Camber Energy(CEI) - 2021 Q1 - Quarterly Report

Part I – Financial Information Financial Statements Camber Energy's Q1 2021 saw total assets increase to $29.6 million, total liabilities to $152.3 million, and a net loss of $44.8 million Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Items | March 31, 2021 (USD) | December 31, 2020 (USD) | | :--- | :--- | :--- | | Total Assets | $29,587,391 | $16,815,251 | | Equity method investment | $28,858,631 | $15,830,538 | | Total Liabilities | $152,303,495 | $113,094,761 | | Derivative liability | $132,161,991 | $93,981,234 | | Long-term debt | $18,000,000 | $18,000,000 | | Total Stockholders' Deficit | ($135,339,150) | ($102,225,562) | Consolidated Statement of Operations Highlights (Unaudited, Three Months Ended March 31) | Income Statement Items | 2021 (USD) | 2020 (USD) | | :--- | :--- | :--- | | Oil and gas sales | $65,653 | $88,899 | | Loss from operations | ($1,860,885) | ($1,505,743) | | Gain (loss) on derivative liability | ($36,601,064) | ($7,546,887) | | Equity (deficit) in earnings of unconsolidated entity | ($5,871,908) | $957,169 | | Net loss | ($44,777,693) | ($8,004,946) | | Net loss per share (basic and diluted) | ($1.80) | ($2.34) | Consolidated Statement of Cash Flows Highlights (Unaudited, Three Months Ended March 31) | Cash Flow Items | 2021 (USD) | 2020 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($526,175) | ($1,597,124) | | Net cash used in investing activities | $0 | ($5,000,000) | | Net cash provided by financing activities | $0 | $5,000,000 | | Net decrease in cash | ($526,175) | ($1,597,124) | | Cash, end of period | $342,373 | $656,615 | Notes to Consolidated Financial Statements Notes detail investment in Viking Energy, a pending merger, significant derivative liability, material internal control weaknesses, and going concern doubts Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses growth strategy, reiterates going concern doubts due to a $44.8 million net loss, $135.3 million stockholders' deficit, and $133.6 million working capital deficiency - The company's growth strategy focuses on acquiring undervalued, producing oil and gas assets, employing enhanced recovery techniques, and pursuing strategic mergers, such as the pending merger with Viking Energy Group[99][100] - There is substantial doubt about the company's ability to continue as a going concern due to a net loss of $44.8 million, a stockholders' deficit of $135.3 million, and a working capital deficiency of approximately $133.6 million as of March 31, 2021[103] Comparison of Results for Three Months Ended March 31 | Metric | 2021 (USD) | 2020 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | Revenue | $65,653 | $88,899 | ($23,246) | | Operating Expenses | $1,926,538 | $1,594,642 | $331,896 | | Loss from Operations | ($1,860,885) | ($1,505,743) | ($355,142) | | Other Expense | ($42,916,808) | ($6,499,203) | ($36,417,605) | | Net Loss | ($44,777,693) | ($8,004,946) | ($36,772,747) | - The significant increase in 'Other Expense' and 'Net Loss' for Q1 2021 compared to Q1 2020 was primarily driven by the non-cash impact of the company's stock price on its derivative liabilities[105] Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Camber Energy is exempt from providing quantitative and qualitative disclosures about market risk - The company is not required to provide quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company under Rule 12b-2 of the Securities Exchange Act of 1934[114] Controls and Procedures Management concluded disclosure controls and procedures were ineffective as of March 31, 2021, citing material weaknesses in staffing, complex accounting, and oversight - The CEO concluded that as of March 31, 2021, the company's disclosure controls and procedures were not effective in providing reasonable assurance of compliance[115] - Material weaknesses identified include insufficient staff for segregation of duties, lack of internal resources for complex accounting, and inadequate oversight for error detection[115] Part II – Other Information Legal Proceedings As of March 31, 2021, no material lawsuits were pending, but a subsequent 'short' report led to a shareholder action against the company and its executives - A 'short' report by Kerrisdale Capital in October 2021 prompted a shareholder lawsuit against the company and its executives, with the company denying allegations[117] Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2021, the company issued 12.8 million unregistered common shares for Series C Preferred Stock conversion and 690,094 shares to consultants - Issued 12,799,645 unregistered common shares to a preferred stockholder for Series C Preferred Stock conversion[119] - Issued 690,094 unregistered common shares to two consultants for services rendered[119] Defaults Upon Senior Securities No defaults upon senior securities occurred during the reporting period - None[120] Mine Safety Disclosures The company had no mine safety disclosures, rendering this item not applicable - None[120] Exhibits This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The report includes certifications from the Principal Executive Officer and Principal Financial and Accounting Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[122]