What changed in this filing

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Item 1. Financial Statements

2023-08-11 compared with 2023-05-15 · 148 added, 132 removed, 650 unchanged (30% of the section changed)

18 unchanged sentences

Total current liabilities

Long-term debt

Long-term debt - net of current portion

Asset retirement obligation

2 unchanged sentences

STOCKHOLDERS' DEFICIT

Preferred Stock Series C, 5,200 shares authorized of $ 0.001 par value, 238 and 270 shares issued and outstanding as of March 31, 2023 and December 31, 2022, liquidation preference of $ 2,380,000 and $ 2,700,000 at March 31, 2023 and December 31, 2022, respectively.

Preferred Stock Series G, 25,000 authorized, $ 0.001 par value, 5,272 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively, liquidation preference of $ 0 as of March 31, 2023 and December 31, 2022, respectively

Common stock, 20,000,000 shares authorized of $ 0.001 par value, 20,000,000 and 18,092,663 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively.

Preferred Stock Series C, 5,200 shares authorized of $ 0.001 par value, 100 and 270 shares issued and outstanding as of June 30, 2023 and December 31, 2022, liquidation preference of $ 1,000,000 and $ 2,700,000 at June 30, 2023 and December 31, 2022, respectively.

Preferred Stock Series G, 25,000 authorized, $.001 par value, 5,272 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively, liquidation preference of $ 0 as of June 30, 2023 and December 31, 2022 respectively

Common stock, 500,000,000 shares authorized of $ 0.001 par value, 26,538,285 and 18,092,663 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.

Additional paid-in-capital

9 unchanged sentences

Consolidated Statements of Operations (Unaudited)

Three Months Ended

Oil and gas sales

8 unchanged sentences

( 3,448,369 )

( 1,986,777 )

Other income (expense)

2 unchanged sentences

( 2,334,107 )

Equity (deficit) in earnings of unconsolidated entity

( 1,966,132 )

Gain (loss) on derivative and warrant liability

Equity (deficit) in earnings of unconsolidated entities

( 1,038,680 )

Total other income (expense)

( 1,531,132 )

Net loss before income taxes

( 2,004,560 )

Gain (loss) on derivative liability

( 57,602,973 )

Total other income (expense)

( 61,573,665 )

Net income (loss) before income taxes

( 63,560,442 )

Income tax benefit (expense)

Net income (loss) attributable to Camber Energy, Inc.

( 63,560,442 )

Less preferred dividends

Net income (loss) attributable to common stockholders

$ ( 425,295 )

Net loss per Share - basic and diluted

$ ( 63,560,442 )

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:

Net Income (loss)

$ ( 425,295 )

$ ( 63,560,442 )

Adjustments to reconcile net loss to cash used by operating activities

Adjustments to reconcile net loss to cash provided (used) by operating activities

Stock-based compensation

25 unchanged sentences

( 1,000,000 )

Net cash provided in financing activities

Net cash provided (used) in financing activities

Net decrease in cash

( 1,029,111 )

( 3,654,804 )

Cash, beginning of period

2 unchanged sentences

Cash paid for:

Supplemental disclosure of Non-Cash Investing and Financing Activities:

Financed insurance premiums

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

1 unchanged sentence

Consolidated Statements of Changes in Stockholders’ Deficit (Unaudited)

Three Months Ended March 31, 2023 and 2022

Six Months Ended June 30, 2023 and 2022

Preferred Stock

1 unchanged sentence

Stockholders'

For the three months ended March 31, 2023

For the six months ended June 30, 2023

Balances, December 31, 2022

5 unchanged sentences

True-Up Shares

Adjustment for rounding

( 2,346,076 )

Balances March 31, 2023

Balances June 30, 2023

$ 573,409,360

1 unchanged sentence

$ ( 16,019,471 )

For the three months ended March 31, 2022

For the six months ended June 30, 2022

Balances, December 31, 2021

15 unchanged sentences

( 63,560,442 )

Balances March 31, 2022

Balances June 30, 2022

$ 516,394,808

7 unchanged sentences

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

On January 8, 2021 and on July 29, 2021 the Company acquired additional interests in Viking resulting in the Company owning approximately 60.9 % of the outstanding common shares of Viking at March 31, 2023.

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.

21 unchanged sentences

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

Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share:

(i) of common stock, par value $0.001 per share, of Viking (the “Viking Common Stock”) issued and outstanding immediately prior to the Effective Time, other than shares owned by the Company, Viking and Merger Sub, will be converted into the right to receive one share of common stock of the Company (the “Camber Common Stock”);

(ii) of Series C Convertible Preferred Stock of Viking (the “Viking Series C Preferred Stock”) issued and outstanding immediately prior to the Effective Time will be converted into the right to receive one share of Series A Convertible Preferred Stock of the Company (the “Camber Series A Preferred Stock”), and (iii) of Series E Convertible Preferred Stock of Viking (the “Viking Series E Preferred Stock,” and, together with the Viking Series C Preferred Stock, the “Viking Preferred Stock”) issued and outstanding immediately prior to the Effective Time will be converted into the right to receive one share of Series H Preferred Stock of the Company (the “Camber Series H Preferred Stock,” and, together with the Camber Series A Preferred Stock, the “New Camber Preferred Stock”).

Each share of Camber Series A Preferred Stock will be convertible into 890 shares of Camber Common Stock (subject to a beneficial ownership limitation preventing conversion into Camber Common Stock if the holder would be deemed to beneficially own more than 9.99% of Camber Common Stock), will be treated equally with Camber Common Stock with respect to dividends and liquidation, and will only have voting rights with respect to voting:

(a) on a proposal to increase or reduce the Company’s share capital;

(b) on a resolution to approve the terms of a buy-back agreement;

(d) on a proposal for the disposal of all or substantially all of the Company’s property, business and undertaking;

(f) during the winding-up of the Company;

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

Each share of Camber Series H Preferred Stock will have a face value of $10,000 per share, will be convertible into a certain number of shares of Camber Common Stock, with the conversion ratio based upon achievement of certain milestones by Viking’s subsidiary, Viking Protection Systems, LLC (provided the holder has not elected to receive the applicable portion of the purchase price in cash pursuant to that certain Purchase Agreement, dated as of February 9, 2022, by and between Viking and Jedda Holdings, LLC), will be subject to a beneficial ownership limitation of 4.99 % of Camber Common Stock (but may be increased up to a maximum of 9.99% at the sole election of a holder by the provision of at least 61 days’ advance written notice) and will have voting rights equal to one vote per share of Camber Series H Preferred Stock held on a non-cumulative basis.

Holders of Viking Common Stock and Viking Preferred Stock will have any fractional shares of Camber Common Stock or New Camber Preferred Stock after the Merger rounded up to the nearest whole share.

At the Effective Time, each then outstanding option or warrant to purchase Viking Common Stock (a “Viking Option”) will, to the extent unvested, automatically become fully vested and will be converted automatically into an option or warrant (an “Adjusted Option”) to purchase, on substantially the same terms and conditions as were applicable to such Viking Option immediately prior to the effective time of the Merger, except that (i) instead of being exercisable into Viking Common Stock, such Adjusted Option will be exercisable into Camber Common Stock, and (ii) all references to the “Company” in the Viking Option agreements will be references to Camber in the Adjusted Option agreements.

At the Effective Time, each promissory note issued by Viking that is convertible into Viking Common Stock (a “Viking Convertible Note”) that, as of immediately prior to the effective time of the Merger, is outstanding and unconverted shall be converted into a promissory note convertible into Camber Common Stock (an “Adjusted Convertible Note”) having substantially the same terms and conditions as applied to the corresponding Viking Convertible Note as of immediately prior to the effective time of the Merger (including, for the avoidance of doubt, any extended post-termination conversion period that applies following consummation of the Merger), except that (i) instead of being convertible into Viking Common Stock, such Adjusted Convertible Note will be convertible into Camber Common Stock, and (ii) all references to the “Company” in the Viking Convertible Note agreements will be references to Camber in the Adjusted Convertible Note agreements..

The Merger Agreement provides, among other things, that effective as of the Effective Time, James A.

Doris, the current Chief Executive Officer of both the Company and Viking, shall serve as President and Chief Executive Officer of the combined company following the Effective Time.

The Merger Agreement provides that, as of the Effective Time, the combined company will have its headquarters in Houston, Texas.

The Merger Agreement also provides that, during the period from the date of the Merger Agreement until the Effective Time, each of the Company and Viking will be subject to certain restrictions on its ability to solicit alternative acquisition proposals from third parties, to provide non-public information to third parties and to engage in discussions with third parties regarding alternative acquisition proposals, subject to customary exceptions.

Viking is required to hold a meeting of its stockholders to vote upon the adoption of the Merger Agreement and, subject to certain exceptions, to recommend that its stockholders vote to adopt the Merger Agreement.

The Company is required to hold a meeting of its stockholders to approve the issuance of Camber Common Stock and New Camber Preferred Stock (including the shares of Camber Common Stock issuable upon conversion thereof) in connection with the Merger (the “Share Issuances”) and, subject to certain exceptions, to recommend that its stockholders approve such proposals.

The completion of the Merger is subject to customary conditions, including (i) adoption of the Merger Agreement by Viking’s stockholders and approval of the Share Issuances by Camber’s stockholders, (ii) receipt of required regulatory approvals, (iii) effectiveness of a registration statement on Form S-4 for the Camber Common Stock to be issued in the Merger (the “Form S-4”), and (iv) the absence of any law, order, injunction, decree or other legal restraint preventing the completion of the Merger or making the completion of the Merger illegal.

Each party’s obligation to complete the Merger is also subject to certain additional customary conditions, including (i) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (ii) subject to certain exceptions, performance by the other party of its obligations under the Merger Agreement and (iii) the absence of any material adverse effect on the other party as defined in the Merger Agreement.

Additional closing conditions to the Merger include:

(i) receipt of fairness opinions from financial advisors of both the Company and Viking that the Merger is fair from a financial point of view to the holders of each company’s common stock, (ii) confirmation from the Company that it is not in default of its outstanding agreements with a certain preferred equity holder and lender, (iii) written agreement from the Company’s warrant holders regarding the number and exercise price of the Company’s outstanding warrants and that the Merger will not trigger any price adjustments in certain outstanding warrant agreements, and (iv) that, in the event the NYSE American determines that the Merger constitutes, or will constitute, a “back-door listing”/”reverse merger”, the Company (and its common stock) is required to qualify for initial listing on the NYSE American, pursuant to the applicable guidance and requirements of the NYSE as of the Effective Time.

The Merger Agreement can be terminated (i) at any time with the mutual consent of the parties;

(ii) by either the Company or Viking if any governmental consent or approval required for closing is not obtained, or any governmental entity issues a final non-appealable order or similar decree preventing the Merger;

(iii) by either Viking or the Company if the Merger shall not have been consummated on or before September 30, 2023;

(iv) by the Company or Viking, upon the breach by the other of a term of the Merger, which is not cured within 30 days of the date of written notice thereof by the other;

(v) by the Company if Viking is unable to obtain the affirmative vote of its stockholders for approval of the Merger;

(vi) by Viking if the Company is unable to obtain the affirmative vote of its stockholders for approval of the Share Issuances;

and (vii) by Viking or the Company if there is a willful breach of the Merger Agreement by the other party thereto.

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

The Merger closed on August 1, 2023, and further details regarding the transaction are included in Note 16 - Subsequent Events.

Although this Quarterly Report on Form 10-Q is filed after completion of the Merger, given that the Merger closed after June 30, 2023, the financial statements herein do not include a consolidation of Viking's financial statements at the Camber level.

Rather, the financial statements herein account for Camber's previous investments in Viking under the equity method of accounting, consistent with previously filed financial reports.

July 2021 Transaction

21 unchanged sentences

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 $ 2,346,076 for the three months ended March 31, 2023 as compared to a net loss of $ 68,155,477 for the three months ended March 31, 2022.

The 2023 loss was comprised of, among other things, certain non-cash items with a total net impact of $ 612,336 including:

The Company generated a net loss of $( 425,295 ) for the six months ended June 30, 2023 as compared to a net loss of $ 63,560,442 for the six months ended June 30, 2022.

The 2023 income was comprised of, among other things, certain non-cash items with a total net impact of $ 3,756,060 including:

(i) a gain on derivative and warrant liability of $ 6,888,313 (ii) loss in earnings of unconsolidated entity of $ 1,531,132 ;

1 unchanged sentence

and (iv) depreciation, depletion and accretion of $ 5,544 .

As of March 31, 2023, the Company has a stockholders’ deficit of $ 19,469,710 and total long-term debt of $ 34,721,141 , net of debt discount.

As of March 31, 2023, the Company has a working capital deficiency of approximately $ 16.6 million.

The largest components of current liabilities creating this working capital deficiency are a derivative liability of $ 9.8 million and a warrant liability of $ 2.4 million.

As of June 30, 2023, the Company has a stockholders’ deficit of $ 16,019,471 and total long-term debt of $ 35,523,337 , net of debt discount.

As of June 30, 2023, the Company has a working capital deficiency of approximately $ 10.7 million.

The largest components of current liabilities creating this working capital deficiency are a derivative liability of $ 5.1 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.

13 unchanged sentences

Amounts presented in the consolidated balance sheet as of December 31, 2022 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, 2023 and 2022 have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

The unaudited consolidated financial statements as of and for the three and six-month periods ended June 30, 2023 and 2022 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 consolidated financial statements and notes thereto contained in Camber’s latest Annual Report filed with the SEC on Form 10-K.

21 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, 2023 and December 31, 2022, 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, 2023 are classified below based on the three fair value hierarchy described above:

As of June 30, 2023 and December 31, 2022, 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, 2023 are classified below based on the three fair value hierarchy described above:

Identical Assets

Significant Unobservable

Total Gains (Losses) (three months ended March 31, 2023)

Total Gains (Losses) (six months ended June 30, 2023)

Financial liabilities:

Derivative liability - Series C Preferred Stock

$ ( 2,165,183 )

Assets and liabilities measured at fair value as of December 31, 2022 and losses for the three months ended March 31, 2022 are classified below based on the three fair value hierarchy described above:

Identical Assets

Assets and liabilities measured at fair value as of December 31, 2022 and losses for the six months ended June 30, 2022 are classified below based on the three fair value hierarchy described above:

Significant Unobservable

Total Gains (Losses) (three months ended March 31, 2022)

(Losses) (six

Financial liabilities:

5 unchanged sentences

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, 2023 and December 31, 2022, the Company’s cash in excess of the federally insured limit was $ 324,977 and $ 916,596 , respectively.

At June 30, 2023 and December 31, 2022, the Company’s cash in excess of the federally insured limit was $ 0 and $ 916,596 , respectively.

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

The Company had no cash equivalents at March 31, 2023 and December 31, 2022.

The Company had no cash equivalents at June 30, 2023 and December 31, 2022.

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, 2023 and December 31, 2022 there were no allowances for doubtful accounts.

At June 30, 2023 and December 31, 2022 there were no allowances for doubtful accounts.

Investment in Unconsolidated Entities

15 unchanged sentences

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, 2023.

No impairment expense was recorded for the six months ended June 30, 2023.

Oil and Gas Properties

73 unchanged sentences

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 March 31, 2023 and December 31, 2022 is negligible due to the restrictions on conversion.

The Company has determined that the fair value of the embedded derivative as of June 30, 2023 and December 31, 2022 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.

6 unchanged sentences

Subsequent Events

The Company has evaluated all subsequent events from March 31, 2023 through the date of filing of this report.

The Company has evaluated all subsequent events from June 30, 2023 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, 2023.

The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the six months ended June 30, 2023.

The allocation between the classifications is based on the relationships summarized in the Company’s annual analysis of reserves as of December 31, 2022.

The Depletion and Adjustments column reflects depletion and all other increases or decreases that occurred during the three months ended March 31, 2023:

Depletion and Adjustments

The Depletion and Adjustments column reflects depletion and all other increases or decreases that occurred during the six months ended June 30, 2023:

Proved developed producing oil and gas properties

14 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, 2023 and 2022, the Company did not record any impairments.

For the three and six months ended June 30, 2023 and 2022, the Company did not record any impairments.

NOTE 6 – INVESTMENT IN UNCONSOLIDATED ENTITIES

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

The Company owns approximately 60.9 % of the outstanding common shares of Viking at March 31, 2023.

Table below shows the changes in the investments in unconsolidated entities for the three months ended March 31, 2023 and the year ended December 31, 2022.

The Company owns approximately 58.7 % of the outstanding common shares of Viking at June 30, 2023.

Table below shows the changes in the investments in unconsolidated entities for the six months ended June 30, 2023 and the year ended December 31, 2022.

Carrying amount – beginning

4 unchanged sentences

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, 2023 and the year ended December 31, 2022.

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, 2023 and the year ended December 31, 2022.

Carrying amount at beginning of year

29 unchanged sentences

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

Twelve month period ended March 31,

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 )

60 unchanged sentences

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, 2023 and the year ended December 31, 2022 were as follows:

Activities for derivative Series C Preferred Stock derivative liability during the six months ended June 30, 2023 and the year ended December 31, 2022 were as follows:

Carrying amount at beginning of year

3 unchanged sentences

( 1,529,458 )

( 175,038,915 )

Carrying amount at end of year

3 unchanged sentences

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

As of June 30, 2023, an accrued balance due of $ 60,000 is included in accounts payable.

The Company’s CFO, Frank W.

1 unchanged sentence

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

As of June 30, 2023, there is no accrued balance due.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

37 unchanged sentences

Oil and Gas Contracts

The following table disaggregates revenue by significant product type for the three months ended March 31, 2023 and 2022 respectively:

The following table disaggregates revenue by significant product type for the six months ended June 30, 2023 and 2022 respectively:

Natural gas sales and liquids

1 unchanged sentence

NOTE 13 – STOCKHOLDERS’ DEFICIT

During the three months ended March 31, 2023, the Company issued to Antilles Family Office, LLC, 571,194 shares of common stock for a conversion of 32 shares of Series C Preferred Stock, and 1,336,143 common shares as True Up shares associated with prior conversions of Series C Preferred Stock as a result of the continuation of the Measurement Period (as defined in the Certificate of Designation with respect to such Series C Preferred Stock) associated with such conversions and a decline in the price of the Company’s common shares within the Measurement Period.

During the six months ended June 30, 2023, the Company issued 4,497,623 common shares to Antilles Family Office, LLC, for the conversion of 170 shares of Series C Preferred Stock, and 3,947,999 common shares to existing and/or former holders of Series C Preferred Stock as True Up shares in connection with prior conversions of Series C Preferred Stock as a result of the continuation of the Measurement Period (as defined in the Certificate of Designation with respect to such Series C Preferred Stock) associated with such conversions and a decline in the price of the Company’s common shares within the Measurement Period.

Series A Convertible Preferred Stock

10 unchanged sentences

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, 2023 and December 31, 2022, the Company had no Series A Convertible Preferred Stock issued or outstanding.

As of June 30, 2023 and December 31, 2022, the Company had no Series A Convertible Preferred Stock issued or outstanding.

Series B Redeemable Convertible Preferred Stock

As of March 31, 2023 and December 31, 2022, the Company had no Series B Redeemable Convertible Preferred Stock issue and outstanding.

As of June 30, 2023 and December 31, 2022, 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.

25 unchanged sentences

and (ii) (A) beginning on the Amendment Date and for the period through December 30, 2022, the Measuring Metric will be the higher of the amount provided in Section I.G.7.1(ii) of the COD and $0.20, and (B) beginning at market close on December 30, 2022 and thereafter, the Measuring Metric will be the volume weighted average trading price of the Common Stock on any day of trading following the date of first issuance of the Series C Preferred Stock.

As of March 31, 2023 and December 31, 2022 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, 2023 and December 31, 2022, 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 $ 162.50 per share at March 31, 2023 and December 31, 2022 respectively

As of June 30, 2023 and December 31, 2022 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, 2023 and December 31, 2022, 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 $ 162.50 per share at June 30, 2023 and December 31, 2022 respectively

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

11 unchanged sentences

Since the Measurement Period with respect to such conversions did not end until October 28, 2022 (as further explained below) and because the low VWAP subsequent to the conversions declined to approximately $ 0.1519 during such period, EMC received certain true-up shares in 2022.

As of March 31, 2023, EMC held zero shares of Series C Preferred Stock, but was entitled to 730,241 common shares in connection with prior conversions.

These shares were issued to EMC on or about May 1, 2023.

As of June 30, 2023, EMC held zero shares of Series C Preferred Stock.

The majority of the Series C Preferred Stock previously converted into common shares by Antilles in 2022 were based on the low VWAP of the Company’s common stock being $0.4503 per share.

36 unchanged sentences

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.

The following is a summary of the Company’s outstanding warrants at March 31, 2023:

lntrinsic Value at

March 31, 2023

1,000,000 (2)

December 30, 2026

1,000,000 (2)

December 30, 2026

December 31, 2026

Warrants issued in connection with a Severance Agreement with Richard N.

Azar II, the Company’s former Chief Executive Officer.

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

Termination of Warrants and Early Redemption Entitlement

On April 25, 2023, the Company entered into two warrant termination agreements (the “Warrant Termination Agreements”), one with Discover and one with Antilles (each, an “Investor” and collectively, the “Investors”), pursuant to which each Investor agreed to cancel and terminate, effective as of April 25, 2023 (the “Termination”) all warrants to purchase the Company’s common stock outstanding under (i) that certain Warrant Agreement, dated as of December 30, 2021, by and between the Company and Antilles, and (ii) that certain Warrant Agreement, dated as of December 31, 2021, by and between the Company and Discover.

The Warrant Termination Agreements are identical as to their terms.

The Investors entered into the Warrant Termination Agreements in order to help facilitate implementation of the Company’s business plans and continued trading on the NYSE American LLC, and, in exchange for the Termination, the Company agreed to the release and indemnity as provided in each Warrant Termination Agreement.

Pursuant to the Warrant Termination Agreement, the Investor also agreed that the Company may make an Early Redemption of any remaining shares of Series C Redeemable Convertible Preferred Stock held by the Investor provided that all Promissory Notes executed by the Company in favor of the Investor or any of its affiliates have been paid in full.

The term “Early Redemption” has the meaning given to it in the Fifth Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock filed by the Company with the State of Nevada regarding such class of preferred stock.

As of June 30, 2023, the Company does not have any outstanding warrants.

NOTE 14 – STOCK-BASED COMPENSATION

29 unchanged sentences

The Company filed a Certificate of Change to decrease the number of our authorized shares of common stock from 1,000,000,000 to 20,000,000 , which certificate was filed with the State of Nevada on December 16, 2022.

On April 26, 2023, an amendment to the Company’s articles of incorporation to increase the number of the Company’s authorized shares of common stock from 20,000,000 to 500,000,000 (the “ Amendment ”) was passed by a majority of the outstanding voting shares of the Company at a Special Meeting of Stockholders.

The Amendment was effected by the Company filing a Certificate of Amendment pursuant to Nevada Revised Statutes Section 78.209 with the Secretary of State of the State of Nevada on April 26, 2023.

NOTE 15 – INCOME (LOSS) PER COMMON SHARE

The calculation of earnings (loss) per share for the three months ended March 31, 2023 and 2022 was as follows:

$ ( 2,346,076 )

$ ( 68,155,477 )

Less preferred dividends

Net loss attributable to common stockholders

The calculation of earnings (loss) per share for the three and six months ended June 30, 2023 and 2022 was as follows:

Three months ended

Six months ended

Income (loss) attributable to common shareholders

$ ( 425,295 )

$ ( 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 common shares – diluted

Loss per common share - basic

Loss per common share - diluted

Dilutive effect Preferred C Shares

Denominator - Weighted average shares - diluted

Income (loss) per share - basic

Income (loss) per share - diluted

NOTE 16 – SUBSEQUENT EVENTS

Termination of Warrants and Early Redemption Entitlement

The Warrant Termination Agreements are identical as to their terms.

Amendment to Articles of Incorporation

The Amendment was effected by the Company filing a Certificate of Amendment pursuant to Nevada Revised Statutes Section 78.209 with the Secretary of State of the State of Nevada on April 26, 2023.

Amendment to Merger Agreement

In connection with the previously announced resumption of merger negotiations and further steps to complete a merger, on April 18, 2023, the Company and Viking entered into an amendment to that certain Amended and Restated Agreement and Plan of Merger, dated as of February 15, 2023 (as it may be further amended from time to time, the “Merger Agreement”).

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

Series C Preferred Stock

Issuance of True Up Shares for prior Conversions of Series C Preferred Stock:

On or about May 2, 2023, the Company issued a total of 730,241 common shares to EMC Capital Partners as True Up shares associated with prior conversions of Series C Preferred Stock as a result of the continuation of the Measurement Period (as defined in the Certificate of Designation with respect to such Series C Preferred Stock) associated with such conversions and a decline in the price of the Company’s common shares within the Measurement Period.

On or about May 2, 2023, the Company issued 242,640 common shares to Antilles as True Up shares associated with prior conversions of Series C Preferred Stock as a result of the continuation of the Measurement Period (as defined in the Certificate of Designation with respect to such Series C Preferred Stock) associated with such conversions and a decline in the price of the Company’s common shares within the Measurement Period.

During July and August 2023, the Company issued 3,403,428 common shares to Antilles as True Up shares associated with prior conversions of Series C Preferred Stock as a result of the continuation of the Measurement Period (as defined in the Certificate of Designation with respect to such Series C Preferred Stock) associated with such conversions and a decline in the price of the Company’s common shares within the Measurement Period.

Issuance of Common Shares for new Conversions of Series C Preferred Stock:

On or about May 5, 2023, the Company issued 1,653,098 common shares to Antilles in connection with Antilles’ conversion of 65 shares of Series C Preferred Stock.

During July and August 2023, the Company issued 4,028,159 common shares to Antilles in connection with Antilles’ conversion of 70 shares of Series C Preferred Stock.

Outstanding Series C Preferred Stock:

As of May 9, 2023, Antilles holds 173 shares of Series C Preferred Stock.

As of August 7, 2023, there were a total of 30 shares of Series C Preferred Stock outstanding, all of which were held by Antilles.

Antilles may convert such Series C Preferred Stock into common shares of the Company pursuant to the terms of the Sixth Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock filed by the Company with the Secretary of State of Nevada on November 8, 2021, as amended on October 28, 2022 (as further described herein) (collectively, the “COD”), and applicable agreements between the Company and Antilles.

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If the Low VWAP falls below $ 0.6184 , the underlying common share entitlement(s) would increase in accordance with the terms of the COD.

Pursuant to the Warrant Termination Agreements executed by the Company on or about April 25, 2023 with Discover and Antilles, the Company may redeem the outstanding shares of Series C Preferred Stock for cash in an amount equal to the Early Redemption Price (as defined in the Fifth Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock filed by the Company with the State of Nevada regarding such class of preferred stock ) provided that all Promissory Notes executed by the Company in favor of Discover have been paid in full.

Merger with Viking

On August 1, 2023, pursuant to the Merger Agreement, Merger Sub completed the Merger with and into Viking, with Viking surviving the Merger as a wholly-owned subsidiary of Camber.

Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time on August 1, 2023 as set forth in the Certificate of Merger duly filed with the Nevada Secretary of State (the “Effective Time”), each share:

(i) of common stock, par value $ 0.001 per share, of Viking (the “Viking Common Stock”) issued and outstanding immediately prior to the Effective Time, other than shares owned by Camber, Viking and Merger Sub, was converted into the right to receive one share of common stock of Camber (the “Camber Common Stock”);

(ii) of Series C Preferred Stock of Viking (the “Viking Series C Preferred Stock”) issued and outstanding immediately prior to the Effective Time was converted into the right to receive one share of Series A Convertible Preferred Stock of Camber (the “New Camber Series A Preferred Stock”) and (iii) of Series E Convertible Preferred Stock of Viking (the “Viking Series E Preferred Stock,” and, together with the Viking Series C Preferred Stock, the “Viking Preferred Stock”) issued and outstanding immediately prior to the Effective Time was converted into the right to receive one share of Series H Preferred Stock of Camber (the “New Camber Series H Preferred Stock,” and, together with the New Camber Series A Preferred Stock, the “New Camber Preferred”).

Pursuant to the Certificate of Designations for the New Camber Series A Preferred Stock, dated as of August 1, 2023 (the “Series A COD”), each share of New Camber Series A Preferred Stock is convertible into 890 shares of Camber Common Stock (subject to a beneficial ownership limitation preventing conversion into Camber Common Stock if the holder would be deemed to beneficially own more than 9.99% of Camber Common Stock), is treated equally with Camber Common Stock with respect to dividends and liquidation, and only has voting rights with respect to voting:

(a) on a proposal to increase or reduce Camber’s share capital;

(b) on a resolution to approve the terms of a buy-back agreement;

(d) on a proposal for the disposal of all or substantially all of Camber’s property, business and undertaking;

(f) during the winding-up of Camber;

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.

Pursuant to the Certificate of Designations for the New Camber Series H Preferred Stock, dated as of August 1, 2023 (the “Series H COD”), each share of New Camber Series H Preferred Stock has a face value of $ 10,000 per share, is convertible into a certain number of shares of Camber Common Stock, with the conversion ratio based upon achievement of certain milestones by Viking’s subsidiary, Viking Protection Systems, LLC (provided the holder has not elected to receive the applicable portion of the purchase price in cash pursuant to that certain Purchase Agreement, dated as of February 9, 2022, by and between Viking and Jedda Holdings, LLC), is subject to a beneficial ownership limitation of 4.99 % of Camber Common Stock (but may be increased up to a maximum of 9.99% at the sole election of a holder by the provision of at least 61 days’ advance written notice) and has voting rights equal to one vote per share of Camber Series H Preferred Stock held on a non-cumulative basis.

Holders of Viking Common Stock and Viking Preferred Stock had any fractional shares of Camber Common Stock or New Camber Preferred after the Merger rounded up to the nearest whole share.

At the Effective Time, each then outstanding option or warrant to purchase Viking Common Stock (a “Viking Option”), to the extent unvested, automatically became fully vested and was converted automatically into an option or warrant (an “Adjusted Option”) to purchase Camber Common Stock, on substantially the same terms and conditions as were applicable to such Viking Option immediately prior to the Effective Time, except that (i) instead of being exercisable into Viking Common Stock, such Adjusted Option is exercisable into Camber Common Stock, and (ii) all references to the “Company” in the Viking Option agreements are references to Camber in the Adjusted Option agreements.

At the Effective Time, each promissory note issued by Viking that is convertible into Viking Common Stock (a “Viking Convertible Note”) that, as of immediately prior to the Effective Time, is outstanding and unconverted, was converted into a promissory note convertible into Camber Common Stock (an “Adjusted Convertible Note”) having substantially the same terms and conditions as applied to the corresponding Viking Convertible Note as of immediately prior to the Effective Time (including, for the avoidance of doubt, any extended post-termination conversion period that applies following consummation of the Merger), except that (i) instead of being convertible into Viking Common Stock, such Adjusted Convertible Note is convertible into Camber Common Stock, and (ii) all references to the “Company” in the Viking Convertible Note agreements are references to Camber in the Adjusted Convertible Note agreements.

In connection with the Merger, Camber issued approximately 49,290,152 shares of Camber Common Stock, which represents approximately 59.99 % of the outstanding Camber Common Stock after giving effect to such issuance.

In addition, Camber reserved for issuance approximately 88,647,137 additional shares of Camber Common Stock in connection with the potential (1) conversion of the New Camber Series A Preferred Stock, (2) conversion of the New Camber Series H Preferred Stock, (3) exercise of the Adjusted Options and (4) conversion of the Adjusted Convertible Notes.

In connection with the closing of the Merger, on August 1, 2023, Camber filed each of the Series A COD and the Series H COD with the Nevada Secretary of State.

Doris will continue to serve as President and Chief Executive Officer of the combined company, and the combined company will continue to have its headquarters in Houston, Texas.

Certificate of Designation for New Camber Series A Preferred Stock

The Series A COD designated up to 28,092 shares of the authorized but unissued shares of its preferred stock as New Camber Series A Preferred Stock.

The following is a summary of the principal terms of the New Camber Series A Preferred Stock.

The holders of the New Camber Series A Preferred Stock (the “Series A Holders”) are entitled to receive, and Camber shall pay, dividends on shares of the New Camber Series A Preferred Stock equal to the amount of the dividend or distribution per share of Camber Common Stock payable at such time multiplied by the number of shares of Camber Common Stock the shares of New Camber Series A Preferred Stock held by such Holder are convertible into.

Voting Rights

Except as required by applicable law the Series A Holders have no right to vote on any matters, questions or proceedings of Camber except:

(a) on a proposal to increase or reduce Camber’s share capital;

(b) on a resolution to approve the terms of a buy-back agreement;

(d) on a proposal for the disposal of all or substantially all of Camber’s property, business and undertaking;

(f) during the winding-up of Camber;

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.

Each share of New Camber Series A Preferred Stock entitles the holder thereof to 890 votes on all matters Series A Holders have the right to vote.

Series A Holders will vote together as one class.

Upon any liquidation, dissolution or winding-up of Camber, whether voluntary or involuntary (a “Liquidation”), Series A Holders will be entitled to receive out of the assets of Camber, whether such assets are capital or surplus, for each share of New Camber Series A Preferred Stock the same amount that a holder of Camber Common Stock would receive if the New Camber Series A Preferred Stock were fully converted to Camber Common Stock, which amounts shall be paid pari passu with all holders of Camber Common Stock.

A Fundamental Transaction, as defined in the Series A COD, shall not be treated as a Liquidation.

Each share of New Camber Series A Preferred Stock is convertible, at the option of the Holder thereof, at any time after the date of issuance of such share, at the office of Camber or any transfer agent for such stock, into eight hundred and ninety (890) shares of fully paid and non-assessable Camber Common Stock (the “Series A Conversion Rate”).

The Series A Conversion Rate is subject to a beneficial ownership limitation of 9.99% as set forth in Section 6(b) of the Series A COD.

Certain Adjustments

If Camber, at any time while the New Camber Series A Preferred Stock is outstanding, issues stock splits, effects a recapitalization of the Camber Common Stock, makes a subsequent rights offerings, or makes any dividend or other distribution of its assets, then the Series A Holders can adjust the Series A Conversion Rate of the New Camber Series A Preferred Stock to account for such transaction.

Certificate of Designation for New Camber Series H Preferred Stock

The Series H COD designated up to 2,075 shares of the authorized but unissued shares of its preferred stock as New Camber Series H Preferred Stock.

The following is a summary of the principal terms of the New Camber Series H Preferred Stock.

Voting Rights

Except as required by applicable law, holders of the New Camber Series H Preferred Stock (“Series H Holders”) have voting rights equal to one vote per share of New Camber Series H Preferred Stock held on a non-cumulative basis.

Each share of New Camber Series H Preferred Stock is convertible into a number of shares of Camber Common Stock as set forth in Section 5(a) of the Series H COD (the “Series H Conversion Rate”).

The Series H Conversion Rate is subject to the beneficial ownership limitation of 4.99% as set forth in Section 5(b) of the Series H COD provided that such beneficial ownership limitation may be increased up to a maximum of 9.99% at the sole election of a holder of such New Camber Series H Preferred Stock

Merger Consummation Share Issuance

On August 1, 2023, in accordance with the terms of the Merger Agreement, the Company issued 49,290,152 common shares to holders of Viking common shares as of the effective date.

Post-Merger Debt Conversion

On August 2, 2023 the Company issued 3,830,439 shares of common stock to FK Venture LLC in connection with a partial conversion of a Viking Convertible Note in the amount of $ 1,500,000 , and on August 3, 2023, the Company issued 1,359,227 shares of common stock to FK Venture LLC in connection with a partial conversion of a Viking Convertible Note in the amount of $ 532,273 .

Pursuant to a Securities Purchase Agreement dated on or about May 5, 2023 between Viking Energy Group, Inc.

and FK Venture, LLC (the “SPA”), on or about August 7, 2023 the Company executed a Promissory Note in favor of FK Venture LLC in the principal amount of $ 800,000 (the “FK Note”), and on August 8, 2023 the Company received $ 800,000 in cash.

The FK Note is one of the ‘Viking Notes’ contemplated and/or permitted by the Merger Agreement .

The FK Note, and previous promissory notes executed by Viking in favor of FK Venture LLC, (a) mature on July 1, 2025 ;

(b) accrue interest at 12 % per annum (provided that if a Note is prepaid within 12 months of the issuance date, a full 12 months of interest shall be paid);

and are (c) convertible into shares of the Company’s common stock at a fixed conversion price equal to $ 0.4158 , being fifty percent of the volume weighted average price of the Company’s common stock on July 31, 2023, i.e.

the day prior to the closing of the Merger.

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