Camber Energy(CEI) - 2025 Q2 - Quarterly Report

Business Acquisitions and Mergers - Camber has a majority interest in a patented medical and bio-hazard waste treatment system using ozone technology and a clean energy and carbon-capture system with exclusivity in Canada and multiple locations in the U.S.[163] - On August 6, 2021, Viking acquired approximately 60.5% of Simson-Maxwell for $7,958,159, which manufactures power generation products and custom energy solutions[164] - Following a restructuring on April 1, 2025, Viking's ownership in Simson-Maxwell decreased to 49%, resulting in the cessation of consolidation of Simson-Maxwell's financial results[167] - Viking acquired a 51% interest in Viking Ozone, which owns a patented medical waste treatment system using ozone technology, designated for exclusive manufacturing by Simson-Maxwell[173] - Viking also acquired a 51% interest in Viking Sentinel and Viking Protection, which own proprietary electric transmission and distribution broken conductor protection systems[174] - Camber completed the merger with Viking Energy Group, Inc. on August 1, 2023, with Viking becoming a wholly-owned subsidiary of Camber[176] - Each share of Viking Common Stock was converted into one share of Camber Common Stock, and Series C and E Preferred Stocks were converted into New Camber Preferred Stocks[178] - The merger resulted in the issuance of approximately 49,290,152 shares of Camber Common Stock, representing about 59.99% of the outstanding shares post-merger[183] Financial Performance - For the six months ended June 30, 2025, the company reported a net income of $1,182,837, a significant improvement from a net loss of $(30,097,506) in the same period of 2024[202] - The company had gross revenues of $6,229,335 for the six months ended June 30, 2025, down from $16,198,030 in the prior year, primarily due to a change in accounting for Simson-Maxwell[198] - Operating expenses decreased to $9,310,944 for the six months ended June 30, 2025, compared to $20,643,939 in the same period of 2024[199] - The company reported a working capital deficit of $(13,142,496) as of June 30, 2025, an improvement from $(15,906,241) in 2024[189] - Net cash used in operating activities was $(1,989,306) for the six months ended June 30, 2025, compared to $(1,409,813) in the same period of 2024[190] - The company had other income, net, of $4,264,446 for the six months ended June 30, 2025, compared to other expense of $(25,651,597) in the prior year[201] Future Operations and Financing - The company’s ability to continue as a going concern is dependent on generating future profitable operations and obtaining necessary financing[187] - T&T Power Group agreed to provide up to CAD $3.0 million in additional working capital to Simson-Maxwell to meet cash requirements[166] Intangible Assets and Amortization - The Company has aggregate intangible assets of $15,433,340 from the acquisition of a 51% interest in Viking Ozone, Viking Sentinel, and Viking Protection, which have an indefinite life and are not being amortized[209] - Intangible assets related to the Company's license agreement with ESG are amortized on a straight-line basis over approximately 16 years[208] - The Company reviews intangible assets annually for possible impairment, estimating anticipated discounted future net cash flows over the remaining estimated useful life[210] Stock and Derivative Liabilities - The Series C Preferred Stock has a fixed conversion rate of $162.50, with a Conversion Premium that may be paid in shares or cash[212] - The Conversion Premium is subject to a VWAP calculation based on the lowest stock price over a specified Measurement Period, which can be adjusted under certain conditions[212] - True-Up shares may be issued if the VWAP calculation after conversion is lower than the VWAP prior to conversion[213] - The fair value of the derivative liability related to the Conversion Premium is equal to the cash required to settle it, estimated using a binomial pricing model[215] Corporate Governance - The restructuring of Simson-Maxwell includes a Unanimous Shareholders Agreement that allows T&T to nominate two board members and Viking to nominate one[168] - The call option allows T&T to purchase Viking's 49% interest for CAD 5.75 million within the first 36 months[168] Environmental and Clean Energy Initiatives - The ESG Clean Energy System aims to capture approximately 100% of the carbon dioxide emitted from internal combustion engines while maintaining efficiency[171] - The Company plans to utilize the ESG Clean Energy System through existing distribution channels and for its own operations[172] Reporting and Compliance - The Company is classified as a smaller reporting company and is not required to furnish certain market risk information[217]