | | Loss on Derivative Liability | $(256,855,721) | $(17,930,335) | $(222,688,936) | $(37,516,652) | | Net Income (Loss) | $(264,555,523) | $(19,986,843) | $(246,495,102) | $(41,625,851) | | Net Income (Loss) Attributable to Common Stockholders | $(264,555,523) | $(19,986,843) | $(253,172,096) | $(45,497,700) | | Income (Loss) per Share - Basic and Diluted | $(1.63) | $(1.01) | $(3.10) | $(7.46) | [Consolidated Statements of Cash Flows](index=3&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes the cash inflows and outflows from operating, investing, and financing activities **Consolidated Statements of Cash Flows Highlights (Unaudited):** | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :------------------------------------ | :-------------------------- | :-------------------------- | | Net Loss | $(246,495,102) | $(41,625,851) | | Change in Fair Value of Derivative Liability | $222,688,936 | $37,516,652 | | Net Cash Provided (Used) in Operating Activities | $(2,203,759) | $(2,940,774) | | Net Cash Provided (Used) in Investing Activities | $(11,000,000) | $(9,200,000) | | Net Cash Provided (Used) in Financing Activities | $17,500,000 | $11,000,000 | | Net Increase (Decrease) in Cash | $4,296,241 | $(1,140,774) | | Cash, End of Period | $5,164,789 | $1,112,965 | [Consolidated Statements of Changes in Stockholders' Equity](index=3&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Outlines the changes in common stock, additional paid-in capital, and accumulated deficit over time **Consolidated Statements of Changes in Stockholders' Equity Highlights (Unaudited):** | Metric | December 31, 2020 | September 30, 2021 | | :------------------------------------ | :---------------- | :----------------- | | Common Stock (Shares Outstanding) | 25,000,000 | 249,563,410 | | Common Stock (Value) | $25,000 | $249,563 | | Additional Paid In Capital | $209,362,384 | $392,326,532 | | Accumulated Deficit | $(311,612,946) | $(558,531,949) | [Notes to Consolidated Financial Statements](index=4&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the consolidated financial statements [NOTE 1 RELATIONSHIP WITH AND OWNERSHIP OF VIKING ENERGY GROUP, INC.](index=4&type=section&id=NOTE%201%20RELATIONSHIP%20WITH%20AND%20OWNERSHIP%20OF%20VIKING%20ENERGY%20GROUP,%20INC.) Details Camber's acquisition and investment in Viking Energy Group, Inc., and the planned merger - Camber acquired a **51% interest** in Viking Energy Group, Inc. on December 23, 2020, for **$10.9 million cash** and cancellation of **$9.2 million** in promissory notes. This led to the appointment of Viking's CEO and CFO to Camber's leadership[16](index=16&type=chunk) - An additional **16,153,846 Viking shares** were acquired on January 8, 2021, by issuing **1,890 shares of Camber's Series C Preferred Stock**, which satisfied a **$20.8 million** secured promissory note from Viking to EMC Capital Partners, LLC[17](index=17&type=chunk)[18](index=18&type=chunk) - A merger agreement was entered into on February 15, 2021, for Viking to become a wholly-owned subsidiary of Camber, with Viking common stock converting to Camber common stock and Viking Preferred Stock converting to Camber Series A Preferred Stock[19](index=19&type=chunk) - On July 29, 2021, Camber acquired an additional **27,500,000 Viking common shares** for **$11.0 million**, which Viking used to acquire a **60.5% interest** in Simson-Maxwell, Ltd., a carbon-capture system license, and for general working capital[26](index=26&type=chunk) - Camber accounts for its investment in Viking under the **equity method**, as it exercises significant influence but not control, partly due to the voting rights associated with Mr. Doris' Series C Preferred Stock being suspended until July 1, 2022[16](index=16&type=chunk)[27](index=27&type=chunk) [NOTE 2 – ORGANIZATION AND OPERATIONS OF THE COMPANY](index=6&type=section&id=NOTE%202%20%E2%80%93%20ORGANIZATION%20AND%20OPERATIONS%20OF%20THE%20COMPANY) Describes Camber's primary business as an independent oil and natural gas company and the impact of COVID-19 - Camber is an independent oil and natural gas company focused on the acquisition, development, and sale of crude oil, natural gas, and natural gas liquids in Louisiana and Texas[28](index=28&type=chunk) - The company's operations have not experienced a significant adverse impact from COVID-19 due to limited production and non-operated properties, but a prolonged disruption could materially affect financial results and operations[29](index=29&type=chunk) [NOTE 3 – LIQUIDITY AND GOING CONCERN CONSIDERATIONS](index=6&type=section&id=NOTE%203%20%E2%80%93%20LIQUIDITY%20AND%20GOING%20CONCERN%20CONSIDERATIONS) Addresses the company's financial viability, highlighting significant losses and liabilities that raise going concern doubts **Liquidity and Going Concern Metrics:** | Metric | September 30, 2021 | September 30, 2020 | | :------------------------------------ | :----------------- | :----------------- | | Net Loss (9 months) | $(246,495,102) | $(41,625,851) | | Stockholders' Deficit | $(165,531,949) | N/A | | Total Long-Term Debt | $20,500,000 | N/A | | Working Capital Deficiency | ~$172.4 million | N/A | | Derivative Liability (Current) | $174.9 million | N/A | - These conditions raise substantial doubt about the Company's ability to continue as a going concern, dependent on generating future profitable operations, developing acquisition opportunities, and obtaining necessary financing[30](index=30&type=chunk) [NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=6&type=section&id=NOTE%204%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines the key accounting principles and estimates used in preparing the financial statements, including fiscal year change, valuation hierarchy, and derivative liabilities - The Company changed its fiscal year from March 31 to December 31, with fiscal year 2021 commencing on January 1, 2021[31](index=31&type=chunk) - The Company uses a three-level valuation hierarchy for financial instruments, with significant inputs to its derivative liability relative to Series C Preferred Stock classified as **Level 3 (unobservable inputs)**[35](index=35&type=chunk) - The **full cost method** of accounting is used for oil and natural gas properties, capitalizing all acquisition, exploration, and development costs, and performing a quarterly 'Ceiling' test for impairment. No impairment expense was recorded for the periods presented[37](index=37&type=chunk)[38](index=38&type=chunk) - Revenue from oil and gas sales is recognized when production is sold to a customer and control of the product has been transferred, fulfilling performance obligations under contracts[41](index=41&type=chunk) - The Series C Preferred Stock contains an embedded derivative liability related to the Conversion Premium and potential True-Up Shares, which are required to be recorded at fair value[44](index=44&type=chunk) [NOTE 5 – OIL AND GAS PROPERTIES](index=9&type=section&id=NOTE%205%20%E2%80%93%20OIL%20AND%20GAS%20PROPERTIES) Details the accounting treatment and net carrying amounts of the company's oil and natural gas properties - Camber uses the **full cost method** for oil and natural gas producing activities, capitalizing all acquisition, exploration, and development costs[46](index=46&type=chunk) **Proved Developed Producing Oil and Gas Properties, Net:** | Date | Amount | | :----------------- | :------- | | December 31, 2020 | $74,877 | | September 30, 2021 | $71,272 | - No impairment expense was recorded for oil and gas properties for the three and nine months ended September 30, 2021 or 2020[46](index=46&type=chunk) [NOTE 6 – INVESTMENT IN UNCONSOLIDATED ENTITIES](index=9&type=section&id=NOTE%206%20%E2%80%93%20INVESTMENT%20IN%20UNCONSOLIDATED%20ENTITIES) Explains the company's equity method accounting for its investment in Viking Energy Group, Inc - The Company accounts for its investment in Viking Energy Group, Inc. under the **equity method**[46](index=46&type=chunk) **Investment in Unconsolidated Entities (Viking):** | Metric | September 30, 2021 | December 31, 2020 | | :------------------------------------ | :----------------- | :------------------ | | Carrying amount – beginning of period | $15,830,538 | $957,169 | | Investment in Viking | $29,900,000 | $20,274,909 | | Proportionate Share of (losses) | $(18,339,293) | $(5,401,540) | | Carrying amount - ending | $27,391,246 | $15,830,538 | [NOTE 7 – ASSET RETIREMENT OBLIGATIONS](index=10&type=section&id=NOTE%207%20%E2%80%93%20ASSET%20RETIREMENT%20OBLIGATIONS) Presents the carrying amounts and changes in the company's asset retirement obligations **Asset Retirement Obligations:** | Metric | September 30, 2021 | December 31, 2020 | | :------------------------------------ | :----------------- | :------------------ | | Carrying amount at beginning of period | $46,748 | $71,150 | | Accretion | $5,854 | $5,825 | | Carrying amount at end of period | $52,602 | $46,748 | [NOTE 8 – LONG TERM DEBT](index=10&type=section&id=NOTE%208%20%E2%80%93%20LONG%20TERM%20DEBT) Details the company's long-term debt obligations, primarily with Discover Growth Fund, and related default conditions **Long-Term Debt Obligations:** | Lender/Note | September 30, 2021 | December 31, 2020 | | :------------------------------------ | :----------------- | :------------------ | | Discover Growth Fund (Dec 11, 2020) | $6,000,000 | $6,000,000 | | Discover Growth Fund (Dec 22, 2020) | $12,000,000 | $12,000,000 | | Discover Growth Fund (Apr 23, 2021) | $2,500,000 | - | | **Total Long-Term Debt** | **$20,500,000** | **$18,000,000** | - All long-term debt notes are subject to cross defaults of the Company's Series C Preferred stock, but all instances of default have been settled as of the filing date[49](index=49&type=chunk) [NOTE 9 – DERIVATIVE LIABILITIES](index=10&type=section&id=NOTE%209%20%E2%80%93%20DERIVATIVE%20LIABILITIES) Discusses the accounting for derivative liabilities embedded in the Series C Preferred Stock, including fair value changes and settlement - The Series C Preferred Stock contains an embedded derivative liability due to its potential conversion into a variable number of common shares, including a Conversion Premium and potential True-Up obligation[50](index=50&type=chunk)[55](index=55&type=chunk) - On April 20, 2021, the Series C Stock Certificate of Designation was amended to require all conversions and dividends to be settled in common shares, removing the cash option and impacting the accounting treatment for the derivative liability[57](index=57&type=chunk)[58](index=58&type=chunk) **Derivative Liabilities (Series C Preferred Stock):** | Metric | September 30, 2021 | December 31, 2020 | | :------------------------------------ | :----------------- | :------------------ | | Carrying amount at beginning of period | $93,981,234 | $77,636,666 | | Issued Series C preferred shares | $46,238,850 | $15,412,950 | | Change in Fair value | $222,688,936 | $41,878,821 | | Settlement of Obligation | $(188,044,268) | $(40,947,203) | | Carrying amount at end of period | $174,864,402 | $93,981,234 | [NOTE 10 – RELATED PARTY TRANSACTIONS](index=11&type=section&id=NOTE%2010%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) Discloses compensation arrangements with the company's CEO and CFO through their affiliated entities - The Company's CEO, James Doris, and CFO, Frank W. Barker, Jr., provide professional services through their affiliates (AGD Advisory Group, Inc. and FWB Consulting, Inc., respectively) at a rate of **$20,000 per month each**, commencing April 2021[60](index=60&type=chunk) [NOTE 11 – COMMITMENTS AND CONTINGENCIES](index=11&type=section&id=NOTE%2011%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) Outlines ongoing legal proceedings and potential liabilities faced by the company - The Company is involved in a lawsuit with Maranatha Oil Co. (filed November 2015) alleging breach of contract and fraud, seeking approximately **$100,000**, which the Company intends to defend[63](index=63&type=chunk) - A lawsuit with PetroGlobe and Signal Drilling (filed March 2019) alleging negligent misrepresentation and breach of contract, seeking over **$600,000**, was settled on January 31, 2020, with a **$250,000 payment** and transfer of C E Energy LLC[64](index=64&type=chunk) - Following a 'short report' in October 2021, a class action lawsuit was commenced against the Company, James Doris, and Frank Barker by shareholders alleging losses, which the defendants deny and are defending[65](index=65&type=chunk) [NOTE 12 – REVENUE FROM CONTRACTS WITH CUSTOMERS](index=12&type=section&id=NOTE%2012%20%E2%80%93%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) Provides a breakdown of oil and gas revenue and the primary drivers for changes in revenue **Total Oil and Gas Revenue from Customers:** | Period | 2021 (USD) | 2020 (USD) | | :------------------------------------ | :--------- | :--------- | | Three months ended September 30 | $103,191 | $57,458 | | Nine months ended September 30 | $266,082 | $180,046 | - The increase in revenue is primarily a result of an increase in oil and gas realized prices in 2021[106](index=106&type=chunk)[109](index=109&type=chunk) [NOTE 13 – STOCKHOLDERS' EQUITY](index=12&type=section&id=NOTE%2013%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) Details changes in the company's equity, including common and preferred stock issuances, designations, and warrants - During the nine months ended September 30, 2021, the Company issued **1,500,094 shares of restricted common stock** for investor relations and marketing services, recognizing **$1,494,858** in share-based compensation expense[67](index=67&type=chunk) - The Series A Convertible Preferred Stock is designated for future conversion of Viking Series C Preferred Stock upon the merger; no shares were issued or outstanding as of September 30, 2021[68](index=68&type=chunk) - The designations for Series B, Series E, and Series F Preferred Stock were terminated as no shares were outstanding[69](index=69&type=chunk)[70](index=70&type=chunk)[78](index=78&type=chunk) - The Series C Preferred Stock, initially sold in February 2020, was classified as temporary equity due to redemption features outside the Company's control and contains embedded derivatives[71](index=71&type=chunk) - Multiple amendments to the Series C Preferred Stock designation in 2021 clarified terms, mandated all dividends and conversion premiums be paid in common shares, and increased the number of designated shares[73](index=73&type=chunk)[74](index=74&type=chunk) **Estimated Common Shares Issuable for Series C Preferred Stock Conversion:** | Date | Estimated Shares | | :----------------- | :--------------- | | September 30, 2021 | 470,776,764 | | December 31, 2020 | 109,666,626 | - Warrants were issued to Regal Consulting, LLC on April 26, 2021, entitling them to purchase **100,000 common shares** at **$0.705**, expiring April 25, 2022[78](index=78&type=chunk) [NOTE 14 – STOCK-BASED COMPENSATION](index=14&type=section&id=NOTE%2014%20%E2%80%93%20STOCK-BASED%20COMPENSATION) Describes the company's stock incentive plans and the accounting treatment for stock-based compensation - The Company has three stock incentive plans (2010, 2012, 2014) to grant equity instruments to employees, consultants, and contractors[78](index=78&type=chunk) - Stock-based compensation cost is measured at the grant-date fair value using the Black-Scholes option pricing model and expensed over the vesting period[43](index=43&type=chunk)[80](index=80&type=chunk) - The number of authorized common shares was increased from **25,000,000 to 250,000,000** on February 23, 2021[80](index=80&type=chunk) [NOTE 15 – INCOME (LOSS) PER COMMON SHARE](index=14&type=section&id=NOTE%2015%20%E2%80%93%20INCOME%20(LOSS)%20PER%20COMMON%20SHARE) Presents the calculation of basic and diluted income or loss per common share for the reporting periods **Income (Loss) Per Common Share (9 Months Ended September 30):** | Metric | 2021 (USD) | 2020 (USD) | | :------------------------------------ | :--------- | :--------- | | Net Income (Loss) Attributable to Common Stockholders | $(253,172,096) | $(45,497,700) | | Weighted Average Common Shares Outstanding (Basic and Diluted) | 81,599,069 | 6,102,942 | | Income (Loss) Per Share - Basic and Diluted | $(3.10) | $(7.46) | [NOTE 16 – SUBSEQUENT EVENTS](index=15&type=section&id=NOTE%2016%20%E2%80%93%20SUBSEQUENT%20EVENTS) Reports significant events occurring after the balance sheet date, including stock issuances, debt amendments, and new financing - On December 30, 2021, the Company increased its authorized common stock from **250,000,000 to 1,000,000,000 shares**[82](index=82&type=chunk) - Between October 2021 and May 2022, the Company issued millions of common shares for Series C Preferred Stock conversions, including **38,185,136 'true-up' shares** to Discover, and redeemed **1,664 Series C shares** from EMC for **$18.85 million**[82](index=82&type=chunk)[83](index=83&type=chunk) - On December 24, 2021, existing **$20.5 million** promissory notes with Discover Growth Fund were amended, extending maturity to January 1, 2027, increasing the conversion price to **$1.50**, and decreasing the interest rate to the WSJ Prime Rate[84](index=84&type=chunk) - The Company secured new financing, including a **$1 million loan** (paid in full January 2022) and a **$25 million loan** (received January 3, 2022) with warrants for **50 million common shares**, and sold **10,544 shares of newly designated Series G Preferred Stock** for **$100 million** (mostly via promissory notes from the investor) with warrants for **100 million common shares**[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - Following non-compliance with filing requirements, Discover and Antilles filed a Verified Complaint in March 2022, which was settled via an agreement approved by the Court on May 12, 2022, requiring the issuance of 'free-trading' common shares upon conversion[94](index=94&type=chunk)[95](index=95&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=18&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition and operational results, including an overview of its business plan, the status of the pending merger with Viking, a discussion of its going concern status, and a detailed comparison of financial performance for the three and nine months ended September 30, 2021 and 2020, highlighting critical accounting policies [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=18&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Warns readers that the document contains forward-looking statements subject to risks and uncertainties, with no obligation to update - The document contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from projections[98](index=98&type=chunk) - The Company does not intend, and undertakes no obligation, to update any forward-looking statements, except as required by federal securities laws[98](index=98&type=chunk) [PLAN OF OPERATIONS](index=18&type=section&id=PLAN%20OF%20OPERATIONS) Outlines Camber's business strategy, focusing on oil and gas asset acquisition, enhanced recovery, and the pending merger with Viking - Camber is an independent oil and natural gas company engaged in the acquisition, development, and sale of crude oil, natural gas, and natural gas liquids in Louisiana and Texas[99](index=99&type=chunk) - The Company's growth strategy includes acquiring undervalued producing oil and gas assets, employing enhanced recovery techniques, implementing lower-risk drilling programs, pursuing cost-efficiencies, exploring strategic M&A, and hedging commodity risk[100](index=100&type=chunk) - A pending merger agreement with Viking Energy Group, Inc. will result in Viking becoming a wholly-owned subsidiary of Camber, with Viking common stock converting to Camber common stock[100](index=100&type=chunk) - Completion of the merger is subject to customary conditions, including stockholder and regulatory approvals, effectiveness of a Form S-4 registration statement, and NYSE American listing qualification[100](index=100&type=chunk)[103](index=103&type=chunk) [Going Concern Qualification](index=19&type=section&id=Going%20Concern%20Qualification) Discusses the financial indicators that raise substantial doubt about the company's ability to continue as a going concern **Going Concern Financial Indicators (September 30, 2021):** | Metric | Amount | | :------------------------------------ | :------------- | | Net Loss (9 months) | $(246,495,102) | | Stockholders' Deficit | $(165,531,949) | | Working Capital Deficiency | ~$172.4 million | | Derivative Liability (Current) | $176 million | - These conditions raise substantial doubt about the Company's ability to continue as a going concern, dependent on generating future profitable operations, developing acquisition opportunities, and obtaining necessary financing[105](index=105&type=chunk) - Oil and gas price volatility due to geopolitical conditions and the global COVID-19 pandemic may continue to negatively impact the Company's financial position and results of operations[104](index=104&type=chunk) [RESULTS OF CONTINUING OPERATIONS](index=19&type=section&id=RESULTS%20OF%20CONTINUING%20OPERATIONS) Compares the company's financial performance for the three and nine months ended September 30, 2021 and 2020 **Financial Performance (3 Months Ended September 30):** | Metric | 2021 (USD) | 2020 (USD) | Change (YoY) | | :------------------------------------ | :--------- | :--------- | :----------- | | Gross Revenues | $103,191 | $57,458 | +$45,733 | | Operating Expenses | $1,023,497 | $885,100 | +$138,397 | | Net Loss | $(264,555,523) | $(19,986,843) | $(244,568,680) | **Financial Performance (9 Months Ended September 30):** | Metric | 2021 (USD) | 2020 (USD) | Change (YoY) | | :------------------------------------ | :--------- | :--------- | :----------- | | Gross Revenues | $266,082 | $180,046 | +$86,036 | | Operating Expenses | $4,271,528 | $3,239,340 | +$1,032,188 | | Net Loss | $(246,495,102) | $(41,625,851) | $(204,869,251) | - The significant increase in net loss for both periods is primarily a result of the Company's stock price and its impact on derivative liabilities[106](index=106&type=chunk)[110](index=110&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=20&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Highlights the key accounting policies and estimates that require significant judgment and can materially affect financial reporting - The Company uses the **full cost method** for oil and natural gas properties, capitalizing all acquisition, exploration, and development costs, and performing a quarterly 'ceiling' test for impairment[112](index=112&type=chunk)[113](index=113&type=chunk) - Estimates of proved reserves are subjective and materially impact depreciation, depletion, amortization, and accretion (DD&A) expense, based on SEC guidelines and 12-month average commodity prices[113](index=113&type=chunk) - Asset retirement obligations (ARO) are recorded as a liability at their estimated present value, representing future costs to plug, abandon, and remediate producing properties[114](index=114&type=chunk) - Derivative liabilities related to Series C Preferred Stock, including the Conversion Premium and potential True-Up shares, are valued at fair value using complex binomial pricing models due to variable conversion terms[115](index=115&type=chunk)[118](index=118&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=21&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, Camber Energy, Inc. is exempt from providing quantitative and qualitative disclosures about market risk under Rule 12b-2 of the Securities Exchange Act of 1934 - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[119](index=119&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=21&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The company's disclosure controls and procedures were deemed ineffective as of September 30, 2021, due to material weaknesses including insufficient staff for segregation of duties, lack of internal resources for complex accounting issues, and inadequate senior management oversight. Management is actively addressing these weaknesses - The Company's disclosure controls and procedures were not effective as of September 30, 2021[120](index=120&type=chunk) - Material weaknesses identified include insufficient staff for segregation of duties, lack of internal resources for complex accounting issues (e.g., Series C Preferred shares), and inadequate competent accounting staff and senior management oversight[120](index=120&type=chunk) - Management is addressing these material weaknesses by hiring additional staff and seeking assistance from subject matter experts for complex accounting advice[120](index=120&type=chunk) - There were no changes in Internal Control Over Financial Reporting during the quarter ended September 30, 2021[120](index=120&type=chunk) [PART II – OTHER INFORMATION](index=22&type=section&id=PART%20II%E2%80%93OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=22&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) As of September 30, 2021, the company reported no pending or threatened lawsuits expected to have a material effect on operations. However, subsequent to this date, a class action lawsuit was initiated against the company and its executives following a 'short report,' which the company intends to defend - As of September 30, 2021, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of operations[123](index=123&type=chunk) - In early October 2021, the Company became the target of a 'short' report, resulting in a class action lawsuit against the Company, James Doris, and Frank Barker by shareholders alleging losses, which the defendants deny and are defending[123](index=123&type=chunk) [ITEM 1A. RISK FACTORS](index=22&type=section&id=ITEM%201A.%20RISK%20FACTORS) As a smaller reporting company, Camber Energy, Inc. is exempt from providing risk factor disclosures under Rule 12b-2 of the Securities Exchange Act of 1934 - The Company is a smaller reporting company and is not required to provide risk factor information under Rule 12b-2 of the Securities Exchange Act of 1934[124](index=124&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.](index=22&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS.) During the three months ended September 30, 2021, Camber Energy, Inc. issued a substantial number of unregistered common shares, primarily for the conversion of Series C Preferred Stock and for consulting services, relying on exemptions from registration under the Securities Act of 1933 - The Company issued **10,360,076 shares of common stock** to a preferred stockholder for prior conversions of Series C Preferred Stock[125](index=125&type=chunk) - The Company issued **148,922,664 shares of common stock** to another preferred stockholder for conversions of Series C Preferred Stock[125](index=125&type=chunk) - The Company issued **4,874,703 shares of common stock** to a third preferred stockholder for conversions of Series C Preferred Stock[125](index=125&type=chunk) - The Company issued **450,000 shares of common stock** to a consultant for services provided[125](index=125&type=chunk) - These issuances were made in reliance on exemptions from registration provided by Sections 3(a)(9), 4(a)(1), and 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 144[125](index=125&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=22&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[125](index=125&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=22&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) The company reported no mine safety disclosures - No mine safety disclosures were reported[125](index=125&type=chunk) [ITEM 5. OTHER INFORMATION](index=22&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section serves as a general placeholder for other information, with no specific details provided in the report content for this item - No specific other information was provided under this item[125](index=125&type=chunk) [ITEM 6. EXHIBITS](index=22&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits accompanying the 10-Q report, including required certifications from the Principal Executive Officer and Principal Financial and Accounting Officer, as well as XBRL (Extensible Business Reporting Language) information - Exhibits include certifications of the Principal Executive Officer and Principal Financial and Accounting Officer as required by the Sarbanes-Oxley Act of 2002 (Rules 13a-14(1) or 15d-14(a) and Section 906)[126](index=126&type=chunk)[127](index=127&type=chunk) - XBRL (Extensible Business Reporting Language) information, including instance document and taxonomy extensions, is furnished[127](index=127&type=chunk) [ITEM 7. OFF BALANCE-SHEET ARRANGEMENTS](index=22&type=section&id=ITEM%207.%20OFF%20BALANCE-SHEET%20ARRANGEMENTS) The company reported that it had no off-balance-sheet arrangements during the period - No off-balance-sheet arrangements were reported[126](index=126&type=chunk) [SIGNATURES](index=22&type=section&id=SIGNATURES) The report is officially signed by Camber Energy, Inc.'s Principal Executive Officer, James Doris, and Principal Financial and Accounting Officer, Frank W. Barker, Jr., both dated May 19, 2022 - The report was signed by James Doris, Principal Executive Officer, and Frank W. Barker, Jr., Principal Financial and Accounting Officer, on May 19, 2022[130](index=130&type=chunk)

[Part I – Financial Information](index=2&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) This section covers the company's financial statements, management's discussion and analysis, market risk disclosures, and internal controls [Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Unaudited financials for June 30, 2021, show increased assets and net income, but significant deficits raise going concern doubts [Note 1: Relationship with and Ownership of Viking Energy Group, Inc.](index=5&type=section&id=NOTE%201%20RELATIONSHIP%20WITH%20AND%20OWNERSHIP%20OF%20VIKING%20ENERGY%20GROUP%2C%20INC.) Camber accounts for its increasing investment in Viking Energy Group under the equity method, with a pending merger to make Viking a wholly-owned subsidiary - Camber acquired a **51% interest** in Viking in December 2020 and increased it to **~63%** in January 2021, accounted for under the equity method due to significant influence but not control[14](index=14&type=chunk) - A new merger agreement was established in February 2021 for Viking to merge with a Camber subsidiary, becoming wholly-owned by Camber, with each Viking common stock share converting into one Camber common stock share[17](index=17&type=chunk) - In July 2021, Camber acquired an additional **27.5 million shares** of Viking for **$11 million**, with proceeds used by Viking for acquisitions and working capital[22](index=22&type=chunk) [Note 3: Liquidity and Going Concern Considerations](index=6&type=section&id=NOTE%203%20%E2%80%93%20LIQUIDITY%20AND%20GOING%20CONCERN%20CONSIDERATIONS) Significant stockholders' deficit and working capital deficiency raise substantial doubt about the company's ability to continue as a going concern - The company reported net income of **$18.1 million** for the six months ended June 30, 2021, primarily due to a non-cash gain on derivative liability of **$34.2 million**[25](index=25&type=chunk) - As of June 30, 2021, the company had a stockholders' deficit of **$(30.4 million)** and a working capital deficiency of approximately **$32.6 million**, with a derivative liability of **$32.3 million** being a major component[25](index=25&type=chunk) - These conditions raise substantial doubt regarding the Company's ability to continue as a going concern, dependent on future profitable operations and obtaining necessary financing[26](index=26&type=chunk) [Note 4: Summary of Significant Accounting Policies](index=7&type=section&id=NOTE%204%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Key accounting policies include full cost for oil and gas, equity method for Viking, and complex fair value measurement of Series C derivative liabilities using Level 3 inputs - The company changed its fiscal year-end from March 31 to December 31, effective February 4, 2021[27](index=27&type=chunk) - The derivative liability related to the Series C Preferred Stock is measured at fair value using Level 3 inputs (unobservable inputs)[30](index=30&type=chunk)[31](index=31&type=chunk) - The Series C Preferred Stock contains an embedded derivative liability due to a variable conversion premium feature, with its fair value estimated based on cash required to settle the premium or, after an April 2021 amendment, the fair value of shares issuable[48](index=48&type=chunk)[61](index=61&type=chunk) [Note 8: Long Term Debt](index=10&type=section&id=NOTE%208%20%E2%80%93%20LONG%20TERM%20DEBT) Total long-term debt increased to $20.5 million as of June 30, 2021, consisting of secured promissory notes maturing in January 2027 Long-Term Debt Obligations | Debt Holder | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Discover Growth Fund | $20,500,000 | $18,000,000 | | **Total Long-Term Debt** | **$20,500,000** | **$18,000,000** | - The entire **$20.5 million** in long-term debt matures after 2026, specifically on January 1, 2027[53](index=53&type=chunk) [Note 9: Derivative Liabilities](index=10&type=section&id=NOTE%209%20%E2%80%93%20DERIVATIVE%20LIABILITIES) The Series C Preferred Stock contains a complex embedded derivative liability, which decreased to $32.3 million by June 30, 2021, following an amendment requiring common share settlement - The Series C Preferred Stock contains an embedded derivative due to the potential conversion into a variable number of common shares to satisfy the Conversion Premium and True-Up obligation[53](index=53&type=chunk)[55](index=55&type=chunk) - On April 20, 2021, the Series C COD was amended to require all conversions to be settled in common shares, removing the cash option and changing the accounting for the derivative[61](index=61&type=chunk) Derivative Liability Activity (Six Months Ended June 30) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Beginning Balance | $93,981,234 | $77,636,666 | | Issued Series C shares | $46,238,850 | $15,412,950 | | Change in Fair value | $(34,166,784) | $41,878,821 | | Settlement of Obligation | $(73,780,539) | $(40,947,203) | | **Ending Balance** | **$32,272,761** | **$93,981,234** | [Note 11: Commitments and Contingencies](index=12&type=section&id=NOTE%2011%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) The company faces ongoing legal proceedings, including a royalty dispute and a new shareholder action initiated after a 'short' report, with all allegations denied - The company is being sued by Maranatha Oil Co for approximately **$100,000** related to alleged unpaid royalty interests[65](index=65&type=chunk) - A lawsuit with PetroGlobe Energy Holdings was settled on January 31, 2020, with the company paying **$250,000** and transferring its subsidiary C E Energy LLC to PetroGlobe[66](index=66&type=chunk) - Following a 'short' report by Kerrisdale Capital in October 2021, a shareholder action was commenced against the company, its CEO, and CFO, who deny the allegations[67](index=67&type=chunk) [Note 13: Stockholders' Deficit](index=12&type=section&id=NOTE%2013%20%E2%80%93%20STOCKHOLDERS%27%20DEFICIT) The stockholders' deficit is heavily influenced by Series C Preferred Stock, with potential dilution from 241.6 million common shares upon conversion and recent covenant breaches - On January 8, 2021, the Company issued **1,890 shares** of Series C Preferred Stock to satisfy approximately **$18.9 million** of Viking's debt, recorded as an additional investment in Viking[74](index=74&type=chunk) - In October 2021, the company received notice of breaching covenants related to its Series C Preferred Stock for failing to timely file SEC reports and maintain sufficient common stock reserves for conversion[76](index=76&type=chunk) Estimated Common Shares for Series C Conversion | Conversion Component | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Shares for conversion at $3.25/share | 11,710,769 | 6,440,000 | | Shares for Conversion Premium | 229,938,443 | 103,226,626 | | **Total Estimated Shares** | **241,649,212** | **109,666,626** | [Note 16: Subsequent Events](index=15&type=section&id=NOTE%2016%20%E2%80%93%20SUBSEQUENT%20EVENTS) Subsequent events include significant financing activities, increased investment in Viking, authorization of 1 billion common shares, new loans, and ongoing Series C conversions - On July 29, 2021, the company acquired an additional **27.5 million shares** of Viking for **$11 million**, increasing its ownership to approximately **73%**[88](index=88&type=chunk) - In December 2021, the company increased its authorized common stock from **250 million** to **1 billion shares**[88](index=88&type=chunk) - The company secured new financing, including a **$25 million** loan in December 2021 and a stock purchase agreement for **$100 million** of new Series G Preferred Stock[97](index=97&type=chunk)[98](index=98&type=chunk) Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Items | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $2,053,074 | $868,548 | | Investment in unconsolidated entity | $22,652,026 | $15,830,538 | | **Total Assets** | **$25,004,945** | **$16,815,251** | | **Liabilities & Equity** | | | | Derivative liability | $32,272,761 | $93,981,234 | | Long-term debt | $20,500,000 | $18,000,000 | | **Total Liabilities** | **$55,454,342** | **$113,094,761** | | **Total Stockholders' Deficit** | **$(30,449,397)** | **$(102,225,562)** | Consolidated Statement of Operations Highlights (Unaudited) | Income Statement Items | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Oil and gas sales | $162,891 | $122,588 | | Loss from operations | $(3,085,140) | $(2,231,652) | | Gain (loss) on derivative liability | $34,166,784 | $(19,586,317) | | **Net income (loss)** | **$18,060,420** | **$(21,639,008)** | | **Net income (loss) per share (basic & diluted)** | **$0.28** | **$(4.04)** | Consolidated Statement of Cash Flows Highlights (Unaudited) | Cash Flow Items | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,315,474) | $(2,348,365) | | Net cash used in investing activities | $0 | $(9,200,000) | | Net cash provided by financing activities | $2,500,000 | $11,000,000 | | **Net increase (decrease) in cash** | **$1,184,526** | **$(548,365)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses oil and gas strategy, reiterates going concern doubts, and highlights revenue increases driven by non-cash derivative gains and critical accounting policies [Plan of Operations](index=18&type=section&id=PLAN%20OF%20OPERATIONS) Camber's business plan focuses on acquiring and developing oil and gas properties, primarily through its investment in and pending merger with Viking Energy Group - The company's business plan is to acquire, explore, and develop oil and gas properties, with a strategy focused on acquiring undervalued producing assets rather than speculative exploration[110](index=110&type=chunk)[111](index=111&type=chunk) - A merger with Viking Energy Group, Inc is pending, which would result in Viking becoming a wholly-owned subsidiary of Camber[112](index=112&type=chunk) [Results of Continuing Operations](index=20&type=section&id=RESULTS%20OF%20CONTINUING%20OPERATIONS) Revenue increased for the three and six months ended June 30, 2021, but operating losses widened, with net income primarily driven by significant non-cash gains on derivative liabilities Three-Month Operational Comparison (Ended June 30) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | $97,238 | $33,689 | | Operating Expenses | $1,321,493 | $759,598 | | Loss from Operations | $(1,224,255) | $(725,909) | | Other Income (Expense) | $64,062,368 | $(12,908,153) | | **Net Income (Loss)** | **$62,838,113** | **$(13,634,062)** | Six-Month Operational Comparison (Ended June 30) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | $162,891 | $122,588 | | Operating Expenses | $3,248,031 | $2,354,240 | | Loss from Operations | $(3,085,140) | $(2,231,652) | | Other Income (Expense) | $21,145,560 | $(19,407,356) | | **Net Income (Loss)** | **$18,060,420** | **$(21,639,008)** | [Critical Accounting Policies and Estimates](index=20&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Critical accounting policies involve significant estimates for oil and gas properties, proved reserves, asset retirement obligations, and complex derivative liabilities sensitive to stock price volatility - The company uses the full cost method of accounting for oil and gas properties, which requires a quarterly 'ceiling' test to assess for impairment[122](index=122&type=chunk)[123](index=123&type=chunk) - Estimates of proved reserves are crucial as they impact DD&A expense and are based on volatile commodity prices and other assumptions[124](index=124&type=chunk) - The accounting for derivative liabilities associated with Series C Preferred Stock is a critical policy, with fair value determined by complex models sensitive to stock price changes, showing potential share issuance ranging from **136 million** to **488 million shares** depending on the stock's VWAP[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is not required to provide quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company - The company is not required to provide quantitative and qualitative disclosures about market risk because it qualifies as a smaller reporting company[128](index=128&type=chunk) [Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of June 30, 2021, due to material weaknesses including insufficient staff, lack of resources for complex accounting, and inadequate oversight - The CEO concluded that the company's disclosure controls and procedures were not effective as of June 30, 2021[128](index=128&type=chunk) - Material weaknesses identified include: (1) lack of segregation of duties, (2) insufficient resources for complex accounting, and (3) inadequate oversight and error detection[129](index=129&type=chunk) [Part II – Other Information](index=22&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) This section details legal proceedings, unregistered equity sales, and required exhibits [Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) While no material lawsuits were pending as of June 30, 2021, a new shareholder action was commenced in October 2021 following a 'short' report, with allegations denied - Following a 'short' report by Kerrisdale Capital in October 2021, a lawsuit was filed against the company and its executives, with the company denying the allegations[131](index=131&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=22&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued a significant number of unregistered common shares during the three months ended June 30, 2021, primarily for Series C Preferred Stock conversions and consultant services - The company issued a total of **46.1 million shares** of common stock to a preferred stockholder for conversions of Series C Preferred Stock[133](index=133&type=chunk) - **360,000 shares** of common stock were issued to a consultant for services[133](index=133&type=chunk) [Exhibits](index=23&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including SOX certifications from the Principal Executive Officer and Principal Financial Officer, and XBRL data files - The report includes certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[136](index=136&type=chunk)