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Item 7. Management’s Discussion and Analysis

2025-05-12 compared with 2024-03-25 · 156 added, 112 removed, 235 unchanged (53% of the section changed)

20 unchanged sentences

PLAN OF OPERATIONS

Camber Energy, Inc.

(“Camber”, the “Company”, “we”, “us” or “our”) is a growth-oriented diversified energy company.

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.

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

The Company is also exploring other 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

Simson-Maxwell

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

6 unchanged sentences

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:

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

Reference No.

10,774,733, File date:

2 unchanged sentences

"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.:

Systems for generating bottoming cycle power and producing distilled water

European Patent No.:

EP3728891, Issue Date:

April 12, 2023, Titled:

April 12, 2023;

Validated in the United Kingdom, France and Germany;

European Patent Application No.:

EP18870699.8, International File date:

October 24, 2018, PCT Publication No.:

WO2019084208, European Publication No.:

"Bottoming Cycle Power System."

Systems for generating bottoming cycle power and producing distilled water

11286832, Issue Date:

March 29, 2022;

Patent Application No.:

1 unchanged sentence

April 7, 2021, Titled:

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

Patent & Trademark Office in March, 2022 (No.

"Bottoming Cycle Power System.”

Systems for generating bottoming cycle power and capturing carbon dioxide

11415052, Issue Date:

August 16, 2022;

Patent Application No.:

17/448,943, File date:

June 25, 2021, Titled:

“Bottoming Cycle Power System”;

September 27, 2021, Titled:

"Systems and Methods Associated With Bottoming Cycle Power Systems for Generating Power and Capturing Carbon Dioxide."

Systems and Methods for generating bottoming cycle power and capturing carbon dioxide

US Patent No.:

11624307, Issue Date:

April 11, 2023;

Patent Application No.:

17/580,777, File date:

January 21, 2022, Titled:

"Systems and Methods Associated With Bottoming Cycle Power Systems for Generating Power and Capturing Carbon Dioxide."

Systems and Methods for generating bottoming cycle power and capturing carbon dioxide

PCT International Patent Application No.:

PCT/US2022/022827, File date:

March 31, 2022, Titled:

"Bottoming Cycle Power Systems."

Systems and Methods for generating bottoming cycle power and capturing carbon dioxide

PCT International Patent Application No.:

PCT/US2022/076635, File date:

September 19, 2022, Titled:

“Systems And Methods Associated With Bottoming Cycle Power Systems For Generating Power And Capturing Carbon Dioxide;

and (viii) U.S.

Published on October 13, 2022 with Publication No.:

WO 2022/216519

Systems and Methods for generating bottoming cycle power and capturing carbon dioxide

11,339,712, Issue Date:

May 24, 2022;

Patent Application No.:

17/358,197, File date:

June 25, 2021, Titled:

"Bottoming Cycle Power System."

Systems for generating bottoming cycle power, capturing carbon dioxide and producing associated products such as distilled water

11,346,256, Issue Date:

May 31, 2022;

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."

Systems and Methods for generating bottoming cycle power, capturing carbon dioxide and producing associated products such as distilled water and diesel exhaust fluid (DEF)

Patent Application No.:

17/661,382, File date:

April 29, 2022, Titled:

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

Systems and Methods for generating bottoming cycle power, capturing carbon dioxide and producing associated products such as distilled water and diesel exhaust fluid (DEF).

PCT International Patent Application No.:

PCT/US2022/034298, File date:

June 21, 2022, Titled:

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

Published on December 29, 2022 with Publication No.:

WO 2022/271667

Systems and Methods for generating bottoming cycle power, capturing carbon dioxide and producing associated products such as distilled water and diesel exhaust fluid (DEF).

11639677, Issue Date:

Patent Application No.:

17/934,279, File date:

September 22, 2022, Titled:

“System And Method For Capturing Carbon Dioxide From A Flow Of Exhaust Gas From A Combustion Process.”

Systems and Methods of Capturing Carbon Dioxide Utilizing The Exhaust Gas From An Internal Combustion Engine

Non-Provisional Patent Application No.:

18/312930, Filing date:

Converted to a non-provisional from provisional case no:

Provisional Patent Application No.:

63/371546, File date:

August 16, 2022, Titled:

"Absorption Chiller System With A Transport Membrane Heat Exchanger."

Systems and Methods for removing water from air or exhaust gas using an absorption chiller system having a transport membrane heat exchanger as an evaporator

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.

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 absorber 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.

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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.

In January 2022, Viking acquired a 51% interest in 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.

2 unchanged sentences

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.

Broken Conductor Protection Technologies:

In February 2022, Viking acquired a 51% interest in two entities, Viking Sentinel and Viking Protection, that own the intellectual property rights to patented and patent pending proprietary electric transmission and distribution broken conductor protection 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.

A summary of the applicable patents, pending patents and/or patent applications associated with the intellectual property owned by Viking Sentinel and/or Viking Protection as at the date hereof is as follows:

Application #

Application Filed

Notice of Allowance Received

Patent Issued

Electric Transmission Line Ground Fault Prevention Methods Using Dual, High Sensitivity Monitoring

Electric Transmission Line Ground Fault Prevention Systems Using Dual, High Sensitivity Monitoring

Electric Transmission Line Ground Fault Prevention systems using dual parameter monitoring with high sensitivity relay devices in parallel with low sensitivity relay devices

Electric Transmission Line Ground Fault Prevention Methods Using Multi-Parameter High Sensitivity Monitoring

End of Line Protection with Trip-Signal Engaging

End of Line Protection with Blocking

International Application No.

PCT/US2024/010627

Electric Transmission Line Ground Fault Prevention Methods Using Multi-Parameter High Sensitivity Monitoring

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.

As of September 30, 2024, the Company did not hold any interest in producing oil and gas properties.

Divestitures in 2024:

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:

On February 1, 2024, the Company sold its working interest in oil and gas properties producing from the Cline and Wolfberry formations in Texas for gross proceeds of $205,000.

The Company recorded a net loss on this transaction, as follows:

Proceeds from sale (net of transaction costs)

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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.

Loss on disposal

Divestitures in 2023:

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

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 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, as follows:

Proceeds from sales (net of transaction costs)

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.

Cash bond recoverable (net of fees)

Gain on disposal

Merger with Viking Energy Group, Inc.

On August 1, 2023, Camber completed the previously announced merger (the “Merger”) with 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.

On August 1, 2023, Camber Energy, Inc.

completed the previously announced merger (the “Merger”) with Viking Energy Group, Inc.

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:

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

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 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 (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.

Each outstanding promissory note issued by Viking that was 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.

For accounting purposes, the Merger was 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 September 30, 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.

NYSE American Listing

On August 7, 2024, the Company received notice from the NYSE Regulation that it had suspended trading of the Company’s common stock and determined to commence proceedings to delist the Company’s common stock from the NYSE American as a result of its determination that the Company is no longer suitable for listing pursuant to Section 1003(f)(v) of the NYSE American Company Guide due to the low selling price of the Company’s common stock.

The Company had a right to a review of the staff’s determination to delist the Company’s common stock by the Listings Qualifications Panel of the Committee for Review of the Board of Directors of the NYSE American.

The Company decided not to request a review of the staff’s determination and appeal this determination.

On August 16, 2024, the NYSE filed a Notification of Removal from Listing with the Securities and Exchange Commission to delist the Company’s common stock pending.

The Company’s common stock began trading under the trading symbol “CEIN” on the OTC Pink Market operated on the OTC Markets system effective with the open of the markets on August 8, 2024.

Effective August 27, 2024, the Company received approval to have its common stock quoted on the OTCQB Venture Market on the OTC Markets.

Going Concern Qualification

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(ii) change in fair value of derivative liability of $18,306,398;

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

(iii) amortization of debt discount of $3,349,404;

(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 $24,297,733, long-term debt, net of current portion, 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.

(iv) impairment of intangible assets of $2,248,940;

(v) loss on extinguishment of debt of $811,132, and;

(vi) depreciation, depletion and amortization of $779,632.

As of December 31, 2024, the Company had stockholders’ deficit of $37,819,657, long-term debt, net of current, of $40,483,795 and a working capital deficiency of $17,655,810.

The largest components of current liabilities creating this working capital deficiency was accrued interest on note payable to Discover of $6,578,169, drawings by Simson-Maxwell against its bank credit facility of $3,937,008, an advance from FK Venture, LLC of $1,200,000 and amounts due to AGD Advisory Group, Inc., a related party, of $960,000.

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

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Net Cash Provided by Investing Activities

Net Cash Provided by (Used in) Financing Activities

$ (3,048,788 )

Net Cash Provided by Financing Activities

Decrease in Cash during the Period

1 unchanged sentence

Cash and Cash Equivalents, end of Period

Net cash used in operating activities increased to $(5,342,265) during the fiscal year ended December 31, 2023, as compared to $(3,760,376) in the comparable period in 2022.

This increase is primarily the result of a lower overall increase in net operating assets as compared to the prior year.

Net cash used in operating activities decreased to $(1,468,439) during the fiscal year ended December 31, 2024, as compared to $(5,342,265) in the comparable period in 2023.

This decrease is the result of a decrease in net operating assets as compared to the prior year, partially offset by higher cash operating losses in the current year.

Net cash flows from investing activities decreased to $150,704 during the fiscal year ended December 31, 2024, as compared to $661,147 in the comparable period in 2023.

This decrease is due to higher proceeds from the sale of oil and gas properties and the sale of notes receivable in 2022.

Net cash used in financing activities increased to $2,347,829 during the fiscal year ended December 31, 2023, as compared to $(3,048,788) in the comparable period in 2022.

This increase is mainly due to the impact of the issuance of debt during 2023 as compared to the repayment of debt in 2022.

This decrease is due to lower proceeds from the sale of oil and gas properties as compared to the prior year.

Net cash from financing activities decreased to $526,323 during the fiscal year ended December 31, 2024, as compared to $2,347,829 in the comparable period in 2023.

This decrease is mainly due to a reduction in the amount of long-term debt issued in 2024.

Segment and Consolidated Results

11 unchanged sentences

General and administrative

Impairment of oil & gas and intangible assets

Stock-based compensation

Impairment of intangible assets

Depreciation, depletion and amortization

2 unchanged sentences

Loss from operations

$ (4,329,558 )

$ (6,853,586 )

$ (11,183,144 )

Year Ended December 31, 2023

5 unchanged sentences

General and administrative

Stock based compensation

Impairment of intangible assets

Impairment of oil & gas and intangible assets

Depreciation, depletion and amortization

5 unchanged sentences

$ (6,994,365 )

The Company had gross revenues of $32,054,323 for the year ended December 31, 2023 as compared to $24,038,160 for the year ended December 31, 2022, an increase of 33%.

Power revenues grew by almost 55% driven by significantly stronger unit sales.

Oil and gas revenues declined by almost 74% reflecting the impact of oil and gas divestitures in the second half of 2022 and in 2023.

The Company had gross revenues of $28,610,567 for the year ended December 31, 2024 as compared to $32,054,323 for the year ended December 31, 2023, a decrease of 9%.

In the power segment, power generation unit and parts revenues decreased by 8%, while service revenues increased by 3%.

Oil and gas revenues declined by 90% reflecting the impact of oil and gas divestitures in the first quarter of 2024.

The Company’s operating expenses increased by 2% to $39,793,711 for the year ended December 31, 2024 from $39,048,688 for the year ended December 31, 2023.

Lease operating costs, depreciation depletion and amortization decreased as a result of dispositions of oil and gas interests.

Cost of sales increased significantly as compared to the prior year, consistent with the increase in power segment revenues.

Lease operating costs, depreciation depletion and amortization all decreased as a result of dispositions of oil and gas interests.

Cost of sales decreased as compared to the prior year due to lower power segment revenues.

General and administrative expenses increased by 5% as compared to the prior year.

Income (Loss) from Operations

2 unchanged sentences

The Company recorded other expense of $59,076,750 for the year ended December 31, 2024 as compared to $11,540,702 for the year ended December 31, 2023, an increase of $47,536,048.

This increase was driven by (i) higher interest expense due to the assumption of debt following the Merger;

(ii) change in the fair value of derivative liabilities acquired at the Merger date;

(iii) higher debt discount amortization, and (iv) a goodwill impairment charge related to the Merger.

This increase was driven by (i) goodwill impairment of $34,860,411;

(ii) an increase of $9,155,939 related to the change in the fair value of derivative liabilities, and;

(iii) higher debt discount amortization.

The Company recorded a net loss of $70,259,894 for the year ended December 31, 2024, as compared to$18,535,067 for the year ended December 31, 2023, due to the reasons explained above.

Off Balance Sheet Arrangements

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The Company consolidates the financial results of a VIE when it is determined that the Company is the primary beneficiary of the VIE.

Oil and Gas Property Accounting

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 of acquisition, exploration and development of oil and natural gas properties (including such costs as leasehold acquisition costs, geological expenditures, dry hole costs, tangible and intangible development costs and direct internal costs) are capitalized as the cost of oil and natural gas properties when incurred.

The full cost method requires the Company to calculate quarterly, by cost center, a “ceiling,” or limitation on the amount of properties that can be capitalized on the balance sheet.

To the extent capitalized costs of oil and natural gas properties, less accumulated depletion and related deferred taxes, exceed the sum of the discounted future net revenues of proved oil and natural gas reserves, the lower of cost or estimated fair value of unproved not properties subject to amortization, the cost of properties not being amortized, and the related tax amounts, such excess capitalized costs are charged to expense.

The Company recorded an impairment charge of $347,050 on the value of its oil and gas assets at December 31 2023.

Proved Reserves

Estimates of our proved reserves included in this report are prepared in accordance with U.S.

SEC guidelines for reporting corporate reserves and future net revenue.

The accuracy of a reserve estimate is a function of:

the quality and quantity of available data;

the interpretation of that data;

the accuracy of various mandated economic assumptions;

the judgment of the persons preparing the estimate.

Our proved reserve information included in this report was predominately based on estimates.

Because these estimates depend on many assumptions, all of which may substantially differ from future actual results, reserve estimates will be different from the quantities of oil and gas that are ultimately recovered.

In addition, results of drilling, testing and production after the date of an estimate may justify material revisions to the estimate.

In accordance with SEC requirements, we based the estimated discounted future net cash flows from proved reserves on the unweighted arithmetic average of the prior 12-month commodity prices as of the first day of each of the months constituting the period and costs on the date of the estimate.

The estimates of proved reserves materially impact DD&A expense.

If the estimates of proved reserves decline, the rate at which we record DD&A expense will increase, reducing future net income.

Such a decline may result from lower market prices, which may make it uneconomic to drill for and produce from higher-cost fields.

Asset Retirement Obligation

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

We determined our 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.

Periodic accretion of discount of the estimated liability is recorded as accretion expense in the accompanying consolidated statements of operations.

ARO liability is determined using significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive lives of wells and a risk-adjusted interest rate.

Changes in any of these assumptions can result in significant revisions to the estimated ARO.

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.

Power Generation Revenues

1 unchanged sentence

Sale of Power Generation Units

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.

The Company considers a completed unit 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.

Commissioning of the unit is considered to be a separate performance obligation for which revenue is recognized when the commissioning is completed.

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 in exchange for the transfer of the units, which is generally the price stated in the contract.

Revenue is measured as the amount of consideration the Company expects to be entitled in exchange for the transfer of the unit and commissioning of the unit, 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.

12 unchanged sentences

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

Oil and Gas Revenues

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

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

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.

8 unchanged sentences

Intangible Assets

Intangible assets include amounts capitalized for the Company’s license agreement with ESG as described in Note 2.

Intangible assets include amounts capitalized for the Company’s license agreement with ESG.

This asset is amortized on a straight-line basis over the remaining life of the related patents being licensed, which is approximately 16 years.

Additionally, with the acquisition of Simson-Maxwell, the Company identified other intangible assets consisting of customer relationships (which is being amortized on a straight-line basis over 10 years) and Simson-Maxwell brand (which is not being amortized) with an aggregate appraised fair value $3,908,126.

With the acquisition of a 51% interest in Viking Ozone, Viking Sentinel and Viking Protection, as described in Note 8, the Company has aggregate intangible assets of $15,433,340.

With the acquisition of a 51% interest in Viking Ozone, Viking Sentinel and Viking Protection the Company has aggregate intangible assets of $15,433,340.

These assets have an indefinite life and are not being amortized.

21 unchanged sentences

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 Note 12).

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

Capitalized terms used but not defined in this section have the meaning assigned to them in the Series C COD.

2 unchanged sentences

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

Item 7. Management’s Discussion and Analysis