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Item 8. Financial Statements and Supplementary Data

2024-08-26 compared with 2022-06-08 · 1362 added, 1597 removed, 230 unchanged (93% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our consolidated financial statements as of and for the fiscal years ended March 31, 2020 and 2019 have been audited by Turner, Stone & Company, L.L.P.

independent registered public accounting firm, and have been prepared in accordance with generally accepted accounting principles pursuant to Regulation S-X.

INDEX TO THE FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of March 31, 2020 and 2019

Consolidated Statements of Operations for the Years Ended March 31, 2020 and 2019

Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Years Ended March 31, 2020 and 2019

Consolidated Statements of Cash Flows for the Years Ended March 31, 2020 and 2019

Report of Independent Registered Public Accounting Firm (PCAOB ID# 76 )

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

Consolidated Statement of Changes in Stockholders’ Deficit for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

Notes to Consolidated Financial Statements

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Board of Directors and Shareholders

Camber Energy, Inc.

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We have audited the accompanying consolidated balance sheets of Camber Energy, Inc.

(the “Company”) as of March 31, 2020 and 2019, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the two years ended March 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2020 and 2019 and the results of its operations and its cash flows for each of the two years ended March 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

(the “Company”) as of December 31, 2023, and 2022, and the related consolidated statements of operations, comprehensive loss, changes in stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 5 to the consolidated financial statements, the 2023 consolidated financial statements have been restated to correct a misstatement.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 3.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Restatement of Previously Issued Financial Statements

As discussed in Note 4 to the financial statements, the Company has restated its 2020 and 2019 financial statements to correct errors related to accounting for its Series C Preferred Stock.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These financial statements are the responsibility of the entity’s management.

Our responsibility is to express an opinion on these financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting.

Accordingly, we express no such opinion.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Impairment of Indefinite Life Intangible Assets:

The impairment evaluation of the Company’s indefinite life intangible assets is an assessment that begins with the Company’s monitoring of indicators of impairment on an individual asset basis, which the Company believes is the lowest level for which there are identifiable cash flows.

The Company reviews indefinite life intangible assets for impairment indicators on a quarterly basis or whenever events or changes in circumstances indicate the carrying amount of the assets may not be fully recoverable.

The Company performed a full quantitative impairment assessment as of December 31, 2023, for all indefinite life intangible assets.

When performing a quantitative impairment assessment, the Company estimates discounted cash flows at the asset level from continuing use through the remainder of the asset’s estimated useful life.

If the estimated discounted cash flows are not sufficient to recover an indefinite life intangible asset’s carrying value, the Company recognizes an impairment to reduce the carrying value to the estimated fair value.

The Company applies significant judgment in estimating the fair value of its intangible assets, based on expected revenues, industry, and business growth, and expected residual cash flows at net present value.

We identified the impairment of indefinite life intangible assets as a critical audit matter because of the significant judgment required by management to determine estimated expected revenues, growth, and discounted cash flows.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s judgements and estimates.

How the Critical Audit Matter was Addressed in the Audit:

Our audit procedures related to management’s model which included projected revenues based on forecasted growth rates and discounted cash flow analysis included the following, among others:

We evaluated management’s ability to forecast future cash flows by evaluating management’s forecast of estimated future cash flows assumptions including, but not limited to, the forecasted performance driven by expected industry receptivity, existing sales orders or outstanding bids, market share, and expected operating costs.

We reviewed the completeness and accuracy of the underlying data used in management’s forecast.

We assessed the underlying source information where available and mathematical accuracy of the calculations.

Goodwill Impairment Assessment:

The Company assesses goodwill for impairment annually during the fourth quarter or more frequently when events or changes in circumstances indicate that impairment may exist.

Reporting units are tested for impairment by comparing the fair value of each reporting unit with it carrying amount.

Management uses a market capitalization approach to estimate the fair value of reporting unit.

During the third quarter of 2023, the Company identified a triggering event.

The Company performed an impairment test of the reporting unit as of September 30, 2023, and concluded the fair value of the reporting unit was less than the carrying amount.

The Company recognized an impairment charge of approximately $14,486,745 during the year ended December 31, 2023.

We identified the evaluation of the goodwill impairment assessment of the reporting unit as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate certain assumptions used in the Company’s estimate of the fair value of the reporting unit.

Changes in these assumptions could have had a significant effect on the Company’s assessment of the fair value of the reporting unit.

How the Critical Audit Matter was Addressed in the Audit:

Our audit procedures related to the impairment of goodwill included:

We assessed the methodology, assumptions and mathematical accuracy of the model developed by the Company to assess whether the goodwill is impaired.

We assessed the analysis utilized to calculate the implied impairment.

We performed a sensitivity analysis of the Company’s historic stock prices for the 15-days before and 15-days after December 31, 2023.

Series C Preferred Stock:

As discussed in Notes 10 and 15, the Company issued a series of preferred stock that contained several features which derived value from sources unrelated to the host preferred stock instrument.

The Company determined certain of the features included in the Series C Preferred Stock designations, including the conversion, dividend and liquidation value, required that the preferred stock be reported as a component of temporary equity with the conversion and dividend components bifurcated and accounted for on a stand-alone basis as derivatives.

The determination of fair value of these derivatives as well as the value of the temporary equity involved using complex valuation methodologies and significant assumptions including volume weighted prices and the estimated valuation of the Company’s common stock taking into consideration the effect of these dilutive instruments.

The Company issued a series of preferred stock that contained several features which derive value from sources unrelated to the host preferred stock instrument.

The Company determined certain of the features included in the Series C Preferred Stock designations, including the conversion, dividend, and liquidation value, required that the conversion and dividend components be bifurcated and accounted for on a stand-alone basis as derivatives.

The determination of fair value of these derivatives involved using complex valuation methodologies and significant assumptions including volume weighted prices and the estimated valuation of the Company’s common stock taking into consideration the effect of these dilutive instruments.

We identified auditing the Company’s evaluation of the accounting for the features included in the Series C Preferred Stock, specifically the methods and assumptions used to estimate the fair value of the derivative liabilities, as a critical audit matter.

How We Addressed the Matter in Our Audit:

The primary procedures we performed to address this critical audit matter included:

How the Critical Audit Matter was Addressed in the Audit:

Our audit procedures related to management’s fair value model for the bifurcated features of the Series C Preferred Stock included:

Obtaining and reviewing the underlying Series C Preferred Stock certificate of designation and related amendments to understand the terms and conditions, economic substance, and identify embedded features requiring evaluation.

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Obtaining an understanding of management’s process for developing the estimated fair value of the embedded features, including evaluation of the appropriateness of the method selected by the Company, identifying the significant assumptions used to determine the fair value estimate, and the application of those assumptions in the related method.

Testing the data and significant assumptions used in developing the fair value estimate, including procedures to determine whether the data was complete and accurate and sufficiently precise.

Assessing the data and significant assumptions used in developing the fair value estimate, including procedures to determine whether the data was complete and accurate and sufficiently precise.

Estimation of Proved Oil and Gas Reserves:

The Company uses the full cost method of accounting for oil and natural gas properties.

This accounting method requires management to make estimates of proved oil and natural gas reserves and related future cash flows to compute and record depreciation, depletion, and amortization expense, as well as to assess potential impairment of oil and natural gas properties (the full cost ceiling test).

To estimate the volume of proved oil and natural gas reserves quantities, management makes significant estimates and assumptions including forecasting the production decline rate of producing properties.

In addition, the estimation of proved oil and natural gas reserves is also impacted by management’s judgements and estimates regarding the financial performance of wells associated with those proved oil and natural gas reserves to determine if wells are expected to be economical under the appropriate pricing assumptions that are required in the estimation of depreciation, depletion and amortization expense and potential ceiling test impairment assessments.

We identified the estimation of proved oil and natural gas reserves as it relates to the recognition of depreciation, depletion and the assessment of potential impairment as a critical audit matter.

How the Critical Audit Matter was Addressed in the Audit:

Our audit procedures related to the estimation of provided oil and gas reserves included:

The work of management's specialists was used in performing the procedures to evaluate the reasonableness of the proved developed oil and gas reserve volumes.

As a basis for using this work, the specialists' qualifications were understood and the Company’s relationship with the specialists was assessed.

Evaluated the methods and assumptions used by the specialists.

We assessed the Company’s inputs and assumptions used in the valuation models applied and the reasonableness of those assumptions.

/s/ Turner, Stone & Company, L.L.P.

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Dallas, Texas

November 19, 2021 (except for Notes 2, 4 and 21 as to which the date is May 17, 2022)

March 22, 2024, except for the restatement paragraph above, and Notes 3, 5, 6, and 17 as to which the date is August 26, 2024

Turner, Stone & Company, L.L.P.

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turnerstone.com

INTERNATIONAL ASSOCIATION OF ACCOUNTANTS AND AUDITORS

INTERNATIONALASSOCIATIONOF ACCOUNTANTS AND AUDITORS

CAMBER ENERGY, INC.

CONSOLIDATED BALANCE SHEETS (Restated)

As of March 31,

At December 31,

Current assets:

Accounts Receivable, Net of Allowance

Other Current Assets

Accounts receivable, net

Inventory, net

Prepaids and other current assets

Total current assets

Property and Equipment

Oil and Gas Properties - Subject to Amortization

Oil and Gas Properties - Not Subject to Amortization

Other Property and Equipment

Total Property and Equipment

Accumulated Depletion, Depreciation, Amortization and Impairment

(78,351,825 )

(78,334,324 )

Total Property and Equipment, Net

Equity Method Investment – Elysium Energy, LLC

Notes Receivable

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Oil and gas properties, full cost method

Proved oil and gas properties, net

Total oil and gas properties, net

Fixed assets, net

Right of use assets, net

ESG Clean Energy license, net

Other intangibles - Simson Maxwell, net

Other intangibles - Variable Interest Entities

Due from related parties

Deposits and other assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Common Stock Payable

Accrued Expenses

Current Asset Retirement Obligations

Current Income Taxes Payable

Accrued expenses and other current liabilities

Customer deposits

Due to Parent

Undistributed revenues and royalties

Current portion of operating lease liability

Due to related parties

Current portion of notes payable - related parties

Bank indebtedness - credit facility

Derivative liability

Current portion of long-term debt - net of discount

Total current liabilities

Long-term Notes Payable, Net of Discount

Asset Retirement Obligations

Derivative Liability

Long term debt - net of current portion and debt discount

Notes payable - related parties - net of current portion

Operating lease liability, net of current portion

Contingent obligations

Asset retirement obligation

TOTAL LIABILITIES

Commitments and Contingencies (see Note 11)

Temporary Equity

Preferred Stock Series C, 2,819 and 2,305 Shares Issued and Outstanding, Respectively, Liquidation Preference of $97,156,835 and $79,338,430, respectively

Stockholders’ Deficit

Preferred Stock Series A, 2,000 Shares Authorized of $0.001 Par Value, -0- Shares issued and Outstanding

Preferred Stock Series B, 600,000 Shares Authorized of $0.001 Par Value, -0- and 44,000 Shares issued and Outstanding, respectively

Preferred Stock Series D, 50,000 Shares Authorized of $0.001 Par Value, -0- Shares issued and outstanding

Preferred Stock Series E, 1,000,000 Shares Authorized of $0.001 Par Value, -0- Shares issued and Outstanding

Preferred Stock Series F, 16,750 Shares Authorized of $0.001 Par Value, -0- Shares issued and Outstanding

Common Stock, 25,000,000 Shares Authorized of $0.001 Par Value, 5,000,000 and 13,441 Shares Issued and Outstanding, respectively

Commitments and contingencies (Note 14)

STOCKHOLDERS’ EQUITY

Preferred stock Series A, $ 0.001 par value, 50,000 shares authorized, 28,092 shares issued and outstanding as of December 31, 2023 and 2022

Preferred stock Series C, $ 0.001 per value, 5,200 shares authorized, 30 shares issued and outstanding as of December 31, 2023.

Liquidation preference of $ 1,033,950 .

Preferred stock Series G, $ 0.001 par value, 25,000 authorized, 5,272 shares issued and outstanding as of December 31, 2023.

No liquidation preference.

Preferred stock Series H, $ 0.001 par value, 2,075 shares authorized, 275 and 475 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

Common stock, $ 0.001 par value, 500,000,000 shares authorized, 119,301,921 and 44,852,611 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total Stockholders’ Deficit

( 140,350,893 )

( 122,187,673 )

Total Liabilities and Stockholders’ Deficit

Parent’s stockholders’ equity in Camber

( 3,617,004 )

Non-controlling interest

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

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

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CONSOLIDATED STATEMENTS OF OPERATIONS (Restated)

For the Year Ended March 31,

Operating Revenues

Natural Gas Liquids

Year Ended December 31,

Power generation units and parts

Service and repairs

Total revenue

Operating expenses

Lease Operating Expenses

Severance and Property Taxes

Depreciation, Depletion, Amortization and Accretion

Cost of goods sold

Lease operating costs

General and administrative

Stock based compensation

Impairment of oil and gas properties

Gain on Sale of Property and Equipment

Impairment of intangible assets

Depreciation, depletion & amortization

Accretion - asset retirement obligation

Total operating expenses

Loss from operations

( 6,994,365 )

General and Administrative

( 9,674,172 )

Operating Income (Loss)

Other Expense (Income)

Other income (expense)

Interest expense

Equity in Earnings of Unconsolidated Entity

Loss on Derivative liability

Other (Income) Expense, Net

Total Other Expense (Income)

Loss Before Income Taxes

( 1,408,096 )

Income Tax Benefit (Expense)

$ (27,958,169

Amortization of debt discount

( 1,711,518 )

Less preferred dividends

Net loss attributable to common shareholders

Change in fair value of derivative liability

( 9,150,459 )

Income (Loss) Per Common Share

(Loss) gain on disposal of membership interests and assets

( 7,747,347 )

Loss on extinguishment of debt

Interest and other income

Total other expense, net

( 11,540,702 )

Weighted Average Number of Common Shares Outstanding

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

CAMBER ENERGY, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED MARCH 31, 2020 and 2019 (Restated)

Preferred Stock

Stockholders'

Distributable

Balances, March 31, 2018 (Restated)

( 7,684,087 )

Net loss before income taxes

( 18,535,067 )

( 17,358,259 )

Common Shares issued for:

Conversion of Series B to Common

Income tax benefit (expense)

( 18,535,067 )

Conversion of Series C Preferred Stock

( 17,358,259 )

Net loss attributable to non-controlling interest

( 1,930,930 )

Rounding Adjustment for Split

Net loss attributable to Camber Energy, Inc.

$ ( 18,163,220 )

Conversion of Debenture

$ ( 15,427,329 )

Issuance of Common Shares for Consulting Fees

Loss per common share, basic and diluted

Weighted average number of common shares outstanding, basic and diluted

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

CAMBER ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Restated)

Year Ended December 31,

$ ( 18,535,067 )

Warrants - Abeyance

$ ( 17,358,259 )

Share-Based Compensation

Foreign currency translation adjustment

Total comprehensive loss

( 18,358,204 )

Issuance of Series C Preferred Shares for Cash Proceeds

( 17,605,955 )

Preferred Dividends

Change in fair value of Series C shares

Less comprehensive loss attributable to non-controlling interest

Loss attributable to non-controlling interest

( 1,930,930 )

Foreign currency translation adjustment attributable to non-controlling interest

Comprehensive loss attributable to non-controlling interest

( 2,028,770 )

Comprehensive loss attributable to Camber Energy, Inc.

$ ( 18,056,308 )

Balances March 31, 2019

$ ( 15,577,185 )

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

CAMBER ENERGY, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT (Restated)

Preferred Stock

Comprehensive

Noncontrolling

Stockholders'

Balances at December 31, 2022

$ 127,757,269

Common Shares issued for:

Conversion of Series C Preferred Stock

$ ( 425,677 )

$ ( 122,187,673 )

Common shares issued on exercise of warrants

Reverse merger adjustment

( 4,428,916 )

Conversion of Debenture - Abeyance

( 4,396,034 )

True-Up Shares

Common shares issued on conversion of debt

Common shares issued on conversion of Series H preferred stock

Common shares issued on conversion of Series C preferred stock

Common shares issued on true-up of Series C preferred stock

Foreign currency translation adjustment

( 18,163,220 )

Payment of Consulting Fees

( 18,535,067 )

Conversion of Series B to Common

Balances at December 31, 2023

$ 136,863,364

Payment of Series B Dividend

$ ( 248,814 )

Issuance of Series E and F Preferred Stock

$ ( 140,350,893 )

Change in valuation of Series E and F Preferred Stock

Preferred Stock

Comprehensive

Noncontrolling

Stockholders'

Balances at December 31, 2021

$ 120,316,152

Redemption of Series E and F Preferred Stock

$ ( 177,981 )

Series C issuance/deemed dividend

$ ( 106,760,344 )

Rounding difference

Shares issued in acquisition of membership interest in Viking Ozone, LLC

Shares issued in acquisition of membership interest in Viking Sentinel, LLC

Shares issued in acquisition of membership interest in Viking Protection, LLC

Adjustment to acquisition of Simson-Maxwell

Warrants issued for services

Foreign currency translation adjustment

( 15,427,329 )

Settlement of Preferred B Stock Warrants

( 1,930,930 )

( 17,358,259 )

Balances March 31, 2020

Balances at December 31, 2022

$ 127,757,269

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$ ( 122,187,673 )

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

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

CAMBER ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Restated)

For the Year Ended March 31,

Cash flows from operating activities:

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$ ( 17,358,259 )

Net Loss from Discontinued Operations

Net Loss from Continuing Operations

Adjustments to Reconcile Net (Loss) to Net Cash Used in Operating Activities:

Depreciation, Depletion, Amortization and Accretion

Impairment of Oil and Gas Properties

Share-Based Compensation

Amortization of Discount on Notes

Bad Debt Expense

Gain on Sale of Property and Equipment

(25,808,246 )

Litigation Settlement – PetroGlobe

Adjustments to reconcile net loss to cash used in operating activities:

Change in fair value of derivative liability

Equity in Earnings of Unconsolidated Entity

Changes in Operating Assets and Liabilities:

Stock-based compensation

Depreciation, depletion and amortization

Accretion – asset retirement obligation

Amortization of right-of-use assets

Loss on extinguishment of debt

Amortization of debt discount

Impairment of intangible assets

Impairment of oil and gas assets

Loss (gain) on disposal of membership interests and assets

Bad debt expense

Foreign currency translation adjustment

Changes in operating assets and liabilities, net of effects of business combination during the year

Accounts receivable

Other Current Assets

Accounts Payable and Accrued Expenses

Net Cash Used in Operating Activities from Continuing Operations

Net Cash Provided by Operating Activities from Discontinued Operations

( 3,476,409 )

Prepaid expenses and other assets

( 4,786,227 )

Accounts payable

( 4,420,222 )

Accrued expenses and other current liabilities

Related party payables

Customer deposits

( 2,677,539 )

Operating lease liabilities

Undistributed revenues and royalties

Net cash used in operating activities

Investing Cash Flows

Cash paid for Oil and Gas Property Development Costs

Cash Acquired in Lineal Acquisition

Cash Disposed of in Connection with Lineal Redemption

Cash Paid for Issuance of Notes Receivable

Cash Proceeds from (Paid for) Deposits

Net Cash Provided by (Used in) Investing Activities from Operating Activities

Cash Used in Investing Activities from Discontinued Operations

Cash Used in Investing Activities

Financing Cash Flows

Proceeds from Issuance of Series C Preferred Stock

Cash Settlement of Preferred B Dividends

Net Cash Provided by Financing Activities from Continuing Operations

Cash Provided by Financing Activities from Discontinued Operations

Cash Provided by Financing Activities

(Decrease) Increase in Cash

Cash at Beginning of the Year

Cash at End of the Year

( 5,342,265 )

( 3,760,376 )

Cash flows from investing activities:

Proceeds from sale of oil and gas properties

Investment in and acquisition of oil and gas properties

Acquisition of fixed assets

Proceeds from sale of fixed assets

Cash acquired on Merger

Collection of notes receivable

Net cash provided by investing activities

Cash flows from financing activities:

Repayment of long-term debt

( 8,632,438 )

Proceeds on issuance of long-term debt

Proceeds from (repayment of) non-interest bearing advances from parent

( 2,120,000 )

Advances on Simson Maxwell bank credit facility

Net cash provided by (used in) financing activities

( 3,048,788 )

Net decrease in cash

( 2,333,289 )

Cash, beginning of year

Cash, end of year

Cash paid for interest

Cash paid for taxes

Supplemental Disclosure of Non-Cash Investing and Financing Activities:

Issuance of shares on conversion of debt

Issuance of shares on true-up of Series C Preferred Stock

Addition of right-of-use asset and lease liability

Issuance of shares for purchase of VIE interests

Issuance of preferred shares for purchase of VIE interests

Contingent obligation associated with acquisition of VIE interests

Issuance of warrants for services

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Organization and Operations of the Company

Camber Energy, Inc.

(“ Camber ” or the “ Company ”) 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, including the Cline shale and upper Wolfberry shale in Glasscock County, Texas.

Additionally, from the July 8, 2019 acquisition of Lineal Star Holdings, LLC (“ Lineal ”), until the divestiture of Lineal effective on December 31, 2019, each as discussed below, the Company, through Lineal, was involved in the oil and gas services industry.

On July 8, 2019, the Company acquired Lineal pursuant to the terms of an Agreement and Plan of Merger dated as of the same date (the “ Lineal Plan of Merger ” and the merger contemplated therein, the “ Lineal Merger ” or the “ Lineal Acquisition ”), by and between Lineal, Camber, Camber Energy Merger Sub 2, Inc., Camber’s wholly-owned subsidiary, and the Members of Lineal (the “ Lineal Members ”).

Lineal is a specialty construction and oil and gas services enterprise providing services to the energy industry.

Pursuant to the Lineal Plan of Merger, Camber acquired 100% of the ownership of Lineal from the Lineal Members in consideration for newly issued shares of Series E Redeemable Convertible Preferred Stock (“ Series E Preferred Stock ”) and Series F Redeemable Preferred Stock (“ Series F Preferred Stock ”).

See also “Note 13 - Merger Agreement and Divestiture“.

On October 8, 2019, Lineal acquired an 80% interest in Evercon Energy LLC (“ Evercon ”).

The acquisition required Lineal to assume certain liabilities and provide working capital for a period of six months in the amount of $50,000 per month to Evercon.

As part of the Lineal Divestiture, described below, Evercon was divested effective December 31, 2019.

On December 31, 2019, the Company entered into a Preferred Stock Redemption Agreement (the “ Redemption Agreement ”) by and between the Company and Lineal, whereby the Company redeemed the Company’s Series E and F Preferred Stock (the holders of such preferred stock, collectively, the “ Preferred Holders ”) issued in connection with the Lineal Merger.

Pursuant to the Redemption Agreement, effective as of December 31, 2019, ownership of 100% of Lineal was transferred back to the Preferred Holders, and, all of the Series E Preferred Stock and Series F Preferred Stock of the Company outstanding were cancelled through the redemption (the “ Lineal Divestiture ”).

See also “Note 13 - Merger Agreement and Divestiture“.

Prior to the acquisition of Lineal, the Company sold a significant portion of its oil and gas production assets in Oklahoma to N&B Energy, LLC (“ N&B Energy ”) effective August 1, 2018 (see further discussion in “Note 2 – Liquidation and Going Concern Considerations“).

Additionally, as part of the sale of its assets to N&B Energy, the Company also retained a 12.5% production payment (effective until a total of $2.5 million has been received) and a 3% overriding royalty interest, in its then existing Okfuskee County, Oklahoma assets;

and an overriding royalty interest on certain other undeveloped leasehold interests, pursuant to an Assignment of Production Payment and Assignments of Overriding Royalty Interests.

No payments were received in regard to any of the retained items noted above through March 31, 2020 and the filing date of these financial statements.

Camber retained its assets in Glasscock County and operated wells in Hutchinson County, Texas until completion of the Settlement Agreement discussed below.

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 will be 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 is expected to occur shortly.

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

See also “Note 11 – Commitments and Contingencies“ – “ Legal Proceedings ”.

On February 3, 2020, the Company entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) with Viking Energy Group, Inc.

(“ Viking ”).

Pursuant to the Merger Agreement, at the effective time of the Merger (the “ Effective Time ”), each share of common stock of Viking (the “ Viking Common Stock ”) issued and outstanding, other than certain shares owned by the Company, Viking and Merger Sub, will be converted into the right to receive the pro rata share of 80% of the Company’s post-closing capitalization, subject to certain adjustment mechanisms discussed in the Merger Agreement (and excluding shares issuable upon conversion of the Series C Preferred Stock of the Company).

Holders of Viking Common Stock will have any fractional shares of Company common stock after the Merger rounded up to the nearest whole share.

The completion of the Merger is subject to certain closing conditions.

See also “Note 6 – Plan of Merger and Investment in Unconsolidated Entity“.

On March 1, 2018, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of Nevada to affect a 1-for-25 reverse stock split of all outstanding common stock shares of the Company.

The reverse stock split was effective on March 5, 2018.

The effect of the reverse stock split was to combine every 25 shares of outstanding common stock into one new share, with no change in authorized shares or par value per share.

On December 20, 2018, the Company filed a Certificate of Change with the Secretary of State of Nevada to affect another 1-for-25 reverse stock split of the Company’s (a) authorized shares of common stock (from 500,000,000 shares to 20,000,000 shares);

and (b) issued and outstanding shares of common stock.

The reverse stock split was effective on December 24, 2018.

The effect of the reverse stock split was to combine every 25 shares of outstanding common stock into one new share, with a proportionate 1-for-25 reduction in the Company’s authorized shares of common stock, but no change in the par value per share of the common stock.

Effective on April 10, 2019, the Company filed, with the Secretary of State of Nevada, a Certificate of Amendment to the Company’s Articles of Incorporation to increase the number of the Company’s authorized shares of common stock, $0.001 per value per share, from 20,000,000 shares to 250,000,000 shares.

On July 3, 2019, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of Nevada to affect another 1-for-25 reverse stock split of all outstanding common stock shares of the Company.

The reverse stock split was effective on July 8, 2019.

The effect of the reverse stock split was to combine every 25 shares of outstanding common stock into one new share, with no change in authorized shares (250,000,000 shares of common stock) or par value per share.

On October 28, 2019, the Company filed a Certificate of Change with the Secretary of State of Nevada to affect a 1-for-50 reverse stock split of the Company’s (a) authorized shares of common stock (from 250,000,000 shares to 5,000,000 shares);

and (b) issued and outstanding shares of common stock.

The reverse stock split was effective on October 29, 2019.

The effect of the reverse stock split was to combine every 50 shares of outstanding common stock into one new share, with a proportionate 1-for-50 reduction in the Company’s authorized shares of common stock, but with no change in the par value per share of the common stock.

The result of the reverse stock split was to reduce, as of the effective date of the reverse stock split, the number of common stock shares outstanding from approximately 74.5 million shares to approximately 1.5 million shares (prior to rounding).

Effective on April 16, 2020, Camber filed a Certificate of Amendment to its Articles of Incorporation to increase its authorized shares of common stock to 25 million shares of common stock.

Proportional adjustments were made to the conversion and exercise prices of the Company’s outstanding convertible preferred stock, warrants and stock options, and to the number of shares issued and issuable under the Company’s stock incentive plans in connection with each of the reverse splits described above.

The reverse stock splits did not affect any stockholder’s ownership percentage of the Company’s common stock, except to the limited extent that the reverse stock splits resulted in any stockholder owning a fractional share.

Fractional shares of common stock were rounded up to the nearest whole share based on each holder’s aggregate ownership of the Company.

All issued and outstanding shares of common stock, conversion terms of preferred stock, options and warrants to purchase common stock and per share amounts contained in the financial statements, in accordance with Staff Accounting Bulletin (SAB) TOPIC 4C, have been retroactively adjusted to reflect the reverse splits for all periods presented.

Note 2 – Liquidity and Going Concern Considerations

At March 31, 2020, the Company’s total current assets of $1.1 million were less than its total current liabilities of approximately $79.67 million, resulting in a working capital deficit of $78.5 million, while at March 31, 2019, the Company’s total current assets of $8.2 million were less than its total current liabilities of approximately $62.4 million, resulting in working capital deficit of $54.2 million.

The reduction from a working capital deficit of $54.2 million to a working capital deficit of $78.5 million is due to losses from continuing operations, costs incurred with the Lineal merger and ultimate divestiture with Lineal as discussed below under “Note 13 - Merger Agreement and Divestiture“, and $7.3 million of advances on long-term notes receivable relating to amounts loaned to Lineal and advanced to Viking, as discussed in greater detail above under “Note 1 - Organization and Operations of the Company“.

Additionally, recent oil and gas price volatility as a result of geopolitical conditions and the global COVID-19 pandemic have already had, and are expected to continue to have a negative impact on the Company’s financial position and results of operations.

Negative impacts could include, but are not limited to, the Company’s ability to sell its oil and gas production, reduction in the selling price of the Company’s oil and gas, failure of a counterparty to make required payments, possible disruption of production as a result of worker illness or mandated production shutdowns or ‘stay-at-home’ orders, and access to new capital and financing.

The factors above raise substantial doubt about the Company’s ability to continue to operate as a going concern for the twelve months following the issuance of these financial statements.

The Company believes that it may not have sufficient liquidity to meet its operating costs unless it can raise new funding, which may be through the sale of debt or equity or unless it closes the Viking Merger (discussed below), which is the Company’s current plan, which Merger is anticipated to close in the third calendar quarter of 2020, and which required closing date is currently September 30, 2020, but can be extended until up to December 31, 2020, pursuant to certain conditions in the Merger Agreement.

There is no guarantee though that the Viking merger will be completed or other sources of funding be available.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company had no secured debt outstanding as of March 31, 2020.

During the years ended March 31, 2020 and 2019, the Company sold 525 shares and 1,577 shares, respectively, of Series C Preferred Stock pursuant to the terms of various Stock Purchase Agreements, for total proceeds of $5 million and $15 million, respectively.

N&B Energy Asset Disposition Agreement

On July 12, 2018, the Company entered into an Asset Purchase Agreement (as amended by the First Amendment to the Sale Agreement dated August 3, 2018 and the Second Amendment to Sale Agreement dated September 24, 2018, the “ Sale Agreement ”), as seller, with N&B Energy as purchaser, which entity is affiliated with Richard N.

Azar II, the Company’s former Chief Executive Officer and former director (“ Azar ”), and Donnie B.

Seay, the Company’s former director (“ Seay ”).

Pursuant to the Sale Agreement, the Company agreed to sell to N&B Energy a substantial portion of its assets, including all of the assets acquired pursuant to the terms of the December 31, 2015 Asset Purchase Agreement and certain other acquisitions, other than the production payment and overriding royalty interests discussed below (the “ Disposed Assets ”).

In consideration for the Disposed Assets, N&B Energy agreed to pay the Company $100 in cash to assume the Company’s liabilities and contractual obligations in connection with the Disposed Assets (including lease and bonus payments), to assume all of the Company’s obligations and debt owed under its outstanding loan agreement with International Bank of Commerce (“ IBC Bank ”), which had a then outstanding principal balance of approximately $36.9 million and the other parties agreed to enter into a settlement agreement.

Assumption Agreement

On September 26, 2018, the Company entered into an Assumption Agreement (the “ Assumption Agreement ”) with IBC Bank;

CE Operating, LLC, the Company’s wholly-owned subsidiary (“ CE Operating ”), which became a party to the Sale Agreement pursuant to the second amendment thereto;

RAD2 Minerals, Ltd., an entity owned and controlled by Azar (“ RAD2 ”);

and DBS Investments, Ltd., an entity owned and controlled by Seay.

Azar, Seay, RAD2, and DBS are collectively referred to as the “ Guarantors ”.

Pursuant to the Assumption Agreement, N&B Energy agreed to assume all of the Company’s liabilities and obligations owed to IBC Bank and IBC Bank approved the transactions contemplated by the Sale Agreement and the assumption by N&B Energy of all of the amounts and liabilities which the Company owed to IBC Bank (collectively, the “ IBC Obligations ”).

Finally, pursuant to the Assumption Agreement, IBC Bank released and forever discharged the Company and CE Operating and each of their current and former officers, directors, and stockholders, from all covenants, agreements, obligations, claims and demands of any kind, whether in law or at equity, which IBC Bank then had, arising out of or related to the amounts which the Company owed to IBC Bank under the Note, Loan Agreement or mortgages and/or under such documents or agreements, and further agreed to release the lien which IBC Bank then held on certain of the Company’s properties located in west Texas.

N&B Energy Sale Agreement Closing

On September 26, 2018, the transactions contemplated by the Sale Agreement closed and N&B Energy assumed all of the IBC Obligations (pursuant to the Assumption Agreement described above) and paid the Company $100 in cash, and the Company transferred ownership of the Assets to N&B Energy.

Notwithstanding the sale of the Assets, the Company retained its assets in Glasscock and Hutchinson Counties, Texas and also retained a 12.5% production payment (effective until a total of $2.5 million has been received) and a 3% overriding royalty interest, in its prior Okfuskee County, Oklahoma assets;

and retained an overriding royalty interest on certain other undeveloped leasehold interests, pursuant to an Assignment of Production Payment and Assignment of Overriding Royalty Interests.

The effective date of the Sale Agreement was August 1, 2018.

The Assets were assigned “ as is ” with all faults.

As a result of the Assumption Agreement and the Sale Agreement, the Company reduced its liabilities by $37.9 million and its assets by approximately $12.1 million.

The following table summarizes the net assets sold and gain recognized in connection with the Assumption Agreement and Sale Agreement:

Assumption of IBC Bank Loan

Assumption of ARO Liability

Assumption of Capital Lease Obligations and Other

Cash Received at Closing

Oil and Gas Properties Transferred

Merger with Viking Energy Group, Inc.

On August 1, 2023, Camber Energy, Inc.

(“Camber”, the “Company”, “we”, “us” or “our”) completed the previously announced merger (the “Merger”) with Viking Energy Group, Inc.

(“Viking”) pursuant to the terms and conditions of the Agreement and Plan of Merger between Camber and Viking dated February 15, 2021, which was amended on April 18, 2023 (as amended, the “Merger Agreement”), with Viking surviving the Merger as a wholly owned subsidiary of Camber.

Upon the terms and conditions in the Merger Agreement, each share:

(i) of common stock, par value $0.001 per share, of Viking (the “Viking Common Stock”) issued and outstanding, other than shares owned by Camber, 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 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 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”).

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.

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.

Each 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, on substantially the same terms and conditions as were applicable to such Viking Option, except that instead of being exercisable into Viking Common Stock, such Adjusted Option is exercisable into Camber Common Stock.

Each outstanding promissory note issued by Viking that is convertible into Viking Common Stock (a “Viking Convertible Note”) 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 (including, for the avoidance of doubt, any extended post-termination conversion period that applies following consummation of the Merger), except that instead of being convertible into Viking Common Stock, such Adjusted Convertible Note is convertible into Camber Common Stock.

In connection with the Merger, Camber issued approximately 49,290,152 shares of Camber Common Stock, which represented 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.

For accounting purposes, the Merger is deemed a reverse acquisition.

Consequently, Viking (the legal subsidiary) was treated as the acquiror of Camber (the legal parent).

Accordingly, these consolidated financial statements reflect the financial position, operating results, and cash flow of Viking up to the date of the Merger, and the combined financial position, operating results and cash flow of Viking and Camber from August 1, 2023 to December 31, 2023.

The prior year comparative financial information is that of Viking.

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

Company Overview and Operations

Camber is a growth-oriented diversified energy company.

Through our majority-owned subsidiaries we provide custom energy and power solutions to commercial and industrial clients in North America, and have a majority interest in:

(i) an entity with intellectual property rights to a fully developed, patented, proprietary Medical and Bio-Hazard Waste Treatment system using Ozone Technology;

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

Also, we hold a license to a patented clean energy and carbon-capture system with exclusivity in Canada and for multiple locations in the United States.

Various of our other subsidiaries own interests in oil properties in the United States.

The Company is also exploring other renewable energy-related opportunities and/or technologies, which are currently generating revenue, or have a reasonable prospect of generating revenue within a reasonable period of time.

Custom Energy and Power Solutions:

Simson-Maxwell Acquisition

On August 6, 2021, Viking, acquired approximately 60.5 % of the issued and outstanding shares of Simson-Maxwell Ltd.

(“Simson-Maxwell”), a Canadian federal corporation, for $ 7,958,159 in cash.

Simson-Maxwell manufactures and supplies power generation products, services and custom energy solutions.

Simson-Maxwell provides commercial and industrial clients with efficient, flexible, environmentally responsible and clean-tech energy systems involving a wide variety of products, including CHP (combined heat and power), tier 4 final diesel and natural gas industrial engines, solar, wind and storage.

Simson-Maxwell also designs and assembles a complete line of electrical control equipment including switch gear, synchronization and paralleling gear, distribution, Bi-Fuel and complete power generation production controls.

Operating for over 80 years, Simson-Maxwell’s seven branches assist with servicing a large number of existing maintenance arrangements and meeting the energy and power-solution demands of the Company’s other customers.

Clean Energy and Carbon-Capture System:

In August 2021, Viking entered into a license agreement with ESG Clean Energy, LLC (“ESG”), to utilize ESG’s patent rights and know-how related to stationary electric power generation and heat and carbon dioxide capture (the “ESG Clean Energy System”).

The intellectual property licensed by Viking includes certain patents and/or patent applications, including:

10,774,733, File date:

October 24, 2018, Issue date:

September 15, 2020, Titled:

“Bottoming Cycle Power System”;

17/661,382, Issue date:

August 8, 2023, Titled:

‘Systems and Methods Associated With Bottoming Cycle Power Systems for Generating Power, Capturing Carbon Dioxide and Producing Products’;

11624307, Issue date:

April 22, 2023, Titled:

‘Systems and Methods Associated With Bottoming Cycle Power Systems for Generating Power and Capturing Carbon Dioxide’ (iv) European (validated in the United Kingdom, France and Germany) Patent No.:

EP3728891, Issue date:

April 12, 2023, Titled:

“Bottoming Cycle Power System”;

Patent Application No.:

17/224,200, File date:

April 7, 2021, Titled:

“Bottoming Cycle Power System” (which was subsequently approved by the U.S.

Patent & Trademark Office in March, 2022 (No.

Patent Application No.:

17/358,197, File date:

June 25, 2021, Titled:

“Bottoming Cycle Power System”;

Patent Application No.:

17/448,943, File date:

September 27, 2021, Titled:

“Systems and Methods Associated With Bottoming Cycle Power Systems for Generating Power and Capturing Carbon Dioxide”;

and (viii) U.S.

Patent Application No.:

17/448,938, File date:

September 27, 2021, Titled:

“Systems and Methods Associated With Bottoming Cycle Power Systems for Generating Power, Capturing Carbon Dioxide and Producing Products .

The ESG Clean Energy System is designed to, among other things, generate clean electricity from internal combustion engines and utilize waste heat to capture approximately 100 % of the carbon dioxide (CO2) emitted from the engine without loss of efficiency, and in a manner to facilitate the production of certain commodities.

11,286,832, for example, covers the invention of an “exhaust-gas-to-exhaust-gas heat exchanger” that efficiently cools – and then reheats – exhaust from a primary power generator so greater energy output can be achieved by a secondary power source with safe ventilation.

Another key aspect of this patent is the development of a carbon dioxide capture system that utilizes the waste heat of the carbon dioxide pump to heat and regenerate the adsorber that enables carbon dioxide to be safely contained and packaged.

The Company intends to sell, lease and/or sub-license the ESG Clean Energy System to third parties using, among other things, Simson-Maxwell’s existing distribution channels.

The Company may also utilize the ESG Clean Energy System for its own account, whether in connection with its petroleum operations, Simson-Maxwell’s power generation operations, or otherwise.

Medical Waste Disposal System Using Ozone Technology:

In January 2022, Viking acquired a 51 % interest in Viking Ozone Technology, LLC (“Viking Ozone”), which owns the intellectual property rights to a patented (i.e., US Utility Patent No.

11,565,289), proprietary medical and biohazard waste treatment system using ozone technology.

Simson-Maxwell has been designated the exclusive worldwide manufacturer and vendor of this system.

The technology is designed to be a sustainable alternative to incineration, chemical, autoclave and heat treatment of bio-hazardous waste, and for the treated waste to be classified as renewable fuel for waste-to-energy (“WTE”) facilities in many locations around the world.

Open Conductor Detection Technologies:

In February 2022, Viking acquired a 51 % interest in two entities, Viking Sentinel Technology, LLC (“Viking Sentinel”) and Viking Protection Systems, LLC (“Viking Protection”), that own the intellectual property rights to patented (i.e.

utility patent 11,769,998 titled " Electric Transmission Line Ground Fault Prevention Systems Using Dual, High Sensitivity Monitoring Devices’) and patent pending (i.e., US Applications 16/974,086, and 17/693,504), proprietary electric transmission and distribution open conductor detection systems.

The systems are designed to detect a break in a transmission line, distribution line, or coupling failure, and to immediately terminate the power to the line before it reaches the ground.

The technology is intended to increase public safety and reduce the risk of causing an incendiary event, and to be an integral component within grid hardening and stability initiatives by electric utilities to improve the resiliency and reliability of existing infrastructure.

Oil and Gas Properties

Existing Assets:

As of December 31, 2023, the Company owns leasehold interests (working interests) in properties producing from the Cline and Wolfberry formations in Texas.

Divestitures in 2023:

On November 5, 2023, Mid-Con Petroleum, LLC and Mid-Con Drilling, LLC, wholly owned subsidiaries of Viking, sold 100 % of their interest in oil and gas assets in Kansas, consisting of 168 producing wells, 90 injector wells and 34 non-producing wells, for gross proceeds of $ 515,000 .

On December 1, 2023, a subsidiary of Petrodome Energy, LLC (“Petrodome”), a wholly owned subsidiary of Viking, sold its non-operated working interest in a producing oil well in Texas for proceeds of $ 250,000 .

The Company recorded a net gain on these two transactions in the amount of $ 854,465 , as follows:

Proceeds from sale (net of transaction costs)

Reduction in oil and gas full cost pool (based on % of reserves disposed)

( 1,049,229 )

Total Gain on Sale

Note 3 – Summary of Significant Accounting Policies

Principles of Consolidation

The financial statements of Camber Energy include the accounts of its wholly-owned subsidiaries, Camber Permian LLC, a Texas limited liability company, which is wholly-owned, CE Operating, LLC, an Oklahoma limited liability company, which is wholly-owned, and C E Energy LLC, a Texas limited liability company, which is wholly-owned, and which will be assigned to PetroGlobe shortly after the date of this report, as discussed below under “Note 11 – Commitments and Contingencies“ – “ Legal Proceedings ”.

All material intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform them with the current year presentation.

These reclassifications had no effect on the reported results of operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Camber’s financial statements are based on a number of significant estimates, including oil and natural gas reserve quantities which are the basis for the calculation of depreciation, depletion and impairment of oil and natural gas properties, and timing and costs associated with its asset retirement obligations, as well as those related to the fair value of stock options, stock warrants and stock issued for services.

While the Company believes that its estimates and assumptions used in preparation of the financial statements are appropriate, actual results could differ from those estimates.

Financial Instruments

ARO recovered

Cash bond recoverable (net of fees)

Gain on disposal

Following these transactions, Petrodome ceased to be the operator of any oil and gas properties and applied for the refund of a cash performance bond of $ 50,000 .

The refund, net of fees, is included in prepaids and other current assets at December 31, 2023 and was included in the determination of the gain on disposal.

Divestitures in 2022:

On July 8, 2022, four of the wholly owned subsidiaries of Petrodome Energy, LLC (“Petrodome”), a wholly owned subsidiary of the Company, entered into Purchase and Sale Agreements to sell all of their interests in the oil and gas assets owned by those Petrodome subsidiaries, including in the aggregate, interests in 8 producing wells, 8 shut-in wells, 2 saltwater disposal wells and 1 inactive well, to third parties for $ 3,590,000 in cash.

The proceeds from the sale were used to fully repay Petrodome’s indebtedness to CrossFirst Bank under the June 13, 2018 revolving line of credit loan.

This transaction resulted in the disposition of most of the Company’s total oil and gas reserves (see Note 6).

The Company recorded a loss on the transaction in the amount of $ 8,961,705 , as follows:

Proceeds from sale

Reduction in oil and gas full cost pool (based on % of reserves disposed)

( 12,791,680 )

ARO recovered

Loss on disposal

$ ( 8,961,705 )

Additionally, in July 2022, the Company received an unanticipated refund of a $ 1,200,000 performance bond as a result of Petrodome ceasing to operate certain assets in the State of Louisiana.

The gain from this refund was included in the “loss from the sale of oil and gas properties and fixed assets’ in the Consolidated Statement of Operations.

Going Concern

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 $( 18,535,067 ) for the year ended December 31, 2023, as compared to a net loss of $( 17,358,259 ) for the year ended December 31, 2022.

The loss for the year ended December 31, 2023, was comprised of, among other things, certain non-cash items, including:

(i) change in fair value of derivative liability of $ 9,150,459 ;

(ii) loss on extinguishment of debt of $ 605,507 ;

(iii) amortization of debt discount of $ 1,711,518 ;

(iv) depreciation, depletion and amortization of $ 1,002,562 ;

(v) impairment of oil and gas and intangible assets of $ 1,016,760 , and;

(vi) accretion of asset retirement obligation of $ 155,463 .

As of December 31, 2023, the Company had a stockholders’ equity of $ 6,187,659 , long-term debt, net of current, of $ 39,971,927 and a working capital deficiency of $ 12,142,644 .

The largest components of current liabilities creating this working capital deficiency is drawings by Simson-Maxwell against its bank credit facility of $ 3,365,995 , accrued interest on notes payable to Discover of $ 5,052,487 and a derivative liability of $ 3,863,321 .

These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon its ability to utilize the resources in place to generate future profitable operations, to develop additional acquisition opportunities, and to obtain the necessary financing to meet its obligations and repay its liabilities arising from business operations when they come due.

Management believes the Company may be able to continue to develop new opportunities and may be able to obtain additional funds through debt and / or equity financings to facilitate its business strategy;

however, there is no assurance of additional funding being available.

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.

Summary of Significant Accounting Policies

Recently issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes, which enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid.

The amendments are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied on a prospective basis.

Retrospective application is permitted.

The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

In November 2023, the FASB issued Accounting Standards Update 2023-07 (“ASU 2023-07”), Segment Reporting, which improves reportable segment disclosure requirements.

ASU 2023-07 primarily enhances disclosures about significant segment expenses by requiring that a public entity disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss.

This ASU also (i) requires that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment, and a description of its composition;

(ii) requires that all annual disclosures are provided in the interim periods;

(iii) clarifies that if the CODM uses more than one measure of profitability in assessing segment performance and deciding how to allocate resources, that one or more of those measures may be reported;

(iv) requires disclosure of the title and position of the CODM and a description of how the reported measures are used by the CODM in assessing segment performance and in deciding how to allocate resources;

(v) requires that an entity with a single segment provide all new required disclosures.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and requires retrospective application.

Early adoption is permitted.

The amendments under ASU 2023-07 relate to financial disclosures and its adoption will not have an impact on the Company’s results of operations, financial position or cash flows.

The Company will adopt ASU 2023-07 for the annual reporting period ending December 31, 2024 and for interim reporting periods thereafter.

Changes in Presentation and Reclassifications

The following items have been reclassified in the Consolidated Statement of Cash Flows for the year ended December 31, 2022 to conform to the current year presentation:

(i) amortization of right of use assets and change in operating lease liabilities have been separately disclosed, and;

(ii) bad debt expense has been separately disclosed.

These reclassifications had no effect on the Company’s consolidated operating results, financial condition or cash flows.

a) Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) for consolidated financial information and with the instructions to Form 10-K as promulgated by the Securities and Exchange Commission (the “SEC”).

Accordingly, these consolidated financial statements include all of the disclosures required by generally accepted accounting principles for complete consolidated financial statements.

b) Basis of Consolidation

The consolidated financial statements presented herein reflect the consolidated financial results of the Company, its wholly owned subsidiaries, Viking Energy Group, Inc.

(“Viking”), Camber Permian LLC, CE Operating LLC and CE Operating LLC, the wholly owned subsidiaries of Viking (Mid-Con Petroleum, LLC, Mid-Con Drilling, LLC, Mid-Con Development, LLC, and Petrodome Energy, LLC.), and Simson-Maxwell (a majority owned subsidiary of Viking).

In January 2022, Viking acquired a 51 % ownership interest in Viking Ozone, and in February 2022, Viking acquired a 51 % ownership interest in both Viking Sentinel and Viking Protection.

These entities were formed to facilitate the monetization of acquired intellectual properties (see Note 8).

These entities are variable interest entities in which the Company owns a controlling financial interest;

consequently, these entities are also consolidated.

All significant intercompany transactions and balances have been eliminated.

c) Foreign Currency

Foreign currency denominated assets and liabilities are translated into U.S.

dollars using the exchange rates in effect at the balance sheet date.

Results of operations and cash flows of businesses conducted in foreign currency are translated using the average exchange rates throughout the period.

The effect of exchange rate fluctuations on translation of assets and liabilities is included as a component of stockholders’ equity in accumulated other comprehensive income (loss).

Gains and losses from foreign currency transactions have been insignificant.

d) Use of Estimates in the Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements in conformity with U.S.

GAAP requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities.

Significant areas requiring the use of management estimates relate to the determination of the fair value of the Company’s various series of preferred stock, impairment of long-lived assets, goodwill, fair value of commodity derivatives, stock-based compensation, asset retirement obligations, and the determination of expected tax rates for future income tax recoveries.

The estimates of proved, probable and possible oil and gas reserves are used as significant inputs in determining the depletion of oil and gas properties and the impairment of proved and unproved oil and gas properties.

There are numerous uncertainties inherent in the estimation of quantities of proved, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures.

Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks.

Actual results could differ from the estimates and assumptions utilized.

e) Financial Instruments

Accounting Standards Codification, “ASC” Topic 820-10, “Fair Value Measurement” requires disclosure of the fair value of financial instruments held by the Company.

ASC Topic 820-10 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measurement.

The carrying amounts reported in the consolidated balance sheets for deposits, accrued expenses and other current liabilities, accounts payable, derivative liabilities, amount due to director, and convertible notes each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, derivative liabilities, debt instruments and certain other assets and liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

The three levels of valuation hierarchy are defined as follows:

1 unchanged sentence

inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

inputs to the valuation methodology are unobservable and significant to the fair value measurement.

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

Identical Assets

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 December 31, 2023, the significant inputs to the Company’s derivative liability relative to the Company’s Series C Redeemable Convertible Preferred Stock (the “Series C Preferred Stock”) were Level 3 inputs.

Assets and liabilities measured at fair value as of and for the year ended December 31, 2023 are classified below based on the three fair value hierarchy described above:

Significant Unobservable

Financial liabilities:

Derivative liability (conversion of Series C preferred Stock)

Derivative liability - Series C Preferred Stock

$ ( 7,383,811 )

Derivative liability – Convertible Debt

( 1,766,648 )

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

Upon conversion, the holder is entitled to dividends as if the shares had been held to maturity, which is referred to as the Conversion Premium.

The Conversion Premium may be paid in shares or cash, at the option of the Company.

If the Conversion Premium is paid in cash, the amount is fixed and not subject to adjustment.

If the Conversion Premium is paid in shares, the conversion ratio is based on a VWAP calculation based on the lowest stock price over the Measurement Period.

The Measurement Period is 30 days (or up to 60 days) prior to the conversion date and 30 days after the conversion date.

Both the VWAP calculation and the Measurement Period are subject to adjustment in the event that the Company is in default of one or more provisions in the certificate of designation.

For example, the Measurement period may be extended one day for every day the Company is not in compliance with one or more of the Equity Conditions.

At the conversion date, the number of shares due for the Conversion Premium is estimated based on the stock price during the Measurement Period prior to the conversion date.

If the Company does not elect to pay the Conversion Premium in cash, the Company will issue all shares due for the conversion and the estimated shares due for the conversion premium.

If the VWAP calculation for the measurement period after the conversion date, is lower than the VWAP calculation prior to the conversion date, the holder will be issued additional shares, referred to as true-up shares.

If the VWAP calculation is higher, no true-up shares are issued.

Management has determined that the obligation to issue additional shares under the Conversion Premium creates a derivative liability.

The determination of the number of true-up shares due, if any, is based on the lowest VWAP calculation over the Measurement Period that extends beyond the conversion date.

In addition, if the Company is in non-compliance with certain provisions of the certificate of designation, the Measurement Period does not end until the company is in compliance.

The obligation to issue additional shares (“True-up Shares”) is a derivative liability.

The derivative liability for the True-Up Shares at the end of each period represents Series C Preferred Stock conversions in which the Measurement Period had not expired as of the period end.

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

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and financial instruments which mature within three months of the date of purchase.

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, 2020 and 2019, the Company’s cash in excess of the federally insured limit was $399,833 and $7,463,944, respectively.

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

The Company had no cash equivalents at March 31, 2020 or 2019, respectively.

Accounts Receivable

Accounts receivable, net, include amounts due for oil and gas revenues from prior month production, accrued interest on the notes receivable due from Lineal and Viking and an estimate of amounts due from N&B Energy related to the September 2018 Sale Agreement.

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, 2020 and March 31, 2019, there were allowances for doubtful accounts of approximately $208,000 and $190,000, respectively, included in accounts receivable, and there were bad debts of $17,694 and $0, recognized for the years ended March 31, 2020 and 2019, respectively.

Notes Receivable

Notes receivable includes the $5,000,000 note from Viking as described in “Note 7 – Long-Term Notes Receivable“ and “Note 6 – Plan of Merger and Investment in Unconsolidated Entity“, and two notes due from Lineal in the amounts of $1,539,719 and $800,000, respectively, as more fully discussed in “Note 7 – Long-Term Notes Receivable“ and “Note 13 – Merger Agreement and Divestiture“.

As of March 31, 2020, the Company had no allowance for uncollectible amounts related to the notes receivable.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over their useful lives.

Amortization of the equipment under capital leases related to the Lineal operations was computed using the straight-line method over lives ranging from 3 to 5 years and is included in depreciation expense.

Costs of maintenance and repairs were charged to expense when incurred.

Long-lived assets including intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the assets carrying amount to determine if an impairment of such asset is necessary.

This evaluation, as well as an evaluation of our intangible assets, requires the Company to make long-term forecasts of the future revenues and costs related to the assets subject to review.

Forecasts require assumptions about demand for the Company’s services and future market conditions.

Estimating future cash flows requires significant judgment, and the Company’s projections may vary from the cash flows eventually realized.

Future events and unanticipated changes to assumptions could require a provision for impairment in a future period.

The effect of any impairment would be to expense the difference between the fair value (less selling costs) of such asset and its carrying value.

Such expense would be reflected in earnings.

No impairments were deemed necessary for the years ended March 31, 2020 and 2019, respectively.

Investment in Unconsolidated Entities

The Company accounts for its investment in unconsolidated entities under the equity method of accounting when it owns less than 51% of a controlling interest and does not have the ability to exercise significant influence over the operating and financial policies of the entity.

The investment is adjusted accordingly for dividends or distributions it receives and its proportionate share of earnings or losses of the entity.

The current investment in unconsolidated entities is a 30% in interest in Elysium Energy, LLC, which is involved in oil and gas exploration and production in the United States.

The balance sheet of Elysium Energy, LLC at March 31, 2020 included current assets of $4.0 million, total assets of $37.7 million, total liabilities of $34.0 million and net assets of $3.7 million.

Additionally, the income statement for Elysium Energy, LLC for the period from February 3, 2020 (the date of investment) through March 31, 2020 included total revenues of $4.0 million and net income of $3.8 million.

See also “Note 6 – Plan of Merger and Investment in Unconsolidated Entity“.

Goodwill is tested for impairment annually and whenever events or circumstances make it more likely than not that an impairment may have occurred.

Goodwill is reviewed for impairment at the reporting unit level, which is defined as operating segments or groupings of businesses one level below the operating segment level.

The Company’s operating segments are the same as the reporting units used in its goodwill impairment test.

Goodwill is tested for impairment by comparing the estimated fair value of a reporting unit, determined using a market approach, if market prices are available, or alternatively, a discounted cash flow model, with its carrying value.

The annual evaluation of goodwill requires the use of estimates about future operating results, valuation multiples and discount rates of each reporting unit to determine their estimated fair value.

Changes in these assumptions can materially affect these estimates.

Once an impairment of goodwill has been recorded, it cannot be reversed.

The Company recognized goodwill during the three months ended September 30, 2019 in conjunction with the Lineal Merger, which was written off during the quarter ended December 31, 2019 as a result of the Lineal Divestiture as discussed in “Note 13 – Merger Agreement and Divestiture“.

Revenue Recognition

Exploration and Production Revenue

The Company’s revenue for its exploration and production operations are comprised entirely of revenue from exploration and production activities.

The Company’s oil is sold primarily to marketers, gatherers, and refiners.

Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, direct end-users, industrial users, local distribution companies, and natural-gas marketers.

Natural gas liquids (“ NGLs ”) are sold primarily to direct end-users, refiners, and marketers.

Payment is generally received from the customer in the month following delivery.

Contracts with customers have varying terms, including month-to-month contracts, and contracts with a finite term.

The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer.

Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed.

Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs.

Revenues are recognized for the sale of the Company’s net share of production volumes.

Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues.

Oil and Gas Services Revenue

The majority of Lineal’s oil and gas service revenue is derived from contracts and projects that typically span between 3 to 12 months.

The oil and gas service contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Lineal’s construction contracts are recognized over time because of the continuous transfer of control to the customer as all of the work is performed at the customer’s site and, therefore, the customer controls the asset as it is being constructed.

Contract costs include labor, material, and indirect costs.

Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs.

For long-term contracts, Lineal estimates the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.

Contract estimates are based on various assumptions to project the outcome of future events.

These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, and the performance of subcontractors.

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the consolidated balance sheet.

On Lineal’s construction contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones.

Generally, billing occurs prior to revenue recognition, resulting in contract liabilities.

These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period.

Fair Value of Financial Instruments

Accounting Standards Codification (“ ASC ”) 820 defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements.

It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

These include quoted prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets or liabilities that are not active;

and model-driven valuations whose inputs are observable or whose significant value drivers are observable.

Valuations may be obtained from, or corroborated by, third-party pricing services.

Level 3 – 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, 2020 and March 31, 2019, the significant inputs to the Company’s derivative liability and mezzanine equity calculations were Level 3 inputs.

Concentration of Credit Risk

The Company generally sells a significant portion of its oil and gas production to a relatively small number of customers.

For the year ended March 31, 2020, the Company’s consolidated revenues were from the sale of oil, gas and natural gas liquids under marketing contracts primarily with Apache Corporation.

For the year ended March 31, 2019, the Company’s consolidated revenues were from the sale of oil, gas and natural gas liquids under marketing contracts primarily with Superior Pipeline Company, Scissortail Energy, LLC and Apache Corporation.

The Company has alternative purchasers available at competitive market prices if there is disruption in services or other events that cause the Company to search for other ways to sell the Company’s production.

During the year ended March 31, 2020, one customer accounted for 92% of total revenues.

During the year ended March 31, 2019, three customers accounted for 84% of total revenues.

The Company does not believe the loss of any customer will have a material effect on the Company because alternative customers are readily available.

Oil and Natural Gas Properties, Full Cost Method

Camber uses the full cost method of accounting for oil and natural gas producing activities.

Costs to acquire mineral interests in oil and natural gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized.

Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities are capitalized as oil and natural gas property costs on a country-by-country basis.

Costs not subject to amortization consist of unproved properties that are evaluated on a property-by-property basis.

Amortization of these unproved property costs begins when the properties become proved or their values become impaired.

Camber assesses overall values of unproved properties, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred.

Impairment of unproved properties is assessed based on management’s intention with regard to future development of individually significant properties and the ability of Camber to obtain funds to finance their programs.

If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized.

Sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves.

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

In applying the full cost method, Camber performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of property and equipment is compared to the “ estimated present value ” of its proved reserves discounted at a 10% interest rate of future net revenues, based on current economic and operating conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties.

If capitalized costs exceed this limit, the excess is charged as an impairment expense.

During the year ended March 31, 2020, no impairments were recorded.

During the year ended March 31, 2019, the Company recorded impairments totaling $1.3 million that were primarily related to unproved properties due to expirations of leaseholds.

Asset Retirement Obligations

The Company records the fair value of a liability for asset retirement obligations (“ ARO ”) in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset.

The present value of the estimated asset retirement cost is capitalized as part of the carrying amount of the long-lived asset and is depreciated over the useful life of the asset.

Camber accrues an abandonment liability associated with its oil and natural gas wells when those assets are placed in service.

The ARO is recorded at its estimated fair value and accretion is recognized over time as the discounted liability is accreted to its expected settlement value.

Fair value is determined by using the expected future cash outflows discounted at Camber’s credit-adjusted risk-free interest rate.

No market risk premium has been included in Camber’s calculation of the ARO balance.

Other Property and Equipment

Other property and equipment are stated at cost and consist primarily of furniture and computer equipment.

Depreciation is computed on a straight-line basis over the estimated useful lives.

Deferred income taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating losses and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Deferred tax assets and accrued tax liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Camber has evaluated and concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements as of March 31, 2020 and 2019.

The Company’s policy is to classify assessments, if any, for tax related interest expense and penalties as interest expense.

Earnings per Common Share

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.

$ ( 9,150,459 )

f) Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and highly liquid investment securities that have original maturities of three months or less.

Accounts at banks in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 , while accounts at banks in Canada are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to CAD $ 100,000 .

The Company’s cash balances may at times exceed the FDIC or CDIC insured limits.

g) Accounts Receivable

Accounts receivable for the Company’s oil and gas operations consist of purchaser receivables and joint interest billing receivables.

The Company evaluates these accounts receivable for collectability and, when necessary, records allowances for expected credit losses.

In establishing the required allowance, if any, management considers significant factors such as historical losses, current receivables aging, the debtors’ current ability to pay its obligation to the Company and existing industry and economic data.

At December 31, 2023 and December 31, 2022, the Company has not recorded an allowance for credit losses related to oil and gas.

The Company extends credit to its power generation customers in the normal course of business.

The Company performs ongoing credit evaluations and generally does not require collateral.

Payment terms are generally 30 days.

The Company carries its trade accounts receivable at invoice amount less an allowance for expected credit losses.

On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for expected credit losses based upon management’s estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions.

At December 31, 2023 and December 31, 2022, the Company had a reserve for expected credit losses on power generation accounts receivable of $ 36,678 and $ 19,330 , respectively.

The Company does not accrue interest on past due accounts receivable.

Inventories are stated at the lower of cost or net realizable value, and consist of parts, equipment and work in process.

Work-in-process and finished goods included the cost of materials, direct labor and overhead.

At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete and slow-moving items.

Inventory consisted of the following at December 31, 2023 and 2022:

Units and work in process

Reserve for obsolescence

( 1,224,931 )

( 1,264,867 )

i) Oil and Gas Properties

The Company uses the full cost method of accounting for its investment in oil and natural gas properties.

Under this method of accounting, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs, are capitalized.

General and administrative costs related to production and general overhead are expensed as incurred.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit of production method using estimates of proved reserves.

Disposition of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in operations.

Unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs.

If the results of an assessment indicate that the properties are impaired, the amount of the impairment is included in loss from operations before income taxes.

j) Limitation on Capitalized Costs

Under the full-cost method of accounting, we are required, at the end of each reporting date, to perform a test to determine the limit on the book value of our oil and natural gas properties (the “Ceiling” test).

If the capitalized costs of our oil and natural gas properties, net of accumulated amortization and related deferred income taxes, exceed the Ceiling, this excess or impairment is charged to expense.

The expense may not be reversed in future periods, even though higher oil and natural gas prices may subsequently increase the Ceiling.

The Ceiling is defined as the sum of:

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.

k) Oil and Gas Reserves

Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation thereof, including evaluations and extrapolations of well flow rates and reservoir pressure.

Estimates by different engineers often vary, sometimes significantly.

In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates.

Because proved reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted by changes in product prices.

The Company uses a third-party engineering firm to estimate its oil and gas reserves.

l) Accounting for Leases

The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires an entity to recognize a lease liability and ROU asset on the lease commencement date.

A lease liability is measured equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental borrowing rate, as the rate implicit in the Company’s leases is not readily determinable.

The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment.

Lease payments include payments made before the commencement date and any residual value guarantees, if applicable.

When determining the lease term, the Company includes option periods that it is reasonably certain to exercise as failure to renew the lease would impose a significant economic detriment.

For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense where the Company is a lessee on a straight-line basis (“Straight-Line Rent”) over the applicable lease terms.

The excess of the Straight-Line Rent over the minimum rents paid is included in the ROU asset where the Company is a lessee.

Short-term lease cost for operating leases includes rental expense for leases with a term of less than 12 months.

The Company elected the package of practical expedients permitted under the transition guidance for the revised lease standard, which allowed Viking to carry forward the historical lease classification, retain the initial direct costs for any leases that existed prior to the adoption of the standard and not reassess whether any contracts entered into prior to the adoption are leases.

The Company also elected to account for lease and non-lease components in lease agreements as a single lease component in determining lease assets and liabilities.

In addition, the Company elected not to recognize the right-of-use assets and liabilities for leases with lease terms of one year or less.

m) Business Combinations

The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets.

Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination.

Goodwill is subject to impairment testing at least annually and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company will proceed to a quantitative test.

The Company may also elect to perform a quantitative test instead of a qualitative test for any or all of our reporting units.

The test compares the fair value of an entity’s reporting units to the carrying value of those reporting units.

This quantitative test requires various judgments and estimates.

The Company estimates the fair value of the reporting unit using a market approach in combination with a discounted operating cash flow approach.

Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting unit.

o) Intangible Assets

Intangible assets include amounts related to the Company’s license agreement with ESG Clean Energy, LLC, and its investments in Viking Ozone, LLC, Viking Protection Systems, LLC and Viking Sentinel, LLC.

Additionally, as part of the acquisition of Simson-Maxwell, Viking identified intangible assets consisting of Simson-Maxwell’s customer relationships and its brand.

These intangible assets are described in detail in Note 8.

The intangible assets related to the ESG Clean Energy license and the Simson-Maxwell customer relationships are being amortized on a straight-line basis over 16 years (the remaining life of the related patents) and 10 years, respectively.

The other intangible assets are not amortized.

The Company reviews these intangible assets, at least annually, for possible impairment when events or changes in circumstances that the assets carrying amount may not be recoverable.

In evaluating the future benefit of its intangible assets, the Company estimates the anticipated discounted future net cash flows of the intangible assets over the remaining estimated useful life.

If the carrying amount is not recoverable, an impairment loss is recorded for the excess of the carrying value of the asset over its fair value.

p) Income (Loss) per Share

Basic and diluted income (loss) per share calculations is 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 shares of common stock 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.

1 unchanged sentence

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

Share-Based Compensation

Camber measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award over the vesting period.

Derivative Liabilities

Certain warrants and certain obligations to issue additional shares relating to conversions of the Series C Preferred Stock contain provisions that could result in modification of the warrants’ exercise price or 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 warrants contain provisions that protect holders from future issuances of the Company’s common stock at prices below such warrants’ respective exercise prices and these The warrants granted to Ironman PI Fund II, LP contain anti-dilution provisions that provide for a reduction in the exercise price of such warrants in the event that future common stock (or securities convertible into or exercisable for common stock) is issued (or becomes contractually issuable) at a price per share (a “Lower Price”) that is less than the exercise price of such warrant at the time.

The amount of any such adjustment is determined in accordance with the provisions of the warrant agreement and depends upon the number of shares of common stock issued (or deemed issued) at the Lower Price and the extent to which the Lower Price is less than the exercise price of the warrant at the time.

The warrants expired on April 21, 2019.

For the years ended December 31, 2023 and 2022, there were approximately 15,998,576 and 17,204,020 common stock equivalents, respectively, that were omitted from the calculation of diluted income per share as they were anti-dilutive.

q) Revenue Recognition

Oil and Gas Revenues

Sales of crude oil, natural gas, and natural gas liquids (“NGLs”) are included in revenue when production is sold to a customer in fulfillment of performance obligations under the terms of agreed contracts.

Performance obligations primarily comprise delivery of oil, gas, or NGLs at a delivery point, as negotiated within each contract.

Each barrel of oil, million BTU (“MMBtu”) of natural gas, or other unit of measure is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated.

Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer.

The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to:

whether the purchaser can direct the use of the hydrocarbons, the transfer of significant risks and rewards, the Company’s right to payment, and transfer of legal title.

In each case, the time between delivery and when payments are due is not significant.

The following table disaggregates the Company’s oil and gas revenue by source for the years ended December 31, 2023 and 2022:

Natural gas and natural gas liquids

Well operations

Power Generation Revenues

Through its 60.5 % ownership in Simson-Maxwell, the Company manufactures and sells power generation products, services and custom energy solutions.

Simson-Maxwell provides commercial and industrial clients with emergency power generation capabilities.

Simson Maxwell’s derives its revenues as follows:

Sale of power generation units .

Simson-Maxwell manufactures and assembles power generation solutions.

The solutions may consist of one or more units and are generally customized for each customer.

Contracts are required to be executed for each customized solution.

The contracts generally require customers to submit non-refundable progress payments for measurable milestones delineated in the contract.

The Company considers the completed unit or units to be a single performance obligation for purposes of revenue recognition and recognizes revenue when control of the product is transferred to the customer, which typically occurs upon shipment or delivery to the customer.

Sales, use, value add and other similar taxes assessed by governmental authorities and collected concurrent with revenue-producing activities are excluded from revenue.

Progress payments are recognized as contract liabilities until the completed unit is delivered.

Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for the transfer of the units, which is generally the price stated in the contract.

The Company does not allow returns because of the customized nature of the units and does not offer discounts, rebates, or other promotional incentives or allowances to customers.

Simson-Maxwell has elected to recognize the cost for freight activities when control of the product has transferred to the customer as an expense within cost of goods.

Parts revenue - Simson-Maxwell sells spare parts and replacement parts to its customers.

Simson-Maxwell is an authorized parts distributor for a number of national and international power generation manufacturers.

The Company considers the purchase orders for parts, which in some cases are governed by master sales agreements, to be the contracts with the customers.

For each contract, the Company considers the commitment to transfer products, each of which is distinct, to be the identified performance obligations.

Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for the transfer of product, which is generally the price stated in the contract specific for each item sold, adjusted for the value of expected returns.

Sales, use, value add and other similar taxes assessed by governmental authorities and collected concurrent with revenue-producing activities are excluded from revenue.

Simson-Maxwell has elected to recognize the cost for freight activities when control of the product has transferred to the customer as an expense within cost of goods sold in the consolidated statements of comprehensive income.

Parts revenues are recognized at the point in time when control of the product is transferred to the customer, which typically occurs upon shipment or delivery to the customer.

Service and repairs - Simson-Maxwell offers service and repair of various types of power generation systems.

Service and repairs are generally performed on customer owned equipment and billed based on labor hours incurred.

Each repair is considered a performance obligation.

As a result of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation.

Simson-Maxwell generally uses the cost-to-cost measure of progress for its service work because the customer controls the asset as it is being serviced.

Most service and repairs are completed within one or two days.

The following table disaggregates Simson-Maxwell’s revenue by source for the years ended December 31, 2023 and 2022:

Power generation units

Total units and parts

Service and repairs

r) Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements.

Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the consolidated financial statements and the tax basis of assets and liabilities by using estimated tax rates for the year in which the differences are expected to reverse.

The Company recognizes deferred tax assets and liabilities to the extent that we believe that these assets and/or liabilities are more likely than not to be realized.

In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations.

If we determine that the Company would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

In assessing the realizability of its deferred tax assets, management evaluated whether it is more likely than not that some portion, or all of its deferred tax assets, will be realized.

The realization of its deferred tax assets relates directly to the Company’s ability to generate taxable income.

The valuation allowance is then adjusted accordingly.

s) Stock-Based Compensation

The Company may issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs.

The cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value.

The fair value is determined using the Black-Scholes option pricing model.

The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

The fair value of stock options and warrants is determined at the date of grant using the Black-Scholes option pricing model.

The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield.

The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns.

Expected volatility is based on the historical volatility of the Company’s stock.

The risk-free rate is based on the U.S.

Treasury yield curve in relation to the contractual life of stock-based compensation instrument.

The dividend yield assumption is based on historical patterns and future expectations for the Company dividends.

t) Impairment of Long-lived Assets

The Company, at least annually, is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets.

Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets.

The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset.

If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value.

The estimation of fair value is generally determined by using the asset’s expected future discounted cash flows or market value.

The Company estimates the fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary.

u) Accounting for Asset Retirement Obligations

Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount the Company will incur to plug, abandon and remediate its producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws.

The Company determined its ARO by calculating the present value of estimated cash flows related to the obligation.

The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties.

The following table describes the changes in the Company’s asset retirement obligations for the years ended December 31, 2023 and 2022:

Asset retirement obligation – beginning

ARO recovered on sale of assets

( 1,104,806 )

ARO acquired on the Merger

Accretion expense

Asset retirement obligation – ending

v) Derivative Liabilities

Convertible Preferred Shares

The Series C Preferred Stock and the Company’s Series G Redeemable Convertible Preferred Stock (the “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.

815 - 40, “Derivatives and Hedging”.

The Series C Preferred Stock are convertible into shares of common stock at a fixed $ 162.50 conversion rate.

Upon conversion, the holder is entitled to dividends as if the shares had been held to maturity, which is referred to as the Conversion Premium.

The Conversion Premium may be paid in shares or cash, at the option of the Company.

If the Conversion Premium is paid in cash, the amount is fixed and not subject to adjustment.

If the Conversion Premium is paid in shares, the conversion ratio is based on a VWAP calculation based on the lowest stock price over the Measurement Period.

The Measurement Period is 30 days (or 60 days if there is a Triggering Event) prior to the conversion date and 30 days (or 60 days if there is a Triggering Event) after the conversion date.

The VWAP calculation is subject to adjustment if there is a Triggering Event and the Measurement Period is subject to adjustment in the event that the Company is in default of one or more Equity Conditions provided in the Certificate of Designation.

The conversion ratio is based on a volume weighted average price (“VWAP”) calculation based on the lowest stock price over the Measurement Period.

The Measurement Period is 30 trading days (or 60 trading days if there is a Triggering Event) prior to the conversion date and 30 trading days (or 60 trading days if there is a Triggering Event) after the conversion date.

For example, the Measurement Period may be extended one day for every day the Company is not in compliance with one or more of the Equity Conditions.

Trigger events are described in the designation of the Series C Preferred Stock, but include items which would typically be events of default under a debt security, including filing of reports late with the SEC.

At the conversion date, the number of shares due for the Conversion Premium is estimated based on the previous 30-day VWAP.

If the Company does not elect to pay the Conversion Premium in cash, the Company will issue all shares due for the conversion and the estimated shares due for the conversion premium.

If the VWAP calculation for the portion of the Measurement Period following the date of conversion is lower than the VWAP for the portion of the Measurement Period prior to the date of conversion, the holder will be issued additional common shares, referred to as “true-up” shares.

At the conversion date, the number of shares due for the Conversion Premium is estimated based on the previous 30-day VWAP (or 60 trading days if there is a Triggering Event).

If the VWAP calculation for the portion of the Measurement Period following the date of conversion is lower than the VWAP for the portion of the Measurement Period prior to the date of conversion, the holder will be issued additional shares of common stock, referred to as True-Up shares.

If the VWAP calculation is higher, no True-Up shares are issued.

The derivative liability at the end of each period includes a derivative liability for the outstanding Series C shares and a derivative liability for the potential obligation to issue True-Up Shares relating to Series C shares that have been converted and the Measurement Period has not expired, if applicable

The fair value of the derivative liability relating to the Conversion Premium for any outstanding Series C Shares is equal to the cash required to settle the Conversion Premium.

The fair value of the potential true-up share obligation has been estimated using a binomial pricing mode and the lesser of the conversion price or the low closing price of the Company’s stock subsequent to the conversion date.

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

(See notes 4 and 10)

Recently Adopted Accounting Pronouncements

ASC 2014-09, ” Revenue from Contracts with Customers (Topic 606) ”, supersedes the revenue recognition requirements and industry-specific guidance under Revenue Recognition (Topic 605).

Topic 606 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services.

The Company adopted Topic 606 on April 1, 2018, using the modified retrospective method applied to contracts that were not completed as of April 1, 2018.

Under the modified retrospective method, prior period financial positions and results will not be adjusted.

The cumulative effect adjustment recognized in the opening balances included no significant changes as a result of this adoption.

While the Company does not expect 2020 net earnings to be materially impacted by revenue recognition timing changes, Topic 606 requires certain changes to the presentation of revenues and related expenses beginning April 1, 2018.

Refer to “Note 12 – Revenue from Contracts with Customers“for additional information.

In November 2016, the Financial Accounting Standards Board (“ FASB ”) issued an Accounting Standards Update (“ ASU ”) amending the presentation of restricted cash within the consolidated statements of cash flows.

The new guidance requires that restricted cash be added to cash and cash equivalents on the consolidated statements of cash flows.

The Company adopted this ASU on April 1, 2018.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230).

ASU 2016-15 seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows.

This update is effective for fiscal years beginning after December 15, 2017.

The Company adopted this ASU on April 1, 2018 and the adoption did not have a significant impact to the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations:

Clarifying the Definition of a Business , which amends the current definition of a business.

Under ASU 2017-01, to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contributes to the ability to create outputs.

ASU 2017-01 further states that when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business.

The new guidance also narrows the definition of the term “ outputs ” to be consistent with how it is described in Topic 606, Revenue from Contracts with Customers .

The changes to the definition of a business will likely result in more acquisitions being accounted for as asset acquisitions.

The guidance is effective for the annual period beginning after December 15, 2017, with early adoption permitted.

The Company adopted this ASU on April 1, 2018 and the adoption did not have a significant impact to the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, “ Compensation-Stock Compensation (Topic 718):

Scope of Modification Accounting ”, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718.

ASU 2017-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued.

The Company adopted this ASU on April 1, 2018 and the adoption did not have a significant impact to the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No.

2016.02 “ Leases (Topic 842) ”.

The new lease guidance supersedes Topic 840.

The core principle of the guidance is that entities should recognize the assets and liabilities that arise from leases.

Topic 840 does not apply to leases to explore for, or to use, minerals, oil, natural gas and similar nongenerative resources including the intangible right to explore for those natural resources and rights to use the land in which those natural resources are contained.

In July 2018, the FASB issued “ Leases (Topic 842):

Targeted Improvements ”, which provides entities with an alternative modified transition method to elect not to recast the comparative periods presented when adopting Topic 842.

The Company adopted Topic 842 as of April 1, 2019, using the alternative modified transition, for which, comparative periods, including the disclosures related to those periods, are not restated.

In addition, the Company elected practical expedients provided by the new standard, and the Company has elected to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs and to retain off-balance sheet treatment of short-term leases (i.e., 12 months or less which do not contain purchase options that the Company is reasonably likely to exercise).

As a result of the short-term expedient election, the Company does not have leases that require the recording of a net lease asset and lease liability on the Company’s consolidated balance sheet or have a material impact on consolidated earnings or cash flows as of April 1, 2019.

Moving forward, the Company will evaluate any new lease commitments for application of Topic 842.

In August 2018, the FASB issued ASU 2018-13, “ Disclosure Framework:

Changes to the Disclosure Requirements for Fair Value Measurement, ” which changes the disclosure requirements for fair value measurements by removing, adding, and modifying certain disclosures.

The Company adopted ASU 2018-13 effective April 1, 2019.

The adoption did not have a material impact on its consolidated financial statements.

Effective January 1, 2020, the Company adopted the Financial Accounting Standards Board’s update, Financial Instruments – Credit Losses (Topic 326), as amended.

The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life.

The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and expectations of the future.

The standard did not have a material impact on the Company’s financial statements.

The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying consolidated financial statements.

Subsequent Events

The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration.

NOTE 4 – Restatement of previously issued financial statements

On October 31, 2020, the Company received a SEC Comment Letter with respect to Amendment No.

2 to the Registration Statement on Form S-4 filed on October 14, 2020.

Among other things, the SEC Comment Letter questioned the Company’s historical accounting treatment regarding the accounting treatment for our Series C Stock.

The Company recorded such sales as permanent equity and the SEC Comment Letter suggested the appropriate accounting classification was something other than permanent equity given certain provisions within the Certificate of Designation for the Series C Stock (“COD”).

After considering the SEC Comment letter and reviewing the COD, the Company and the holder of the Series C Stock determined there were several errors made in the drafting of the COD that could result in unintended consequences.

Both parties agreed to subsequently correct the Certificate of Designation, and Certificates of Correction to the COD were filed on December 9, 2020 and on April 20, 2021 to correct the errors.

Both parties agreed the corrections would be applied retroactive to the original filing date of the COD, being August 25, 2016.

However, US GAAP requires a transaction to be accounted for in accordance with the terms of an agreement in effect during the period of the financial statements and, consequently, the Company determined that in accordance with the terms of the original COD, the Series C Stock should have been recorded as temporary equity instead of permanent equity.

In addition, certain provisions of the original COD required the Company to recognize a derivative liability for certain conversions of the Series C Stock into common stock.

As a result of the errors described above, we restated our financial statements to reclassify the Series C Stock from permanent equity to temporary equity and to recognize a derivative liability for the potential obligation to issue additional shares after the Series C shares have been converted to common shares with Amendment No.

1 to our Annual Report on Form 10-K/A (“First Amendment”).

We estimated the fair value of the derivative liability at March 31, 2020 and 2019 using a binomial pricing model, the actual conversion rate and the historical volatility rate for the Company’s common stock.

After additional consultations with the SEC staff and review of the applicable accounting requirements, the Company determined that the accounting for the Series C Stock required further adjustment from the accounting treatment applied in the First Amendment.

The Series C Stock were initially issued in September 2016 and should have been recorded with a deemed dividend to recognize the required conversion premium upon issuance and a loss on derivative liability to recognize the variability if the shares were converted to common shares.

Subsequent measurement should have included adjustments to the carrying value of the Series C Stock to recognize changes in fair value due to changes in the Company’s stock price and recognition of gains or losses on conversion of the Series C Stock into common stock.

Our accounting treatment and calculations are more fully described in note 10.

The impact of the restatement on our financial statements included in the First amendment is as follows:

The table below sets forth changes to the consolidated balance sheet as of March 31, 2020:

As Previously

(First Amendment)

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

Common stock payable

Accrued expenses

Derivative liability - Series C

Current income taxes payable

Total current liabilities

Asset retirement obligations

TOTAL LIABILITIES

Commitments and contingencies

TEMPORARY EQUITY

Preferred Stock Series C

The Company has determined that the Series C Preferred Stock contains an embedded derivative liability relating to the Conversion Premium and, upon conversion, a derivative liability for the potential obligation to issue True-Up Shares relating to shares of Series C Preferred Stock that have been converted and the Measurement Period has not expired, if applicable.

The fair value of the derivative liability relating to the Conversion Premium for any outstanding shares of Series C Preferred Stock is equal to the cash required to settle the Conversion Premium.

The fair value of the potential True-Up share obligation has been estimated using a binomial pricing mode and the lesser of the conversion price or the lowest closing price of the Company’s stock subsequent to the conversion date, 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 shares of common stock, 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 Preferred 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 is negligible due to the restrictions on conversion.

Capitalized terms used but not defined herein with respect to the Series C Preferred Stock or the Series G Preferred Stock have the meaning assigned to them 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 Secretary of State of Nevada on November 8, 2021, as amended on October 28, 2022 (as amended, the “Series C COD”) or the Certificate of Designations of Preferences, Powers, Rights and Limitations of Series G Redeemable Convertible Preferred Stock filed by the Company with the Secretary of State of Nevada on December 30, 2021 (the “Series G COD”), as applicable.

Convertible Debt

We review the terms of convertible debt issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments.

In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense.

When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments.

The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value.

The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense.

The Company has adopted a sequencing approach to allocating its authorized and unissued shares when the number of such shares is insufficient to satisfy all convertible instruments or option type contracts that may be settled in shares.

Specifically, the Company allocates it authorized and unissued shares based on the inception date of each instrument, with shares allocated first to those instruments with the earliest inception dates.

Instruments with later inception dates for which no shares remain to be allocated are reclassified to asset or liability.

w) Undistributed Revenues and Royalties

The Company records a liability for cash collected from oil and gas sales that have not been distributed.

The amounts are distributed in accordance with the working interests of the respective owners.

x) Subsequent events

The Company has evaluated all subsequent events from December 31, 2023 through March 25, 2024, the filing date of the Original Report (see Note 18).

Restatement of Previously Issued Financial Statements

As discussed in Note 6, the Merger was deemed to be a reverse merger for accounting purposes.

As a result, the Company previously valued Camber’s investment in the common stock it held in Viking at the Merger date at book value as the Company believed it could not write up the value of its own shares as part of the transaction.

This book value investment was then eliminated upon consolidation.

The Company has concluded that this investment should rather be recorded at fair value at the Merger date.

This investment is accordingly then treated as an acquisition of stock and classified as a reduction of stockholders’ equity.

The Company has restated its consolidated financial statements for the periods subsequent to the Merger to reflect this change.

The restatement results in a reduction in goodwill arising from the merger and a corresponding reduction in Stockholders’ Equity in the consolidated balance sheet.

For the year ended December 31, 2023, the restatement reduces the net loss and net loss per share on the consolidated statement of operations as there is no longer the goodwill impairment charge previously recognized at December 31 2023.

The restatement is a non-cash adjustment and does not impact the cash flows of the Company.

The table below sets forth the changes to the consolidated balance sheet as of December 31, 2023:

As Previously Reported

Total current assets

Total oil and gas properties, net

Fixed assets, net

Right of use assets, net

ESG Clean Energy license, net

Other intangibles - Simson Maxwell, net

Other intangibles - Variable Interest Entities

( 18,110,074 )

34,860,411 (1) (2)

Due from related parties

Deposits and other assets

( 18,110,074 )

LIABILITIES AND STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES

STOCKHOLDERS’ EQUITY

Preferred stock Series A

Preferred stock Series C

Preferred stock Series G

Preferred stock Series H

Common stock to be issued

Additional paid-in capital

Retained (deficit)

( 32,596,819 )

Total stockholders’ equity (deficit)

136,863,364 (1)

(39,379,079 )

Accumulated other comprehensive loss

Accumulated deficit

( 154,837,638 )

TOTAL LIABILITIES AND EQUITY

The table below sets forth changes to the consolidated balance sheet as of March 31, 2019:

As Previously

Restated (First Amendment)

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

Common stock payable

Accrued expenses

Current income taxes payable

Derivative liability - Series C

Total current liabilities

Asset retirement obligations

Derivative liability

TOTAL LIABILITIES

Commitments and contingencies

TEMPORARY EQUITY

Preferred Stock Series C

( 140,350,893 ) (2)

STOCKHOLDERS EQUITY

Preferred Stock Series B

Additional paid in capital

Retained earnings (deficit)

Parent’s stockholders’ equity in Camber

( 18,110,074 )

Total stockholders’ (deficit)

( 3,617,004 )

Non-controlling interest

TOTAL STOCKHOLDERS’ EQUITY

( 18,110,074 )

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

( 18,110,074 )

TOTAL LIABILITIES AND EQUITY

The table below sets forth changes to the consolidated statement of operations for the year ended March 31, 2020:

For the Year Ended March 31, 2020

As previously

Restated (First Amendment)

Operating revenues

(1) Reduction of goodwill and additional paid-in capital due to restatement of Camber's equity investment in Viking at merger date to fair value.

(2) Reversal of goodwill impairment charge.

The table below sets forth the changes to the consolidated statement of operations for the year ended December 31, 2023:

As Previously Reported

Operating expenses

Lease Operating Expenses

Severance and Property Taxes

Depreciation, Depletion, Amortization and Accretion

Impairment of Oil and Gas Properties

Gain on Sale of Property and Equipment

General and Administrative

Operating Income (Loss)

Other Expense (Income)

Interest Expense

Equity in Earnings of Unconsolidated Entity

Loss on Derivative liability

Other (Income) Expense, Net

Total Other Expense

Loss Before Income Taxes

Loss from operations

( 6,994,365 )

Income Tax Benefit (Expense)

Other income (expense)

Interest expense, net

( 1,408,096 )

Amortization of debt discount

( 1,711,518 )

Less preferred dividends

Net loss attributable to common shareholders

( 1,711,518 )

Change in fair value of derivative liability

( 9,150,459 )

(Loss) Per Common Share

Weighted Average Number of Common Shares Outstanding

The table below sets forth changes to the consolidated statement of operations for the year ended March 31, 2019:

For the Year Ended March 31, 2019

As previously

Restated (First Amendment)

Operating revenues

Operating Expenses

Lease Operating Expenses

Severance and Property Taxes

Depreciation, Depletion, Amortization and Accretion

Impairment of Oil and Gas Properties

Gain on Sale of Property and Equipment

Net loss on sale of oil and gas properties and fixed assets

Loss on extinguishment of debt

Goodwill impairment

( 14,486,745 )

General and Administrative

Total other expense, net

( 26,027,447 )

Operating (Loss)

Other Expense (Income)

Interest Expense

Equity in Earnings of Unconsolidated Entity

Loss on Derivative liability

Other (Income) Expense, Net

Total Other Expense (Income)

Loss Before Income Taxes

( 11,540,702 )

Net loss before income taxes

( 33,021,812 )

( 18,535,067 )

Income tax benefit (expense)

1 unchanged sentence

( 18,535,067 )

Net income (loss) attributable to non-controlling interest

Net loss attributable to Camber Energy, Inc.

$ ( 32,649,965 )

Less preferred dividends

Net (loss) attributable to common shareholders

$ ( 18,163,220 )

Loss per share of common stock

Basic and Diluted

Weighted average number of shares of common stock outstanding

Basic and Diluted

(2) Reversal of goodwill impairment charge.

The table below sets forth the changes to the consolidated statement of cash flows for the year ended December 31, 2023:

As Previously Reported

Cash flows from operating activities:

( 33,021,812 )

( 18,535,067 ) (2)

Income (Loss) Per Common Share

Adjustments to reconcile net loss to cash used in operating activities:

Change in fair value of derivative liability

Stock based compensation

Depreciation, depletion and amortization

Accretion - asset retirement obligations

Amortization of operational right-of-use assets

Loss on extinguishment of debt

Amortization of debt discount

Goodwill impairment

( 14,486,745 )

Impairment of intangible assets

Impairment of oil and gas assets

Loss (gain) on disposal of membership interests

Bad debt expense

Foreign currency translation adjustment

Changes in operating assets and liabilities

Accounts receivable

( 3,476,409 )

Prepaids and other current assets

Accounts payable

Accrued expenses and other current liabilities

Due to related parties

Customer deposits

( 2,677,539 )

Weighted average Number of Shares Outstanding

The table below sets forth changes to the consolidated statement of shareholders’ equity for the year ended March 31, 2020:

As previously restated (First Amendment)

Balances March 31, 2020

Series C preferred Stock

( 2,677,539 )

Additional Paid-in Capital

Accumulated Deficit

Operating lease liabilities

( 1,304,247 )

Total Stockholders' Equity, March 31, 2020

( 1,304,247 )

Undistributed revenues and royalties

Net cash used in operating activities

( 5,342,265 )

The table below sets forth changes to the consolidated statement of shareholders’ equity for the year ended March 31, 2019:

As previously restated (First Amendment)

Balances March 31, 2019

Series C preferred Stock

Net cash provided by investing activities

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

( 2,333,289 )

Series B preferred stock

( 2,333,289 )

Cash, beginning of period

Cash, end of period

(2) Reversal of goodwill impairment charge.

The table below sets forth the changes to the consolidated statement of changes in Stockholders’ Equity for the year ended December 31, 2023:

Additional Paid In Capital

Stock Dividend distributable

Accumulated Deficit

As Previously Reported

Balances at December 31, 2022

( 122,187,673 )

Total Stockholders' Equity, March 31, 2019

( 122,187,673 )

Common shares issued on exercise of warrants

Reverse merger adjustment

( 32,596,819 )

( 4,428,916 ) (1)

The table below sets forth changes to the consolidated statements of cash flows for the year ended March 31, 2020:

For the Year Ended March 31, 2020

As previously

Restated (First Amendment)

Cash Flows from Operating Activities

Common shares issued on conversion of debt

Common shares issued on conversion of Series H preferred stock

Common shares issued on conversion of Series C preferred stock

Common shares issued on true-up of Series C preferred stock

Foreign currency translation adjustment

( 32,649,965 )

( 18,163,220 ) (2)

Balances at December 31, 2023

( 32,596,819 )

Net Loss from Discontinued Operations

Net Loss from Continuing Operations

Adjustments to Reconcile Net (Loss) to Net Cash Used in Operating Activities:

Depreciation, Depletion, Amortization and Accretion

Share-Based Compensation

Bad Debt Expense

Litigation Settlement – PetroGlobe

Change in Fair Value of Derivative Liability

Equity in Earnings of Unconsolidated Entity

Changes in Operating Assets and Liabilities:

Accounts Receivable

Other Current Assets

Accounts Payable and Accrued Expenses

Net Cash Used in Operating Activities from Continuing Operations

Net Cash Provided by Operating Activities from Discontinued Operations

Net Cash Used in Operating Activities

Net Cash Used in Investing Activities from Continuing Operations

Cash Used in Investing Activities from Discontinued Operations

Cash Used in Investing Activities

Financing Cash Flows

Proceeds from Issuance of Series C Preferred Stock

Cash Settlement of Preferred B Dividends

Net Cash Provided by Financing Activities from Continuing Operations

Cash Provided by Financing Activities from Discontinued Operations

Cash Provided by Financing Activities

(Decrease) in Cash

Cash at Beginning of the Year

Cash at End of the Year

The table below sets forth changes to the consolidated statements of cash flows for the year ended March 31, 2019:

For the Year Ended March 31, 2019

As previously

Restated (First Amendment)

Cash Flows from Operating Activities

( 154,837,638 )

( 140,350,893 )

(1) Reduction of goodwill and additional paid-in capital due to restatement of Camber's equity investment in Viking at merger date to fair value.

(2) Reversal of goodwill impairment charge.

Merger of Camber Energy, Inc.

and Viking Energy Group, Inc.

As discussed in Note 1, the Merger has been accounted for as a reverse acquisition with Viking treated as the acquiror of Camber for financial accounting purposes.

The transaction consideration transferred by the accounting acquirer for its interest in the accounting acquiree is based on the number of equity interests the legal subsidiary would have had to issue to give the owners of the legal parent the same percentage equity interest in the combined entity that results from the reverse acquisition.

This was determined as follows:

Number of Viking shares of common stock outstanding at merger date

Viking shareholder ownership interest in the merged entity

Grossed up number of shares

Number of shares theoretically issued to Camber shareholders

Viking share price at date of merger

Consideration transferred

The consideration transferred was allocated to the assets acquired and liabilities assumed of Camber based upon their estimated fair values as of the merger closing date, and any excess value of the consideration transferred over the net assets was recognized as goodwill, as follows:

Consideration transferred

Net Assets Acquired and Liabilities Assumed (Camber):

Oil and gas properties

Advances due from Viking

Investment in Viking

Total net assets acquired

Accounts payable

Accrued expenses and other current liabilities

Derivative liability

Long term debt

Asset retirement obligations

Total net liabilities assumed

Total Net Assets Acquired and Liabilities Assumed

Oil and Gas Properties

The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the year ended December 31, 2023:

Proved developed producing oil and gas properties

United States cost center

$ ( 2,397,488 )

Adjustments to Reconcile Net (Loss) to Net Cash Used in Operating Activities:

Depreciation, Depletion, Amortization and Accretion

Impairment of Oil and Gas Properties

Share-Based Compensation

Amortization of Discount on Notes

Bad Debt Expense

Gain on Sale of Property and Equipment

$ ( 347,050 )

Accumulated depreciation, depletion and amortization

( 2,803,375 )

Change in Fair Value of Derivative Liability

Changes in Operating Assets and Liabilities:

Accounts Receivable

Other Current Assets

Accounts Payable and Accrued Expenses

Net Cash Used in Operating Activities from Continuing Operations

Cash Used in Investing Activities

Financing Cash Flows

Proceeds from Issuance of Series C Preferred Stock

Cash Provided by Financing Activities

(Decrease) Increase in Cash

Cash at Beginning of the Year

Cash at End of the Year

NOTE 5 – PROPERTY AND EQUIPMENT

Oil and Gas Properties

Camber uses the full cost method of accounting for oil and natural gas producing activities.

Costs not subject to amortization consist of unproved properties that are evaluated on a property-by-property basis.

Amortization of these unproved property costs begins when the properties become proved or their values become impaired.

Camber assesses overall values of unproved properties, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred.

If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized.

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

Costs of oil and natural gas properties are amortized using the units of production method.

Amortization expense calculated per equivalent physical unit of production amounted to $1.30 and $1.18 per barrel of oil equivalent for the year ended March 31, 2020 and 2019, respectively.

All of Camber’s oil and natural gas properties are located in the United States.

Costs being amortized at March 31, 2020 and 2019 are as follows:

Oil and gas properties subject to amortization

Oil and gas properties not subject to amortization

Capitalized asset retirement costs

Total oil & natural gas properties

Accumulated depreciation, depletion, and impairment

Proved developed producing oil and gas properties, net

$ ( 347,050 )

Undeveloped and non-producing oil and gas properties

United States cost center

Accumulated depreciation, depletion and amortization

Undeveloped and non-producing oil and gas properties, net

$ ( 216,805 )

Net Capitalized Costs

For the year ended March 31, 2020, the Company recorded no impairments.

For the year ended March 31, 2019, the Company recorded impairments totaling $1,304,785, which were due to lease expirations.

Additions and Depletion

During the years ended March 31, 2020 and 2019, the Company incurred costs of approximately $0 and $2.1 million, respectively, for technical and other capital enhancements to extend the lives of the Company’s wells.

Additionally, the Company recorded $16,977 and $473,521 for depletion for the years ended March 31, 2020 and 2019, respectively.

Disposition of Oil and Natural Gas Properties

On July 12, 2018, the Company entered into the Sale Agreement, as seller, with N&B Energy as purchaser.

Pursuant to the Sale Agreement, the Company agreed to sell to N&B Energy a substantial portion of its assets, including all of the assets acquired pursuant to the terms of the December 31, 2015 Asset Purchase Agreement and certain other acquisitions, other than a production payment and overriding royalty interests (the “ Disposed Assets ”).

In consideration for the Disposed Assets, N&B Energy agreed to pay the Company $100 in cash, to assume all of the Company’s obligations and debt owed under its outstanding loan agreement with IBC Bank, which had a then outstanding principal balance of approximately $36.9 million, and certain other parties agreed to enter into a settlement agreement.

The transaction closed in September 2018.

As part of the Lineal Acquisition, the Company acquired various operating and finance leases for sales and administrative offices, motor vehicles and machinery and equipment.

Due to the Redemption Agreement discussed below in “Note 13 – Merger Agreement and Divestiture“, the Company no longer owns the operating and finance leases that it had acquired in connection with the Lineal Acquisition.

Effective August 1, 2018, the Company entered into a month-to-month lease at 1415 Louisiana, Suite 3500, Houston, Texas 77002.

The entity providing use of the space without charge is affiliated with the Company’s Chief Financial Officer.

NOTE 6 – PLAN OF MERGER AND INVESTMENT IN UNCONSOLIDATED ENTITY

Viking Plan of Merger and Related Transactions

On February 3, 2020, the Company and Viking entered into a merger agreement (the “ Merger Agreement ”).

Pursuant to the Merger Agreement, at the effective time of the Merger, each share of common stock of Viking issued and outstanding, other than certain shares owned by the Company, Viking and the Company’s merger sub which will be merged with and into Viking, with Viking being the surviving entity in the merger (“ Merger Sub ”), will be converted into the right to receive the pro rata share of 80% of the Company’s post-closing capitalization, subject to certain adjustment mechanisms discussed in the Merger Agreement (and excluding shares issuable upon conversion of the Series C Preferred Stock of the Company).

Holders of Viking Common Stock will have any fractional shares of Company common stock after the Merger rounded up to the nearest whole share.

The Merger Agreement can be terminated under certain circumstances, including by either Viking or the Company if the Merger has not been consummated on or before September 30, 2020, provided that the Company or Viking shall have the right to extend such date from time to time, until up to December 31, 2020, in the event that the Company has not fully resolved SEC comments on the Form S-4 (a preliminary draft of which has previously been filed) or other SEC filings related to the Merger, and Camber is responding to such comments in a reasonable fashion, subject to certain exceptions.

A further requirement to the closing of the Merger was that the Company was required to have acquired 25% of Viking’s subsidiary Elysium Energy, LLC (“ Elysium ”) as part of a $5,000,000 investment in Viking’s Rule 506(c) offering, which transaction was completed on February 3, 2020, as discussed below and an additional 5% of Elysium as part of a $4,200,000 investment in Viking’s Rule 506(c) offering, which transaction was completed on June 25, 2020 (as discussed below under “Note 21 – Subsequent Events“.

In the event of termination of the Merger Agreement, Camber is required, under certain circumstances described below, to return a portion of the Elysium interests to Viking:

Reason for Termination

Percentage of Elysium

Retained by Camber

The reasonable likelihood that the combined company will not meet the initial listing requirements of the NYSE American, required regulatory approvals will not be obtained, or the registration statement on Form S-4 will not be declared effective, through no fault of Camber or Viking

Termination of the Merger Agreement by either party, through no fault of Camber

Termination of the Merger Agreement due to a material breach of the Merger Agreement by Camber or its disclosure schedules

Termination of the Merger Agreement for any reason and in the event the Secured Notes (defined below) are not repaid within 90 days of the date of termination and the Additional Payment (defined below) is not made.

*Assumes the payment of Secured Notes within 90 days of the date of termination of the Merger Agreement and the Additional Payment (defined below) is made.

The Merger Agreement provides that the Secured Notes (defined below) will be forgiven in the event the Merger closes, and the Secured Notes will be due 90 days after the date that the Merger Agreement is terminated by any party for any reason, at which time an additional payment shall also be due to the Company and payable by Viking in an amount equal to (i) 115.5% of the original principal amount of the Secured Notes, minus (ii) the amount due to the Company pursuant to the terms of the Secured Notes upon repayment thereof (the “ Additional Payment ”) is due.

A required condition to the entry into the Merger was that the Company loan Viking $5 million, pursuant to the terms of a Securities Purchase Agreement, which was entered into on February 3, 2020 (the “ SPA ”).

On February 3, 2020, the Company and Discover entered into a Stock Purchase Agreement pursuant to which Discover purchased 525 shares of Series C Preferred Stock, for $5 million, at a 5% original issue discount to the $10,000 face value of such preferred stock.

Pursuant to the SPA, the Company made a $5 million loan to Viking (using funds raised from the sale of the Series C Preferred Stock shares to Discover), which was evidenced by a 10.5% Secured Promissory Note (the “ Secured Note ”).

The Secured Note is secured by a security interest, para passu with the other investors in Viking’s Secured Note offering (subject to certain pre-requisites) in Viking’s then 75% ownership of Elysium and 100% of Ichor Energy Holdings, LLC, which is wholly-owned by Viking.

Additionally, pursuant to a separate Security and Pledge Agreement entered into on February 3, 2020, Viking provided the Company a security interest in the membership, common stock and/or ownership interests of all of Viking’s existing and future, directly owned or majority owned subsidiaries, to secure the repayment of the Secured Note.

The Secured Note is convertible into common shares of Viking at a conversion price of $0.24 per share at any time after March 4, 2020, and before the 15th day after Viking’s common stock has traded at an average daily price of at least $0.55 for 15 consecutive business days (at which point the Secured Note is no longer convertible), provided that the Company is restricted from converting any portion of the Secured Note into Viking’s common stock if upon such conversion the Company would beneficially own more than 4.99% of Viking’s common stock (which percentage may be increased or decreased, with 61 days prior written notice to Viking, provided that such percentage cannot under any circumstances be increased to greater than 9.99%).

As additional consideration for the Company making the loan to Viking, Viking assigned the Company a 25% interest in Elysium pursuant to the terms of an Assignment of Membership Interests dated February 3, 2020.

Subsequently, on June 25, 2020, as discussed in greater detail below under “Note 21 – Subsequent Events“, the Company loaned an additional $4.2 million to Viking evidenced by another Secured Note (such $9.2 million in aggregate outstanding Secured Notes, the “ Secured Notes ”).

Investment in Unconsolidated Entity

The Company owns 30% of Elysium as of March 31, 2020, as discussed above, and accounts for such ownership under the equity method of accounting.

The investment is adjusted accordingly for dividends or distributions it receives and its proportionate share of earnings or losses of the entity.

Elysium is involved in oil and gas exploration and production in the United States.

The balance sheet of Elysium at March 31, 2020 included current assets of $4.0 million, total assets of $37.7 million, total liabilities of $34.0 million and net assets of $3.7 million.

Additionally, the income statement for Elysium for the period from February 3, 2020 (the date acquired) through March 31, 2020 included total revenues of $4.0 million and net income of $3.8 million.

Table below shows the changes in the Investment in entities for the years ended March 31, 2020 and 2019, respectively:

Carrying amount at beginning of year

Investment in Elysium

Proportionate Share of Elysium Earnings

Carrying amount at end of year

NOTE 7 – LONG-TERM NOTES RECEIVABLE

Long-term notes receivable as of March 31, 2020 and 2019 are comprised of:

Note receivable from Viking Energy Group, Inc.

pursuant to a 10.5% Secured Promissory Note dated February 3, 2020 in the original principal amount of $5,000,000, having an annual interest rate of 10.5%, with interest due quarterly beginning on May 1, 2020, maturing February 3, 2022.

Accrued and unpaid interest of $83,425 is included in accounts receivable at March 31, 2020.

The Note is secured by secured interests in 6 Viking Energy Group, Inc.

subsidiaries.

See also “Note 6 – Plan of Merger and Investment in Unconsolidated Entity“.

Note receivable from Lineal Star Holdings, LLC pursuant to a Promissory Note dated effective December 31, 2019, in the original principal amount of $1,539,719, accruing annual interest of 10.5%, due quarterly beginning on March 31, 2020, maturing December 31, 2021, with accrued and unpaid interest of $37,966 included in accounts receivable at March 31, 2020.

See also “Note 12 - Merger Agreement and Divestiture“.

Note receivable from Lineal Star Holdings, LLC pursuant to a Promissory Note No.

2 dated effective December 31, 2019, in the original principal amount of $800,000, accruing annual interest of 8%, due quarterly beginning on March 31, 2020, maturing December 31, 2021, with accrued and unpaid interest of $15,781 included in accounts receivable at March 31, 2020.

See also “Note 13 - Merger Agreement and Divestiture“.

current maturities

NOTE 8 – 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 years ended March 31, 2020 and 2019:

Carrying amount at beginning of year

Revisions of previous estimates

Carrying amount at end of year

Camber has short-term obligations of $30,227 and $0 related to the plugging liabilities at March 31, 2020 and 2019, respectively.

NOTE 9 – NOTES PAYABLE AND DEBENTURE

The Company had no notes payable or debenture outstanding as of March 31, 2020 and 2019.

On October 31, 2018, an accredited institutional investor, Discover Growth Fund LLC (“ Discover ”) converted the entire $495,000 remaining balance of principal owed under the terms of a convertible debenture which it held, into an aggregate of 642 shares of common stock, including 5 shares of common stock issuable upon conversion of the principal amount thereof (at a conversion price of $101,562.50 per share), and 637 shares in connection with conversion premiums due thereon (at an initial conversion price, as calculated as provided in such debenture, of $1,912.50 per share).

A total of 80 of such shares were issued to Discover in connection with the initial conversion and the remaining shares were held in abeyance subject to Discover’s 9.99% ownership limitation, to be issued from time to time, at the request of Discover.

Subsequent to the October 31, 2018 conversion date, Discover was due an additional 38,116 shares of common stock in connection with true ups associated with the original issuance, as a result of the conversion price of the conversion premiums falling to $31.25 per share pursuant to the terms of the convertible debenture.

Through March 31, 2020, all of the shares have been issued.

NOTE 10 – DERIVATIVE LIABILITIES

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

Upon conversion, the holder is entitled to dividends as if the shares had been held to maturity, which is referred to as the Conversion Premium.

The Conversion Premium may be paid in shares or cash, at the option of the Company.

If the Conversion Premium is paid in cash, the amount is fixed and not subject to adjustment.

If the Conversion Premium is paid in shares, the conversion ratio is based on a volume weighted average stock price of the Company’s common stock (“VWAP”) calculation based on the lowest stock price over the Measurement Period.

The conversion price is equal to 95% (85% following a Triggering Event) of the five lowest VWAPs over the Measurement Period, less $0.05 ($0.10 following a Triggering Event) per share.

The Measurement Period is 30 days (or 60 days if there is a Triggering Event) prior to the conversion date and 30 days (or 60 days if there is a Triggering Event) after the conversion date.

For example, the Measurement period may be extended one day for every day the Company is not in compliance with one or more of the Equity Conditions.

At the conversion date, the number of shares due for the Conversion Premium is estimated based on the previous 30-day VWAP.

If the Company does not elect to pay the Conversion Premium in cash, the Company will issue all shares due for the conversion and the estimated shares due for the conversion premium.

If the VWAP calculation is higher, no true-up shares are issued.

Our accounting treatment of the Series C Stock is described below:

Prior to April 20, 2021

Issuance of the Series C Stock

Upon issuance we determined that the Series C Stock included an embedded derivative and, because the conversion was generally outside the control of the Company, the Series C Stock were required to be recorded as temporary equity.

Upon issuance of the Series C Stock, we determined the amount to be the allocated to the derivative liability to be the Conversion Premium, assuming a cash settlement and we determined the redemption value of the Series C Stock to be the fair value of the common shares issuable to satisfy the conversion of the Series C Stock.

To the extent that consideration paid for the Series C Stock was less than the redemption value plus the derivative liability, we first allocated the consideration to the derivative liability and recorded the difference as a loss on derivative liability.

The consideration received never exceeded the derivative liability.

Consequently, no proceeds were allocated to the redemption value.

The redemption value was recorded as temporary equity and a deemed dividend.

The cash obligation required to satisfy the Conversion Premium, less cash received was recorded as a derivative liability.

Conversion of the Series C Stock

The Company receives notice of conversion from the holder with a calculation of the number of common shares required to be issued to satisfy the redemption value plus the Conversion Premium.

The Company has never elected to satisfy the conversion premium in cash.

The Company then issues the number of common shares determined by the holder using a VWAP calculation for the Measurement Period before the conversion date.

Total Oil and Gas Properties, Net

$ ( 347,050 )

During the year ended December 31, 2023, the Company recorded an addition to oil and gas properties of $ 1,475,000 related to the merger with Camber (see Note 5).

For the year ended December 31, 2023, the Company recorded a disposal of $ 1,049,229 ($ 1,285,918 less $ 236,689 of depletion expense) related to the sale of its assets in Kansas and Texas (see Note 2 – 2023 Divestitures) and an impairment charge of $ 347,050 related to its remaining oil and gas assets driven by a decrease in commodity prices.

Intangible Assets

ESG Clean Energy License

The Company’s intangible assets include costs associated with securing an Exclusive Intellectual Property License Agreement with ESG in August 2021, pursuant to which Viking received (i) an exclusive license to ESG’s patent rights and know-how related to stationary electric power generation (not in connection with vehicles), including methods to utilize heat and capture carbon dioxide in Canada, and (ii) a non-exclusive license to the intellectual property in up to 25 sites in the United States that are operated by the Company or its affiliates.

In consideration of the licenses, Viking paid an up-front royalty of $ 1,500,000 and Viking was obligated to make additional royalty payments as follows:

(i) an additional $ 1,500,000 on or before January 31, 2022, which may be paid in whole or in part in the form of Viking’s common stock based on the price of Viking’s common stock on August 18, 2021, at ESG’s election;

(ii) an additional $ 2,000,000 on or before April 20, 2022, which may be paid in whole or in part in the form of Viking’s common stock based on the price of Viking’s common stock on August 18, 2021, at ESG’s election;

and (iii) continuing royalties of not more than 15% of the Company’s net revenues generated using the intellectual property, with the continuing royalty percentage to be jointly determined by the parties collaboratively based on the parties’ development of realistic cashflow models resulting from initial projects utilizing the intellectual property, and with the parties utilizing mediation if they cannot jointly agree to the continuing royalty percentage.

With respect to the payments noted in (i) and (ii) above, totaling $3,500,000, on or about November 22, 2021, the Company paid $500,000 to or on behalf of ESG and ESG elected to accept $2,750,000 in shares of Viking’s common stock at the applicable conversion price, resulting in 6,942,691 shares, leaving a balance owing of $250,000 which was paid in January 2022.

The Company’s exclusivity with respect to Canada shall terminate if minimum continuing royalty payments to ESG are not at least equal to the following minimum payments based on the date that ESG first begins capturing carbon dioxide and selling for commercial purposes one or more commodities from a system installed and operated by ESG using the intellectual property (the “Trigger Date”):

Years from the Trigger Date:

Year nine and after

The Company’s management believes that the Trigger Date could occur as early as the second quarter of 2024 but there is no assurance that it will occur at that or any time.

If the continuing royalty percentage is adjusted jointly by the parties downward from the maximum of 15 %, then the minimum continuing royalty payments for any given year from the Trigger Date shall also be adjusted downward proportionally.

The Company recognized amortization expense of $ 308,694 for the year ended December 31, 2023.

The estimated future amortization expense for each of the next five years is $ 304,465 per year.

The ESG intangible asset consisted of the following at December 31, 2023 and December 31, 2022:

ESG Clean Energy License

Accumulated amortization

Other intangibles – Simson-Maxwell – Customer Relationships and Brand

The Company allocated a portion of the purchase price of Simson-Maxwell to Customer Relationships with a fair value of $ 1,677,453 and an estimated useful life of 10 years, and the Simson-Maxwell Brand with a fair value of $ 2,230,673 and an indefinite useful life.

The Company recognized amortization expense for the Customer Relationship intangible of $ 167,745 for the year ended December 31, 2023.

The estimated future amortization expense for each of the next five years is $ 167,745 per year.

The Company periodically reviews the fair value of the Customer Relationships and Brand to determine if an impairment charge should be recognized.

For the year ended December 31, 2023, the Company recorded an impairment charge of $ 311,837 related to the Simmax Brand and $ 357,873 related to Customer Relationships, driven by lower actual and forecast revenue growth as compared to the date of acquisition.

For the year ended December 31, 2022, the Company recorded an impairment charge of $ 367,907 and $ 83,865 , respectively, related to these assets for the same reason.

The Other intangibles – Simson-Maxwell consisted of the following at December 31, 2023 and 2022:

Customer Relationships

Impairment of intangible assets

( 1,121,482 )

Accumulated amortization

Intangible Assets - Variable Interest Entity Acquisitions (VIE’s)

Medical Waste Disposal System

On January 18, 2022, Viking entered into a Securities Purchase Agreement to purchase 51 units, representing 51%, of Viking Ozone, from Choppy Group LLC , a Wyoming limited liability company (“Choppy”), in consideration of the issuance of 8,333,333 shares of Viking common stock to Choppy, 3,333,333 of which shares were issued at closing, 3,333,333 of which shares are to be issued to Choppy after 5 units of the System (as defined below) have been sold, and 1,666,667 of which shares are to be issued to Choppy after 10 units of the System have been sold .

Viking Ozone was organized on or about January 14, 2022, for the purpose of developing and distributing a medical and biohazard waste treatment system using ozone technology (the “System”), and on or about January 14, 2022, Choppy was issued all 100 units of Viking Ozone in consideration of Choppy’s assignment to Viking Ozone of all of Choppy’s intellectual property and intangible assets, including patent rights, know-how, procedures, methodologies, and contract rights in connection with the System, and specifically the invention entitled “Multi-Chamber Medical Waste Ozone-Based Treatment Systems and Methods (Docket No.

RAS-101A) and related patent application.

On January 18, 2022 Viking acquired 51 units (51%) of Viking Ozone from Choppy with Choppy retaining the remaining 49 units (49%) of Viking Ozone, and Viking issued 3,333,333 shares of Viking common stock to Choppy.

Viking and Choppy then entered into an Operating Agreement on January 18, 2022 governing the operation of Viking Ozone.

Based on the closing price of the Company’s stock on January 18, 2022, the fair value was approximately $2,000,000.

The Company determined the acquisition of a 51 % interest in Viking Ozone was the acquisition of and initial consolidation of a VIE that is not a business.

The acquisition was recorded as follows:

Purchase Price:

Fair value of stock at closing

Fair value of contingent consideration

Total consideration

Purchase Price Allocation:

Intangible asset

Non-controlling interest

( 2,420,189 )

Camber ownership interest

Open Conductor Detection Technologies

On February 9, 2022, Viking entered into a Securities Purchase Agreement to purchase 51 units, representing 51% of Viking Sentinel, from Virga Systems LLC , a Wyoming limited liability company (“Virga”), in consideration of the issuance of 416,667 shares of Viking common stock to Virga.

Viking Sentinel was formed on or about January 31, 2022, and Virga was issued all 100 units of Viking Sentinel in consideration of Virga’s assignment to Viking Sentinel of all of Virga’s intellectual property and intangible assets, including patent rights, know-how, procedures, methodologies, and contract rights in connection with an end of line protection with trip signal engaging for distribution system, and related patent application(s).

On February 9, 2022 Viking acquired 51 units (51%) of Viking Sentinel from Virga with Virga retaining the remaining 49 units (49%) of Viking Sentinel, and Viking issued 416,667 shares of Viking common stock to Virga.

Viking and Virga then entered into an Operating Agreement on February 9, 2022 governing the operation of Viking Sentinel.

The Company determined the acquisition of a 51 % interest in Viking Sentinel was the acquisition and initial consolidation of a VIE that is not a business.

The acquisition was recorded as follows:

Purchase Price:

Fair value of stock at closing

Total consideration

Purchase Price Allocation:

Intangible asset

Non-controlling interest

Camber ownership interest

On February 9, 2022, Viking entered into a Securities Purchase Agreement to purchase (the “Purchase”) 51 units (the “Units”), representing a 51 % ownership interest in Viking Protection Systems, LLC (“Viking Protection”), from Jedda Holdings LLC (“Jedda”).

In consideration for the Units, Viking agreed to issue to Jedda, shares of a new class of Convertible Preferred Stock of Viking with a face value of $ 10,000 per share (the “Viking Series E Preferred Stock”), or pay cash to Jedda, if applicable, as follows:

Purchase Price *

Conversion Price

of Underlying Common Shares

Estimated Revenues if Sales Target Achieved**

Upon the sale of 10k units

Upon the sale of 20k units

Upon the sale of 30k units

Upon the sale of 50k units

Upon the sale of 100k units

The $ 5 million due on closing was payable solely in stock of Viking.

All other payments, if the subject sales targets are met, are payable in cash or in shares of convertible preferred stock of the Company, at the seller’s option.

These are estimates only.

There is no guarantee any sales targets will be reached.

Notwithstanding the above, the Company shall not effect any conversion of any shares of Viking Series E Preferred Stock, and Jedda shall not have the right to convert any shares of Viking Series E Preferred Stock, to the extent that after giving effect to the conversion, Jedda (together with Jedda’s affiliates, and any persons acting as a group together with Jedda or any of Jedda’s affiliates) would beneficially own in excess of 4.99% of the number of shares of the Camber Common Stock outstanding immediately after giving effect to the issuance of shares of Camber Common Stock issuable upon conversion of the shares of Viking Series E Preferred Stock by Jedda.

Jedda, upon not less than 61 days’ prior notice to Camber, may increase or decrease the beneficial ownership limitation, provided that the beneficial ownership limitation in no event exceeds 9.99% of the number of shares of Camber Common Stock outstanding immediately after giving effect to the issuance of shares of Camber Common Stock upon conversion of the Preferred Share(s) held by Jedda and the beneficial ownership limitation provisions of this Section shall continue to apply.

Any such increase or decrease will not be effective until the 61 st day after such notice is delivered to Camber.

Viking Protection was formed on or about January 31, 2022, and Jedda was issued all 100 units of Viking Protection in consideration of Jedda’s assignment to Viking Protection of all of Jedda’s intellectual property and intangible assets, including patent rights, know-how, procedures, methodologies, and contract rights in connection with an electric transmission ground fault prevention trip signal engaging system, and related patent application(s).

On February 9, 2022 Viking acquired 51 units (51%) of Viking Protection from Jedda with Jedda retaining the remaining 49 units (49%) of Viking Protection, and Viking issued the 475 shares of Viking Series E Preferred Stock to Jedda.

Viking and Jedda then entered into an Operating Agreement on February 9, 2022 governing the operation of Viking Protection.

The Company determined the acquisition of a 51% interest in Viking Protection was the acquisition and initial consolidation of a VIE that is not a business.

The acquisition was recorded as follows:

Purchase Price:

Fair value of stock at closing

Fair value of contingent consideration

Total consideration

Purchase Price Allocation:

Intangible asset

Non-controlling interest

( 4,686,542 )

Camber ownership interest

The Company consolidates any VIEs in which it holds a variable interest and is the primary beneficiary.

Generally, a VIE, is an entity with one or more of the following characteristics:

(a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support;

(b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity;

or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights.

The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

The Company has determined that it is the primary beneficiary of three VIEs, Viking Ozone, Viking Sentinel and Viking Protection, and consolidates the financial results of these entities, as follows:

Intangible asset

Non-controlling interest

( 2,420,189 )

( 4,686,542 )

( 7,330,915 )

Camber ownership interest

Upon consummation of the Merger between Viking and Camber, all shares of Viking Series E Preferred Stock were exchanged for Camber Series H Preferred Stock, with substantially the same rights and terms with respect to Camber.

Related Party Transactions

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

During the years ended December 31, 2023 and 2022, the Company paid or accrued $ 460,000 and $ 360,000 , respectively, in fees to AGD Advisory Group, Inc.

As of December 31, 2023 and 2022, the total amount due to AGD Advisory Group, Inc.

was $ 600,000 and $ 370,000 , respectively, and is included in accounts payable.

The Company’s CFO, John McVicar, renders professional services to the Company through 1508586 Alberta Ltd., an affiliate of Mr.

During the years ended December 31, 2023 and 2022, the Company paid or accrued $ 280,000 and $ 140,000 , respectively, in fees to 1508586 Alberta Ltd.

The Company’s previous CFO, Frank W.

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

During the years ended December 31, 2023 and 2022, the Company paid or accrued $ 20,000 and $ 130,000 , respectively, in fees to FWB Consulting, Inc.

Due to Parent

In 2021 and 2022, prior to the Merger of Camber and Viking, Camber made various cash advances to the Viking.

The advances were non-interest bearing and stipulated no repayment terms or restrictions.

These balances have been eliminated upon consolidation at December 31, 2023.

As of December 31, 2022, the amount due to Camber from Viking was $ 6,572,300 .

Simson-Maxwell

At the time of acquisition, Simson-Maxwell had several amounts due to/due from related parties and notes payable to certain employees, officers, family members and entities owned or controlled by such individuals.

Viking assumed these balances and loan agreements in connection with the acquisition.

The balance of amounts due to and due from related parties as of December 31, 2023 and 2022 are as follows:

related party

December 31, 2023

& majority owner

$ ( 643,121 )

$ ( 308,684 )

Adco Power Ltd.

$ ( 643,121 )

$ ( 308,684 )

December 31, 2022

& majority owner

$ ( 629,073 )

$ ( 301,941 )

Adco Power Ltd.

$ ( 629,073 )

$ ( 301,941 )

owns a 17 % non-controlling interest in Simson-Maxwell and is majority owned by a Director of Simson-Maxwell.

Adco Power Ltd., an industrial, electrical and mechanical construction company, is a wholly owned subsidiary of Simmax Corp., and conducts business with Simson-Maxwell.

The notes payable to related parties as of December 31, 2023 and 2022 are as follows:

Total notes payable to related parties

Less current portion of notes payable - related parties

Notes payable - related parties, net of current portion

On June 1, 2023, Simson-Maxwell issued CAD$457,000 ($ 345,060 ) in promissory notes to related parties.

The notes bear interest at 12 % per annum, payable monthly, and mature on June 1, 2024 .

Noncontrolling Interests

The following discloses the effects of changes in the Company’s ownership interest in Simson-Maxwell, and on the Company’s equity for the year ended December 31, 2023:

Noncontrolling interest - January 1, 2023

Net loss attributable to noncontrolling interest

Noncontrolling interest – December 31, 2023

The following discloses the effects of the Company’s ownership interest in Viking Ozone, Viking Sentinel and Viking Protection in the aggregate, and on the Company’s equity for the year ended December 31, 2023:

Noncontrolling interest - January 1, 2023

Net loss attributable to noncontrolling interest

Noncontrolling interest – December 31, 2023

Long-Term Debt and Other Short-Term Borrowings

Long term debt and other short-term borrowings consisted of the following at December 31, 2023 and 2022:

Long-term debt:

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 (3.25%) as of the effective date and is secured by lien on substantially all of the Company’s assets.

The balance at December 31, 2023 is shown net of unamortized debt discount of $9,714,868.

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.

Pursuant to an amendment dated December 24, 2021 the interest rate was adjusted to the Wall Street Journal Prime Rate (3.25%) as of the amendment date.

The Note is secured by a 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 maturity on January 1, 2027.

Pursuant to an amendment dated December 24, 2021 the interest rate was adjusted to the Wall Street Journal Prime Rate (3.25%) as of the amendment date.

The Note is secured by a 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.

Pursuant to an amendment dated December 24, 2021 the interest rate was adjusted to the Wall Street Journal Prime Rate (3.25%) as of the amendment date.

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

Promissory note payable by Mid-Con Petroleum LLC, a wholly owned subsidiary, to Cornerstone Bank dated July 24, 2019 in the amount of $2,241,758, bearing interest at 6%, payable interest only through July 24, 2021, then on August 24, 2021, payable in monthly installments of principal and interest of $43,438, with a final payment due on a maturity date of July 24, 2025.

The note was secured by a first mortgage on all of the assets of Mid-Con Petroleum, LLC and a guarantee of payment by Viking.

On March 10, 2023, the promissory note was amended to include a conversion feature and to include Viking as an additional obligor.

In April 2023, Viking issued 588,235 shares of common stock to convert $200,000 of the outstanding principal balance.

On July 31, 2023, the outstanding principal balance was assigned by Cornerstone Bank to FK Venture LLC and in August 2023 the Company issued a total of 5,189,666 shares of common stock to convert the total outstanding principal balance owed by both Mid-Con Petroleum LLC and Mid-Con Drilling LLC.

The balance at December 31, 2022 is shown is net of unamortized discount of $12,224.

Promissory note payable by Mid-Con Drilling LLC, a wholly owned subsidiary, to Cornerstone Bank dated July 24, 2019 in the amount of $1,109,341, bearing interest at 6%, payable interest only through July 24, 2021, then on August 24, 2021, payable in monthly installments of principal and interest of $21,495, with a final payment due on a maturity date of July 24, 2025.

The note was secured by a first mortgage on all of the assets of Mid-Con Drilling, LLC and a guarantee of payment by Viking.

On March 10, 2023, the promissory note was amended to include a conversion feature and to include Viking as an additional obligor.

The balance at December 31, 2022 is shown is net of unamortized discount of $12,190.

On May 5, 2023, Viking signed a securities purchase agreement with FK Venture LLC under which FK Venture LLC agreed to purchase convertible promissory notes from the Company in the amount of $800,000 on the 5th day of each month commencing May 5, 2023 for 6 months, for a minimum commitment of $4,800,000.

FK Venture LLC has the right to purchase up to $9,600,000 of such notes.

The notes bear interest at 12% per annum.

The maturity date of the notes is the earlier of (i) July 1, 2025, or (ii) 90 days following the date that the Company completes a direct up-listing of its common stock to a national securities exchange (not including any merger or combination with Camber).

FK Venture LLC shall have the right to convert all or any part of the outstanding and unpaid principal balance into common stock of the Company.

The conversion price shall be the lesser of (i) $0.75, or (ii) if the Merger with Camber closes, 50% of the trading price of Camber Energy, Inc.’s common stock on the day prior to the closing of the Merger with Camber ($0.4158 per share).

At December 31, 2023, the Buyer had purchased six notes and converted two of these notes subsequent to the closing of the Merger in exchange for 3,848,004 shares of the Company’s common stock.

The Company recorded a loss on early extinguishment of $35,402 related to these conversions.

The balance at December 31, 2023 is shown is net of unamortized discount of $488,270.

Loan of $150,000 dated July 1, 2020 from the U.S.

Small Business Administration.

The loan bears interest at 3.75% and matures on July 28, 2050.

The loan is payable in monthly installments of $731 with the remaining principal and accrued interest due at maturity.

Installment payments were originally due to start 12 months from the date of the note but the date was extended to January 2023.

Accrued interest from the original installment due date to January 2023 was capitalized to the loan principal balance.

Total long-term debt

Less current portion and debt discount

Total long-term debt, net of current portion and debt discount

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

Twelve-month period ended December 31,

Unamortized Discount

( 9,714,868 )

$ ( 10,203,138 )

Bank Credit Facility

Simson-Maxwell has an operating credit facility with TD Bank, secured by accounts receivable and inventory, bearing interest at prime plus 2.25% on Canadian funds up to CAD $5,000,000 and the bank’s US dollar base rate plus 2.25% on US funds, plus a monthly administration fee of CAD 500 .

The balance outstanding under this credit facility is CAD $4,457,947 ($ 3,365,995 ) and CAD $4,139,785 ($ 3,111,350 ) as of December 31, 2023 and 2022, respectively.

Derivative Liability

Series C Preferred Stock

The Series C Preferred Stock contains an embedded derivative due to the potential conversion into a variable number of shares of common stock.

Upon conversion of the Series C Preferred Stock into shares of common stock, the Company has a potential obligation to issue additional shares of common stock to satisfy the True-Up obligation.

Both the Conversion Premium and the True-Up obligation are derivatives and are required to be recorded at fair value.

Conversion of the face value of the Series C Preferred Stock is fixed at $ 162.50 per share of common stock.

The Conversion Premium is convertible into shares of common stock based on a variable that is not an input to fair value of a fixed-for-fixed option as defined in FASB ASC 815-40 and is a derivative liability and is recorded at fair value.

The Company determines the redemption value of the face value of the Series C Preferred Stock to be the fair value of the shares of common stock issuable to satisfy the conversion of the face value of the Series C Preferred Stock.

The fair value of the Conversion Premium is determined to be the fair value of the shares required to satisfy the Conversion Premium.

The Company receives notice of conversion from the holder with a calculation of the number of shares of common stock required to be issued to satisfy the redemption value plus the Conversion Premium.

The Company then issues the number of shares of common stock determined by the holder using a VWAP calculation for the Measurement Period before the conversion date.

The shares may be issued over time due to ownership limitations of the holder.

Upon conversion of the Series C Stock, the Company reduces the derivative liability by the amount that was originally recorded for the number of Series C Stock converted.

Any difference between the current fair value of the common shares issued to satisfy the conversion premium and the originally recorded derivative liability was recorded as a loss on derivative liability.

Temporary equity is also reduced by the fair value the common shares issued to satisfy the redemption value (amounts recorded in temporary equity).

Any difference is recorded as additional deemed dividend or an equity contribution.

Upon conversion of the Series C Preferred Stock, the Company reduces the derivative liability by the amount that was originally recorded for the number of Series C Preferred Stock converted.

Any difference between the current fair value of the common shares issued to satisfy the conversion premium and the originally recorded derivative liability is recorded as a loss on derivative liability.

The holder may be entitled to additional shares subsequent to the conversion date if the VWAP calculation for the portion of the Measurement Period following the date of conversion is lower than the VWAP for the portion of the Measurement Period prior to the date of conversion, referred to as True-Up shares.

If the VWAP calculation is higher, no True-Up shares are issued.

Management has determined that the potential obligation to issue “true-up” shares under the Conversion Premium creates an additional derivative liability.

The potential obligation to issue True-Up shares creates an additional derivative liability.

The determination of the number of True-Up shares due, if any, is based on the lowest VWAP calculation over the Measurement Period that extends beyond the conversion date.

In addition, if the Company has not complied with certain provisions of the Certificate of Designation, the Measurement Period does not end until the Company is in compliance.

In addition, if the Company has not complied with certain provisions of the COD, the Measurement Period does not end until the Company is in compliance.

The potential obligation to issue True-Up shares after the conversion date is a derivative liability.

The derivative liability for the True-Up Shares at the end of each period represents Series C Stock conversions in respect of which the Measurement Period had not expired as of the period end.

The derivative liability for the True-Up Shares at the end of each period represents Series C Preferred Stock conversions in respect of which the Measurement Period had not expired as of the period end.

The fair value of the derivative liability has been estimated using a binomial pricing model, the estimated remaining Measurement Period, the share price and the historical volatility of the Company’s common stock.

Adjustments to the Carrying value of the Series C Stock and the Derivative Liability

At each reporting period the Company determined the fair value of the common shares required to satisfy the redemption of the outstanding Series C Stock and recorded an additional deemed dividend or an equity contribution for any differences.

The redemption Conversion Premium was assumed to be settled in cash because cash settlement is more favorable to the Company.

The fair value of the common shares required to satisfy the redemption of the Series C Stock was determined generally using the closing share price of the Company’s stock as of the reporting date.

The amount of cash required to settle the Conversion Premium was generally fixed at the time of issuance.

Consequently, the fair value of the derivative liability relating to the cash obligation to satisfy the Conversion Premium is generally unchanged until conversion.

The cash required to settle the conversion premium was unchanged until the dividend rate of 24.95% was increased in accordance with the terms of the Series C Stock to 34.95% due to covenant violations.

The increase in the conversion premium was recorded as an increase in the derivative liability and a loss on change in fair value of derivative liability.

The fair value of the derivative liability relating to the potential obligation to issue true-up shares is subject to adjustment as the Company’s stock price changes.

Such changes are recorded as changes in fair value of derivative liability.

April 20, 2021 Amendment to the Series C Stock COD

On April 20, 2021, the Company amended the Series C Stock certificate of designation (COD) to require all conversions to be in common shares, thus removing the cash option for redemption of the Conversion Premium.

We determined that the amendment required reclassification of the Series C Stock recorded in temporary equity to be reclassified to permanent equity with no further quarterly adjustments.

Effect on derivative liability

We determined that the removal of the cash option for conversion of the Conversion Premium changed the cash redemption assumption to assume, in all cases, share redemption.

Therefore, the derivative liability is required to be recorded at the fair value of the equivalent number of common shares issuable to satisfy the Conversion Premium.

We recorded an adjustment to derivative liability and loss on derivative on April 20, 2021 and we will record changes in fair value of the derivative liability each quarter thereafter as long as any Series C Stock are outstanding.

We estimated the fair value of the derivative liability for the outstanding Series C Stock Conversion Premium using the period end number of shares required to satisfy the Conversion Premium at the period end closing share price of the Company’s common stock, except as noted below.

Limitations on using the closing price of the Company’s common stock to determine fair value

The Company is a smaller reporting company and is traded on the NYSE American exchange.

Historically, our stock price has been extremely volatile and subject to large and sometimes unexplained price variations on a daily or weekly basis.

In addition, the Company declared four reverse stock splits in 2018 and 2019 and the Company’s common stock generally trades at less than $1.00 per share.

These factors have exacerbated daily volatility of our stock price.

Consequently, we believe that the closing price of our stock on the reporting date may not, in all cases, represent the fair value of the common share required to satisfy the redemption of the Series C Stock.

Recognizing that the closing share price of our publicly traded stock is an observable input to fair value, we used such price for determining fair value in most cases and only considered an alternative measure of fair value when the closing price of the Company’s common stock varied by more than 20% from the five-day moving average immediately prior to the measurement date.

In such cases, we used an average closing price of the previous 30-day period as an estimate of fair value, adjusted for stock splits if applicable.

In addition, conversion of the Series C shares require a significant number of common shares to be issued in relation to the total number of shares outstanding.

We do not believe that the market price of the Company’s common stock appropriately reflects the potential for significant dilution caused by a large conversion and may not be representative of market value.

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) we determined the fair value of the embedded features based on the historical market capitalization of the Company.

Activities for derivative warrant instruments during the years ended March 31, 2020 and 2019 were as follows:

Carrying amount at beginning of period

Change in fair value

Carrying amount at end of period

The fair value of the derivative warrants was calculated using the Black-Scholes pricing model.

Variables used in the Black Scholes pricing model as of March 31, 2019 include (1) discount rate of 2.20%, (2) expected term of 0.10 years, (3) expected volatility of 253.77%, and (4) zero expected dividends.

Activities for derivative Series C Preferred Stock derivative liability during the years ended March 31, 2020 and 2019 were as follows:

Carrying amount at beginning of period

Activities for Series C Preferred Stock derivative liability during the year ended December 31, 2023 was as follows:

Carrying amount at beginning of year

Derivative liability recognized on Merger

Change in fair value

Settlement of Obligation (issuance of common shares)

Settlement of obligation (issuance of shares of common stock)

( 7,060,526 )

Carrying amount at end of period

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 11 – COMMITMENTS AND CONTINGENCIES

Office Lease .

Information regarding the Company’s office space is disclosed in greater detail above under “Note 5 Property and Equipment –Leases“, above.

During March and April 2018, the Company purchased certain equipment pursuant to capital leases.

The effective borrowing rate was approximately 35%, and all obligations were due by December 2018.

In conjunction with the assignment of the liabilities owed under the IBC Bank loan agreements to N&B Energy in September 2018, as discussed under “Note 2 – Liquidity and Going Concern Considerations“ – “ Assumption Agreement ” all of the remaining obligations were assumed by the purchaser.

Lineal (which as of December 31, 2019 has been completely divested in connection with the Lineal Divestiture discussed in “Note 13 – Merger Agreement and Divestiture“) has the usual liability of contractors for the completion of contracts and the warranty of its work.

In addition, Lineal acts as prime contractor on a majority of the projects it undertakes and is normally responsible for the performance of the entire project, including subcontract work.

Management is not aware of any material exposure related thereto which has not been provided for in the accompanying consolidated financial statements.

Carrying amount at end of year

Convertible Debt

On March 10, 2023, the terms of the promissory notes held by Mid-Con Petroleum, LLC and Mid-Con Drilling, LLC described in Note 11 were amended to include a conversion feature granting the holder of the note the option to convert the principal balance of the debt, in whole or in part, into common stock of Viking.

The conversion price is equal to the lesser of :

(i) the average of the 5 lowest individual daily volume weighted average prices (“VWAP”) of Viking common stock during the 30-day period prior to the date of the notice of conversion;

or (ii) one dollar ($1.00) per share.

All other terms of the promissory notes remained unchanged .

The modification to the terms of the promissory notes was treated as a debt extinguishment and the Company recorded a loss on the extinguishment of debt of $ 154,763 .

The fair value of the debt was determined as the total number of shares, equal to the face value of the debt on March 10, 2023 divided by the VWAP, multiplied by the closing share price on that day.

The value of the conversion option was based upon the fair value of Viking’s common stock.

As the option was convertible into a variable number of shares, it was considered to be a derivative to be continuously recognized at fair value, with changes to fair value recorded in the statement of operations.

The fair value of the conversion feature at the date of modification was determined to be $ 2,276,217 using a binomial option pricing model.

The derivative liability is classified as a Level 3 liability in the Fair Value Hierarchy.

At March 31, 2023, the fair value of the conversion feature was remeasured and determined to be $ 2,810,824 using a binomial option pricing model.

Consequently, the Company recorded a loss of $ 534,607 on the change in fair value of the derivative liability in the accompanying consolidated statement of operations.

On April 28, 2023, $ 200,000 of the promissory note was assigned and converted into 588,235 shares of common stock.

The Company recorded a reduction to the derivative of $ 330,823 related to the conversion and recognized a loss on early extinguishment of debt of $ 8,541 .

On June 30, 2023, the fair value of the conversion feature was remeasured and determined to be $ 1,762,648 using a binomial option pricing model, and the Company recorded a gain of $ 717,352 on the change in fair value of the derivative liability in the accompanying consolidated statement of operations.

On July 31, 2023, the fair value of the conversion feature was remeasured and determined to be $ 3,712,041 using a binomial option pricing model, and the Company recorded a loss of $ 1,949,393 on the change in fair value of the derivative liability in the accompanying consolidated statement of operations.

In August 2023, the balance of the promissory notes was assigned and converted into 5,189,666 shares of common stock of the Company.

The Company recorded a loss on early extinguishment of debt of $ 406,801 related to this conversion and reduced the value of the derivative liability to nil.

(a) Common Stock

The Company is authorized to issue 500,000,000 shares of Common Stock, par value $ 0.001 per share.

During the year ended December 31, 2023, the Company issued a total of 105,646,799 shares of common stock, as follows:

A total of 8,525,782 shares of common stock on the conversion of 240 shares of Series C Preferred Stock.

Of this total, 1,093,358 shares were issued subsequent to the Merger.

A total of 31,022,321 true-up shares related to prior conversions of Series C Preferred Stock as a result of the continuation of the Measurement Period (as defined in the Series C COD with respect to such Series C Preferred Stock) associated with such conversions and a decline in the price of the Company’s shares of common stock within the Measurement Period.

Of this total, 23,670,894 shares were issued subsequent to the Merger.

588,235 shares of common stock related to the assignment and conversion of $ 200,000 of promissory notes payable to Cornerstone Bank.

3,849,306 shares of common stock on the exercise of 3,888,889 warrants.

A total of 5,189,666 shares of common stock related to the assignment and conversion of $ 2,232,273 of promissory notes payable to Cornerstone Bank.

3,333,333 shares of common stock related to the conversion of 200 shares of Series H Preferred Stock.

A total of 3,848,004 shares of common stock related to the conversion of two promissory notes, each in the amount of $800,000 (for a total of $ 1,600,000 ), due to FK Venture, LLC.

A total of 49,290,152 shares of common stock to the former shareholders of Viking Energy Group, Inc.

as part of the Merger.

(b) Preferred Stock

The Company is authorized to issue 10,000,000 shares of Preferred Stock, par value $ 0.001 per share (the “Preferred Stock”).

(i) Series A Convertible Preferred Stock

On August 1, 2023, the Company issued 28,092 shares of new Series A Preferred Stock in exchange for 28,092 outstanding shares of old Series C Preferred Stock of Viking Energy Group Inc.

Pursuant to the COD for the Series A Preferred Stock (the “Series A COD”), each share of 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.

(ii) Series C Redeemable Convertible Preferred Stock

Holders of the Series C Preferred Stock are entitled to cumulative dividends in the amount of 24.95 % per annum (adjustable up to 34.95% if a Trigger Event, as described in the Series C COD occurs), payable upon redemption, conversion, or maturity, and when, as and if declared by our board of directors in its discretion, provided that upon any redemption, conversion, or maturity, seven years of dividends are due and payable on such redeemed, converted or matured stock.

The Series C Preferred Stock ranks senior to the common stock.

Except as prohibited by applicable law or as set forth herein, the holders of shares of Series C Preferred Stock have the right to vote together with holders of Common Stock 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 C Preferred Stock), in each instance 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 shares of Series C Preferred Stock.

The Series C Preferred Stock may be converted into shares of our common stock at any time at the option of the holder, or at Camber’s option if certain equity conditions (as defined in the Series C COD), are met.

Upon conversion, Camber will pay the holders of the Series C Preferred Stock being converted through the issuance of common stock, in an amount equal to the dividends that such shares would have otherwise earned if they had been held through the maturity date (i.e., seven years), and issue to the holders such number of shares of common stock equal to $ 10,000 per share of Series C Preferred Stock (the “Face Value”) multiplied by the number of such shares of Series C Preferred Stock divided by the applicable conversion price of $ 162.50 (after adjustment following the December 21, 2022 reverse stock split) adjusted for any future forward or reverse splits.

The conversion premium under the Series C Preferred Stock is payable and the dividend rate under the Series C Preferred Stock is adjustable.

Specifically, the conversion rate of such premiums and dividends equals 95% of the average of the lowest 5 individual daily volume weighted average prices during the Measuring Period (as defined below), not to exceed 100% of the lowest sales prices on the last day of the Measuring Period, less $0.05 per share of common stock, unless a trigger event has occurred, in which case the conversion rate equals 85% of the lowest daily volume weighted average price during the Measuring Period, less $0.10 per share of common stock not to exceed 85% of the lowest sales prices on the last day of such the Measuring Period, less $0.10 per share .

The “Measuring Period” is the period beginning, if no trigger event has occurred, 30 trading days, and if a trigger event has occurred, 60 trading days, before the applicable notice has been provided regarding the exercise or conversion of the applicable security, and ending, if no trigger event has occurred, 30 trading days, and if a trigger event has occurred, 60 trading days, after the applicable number of shares stated in the initial exercise/conversion notice have actually been received into the holder’s designated brokerage account in electronic form and fully cleared for trading.

Trigger Events are described in the designation of the Series C Preferred Stock, but include items which would typically be events of default under a debt security, including filing of reports late with the SEC.

The Series C Preferred Stock has a maturity date that is seven years after the date of issuance and, if the Series C Preferred Stock has not been wholly converted into shares of common stock prior to such date, all remaining outstanding Series C Preferred Stock will automatically be converted into shares of common stock, to the extent Camber has sufficient authorized but unissued shares of common stock available for issuance upon conversion.

Notwithstanding any other provision of this designation, available authorized and unissued shares of common stock will be a limit and cap on the maximum number of shares of common stock that could be potentially issuable with respect to all conversions and other events that are not solely within the control of Camber.

Camber will at all times use its best efforts to authorize sufficient shares.

The number of shares required to settle the excess obligation is fixed on the date that net share settlement occurs.

The Dividend Maturity Date will be indefinitely extended and suspended until sufficient authorized and unissued shares become available.

100 % of the Face Value, plus an amount equal to any accrued but unpaid dividends thereon, automatically becomes payable in the event of a liquidation, dissolution or winding up by Camber.

Camber may not issue any preferred stock that is pari passu or senior to the Series C Preferred Stock with respect to any rights for a period of one year after the earlier of such date (i) a registration statement is effective and available for the resale of all shares of common stock issuable upon conversion of the Series C Preferred Stock, or (ii) Rule 144 under the Securities Act is available for the immediate unrestricted resale of all shares of common stock issuable upon conversion of the Series C Preferred Stock.

The Series C Preferred Stock is subject to a beneficial ownership limitation, which prevents any holder of the Series C Preferred Stock from converting such Series C Preferred Stock into common stock, if upon such conversion, the holder would beneficially own greater than 9.99 % of Camber’s outstanding common stock.

Pursuant to the Series C COD, holders of the Series C Preferred Stock are permitted to 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 Series C COD, even if there are insufficient shares of authorized common stock to fully convert the Series C Preferred Stock.

Also pursuant to certain agreements entered into with the holders of the Series C Preferred Stock in October 2021, due to the occurrence of a Trigger Event, Camber no longer has the right to conduct an early redemption of the Series C Preferred Stock as provided for in the Series C COD unless the Company’s indebtedness to Discover is paid in full.

On October 31, 2022, Camber filed with the Secretary of State of Nevada an amendment to the Series C COD (the “Series C Amendment”), dated as of October 28, 2022 (the “Series C Amendment Date”), pursuant to agreements between Camber and each of Discover and Antilles signed on October 28, 2022, which amended the Series C COD such that (i) beginning on the Series C Amendment Date and thereafter, when determining the conversion rate for each share of Series C Preferred Stock based on the trading price of Camber’s common stock over a certain number of previous days (“Measurement Period”), no day will be added to what would otherwise have been the end of any Measurement Period for the failure of the Equity Condition (as defined in the Series C COD), even if the volume weighted average trading price (“Measuring Metric”) is not at least $ 1.50 and each holder of Series C Preferred Stock waived the right to receive any additional shares of common stock that might otherwise be due if such Equity Condition were to apply after the Series C Amendment Date, including with respect to any pending Measurement Period;

and (ii) (A) beginning on the Series C 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 Series C 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 .

November 2022 Agreement with Discover Growth Fund, LLC

On November 3, 2022, the Company entered into an agreement with Discover, pursuant to which Discover absolutely and unconditionally waived and released any and all rights to receive further or additional shares of the Company’s common stock (the “ Conversion Shares ”) with respect to any and all shares of Series C Preferred Stock previously converted by Discover including, but not limited to, the right to deliver additional notices for more Conversion Shares under the Series C COD.

Discover also absolutely and unconditionally waived and released any and all rights to convert all or any part of any Promissory Notes previously executed by the Company in favor of Discover into shares of the Company’s common stock and agreed not to convert or attempt to convert any portion of any Promissory Notes, at any particular price or at all.

As of December 31, 2023, Antilles held 30 shares of Series C Preferred Stock.

The Series C Preferred Stock was convertible into a substantial number of the Company’s shares of common stock which could result in significant dilution of the Company’s existing shareholders.

If the outstanding Series C Preferred Stock were converted as of December 31, 2023, the Company estimates that the following shares of common stock would be required to be issued to satisfy the conversion of shares of the Series C Preferred Stock:

Estimated number of shares issuable for conversion at $ 162.50 per share at September 30, 2023

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

*based on 30 shares of Series C Convertible Preferred Stock outstanding as of such date and an estimated low VWAP as at such date

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

As of December 31, 2023, Antilles was entitled to approximately 34,488,937 true-up shares in connection with the prior conversion by Antilles of 240 shares of Series C Preferred Stock throughout 2023 as a result of:

(i) the Measurement Period in connection with such conversions continuing to extend as a result of the Company’s previously announced outstanding deficiency with the New York Stock Exchange regarding continued listing standard(s) concerning minimum stockholders’ equity requirements;

and (ii) the Company’s stock price declining following the initial conversion(s) of the 240 shares of Series C Preferred Stock.

(iii) Series G Redeemable Convertible Preferred Stock

On or about December 30, 2021, the Company created a new class of 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 Series G COD.

Pursuant to the Series G 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 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 COD 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 Series G COD;

(b) upon conversion of such shares in accordance with the Series G 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 as at the date of payment or issuance of shares of common stock 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 Material Adverse Change 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 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 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 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.

In 2022, the Company paid the Investor $ 2,750,000 and redeemed 5,272 shares of Series G Preferred Stock associated with the Notes due March 31, 2022 and June 30, 2022, thereby canceling such Notes and reducing the number of shares of Series G Preferred Stock outstanding from 10,544 to 5,272 .

The Investor may not convert any of the remaining shares of Series G 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.

As of December 31, 2023, none of the outstanding Notes had been paid in full and thus the underlying shares were not convertible.

(iv) Series H Convertible Preferred Stock

On August 1, 2023, the Company issued 475 shares of new Series H Preferred Stock in exchange for 475 outstanding shares of old Series E Preferred Stock of Viking Energy Group inc.

Pursuant to the COD for the Series H Preferred Stock (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 .

On or about August 9, 2023, Jedda Holdings converted 200 of the 475 shares of Series H Preferred Stock into 3,333,333 shares of common stock, leaving a balance of 200 shares of Series H Preferred Stock outstanding as at December 31, 2023.

The following table represents stock warrant activity as of and for the year ended December 31, 2023:

Contractual Life

Warrants Outstanding – December 31, 2022

Forfeited/expired/cancelled

Warrants Outstanding – December 31, 2023

Outstanding Exercisable – December 31, 2023

Commitments and Contingencies

Office lease – Petrodome

In April 2018, the Company’s subsidiary, Petrodome entered into a 66-month lease for 4,147 square feet of office space for its corporate office in Houston, Texas.

The annual base rent commenced at $22.00 per square foot and escalates at $0.50 per foot each year through expiration of the lease term.

Operating lease expense is recognized on a straight-line basis over the lease term .

Operating lease expense was $ 80,318 and $ 96,382 for the years ended December 31, 2023 and 2022, respectively.

The lease expired on November 30, 2023 and the Company has moved to new premises rented on a month-to-month basis.

Building, vehicle and equipment leases – Simson-Maxwell

The Company has right-of-use assets and operating lease liabilities associated with various operating lease agreements of Simson-Maxwell pertaining to seven business locations, for the premises, vehicles and equipment used in operations in the amount of $ 6,947,307 .

These values were determined using a present value discount rate of 3.45 % for the premises, and 7.5 % for vehicles and equipment.

The leases have varying terms, payment schedules and maturities.

Operating lease expense is recognized on a straight-line base over each of the lease terms.

Payments due in each of the next five years and thereafter at December 31, 2023 under these leases are as follows:

Vehicle and Equipment

2028 and thereafter

Less imputed interest

Present value of remaining lease payments

Operating lease expense for these leases was $ 1,586,879 and $ 1,474,960 for the years ended December 31, 2023 and 2022, respectively.

Legal matters

Legal Proceedings .

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Camber records reserves for contingencies when information available indicates that a loss is probable, and the amount of the loss can be reasonably estimated.

Merger-Related Litigation

On February 9, 2024, plaintiff Lawrence Rowe, on behalf of himself and all other similarly situated former public minority shareholders of Viking, filed against the Company and its CEO a putative Class Action Complaint (i.e.

No.4:24-cv-00489) styled Lawrence Rowe, Individually and on Behalf of All Others Similarly Situated v.

Doris and Camber Energy, Inc.

, in the U.S.

District Court for the Southern District of Texas, Houston Division.

The Complaint alleges breaches of fiduciary duty in connection with the merger between Viking and the Company and seek to recover damages for the alleged breaches.

The defendants deny the allegations and intend to move to dismiss the case.

Shareholder-Related Litigation

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 sought to recover damages alleged to have been suffered by them as a result of the defendants’ violations of federal securities laws.

The Company and the other Defendants filed a Motion to Dismiss (“MTD”) the Class Action Complaint, and on September 22, 2023, the Court granted the MTD in full.

On October 25, 2023, the Court signed a joint stipulation submitted by the parties, dismissing the case with prejudice.

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”).

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.

On January 20, 2023, the U.S.

District Court held that certain claims brought by the plaintiff relating to director actions and statements made in proxy statements prior to June 30, 2019, were time barred, but did not dismiss certain claims brought by plaintiff relating to director actions and statements made in proxy statements after June 30, 2019.

Pursuant to Article 6 of the Amended and Restated Bylaws, on February 15, 2023, the Company’s Board of Directors (the “Board”) formed a Committee of the Board (the “Special Litigation Committee”) to investigate, analyze, and evaluate the remaining allegations in the Houston Derivative Complaint.

The Special Litigation Committee completed its investigation and found no basis to conclude that any Camber officer’s or director’s conduct “involved intentional misconduct, fraud or a knowing violation of law,” which would be required under applicable Nevada law to prevail on any claims for breach of fiduciary duty or federal proxy violations;

and, on November 17, 2023, filed with the U.S.

District Court a Motion to Terminate or, in the alternative, schedule an evidentiary hearing on the Motion.

Briefing on the Motion was completed on January 12, 2024, and it remains pending.

The defendants deny the allegations contained in the Houston Derivative Complaint.

Maranatha Oil Matter

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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 and Signal sued the Company in the 316 th 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.

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 release is subject to approval by the Company upon the successful transfer of all wells and partnership interests of the Company’s current wholly-owned subsidiary CE to PetroGlobe.

The Company recognized a net settlement cost of $204,842 included on the statement of operations for the year ended March 31, 2020 in connection with the settlement.

The Company has since brought the applicable wells into regulatory compliance to the extent such compliance was required by the Railroad Commission of Texas and the Company is in the process of assigning to PetroGlobe all of its right, title and interest in all wells, leases, royalties, minerals, equipment, and other tangible assets associated with specified wells and properties, which is expected to be completed shortly after the date of this report.

The Company also plans to assign all of its membership interests in CE to Petrolia shortly after the date of this report.

The Company released the parties to the Settlement Agreement, including Ian Acrey, individually, as well as their officers, directors, or members from any claims asserted in the lawsuit, and the parties to the Settlement Agreement along with Ian Acrey, individually, released the Company, its officers, directors, shareholders and affiliate corporations from any claims asserted in the lawsuit.

The Company did not release any claims or causes of action against N&B Energy, LLC, Sezar Energy, LLP related to Richard Azar, or any of their affiliates, or predecessors, or successors.

The parties filed a motion and order to dismiss the lawsuit with prejudice shortly after execution of the Settlement Agreement.

Apache Corporation

In December 2018, Apache Corporation (“ Apache ”) sued the Company, Sezar Energy, L.P., and Texokcan Energy Management Inc., in the 129th Judicial District Court of Harris County, Texas (Cause 2018-89515).

Apache alleged causes of action for Breach of Contract, Money Had & Received and Conversion, relating to amounts Apache alleged it was owed under a joint operating agreement.

Apache is seeking $586,438 in actual damages, exemplary damages, pre- and post-judgment interest, court costs and other amounts which it may be entitled.

The Company has filed a general denial to the claims and asserted the affirmative defense of failure to mitigate.

The parties are currently moving towards discovery.

The Company denies Apache’s claims and intends to vehemently defend itself against the allegations.

On September 12, 2019, N&B Energy filed a petition in the District Court for the 285 th Judicial District of Bexar County, Texas (Case #2019CI11816).

Pursuant to the petition, N&B Energy raises claims against the Company for breach of contract, unjust enrichment, money had and received and disgorgement, in connection with $706,000 which it alleges it is owed under the Sale Agreement for true ups and post-closing adjustments associated therewith.

The petition seeks amounts owed, pre- and post-judgment interest and attorney’s fees.

The Company denies N&B Energy’s claims.

Effective December 18, 2020, the Company entered into a Settlement Agreement and Mutual Release with N&B, and the lawsuit/arbitration was dismissed with prejudice.

NOTE 12 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Oil and Gas Contracts

The following table disaggregates revenue by significant product type for the years ended March 31, 2020 and 2019, respectively:

Natural gas sales

Natural gas liquids sales

Total oil and gas revenue from customers

NOTE 13 – MERGER AGREEMENT AND DIVESTITURE

Merger Agreement

On July 8, 2019 (the “ Closing Date ”), the Company entered into, and closed the transactions contemplated by, the Lineal Plan of Merger, by and between the Company, Camber Energy Merger Sub 2, Inc., the Company’s then newly formed wholly-owned subsidiary, Lineal, and the Lineal Members.

Pursuant to the Lineal Plan of Merger, the Company acquired 100% of the ownership of Lineal from the Lineal Members in consideration for newly issued shares of Series E Redeemable Convertible Preferred Stock and Series F Redeemable Preferred Stock, as described in greater detail below.

In connection with the Lineal Plan of Merger, the Company entered into several other agreements, including (a) a Security Exchange Agreement dated July 8, 2019 (the “ Exchange Agreement ”), by and between the Company and Discover;

(b) a Termination Agreement dated July 8, 2019, by and between the Company and Discover Growth Fund, which purchased shares of Series C Preferred Stock from us in December 2018 (“ Discover Growth ”, which subsequently transferred all of its shares of Series C Preferred Stock to Discover);

and (c) a Funding and Loan Agreement dated July 8, 2019, by and among the Company, Lineal, and certain of the Lineal Members who also acquired shares of the Company’s preferred stock as a result of the Lineal Merger (the “ Funding Agreement ”), which provided for the Company to loan $1,050,000 to Lineal, which loan was evidenced by a Promissory Note entered into by Lineal, as borrower, in favor of the Company, as lender, dated July 8, 2019 (the “ July 2019 Lineal Note ”).

Also as part of the Lineal Merger, the Company designated three new series of preferred stock, (1) Series D Convertible Preferred Stock (the “ Series D Preferred Stock ” and the certificate of designations setting forth the rights thereof, the “ Series D Designation ”);

(2) Series E Redeemable Convertible Preferred Stock (the “ Series E Preferred Stock ” and the certificate of designation setting forth the rights thereof (the “ Series E Designation ”);

and (3) Series F Redeemable Preferred Stock (the “ Series F Preferred Stock ” and the certificate of designation setting forth the rights thereof, the “ Series F Designation ”, and the Series E Preferred Stock and the Series F Preferred Stock, collectively, the “ Series E and F Preferred Stock ”).

Additionally, with the approval of the holders thereof, the Company amended and restated the designation of its Series C Redeemable Convertible Preferred Stock (the “ Series C Preferred Stock ” and the amended and restated designation setting forth the rights thereof, the “ Series C Designation ”).

The Lineal Plan of Merger, Series D Designation and Series E Designation, provided that, effective upon the date that the stockholders of the Company had approved the Lineal Plan of Merger and issuance of shares in connection therewith (the “ Stockholder Approval ” and such date of Stockholder Approval, the “ Stockholder Approval Date ”), and subject to certain closing conditions, (a) the common stock holders of the Company were to hold between 6% and 6.67% of the Company’s fully-diluted capitalization (depending on certain factors);

(b) Discover was to hold Series D Preferred Stock convertible into 26.67% of the Company’s fully-diluted capitalization, subject to the terms of the Series D Preferred Stock;

and (c) the Lineal Members, who held the Series E Preferred Stock, were to have the right to convert such Series E Preferred Stock, subject to the terms thereof, as discussed above, into 66.67% of the Company’s fully-diluted capitalization, or 70%, subject to certain factors.

Pursuant to the Lineal Plan of Merger, Merger Sub merged with and into Lineal, with Lineal continuing as the surviving entity in the Lineal Merger and as a wholly-owned subsidiary of the Company.

The Funding Agreement required the Company to fund $1,050,000 in immediately available funds to Lineal (the “ Loan ”).

The Loan was documented by the July 2019 Lineal Note and the Loan was made on July 9, 2019.

The consideration paid for the acquisition was as follows:

Series E Preferred Shares

Series F Preferred Shares

Total consideration

The Series E Preferred Shares and the Series F Preferred Shares were determined to be contingently redeemable preferred stock and were accounted for as mezzanine equity.

The fair value of the instruments was determined using an income valuation approach to estimated cash flows of the acquired business, analysis of the terms and rights of each class of equity instrument issued by the Company and an assessment of the probability of the various scenarios that could occur depending on the outcome of the Stockholder Approval vote, and the impact each scenario would have on the capital structure of the Company.

Subsequent to the date of the Lineal Merger, the instruments will be assessed to determine whether it is probable of the instruments being redeemed as a result of contingencies being resolved.

When it is deemed probable, the fair value will be adjusted to the new estimate of fair value in that period.

The allocation of the preliminary purchase price to the assets and liabilities acquired in connection with the Lineal Merger was based on the current values of the assets and liabilities of Lineal as of the Lineal Merger date on July 8, 2019 and are as follows:

Accounts receivable

Deferred tax assets

Cost in excess of billings

Property and equipment

Right of use asset – operating leases

Other current assets and deposits

Accounts payable – trade

Accrued and other liabilities

Operating lease liabilities

Finance lease liabilities

Loan Payable – shareholder

Notes payable

Net assets acquired

The total purchase price was allocated to the acquired tangible and intangible assets and liabilities of Lineal based on their estimated fair values as of the purchase closing date.

The excess of the purchase price over the fair value of assets and liabilities acquired was allocated to goodwill.

On December 31, 2019, the Company entered into, and closed the transactions contemplated by the Redemption Agreement, by and between the Company, Lineal and the Preferred Holders.

Pursuant to the Redemption Agreement, the Company redeemed the Company’s Series E and F Preferred Stock issued in connection with the Lineal Merger and ownership of 100% of Lineal was transferred back to the Preferred Holders, and all of the Series E Preferred Stock and Series F Preferred Stock of the Company outstanding were cancelled through the redemption.

The Redemption Agreement also provided for (a) the entry by Lineal and the Company into a new unsecured promissory note in the amount of $1,539,719, the outstanding amount of the July 2019 Lineal Note together with additional amounts loaned by Camber to Lineal through December 31, 2019 (the “ December 2019 Lineal Note ”);

(b) the unsecured loan by the Company to Lineal on December 31, 2019 of an additional $800,000, entered into by Lineal in favor of the Company on December 31, 2019 (“ Lineal Note No.

and (c) the termination of the prior Lineal Plan of Merger and Funding Agreement entered into in connection therewith (pursuant to which all funds previously held in a segregated account for future Lineal acquisitions, less amounts loaned pursuant to Lineal Note No.

2, were released back to the Company).

The December 2019 Lineal Note and Lineal Note No.

2, accrue interest, payable quarterly in arrears, beginning on March 31, 2020 and continuing until December 31, 2021, when all interest and principal is due, at 8% and 10% per annum (18% upon the occurrence of an event of default), respectively.

As of March 31, 2020, $53,746 of interest related to the December 2019 Lineal Note and Lineal Note No.

2 was accrued and included in the consolidated balance sheet in Accounts Receivable.

The divestiture resulting from the Redemption Agreement qualifies as a discontinued operation in accordance with U.S.

generally accepted accounting principles (“ GAAP ”).

As a result, operating results and cash flows related to the Lineal operations have been reflected as discontinued operations in the Company’s consolidated statements of operations and consolidated statements of cash flows for the periods presented.

The net consideration received for the divestiture was as follows:

Return of Series E Preferred Shares

Return of Series F Preferred Shares

Total net consideration

The fair value of the instruments immediately prior to the divestiture was determined using an income valuation approach to estimate cash flows of the acquired business, analysis of the terms and rights of each class of equity instrument issued by the Company and an assessment of the probability of the various scenarios that could occur depending on the outcome of the Stockholder Approval vote, and the impact each scenario would have on the capital structure of the Company.

Immediately prior to the Lineal Disposition, the Company recognized a gain on the change in fair value of the Series E and F Preferred Shares of $3,018,000, included within net loss from discontinued operations.

The following table summarizes the assets and liabilities of Lineal which were transferred from the Company to the Preferred Holders, together with Lineal, as part of the Redemption agreement:

Accounts receivable

Deferred tax assets

Cost in excess of billings

Property and equipment

Right of use asset – operating leases

Other current assets and deposits

Accounts payable – trade

Accrued and other liabilities

Billings in excess of costs

Operating lease liabilities

Finance lease liabilities

Notes payable

Net assets divested

As a result of the above, the Company recognized a loss on the disposal of the Lineal operations of $2,706,628 included within net loss from discontinued operations.

Components of amounts reflected in the Company’s consolidated statements of operations related to discontinued operations are presented in the following table for the year ended March 31, 2020.

Contract revenue

Contract costs

Depreciation and amortization

Selling, general and administrative

Operating loss

Interest expense

Net (loss) from discontinued operations

Loss on disposal of business

Change in value of preferred stock

Total loss on discontinued operations

NOTE 14 – INCOME TAXES

The Company recorded a provision for income taxes of approximately $0 and $3,000 for the years ended March 31, 2020 and March 31, 2019, respectively.

Current taxes:

Deferred taxes:

The following is a reconciliation between actual tax expense (benefit) and income taxes computed by applying the U.S.

federal income tax rate of 21% to income from continuing operations before income taxes for the years ended March 31, 2020 and 2019:

Tax expense (benefit), computed at expected tax rates

Petrodome Matter

In or about late 2011 or early 2012, Petrodome Operating, LLC (“Petrodome Operating”), a wholly-owned subsidiary of Petrodome Energy, LLC (which in or about December, 2017 become a wholly owned subsidiary of Viking), on behalf of various working interest owners, including Petrodome East Creole, LLC, another subsidiary of Petrodome Energy, LLC, coordinated the drilling of an approx.

13,000 foot well in the Kings Bayou Field in Cameron Parish, LA.

Petrodome Operating engaged a third party to complete the drilling work.

The subject well produced hydrocarbons from 2012 until approximately June 2016, at which time production ceased, after which Petrodome Operating arranged for the well to be plugged in accordance with State guidelines.

During the time the well was producing hydrocarbons, royalty and/or over-riding royalty payments were made to various mineral and/or land/owners (collectively, “Mineral Owners”).

In or about October, 2019 the Mineral Owners commenced an action against Petrodome Operating, Petrodome East Creole, LLC and others claiming the Mineral Owners suffered damages (i.e.

a loss of royalty and/or over-riding royalty payments) as a result of the subject well not, according to the Mineral Owners, being drilled and/or completed properly.

Petrodome Operating, Petrodome East Creole, LLC and the other defendants denied the Mineral Owners’ claims and engaged counsel to defend the action.

In or about November, 2023, the parties, without the subject Petrodome entities admitting liability, agreed to fully and completely settle the matter and pay the Mineral Owners a total sum of $ 6.5 million, of which Petrodome is liable for $ 4.15 million.

Payment of Petrodome’s portion of the settlement is fully covered by insurance.

At December 31, 2023, the Company recorded an accrued liability in respect of this settlement and a receivable related to the insurance proceeds in the amount of $ 4.15 million.

In or about February, 2024, the action commenced by the Mineral Owners was dismissed with prejudice.

The Company files income tax returns in the United States and Canada federal jurisdictions.

At December 31, 2023, the Company had estimated net operating loss carry forwards realized subsequent to the date of the Merger of approximately $ 4.4 million.

At December 31, 2023 and 2022, Camber Energy, Inc.

had pre-Merger operating loss carryforwards of approximately $ 71.9 million and $ 67.1 million, respectively, which can be applied only to the future taxable income of Camber Energy Inc.

The Company has estimated that $ 44.5 million of this net operating loss could potentially be lost due to the IRC Section 382 limitation as a result of an ownership change that occurred during the year ended March 31, 2017.

At December 31, 2023 and 2022, Viking Energy, Inc.

had pre-Merger operating loss carryforwards of approximately $ 49.2 million and $ 48.0 million, respectively, which can be applied only to the future taxable income of Viking Energy Inc.

In addition, the Company, through its subsidiary Simson-Maxwell, has estimated foreign loss carryforwards of approximately $ 6.8 million and $ 6.3 million as of December 31, 2023 and 2022, respectively, which expire between 2038 and 2043 .

The potential benefit of these net operating losses has not been recognized in these financial statements because the Company cannot be assured it is more likely than not that it will utilize the net operating losses carried forward in future years.

The current and deferred income tax expense (benefit) consists of the following for the years ended December 31, 2023 and 2022:

For the Years Ended

$ ( 2,019,576 )

( 1,606,355 )

Nondeductible expenses

State taxes net of FIT benefit

Return to accrual true-up

Change in valuation allowance

Tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred liabilities are presented below:

Total current tax benefit

$ ( 3,625,931 )

Deferred tax timing differences

$ ( 3,642,729 )

$ ( 703,407 )

Total deferred tax timing differences

$ ( 3,816,576 )

$ ( 703,407 )

Increase in valuation allowance

Income tax expense (benefit)

As a result of the Merger, the Company acquired approximately $ 20.3 million of deferred tax timing differences against which a valuation allowance of approximately $ 20.3 million had been recorded.

The components of deferred tax assets and liabilities as of December 31, 2023, and 2022 is as follows (2022 figures have been revised to reflect final tax filing):

Deferred tax assets:

Net operating tax loss carryforwards

Depreciation, depletion and amortization

Income from subsidiary

NOL carry forwards

Bad debt reserves

Impairment of oil and gas assets

Unrealized loss

Derivative losses

Book tax depletion difference

Loss on financing settlements

Share based compensation

Bad debt reserve

Total deferred tax assets (liabilities)

valuation allowance

Intangible drilling costs

Loss from equity interests

Total deferred tax assets

Deferred tax liabilities:

Derivative gains

$ ( 121,947 )

The above estimates are based on management’s decisions concerning certain elections which could change the relationship between net income and taxable income.

Management decisions are made annually and could cause the estimates to vary significantly.

The Company experienced an “ ownership change ” within the meaning of IRC Section 382 during the year ended March 31, 2017.

As a result, certain limitations apply to the annual amount of net operating losses that can be used to offset post ownership change taxable income.

The Company has estimated that $44.5 million of its pre-ownership change net operating loss could potentially be lost due to the IRC Section 382 limitation for the year ending March 31, 2017.

This amount may increase if the Company experiences another ownership change(s) since the last ownership change.

However, the income tax effect of those ownership change(s) should be nil as the Company had recorded a full valuation allowance against its deferred assets.

At March 31, 2020, the Company had estimated net operating loss carryforwards for federal income tax purposes of approximately $50 million, adjusted for the ownership change limitation discussed above, which will begin to expire, if not previously used, beginning in the fiscal year 2028.

A valuation allowance has been established for the entire amount of the deferred tax assets for the years ended March 31, 2020 and March 31, 2019.

On December 22, 2017, the U.S.

government enacted comprehensive tax legislation commonly referred to as the 2017 Tax Cuts and Jobs Act (“ 2017 Tax Reform ”).

The 2017 Tax Reform significantly revised the future ongoing U.S.

corporate income tax by, among other things, lowering U.S.

corporate income tax rates and implementing a territorial tax system.

The Company has reasonably estimated the effects of the 2017 Tax Reform and recorded provisional amounts in the consolidated financial statements as of March 31, 2018.

This amount is primarily comprised of the re-measurement of federal net deferred tax liabilities resulting from the permanent reduction in the U.S.

statutory corporate tax rate to 21%, from 34%.

The Company will continue to monitor additional guidance issued by the U.S.

Treasury Department, the IRS, and other standard-setting bodies, so we may make adjustments to the provisional amounts (if any).

However, management’s opinion is that future adjustments due to the 2017 Tax Reform should not have a material impact on the Company’s provision for income taxes.

On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security Act” (“ CARES ACT ”).

The CARES Act, among other things, includes provisions relating to net operating loss (“ NOL ”) carryback periods.

The Company is evaluating the impact, if any, that the CARES Act may have on the Company’s future operations, financial position, and liquidity in fiscal year 2021.

At this time, the Company does not expect to realize the benefits of the NOL carryback provisions.

The Company files income tax returns for federal and state purposes.

Management believes that with few exceptions, the Company is not subject to examination by United States tax authorities for periods prior to 2016.

NOTE 15 – STOCKHOLDERS’ DEFICIT

On April 20, 2018, Discover was issued 5 shares of common stock as a result of true-ups in connection with the August 23, 2017 conversion of $35,000 of the principal amount of the debenture held by Discover.

During the quarter ended September 30, 2018, the Company issued a stock dividend on the Series B Preferred Stock consisting of 1 share (with a fair value of $15,625 based on the share price at September 30, 2018) of the Company’s common stock.

Due to the fact that the Company is in a retained deficit position, the Company recognized a charge to additional paid in-capital of $882 and stock dividends distributable but not issued based on the par value of the common stock issued.

During the quarter ended September 30, 2018, the Company issued 1 share to settle a stock dividend accrued on Series B Preferred Stock.

On November 15, 2018, the Company entered into a consulting agreement with Regal Consulting (“ Regal ”), an investor relations firm, pursuant to which the firm agreed to provide the Company investor relations and consulting services for a period of six months, for monthly consideration of $28,000 and 7 restricted shares of the Company’s common stock.

In January 2019, the Company issued 13 shares of restricted common stock to Regal Consulting for the months of November and December 2018, which shares were issued during the year ended March 31, 2019.

On February 13, 2019, and effective on January 31, 2019, the Company entered into a First Amendment to the Consulting Agreement previously entered into with Regal Consulting.

Pursuant to the First Amendment, the parties agreed to expand the investor relations services required to be provided by Regal Consulting under the agreement in consideration for $50,000 per month and 40 restricted shares of common stock per month (the “ Regal Shares ”)(which are fully-earned upon issuance) during the term of the agreement, and agreed to extend the term of the agreement until October 1, 2019 (unless the Company completes an acquisition or combination prior to such date).

All of the Regal Shares had been earned and issued to Regal as of September 30, 2019.

On October 15, 2019, the Company entered into a Settlement and Mutual Release Agreement (the “ Release ”) with Regal, pursuant to which it agreed to settle and terminate the consulting agreement with Regal.

Pursuant to the Release, the Company agreed to issue Regal 1,514 shares of the Company’s restricted common stock and to pay Regal $17,500 in consideration for agreeing to terminate the agreement.

The Company and Regal also provided each other mutual releases in connection with the Release.

The 1,514 shares of common stock were issued to Regal on June 1, 2020.

On February 13, 2019, the Company entered into a letter agreement with SylvaCap Media (“ SylvaCap ”), pursuant to which SylvaCap agreed to act as the Company’s non-exclusive digital marketing service provider in consideration for an aggregate of 480 shares of restricted common stock (the “ SylvaCap Shares ”), which are fully-earned upon their issuance, and $50,000 per month during the term of the agreement, which ends on November 12, 2019 (unless the Company completes an acquisition or combination prior to such date) or upon termination by either party for cause.

The Company also agreed to provide SylvaCap piggy-back registration rights in connection with the SylvaCap Shares and to pay SylvaCap $6,250 every three months as an expense reimbursement.

The total value of the restricted shares of common stock due of $261,540 was accrued in common stock payable as of March 31, 2019.

The 480 SylvaCap shares were issued in May 2019 and there are no shares due as of March 31, 2020.

During the year ended March 31, 2020, Discover and Discover Growth, which purchased shares of Series C Preferred Stock from the Company in December 2018, and which subsequently transferred all of its shares of Series C Preferred Stock to Discover, converted 11 shares of the Series C Preferred Stock with a face value of $110,000, and a total of 4,899,442 shares of common stock were issued, which includes additional shares for conversion premiums and true ups in connection with those conversions through March 31, 2020.

From April 1, 2019 to March 31, 2020, Discover was issued 29,073 shares of common stock as true-ups in connection with the October 31, 2018 conversion of the $495,000 remaining balance of principal owed under the terms of a convertible debenture.

No additional shares were owed to Discover as of March 31, 2020, pursuant to the debenture.

Series A Convertible Preferred Stock

As of March 31, 2020 and 2019, the Company had no Series A Convertible Preferred Stock issued or outstanding.

Series B Redeemable Convertible Preferred Stock

As of March 31, 2020 and 2019, there were 0 and 44,000 shares of Series B Preferred Stock outstanding, respectively, which have the following features:

a liquidation preference senior to all of the Company’s common stock;

a dividend, payable quarterly, at an annual rate of six percent (6%) of the original issue price until such Series B Preferred Stock is no longer outstanding either due to conversion, redemption or otherwise;

voting rights on all matters, with each share having 1/781,250 of one vote.

During the quarter ended September 30, 2018, the Company issued a stock dividend on the Series B Preferred Stock consisting of 1 share of the Company’s common stock as described above.

On May 15, 2019, the Company entered into a conversion agreement with the then holder of all 44,000 shares of the Company’s then outstanding Series B Preferred Stock.

Pursuant to the Conversion Agreement, all of the Series B Preferred Stock was converted into 1 share of the Company’s common stock pursuant to the stated terms of such Series B Preferred Stock, in consideration for $25,000 in cash due at the time of the parties entry into the agreement, which payment was made during the three months ended September 30, 2019.

The holder also provided the Company a release in connection with certain of his rights under the Series B Preferred Stock (including any and all accrued and unpaid dividends) and certain other matters.

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.

Series C Redeemable Convertible Preferred Stock

During the year ended March 31, 2020, the Company sold 525 shares of Series C Preferred Stock for total proceeds of $5 million.

In the event the Merger Agreement entered into with Viking in February 2020 is terminated for any reason, we (until June 22, 2020, when such terms were amended) were required to redeem the 525 shares of Series C Preferred Stock which we sold during the year ended March 31, 2020, at a 110% premium, in an aggregate amount equal to $5,775,000.

In addition, certain provisions of the Series C Preferred Stock may require the Company to redeem the stock, including the requirement to redeem 525 shares of Series C Preferred Stock in the event the Merger Agreement is terminated, are outside the control of the Company, the Series C Preferred Stock is classified as temporary.

Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable.

During the year ended March 31, 2019, the Company sold and issued 1,577 shares of Series C Preferred Stock pursuant to the terms of a October 2017 Stock Purchase Agreement, October 2018 Stock Purchase Agreement and November 2018 Stock Purchase Agreement, for total consideration of $15 million.

As of March 31, 2020 and 2019, there were 2,819 and 2,305 shares of Series C Preferred Stock outstanding, respectively.

During the year ended March 31, 2019, Discover and Discover Growth converted 404 shares of the Series C Preferred Stock with a face value of $4.04 million, and a total of 3,794 shares of common stock were issued, which includes additional shares for conversion premiums and true ups in connection with those conversions through March 31, 2019.

During the year ended March 31, 2020, Discover and Discover Growth converted 11 shares of the Series C Preferred Stock with a face value of $110,000, and a total of 4,899,442 shares of common stock were issued, which includes additional shares for conversion premiums and true ups in connection with those conversions through March 31, 2020.

Under certain circumstances, the Company may be required to issue additional common shares after the Series C Preferred Stock has been converted.

The Company records an estimate of the obligation to issue additional shares as a derivative liability.

The Securities Purchase Agreements (“SPAs”) between the Company and the Investors regarding the purchase and sale of the Series C Preferred Shares require the Company to, among other things, timely file all reports required to be filed by Company pursuant to requirements of the SEC, and to maintain sufficient reserves from its duly authorized Common Stock for issuance of all Conversion Shares.

On October 6, 2021, the Company received notice from the Investors that they believed the Company breached the SPAs for failing to comply with the foregoing two items, and the Notes 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 agreements (the “October Agreements”) with each of the First Series C Preferred Stock investors, pursuant to which the investors agreed to refrain from declaring defaults or bringing a breach of contract action under the SPAs, and one investor, a noteholder, agreed to refrain from declaring defaults or bringing a breach of contract action under the Notes, in each case 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 with the SEC;

and (iii) to implement and maintain, 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

In November 2021, 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 Company did not meet satisfy the Filing Requirement.

As of March 31, 2020 and 2019, 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, 2020 and 2019, 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, 2020

March 31, 2019

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

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).

As of March 31, 2020, the Company had 25,000,000 authorized common shares and 5,000,000 common shares outstanding.

Under the terms of the Series C COD in effect as of that date, it did not clearly articulate the issue if there were an insufficient number of shares available for issuance.

However, the Company believed that it was under no obligation to satisfy the conversion option in anything other than common shares and had a verbal agreement with the holder of this understanding.

This understanding was later memorialized in the April 20, 2021 amendment which specifies that the Company is required to use its best efforts to obtain shareholder approval to increase the number of authorized shares to satisfy conversions.

The Company is under no obligation to satisfy any requested conversions if there is an insufficient number of unissued authorized shares available.

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.

A default under the CODs and/or SPA’s is also considered an event of default under each of the Promissory Notes executed by the Company in favor of Discover (collectively, the “Discover Notes”) (see subsequent events), and upon an event of default under the Discover Notes, Discover may, at its option, declare the principal and any and all interest then accrued thereon, at once due and payable, and exercise any other rights under applicable agreements.

Discover did not exercise its right to declare the amount owing under the Discover Notes immediately due and payable, but Failure by Discover to exercise such right does not constitute a waiver of the right to exercise the same in the event of any subsequent default.

As of April 18, 2022, Discover, Antilles and the Company entered into a Settlement Agreement to settle the Discover/Antilles Complaint, and the Settlement Agreement was approved by the Court on or about May 12, 2022.

If the Company fails to satisfy future Filing Requirements, it would be considered a default under the CODs and SPA’s, which in turn would constitute an event of default under the Discover Notes.

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

As described above in “Note 1 – General“ and “Note 13 – Merger Agreement and Divestiture“, on the Closing 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, 2020:

Intrinsic Value at

March 31, 2020

April 26, 2021

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.

Warrants issued in connection with funding.

The warrants were exercisable on the grant date (September 12, 2017) and remain exercisable until September 12, 2022.

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.

NOTE 16 – SHARE-BASED COMPENSATION

The Company stockholders approved the 2014 Stock Incentive Plan (as amended to date, the “ 2014 Plan ”) at the annual stockholder meeting held on February 13, 2014.

The 2014 Plan provides the Company with the ability to offer up to 2.5 million (i) incentive stock options (to eligible employees only);

(ii) nonqualified stock options;

(iii) restricted stock;

(iv) stock awards;

(v) shares in performance of services;

or (vi) any combination of the foregoing, to employees, consultants and contractors as provided in the 2014 Plan.

The Company stockholders approved the Lucas Energy, Inc.

2012 Stock Incentive Plan (“ 2012 Incentive Plan ”) at the annual stockholder meeting held on December 16, 2011.

The 2012 Incentive Plan provides the Company with the ability to offer (i) incentive stock options (to eligible employees only);

(ii) nonqualified stock options;

(iii) restricted stock;

(iv) stock awards;

(v) shares in performance of services;

or (vi) any combination of the foregoing, to employees, consultants and contractors as provided in the 2012 Incentive Plan.

The Company stockholders approved the Lucas Energy, Inc.

2010 Long Term Incentive Plan (“ 2010 Incentive Plan ” or ” 2010 Plan ”) at the annual stockholder meeting held on March 30, 2010.

The 2010 Incentive Plan provides the Company with the ability to offer (1) incentive stock options, (2) non-qualified stock options, and (3) restricted shares (i.e., shares subject to such restrictions, if any, as determined by the Compensation Committee or the Board) to employees, consultants and contractors as performance incentives.

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.

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.

Any issued or granted security that becomes available due to expiration, forfeiture, surrender, cancellation, termination or settlement in cash of an award under the Incentive Plans may be requested and used as part of a new award under the Plans.

The Plans are administered by the Compensation Committee and/or the Board in its discretion (the “ Committee ”).

The Committee interprets the Plans and has broad discretion to select the eligible persons to whom awards will be granted, as well as the type, size and terms and conditions of each award, including the exercise price of stock options, the number of shares subject to awards, the expiration date of awards, and the vesting schedule or other restrictions applicable to awards.

Camber measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award over the vesting period.

Stock Options

The following summarizes Camber’s stock option activity for each of the years ended March 31, 2020 and 2019:

Number of Stock

Exercise Price

Number of Stock

Exercise Price

Outstanding at Beginning of Year

Expired/Cancelled

Outstanding at End of Year

Of the Company’s outstanding options, no options were exercised or forfeited during the years ended March 31, 2020 and 2019, respectively.

Compensation expense related to stock options during the years ended March 31, 2020 and 2019 was $0.

Options outstanding and exercisable at March 31, 2020 and 2019 had no intrinsic value.

The intrinsic value is based upon the difference between the market price of Camber’s common stock on the date of exercise and the grant price of the stock options.

As of March 31, 2020 and 2019, there was no remaining unrecognized share-based compensation expense related to all non-vested stock options, respectively.

Options outstanding and exercisable as of March 31, 2020:

NOTE 17– INCOME (LOSS) PER COMMON SHARE

The calculation of earnings (loss) per share for the years ended March 31, 2020 and 2019 was as follows:

2020 (as Restated)

2019 (as Restated)

Income (loss)

Bargain purchase and other gains

( 10,836,356 )

( 9,760,490 )

Less preferred dividends

Net loss attributable to common stockholders

Total deferred tax liabilities

( 10,958,303 )

( 9,882,437 )

Weighted average share – basic

Dilutive effect of common stock equivalents

Options/warrants

Total Weighted average shares – diluted

Income (loss) per share – basic

Continuing operations

Deferred tax assets - before valuation allowance

Less valuation allowance

( 51,475,560 )

Income (loss) per share – diluted

( 27,387,557 )

Deferred tax asset (liability) - net

A reconciliation of the federal and state statutory income tax rates to the Company’s effective income tax rate applicable to income before income tax benefit from continuing operations is as follows for the years ended December 31, 2023 and 2022:

For the Years Ended

Continuing operations

Expected provision at US statutory rate

State income tax net of federal benefit

Higher tax rate on foreign source income

Other items effecting timing differences

Valuation allowance

Effective income tax rate

The Company files income tax returns in the United States and Canada federal jurisdictions.

As of December 31, 2023, the U.S.

and Canadian tax returns for the Company for the years ending 2018 through 2022 remain open to examination by the respective tax authorities.

The Company and its subsidiaries are not currently under examination for any period.

No material change in the reserve for uncertain tax positions is expected in the next 12 months.

As a result of Viking becoming a majority-owned subsidiary of Camber as discussed in Note 1, Viking has undergone an ownership change as defined in Section 382 of the Internal Revenue Code, and its tax net operating loss carry forwards generated prior to the ownership change will be subject to an annual limitation, which could reduce or defer the utilization of these losses.

The Company intends to complete a Section 382 analysis before any net operating loss carryforwards are utilized.

Business Segment Information and Geographic Data

The Company has two reportable segments:

Power Generation and Oil and Gas Exploration.

The power generation segment provides custom energy and power solutions to commercial and industrial clients in North America and the oil and gas segment is involved in exploration and production with properties in central and southern United States.

We evaluate segment performance based on revenue and operating income (loss).

Information related to our reportable segments and our consolidated results for the year ended December 31, 2023 is presented below.

Year Ended December 31, 2023

Power Generation

Loss from Operations is as follows:

Operating expenses

Cost of goods

Lease operating costs

General and administrative

Impairment of oil and gas and intangible assets

Depreciation, depletion and amortization

Accretion - ARO

Total operating expenses

Loss from operations

$ ( 5,578,677 )

For the year ended March 31, 2019, the effect of the common stock equivalents was anti-dilutive.

Consequently, basic and dilutive earning per share are the same.

For the years ended March 31, 2020 and 2019, the following share equivalents related to convertible debt and warrants to purchase shares of common stock were excluded from the computation of diluted net income (loss) per share as the inclusion of such shares would be anti-dilutive (assuming the maximum possible conversion price).

Common Shares Issuable for:

Convertible Debt

Options and Warrants

Series C Preferred Shares

NOTE 18 – SUPPLEMENTAL CASH FLOW INFORMATION

Net cash paid for interest and income taxes was as follows for the years ended March 31, 2020 and 2019:

Non-cash investing and financing activities for the years ended March 31, 2020 and 2019 included the following:

Reduction in Accounts Payable for Payments Made on Previously Accrued Capital Expenditures

Change in Estimate for Asset Retirement Obligations

Issuance of Common Stock for Payment of Consulting Fees

Settlement of Common Stock Payable

Conversion of Preferred B Shares to Common Stock

Conversion of Notes and Accrued Interest to Common Stock

Conversion of Preferred Stock to Common Stock

Warrants Issued in Abeyance

Issuance of Common Stock for Dividends

Note 19 – FAIR VALUE MEASUREMENTS

When applying fair value principles in the valuation of assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs.

The Company has not changed its valuation techniques used in measuring the fair value of any financial assets or liabilities during the fiscal years presented.

The fair value estimates take into consideration the credit risk of both the Company and its counterparties.

When active market quotes are not available for financial assets and liabilities, the Company uses industry standard valuation models.

Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including credit risk, interest rate curves, foreign currency rates and forward and spot prices for currencies.

In circumstances where market-based observable inputs are not available, management judgment is used to develop assumptions to estimate fair value.

Generally, the fair value of our Level 3 instruments are estimated as the net present value of expected future cash flows based on internal and external inputs.

Fair Value Measurements

The liabilities carried at fair value as of March 31, 2020 and March 31, 2019 were as follows:

March 31, 2020

Derivative liability

Total liabilities at fair value

March 31, 2019

Derivative liability

Total liabilities at fair value

The derivative liabilities relating to the Series C Preferred Stock are considered level 3 because, under certain circumstances the closing price of the Company’s common stock as quoted on the NYSE American stock exchange may not represent fair value and require adjustment (see note 10).

There were no transfers in or out of Level 3 for the year ended March 31, 2020 or 2019.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

In addition to the financial instruments that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a non-recurring basis as required by U.S.

Generally, assets are recorded at fair value on a non-recurring basis as a result of impairment charges or as part of a business combination.

As discussed in “ Note 13 – Merger Agreement and Divestiture” , during the year ended March 31, 2020, the Company recorded non-recurring fair value measurements related to the Lineal Plan of Merger.

These fair value measurements were classified as Level 3 within the fair value hierarchy.

Additionally, the Series E Preferred Stock and Series F Preferred Stock were considered contingently redeemable preferred stock and were classified as mezzanine equity during the period.

The fair value of these instruments was estimated as part of the accounting for the Lineal Plan of Merger described in “ Note 13 – Merger Agreement and Divestiture”.

Effective December 31, 2019, the Series E and Series F Preferred Stock were returned to the Company and cancelled as part of the Lineal Divestiture.

Immediately prior to the Lineal Divestiture, the estimated fair value of the Series E and Series F Preferred Stock was determined using an income valuation approach to estimate the future cash flows of the Lineal business as of December 31, 2019, including an analysis of the terms and rights of each class of equity and their current value based on the disposition of the Lineal business.

No Series E and Series F Preferred Stock was outstanding as of March 31, 2020.

NOTE 20 – RELATED PARTY TRANSACTIONS

Effective August 1, 2018, the Company entered into a month-to-month lease at 1415 Louisiana, Suite 3500 Houston, Texas 77002 with BlackBriar Advisors LLC (“ BlackBriar ”).

Pursuant to the sublease, BlackBriar is providing us, without charge, use of the office space in Houston, Texas.

BlackBriar is affiliated with the Company’s former Chief Financial Officer.

During the years ended March 31, 2020 and 2019, the Company paid Louis G.

Schott, the interim chief executive officer consulting and other fees of $334,453 and $358,120 respectively.

During the years ended March 31, 2020 and 2019, the Company paid Robert Schleizer, the former chief financial officer, consulting and directors of $538,333 and $739,666 respectively, either directly or through owned or controlled by him.

During the year ended March 31, 2019 the Company paid Richard N.

Azar, the former Chief Executive Officer consulting and other fees of $454,000 and warrants valued at $390,000.

During the years ended March 31, 2020 and 2019 the Company paid Fred Zeidman directors fees of $53,333 annually.

During the year ended March 31, 2020 the Company paid James Miller directors fees of $53,333.

NOTE 21– SUBSEQUENT EVENTS

Authorized Shares of Common Stock :

On April 16, 2020, pursuant to the authorization and approval provided by the stockholders of the Company at the special meeting of stockholders held on April 16, 2020, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada to increase its authorized shares of common stock, $0.001 par value per share, from 5 million shares to 25 million shares, which filing became effective on the same date.

On February 23, 2021, pursuant to the authorization and approval provided by the stockholders of the Company at the special meeting of stockholders held on February 23, 2021, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada to increase its authorized shares of common stock, $0.001 par value per share, from 25 million shares to 250 million shares, which filing became effective on the same date.

On December 30, 2021, pursuant to the authorization and approval provided by the stockholders of the Company at the special meeting of stockholders held on December 30, 2021, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada to increase its authorized shares of common stock, $0.001 par value per share, from 250 million shares to 1 billion shares, which filing became effective on the same date.

Consulting Agreements:

On February 15, 2020, the Company entered into a letter agreement (“Sylva Agreement”) with Sylva International LLC d/b/a SylvaCap Media (“SylvaCap”), pursuant to which SylvaCap agreed to act as the Company’s non-exclusive digital marketing service provider in consideration for an aggregate of 100,000 shares of restricted common stock (the “SylvaCap Shares”), which are fully-earned upon their issuance, and $50,000 per month during the term of the agreement, which was to end on June 15, 2020.

On May 12, 2020, the Company entered into the first amendment to the Sylva Agreement.

Pursuant to the amendment, the Company and SylvaCap extended the term of the letter agreement to October 19, 2020.

The SylvaCap Shares were issued on May 15, 2020.

On January 6, 2021, the Company entered into a letter agreement SylvaCap (the “2021 Sylva Agreement”), pursuant to which SylvaCap agreed to act as the Company’s non-exclusive digital marketing service provider in consideration for an aggregate of 275,000 shares of restricted common stock, which are fully-earned upon their issuance, and $50,000 per month during the term of the agreement, which was to end on December 31, 2021.On or about January 1, 2022, the Company and SylvaCap extended the term of the 2021 Sylva Agreement to June 30, 2022, and the Company agreed to issue SylvaCap an additional 150,000 shares of restricted common stock.

The monthly cash fee remained the same.

On or about January 11, 2021, the Company entered into a consulting agreement with Agro Consulting, LLC (“Agro”) pursuant to which Agro agreed to provide services, including introductions to business development and acquisition opportunities, to the Company for a 4-month period ending May 11, 2021.

The Company agreed to pay Agro a consulting fee of $195,000, payable, at the Company’s option, in cash or shares of restricted common stock of the Company based on a share price equal to the closing price of the Company’s common stock on January 11, 2021.

The Company opted to pay $25,000 in cash and $170,000 in stock.

On or about February 25, 2021 the parties entered into an amending agreement to extend the term to November 15, 2021, in exchange for which the Company agreed to pay Agro a fee of $295,000, which the Company opted to pay $25,000 in cash and $270,000 in stock (based on the same stock price as per the original agreement).

On or about April 22, 2021 the parties entered into a second amending agreement to extend the term to March 15, 2022, in exchange for which the Company agreed to pay Agro a cash fee of $50,000 and issue to Agro 360,000 shares of restricted common stock.

On or about July 28, 2021 the parties entered into a third amending agreement to extend the term to August 31, 2022, in exchange for which the Company agreed to pay Agro a cash fee of $50,000 and issue to Agro 450,000 shares of restricted common stock.

On or about April 22, 2021, the Company entered into a letter agreement with Regal Consulting LLC (“ Regal ”), pursuant to which Regal agreed to provide the Company with strategic consulting and business advisory services in consideration for warrants entitling Regal to purchase 100,000 shares of common stock (the “ Regal Warrants ”), and $20,000 per month during the term of the agreement, which was to end on October 22, 2021.

The Regal Warrants have a one-year term and an exercise price equal to closing price of the Company’s common stock on April 22, 2021.

On October 14, 2021, the Company entered into an amendment to the agreement to extend the term to April 22, 2022.

Pursuant to the amendment, the Company and SylvaCap extended the term of the letter agreement to October 19, 2020, and the Company agreed to issue Regal 5,000 shares of restricted common stock per month during the extended term.

Shares of Series A, Series B, Series E and Series F Convertible Preferred Stock:

The Company previously designated (a) 2,000 shares of preferred stock as Series A Convertible Preferred Stock (November 2011);

(b) 600,000 shares of preferred stock as Series B Redeemable Convertible Preferred Stock (Amended and Restated on August 2016);

(d) 1,000,000 shares of preferred stock as Series E Redeemable Convertible Preferred Stock (July 2019);

and (e) 16,750 shares of preferred stock as Series F Redeemable Preferred Stock (July 2019).

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

As a result, the only preferred stock which is currently designated by the Company is the Company’s Series C Redeemable Convertible Preferred Stock.

Shares of Series C Preferred Stock:

Conversions of Series C Stock in 2020:

From April 1, 2020 through December 31, 2020, Discover converted 756 shares of Series C Preferred Stock into approximately 19,823,487 shares of common stock.

Sales of Series C Stock in 2020:

On and effective June 22, 2020, the Company and Discover entered into a Stock Purchase Agreement (the “ June 2020 Purchase Agreement ”), pursuant to which Discover purchased 630 shares of Series C Preferred Stock for $6 million, at a 5% original issue discount to the $10,000 face value of such preferred stock (the “ Face Value ”).

Pursuant to the June 2020 Purchase Agreement, as long as Discover holds any shares of Series C Preferred Stock, the Company agreed that, except as contemplated in connection with the Merger, the Company would not issue or enter into or amend an agreement pursuant to which the Company may issue any shares of common stock, other than (a) for restricted securities with no registration rights, (b) in connection with a strategic acquisition, (c) in an underwritten public offering, or (d) at a fixed price.

The Company also agreed that it would not issue or amend any debt or equity securities convertible into, exchangeable or exercisable for, or including the right to receive, shares of common stock (i) at a conversion price, exercise price or exchange rate or other price that is based upon or varies with, the trading prices of or quotations for the shares of common stock at any time after the initial issuance of the security or (ii) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of the security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the common stock.

Additionally, provided that the Company has not materially breached the terms of the June 2020 Purchase Agreement, the Company may at any time, in its sole and absolute discretion, repurchase from Discover all, but not less than all, of the then outstanding shares of Series C Preferred Stock sold pursuant to the agreement by paying to Discover 110% of the aggregate face value of all such shares.

The Company also agreed to provide Discover a right of first offer to match any offer for financing the Company receives from any person while the shares of Series C Preferred Stock sold pursuant to the June 2020 Purchase Agreement are outstanding, except for debt financings not convertible into common stock, which are excluded from such right to match.

Finally, the Company agreed that if it issues any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Discover, then the Company would notify Discover of such additional or more favorable term and such term, at Discover’s option, may become a part of the transaction documents with Discover.

The Company agreed pursuant to the June 2020 Purchase Agreement that if the Merger does not close by the required date approved by the parties thereto (as such may be extended from time to time), the Company is required, at Discover’s option, in its sole and absolute discretion, to immediately repurchase from Discover all then outstanding Series C Preferred Stock shares acquired by Discover pursuant to the June 2020 Purchase Agreement, by paying to Discover 110% of the aggregate Face Value of all such shares (the “ Repurchase Requirement ”), which totals $6,930,000.

Finally, the Company agreed to include proposals relating to the approval of the June 2020 Purchase Agreement and the issuance of the shares of common stock upon conversion of the Series C Preferred Stock sold pursuant to the June 2020 Purchase Agreement, as well as an increase in authorized common stock to fulfill the Company’s obligations to issue such shares, at the meeting held to approve the Merger or a separate meeting in the event the Merger is terminated prior to shareholder approval, and to use commercially reasonable best efforts to obtain such approvals as soon as possible and in any event prior to December 31, 2020.

On June 22, 2020, the Company and Discover entered into an Amendment to Stock Purchase Agreement (the “ SPA Amendment ”), pursuant to which Discover agreed to terminate the obligation set forth in the Stock Purchase Agreement previously entered into between the Company and Discover on February 3, 2020, which contained a Repurchase Requirement substantially similar to the one contained in the June 2020 Purchase Agreement (as to the 525 shares of Series C Preferred Stock sold to Discover on February 3, 2020), which would have required that the Company pay Discover an aggregate of $5,775,000 in connection with the redemption of the 525 shares of Series C Preferred Stock the Company sold to Discover in the event the Merger was terminated.

On December 11, 2020, the Company entered into an Exchange Agreement (the “ Exchange Agreement ”) with Discover.

The transactions contemplated by the Exchange Agreement closed on December 11, 2020.

Pursuant to the Exchange Agreement, as an accommodation to the Company, and in order to reduce the potential dilutive impact of the Series C Preferred Stock, by reducing the number of outstanding shares of Series C Preferred Stock, the Investor exchanged 600 shares of Series C Preferred Stock, which had an aggregate face value of $6,000,000 (600 shares each with a face value of $10,000 per share), for a $6,000,000 secured Promissory.

Sales of Series C Stock in 2021:

On January 8, 2021, the Company issued, effective December 31, 2020, 1,890 shares of Series C Stock to EMC Capital Partners, LLC, and received 16,153,846 shares of Viking common stock as consideration.

On or about July 9, 2021, Antilles Family Office, LLC purchased 1,575 shares of Series C Stock from the Company for $15 million.

True-Up Issuances in 2021:

Between February 23, 2021 and June 17, 2021, the Company issued Discover 43,970,077 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 2021:

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.

Outstanding Series C Stock

As of May 16, 2022, Discover no longer holds any Series C Preferred Stock and Antilles holds 1,175 shares of Series C Preferred Stock.

Based on applicable conversion metrics and entitlements set out in the COD, the Company estimates the number of common shares issuable to Antilles on the conversion of such shares of Series C Preferred Stock to be as follows:

Common Shares Potentially Issuable to Antilles:

Antilles Family Office - Est.

Common Share Calc.

Conversion Price for Preferred Stock

Camber Common Share Price

Price for Calculating Conversion Premium (i.e.

85% of VWAP less $0.10)

Series C Pref Shares

Face value per share

Annual Conversion Premium

Total conversion Premium (7 years guaranteed)

Underlying common shares for Face Value Portion

Underlying common shares for Conversion Premium

Total Potential Shares

Dealings with Viking Energy Group, Inc.

Amendments to and Termination of 2020 Merger Agreement :

On May 27, 2020, Viking and Camber entered into the First Amendment to Agreement and Plan of Merger (the “ First Amendment ”) to amend the Merger Agreement to (i) modify the Camber Percentage (as defined below) adjustment mechanism to cap the aggregate Camber Percentage Increase (as defined below) or Camber Percentage Decrease (as defined below) at 5%;

(ii) modify the events resulting in such adjustments;

(iii) correct a prior error with such calculation which discussed Camber being required to have $4 million in cash at closing;

and (iv) agree that neither party will raise capital from the other party’s existing shareholders without the prior written consent of the other party.

On June 15, 2020, Viking and the Company entered into a Second Amendment to Agreement and Plan of Merger (the “ Second Amendment ”) to amend the Merger Agreement to extend the date after which the Merger Agreement can be cancelled by either the Company or Viking, if not completed thereby, from June 30, 2020 to September 30, 2020.

On June 25, 2020, the Company and Viking entered into a Third Amendment to Agreement and Plan of Merger, which (i) provided for the entry into the June 2020 SPA (defined below)

On June 25, 2020, the Company loaned Viking an additional $4.2 million, pursuant to the terms of a Securities Purchase Agreement, which was entered into on the same date (the “ June 2020 SPA ”).

The $4.2 million loan was evidenced by a 10.5% Secured Promissory Note (the “ June 2020 Secured Note ” and together with the February 2020 Secured Note, the “ Secured Notes ”), the repayment of which was secured by the terms of a Security and Pledge Agreement.

The June 2020 Secured Note has substantially similar terms as the February 3, 2020 10.5% Secured Note discussed under “Note 6 – Plan of Merger and Investment in Unconsolidated Entity“, and substantially similar security obligations of Viking in connection therewith.

As additional consideration for the Company making the loan to Viking, Viking assigned the Company an additional 5% of Elysium pursuant to the terms of an Assignment of Membership Interests dated June 25, 2020, which brings the Company’s current total ownership of Elysium up to 30%.

December 23, 2020 Transaction :

On December 23, 2020, the Company entered into a Securities Purchase Agreement with Viking, pursuant to which Camber acquired (“Camber’s Acquisition”) 26,274,510 shares 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.

In connection with Camber’s Acquisition, the Company and Viking terminated their previous merger agreement, dated August 31, 2020, as amended, and the Company assigned its membership interests in one of Viking’s subsidiaries, Elysium Energy Holdings, LLC, to Viking.

Also in connection with Camber’s Acquisition, effective December 23, 2020, the Company (i) borrowed $12,000,000 from an institutional investor;

(ii) issued the investor a promissory note in the principal amount of $12,000,000, accruing interest at the rate of 10% per annum and maturing December 11, 2022 (the “Camber Investor Note”);

(iii) granted the Investor a first-priority security interest in Camber’s Viking Shares and Camber’s other assets pursuant to a pledge agreement and a general security agreement, respectively;

and (iv) entered into an amendment to the Company’s $6,000,000 promissory note previously issued to the investor dated December 11, 2020 (the “Additional Camber Investor Note”), amending the acceleration provision of the note to provide that the note repayment obligations would not accelerate if the Company increased its authorized capital stock by March 11, 2021 (and the Company increased its authorized capital stock in February 2021 as required).

In order to close Camber’s Acquisition, effective December 23, 2020, Viking entered into a Guaranty Agreement, guaranteeing repayment of the Camber Investor Note and the Additional Camber Investor Note.

On December 23, 2020, the Camber Investor Note was funded, and the Company and Viking closed Camber’s Acquisition, with the Company paying the Cash Purchase Price to Viking and cancelling Camber’s Viking Notes, as additional consideration.

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.

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

Extinguishment of $18.9 million Promissory Note :

On January 8, 2021, the Company entered into another purchase agreement with Viking pursuant to which the Company agreed to acquire an additional 16,153,846 shares of Viking common stock (the “Shares”) in consideration of (i) the Company issuing 1,890 shares of Camber’s Series C Redeemable Convertible Preferred Stock to EMC Capital Partners, LLC (“EMC”), one of the Viking’s lenders which held a secured promissory note issued by Viking to EMC in the original principal amount of $20,869,218 in connection with the purchase of oil and gas assets on or about February 3, 2020 (the “EMC Note”);

and (ii) EMC considering the EMC Note paid in full and cancelled pursuant to the Cancellation Agreement described below.

Simultaneously, on January 8, 2021, Viking entered into a Cancellation Agreement with EMC (the “Cancellation Agreement”) pursuant to which Viking agreed to pay $325,000 to EMC, and EMC agreed to cancel and terminate in the EMC Note and all other liabilities, claims, amounts owing and other obligations under the Note.

At the same time, the Company entered into a purchase agreement with EMC pursuant to which (i) the Company agreed to issue 1,890 shares of Camber’s Series C Redeemable Convertible Preferred Stock to EMC, and (ii) EMC agreed to enter into the Cancellation Agreement with Viking to cancel the EMC Note.

February 2021 Merger Agreement with Viking :

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.

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

(i) of common stock, 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, will be converted into the right to receive one share of common stock of the Company;

and (ii) of Series C Convertible Preferred Stock of Viking (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 A Convertible Preferred Stock of the Company (the “Camber Series A Preferred Stock”).

Each share of Camber Series A Preferred Stock will convert into 890 shares of common stock of Camber (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 the Company’s common stock), will be treated equally with the Company’s 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 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.

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

At the Effective Time, each outstanding Viking equity award, will be converted into the right to receive the merger consideration in respect of each share of Viking Common Stock underlying such equity award and, in the case of Viking stock options, be converted into vested Camber stock options based on the merger exchange ratio calculated as provided above (the “Exchange Ratio”).

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 continue to serve as President and Chief Executive Officer 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 Viking and the Company 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 Viking Common Stock and Viking Preferred Stock in connection with the Merger (the “ Merger Share Issuances ”).

The completion of the Merger is subject to customary conditions, including (i) adoption of the Merger Agreement by the Company’s stockholders and approval of the Merger Share Issuances by the Company’s stockholders, (ii) receipt of required regulatory approvals, (iii) effectiveness of a registration statement on Form S-4 for the Company’s 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 that in the event the NYSE American determines that the Merger constitutes, or will constitute, a “back-door listing” or “reverse merger”, the Company (and its common stock) would be 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 Company or Viking if the Merger shall not have been consummated on or before August 1, 2021;

(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 Company or Viking is unable to obtain the affirmative vote of its stockholders for approval of the Merger;

(vi) by Viking if Company is unable to obtain the affirmative vote of its stockholders required pursuant to the terms of the Merger Agreement;

and (vii) by Company or Viking 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.

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

July, 2021 Transaction

On July 29, 2021, the Company entered into a Securities Purchase Agreement with Viking to acquire an additional 27,500,000 shares of Viking common stock for an aggregate purchase price of $11,000,000.

The proceeds from the transaction were used by Viking to (i) acquire an approximate 60.5% interest Simson-Maxwell, Ltd, a Canadian company engaged in the manufacture and supply of industrial engines, power generation products, services and custom energy solutions;

(ii) acquire a license of a patented carbon-capture system for exclusive use in Canada and for a specified number of locations in the United States;

and (iii) for general working capital purposes.

December 2021 Financing Transactions

$1,000,000 Loan:

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

(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, accruing interest at the rate of 10% per annum and maturing March 8, 2022;

(ii) a Security Agreement-Pledge granting Discover a first-priority security interest in Camber’s common shares of Viking;

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

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

This promissory note was paid in full by the Company on January 4, 2022.

$25,000,000 Loan :

On December 31, 2021, Discover loaned the Company $25,000,000 pursuant to a loan agreement dated on or about December 24, 2021 (the “ Loan ”).

Features of the Loan include:

(i) a maturity date of January 1, 2027;

(ii) an interest rate equal to the Wall Street Journal Prime Rate, and payable at maturity:

(iii) an original issue discount equal to 5%;

and (iv) a conversion feature entitling the Investor to convert all or part of the principal amount of the Loan into shares of common stock of the Company at a price equal to $1.50 per share, subject to a 9.99% beneficial ownership limitation.

The Loan is secured by a first-priority security interest in the Company’s assets, including a pledge of the shares of common stock owned by the Company in Viking.

The Loan is also supported by a Guaranty from Viking.

The Company also executed a Warrant Agreement in favor of Discover entitling Discover 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 will have a term of five years.

Amendments to Promissory Notes:

Effective December 24 2021, Camber and Discover executed amendments to previously issued Promissory Notes by the Company in favor of Discover, pursuant to which:

the Maturity Date of each of the Promissory Notes was extended from January 1, 2024 to January 1, 2027;

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

the interest rate was decreased from 10% per annum to the WSJ Prime Rate.

Sale of Series G Preferred Stock:

On December 30, 2021, Antilles Family Office, LLC (“Antilles”) agreed to purchase 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 Antilles 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 Antilles in favor of Company, each in the amount of $23,750,000 and payable by Antilles 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 Antilles 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 Antilles.

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

Also, Antilles 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.

On December 31, 2021, the Company also executed and delivered a Warrant Agreement (the “ Warrant Agreement ”) in favor of Antilles entitling Antilles 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.

The Company agreed to 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.

Partial Redemption of Series G Preferred Stock

On March 10, 2022, the Company paid Antilles $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.

As mentioned above, Antilles 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 Antilles, and the Company may redeem the shares of Series G Preferred Stock associated with each Note by paying Antilles $1,375,000 as full consideration for such redemption.

Terms of Series G Stock

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.

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.

(i) the election of directors;

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.

Legal Proceedings

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 Sit uated 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.

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

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

to defend the action.

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 the Company agreed to settle claims asserted by the Investors in the Verified Complaint filed by the Investors against the Company in the United States District Court (the “ Court ”) for the Southern District of Texas (Case No.

4:22-cv-755) on or about March 9, 2022, which complaint alleged that the Company breached its Stock Purchase Agreements with the Investors, pursuant to which the Investors had purchased shares of Series C Redeemable Convertible Preferred Stock and Series G Redeemable Convertible Preferred Stock of the Company (collectively the “ Preferred Stock ”), by failing to timely file all reports required to be filed by the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”).

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 or about May 12, 2022, the Settlement Agreement was approved by the Court.

The Stock Purchase Agreements between the Investors and the Company remain in full force and effect, as do the Promissory Notes executed and delivered by Antilles Family Office, LLC (“ Antilles ”) in favor of the Company (the “ Antilles Notes ”).

Among other things, (i) Antilles shall not be entitled to sell or convert any Series G Redeemable Convertible Preferred Stock unless Antilles has paid all amounts owing under the Antilles Notes, and (ii) the Company is still entitled to redeem the remaining Series G Redeemable Convertible Preferred Stock pursuant to the terms of the Stock Purchase Agreements and/or Antilles Notes.

Supplemental Oil and Gas Disclosures (Unaudited)

The following disclosures for the Company are made in accordance with authoritative guidance regarding disclosures about oil and natural gas producing activities.

Users of this information should be aware that the process of estimating quantities of “ proved, ” “ proved developed, ” and “ proved undeveloped ” crude oil, natural gas liquids and natural gas reserves is complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reservoir.

The data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions.

Consequently, material revisions (upward or downward) to existing reserve estimates may occur from time to time.

Although reasonable effort is made to ensure that reserve estimates reported represent the most accurate assessments possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures.

Proved reserves represent estimated quantities of crude oil, natural gas liquids and natural gas that geoscience and engineering data can estimate, with reasonable certainty, to be economically producible from a given day forward from known reservoirs under economic conditions, operating methods and government regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.

Proved developed reserves are proved reserves expected to be recovered under operating methods being utilized at the time the estimates were made, through wells and equipment in place or if the cost of any required equipment is relatively minor compared to the cost of a new well.

The Company reported financial results from its acquisition of 25% of the membership interests of Elysium effective February 3, 2020, based on information provided by Viking’s management, which was derived from reserve reports prepared by an independent third party in conjunction with the acquisition due diligence as of September 1, 2019.

Those balances were then adjusted for production reported by the seller through December 31, 2019 and then for actual production from the acquisition date through March 31, 2020.

Elysium reported estimated total net reserves as of March 31, 2020 were 2,988,160 barrels (Bbls) of crude oil and 41,576,500 thousand cubic feet (Mcf) of natural gas which translates to an equivalent of 9,917,580 barrel of oil equivalents (Boe).

Camber’s 25% interest in Elysium equates to ownership of 747,040 Bbls of crude oil and 10,394,130 Mcf of natural gas, which translates to an equivalent of 2,479,390 Boe.

These reserves are based on the Oil and Gas Benchmark Prices to Estimate Year-End Petroleum Reserves and Values Using U.S.

Securities and Exchange Commission Guidelines from the Modernization of Oil and Gas Reporting and on the quantities of oil, natural gas and natural gas liquids (NGLs), which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, under existing economic conditions, operating methods and government regulations, prior to the time at which contracts providing the rights to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.

Reserves and economic evaluation of all of the Company’s properties are prepared on a well-by-well basis.

The accuracy of the reserve estimates is a function of the quality and quantity of available data;

interpretation of that data;

and accuracy of various mandated economic assumptions.

As of March 31, 2020, Viking had net capitalized costs of $30.2 million and a net operating income from its oil and gas properties of $1.6 million.

Camber’s 25% ownership in Elysium equates to net capitalized costs of $7.6 million and net operating income from its interest in the Elysium oil and gas properties of $0.4 million.

Viking’s management used an average monthly crude oil price of $52.048 per Bbl and a natural gas price of $2.74 per Mcf, for the twelve months ended March 31, 2020, to calculate the estimated discounted future net cash flow (“ PV-10 ”) before tax expenses for total proved reserves of Elysium of approximately $104.9 million.

Camber’s 25% ownership of Elysium equates to a PV10 before tax expense $26.2 million.

Oil, natural gas and NGL prices are market driven and have been historically volatile, and we expect that future prices will continue to fluctuate due to supply and demand factors, seasonality, and geopolitical and economic factors, and such volatility can have a significant impact on our estimates of proved reserves and the related PV-10 value.

Proved undeveloped reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required.

Reserves on undrilled acreage are limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.

Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances justify a longer time.

Estimates for proved undeveloped reserves are not attributed to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other evidence using reliable technology establishing reasonable certainty.

PROVED RESERVE SUMMARY

All of the Company’s reserves are located in the United States.

The following tables sets forth the changes in Camber’s net proved reserves (including developed and undeveloped reserves) for the years ended March 31, 2020 and 2019.

Reserves estimates as of March 31, 2020 and 2019, respectively, were estimated by the independent petroleum consulting firm Graves & Co.

Consulting LLC:

Crude Oil (Bbls)

Net proved reserves at beginning of year

Revisions of previous estimates

Purchases in place

Extensions, discoveries and other additions

Sales in place

Net proved reserves at end of year

Natural Gas (Mcf)

Net proved reserves at beginning of year

Revisions of previous estimates

Purchases in place

Extensions, discoveries and other additions

Sales in place

Net proved reserves at end of year

Net proved reserves at beginning of year

Revisions of previous estimates

Purchases in place

Extensions, discoveries and other additions

Sales in place

Net proved reserves at end of year

Oil Equivalents (Boe)

Net proved reserves at beginning of year

Revisions of previous estimates

Purchases in place

Extensions, discoveries and other additions

Sales in place

Net proved reserves at end of year

The following table sets forth Camber’s proved developed and undeveloped reserves at March 31, 2020 and 2019:

Proved Developed Producing Reserves

Crude Oil (Bbls)

Natural Gas (Mcf)

Oil Equivalents (Boe)

Proved Developed Non-Producing Reserves

Crude Oil (Bbls)

Natural Gas (Mcf)

Oil Equivalents (Boe)

Proved Undeveloped Reserves

Crude Oil (Bbls)

Natural Gas (Mcf)

Oil Equivalents (Boe)

Proved Reserves

Crude Oil (Bbls)

Natural Gas (Mcf)

Oil Equivalents (Boe)

*The Company engaged Graves & Co Consulting, LLC, an independent reserve engineering firm, to provide a reserve report on the Company’s properties as of March 31, 2020.

Proved Developed Not Producing Reserves

At March 31, 2020 and 2019, the Company had proved developed not producing reserves of crude oil of 0 Bbls and 48,030, respectively.

Proved Undeveloped Reserves

At March 31, 2020 and 2019, the Company had no proved undeveloped reserves.

The following table sets forth Camber’s net reserves in Boe by reserve category and by formation at March 31, 2020 and 2019:

Non-Producing

Hutchinson Area

At March 31, 2020

At March 31, 2019

At March 31, 2020

At March 31, 2019

At March 31, 2020

At March 31, 2019

At March 31, 2020

At March 31, 2019

Capitalized Costs Relating to Oil and Natural Gas Producing Activities .

The following table sets forth the capitalized costs relating to Camber’s crude oil and natural gas producing activities at March 31, 2020 and 2019:

Oil and gas properties subject to amortization

Oil and gas properties not subject to amortization

Capitalized asset retirement costs

Total oil & natural gas properties

Accumulated depreciation, depletion, and impairment

$ ( 1,415,688 )

$ ( 6,994,365 )

Net Capitalized Costs

Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Activities .

The following table sets forth the costs incurred in Camber’s oil and natural gas property acquisition, exploration and development activities for the years ended March 31, 2020 and 2019:

Acquisition of properties

Exploration costs

Development costs

Results of Operations for Oil and Natural Gas Producing Activities .

The following table sets forth the results of operations for oil and natural gas producing activities for the years ended March 31, 2020 and 2019:

Crude oil and natural gas revenues

Production costs

Depreciation and depletion

Results of operations for producing activities, excluding corporate overhead and interest costs

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves.

The following information has been developed utilizing procedures prescribed by ASC Topic 932 and based on crude oil and natural gas reserves and production volumes estimated by the independent petroleum consultants of Camber.

The estimates were based on a 12-month average of first-of-the-month commodity prices for the years ended March 31, 2020 and 2019.

The following information may be useful for certain comparison purposes, but should not be solely relied upon in evaluating Camber or its performance.

Further, information contained in the following table should not be considered as representative of realistic assessments of future cash flows, nor should the Standardized Measure of Discounted Future Net Cash Flows be viewed as representative of the current value of Camber.

The future cash flows presented below are based on cost rates and statutory income tax rates in existence as of the date of the projections and average prices over the preceding twelve months.

It is expected that material revisions to some estimates of crude oil and natural gas reserves may occur in the future, development and production of the reserves may occur in periods other than those assumed, and actual prices realized and costs incurred may vary significantly from those used.

Management does not rely upon the following information in making investment and operating decisions.

Such decisions are based upon a wide range of factors, including estimates of probable and possible as well as proved reserves, and varying price and cost assumptions considered more representative of a range of possible economic conditions that may be anticipated.

The following table sets forth the standardized measure of discounted future net cash flows from projected production of Camber’s oil, NGL, and natural gas reserves as of March 31, 2020 and 2019:

Segment assets

Corporate and unallocated assets

Total Consolidated Assets

Year Ended December 31, 2022

Power Generation

Loss from Operations is as follows:

Operating expenses

Cost of goods

Lease operating costs

General and administrative

Stock based compensation

Impairment of intangible assets

Depreciation, depletion and amortization

Accretion - ARO

Total operating expenses

Loss from operations

$ ( 4,669,172 )

$ ( 5,005,000 )

$ ( 9,674,172 )

Segment assets

Corporate and unallocated assets

Total Consolidated Assets

Subsequent Events

Series C Preferred Stock:

On or about February 14, 2024 the low VWAP of the Company’s stock for the purpose of calculating the Conversion Premium associated with its Series C Preferred Stock was approximately $ 0.158 .

Consequently, as of March 20, 2024, the Company estimates there to be:

(i) approximately 21.4 million underlying shares of common stock associated with the potential conversion of the 30 shares of Series C Preferred Stock outstanding;

and (ii) approximately 105.6 million true-up shares of common stock due to Antilles in connection with its prior conversion of 240 shares of Series C Preferred Stock throughout 2023.

On or about February 15, 2024, the Company and Antilles entered into the February 2024 Antilles Agreement in relation to an amendment to the fifth amended and restated certificate of designations regarding its Series C Preferred Stock, as amended (the “ COD ”).

Particularly, in exchange for the release and indemnity as provided for in the Agreement, Antilles agreed to certain amendments to the COD.

On February 21, 2024, the Company filed with the Secretary of State of Nevada an amendment to the COD (the “ Amendment ), dated as of February 21, 2024 (the “ Amendment Date ”), pursuant to the Agreement, which amended the COD to (i) establish a floor price in connection with determining the Conversion Premium (as defined in the COD) associated with conversions of Series C Preferred Stock, (ii) confirm that the Company may make an early redemption of any outstanding Series C Preferred Stock provided that outstanding promissory notes in favor of the Investor or its affiliates (collectively, the “ Notes ”) are paid in full, and (iii) confirm that no additional conversion shares will be owed to the Investor if the Notes are paid in full and all then outstanding shares of Series C Preferred Stock have been redeemed.

Specifically, the Amendment provides that (i) beginning on the Amendment Date and thereafter, the Measuring Metric will be the higher of (x) the volume weighted average price of the Common Stock on any Trading Day following the Issuance Date of the Series C Preferred Stock and (y) $0.15, (ii) notwithstanding any other provision of the COD or any other document or agreement between the parties, the Company may make an early redemption pursuant to Section I.F.2 of the COD even though multiple Trigger Events (as defined in the COD) have occurred, subject to full repayment of any outstanding Notes, and (iii) if all outstanding Notes are paid in full and all then outstanding shares of Series C Preferred Stock are redeemed, the Investor will not thereafter deliver any Additional Notices (as defined in the COD) with respect to then already-converted shares of Series C Preferred Stock, and no additional Conversion Shares (as defined in the COD) will be owed to Antilles.

In addition, pursuant to the Agreement, (i) beginning on February 15, 2024 and thereafter, the Company agreed to pay at least fifty percent of the net proceeds received by the Company in connection with any registered or unregistered offering of equity or debt securities of the Company toward repayment of any outstanding Notes, and (ii) Antilles rescinded its prior notice to increase the beneficial ownership limitation to 9.99%, such that the limitation is restored to 4.99% effective five Business Days from the date of the Agreement .

On February 1, 2024, the Company sold its non-operated working interest in properties producing from the Cline and Wolfberry formations in Texas for proceeds of $ 205,000 .

SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (unaudited)

The following supplemental unaudited information regarding the Company’s oil and gas activities is presented pursuant to the disclosure requirements of ASC 932, “Extractive Activities – Oil and Gas”.

Camber’s oil and gas activities are located in the United States.

On November 5, 2023, Mid-Con Petroleum, LLC and Mid-Con Drilling, LLC, wholly owned subsidiaries of Viking, sold 100% of their interest in oil and gas assets in Kansas, consisting of 168 producing wells, 90 injector wells and 34 non-producing wells.

On December 1, 2023, a subsidiary of Petrodome Energy, LLC (“Petrodome”), a wholly owned subsidiary of Viking, sold its non-operated working interest in a producing oil well in Texas.

These two dispositions represented 100% of the reserves owned by Viking and its subsidiaries.

The Company’s remaining reserves at December 31, 2023 consist solely of the reserves acquired on the merger with Camber.

Results of Operations

Oil and Gas Sales by geographic area for the years ended December 31, 2023 and 2022:

United States

Lease operating costs

Depletion, accretion and impairment

Reserve Quantity Information

The supplemental unaudited presentation of proved reserve quantities and related standardized measure of discounted future net cash flows provides estimates only and does not purport to reflect realizable values or fair market values of the Company’s reserves.

The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of producing oil and gas properties.

Accordingly, significant changes to these estimates can be expected as future information becomes available.

Under SEC reporting requirements, proved undeveloped reserves include only those reserves in which the Company has current plans to develop, generally within five years.

During 2023 and 2022, the Company made several strategic dispositions which has modified its capital expenditure plans.

The Company currently has no firm commitments to drill or otherwise develop its proved undeveloped reserves.

As of December 31, 2022, the Company has reclassified all of its proved undeveloped properties to unproved reserves.

Estimated Quantities of Proved Reserves (BOE)

United States

Years Ended December 31,

Proved Developed, Producing

Proved Developed, Non-Producing

Total Proved Developed

Proved Undeveloped

Petroleum and Natural Gas Reserves

Reserves are estimated remaining quantities of oil and natural gas and related substances, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible - from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations - prior to the time at which contracts providing the right to operate expire.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves

The standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves and the changes in standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves were prepared in accordance with provisions of ASC 932.

Future cash inflows at December 31, 2023 and 2022 were computed by applying the unweighted, arithmetic average of the closing price on the first day of each month for the 12-month period prior to December 31, 2023 and 2022 to estimated future production.

Future production and development costs are computed by estimating the expenditures to be incurred in developing and producing the proved oil and natural gas reserves at year-end, based on year-end costs and assuming continuation of existing economic conditions.

Future income tax expenses are calculated by applying appropriate year-end tax rates to future pretax net cash flows relating to proved oil and natural gas reserves, less the tax basis of properties involved.

Future income tax expenses give effect to permanent differences, tax credits and loss carry forwards relating to the proved oil and natural gas reserves.

Future net cash flows are discounted at a rate of 10% annually to derive the standardized measure of discounted future net cash flows.

This calculation procedure does not necessarily result in an estimate of the fair market value of the Company’s oil and natural gas properties.

The standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves for the years ended December 31, 2023 and 2022 are as follows:

United States

Years Ended December 31,

Future cash inflows

1 unchanged sentence

Future development costs

Future income taxes

Future income tax expense

Future net cash flows

Discount to present value at 10% annual rate

Standardized measure of discounted future net cash flows relating to proved oil and gas reserves

10% annual discount for estimated timing of cash flows

Standardized measure of DFNCF

Changes in Standardized Measure of Discounted Future Net Cash Flows

The following table sets forth the changes in the standardized measure of discounted future net cash flows for each of the years ended March 31, 2020 and 2019:

Standardized measure, beginning of year

Crude oil and natural gas sales, net of production costs

The changes in the standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves for the years ended December 31, 2023 and 2022 are as follows:

United States

Years Ended December 31,

Balance - beginning

Net changes in prices and production costs

Changes in estimated future development costs

Net changes in future development costs

Sales of oil and gas produced, net

Extensions, discoveries and improved recovery

Purchases of reserves

Sales of reserves

(12,334,224 )

Revisions of previous quantity estimates

Accretion of discount

Previously estimated development costs incurred

Net change in income taxes

Purchases of reserves in place

Sales of reserves in place

Change in timing of estimated future production

(28,663,972 )

Standardized measure, end of year

Accretion of discount

Balance - ending

In accordance with SEC requirements, the pricing used in the Company’s standardized measure of future net revenues is based on the 12-month unweighted arithmetic average of the first day-of-the-month price for the period January through December for each period presented and adjusted by lease for transportation fees and regional price differentials.

The use of SEC pricing rules may not be indicative of actual prices realized by the Company in the future.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On September 16, 2021, the Audit Committee of the Board of Directors (the “Audit Committee”) of Camber Energy, Inc, Inc.

(the “Company”), dismissed Marcum LLP (“Marcum”) as its independent registered public accounting firm, effective as of such date.

The report of Marcum on the Company’s consolidated financial statements as of March 31, 2019 and March 31, 2018 and for the years then ended did not contain an adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles, other than an explanatory paragraph relating to the Company’s ability to continue as a going concern.

The consolidated financial statements as of March 31, 2020 and March 31, 2019, and for the years then ended were the most current audited financial statements of the Company, the Company changed its fiscal year to December 31 st on February 4, 2021, and on September 11, 2021, the Company determined that those audited financial statements should not be relied on, and filed a Current Report on Form 8-K with the Securities and Exchange Commission on or about September 16, 2021, regarding that non-reliance.

During the Company’s prior fiscal years ended March 31, 2020 and March 31, 2019 and through September 16, 2021, there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) with Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Marcum, would have caused Marcum to make reference to the matter in its report on the consolidated financial statements for such year.

On September 17, 2021, the Audit Committee approved the appointment of Turner, Stone & Company, L.L.P.

(“Turner Stone”) as the Company’s independent registered public accounting firm for the fiscal years ended March 31, 2020 and March 31 2019, and for the transition period ended December 31, 2020, and such engagement was formalized on September 21, 2021.

During the prior fiscal years ended March 31, 2019 and March 31, 2018 and through September 21, 2021, neither the Company nor anyone on their behalf consulted with Turner Stone with respect to either (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither written nor oral advice was provided to the Company that Turner Stone concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue;

or (ii) any matter that was either the subject of disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K, or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.

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-K/A

Item 8. Financial Statements and Supplementary Data