Camber Energy(CEI) - 2024 Q3 - Quarterly Report

Revenue and Financial Performance - Total revenue for the nine months ended September 30, 2024, was $25.41 million, compared to $24.41 million for the same period in 2023[4] - Revenue for the nine months ended September 30, 2024, increased by 4% to $25.4 million compared to $24.4 million in 2023, driven by higher power segment revenues[120] - Revenue for the three months ended September 30, 2024, decreased by 29% to $7.2 million compared to $10.1 million in 2023, primarily due to an unusually large sale in the prior year[119] - Revenue from power generation units and parts for the nine months ended September 30, 2024, was $15,998,386, compared to $14,502,388 for the same period in 2023[4] - Revenue from service and repairs for the nine months ended September 30, 2024, was $9,314,762, compared to $9,199,965 for the same period in 2023[4] - Oil and gas sales revenue for the nine months ended September 30, 2024, was $97,357, compared to $705,230 for the same period in 2023[4] - Power generation units revenue for the nine months ended September 30, 2024, was $12,964,409, compared to $10,416,808 in the same period in 2023[45] - Parts revenue for the nine months ended September 30, 2024, was $3,033,977, compared to $4,085,580 in the same period in 2023[45] - Total units and parts revenue for the nine months ended September 30, 2024, was $15,998,386, compared to $14,502,388 in the same period in 2023[45] - Service and repairs revenue for the nine months ended September 30, 2024, was $9,314,762, compared to $9,199,965 in the same period in 2023[45] - Total revenue for the nine months ended September 30, 2024, was $25,313,148, compared to $23,702,353 in the same period in 2023[45] - Power generation units revenue for the three months ended September 30, 2024, was $3,029,038, compared to $4,849,415 in the same period in 2023[45] - Parts revenue for the three months ended September 30, 2024, was $883,335, compared to $1,892,767 in the same period in 2023[45] - Total units and parts revenue for the three months ended September 30, 2024, was $3,912,373, compared to $6,742,182 in the same period in 2023[45] - Service and repairs revenue for the three months ended September 30, 2024, was $3,282,781, compared to $3,155,064 in the same period in 2023[45] - Total revenue for the three months ended September 30, 2024, was $7,195,154, compared to $9,897,246 in the same period in 2023[45] Net Loss and Comprehensive Loss - Net loss for the nine months ended September 30, 2024, was $63.94 million, compared to a net loss of $10.79 million for the same period in 2023[5] - Net loss for the nine months ended September 30, 2024, was $63,944,509, compared to $10,785,683 for the same period in 2023[6] - Total comprehensive loss for the nine months ended September 30, 2024, was $63,989,167, compared to $10,664,188 for the same period in 2023[6] - Net loss for the nine months ended September 30, 2024, was $34,267,479[11] - Net loss for the nine months ended September 30, 2023, was $8,175,563[14] - The company reported a net loss of $63.9 million for the nine months ended September 30, 2024, compared to a net loss of $10.8 million for the same period in 2023[116] - The company reported a net loss of $34.8 million for the three months ended September 30, 2024, compared to a net loss of $7.9 million in 2023, driven by a goodwill impairment of $34.9 million[120] Cash and Cash Equivalents - Cash and cash equivalents decreased to $451,415 as of September 30, 2024, from $906,060 as of December 31, 2023[3] - Net cash used in operating activities for the nine months ended September 30, 2024, was $1,454,022, compared to $4,840,379 for the same period in 2023[7] - Cash flows from financing activities provided $860,831 for the nine months ended September 30, 2024, compared to $3,012,047 for the same period in 2023[8] - Cash at the end of the period for September 30, 2024, was $451,415, compared to $1,432,599 for the same period in 2023[8] - Net cash used in operating activities was $1.5 million for the nine months ended September 30, 2024, compared to $4.8 million in 2023, with a decrease in cash during the period to $451,415 from $1.4 million[119] - Cash decreased from $906,060 as of December 31, 2023, to $451,415 as of September 30, 2024[3] Goodwill and Intangible Assets - Goodwill impairment of $34.86 million was recorded in the nine months ended September 30, 2024[5] - Goodwill impairment and change in fair value of derivative liability adjustments totaled $34,860,411 and $18,573,289, respectively, for the nine months ended September 30, 2024[7] - Goodwill impairment charge of $34,860,411 recorded for the three months ended September 30, 2024, representing the entire goodwill balance[51] - The Company recorded a goodwill impairment charge of $34,860,411 for the three months ended September 30, 2024, due to a significant decline in stock price and delisting from a national stock exchange[51] - Goodwill is subject to impairment testing at least annually, with the option to first assess qualitative factors before proceeding to a quantitative test comparing fair value to carrying value[40] - Intangible assets related to the ESG Clean Energy license are amortized over 16 years, while Simson-Maxwell customer relationships are amortized over 10 years[41] - Intangible assets from the Simson-Maxwell acquisition include customer relationships valued at $3,908,126, amortized over 10 years, and the Simson-Maxwell brand, which is not amortized[127] - The acquisition of a 51% interest in Viking Ozone, Viking Sentinel, and Viking Protection resulted in aggregate intangible assets of $15,433,340, which have an indefinite life and are not amortized[128] - The ESG Clean Energy License intangible asset valued at $5,000,000 with accumulated amortization of $963,295 as of September 30, 2024[57] - Estimated future amortization expense for ESG Clean Energy License is $304,465 per year for the next five years[58] - Simson-Maxwell Brand and Customer Relationships valued at $2,230,673 and $1,677,453 respectively, with estimated future amortization of $167,745 per year for Customer Relationships[58] Operating Expenses - Total operating expenses for the nine months ended September 30, 2024, were $30.80 million, compared to $27.62 million for the same period in 2023[4] - The company's operating expenses increased by $3.2 million to $30.8 million for the nine months ended September 30, 2024, compared to $27.6 million in 2023, primarily due to increased power segment sales[120] - The company's operating expenses decreased by $1.6 million to $9.1 million for the three months ended September 30, 2024, compared to $10.7 million in 2023[119] - The company's total operating expenses for the nine months ended September 30, 2024, were $30,801,256, with oil and gas segment expenses at $3,749,935 and power generation segment expenses at $27,051,321[101] - The company's general and administrative expenses for the nine months ended September 30, 2024, were $11,990,210, with oil and gas segment expenses at $3,144,693 and power generation segment expenses at $8,845,517[101] Stock and Equity - Loss per share of common stock for the nine months ended September 30, 2024, was $0.35, compared to $0.18 for the same period in 2023[5] - Common shares issued on true-up of Series C preferred stock for the nine months ended September 30, 2024, totaled 36,103,638 shares[10] - Common shares issued on true-up of Series C preferred stock increased by 36,103,638 shares, amounting to $36.104 million[10] - Common shares issued on conversion of debt totaled 19,907,976 shares, amounting to $19.908 million[10] - Additional paid-in capital increased to $155,913,262 as of September 30, 2024[10] - Common shares issued on conversion of Series H preferred stock amounted to 3,333,333 shares, totaling $3.333 million[13] - Common shares issued on true-up of Series C preferred stock in 2023 amounted to 11,900,223 shares, totaling $11.900 million[13] - The company issued a total of 116,834,937 shares of common stock during the nine months ended September 30, 2024, including 89,149,679 True-Up shares and 19,907,976 shares from debt conversion[82] - 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[83] - The conversion rate for Series C Preferred Stock is 95% of the average of the lowest 5 daily VWAPs during the Measuring Period, not exceeding 100% of the lowest sales price on the last day of the Measuring Period[85] - The Series C Preferred Stock has a maturity date of seven years after issuance, after which remaining shares will automatically convert into common stock if sufficient shares are available[85] - Camber filed an amendment to the Series C COD on October 31, 2022, adjusting the conversion rate calculation and waiving additional shares due to Equity Condition failures[85] - Discover waived all rights to receive additional Conversion Shares and convert Promissory Notes into common stock, effective November 3, 2022[86] - As of September 30, 2024, Antilles held 30 shares of Series C Preferred Stock, convertible into common stock at a floor price of $0.15 per share[86] - The fair value of 101,585,980 True-Up shares due from prior conversions was $16,253,757 as of March 25, 2024, with 43,574,679 shares remaining by September 30, 2024[87] - Series G Preferred Stock has a face value of $10,000 per share and accrues cumulative dividends at 10.0% per annum[90] - In 2022, the Company redeemed 5,272 shares of Series G Preferred Stock, reducing outstanding shares from 10,544 to 5,272[91] - As of September 30, 2024, 2,641,416 warrants were outstanding with a weighted average exercise price of $0.21 and a remaining contractual life of 2.60 years[94] - Series H Preferred Stock was issued at $10,000 per share, with 475 shares converted into 7,916,666 shares of common stock by September 30, 2024[92] - The company increased the exercise price of James Doris' outstanding warrants from $0.009 per share to $1.00 per share on October 23, 2024[101] Mergers and Acquisitions - Camber Energy completed a merger with Viking Energy Group on August 1, 2023, issuing 49,290,152 shares of Camber Common Stock representing 59.99% of outstanding shares[17] - Camber reserved 88,647,137 additional shares for potential conversions and exercises related to the merger[17] - The merger is accounted for as a reverse acquisition with Viking treated as the acquirer[17] - Viking acquired 60.5% of Simson-Maxwell Ltd. for $7,958,159 in cash, expanding its portfolio in power generation and custom energy solutions[18] - Viking acquired a 51% interest in Viking Ozone Technology, LLC, which owns a patented medical waste disposal system using ozone technology, with Simson-Maxwell as the exclusive worldwide manufacturer[20] - Viking acquired a 51% interest in Viking Sentinel and Viking Protection, owning intellectual property for open conductor detection systems to enhance grid safety and stability[20] - The merger consideration transferred was $52,036,151, with Viking shareholders owning 64.9% of the merged entity[50] - Net assets acquired in the merger included $1,475,000 in oil and gas properties and $56,432,183 in investment in Viking[52] - Camber completed the merger with Viking Energy Group, Inc., with Viking surviving the merger as a wholly owned subsidiary of Camber, and Camber issued approximately 49,290,152 shares of Camber Common Stock, representing approximately 59.99% of the outstanding Camber Common Stock[112][114] - Viking acquired approximately 60.5% of the issued and outstanding shares of Simson-Maxwell Ltd. for $7,958,159 in cash, with Simson-Maxwell providing commercial and industrial clients with efficient, flexible, environmentally responsible and clean-tech energy systems[106] - Viking acquired 51% of Viking Ozone for $2,495,868, including $2 million in stock and $495,868 in contingent consideration, with patents and intellectual property valued at $4,916,057[60][61] - Viking acquired 51% of Viking Sentinel for $233,334 in stock, with patents and intellectual property valued at $457,518[62][63] - Viking acquired 51% of Viking Protection for $21 million, payable in convertible preferred stock or cash, with potential revenues of $500 million if sales targets are met[64][65] - Total consideration for the acquisition is $5,373,223, including $4,433,334 in fair value of stock and $939,889 in contingent consideration[66] - Intangible assets for patents and intellectual property are valued at $10,059,765, with a non-controlling interest of $(4,686,542)[66] - The company consolidates three VIEs: Viking Ozone, Viking Sentinel, and Viking Protection, with total intangible assets of $15,433,340 and non-controlling interests of $(7,330,915)[67][68] Asset and Liability Changes - Accounts receivable decreased to $5.92 million as of September 30, 2024, from $8.55 million as of December 31, 2023[3] - Inventory decreased to $8.32 million as of September 30, 2024, from $9.80 million as of December 31, 2023[3] - Total current liabilities decreased to $29.31 million as of September 30, 2024, from $31.80 million as of December 31, 2023[3] - Accounts receivable decreased from $8,545,449 as of December 31, 2023, to $5,922,607 as of September 30, 2024[3] - Inventory decreased from $9,795,969 as of December 31, 2023, to $8,321,934 as of September 30, 2024[3] - Total current assets decreased from $19,653,836 as of December 31, 2023, to $15,085,907 as of September 30, 2024[3] - Current assets decreased to $15.1 million as of September 30, 2024, from $17.9 million in 2023, while current liabilities increased to $29.3 million from $27.4 million, resulting in a working capital deficit of $14.2 million[118] - The company's stockholders' deficit stood at $(31,662,829) as of September 30, 2024, with long-term debt of $39,673,475 and a working capital deficiency of $14,221,385[24] - The largest components of current liabilities include accrued interest on notes payable of $6,194,664 and drawings against the bank credit facility of $4,193,122[24] - The company's derivative liability for Series C Preferred Stock was valued at $533,782 using Level 3 inputs, with total losses of $(18,573,289) for the nine months ended September 30, 2024[35] - The company's reserve for expected credit losses on power generation accounts receivable was $31,444 as of September 30, 2024, down from $36,678 at December 31, 2023[36] - Inventory as of September 30, 2024 was $8,321,934, down from $9,795,969 at December 31, 2023, with a reserve for obsolescence of $(1,189,313)[37] - The company uses the right-of-use (ROU) model for leases, recognizing lease liabilities and ROU assets at the lease commencement date, discounted using the incremental borrowing rate[36] - The company's notes payable to related parties as of September 30, 2024, totaled $1,021,768, with a current portion of $502,730[73] - Noncontrolling interest decreased from $7,040,648 on January 1, 2024, to $6,911,867 on September 30, 2024, reflecting a net loss attributable to noncontrolling interest of $128,781[75] - The company's long-term debt and other short-term borrowings totaled $39,676,296 as of September 30, 2024, with