What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-20 · 255 added, 268 removed, 575 unchanged (48% of the section changed)

9 unchanged sentences

Total oil and gas properties, net

Due from Viking Energy Group, Inc.

Equity method investment

6 unchanged sentences

Total current liabilities

Long-term debt - net of current portion

Long-term debt

Asset retirement obligation

1 unchanged sentence

Commitments and contingencies (Note 11)

TEMPORARY EQUITY

Preferred Stock Series C, 3,983 and 2,093 shares issued and outstanding, respectively, liquidation preference of $137,274,095 and $72,135,245, respectively

STOCKHOLDERS' DEFICIT

Common stock, 250,000,000 shares authorized of $0.001 par value, 38,489,739 and 25,000,000 shares issued and outstanding as of March 31, 2021 and December31, 2020

Preferred Stock Series C, 5,200 shares authorized of $ 0.001 par value, 695 and 3,886 shares issued and outstanding as of June 30, 2022 and December 31, 2021, liquidation preference of $ 23,953,175 and $ 133,930,990 at June 30, 2022 and December 31, 2021, respectively.

Preferred Stock Series G, 25,000 authorized, $ 0.001 par value, 5,272 and 10,544 issued and outstanding as of June 30, 2022 and December 31, 2021, respectively, liquidation preference of $ 0 as of June 30, 2022 and December 31, 2021, respectively

Common stock, 1,000,000,000 shares authorized of $ 0.001 par value, 457,291,794 and 257,132,026 shares issued and outstanding as of June 30, 2022 and December 31, 2021

Additional paid-in-capital

10 unchanged sentences

Three months ended

Six months ended

Oil and gas sales

6 unchanged sentences

Loss from operations

( 1,224,255 )

( 1,986,777 )

( 3,085,140 )

Other income (expense)

Interest expense

Equity (deficit) in earnings of unconsolidated entity

( 1,966,132 )

Equity (deficit) in earnings of unconsolidated entities

( 1,038,650 )

( 6,206,605 )

( 2,004,560 )

( 12,078,513 )

Gain (loss) on derivative liability

( 57,602,973 )

Interest and other income

Total other income (expense)

6 unchanged sentences

Less preferred dividends

Net income (loss) attributable to common stockholders

( 6,676,994 )

Net income (loss) attributable to common stockholders

$ ( 63,560,442 )

Income (loss) attributable to common stockholders per weighted average number of common shares outstanding - basic and diluted

Income (loss) per weighted average number of common shares outstanding - basic and diluted

Weighted average number of common shares outstanding

3 unchanged sentences

Consolidated Statements of Cash Flows (Unaudited)

Three months ended

Six months ended

Cash flows from operating activities:

$ (44,777,693 )

Net income (loss)

$ ( 63,560,442 )

3 unchanged sentences

Change in fair value of derivative liability

(Equity) deficit in earnings of unconsolidated entity

( 34,166,784 )

Amortization of debt discount

Deficit in earnings of unconsolidated entity

Changes in operating assets and liabilities

2 unchanged sentences

Accounts payable and accrued expenses

Net cash provided (used ) in operating activities

Net cash used in operating activities

( 2,132,504 )

( 1,315,474 )

Cash flows from investing activities:

Loan to Viking prior to investment

Net cash provided (used) in investing activities

Loan to Viking

( 3,922,300 )

Net cash used in investing activities

( 3,922,300 )

Cash flows from financing activities:

Proceeds from issuance of Series C Preferred Stock

Net cash provided (used) in financing activities

Repayment of long-term debt

( 1,000,000 )

Redemption of Series G preferred stock

( 2,750,000 )

Redemption of Series C preferred stock

( 18,850,000 )

Proceeds from long-term debt

Net cash provided in financing activities

Net increase (decrease) in cash

( 3,654,804 )

Cash, beginning of period

7 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

Three Months Ended March 31, 2021 and 2020

Preferred Stock

Six Months Ended June 30, 2022 and 2021

Preferred Stock

2 unchanged sentences

Stockholders'

(Deficit) Equity

For the three months ended March 31, 2021

For the six months ended June 30, 2022

Balances, December 31, 2021

6 unchanged sentences

Issuance of Common Shares for Consulting Fees

Issuance of Series C Preferred Shares for Cash Proceeds

Change in fair value of Series C shares

Redemption of Series C preferred stock for cash

( 18,849,998 )

( 18,850,000 )

Balances March 31, 2021

Redemption of Series G preferred stock

( 2,749,995 )

( 2,750,000 )

Warrants issued for debt discount

( 63,560,442 )

For the three months ended March 31, 2021

( 63,560,442 )

Balances June 30, 2022

$ 515,946,663

$ ( 544,848,557 )

$ ( 28,444,596 )

For the six months ended June 30, 2021

Balances, December 31, 2020

5 unchanged sentences

True-Up Shares

Payment of Consulting Fees

Issuance of Common Shares for Consulting Fees

Equity contribution

( 11,208,840 )

Warrants issued for compensation

Issuance of Series C Preferred Shares for Cash Proceeds

Series C fair value adjustment

Balances March 31, 2020

( 6,164,308 )

Change in fair value of Series C shares

Transfer of Series C Preferred Stock to Permanent Equity

( 1,414,206 )

Balances June 30, 2021

$ 263,018,169

$ ( 293,552,526 )

$ ( 30,449,397 )

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4 unchanged sentences

(“Camber”, the “Company”) acquired a 51 % interest in Viking Energy Group, Inc.

On January 8, 2021, the Company acquired an additional interest in Viking resulting in the Company owning approximately 63% of the outstanding common shares of Viking.

On January 8, 2021 and on July 29, 2021 the Company acquired additional interests in Viking resulting in the Company owning approximately 63 % of the outstanding common shares of Viking.

The Company accounts for its investment in Viking under the equity method of accounting because the Company has the ability to exercise significant influence over the operating and financial policies of Viking, but not control.

The December 2020 and January 2021 transactions and a new merger agreement in February 2021 are described further below.

The December 2020, January 2021 and July 2021 transactions and a merger agreement signed between Camber and Viking in February 2021 are described further below.

December 23, 2020 Transaction

On December 23, 2020, the Company entered into a Securities Purchase Agreement with Viking, pursuant to which Camber acquired 26,274,510 shares (“Camber’s Investment”) of Viking common stock (“Camber’s Viking Shares”), which constituted 51 % of the total outstanding common stock of Viking, in consideration of (i) Camber’s payment of $ 10,900,000 to Viking (the “Cash Purchase Price”), and (ii) cancellation of $ 9,200,000 in promissory notes issued by Viking to Camber (“Camber’s Viking Notes”).

Pursuant to the purchase agreement, Viking is obligated to issue additional shares of Viking common stock to Camber to ensure that Camber shall own at least 51% of the common stock of Viking through July 1, 2022.

Pursuant to the purchase agreement, Viking was obligated to issue additional shares of Viking common stock to Camber, if necessary, to ensure Camber owned at least 51% of the common stock of Viking through July 1, 2022.

In connection with Camber’s Investment, the Company and Viking terminated their previous merger agreement, dated August 31, 2020, as amended, and the Company assigned its membership interests in the Company’s unconsolidated subsidiary, Elysium Energy Holdings, LLC (“Elysium”), to Viking.

6 unchanged sentences

In exchange, Viking issued 26,274,510 shares of its common stock to Camber, representing 51% of Viking’s total outstanding common shares, the Viking Shares.

At the closing, James Doris and Frank Barker, Jr., Viking’s CEO and CFO, were appointed the CEO and CFO of Camber, and Mr.

At the closing, James Doris and Frank Barker, Jr., Viking’s CEO and CFO, respectively, at the time, were appointed the CEO and CFO of Camber, and Mr.

Doris was appointed a member of the Board of Directors of Camber.

6 unchanged sentences

On February 15, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Viking.

The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, a newly-formed wholly-owned subsidiary of Camber (“Merger Sub”) will merge with and into Viking (the “Merger”), with Viking surviving the Merger as a wholly-owned subsidiary of the Company.

The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, a newly formed wholly-owned subsidiary of Camber (“Merger Sub”) would merge with and into Viking (the “Merger”), with Viking surviving the Merger as a wholly-owned subsidiary of the Company.

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share:

27 unchanged sentences

The Merger Agreement contains customary indemnification obligations of the parties and representations and warranties.

As of the date hereof, neither Viking nor Camber has advised of its intention to terminate the Merger Agreement.

As of August 12, 2022, neither Viking nor Camber has advised of its intention to terminate the Merger Agreement.

However, given the lapse of time since the date of the Merger Agreement and the lack of progress during that period toward completing certain of the transaction requirements and satisfying certain of the conditions to the merger, we believe it is reasonably likely that certain terms, including economic terms of the merger would need to be modified by the parties in order for the parties to proceed with the merger.

While the parties have discussed this likelihood, neither party has determined the revised terms, if any, upon which it would be prepared to proceed with a revised merger agreement.

Any revisions to the terms and conditions of the merger agreement would be subject to the written agreement of the parties, and there is no assurance Viking and Camber will agree on any such proposed modifications or conditions.

Moreover, the satisfaction of conditions, whether existing or new, may be outside of Camber’s control.

July 2021 Transaction

14 unchanged sentences

NOTE 2 – ORGANIZATION AND OPERATIONS OF THE COMPANY

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 from various known productive geological formations in Louisiana and Texas.

Through the recent investment in Viking and through the Company’s subsequent investments and planned merger with Viking, the Company will continue to be engaged in the acquisition, exploration, development and production of oil and natural gas properties, both individually and through unconsolidated subsidiaries or collaborative partnerships with other companies in this field of endeavor.

On January 31, 2020, the Company entered into a Compromise Settlement Agreement (the “ Settlement Agreement ”) with PetroGlobe Energy Holdings, LLC (“ PetroGlobe ”), Signal Drilling, LLC (“ Signal ”), Petrolia Oil, LLC (“ Petrolia ”), Prairie Gas Company of Oklahoma, LLC (“ PGCO ”), and Canadian River Trading Company, LLC (“ CRTC ”).

Pursuant to the Settlement Agreement, the Company agreed to pay PetroGlobe $250,000, of which $100,000 was due upon execution of the Settlement Agreement, which payment has been made, and $150,000 was paid to an escrow account, which was released by the Company upon the successful transfer of all wells and partnership interests of the Company’s prior wholly-owned subsidiary C E Energy LLC (“ CE ”) to PetroGlobe, which was completed on July 16, 2020.

CE operates all of the wells and leases which we held prior to such transfer which are located in Hutchinson County, Texas.

A novel strain of coronavirus (“ COVID-19 ”) was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization on March 11, 2020.

As a result of the outbreak, many companies have experienced disruptions in their operations, workforce and markets served, including a significant reduction in the demand for petroleum-based products.

The market for the Company’s oil and gas assets began being adversely impacted by the effects of COVID-19 in March of 2020 when circumstances surrounding, and responses to, the pandemic, including stay-at-home orders, began to materialize in North America.

Due to the Company’s limited oil and gas production and the fact that all of the Company’s current properties are non-operated, the Company has yet to experience a significant adverse impact from COVID-19.

However, the full extent of the COVID-19 outbreak and changes in demand for oil and the impact on the Company’s operations is uncertain.

A prolonged disruption could have a material adverse impact on the financial results, assets (including requiring write-downs or impairments), and business operations of the Company.

Camber’s aim is to become a growth-oriented diversified energy company.

The Company owns minority, non-operated working interests in certain oil & gas wells in Texas and/or Louisiana, and through its investment in Viking, the organization provides custom energy & power solutions to commercial and industrial clients in North America.

Viking also holds an exclusive license in Canada to a patented carbon-capture system, and has a majority interest in:

(i) an entity with intellectual property rights to a fully developed, patent pending, ready-for-market proprietary Medical & Bio-Hazard Waste Treatment system using Ozone Technology;

and (ii) entities with the intellectual property rights to fully developed, patent pending, ready-for-market proprietary Electric Transmission and Distribution Open Conductor Detection Systems.

NOTE 3 – LIQUIDITY AND GOING CONCERN CONSIDERATIONS

The Company’s consolidated financial statements included herein have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company generated a net loss of $(44,777,693) for the three months ended March 31, 2021 as compared to a net loss of $8,004,946 for the three months ended March 31, 2020.

The Company generated a net loss of $ 63,560,442 for the six months ended June 30, 2022 as compared to a net income of $ 18,060,420 for the six months ended June 30, 2021.

The 2022 loss was comprised of, among other things, certain non-cash items with a total net impact of $ 59,737,024 including:

(i) Loss on derivative liability of $36,601,064 (ii) Loss in earnings of unconsolidated entity of $5,871,908 (iii) stock-based compensation of $1,020,792;

(i) a loss on derivative liability of $ 57,602,973 (ii) loss in earnings of unconsolidated entity of $ 2,004,560 (iii) stock-based compensation of $ 123,754 ;

and (iv) depreciation, depletion and accretion of $ 5,737 .

As of March 31, 2021, the Company has a stockholders’ deficit of $(135,339,150) and total Long-Term Debt of $18,000,000.

As of March 31, 2021, the Company has a working capital deficiency of approximately $133.6 million.

The largest components of current liabilities creating this working capital deficiency include:

(i) a term loan agreement with a face value of approximately $18.0 million as of March 31, 2021 and a derivative liability of $132.2 million.

As of June 30, 2022, the Company has a stockholders’ deficit of $ 28,444,596 and total long-term debt of $ 32,305,737 , net of debt discount.

As of June 30, 2022, the Company has a working capital deficiency of approximately $ 38.5 million.

The largest component of current liabilities creating this working capital deficiency is a derivative liability of $ 37 million.

Management believes it will be able to continue to leverage the expertise and relationships of its operational and technical teams to enhance existing assets and identify new development and acquisition opportunities in order to improve the Company’s financial position.

8 unchanged sentences

These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

In April 2021, the Company borrowed $2.5 million from an institutional investor at 10% per annum maturing December 11, 2022, and in July 2021 the Company sold 1,575 shares of Series C Preferred Stock to an institutional investor in the amount of $15 million, both to facilitate working capital and new acquisitions.

The Company entered into a Loan Agreement on December 24, 2021 with the investor named therein (the “ Investor ”) pursuant to which the Investor agreed to loan the Company $ 25,000,000 subject to, among other things, the Company having increased its authorized capital of common shares on or before December 31, 2021, which increase occurred on December 30, 2021.

On January 3, 2022 the Company received $ 25,000,000 (the “ Loan Proceeds ”) from the Investor, and in connection therewith executed and delivered the following in favor of the Investor:

(i) a promissory note dated on or about December 31, 2021 in the principal amount of $ 26,315,789 .47, representing a 5 % original issue discount (the “ Investor Note ”), accruing interest at a rate equal to the Wall Street Journal Prime Rate, payable at maturity, and maturing January 1, 2027;

(ii) a Security Agreement-Pledge (the “ Pledge Agreement ”) granting the Investor a first-priority security interest in Camber’s common shares of Viking Energy Group, Inc.;

and (iii) a general security agreement (the “ Security Agreement ”) granting the Investor a first-priority security interest in Camber’s other assets.

The Investor may convert amounts owing under the Investor Note into shares of common stock of Camber at a fixed price of $ 1.50 per share, subject to beneficial ownership limitations.

The obligations under the Investor Note are supported by a Guaranty from Viking Energy Group, Inc.

The majority of the Loan Proceeds of the loan were used to:

(i) redeem shares of Series C Redeemable Convertible Preferred Stock of the Company not owned by the Investor or its affiliates;

and (ii) pay in full the secured loan disclosed by the Company in a Current Report Filed on Form 8-K filed with the SEC on December 17, 2021.

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

On February 4, 2021, the Board of Directors of the Company approved changing the Company's fiscal year from a fiscal year ending on March 31 of each year to a fiscal year ending on December 31 of each year.

As a result of this change, we filed a Transition Report on Form 10-KT covering the nine-month transition period from April 1, 2020, to December 31, 2020.

The Company’s fiscal year 2021 commenced on January 1, 2021.

The Company has provided a discussion of significant accounting policies, estimates, and judgments in its December 31, 2020, Annual Report on Form 10-KT.

The Company has provided a discussion of significant accounting policies, estimates, and judgments in its December 31, 2021, Annual Report on Form 10-K.

There have been no changes to the Company’s significant accounting policies since December 31, 2021, which are expected to have a material impact on the Company’s financial position, operations, or cash flows.

Amounts presented in the consolidated balance sheet as of December 31, 2021 are derived from our audited consolidated financial statements as of that date.

The unaudited consolidated financial statements as of and for the three-month periods ended March 31, 2021 and 2020 have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in Camber’s latest Annual Report filed with the SEC on Form 10-KT.

The unaudited consolidated financial statements as of and for the three and six-month periods ended June 30, 2022 and 2021 have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein.

18 unchanged sentences

inputs to the valuation methodology are unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort.

As of March 31, 2021 and December 31, 2020, the significant inputs to the Company’s derivative liability relative to the Series C Preferred Stock were Level 3 inputs.

Assets and liabilities measured at fair value as of and for the three months ended March 31, 2021 are classified below based on the three fair value hierarchy described above:

As of June 30, 2022 and December 31, 2021, the significant inputs to the Company’s derivative liability relative to the Series C Preferred Stock were Level 3 inputs.

Assets and liabilities measured at fair value as of and for the six months ended June 30, 2022 are classified below based on the three fair value hierarchy described above:

Identical Assets

Significant Unobservable

(six months ended June 30, 2022)

Financial liabilities:

2 unchanged sentences

( 57,602,973 )

$ (132,161,991 )

$ (36,601,064 )

Assets and liabilities measured at fair value as of and for the three months ended March 31, 2020 are classified below based on the three fair value hierarchy described above:

Assets and liabilities measured at fair value as of December 31, 2021 and losses for the six months ended June 30, 2021 are classified below based on the three fair value hierarchy described above:

Identical Assets

Significant Unobservable

Inputs- December 31, 2021

Total (gains) (six months ended June 30, 2021

Financial liabilities:

Derivative liability - Series C preferred Stock

$ (7,546,887 )

Cash and Cash Equivalents

1 unchanged sentence

The Company maintains cash and cash equivalents in bank deposit accounts, which at times may exceed federally insured limits of $ 250,000 .

At March 31, 2021 and December 31, 2020, the Company’s cash in excess of the federally insured limit was $92,373 and $618,548, respectively.

At June 30, 2022 and December 31, 2021, the Company’s cash in excess of the federally insured limit was $ 1,949,578 and $ 5,604,382 , respectively.

Historically, the Company has not experienced any losses in such accounts.

The Company had no cash equivalents at March 31, 2021 and December 31, 2020, respectively

The Company had no cash equivalents at June 30, 2022 and December 31, 2021, respectively

Accounts Receivable

1 unchanged sentence

The allowance for doubtful accounts is the Company’s best estimate of the probable amount of credit losses in the Company’s existing accounts receivable.

At March 31, 2021 and December 31, 2020 there were no allowances for doubtful accounts.

At June 30, 2022 and December 31, 2021 there were no allowances for doubtful accounts.

Investment in Unconsolidated Entities

The Company accounts for its investment in unconsolidated entities under the equity method of accounting when it does not own a controlling financial interest and it has the ability to exercise significant influence over the operating and financial policies of the entity.

The Company accounts for its investments in Viking and Elysium (until the Company’s Elysium interest was assigned to Viking on December 23, 2020) under the equity method.

The Company accounts for its investments in Viking under the equity method.

Under the equity method, the investment is initially recorded at cost and the investment is reduced for dividends or distributions it receives and increased or decreased for its proportionate share of earnings or losses of the entity.

8 unchanged sentences

The Ceiling is defined as the sum of:

(a) the present value, discounted at 10 percent, and assuming continuation of existing economic conditions, of 1) estimated future gross revenues from proved reserves, which is computed using oil and natural gas prices determined as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month hedging arrangements pursuant to SAB 103, less 2) estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves, plus

(b) the cost of properties not being amortized;

(d) the related tax effects related to the difference between the book and tax basis of our oil and natural gas properties.

No impairment expense was recorded for the three months ended March 31, 2021 or 2020

the present value, discounted at 10 percent, and assuming continuation of existing economic conditions, of 1) estimated future gross revenues from proved reserves, which is computed using oil and natural gas prices determined as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month hedging arrangements pursuant to SAB 103, less 2) estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves, plus

the cost of properties not being amortized;

the lower of cost or estimated fair value of unproven properties included in the costs being amortized, net of

the related tax effects related to the difference between the book and tax basis of our oil and natural gas properties.

No impairment expense was recorded for the six months ended June 30, 2022.

Oil and Gas Properties

12 unchanged sentences

Income (loss) per Share

Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period.

Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding and adjusted by any effects of warrants and options outstanding during the period.

At March 31, 2021 and December 31, 2020 there were 137,254,308 and 109,766,938 common stock equivalents that were anti-dilutive, respectively.

Basic and diluted income (loss) per share calculations are calculated on the basis of the weighted average number of shares of the Company’s common stock outstanding during the year.

Diluted earnings per share give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.

In computing diluted earnings per share, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise price of the options and warrants.

Purchases of treasury stock reduce the outstanding shares commencing on the date that the stock is purchased.

Common stock equivalents are excluded from the calculation when a loss is incurred as their effect would be anti-dilutive.

At June 30, 2022 and December 31, 2021 there were 220,287,923 and 262,224,956 common stock equivalents that were anti-dilutive, respectively.

Revenue Recognition

33 unchanged sentences

Derivative Liabilities

The Series C Preferred Stock certificate of designation, or COD, contains provisions that could result in modification of the Series C Preferred Stock conversion price that is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No.

The Series C Preferred Stock and Series G preferred stock contain provisions that could result in modification of the conversion price that is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No.

The Series C Preferred Stock are convertible into shares of common stock at a fixed $ 3.25 conversion rate.

15 unchanged sentences

and the historical volatility of the Company’s common stock.

The Series G Convertible Preferred stock is redeemable or convertible into a variable number of common shares, at the option of the Company.

The conversion rate is determined at the time of conversion using a VWAP calculation similar to the Series C Stock described above.

As a result, the Series G Preferred Stock contains an embedded derivative that is required to be recorded at fair value.

The Company has determined that the fair value of the embedded derivative as of June 30, 2022 and December 31, 2021 is negligible due to the restrictions on conversion.

The embedded derivative associated with the Series G Stock is marked to market at each reporting date with changes in fair value recorded in income.

Accounting for Asset Retirement Obligations

5 unchanged sentences

Subsequent events

The Company has evaluated all subsequent events from March 31, 2021 through the date of filing of this report.

The Company has evaluated all subsequent events from June 30, 2022 through the date of filing of this report.

NOTE 5 – OIL AND GAS PROPERTIES

The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the three months ended March 31, 2021.

The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the six months ended June 30, 2022.

The allocation between the classifications is based on the relationships summarized in the Company’s annual analysis of reserves as of December 31, 2021.

The Adjustments column reflects depletion and all other increases or decreases that occurred during the three months ended March 31, 2021:

The Adjustments column reflects depletion and all other increases or decreases that occurred during the six months ended June 30, 2022:

Depletion and Adjustments

15 unchanged sentences

If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the statements of operations.

For the three months ended March 31, 2021 and 2020, the Company recorded $0 and $0 impairments, respectively.

NOTE 6 – INVESTMENT IN UNCONSOLIDATED ENTITY

The Company accounts for its investments in Viking and Elysium (until the Company’s Elysium interest was assigned to Viking on December 23, 2020) under the equity method.

The Company owns 0% of Elysium as of March 31, 2021 and December 31, 2021, respectively (25% from February 3, 2020 to March 31, 2020)

Table below shows the changes in the investments in Viking (March 31, 2021) and Elysium (March 31, 2020) as of and for the three months ended March 31, 2021 and 2020, respectively:

For the six months ended June 30, 2022 and 2021, the Company recorded $ 0 and $ 0 impairments, respectively.

NOTE 6 – INVESTMENT IN UNCONSOLIDATED ENTITIES

The Company accounts for its investment in Viking under the equity method.

The Company owns approximately 63 % of the outstanding common shares of Viking at June 30, 2022 and December 31, 2021.

Table below shows the changes in the investments in unconsolidated entities for the six-month period ended June 30, 2022 and the year ended December 31, 2021.

Carrying amount – beginning of period

Investment in Viking in 2021 and Elysium in 2020

Proportionate Share of Viking (losses) in 2021 and Elysium Earnings in 2020

Investment in Viking

Proportionate Share of (losses)

( 2,004,560 )

( 9,430,946 )

Carrying amount - ending

NOTE 7 – ASSET RETIREMENT OBLIGATIONS

The following table presents the reconciliation of the beginning and ending aggregate carrying amounts of long-term legal obligations associated with the future retirement of oil and natural gas properties for the three months ended March 31, 2021 and the nine months ended December 31, 2020.

The following table presents the reconciliation of the beginning and ending aggregate carrying amounts of long-term legal obligations associated with the future retirement of oil and natural gas properties for the six months ended June 30, 2022 and the year ended December 31, 2021.

Six months ended June 30,

Year ended December 31,

Carrying amount at beginning of period

Acquisition of Viking

Revisions of previous estimates

Carrying amount at end of period

1 unchanged sentence

Long-term debt obligations of Camber Energy, Inc.:

Note payable to Discover Growth Fund, pursuant to a 10.0% Secured Promissory Note dated December 11, 2020 in the original amount of $6,000,000 with interest and principal due at the revised maturity date of January 1, 2027.

Note payable to Discover Growth Fund, pursuant to a Secured Promissory Note dated December 24, 2021 and funded on January 3, 2022 in the original amount of $26,315,789 with interest and principal due at maturity on January 1, 2027.

The note bears interest at a rate equal to the Wall Street Journal Prime Rate and is secured by lien on substantially all of the Company’s assets.

Note payable to Discover Growth Fund, pursuant to a 10.0% Secured Promissory Note dated December 11, 2020 in the original amount of $6,000,000 with interest and principal due at maturity on January 1, 2027.

The Note is secured by lien on substantially all of the Company’s assets.

Note payable to Discover Growth Fund, pursuant to a 10.0% Secured Promissory Note dated December 22, 2020 in the original amount of $12,000,000 with interest and principal due at the revised maturity date of January 1, 2027.

The Note is secured by first lien on the Company’s ownership in Viking.

Total long-term debt associated with Camber Energy, Inc.

Note payable to Discover Growth Fund, LLC pursuant to a 10.0% Secured Promissory Note dated April 23, 2021 in the original amount of $2,500,000 with interest and principal due at maturity on January 1, 2027.

The Note is secured by lien on substantially all of the Company’s assets.

Note payable to Discover Growth Fund, LLC pursuant to a 10.0% Secured Promissory Note dated December 9, 2021 in the original amount of $1,000,000 with interest and principal due at maturity on March 8, 2022.

The Note is secured by lien on substantially all of the Company’s assets.

The note was paid in full on January 4, 2022.

Principal value of debt

unamortized debt discount

( 14,510,052 )

Total long-term debt, net

Less current portion

All of Company’s long-term debt is due in 2027

The Company entered into a Loan Agreement on December 24, 2021 with the Discover pursuant to which the agreed to loan the Company $ 25,000,000 subject to, among other things, the Company having increased its authorized capital of common shares on or before December 31, 2021, which increase occurred on December 30, 2021.

On January 3, 2022 the Company received $ 25,000,000 representing a 5 % original issue discount of the loan face value of $ 2,631,579 .

The Company granted the lender a first-priority security interest in Camber’s common shares of Viking and a first-priority security interest in Camber’s other assets.

The notes are convertible into shares of common stock of Camber at a fixed price of $ 1.50 per share, subject to beneficial ownership limitations.

The obligations under the Investor Note are supported by a Guaranty from Viking.

As an incentive to enter into the Note agreement, Camber granted the lender warrants to purchase 25,000,000 shares of Camber common stock at an exercise price of $ 10.00 and 25,000,000 warrants with an exercise price of $ 20.00 .

The warrants expire on December 31, 2026 .

The Company allocated the net proceeds received of $ 25,000,000 to the notes and the warrants based on relative fair value and recorded the loan proceeds allocated to the warrants as an additional debt discount of $ 14,763,393 .

The fair value of the warrants was determined based on a black-scholes model.

Debt discounts on the Note are amortized over the life of the Note using the interest method.

The majority of the Loan Proceeds of the loan were used to:

(i) redeem shares of Series C Redeemable Convertible Preferred Stock of the Company not owned by the Investor or its affiliates;

and (ii) pay in full the secured loan disclosed by the Company in a Current Report Filed on Form 8-K filed with the SEC on December 17, 2021.

Principal maturities of long-term debt for the next five years and thereafter are as follows:

Twelve-month period ended June 30,

The above notes were in default at various times, but have been resolved through settlement (see Note 13 Stockholders Deficit)

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In cases where the number of common shares required to satisfy a conversion of the Series C shares into common stock was significant in relation to the total number of shares outstanding (approximately 30% or greater) fair value of the embedded features was determined based on the historical market capitalization of the Company.

Activities for derivative Series C Preferred Stock derivative liability during the three months ended March 31, 2021 and the nine months ended December 31, 2020 were as follows:

Activities for derivative Series C Preferred Stock derivative liability during the six months ended June 30, 2022 and the year ended December 31, 2021 were as follows:

Carrying amount at beginning of period

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Carrying amount at end of period

$ 132,161,991

The fair value of the derivative liability has been estimated using a binomial model and the historical volatility of the Company’s common stock as of the date of conversion.

NOTE 10 – RELATED PARTY TRANSACTIONS

The Company’s CEO and director, James A.

Doris and the Company’s CFO, Frank W.

render services in the same capacity to both Camber and Viking.

The Company’s CEO and director, James Doris, renders professional services to the Company through AGD Advisory Group, Inc., an affiliate of Mr.

Doris’, at a rate of $ 20,000 per month commencing April 2021.

The Company’s CFO, Frank W.

Barker, Jr., renders professional services to the Company through FWB Consulting, Inc., an affiliate of Mr.

Barker’s, at a rate of $ 20,000 per month commencing April 2021.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

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The Company has filed a denial to the claims and intends to vehemently defend itself against the allegations.

PetroGlobe Energy Holdings, LLC and Signal Drilling, LLC

In March 2019, PetroGlobe Energy Holdings, LLC (“ PetroGlobe ”), Signal Drilling, LLC (“ Si g nal ”)sued the Company in the 316th Judicial District of Hutchinson County, Texas (Cause No.

The plaintiffs alleged causes of action relating to negligent misrepresentation;

fraud and willful misconduct;

gross negligence;

statutory fraud;

breach of contract;

and specific performance, in connection with a purchase and sale agreement entered into between the parties in March 2018, relating to the purchase by plaintiffs of certain oil and gas assets from the Company, and a related joint venture agreement.

The lawsuit seeks in excess of $600,000 in damages, as well as pre- and post-judgment interest, court costs and attorneys’ fees, and punitive and exemplary damages.

Additionally, a portion of the revenues from the properties in contention are being held in suspense as a result of the lawsuit.

On October 31, 2019, the Company brought counterclaims against PetroGlobe and Signal, and Petrolia Oil, LLC, and Ian Acrey, including bringing claims for causes of actions including declaratory judgment (that PetroGlobe and certain other plaintiffs represented that a lease and related wells were free of all agreements and rights in favor of third parties and provided a special warranty of title pursuant to the purchase and sale agreement);

breach of contract (in connection with the purchase and sale agreement);

statutory fraud;

common law fraud (against Mr.

Acrey and other plaintiffs);

fraud by non-disclosure (against Mr.

Acrey and other plaintiffs);

negligent misrepresentation (against Mr.

Acrey and other plaintiffs);

breach of fiduciary duty (against Mr.

Acrey and other plaintiffs) and seeking attorney’s fees and pre- and post-judgment interest.

On January 31, 2020, the Company entered into a Compromise Settlement Agreement (the “ Settlement A g reement ”) with PetroGlobe, Signal, Petrolia Oil, LLC (“ Petrolia ”), Prairie Gas Company of Oklahoma, LLC (“ PGCO ”), and Canadian River Trading Company, LLC (“ CRTC ”).

Litigation as a Result of “Short Report”

The Company was the target of a “short” report issued by Kerrisdale Capital in early October, 2021, and as a result of such short report there was an action commenced against the Company, James Doris and Frank Barker by or on behalf of certain shareholders of Camber in connection with losses alleged to have been suffered by the shareholders.

The Company and Messrs.

Doris and Barker have retained the firm of Baker Botts LLP to defend the action, and deny the allegations contained in the claim.

The Company was the target of a “short” report issued by Kerrisdale Capital in early October, 2021, and as a result of such short report there were actions (including two derivative actions) and/or complaints commenced or filed, as applicable, against the Company, its officers, directors and certain former directors by or on behalf of certain shareholders of Camber in connection with losses alleged to have been suffered by the shareholders.

The Company and its management, including former directors, have retained the firm of Baker Botts LLP to defend the actions, and deny the allegations contained in the claim(s).

NOTE 12 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Oil and Gas Contracts

The following table disaggregates revenue by significant product type for the three months ended March 31, 2021 and 2020 respectively:

The following table disaggregates revenue by significant product type for the six months ended June 30, 2022 and 2021 respectively:

Six months ended June 30,

Natural gas sales and liquids

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NOTE 13 – STOCKHOLDERS’ DEFICIT

During the three months ended March 31, 2021, the Company issued 690,094 shares of restricted common stock to service providers in consideration for investor relations and marketing services.

During the six months ended June 30, 2022, the Company issued 140,000 shares of restricted common stock to service providers in consideration for investor relations and marketing services.

The Company recognized $ 123,754 , based on the grant date fair value of the Company’s common stock, in share-based compensation expense.

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and/or (g) with respect to a proposed merger or consolidation in which Camber is a party or a subsidiary of Camber is a party.

As of March 31, 2021 and December 31, 2020, the Company had no Series A Convertible Preferred Stock issued or outstanding.

As of June 30, 2022 and December 31, 2021, the Company had no Series A Convertible Preferred Stock issued or outstanding.

Series B Redeemable Convertible Preferred Stock

As of March 31, 2021 and December 31, 2020, the Company had no Series B Redeemable Convertible Preferred Stock issue and outstanding.

As of June 30, 2022 and December 31, 2021, the Company had no Series B Redeemable Convertible Preferred Stock issue and outstanding.

Effective on May 15, 2020, due to the fact that no shares of Series B Preferred Stock were outstanding, the Board of Directors approved, and the Company filed, a Certificate of Withdrawal of Certificate of Designation relating to such series of preferred stock with the Secretary of State of Nevada and terminated the designation of its Series B Preferred Stock effective as of the same date.

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The issuance was recorded as an additional investment by the Company in Viking

As of March 31, 2021, Discover was owed approximately 31,170,432 common shares in connection with previous conversion notices as a result of the extension of the Measurement Period and the drop in the price of Camber’s common stock during the extended Measurement following delivery of the original conversion notices .

As of March 31, 2021 and December 31, 2020, the Company recorded a derivative liability of $34,717,896 and $42,775,989, respectively, associated with true-up obligations (see note 9).

All of these True-Up Shares have subsequently been issued to Discover.

As of June 30, 2022, Discover was not owed any common shares in connection with previous conversion notices as a result of the extension of the Measurement Period.

The Company has not declared any dividends on the Series C Preferred stock, but recognized cumulative dividends as an adjustment to income available to common stockholders and an increase in the carrying value of the Series C Preferred Stock.

As of March 31, 2021, and December 31, 2020 Company accrued common stock dividends on the Series C Preferred Stock based on the then 24.95% premium dividend rate.

The Company recognized a total charge to additional paid-in capital of $2,379,606 and $1,654,178 related to the cumulative stock dividends for the three months ended March 31, 2021, and 2020, respectively.

On April 15, 2021, the Company, with the approval of the Board of Directors, and holders of the Company’s Series C Preferred Stock, filed certificate of corrections with the Secretary of State of Nevada to correct the original designation of the Company’s Series C Redeemable Convertible Preferred Stock and the subsequent amended and restated designations thereof, to correct certain errors which were identified in such designations as follows:

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Pursuant to the December 24 th Agreements, as a further accommodation to the Company and in order to help facilitate implementation of the Company’s business plans and continued trading on the NYSE American, the parties agreed:

(i) the deadline for the Filing Requirement is extended to January 14, 2022;

(ii) the deadline for the Reserve Requirement remains December 31, 2021, meaning the Company is required to obtain on or before such date, approval of the proposals outlined in the preliminary proxy statement filed by the Company with the Securities and Exchange Commission on November 9, 2021 (to increase the Company’s authorized common stock);

(iii) each and every Measurement Period (as defined in the COD) with regard to any share of Preferred converted by Investor or any affiliate of Investor prior to December 24, 2021 will terminate, and the provisions of Section I.G.1.d of the COD shall no longer apply with respect to any shares of Preferred converted prior to December 24, 2021;

(iv) If the Reserve Requirement and the Filing Requirement are not met by the deadlines mentioned above, Company acknowledges and agrees that (A) Company will be in uncured material breach and default under all of the Notes and Agreements, and (B) all Measurement Periods will remain open and continue to run in accordance with the terms of the COD.

The Company satisfied the Reserve Requirement by the required deadline but did not satisfy the Filing Requirement.

As of March 31, 2021 and December 31, 2020, the Series C Preferred shares were convertible into a substantial number of the Company’s common shares which could result in significant dilution of the Company’s existing shareholders.

If the outstanding Series C Preferred were converted as of March 31, 2021 and December 31, 2020, the Company estimates that the following common shares would be required to be issued to satisfy the conversion of the Series C Preferred shares:

March 31, 2021

December 31, 2020

the deadline for the Filing Requirement is extended to January 14, 2022;

the deadline for the Reserve Requirement remains December 31, 2021, meaning the Company is required to obtain on or before such date, approval of the proposals outlined in the preliminary proxy statement filed by the Company with the Securities and Exchange Commission on November 9, 2021 (to increase the Company’s authorized common stock);

each and every Measurement Period (as defined in the COD) with regard to any share of Preferred converted by Investor or any affiliate of Investor prior to December 24, 2021 will terminate, and the provisions of Section I.G.1.d of the COD shall no longer apply with respect to any shares of Preferred converted prior to December 24, 2021;

If the Reserve Requirement and the Filing Requirement are not met by the deadlines mentioned above, Company acknowledges and agrees that (A) Company will be in uncured material breach and default under all of the Notes and Agreements, and (B) all Measurement Periods will remain open and continue to run in accordance with the terms of the COD.

The Company satisfied the Reserve Requirement by the required deadline but did not satisfy the Filing Requirement by January 14, 2022, and accordingly, the Measurement Period with regard to shares of Preferred converted by Investor or any affiliate of Investor prior to December 24, 2021 did not end.

As of June 30, 2022 and December 31, 2021, the Series C Preferred shares were convertible into a substantial number of the Company’s common shares which could result in significant dilution of the Company’s existing shareholders.

If the outstanding Series C Preferred were converted as of June 30, 2022 and December 31, 2021, the Company estimates that the following common shares would be required to be issued to satisfy the conversion of the Series C Preferred shares:

Estimated number of shares issuable for conversion at $3.25 per share

Estimated number of common shares required to satisfy Conversion Premium using VWAP at period end

*based on 695 shares of Series C Convertible Preferred Stock outstanding as of such date

**based on 3,886 shares of Series C Convertible Preferred Stock outstanding as of such date

Additionally.

if the Series C preferred shares were converted on the above dates, the Company could be required to issue additional common shares (true-up shares).

The Certificates of Designations with respect to the Company’s Series C Preferred Stock and/or the Stock Purchase Agreements regarding the sale of such Series C Preferred Stock and Series G Preferred Stock (collectively, the “SPA’s”), contain covenants requiring the Company to timely file all reports required to be filed by the Company pursuant to the Exchange Act (the “Filing Requirement”).

even if the Series C preferred shares were converted on the above dates, the Company could, pursuant to terms out in the COD, be required to issue additional common shares (true-up shares).

The Certificates of Designations with respect to the Company’s Series C Preferred Stock and Series G Preferred Stock (collectively, the “CODs”) and/or the Stock Purchase Agreements regarding the sale of such Series C Preferred Stock and Series G Preferred Stock (collectively, the “SPA’s”), contain covenants requiring the Company to timely file all reports required to be filed by the Company pursuant to the Exchange Act (the “Filing Requirement”).

The Company did not satisfy the Filing Requirement and, consequently, on or about March 9, 2022, the preferred stock holders, Discover and Antilles, filed a Verified Complaint against the Company (the “Discover/Antilles Complaint”) as a result of the default by the Company under the CODs.

4 unchanged sentences

Series E Redeemable Convertible Preferred Stock and Series F Convertible Preferred Stock

On July 8, 2019, the Company acquired Lineal Star Holdings, LLC (“Lineal”) pursuant to a Plan of Merger dated as of the same date.

Pursuant to the Lineal Plan of Merger, the Company acquired 100 % of the ownership of Lineal from the Lineal Members in consideration for 1,000,000 of the newly issued shares of Series E Preferred Stock and 16,750 of the newly issued shares of Series F Preferred Stock and effective on December 31, 2019, the Company divested its ownership in Lineal and the Series E Preferred Stock and Series F Preferred Stock were returned to the Company and cancelled.

Effective on May 15, 2020, due to the fact that no shares of Series E Preferred Stock and Series F Preferred Stock were outstanding, the Board of Directors approved, and the Company filed, Certificates of Withdrawal of the Certificate of Designations relating to such series of preferred stock with the Secretary of State of Nevada and terminated the designation of its Series E Preferred Stock and Series F Preferred Stock effective as of the same date.

The following is a summary of the Company’s outstanding warrants at March 31, 2021:

Series G Redeemable Convertible Preferred Stock

On or about December 30, 2021, the Company created a new class of preferred stock known as Series G redeemable convertible preferred stock (the “ Series G Preferred Stock ”), having a face value of $ 10,000 per share.

The rights, entitlements and other characteristics of the Series G Preferred Stock are set out in the Certificate of Designations of Preferences, Powers, Rights and Limitations of Series G Redeemable Convertible Preferred Stock filed by the Company with the State of Nevada on December 30, 2021 (the “ COD ”).

Pursuant to the COD, the Series G Preferred Stock may be converted into shares of common stock at any time at the option of the holder at a price per share of common stock equal to one cent above the closing price of the Company’s common stock on the date of the issuance of such shares of Series G Preferred Stock, or as otherwise specified in the Stock Purchase Agreement, subject to adjustment as otherwise provided in the COD.

Upon conversion, the Company will pay the holders of the Series G Preferred Stock being converted a conversion premium equal to the amount of dividends that such shares would have otherwise earned if they had been held through the maturity date.

The Series G Preferred Stock, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank:

(a) senior to the Company’s common stock;

(b) junior to the Series C Redeemable Convertible Preferred Stock, (c) senior to the Series E Redeemable Convertible Preferred Stock and Series F Redeemable Convertible Preferred Stock, as such may be designated as of the date of this Designation, or which may be designated by the Company after the date of this Designation;

(d) senior, pari passu or junior with respect to any other series of Preferred Stock, as set forth in the Certificate of Designations of Preferences, Powers, Rights and Limitations with respect to such Preferred Stock;

and (d) junior to all existing and future indebtedness of the Company.

Except as prohibited by applicable law or as set forth herein, the holders of shares of Series G Preferred Stock will have the right to vote together with holders of common stock and Series C Preferred on all matters other than:

(i) the election of directors;

(ii) and any shareholder proposals, including proposals initiated by any holder of shares of Series G Preferred Stock), in each instance on an as-converted basis, subject to the beneficial ownership limitation in the COD even if there are insufficient shares of authorized common stock to fully convert the shares of Series G Preferred Stock into common stock.

Commencing on the date of the issuance of any such shares of Series G Preferred Stock, each outstanding share of Series G Preferred Stock will accrue cumulative dividends at a rate equal to 10.0% per annum, subject to adjustment as provided in the COD, of the Face Value.

Dividends will be payable with respect to any shares of Series G Preferred Stock upon any of the following:

(a) upon redemption of such shares in accordance with the COD;

(b) upon conversion of such shares in accordance with the COD;

and (c) when, as and if otherwise declared by the board of directors of the Corporation.

Dividends, as well as any applicable Conversion Premium payable hereunder, will be paid in shares of common stock valued at (i) if there is no Material Adverse Change (“MAC”) as at the date of payment or issuance of common shares for the Conversion Premium, as applicable, (A) 95.0% of the average of the 5 lowest individual daily volume weighted average prices of the common stock on the Trading Market during the applicable Measurement Period, which may be non-consecutive, less $0.05 per share of common stock, not to exceed (B) 100% of the lowest sales price on the last day of such Measurement Period less $0.05 per share of common stock, or (ii) during the time that any MAC is ongoing, (A) 85.0% of the lowest daily volume weighted average price during any Measurement Period for any conversion by Holder, less $0.10 per share of common stock, not to exceed (B) 85.0% of the lowest sales price on the last day of any Measurement Period, less $0.10 per share of common stock .

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 .

In the first quarter of 2022, pursuant to a stock purchase agreement (the “ Stock Purchase Agreement ”) between the Company and an accredited investor (the “Investor”) dated on or about December 30, 2021, the Investor purchased from the Company 10,544 shares of newly designated Series G redeemable convertible preferred stock (the “ Series G Preferred Stock ”), having a face value of $ 10,000 per share, for an aggregate price of $ 100,000,000 (the “ Purchase Price ”), representing at a 5 % original issue discount.

The Purchase Price was paid by the Investor via payment of $ 5,000,000 in cash, and the execution and delivery of four Promissory Notes (each a “ Note ” and collectively, the “ Notes ”) from the Investor in favor of Company, each in the amount of $ 23,750,000 and payable by the Investor to the Company on March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022, respectively.

There are 2,636 shares of Series G Preferred Stock associated with each Note, and the Investor may not convert the shares of preferred stock associated with each Note into shares of common stock or sell any of the underlying shares of common stock (the “ Conversion Shares ”) unless that Note is paid in full by the Investor.

The Company may in its sole discretion redeem the 2,636 shares of Series G Preferred Stock associated with each Note by paying the Investor $1,375,000 as full consideration for such redemption.

Also, the Investor may offset the then outstanding balance of each Note against the 2,636 shares of Series G Preferred Stock associated with that Note by electing to cancel the 2,636 shares as full consideration for cancellation of the Note in the event of a breach or default of any of the transaction documents by the Company .

Partial Redemptions of Series G Preferred Stock

On March 10, 2022, the Company paid the Investor $ 1,375,000 and redeemed the 2,636 shares of Series G Preferred Stock associated with the Note due March 31, 2022, thereby canceling such Note and reducing the number of shares of Series G Preferred Stock outstanding from 10,544 to 7,908 .

On June 15, 2022, the Company paid the Investor $ 1,375,000 and redeemed an additional 2,636 shares of Series G Preferred Stock associated with the Note due June 30, 2022, thereby canceling such Note and reducing the number of shares of Series G Preferred Stock outstanding from 7,908 to 5,272 .

As mentioned above, the Investor may not convert any of the remaining shares of preferred stock associated with any remaining Note into shares of common stock or sell any of the underlying shares of common stock unless that Note is paid in full by the Investor, and the Company may redeem the shares of Series G Preferred Stock associated with each Note by paying the Investor $ 1,375,000 as full consideration for such redemption.

On April 26, 2021, the Company issued warrants to Regal Consulting, LLC (“Regal”) entitling Regal to purchase 100,000 shares of common stock of the Company at an exercise price of $ 0.705 per share.

The company recognized an expense of $ 42,037 in connection with the warrants.

The warrants expired on April 25, 2022 .

The following is a summary of the Company’s outstanding warrants at June 30, 2022:

lntrinsic Value at

March 31, 2021

April 26, 2021

June 30, 2022

September 12, 2022

Warrants issued in connection with the sale of convertible notes.

The warrants were exercisable on the grant date (April 26, 2016) and remain exercisable until April 26, 2021.

December 30, 2026

April 25, 2025

December 31, 2026

Warrants issued in connection with funding.

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The warrants were exercisable on the grant date (May 25, 2018) and remain exercisable until May 24, 2023.

Warrants issued in connection with the Series G Preferred Stock and remain exercisable until December 30, 2026

Warrants issued to a consultant for services and are exercisable until April 25, 2022.

Warrants issued in connection with the issuance of a $25,000,000 promissory note

NOTE 14 – STOCK-BASED COMPENSATION

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Under the 2010 Incentive Plan, 58 shares of the Company’s common stock are authorized for initial issuance or grant, under the 2012 Incentive Plan, 96 shares of the Company’s common stock are authorized for initial issuance or grant, and under the 2014 Incentive Plan, as amended, 2,500,000 shares of the Company’s common stock are authorized for issuance or grant.

As of March 31, 2020, there was an aggregate of 1 share available for issuance or grant under the 2010 Incentive Plan, 5 shares were available for issuance or grant under the 2012 Incentive Plan and an aggregate of approximately 1,999 securities were available for issuance or grant under the 2014 Incentive Plan as amended for future issuances and grants, respectively.

As of September 30, 2020, there was an aggregate of 1 share available for issuance or grant under the 2010 Incentive Plan, 5 shares were available for issuance or grant under the 2012 Incentive Plan and an aggregate of approximately 1,999 securities were available for issuance or grant under the 2014 Incentive Plan as amended for future issuances and grants, respectively.

The number of securities available under the 2010, 2012 and 2014 Plans is reduced one for one for each security delivered pursuant to an award under the Plans.

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NOTE 15 – INCOME (LOSS) PER COMMON SHARE

The calculation of earnings (loss) per share for the three months ended March 31, 2021 and 2020, was as follows:

The calculation of earnings (loss) per share for the three and six months ended June 30, 2022 and 2021, was as follows:

Three months ended

Six months ended

Income (loss)

$ ( 63,560,442 )

$ (8,004,946 )

Less preferred dividends

Net income (loss) attributable to common stockholders

( 6,676,994 )

Net income (loss) attributable to common shareholders

$ ( 63,560,442 )

Weighted average share – basic

Denominator - Weighted average shares - basic

Dilutive effect of common stock equivalents - options/ warrants

Preferred C shares

Total Weighted average shares – diluted

Dilutive effect Preferred C Shares

Denominator - Weighted average shares - diluted

Income (loss) per share - basic

Continuing operations

Income (loss) per share - diluted

Continuing Operations

NOTE 16 – SUBSEQUENT EVENTS

Between April 1, 2021 and September, 2021, the Company issued 810,000 shares of restricted common stock to Agro Consulting, LLC (“Agro”) pursuant to a Consulting Agreement, as amended, between the Company and Agro, as amended, which expires August 31, 2022.

On or about April 26, 2021, the Company issued warrants to Regal Consulting, LLC (“Regal”) entitling Regal to purchase 100,000 shares of common stock of the Company at an exercise price of $0.705 per share.

The warrants expire on April 25, 2022.

In April 2021, the Company borrowed $2.5 million from an institutional investor at 10% per annum maturing December 11, 2022.

On or about July 12, 2021, the Company issued 1,575 shares of Series C Preferred Stock were issued to an investor in exchange for $15,000,000.

On July 29, 2021, the Company entered into a Securities Purchase Agreement with Viking to acquire an additional 27,500,000 shares of Viking’s common stock for an aggregate purchase price of $11,000,000, increasing the Company’s ownership to approximately 73% of the issued and outstanding shares of Viking common stock as of such date.

Amendments to Articles

On December 30, 2021, the Company filed an amendment to the Company’s articles of incorporation to effect a proposal approved at a Special Meeting of Stockholders on December 30, 2021 whereby the Company's stockholders approved an amendment to the Company's Articles of Incorporation to increase the number of authorized shares of common stock from 250,000,000 to 1,000,000,000.

Share Issuances & Consulting Arrangements

Between September 14, 2021 and January 6, 2022, the Company issued 14,495,827 shares of common stock to EMC Capital Partners, LLC (“EMC“) in connection with the conversion by EMC of shares of the Company’s Series C Preferred Stock.

On or about October 14, 2021 the Company executed an amendment to an existing Consulting Agreement with Regal Consulting which extended the term of the consulting arrangement to April 22, 2022.

Pursuant to the terms of the amendment, the Company agreed to pay the consultant a cash fee of $20,000 per month and issue the consultant 5,000 shares of the Company’s common stock per month until the end of the amended term.

On or about January 5, 2022 the Company executed an amendment to an agreement with Sylva International LLC, effective January 1, 2022, which extended the term of the agreement to June 30, 2022.

Pursuant to the terms of the amendment, the Company agreed to pay the consultant a cash fee of $50,000 per month and issue the consultant 150,000 shares of the Company’s common stock.

On or about July 1, 2022 the Company signed a second amendment to an agreement with Sylva International LLC (“Sylva”), which extended the term of Sylva’s engagement with the Company to December 31, 2022.

Pursuant to the terms of the second amendment, the Company agreed to pay Sylva a cash fee of $ 50,000 per month and issue the consultant 175,000 shares of the Company’s common stock.

Series C Preferred Stock

Sales of Series C Stock in 2021:

On July 12, 2021, the Company issued 1,575 shares of Series C Preferred Stock to Antilles, an affiliate of Discover, in exchange for cash proceeds of $15,000,000.

True-Up Issuances in 2021:

Between April 1, 2021 and June 17, 2021, the Company issued Discover approximately 31,170,432 shares of common stock in connection with the shares of Series C Stock converted by Discover in 2020.

This “true-up” entitlement was a result of the price of the Company’s common stock being lower during the portion of the Measurement Period following the initial conversions than the low VWAP of the common stock during the portion of the Measurement Period prior to the initial conversions.

On September 1, 2021, the Company issued 10,360,076 shares of common stock to Discover in connection with a true-up notice from Discover.

The Company disputed the issuance but issued the shares on a without prejudice basis.

In October, 2021, as part of a forbearance arrangement entered into with Discover in connection with the Company not filing all reports required with the Securities and Exchange Commission, the Company acknowledged that all prior conversion notices issued by Discover were true and correct.

Conversions of Series C Stock in 2022:

From June 18, 2021 through December 31, 2021, Discover converted 1,575 shares of Series C Preferred Stock into approximately 174,218,536 shares of common stock.

From September 14, 2021 through December 31, 2021, EMC converted 97 shares of Series C Preferred Stock into approximately 12,443,320 shares of common stock.

Redemptions of Series C Stock in 2022:

On or about January 3, 2022, the Company purchased for cancellation 1,664 shares of Series C Stock held by EMC Capital Partners, LLC for a redemption price of $18,850,000.

True-Up Issuances in 2022:

Between January 18, 2022 and February 22, 2022, the Company issued Discover 38,185,136 shares of common stock in connection with the shares of Series C Stock converted by Discover in 2021.

Conversions of Series C Stock in 2022:

On or about January 4, 2022, EMC converted 129 shares of Series C Preferred Stock, entitling EMC to receive 16,548,332 shares of common stock, of which 2,052,507 shares of common stock were issued to EMC and the balance of 14,495,825 were issued May 16, 2022.

From February 23, 2022 through March 7, 2022, Discover converted 488 shares of Series C Preferred Stock into approximately 62,601,441 shares of common stock.

On May 16, 2022, Discover converted their remaining 30 shares of Series C Preferred Stock into 3,848,450 shares of common stock.

On May 16, 2022, Antilles converted 400 shares of Series C Preferred Stock into approximately 35,834,731 shares of common stock.

From July 1, 2022 through August 8, 2022, Antilles Family Office, LLC (“Antilles”) converted 280 shares of Series C Preferred Stock into approximately 33,938,315 shares of common stock.

Outstanding Series C Stock

As of May 19, 2022, Discover no longer holds any Series C Preferred Stock and Antilles holds 1,175 shares of Series C Preferred Stock

Amendments to Existing Promissory Notes

Effective December 24,2021, Camber executed amendments to Promissory Notes previously executed by the Company in favor of Discover Growth Fund, LLC, in the aggregate principal amount of $20,500,000, pursuant to which:

(i) the Maturity Date of each Promissory Note was extended from January 1, 2024 to January 1, 2027;

(ii) the conversion price was increased from $1.25 to $1.50 per share of common stock;

and (iii) the interest rate was decreased from 10% per annum to the WSJ Prime Rate.

New Financing Transactions

$1,000,000 Loan:

On or about December 9, 2021, the Company received $1,000,000 from an investor and in connection therewith executed and delivered the following in favor of the investor:

(i) a promissory note dated on or about December 8, 2021 in the principal amount of $1,052,631.58, representing a 5% original issue discount (the “ Investor Note ”), accruing interest at the rate of 10% per annum and maturing March 8, 2022;

(ii) a Security Agreement-Pledge granting the Investor a first-priority security interest in Camber’s common shares of Viking Energy Group, Inc.;

and (iii) a general security agreement granting the Investor a first-priority security interest in Camber’s other assets.

The Investor may convert amounts owing under the Investor Note into shares of common stock of Camber at a fixed price of $1.25 per share, subject to beneficial ownership limitations.

The Investor Note was paid in full by the Company on January 4, 2022.

$25,000,000 Loan:

The Company entered into a Loan Agreement on December 24, 2021 with the investor named therein (the “ Investor ”) pursuant to which the Investor agreed to loan the Company $25,000,000 subject to, among other things, the Company having increased its authorized capital of common shares on or before December 31, 2021, which increase occurred on December 30, 2021.

On January 3, 2022 the Company received $25,000,000 (the “ Loan Proceeds ”) from the Investor, and in connection therewith executed and delivered the following in favor of the Investor:

(i) a promissory note dated on or about December 31, 2021 in the principal amount of $26,315,789.47, representing a 5% original issue discount (the “ Investor Note ”), accruing interest at a rate equal to the Wall Street Journal Prime Rate, payable at maturity, and maturing January 1, 2027;

(ii) a Security Agreement-Pledge (the “ Pledge Agreement ”) granting the Investor a first-priority security interest in Camber’s common shares of Viking Energy Group, Inc.;

and (iii) a general security agreement (the “ Security Agreement ”) granting the Investor a first-priority security interest in Camber’s other assets.

The Investor may convert amounts owing under the Investor Note into shares of common stock of Camber at a fixed price of $1.50 per share, subject to beneficial ownership limitations.

The obligations under the Investor Note are supported by a Guaranty from Viking Energy Group, Inc.

The Company also executed a Warrant Agreement in favor of the Investor entitling the Investor to purchase up to 50,000,000 shares of common stock of the Company at an exercise price of ten dollars ($10.00) per share for the first 25,000,000 shares, and twenty dollars ($20.00) per share for the remaining 25,000,000 shares (the “ Warrant Agreement ”).

The Warrant Agreement has a term of five years, and there is no adjustment to the exercise price of the warrants as a result of the Company issuing securities at lower prices during the term pursuant to agreements which the Company was a party as of the date of the Warrant Agreement.

The majority of the Loan Proceeds of the loan were used to:

(i) redeem shares of Series C Redeemable Convertible Preferred Stock of the Company not owned by the Investor or its affiliates;

and (ii) pay in full the secured loan disclosed by the Company in a Current Report Filed on Form 8-K filed with the SEC on December 17, 2021 that was due on March 8, 2022.

Sale of Shares of Series G Preferred Stock:

On December 30, 2021, the Company and an accredited institutional investor (the “ Investor ”) entered into a stock purchase agreement (the “ Stock Purchase Agreement ”) pursuant to which the Investor purchased from the Company 10,544 shares of newly designated Series G redeemable convertible preferred stock (the “ Series G Preferred Stock ”), having a face value of $10,000 per share, for an aggregate price of $100,000,000 (the “ Purchase Price ”), representing at a 5% original issue discount.

The Purchase Price was paid by the Investor via payment of $5,000,000 in cash on December 31, 2021, and the execution and delivery of four Promissory Notes (each a “ Note ” and collectively, the “ Notes ”) from the Investor in favor of Company, each in the amount of $23,750,000 and payable by the Investor to the Company on March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022, respectively.

The Company may in its sole discretion redeem the 2,636 shares of Series G Preferred Stock associated with each Note by paying the Investor $1,375,000 as full consideration for such redemption.

On December 30, 2021, the Company also executed and delivered a Warrant Agreement (the “ Warrant Agreement ”) in favor of the Investor entitling the Investor to purchase up to 100,000,000 shares of common stock of the Company (the “ Warrant Shares ”) at an exercise price of $2.00 per share for the first 50,000,000 shares and an exercise price of $4.00 per share for the remaining 50,000,000 shares.

The Warrant Agreement has a term of five years.

As of August 8, 2022, Discover holds 0 shares of Series C Preferred Stock and Antilles holds 415 shares of Series C Preferred Stock.

NYSE Approval Requirement

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Registration Statement

The Company agreed use its best efforts to file with the Securities and Exchange Commission as promptly as practicable, and in any event within 30 days after the date on which the Company files all reports required to be filed pursuant to the Securities Exchange Act of 1934 (the “ Act ”), a Registration Statement on Form S-3 registering the delayed and continuous resale of all Conversion Shares and Warrant Shares pursuant to Rule 415 under the Act, subject to any limitations imposed by applicable securities laws as to the number of Conversion Shares and/or Warrant Shares that are eligible for registration, and to use best efforts to cause such Registration Statement to be declared effective under the Act as promptly as practicable and in any event within 60 days after filing.

No Registration Statement will be declared effective unless the Investor pays for the particular tranche of shares of Series G Preferred Stock in full.

The Company agreed use its best efforts to file with the Securities and Exchange Commission as promptly as practicable, and in any event within 30 days after the date on which the Company files all reports required to be filed pursuant to the Securities Exchange Act of 1934 (the “ Act ”), a Registration Statement registering the delayed and continuous resale of all Conversion Shares and Warrant Shares pursuant to Rule 415 under the Act, subject to any limitations imposed by applicable securities laws as to the number of Conversion Shares and/or Warrant Shares that are eligible for registration, and to use best efforts to cause such Registration Statement to be declared effective under the Act as promptly as practicable and in any event within 60 days after filing.

In connection with the foregoing, the Company filed on June 17, 2022 a draft S-1 Registration Statement with the Securities and Exchange Commission and it is the Company’s objective to have the Registration Statement declared effective on or before August 15, 2022.

Terms of Series G Stock

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Other Agreements

On or about December 24, 2021, the Company entered into two agreements (collectively, the “ December 24 th Agreements ”) as follows:

one agreement (the “ First Agreement ”) was entered into with an investor (the “ First Investor ”) that holds shares of Series C Preferred Stock of the Company (the “ Preferred Shares ”), and the second agreement (the “ Second Agreement ”) was entered into with another investor (the “ Second Investor ”, together with the First Investor, the “ Investors ”) that holds Preferred Shares along with four promissory notes, with an aggregate principal amount totaling $21,552,631.58, previously executed by the Company in favor of the Second Investor (collectively, the “ Notes ”).

The December 24 th Agreements are identical as to their terms.

The original securities purchase agreements between the Company and the Investors regarding the purchase and sale of the Preferred Shares (the “ SPAs ”) require the Company to, among other things, timely file all reports required to be filed by Company pursuant to the Securities Exchange Act of 1934, as amended (the “ Exchange A ct”), and to maintain sufficient reserves from its duly authorized Common Stock for issuance of all Conversion Shares (as such term is defined in the Certificate of Designation regarding the Preferred Shares (the “ COD ”), or the shares of Company common stock to be issued upon conversion of the Preferred Shares).

On October 6, 2021, the Company received notice from the Investors that they believed the Company breached the SPAs by failing to comply with those two requirements in the SPAs, and the Notes also contain a provision stating a breach by the Company of any terms within the SPA or COD is also a breach under the Notes, which would result in an immediate acceleration of the Notes at the holder’s option.

On October 9, 2021 the Company entered into amending agreements (the “ October Agreements ”) with each of the First Investor and Second Investor (as disclosed by the Company in its Current Report Filed on Form 8-K filed with the Securities and Exchange Commission on October 13, 2021), pursuant to which the Investors agreed to refrain from declaring defaults or bringing a breach of contract action under the SPAs, and the Second Investor agreed to refrain from declaring defaults or bringing a breach of contract action under the Notes, provided the Company:

(i) within 30 days of the date of the October Agreements, amended the COD to provide that holders of the Preferred Shares will vote together with holders of common stock on all matters other than election of directors and shareholder proposals (including proposals initiated by any holders of Preferred Shares), on an as-if converted basis, subject to the beneficial ownership limitation in the COD, even if there are insufficient shares of authorized common stock to fully convert the Preferred Shares (the “ COD Amendment Requirement ”); (ii) files by November 19, 2021 all reports required to be filed by the Company pursuant to the Exchange Act (the “ Filing Requirement ”); and (iii) implements and maintains, as soon as possible but no later than December 31, 2021, a sufficient reserve from its duly authorized Common Stock for issuance of all Conversion Shares (the “ Reserve Requirement ”).

The Company complied with the COD Amendment Requirement on November 8, 2021.

On November 18, 2021 the Company entered into amending agreements (the “ November Agreements ”) with each of the First Investor and Second Investor (as disclosed by the Company in its Current Report Filed on Form 8-K filed with the Securities and Exchange Commission on November 19, 2021).

Pursuant to the November Agreements, as a further accommodation to the Company and in order to help facilitate implementation of the Company’s business plans and continued trading on the NYSE American, the Investors agreed to extend the deadline for the Filing Requirement to December 6, 2021.

The deadline for the Reserve Requirement remained December 31, 2021.

On December 3, 2021 the Company entered into amending agreements (the “ December Agreements ”) with each of the First Investor and Second Investor (as disclosed by the Company in its Current Report Filed on Form 8-K filed with the Securities and Exchange Commission on December 6, 2021).

Pursuant to the December Agreements, as a further accommodation to the Company and in order to help facilitate implementation of the Company’s business plans and continued trading on the NYSE American, the Investors agreed to extend the deadline for the Filing Requirement to December 17, 2021.

The deadline for the Reserve Requirement remained December 31, 2021.

(i) the deadline for the Filing Requirement is extended to January 14, 2022;

The Company satisfied the Reserve Requirement by the required deadline but did not satisfy the Filing Requirement.

On or about March 9, 2022, Discover and Antilles filed a Verified Complaint against Camber in the United States District Court (the “ Court ”) for the Southern District of Texas (Case No.

4:22-cv-755), alleging Camber breached the COD and its Stock Purchase Agreements with each of Discover and Antilles as a result of Camber not satisfying the Filing Requirement.

Effective as of April 18, 2022, the Company entered into a Settlement Agreement (the “ Settlement Agreement ”) with Discover and Antilles (collectively, the “Investors”), pursuant to which Camber agreed to settle claims asserted by them in the Verified Complaint.

Conditioned upon the Court approving the Settlement Agreement, the Company and its transfer agent are required to issue “free-trading” shares of Company common stock to the Investors without restrictive legend pursuant to the conversion terms in the Certificates of the Designation governing the Preferred Stock.

The Investors and the Company are required to jointly request a stipulated order (a) finding that (i) under Section 3(a)(10) of the Securities Act of 1933, as amended (the “ Securities Act ”) that the exchange of Preferred Stock for shares of Company common stock provided for in the Settlement Agreement is fair, (ii) the shares of Company common stock issued upon conversion of the shares of Preferred Stock previously purchased by the Investors are not required to be registered under the Securities Act, and (iii) the Investors are not required to register as dealers pursuant to Section 15(b) of the Exchange Act;

(b) requiring 500,000,000 shares of Company common stock to be reserved for issuance on conversion of all shares Preferred Stock currently held by the Investors, or which the Investors are entitled to acquire under their purchase agreements;

and (c) requiring the immediate issuance of free-trading shares of Company common stock on delivery of a conversion request regarding shares of Preferred Stock.

On April 18, 2022, the parties submitted that stipulated order to the Court for approval.

No payments are due to the Investors pursuant to the Settlement Agreement, and the number of shares of common stock to be issued to the Investors upon conversion of the Preferred Stock will be calculated pursuant to the terms of the applicable Certificate of Designation, the terms of which have not been modified by the Settlement Agreement.

On May 12, 2022, the Court approved the Settlement Agreement.

Legal Proceedings:

The Company was the target of a “short” report issued by Kerrisdale Capital in early October, 2021, and as a result of such short report on October 29, 2021, a Class Action Complaint (i.e.

C.A.No.4:21-cv-03574) was filed against the Company, its CEO and CFO by Ronald E.

Coggins, Individually and on Behalf of All Others Similarly Situated v.

Camber Energy, Inc., et al .;

District Court for the Southern District of Texas, Houston Division, pursuant to which the Plaintiffs are seeking to recover damages alleged to have been suffered by them as a result of the defendants’ violations of federal securities laws.

The defendants deny the allegations contained in the Class Action Complaint, and have engaged Baker Botts L.L.P.

to defend the action.

On or about April 18, 2022, the Company was made aware of a Shareholder Derivative Complaint filed with the District Court in Clark County, Nevada (Case No.:

A-22-848486-B) against the Company and its directors, and on or about May 4, 2022 the Company was made aware of a second Shareholder Derivative Complaint against the Company and its directors.

The allegations contained in the derivative actions are similar to those in the above-noted Class Action Complaint.

A-22-848486-B) against the Company and its directors, and on or about May 4, 2022 the Company was made aware of a second Shareholder Derivative Complaint filed with the District Court in Clark County, Nevada (Case No.

A-22-852069-B) against the Company and its directors.

On July 18, 2022, the shareholder plaintiff in Case No.

A-22-848486-B voluntarily dismissed his lawsuit, leaving only Case No.

A-22-852069-B currently pending in Clark County, Nevada (the “Nevada Derivative Complaint”) to the Company’s knowledge.

The allegations contained in the Nevada Derivative Complaint involve state-law claims for breach of fiduciary duty and unjust enrichment and are based on allegations similar to those in the above-noted Class Action Complaint.

On or about June 30, 2022, the Company was made aware of a Shareholder Derivative Complaint filed in the U.S.

District Court for the Southern District of Texas, Houston Division (Case No.

4:22-cv-2167) against the Company, its current directors, and certain of its former directors (the “Houston Derivative Complaint” and, together with the Nevada Derivative Complaint, the “Derivative Complaints”).

The allegations contained in the Houston Derivative Complaint involve state-law claims for breach of fiduciary duty and unjust enrichment and a federal securities claim under Section 14(a) of the Securities Exchange Act of 1934.

The defendants deny the allegations contained in the Derivative Complaints and have engaged Baker Botts L.L.P.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements