UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ | QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 20202021
OR
☐ | TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______ to _______.
Commission file number: 000-29219
VIKING ENERGY GROUP, INC. | ||
(Formerly Viking Investments Group, Inc.) (Exact name of registrant as specified in its charter) |
Nevada | 98-0199508 | |
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(Address of principal executive offices) | |||
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15915 Katy Freeway, Suite 450
Houston, TX 77094
(Address of principal executive offices)
(281) 404 4387 (Registrant’s telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Not applicable. Note applicable. Not applicable. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large Accelerated Filer Accelerated Filer ☐ Non-Accelerated Filer Smaller Reporting Company ☒ Emerging Growth Company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ APPLICABLE ONLY TO CORPORATE ISSUERS As of November 3 Consolidated Balance Sheets as of September 30, 3 4 5 6 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations VIKING ENERGY GROUP, INC. (A Majority Owned Subsidiary of Camber Energy, Inc.) Consolidated Balance Sheets September 30, 2020 December 31, 2019 September 30, 2021 December 31, 2020 (unaudited) (unaudited) ASSETS Current assets: Cash Restricted cash Accounts receivable – oil and gas - net Prepaid expenses Total current assets Oil and gas properties, full cost method Proved developed producing oil and gas properties, net Proved undeveloped and non-producing oil and gas properties, net Total oil and gas properties, net Fixed assets, net Derivative asset Investment in unconsolidated entity ESG Clean Energy license, net Deposits TOTAL ASSETS LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable Accrued expenses and other current liabilities 3,933,036 Undistributed revenues and royalties Derivative liability Amount due to director Due to director Current portion of long-term debt and other short-term borrowings – net of debt discount Total current liabilities Long term debt - net of current portion and debt discount Operating lease liability Asset retirement obligation TOTAL LIABILITIES Commitments and contingencies STOCKHOLDERS’ EQUITY Preferred stock, $0.001 par value, 5,000,000 shares authorized, 28,092 shares issued and outstanding as of September 30, 2020 and December 31, 2019 STOCKHOLDERS’ DEFICIT Preferred stock, $0.001 par value, 5,000,000 shares authorized, 28,092 shares issued and outstanding as of September 30, 2021 and December 31, 2020 Common stock, $0.001 par value, 500,000,000 shares authorized, 225,243,059 and 124,198,309 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively. 99,363,736 and 51,494,956 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively. Additional paid-in capital Accumulated deficit Equity attributable to Viking Energy Group, Inc. Noncontrolling interest TOTAL STOCKHOLDERS’ EQUITY TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY TOTAL STOCKHOLDERS’ DEFICIT TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT The accompanying notes are an integral part of these unaudited consolidated financial statements. VIKING ENERGY GROUP, INC. (A Majority Owned Subsidiary of Camber Energy, Inc.) Consolidated Statements of Operations (Unaudited) Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Revenue �� Oil and gas sales Operating expenses Lease operating costs General and administrative Stock based compensation Depreciation, depletion and amortization Impairment of oil and gas properties Accretion - ARO Total operating expenses Income from operations Other income (expense) Interest expense Amortization of debt discount Change in fair value of derivatives Loss on financing settlements Interest and other income Total other income (expense) Net income (loss) before income taxes Income tax benefit (expense) Net income (loss) Net loss attributable to noncontrolling interest Net income (loss) attributable to Viking Energy Group, Inc. Earnings (loss) per common share Basic and Diluted Weighted average number of common shares outstanding Basic and Diluted Nine Months Ended September 30, 2020 2019 Cash flows from operating activities: Net loss Adjustments to reconcile net loss to cash provided by operating activities: Change in fair value of derivative liability Stock based compensation Depreciation, depletion and amortization Amortization of operational right-of-use assets Accretion – Asset retirement obligation Impairment of oil and gas properties Amortization of debt discount Loss on financing settlement Stock-based interest expense Changes in operating assets and liabilities Accounts receivable Prepaid expenses and other assets Accounts payable Accrued expenses and other current liabilities Undistributed revenues and royalties Net cash provided by operating activities Cash flows from investing activities: Investment in and acquisition of oil and gas properties Acquisition of fixed assets Proceeds from sale of oil and gas interests Net cash used in investing activities Cash flows from financing activities: Proceeds from long-term debt Repayment of long-term debt Proceeds from amount due to director Proceeds from sale of stock Proceeds from exercise of warrants Short term advance Repayment of amount due director Net cash provided by financing activities Net increase in cash Cash and Restricted Cash, beginning of period Cash and Restricted Cash, end of period Supplemental Cash Flow Information: Cash paid for: Interest Income taxes Supplemental disclosure of Non-Cash Investing and Financing Activities: Recognition of asset retirement obligation Recognition of right-of-use asset and lease liability Amortization of right-of-use asset and lease liability Purchase of transportation equipment through direct financing Proceeds from sale of oil and gas properties paid directly to reduce debt Elimination of asset retirement obligation associated with sale of assets Issuance of shares as payment of interest on debt Issuance of warrants for services Issuance of warrants as discount on debt Debt refinanced through new credit facility Issuance of warrant shares as reduction of debt Issuance of shares in debt conversion Issuance of shares as discount on debt Private placement debt exchanged for new private placement debt Purchase of working interest through new debt Recognition of beneficial conversion feature as discount on debt Accrued interest rolled into new private placement Issuance of shares as reduction of debt and accrued expenses Three months ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Revenue Oil and gas sales Operating expenses Lease operating costs General and administrative Stock based compensation Depreciation, depletion and amortization Impairment of oil and gas properties Accretion - ARO Total operating expenses Income from operations Other income (expense) Interest expense Amortization of debt discount Change in fair value of derivatives Equity in earnings of unconsolidated entity Loss on financing settlements Interest and other income Total other income (expense) Net income (loss) before income taxes Income tax benefit (expense) Net income (loss) Net (income) loss attributable to noncontrolling interest Net income (loss) attributable to Viking Energy Group, Inc. Earnings (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 unaudited consolidated financial statements. VIKING ENERGY GROUP, INC. (A Majority Owned Subsidiary of Camber Energy, Inc.) Consolidated Statements of For the nine months ended September 30, 2020 Retained Preferred Stock Common Stock Additional Earnings Total Number Amount Number Amount Paid-in Capital (Accumulated Deficit) Noncontrolling Interest Stockholders' Equity Balances at December 31, 2019 Shares issued for services Warrant exercise Warrants exercised to reduce debt Warrants issued for services Warrants issued as debt discount Shares issued as debt discount Shares issued for sale of stock Shares issued in conversion of debt Shares issued for interest payments Shares issued in conversion of debt Beneficial conversion features as debt discount Shares issued as reduction of debt and accrued expenses Net income (loss) Balances at September 30, 2020 For the nine months ended September 30, 2019 Retained Preferred Stock Common Stock Additional Earnings Total Number Amount Number Amount Paid-in Capital (Accumulated Deficit) Noncontrolling Interest Stockholders' Equity Balances at December 31, 2018 Shares issued for services Shares issued for interest Warrants issued for services Warrants issued as debt discount Net loss Balances at September 30, 2019 Nine Months Ended September 30, 2021 2020 Cash flows from operating activities: Net income (loss) Adjustments to reconcile net loss to cash provided by operating activities: Change in fair value of derivative liability Stock based compensation Depreciation, depletion and amortization Amortization of operational right-of-use assets Accretion – asset retirement obligation Impairment of oil and gas properties Amortization of debt discount Loss on debt settlement Stock based interest expense PPP loan forgiveness Equity in earnings of unconsolidated entity Changes in operating assets and liabilities Accounts receivable Prepaid expenses and other assets Accounts payable Accrued expenses and other current liabilities Undistributed revenues and royalties Net cash provided by operating activities Cash flows from investing activities: Investment in and acquisition of oil and gas properties Acquisition of fixed assets Payments for ESG Clean Energy license Investment in unconsolidated entity Proceeds from sale of oil and gas properties Net cash used in investing activities Cash flows from financing activities: Proceeds from long-term debt Repayment of long-term debt Proceeds from sale of stock to Camber Energy, Inc. Proceeds from sale of stock Proceeds from exercise of warrants Repayment of amount due director Net cash provided by financing activities Net decrease in cash Cash and Restricted Cash, beginning of period Cash and Restricted Cash, end of period Supplemental Cash Flow Information: Cash paid for: Interest Income taxes Supplemental disclosure of Non-Cash Investing and Financing Activities: Recognition of asset retirement obligation Equity in earnings of unconsolidated entity Amortization of right-of-use asset and lease liability Issuance of shares as payment of interest on debt Issuance of shares for services Issuance of warrants for services Issuance of warrants as discount on debt Issuance of warrant shares as reduction of debt Issuance of shares in debt conversion Issuance of shares as discount on debt Private placement debt exchanged for new private placement debt Purchase of working interest through new debt Recognition of beneficial conversion feature as discount on debt Accrued interest rolled into new private placement Issuance of shares as reduction of debt and accrued expenses Issuance of shares to parent for reduction of debt and accrued expenses Issuance of shares for prepaid services PPP loan forgiveness The accompanying notes are an integral part of these unaudited consolidated financial statements. VIKING ENERGY GROUP, INC. (A Majority Owned Subsidiary of Camber Energy, Inc.) Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) For the nine months ended September 30, 2021 Retained Preferred Stock Common Stock Additional Paid-in Earnings (Accumulated Noncontrolling Total Stockholders' Number Amount Number Amount Capital Deficit) Interest Equity Balances at December 31, 2020 Rounding due to reverse split Shares issued for services Shares issued as debt discouint Warrants issued for services Shares issued to parent for reduction of debt and accrued expenses Shares issued for sale of stock to Camber Energy, Inc. Shares issued in conversion of debt Shares issued for prepaid services Net loss Balances at September 30, 2021 For the nine months ended September 30, 2020 Retained Preferred Stock Common Stock Additional Paid-in Earnings (Accumulated Noncontrolling Total Stockholders' Number Amount Number Amount Capital Deficit) Interest Equity Balances at December 31, 2019 Shares issued for services Warrant exercise Warrants issued for services Warrants exercised to reduce debt Warrants issued as debt discount Shares issued for sale of stock Shares issued as debt discount Shares issued for interest payments Shares issued in conversion of debt Beneficial conversion features as debt discount Shares issued as payment on debt Net income Balances at September 30, 2020 The accompanying notes are an integral part of these unaudited consolidated financial statements. VIKING ENERGY GROUP, INC. Notes to Consolidated Financial Statements (Unaudited) Note 1 On December 23, 2020 Camber Energy, Inc. (“Camber”) acquired a 51% interest in Viking Energy Group, Inc. (“Viking” or the “Company”). On January 8, 2021 and July 29, 2021, Camber acquired additional interests in the Company resulting in Camber owning approximately 62% of the outstanding common shares of the Company after the January transaction and approximately 73% of the outstanding common shares of the Company after the July transaction. As a result, since December 23, 2020 Viking has been a majority-owned subsidiary of Camber. The December 2020, January 2021 and July 2021 transactions, along with a new merger agreement executed by Viking and Camber in February 2021 are described further below. References below to the Company’s various debt arrangements are described further in Note 8. December 23, 2020 Transaction On December 23, 2020, the Company entered into a Securities Purchase Agreement with Camber, pursuant to which Camber acquired (“Camber’s Acquisition”) 26,274,510 shares of Viking common stock (“Camber’s Viking Shares”), constituting 51% of the common stock of Viking, in consideration of (i) Camber’s payment of $10,900,000 to Viking (the “Cash Purchase Price”), and (ii) cancelation of $9,200,000 in promissory notes issued by Viking to Camber (“Camber’s Viking Notes”). Pursuant to the Securities Purchase Agreement, if at any time between December 23, 2020 and July 2, 2022 Viking issues shares of its common stock to one or more persons such that Camber’s percentage ownership of Viking’s common stock is less than 51%, Viking is obligated to issue additional shares to Camber to ensure that Camber owns at least 51% of the common stock of Viking (the “Adjustment Entitlement”). The Adjustment Entitlement expires on July 1, 2022. In connection with Camber’s Acquisition, the Company and Camber terminated their previous merger agreement, dated August 31, 2020, as amended, and Camber assigned its membership interests in one of Viking’s subsidiaries, Elysium Energy Holdings, LLC, back to Viking. Also in connection with Camber’s Acquisition, effective December 23, 2020, Camber (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 “First 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 Camber’s $6,000,000 promissory note previously issued to the investor dated December 11, 2020 (the “Second Camber Investor Note”), amending the acceleration provision of the note to provide that the note repayment obligations would also not accelerate if Camber has increased its authorized capital stock by March 11, 2021 (and Camber 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 First Camber Investor Note and the Second Camber Investor Note. On December 23, 2020, the First Camber Investor Note was funded, and Viking and Camber closed Camber’s Acquisition, with Camber paying the Cash Purchase Price to Viking and cancelling Camber’s Viking Notes, and Viking issuing Camber’s 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. January 8, 2021 Transactions On January 8, 2021, the Company entered into another purchase agreement with Camber pursuant to which Camber agreed to acquire an additional 16,153,846 shares of Company common stock (the “Shares”) in consideration of (i) Camber issuing 1,890 shares of Camber’s Series C Redeemable Convertible Preferred Stock to EMC Capital Partners, LLC (“EMC”), one of the Company’s lenders which held a secured promissory note issued by the Company 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. The fair value of the 1,890 shares of Camber’s Series C Redeemable Convertible Preferred Stock was determined to be $19,622,000 at the date of the transaction; as a result, the Company recognized a loss on debt settlement in the amount of $926,531. Simultaneously, on January 8, 2021, the Company entered into a Cancellation Agreement with EMC (the “Cancellation Agreement”) pursuant to which the Company 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, Camber entered into a purchase agreement with EMC pursuant to which (i) Camber 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 the Company to cancel the EMC Note. February 2021 Merger Agreement with Camber On February 15, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Camber. 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 the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Camber. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share: (i) of common stock, par value $0.001 per share, of the Company (the “Viking Common Stock”) issued and outstanding immediately prior to the Effective Time, other than shares owned by Camber, the Company and Merger Sub, will be converted into the right to receive one share of common stock of Camber; and (ii) of Series C Convertible Preferred Stock of the Company (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 Camber (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 Camber’s common stock), will be treated equally with Camber’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 Camber’s share capital; (b) on a resolution to approve the terms of a buy-back agreement; (c) on a proposal to wind up Camber; (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 Company 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 Company 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 Camber, shall serve as President and Chief Executive Officer of the Combined Company following the Effective Time. The Merger Agreement provides that, as of the Effective Time, the Combined Company will have its headquarters in Houston, Texas. The Merger Agreement also provides that, during the period from the date of the Merger Agreement until the Effective Time, each of Camber and 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. Company 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. Camber 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 “Share Issuance”). The completion of the Merger is subject to customary conditions, including (i) adoption of the Merger Agreement by Camber’s stockholders and approval of the Share Issuance by Camber’s stockholders, (ii) receipt of required regulatory approvals, (iii) effectiveness of a registration statement on Form S-4 for the Camber common stock to be issued in the Merger (the “Form S-4”), and (iv) the absence of any law, order, injunction, decree or other legal restraint preventing the completion of the Merger or making the completion of the Merger illegal. Each party’s obligation to complete the Merger is also subject to certain additional customary conditions, including (i) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (ii) subject to certain exceptions, performance by the other party of its obligations under the Merger Agreement and (iii) the absence of any material adverse effect on the other party, as defined in the Merger Agreement. Additional closing conditions to the Merger include that in the event the NYSE American determines that the Merger constitutes, or will constitute, a “back-door listing” / “reverse merger”, Camber (and its common stock) is required to qualify for initial listing on the NYSE American, pursuant to the applicable guidance and requirements of the NYSE as of the Effective Time. The Merger Agreement can be terminated (i) at any time with the mutual consent of the parties; (ii) by either Camber or Company 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 Camber if the Merger shall not have been consummated on or before August 1, 2021; (iv) by Camber or Company, 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 Camber if Company is unable to obtain the affirmative vote of its stockholders for approval of the Merger; (vi) by Company if Camber is unable to obtain the affirmative vote of its stockholders required pursuant to the terms of the Merger Agreement; and (vii) by Company or Camber if there is a willful breach of the Merger Agreement by the other party thereto. The Merger Agreement contains customary indemnification obligations of the parties and representations and warranties. The Merger has not been completed. As of the date of filing this report, neither Viking or Camber has advised of its intention to terminate the Merger Agreement. April 23, 2021 Transaction On or about April 23, 2021, Camber (i) borrowed $2,500,000 from an institutional investor; (ii) issued the investor a promissory note in the principal amount of $2,500,000, accruing interest at the rate of 10% per annum and maturing December 11, 2022 (the “Third 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. Viking entered into a Guaranty Agreement, guaranteeing repayment of the Third Camber Investor Note. July 9, 2021 Transaction: Effective July 9, 2021, Camber and the institutional investor executed amendments to each of the First Camber Investor Note, the Second Camber Investor Note and the Third Camber Investor Note (collectively, the “Notes”), pursuant to which (i) the Maturity Date of each of the Notes was extended from December 11, 2022, to January 1, 2024; and (ii) the Investor is permitted to convert amounts owing under the Notes into shares of common stock of Camber at a fixed price of $1.25 per share, subject to beneficial ownership limitations. July 29, 2021 Transaction: On July 29, 2021, the Company entered into a Securities Purchase Agreement with Camber, pursuant to which Camber acquired an additional 27,500,00 shares of Viking common stock for an aggregate purchase price of $11,000,000. As a result, Camber’s ownership increased as of such date to approximately 73% of the issued and outstanding shares of Viking common stock. Camber’s Series C Preferred Share Designation The Certificate of Designation(s) (the “COD”) regarding Camber’s Series C Convertible Preferred Shares requires, among other things, Camber to: (i) timely file with the Securities and Exchange Commission all reports required to pursuant to the Exchange Act (the “Reporting Requirement”); and (ii) maintain a sufficient share reserve with respect to the common shares to which the preferred shares may be converted (“Share Reserve Requirement”). Any breach under the COD is also a default under the Notes. Camber is not currently in compliance with the Reporting Requirement or the Share Reserve Requirement. The institutional investor has agreed not to claim against Camber for any breaches or defaults provided the Reporting Requirement and the Share Reserve Requirement are satisfied by November 19, 2021 and December 31, 2021, respectively. If Camber fails to satisfy such requirements Viking may be called upon to honor its obligations under the Guaranty and Security Agreements executed by Viking in favor of the institutional investor with respect to the Notes. Note 2Company Overview and Operations Viking Energy Group, Inc. and subsidiaries is an energy company, targeting opportunities in the power generation, clean energy and resource sectors. Through its 60.5 % majority-owned subsidiary, Simson-Maxwell Ltd. (“Simson-Maxwell”), the Company provides power generation products, services and custom energy solutions to commercial and industrial clients. Through other wholly-owned subsidiaries, the Company is engaged in petroleum exploration and production and the sale of crude oil, natural gas and natural gas liquids. Additionally, the Company recently 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 Company intends to sell, lease, and sub-license the ESG Clean Energy System to third parties using, among others, Simson-Maxwell’s existing distribution channels, and 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. The following overview provides a background related to various operations and acquisition efforts over the last several years: Oil & Gas Acquisitions On December 22, 2017, the Company completed an acquisition of 100% of the membership interests of Petrodome Energy, LLC (“Petrodome”), a privately-owned company, with working interests in multiple oil and gas fields across Texas, Louisiana and Mississippi, comprising approximately 11,700 acres. As a part of this acquisition, the Company retained an operational office and staff in Houston, Texas, which provided the Company the capability of operating many of its own wells internally. This expertise has since been utilized to evaluate potential oil and gas acquisitions, evaluate the management of the Company’s oil and gas assets, and evaluate possible drilling prospects. On May 10, 2019, Petrodome Louisiana Pipeline LLC (“Petrodome LA”), a subsidiary of Petrodome, acquired a majority working interest in 6 gas wells (including 2 producing gas wells), 1 producing oil well and 1 salt water disposal well located in the East Mud Lake Field in Cameron Parish, Louisiana, with leases to mineral rights (oil and gas) concerning approximately 765 acres. Viking’s petroleum operations are focused on the acquisition Oil and Gas Acquisitions & Disposals On December 28, 2018, the Company, On February 3, 2020, the Company, through its newly formed majority-owned Elysium Energy Holdings, LLC subsidiary (“Elysium Energy Holdings”), acquired interests in oil and gas properties located in Texas and Louisiana, which included leases, working interests, and over-riding royalty interests in oil and gas properties in Texas (approximately 72 wells in 11 counties) and Louisiana (approximately 55 wells in 6 parishes), along with associated equipment. On October 12, 2021, the Company transferred all of the membership interests of Elysium Energy Holdings to a third party, and the third party assumed all of the rights and obligations associated with such membership interests, including the debt and derivatives associated with Elysium Energy Holdings and all of its entities. The consideration for the conveyance of the membership interests of Elysium Energy Holdings was the assumption by the third party of all of the rights and obligations associated with Elysium Energy Holdings and all of its entities. The following table provides condensed aggregate financial information as of and for the nine months ended September 30, 2021 and 2020, regarding the entities transferred to third parties during October 2021: September 30, 2021 2020 Total assets Total liabilities Nine months ended September 30, 2021 2020 Revenue Operating expenses Interest expenses Amortization of debt discount Gain (loss) on change in fair value of derivatives Simson-Maxwell Acquisition On August 6, 2021, the Company acquired approximately 60.5% of the issued and outstanding shares of Simson-Maxwell Ltd., a Canadian federal corporation, for $7,958,159 in cash. Simson-Maxwell is a leading manufacturer and supplier of industrial engines, power generation products, services and custom energy solutions. The company integrates innovative technology with superior products to contribute to global energy sustainability. Operating for over 80 years, Simson-Maxwell’s diverse group of employees at seven branch locations service over 4,000 maintenance contracts and assist with satisfying the energy and power-solution demands of the company’s entire customer-base. On August 18, 2021, the Company entered into a license agreement with ESG, a Delaware limited liability company, pursuant to which the Company received (i) an exclusive license to ESG Clean Energy’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. See Note 5 for further information regarding this license agreement. The Company intends to sell, lease, and sub-license the intellectual property to third parties using, among others, Simson-Maxwell’s existing distribution channels, and 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. Note 3Going 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 As of September 30, Management believes it will be able to leverage the expertise and relationships of its operational and technical teams to enhance existing assets and identify new development and acquisition opportunities in order to improve operations. Nonetheless, 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 Note a) Basis of Presentation The accompanying unaudited 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") and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in Viking’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. b) Basis of Consolidation The financial statements presented herein reflect the consolidated financial results of the Company, its wholly owned subsidiaries, Mid-Con Petroleum, LLC, Mid-Con Drilling, LLC, and Mid-Con Development, LLC, which were all formed to provide a base of operations for properties in the Central United States, and Petrodome Energy, LLC, Ichor Holdings, LLC, Ichor Energy, LLC, Ichor Energy (TX), LLC, and Ichor Energy (LA), LLC., 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 shareholders’ 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 Financial Statements The preparation of consolidated financial statements in conformity with 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 impairment of long-lived assets, 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. • Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: 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. • Level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement. Assets and liabilities measured at fair value as of Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Gains (Losses) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Gains (Losses) Financial Assets Commodity Derivative Financial liabilities Commodity Derivative Assets and liabilities measured at fair value as of and for the year ended December 31, Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Gains (Losses) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Gains (Losses) Financial Assets Commodity Derivative Financial liabilities Commodity Derivative The Company has entered into certain commodity derivative instruments containing swaps and collars, which management believes are effective in mitigating commodity price risk associated with a portion of its future monthly natural gas and crude oil production and related cash flows. The Company does not designate its commodities derivative instruments as hedges and therefore does not apply hedge accounting. Changes in fair value of derivative instruments subsequent to the initial measurement are recorded as change in fair value on derivative liability, in other income (expense). The estimated fair value amounts of the Company’s commodity derivative instruments have been determined at discrete points in time based on relevant market information which resulted in the Company classifying such derivatives as Level 2. Although the Company’s commodity derivative instruments are valued using public indices, as well as the Black-Sholes model, the instruments themselves are traded with unrelated counterparties and are not openly traded on an exchange. In a commodities swap agreement, the Company trades the fluctuating market prices of oil or natural gas at specific delivery points over a specified period, for fixed prices. As a producer of oil and natural gas, the Company holds these commodity derivatives to protect the operating revenues and cash flows related to a portion of its future natural gas and crude oil sales from the risk of significant declines in commodity prices, which helps reduce exposure to price risk and improves the likelihood of funding its capital budget. If the price of a commodity rises above what the Company has agreed to receive in the swap agreement, the amount that it agreed to pay the counterparty is expected to be offset by the increased amount it received for its production. The Company has also entered into collar agreements related to oil and gas production with established floors and ceilings. Upon settlement, if the current market price of the commodity is below the floor, the Company receives the difference. Conversely, if the current market price of the commodity is above the ceiling at settlement, the Company pays the excess over the ceiling price. Although the Company is exposed to credit risk to the extent of nonperformance by the counterparties to these derivative contracts, the Company does not anticipate such nonperformance and monitors the credit worthiness of its counterparties on an ongoing basis. The derivative assets were The table below is a summary of the Company’s commodity derivatives as of September 30, Natural Gas Period Average MMBTU per Month Fixed Price per MMBTU Swap Dec 18 to Dec 22 Collar Mar 20 / Aug 22 2.00 / $2.43 Crude Oil Period Average BBL per Month Price per BBL Swap Dec 18 to Dec 22 Collar Feb 20 to Dec 20 45.00 / $54.20 Collar Jan 21 to Dec 21 45.00 / $56.00 Collar Jan 22 to July 22 45.00 / $52.70 Natural Gas Period Average MMBTU per Month Fixed Price per MMBTU Swap Dec-18 to Dec-22 Collar Mar 20 / Aug 22 $2.00 / $2.43 Crude Oil Period Average BBL per Month Price per BBL Swap Dec-18 to Dec- 22 Collar Jan 21 to Dec 21 $45.00 / $56.00 Collar Jan 22 to July 22 $45.00 / $52.70 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. At September 30, Restricted cash in the amount of Pursuant to the Term Loan Credit Agreement to which Ichor Energy, LLC, and its subsidiaries are parties, following March 31, 2019 the company is required at all times to maintain a minimum cash balance of $2,000,000 (the “MLR”). Within 30 days of the end of each quarter, commencing with the quarter ended June 30, 2019, the company is required to pay the lenders, as an additional principal payment on the debt, any cash in excess of (i) the MLR and (ii) any funds necessary for the capital expenditures contemplated to be expended in the next Pursuant to the Term Loan Credit Agreement to which Elysium Energy, LLC and its subsidiaries are parties, all receipts are to be deposited to a lockbox account under the control of the administrative agent, and then subsequently transferred for operations to the company’s bank accounts, all of which are subject to deposit account control agreements. The aggregate amount of unencumbered cash held in any Operating Account is not to be less than $2,500,000 for the period commencing June 30, 2021 through and including the Maturity Date. Commencing with the quarter ended September 30, 2020, the company is required to make mandatory prepayments of principal equal to 75% of Excess Cash Flow as defined in the agreement. Accounts receivable consist of oil and gas receivables. The Company evaluates these accounts receivable for collectability and, when necessary, records allowances for expected unrecoverable amounts. The Company has recorded an allowance for doubtful accounts of $217,057 at September 30, Prepaid expenses represent amounts paid in advance through the issuance of restricted shares of stock for future contractual benefits to be received. These advances are amortized over the life of the contract using the straight-line method. 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. 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: (a) the present value, discounted at 10 percent, and assuming continuation of existing economic conditions, of 1) estimated future gross revenues from proved reserves, which is computed using oil and natural gas prices determined as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month hedging arrangements pursuant to SAB 103, less 2) estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves, plus (b) the cost of properties not being amortized; plus (c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized, net of (d) the related tax effects related to the difference between the book and tax basis of our oil and natural gas properties. 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 accounts for its investment in unconsolidated entities under the equity method of accounting when it (i) owns less than 51% of a controlling interest in the entity or (ii) has the ability to exercise significant influence over the operating and financial policies of the entity. As described in Note 2, during August 2021 the Company acquired a 60.5% interest in Simson-Maxwell. Pursuant to a shareholder agreement in effect as of September 30, 2021, the Company did not have the ability to control the operating and financial policies of the entity as of such date, and as such has accounted for such ownership under the equity method of accounting. The investment is adjusted for its proportionate share of earnings or losses of the entity. For the period from August 6, 2021 (the date acquired) through September 30, 2021 Simson-Maxwell had total revenues of approximately $3.5 million and net income of $78,961. The table below shows the changes in the Investment in Unconsolidated Entities for the nine months ended September 30, 2021: Carrying amount - December 31, 2020 Investment in Simson-Maxwell Proportionate share of Simson-Maxwell earnings Carrying amount - September 30, 2021 On October 18, 2021, the shareholder agreement was amended, resulting in Viking having control over Simson-Maxwell. As a result, commencing with the date of the amendment, the Company will include Simson-Maxwell in its consolidation. m) Intangible assets Intangible assets represent amounts capitalized for the Company’s license agreement with ESG Clean Energy, LLC as described in Notes 2 and 5. This asset is amortized on a straight-line basis over the remaining life of the related patents being licensed, which is approximately 16 years. The Company reviews these intangible assets 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 undiscounted 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. n) Income (loss) per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding and adjusted by any effects of warrants and options outstanding during the period, if dilutive. For the 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 revenue by source for the three and nine months ended September 30, Three months ended Nine months ended Three months ended Nine months ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 2021 2020 2021 2020 Oil Natural gas and natural gas liquids Settlement on Hedge Contracts Other 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. 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. The following table represents stock warrant activity as of and for the nine months ended September 30, Number Weighted Weighted Aggregate Number Weighted Weighted Aggregate Warrants Outstanding – December 31, 2019 5.6 years Warrants Outstanding – December 31, 2020 5.22 years Granted .57 years Exercised Forfeited/expired/cancelled Warrants Outstanding – September 30, 2020 4.8 years Warrants Outstanding – September 30, 2021 4.99 years Outstanding Exercisable – September 30, 2020 4.8 years Outstanding Exercisable – September 30, 2021 5.22 years The Company 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 fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There is no impairment of long-lived assets during the 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 nine months ended September 30, Nine months ended September 30, 2020 Nine months ended September 30, 2021 Asset retirement obligation – beginning Oil and gas purchases Revisions ARO settlements Accretion expense Asset retirement obligation – ending The Company records a liability for cash collected from oil and gas sales that have not been distributed. The amounts get distributed in accordance with the working interests of the respective owners. The Company has evaluated all subsequent events from September 30, Note Provisional Fair Value of Assets and Liabilities Oil and Gas Properties Asset retirement obligations assumed Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Revenues Net loss Net loss per share The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the nine months ended September 30, December 31, 2019 Adjustments Impairments September 30, 2020 December 31, 2020 Adjustments Impairments September 30, 2021 Proved developed producing oil and gas properties United States cost center Accumulated depreciation, depletion and amortization Proved developed producing oil and gas properties, net 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 Total Oil and Gas Properties, Net The Company’s intangible asset consists of costs associated with securing in August 2021 an Exclusive Intellectual Property License Agreement with ESG Clean Energy, LLC (“ESG”), pursuant to which the Company In consideration of the licenses, the Company paid an up-front royalty of $1,500,000 and the Company is 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 net revenues of Viking 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. Viking’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: Minimum Payments for that Year Year two Year three Year four Year five Year six Year seven Year eight Year nine and after 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’s intangible assets consisted of the following at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 ESG Clean Energy License Accumulated amortization The Company recognized amortization expense of $36,367 for the three and nine months ended September 30. 2021. The estimated future amortization expense for each of the next five years is $304,465 per year. Note The Company’s CEO and director, James Doris, The Company’s CFO, Frank W. Barker, Jr., renders professional services to the Company through FWB Consulting, Inc., an affiliate of Mr. Barker’s. As of September 30, Note (a) Preferred Stock The Company is authorized to issue 5,000,000 shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”), of which 50,000 have been designated as Series C Preferred Stock (the “Series C Preferred Stock”). As of September 30, 2021 there were 28,092 shares of Series C Preferred Stock issued and outstanding. Pursuant to the amended Certification of Designation of the Series C Preferred Stock filed on (b) Common Stock On During the nine months ended September 30, 2021, the Company · · · · · · During the nine months ended September 30, 2020, the Company issued shares of its common stock as follows: · · · · · · · · Note Long term debt September 30, 2020 December 31, 2019 Long-term debt: During June through December of 2018, the Company borrowed $9,459,750 from private lenders, and exchanged $5,514,000 of amounts due lenders from prior borrowings as well as $191,250 in accrued interest, pursuant to a 10% Secured Promissory Note with 50% of the principal convertible into the Company’s common stock at $0.20 per share, all principal and accrued interest payable on the maturity date of December 31, 2020 (“the 2018 Convertible Notes”). The notes are secured by the Company’s membership interests in its subsidiaries, Petrodome Energy, LLC, Mid-Con Petroleum, LLC, Mid-Con Drilling, LLC, and Mid-Con Development, LLC. The balance shown is net of unamortized discount of $0 at September 30, 2020 and $2,086,008 at December 31, 2019. A majority of these lenders are also Viking shareholders. On June 13, 2018, the Company borrowed $12,400,000 pursuant to a revolving line of credit facility with a maximum principal amount of $30,000,000 from Crossfirst Bank, bearing interest 1.5% above a base rate equal to the prime rate of interest published by the Wall Street Journal. Principal is payable at $100,000 monthly through the maturity date of May 10, 2021, at which time all remaining unpaid principal and accrued interest is due. The loan is secured by a mortgage on all of the oil and gas leases of Petrodome Energy, LLC and its subsidiaries, a security agreement covering all of Petrodome Energy, LLC’s assets and a guaranty by Viking Energy Group, Inc. The balance shown is net of unamortized discount of $0 at September 30, 2020 and $34,411 at December 31, 2019 On December 28, 2018, to facilitate the acquisition of certain oil and gas assets, the Company, through its subsidiary, Ichor Energy LLC, entered into a Term Loan Credit Agreement with various lenders represented by ABC Funding, LLC as administrative agent. The agreement provided for a total loan amount of $63,592,000, bearing interest at a rate per annum equal to the greater of (i) a floating rate of interest equal to 10% plus LIBOR, and (ii) a fixed rate of interest equal to 12%, payable monthly on the last day of each calendar month, commencing January 31, 2019. Principal payments are made quarterly at 1.25% of the initial loan amount, commencing on the last business day of the fiscal quarter ending June 30, 2019. On June 3, 2020, the Term Loan Credit Agreement was amended to reduce the permitted Asset Coverage Ratio for the fiscal quarters ending March 31, 2020, June 30, 2020 and September 30, 2020 from 1.35:1.00 to 1.15:1.00. Additionally, the First Amendment revises the interest rate under the Term Loan for the period from May 16, 2020 a per annum interest rate (i) if, as of the last day of the immediately preceding fiscal quarter, the Asset Coverage Ratio is less than 1.50:1.00, then the interest rate is the greater of (x) a floating rate of interest equal to 11.00% plus LIBOR, and (y) a fixed rate of interest equal to 13.00%, or (ii) if, as of the last day of the immediately preceding fiscal quarter, the Asset Coverage Ratio is greater than or equal to 1.50:1.00, then the interest rate is the greater of (x) a floating rate of interest equal to 10.50% plus LIBOR and (y) a fixed rate of interest equal to 12.50%. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the Term Loan, approximately $12,000,000 of oil and gas development projects approved by the lender, and distributions to the Company of $65,000 per month for general and administrative expenses, and a quarterly tax distribution at the current statutory rates. Within 30 days of the end of each quarter, commencing with the quarter ended June 30, 2019, Ichor Energy, LLC is required to pay, as an additional principal payment on the debt, any cash in excess of the MLR and the APOD Capex Amount. To the extent not previously paid, all loans under the Loan Agreement shall be due and payable on the December 28, 2023 (the Maturity Date). The loan agreement contains prepayment penalties through December 28, 2021 and “make-whole” obligations through December 28, 2020. In addition, at maturity (or sooner under certain circumstances which include prepayment of the loan or sale of Ichor Energy, LLC) the lenders will receive a payment approximating 7% of the fair value of Ichor Energy, LLC at that time; such amount is not estimable. Obligations under the loan agreement are secured by mortgages on the oil and gas leases of Ichor Energy, LLC and all of its subsidiaries, a security agreement covering all assets of Ichor Energy, LLC, and a pledge by Ichor Holdings of all if the membership interests in Ichor Energy LLC. The balance shown is net of unamortized discount of $2,848,230 at September 30, 2020 and $3,507,364 at December 31, 2019. September 30, 2021 December 31, 2020 Long-term debt: On June 13, 2018, the Company borrowed $12,400,000 pursuant to a revolving line of credit facility with a maximum principal amount of $30,000,000 from Crossfirst Bank, bearing interest 1.5% above a base rate equal to the prime rate of interest published by the Wall Street Journal. Principal is payable at $100,000 monthly through the maturity date of January 5, 2022, at which time all remaining unpaid principal and accrued interest is due. The loan is secured by a mortgage on all of the oil and gas leases of Petrodome Energy, LLC and its subsidiaries, a security agreement covering all of Petrodome Energy, LLC’s assets and a guaranty by Viking Energy Group, Inc. The balance shown is net of unamortized discount of $0 at September 30, 2021 and at December 31, 2020 On December 28, 2018, to facilitate the acquisition of certain oil and gas assets, the Company, through its subsidiary, Ichor Energy LLC, entered into a Term Loan Credit Agreement with various lenders represented by ABC Funding, LLC as administrative agent. The agreement provided for a total loan amount of $63,592,000, bearing interest at a rate per annum equal to the greater of (i) a floating rate of interest equal to 10% plus LIBOR, and (ii) a fixed rate of interest equal to 12%, payable monthly on the last day of each calendar month, commencing January 31, 2019. Principal payments are made quarterly at 1.25% of the initial loan amount, commencing on the last business day of the fiscal quarter ending June 30, 2019. On June 3, 2020, the Term Loan Credit Agreement was amended to reduce the permitted Asset Coverage Ratio for the fiscal quarters ending March 31, 2020, June 30, 2020 and September 30, 2020 from 1.35:1.00 to 1.15:1.00. Additionally, the First Amendment revises the interest rate under the Term Loan for the period from May 16, 2020 a per annum interest rate (i) if, as of the last day of the immediately preceding fiscal quarter, the Asset Coverage Ratio is less than 1.50:1.00, then the interest rate is the greater of (x) a floating rate of interest equal to 11.00% plus LIBOR, and (y) a fixed rate of interest equal to 13.00%, or (ii) if, as of the last day of the immediately preceding fiscal quarter, the Asset Coverage Ratio is greater than or equal to 1.50:1.00, then the interest rate is the greater of (x) a floating rate of interest equal to 10.50% plus LIBOR and (y) a fixed rate of interest equal to 12.50%. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the Term Loan, approximately $12,000,000 of oil and gas development projects approved by the lender, and distributions to the Company of $65,000 per month for general and administrative expenses, and a quarterly tax distribution at the current statutory rates. Within 30 days of the end of each quarter, commencing with the quarter ended June 30, 2019, Ichor Energy, LLC is required to pay, as an additional principal payment on the debt, any cash in excess of the MLR and the APOD Capex Amount. To the extent not previously paid, all loans under the Loan Agreement shall be due and payable on the December 28, 2023 (the Maturity Date). The loan agreement contains prepayment penalties through December 28, 2021 and “make-whole” obligations through December 28, 2020. In addition, at maturity (or sooner under certain circumstances which include prepayment of the loan or sale of Ichor Energy, LLC) the lenders will receive a payment approximating 7% of the fair value of Ichor Energy, LLC at that time; such amount is not estimable. Obligations under the loan agreement are secured by mortgages on the oil and gas leases of Ichor Energy, LLC and all of its subsidiaries, a security agreement covering all assets of Ichor Energy, LLC, and a pledge by Ichor Holdings of all if the membership interests in Ichor Energy LLC. The balance shown is net of unamortized discount of $1,970,186 at September 30, 2021 and $2,626,915 at December 31, 2020. On October 5, 2021 this debt was transferred to a third party as discussed in Note 2. On December 28, 2018, the Company issued a 10% secured promissory note in the amount of $23,777,948, payable to RPM Investments, secured by 100% of the membership interests of Ichor Energy Holdings, LLC. All accrued interest and unpaid principal were due on the earlier of (i) the date the Company or one of its affiliates completes an acquisition with one or more of the sellers for a purchase price equal to or greater than $50,000,000 or (ii) January 31, 2020. This note was secured by a pledge of all of the membership interests of Viking’s wholly-owned subsidiary, Ichor Energy Holdings, LLC. On February 3, 2020 in connection with an acquisition of oil and gas interests this note (including all unpaid accrued interest of $2,625,346) was settled and replaced with a new note. On February 14, 2019, the Company executed a promissory note payable to CrossFirst Bank in the amount of $56,760 for the purchase of transportation equipment, bearing interest at 7.15%, payable in 60 installments of $1,130, secured by a vehicle, with a maturity date of February 14, 2024. On July 24, 2019, the Company through its wholly owned subsidiary, Mid-Con Petroleum, LLC, executed a promissory note payable to Cornerstone Bank in the amount of $2,241,758, bearing interest at 6%, payable interest only for the first year, then payable in 59 installments of $43,438, with a final payment due on a maturity date of July 24, 2025. The note is secured by a first mortgage on all of the assets of Mid-Con Petroleum, LLC and a guarantee of payment by Viking Energy Group, Inc. The balance shown is net of unamortized discount of $22,959 at September 30, 2020 and $26,538 at December 31, 2019. On July 24, 2019, the Company through its wholly owned subsidiary, Mid-Con Drilling, LLC, executed a promissory note payable to Cornerstone Bank in the amount of $1,109,341, bearing interest at 6%, payable interest only for the first year, then payable in 59 installments of $21,495, with a final payment due on a maturity date of July 24, 2025. The note is secured by a first mortgage on all of the assets of Mid-Con Drilling, LLC and a guarantee of payment by Viking Energy Group, Inc. The balance shown is net of unamortized discount of $22,896 at September 30, 2020 and $26,464 at December 31, 2019. On February 3, 2020, the Company executed a promissory note payable to Camber Energy, Inc. in the amount of $5,000,000, bearing interest at 10.5% payable quarterly with a maturity date of February 3, 2022. On June 26, 2020, the Company executed a second promissory note payable to Camber Energy, Inc. in the amount of $4,200,000, also bearing interest at 10.5% payable quarterly with a maturity date of February 3, 2022. Both of these notes are generally convertible into common shares of Viking at a conversion price of $0.24 per share subject to certain restrictions. The terms of the notes provide Camber with a security interest (subject to certain prerequisites) in Viking’s 70% ownership of Elysium Holdings, LLC and Viking’s 100% ownership of Ichor Energy Holdings, LLC. Additionally, Viking provided Camber a junior security interest in the membership or common stock of ownership interests of all of Viking’s other existing and future, directly-owned or majority-owned subsidiaries. On February14, 2019, the Company executed a promissory note payable to CrossFirst Bank in the amount of $56,760 for the purchase of transportation equipment, bearing interest at 7.15%, payable in 60 installments of $1,130, secured by a vehicle, with a maturity date of February 14, 2024. On July 24, 2019, the Company through its wholly owned subsidiary, Mid-Con Petroleum, LLC, executed a promissory note payable to Cornerstone Bank 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 $43,438, with a final payment due on a maturity date of July 24, 2025. The note is secured by a first mortgage on all of the assets of Mid-Con Petroleum, LLC and a guarantee of payment by Viking Energy Group, Inc. The balance shown is net of unamortized discount of $18,192 at September 30, 2021 and $21,758 at December 31, 2020. On July 24, 2019, the Company through its wholly owned subsidiary, Mid-Con Drilling, LLC, executed a promissory note payable to Cornerstone Bank 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 $21,495, with a final payment due on a maturity date of July 24, 2025. The note is secured by a first mortgage on all of the assets of Mid-Con Drilling, LLC and a guarantee of payment by Viking Energy Group, Inc. The balance shown is net of unamortized discount of $18,142 at September 30, 2021 and $21,697 at December 31, 2020. On February 3, 2020, in connection with an acquisition of oil and gas interests, the Company executed a secured promissory note in the amount of $20,869,218, payable to EMC Capital Partners, LLC, subject to revision to the extent of any post-closing adjustment payments in connection with the acquisition. Such payments were to be applied to reduce the balance owing under the promissory note. During April 2020 the Company received post-closing adjustment payments in the amount of $5,277,589 which were applied to the note balance. This note replaced the secured promissory dated December 18, 2018 in favor of RPM Investments. This note bears interest at 10% and is payable along with the full amount of principal on June 11, 2021 and is secured by a pledge of all of the membership interests of Viking’s wholly-owned subsidiary, Ichor Energy Holdings, LLC. On January 8, 2021, as discussed in Note 1, this debt was extinguished by the issuance of equity and was therefore classified as noncurrent on the consolidated balance sheet at December 31, 2020. On February 3, 2020, to facilitate the acquisition of certain oil and gas assets, the Company, through one of its subsidiaries, Elysium Energy LLC, entered into a Term Loan Credit Agreement with various lenders represented by 405 Woodbine, LLC as administrative agent. The agreement provides for a total loan amount of $35,000,000 at a 4.0% original issue discount. bearing interest at the prime rate plus seven and three quarters percent (7.75%) payable monthly. Principal payments are due beginning on May 1, 2020, and on each month thereafter at one percent (1%) of the then-outstanding balance, and to the extent not paid on the maturity date of August 3, 2022. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the Term Loan, oil and gas development projects approved by the lender, and a cost allocation of $150,000 per month for general and administrative expenses of the Company. The Borrower shall have the right at any time to prepay all or a portion of the Loan Balance. The loan agreement contains a prepayment penalty of 5% of any voluntary prepayment of principal through February 3, 2021 and 3% of any voluntary prepayment of principal on or between February 3, 2021 and February 3, 2022. Commencing with the quarter ended September 30, 2020 the Borrower is required to make mandatory prepayments of principal equal to 75% of Excess Cash Flow as defined in the agreement without any prepayment penalty fees. The loans are secured by mortgages on the oil and gas leases of Elysium Energy LLC and its subsidiaries, a security agreement covering all assets of Elysium and its subsidiaries, and a pledge of all of Elysium’s membership interests. The balance shown is net of unamortized discount of $1,666,324 at September 30, 2021 and $3,148,104 at December 31, 2020. On October 12, 2021 this debt was transferred to a third party as discussed in Note 2. �� 29,065,540 30,493,630 On or about February 18, 2020, the Company commenced an offering of securities consisting of a subordinated, secured, convertible debt instrument with equity features. The notes bear interest at 12%, payable quarterly, contain a conversion entitlement to convert all or a portion of the amount outstanding into common shares of the Company at $1.35 per share, and provide for the issuance of 16,667 common shares of the Company for every $100,000 exchanged or advanced. As security, the holders received, pari passu with all other holders, a pledge of the Company’s membership interest in Elysium Energy Holdings, LLC, and, as soon as the Company’s obligations to EMC Capital Partners, LLC were satisfied, a pledge of the Company’s membership interest in Ichor Energy Holdings, LLC. These security interests were released by the collateral agent at the time of the transfer of the membership interests as described in Note 2. Any unpaid principal and interest are due on the maturity date of February 11, 2022. During September 2021, the Company offered the noteholders an amended conversion price under these notes of $0.75 per share for conversions prior to October 31, 2021; $1.00 per share for conversions prior to November 30, 2021; $1.10 per share for conversions prior to December 31, 2021; $1.20 per share for conversions prior to January 31, 2022; and back to $1.35 for any conversions thereafter. During September 2021, noteholders converted debt aggregating $1,952,354 into 2,603,139 shares of common stock valued at $3,800,164 pursuant to the amended conversion prices. The balance shown is net of unamortized discount of $385,170 as of September 30, 2021 and $1,504,868 as of December 31, 2020. On April 18, 2020, the Company entered into an unsecured promissory note with Crossfirst Bank in the principal amount of $149,600 related to the CARES Act Payroll Protection Program. This note is fully guaranteed by the Small Business Administration and may be forgivable provided that certain criteria are met. The interest rate on the loan is 1%, and the note has a two-year maturity. The loan was forgiven on August 23, 2021. On July 1, 2020 the Company received a loan of $150,000 from the U.S. Small Business Administration. The loan bears interest at 3.75%, and is payable in monthly installments of at $731 monthly beginning 12 months from the date of the note, with the remaining principal and accrued interest due 30 years from the date of the note. Total long-term debt and other short-term borrowings Less current portion On February 3, 2020, in connection with an acquisition of oil and gas interests, the Company executed a secured promissory note in the amount of $20,869,218, payable to EMC Capital Partners, LLC, subject to revision to the extent of any post-closing adjustment payments in connection with the acquisition. Such payments were to be applied to reduce the balance owing under the promissory note. During April 2020 the Company received post-closing adjustment payments in the amount of $5,277,589 which were applied to the note balance. This note replaced the secured promissory dated December 18, 2018 in favor of RPM Investments. This note bears interest at 10% and is payable along with the full amount of principal on June 11, 2021 and is secured by a pledge of all of the membership interests of Viking’s wholly-owned subsidiary, Ichor Energy Holdings, LLC. On February 3, 2020, to facilitate the acquisition of certain oil and gas assets, the Company, through one of its subsidiaries, Elysium Energy LLC, entered into a Term Loan Credit Agreement with various lenders represented by 405 Woodbine, LLC as administrative agent. The agreement provides for a total loan amount of $35,000,000 at a 4.0% original issue discount. bearing interest at the prime rate plus seven and three quarters percent (7.75%) payable monthly. Principal payments are due beginning on May 1, 2020, and on each month thereafter at one percent (1%) of the then-outstanding balance, and to the extent not paid on the maturity date of August 3, 2022. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the Term Loan, oil and gas development projects approved by the lender, and a cost allocation of $150,000 per month for general and administrative expenses of the Company. The Borrower shall have the right at any time to prepay all or a portion of the Loan Balance. The loan agreement contains a prepayment penalty of 5% of any voluntary prepayment of principal through February 3, 2021 and 3% of any voluntary prepayment of principal on or between February 3, 2021 and February 3, 2022. Commencing with the quarter ended September 30, 2020 the Borrower is required to make mandatory prepayments of principal equal to 75% of Excess Cash Flow as defined in the agreement without any prepayment penalty fees. The loans are secured by mortgages on the oil and gas leases of Elysium Energy LLC and its subsidiaries, a security agreement covering all assets of Elysium and its subsidiaries, and a pledge of all of Elysium’s membership interests. The balance shown is net of unamortized discount of $3,647,458 at September 30, 2020. On or about February 18, 2020, the Company commenced an offering of securities consisting of a subordinated, secured, convertible debt instrument with equity features; during the nine months ended September 30, 2020, the Company borrowed $2,780,554 under this offering from private lenders. The notes bear interest at 12%, payable quarterly, contain a conversion entitlement to convert all or a portion of the amount outstanding into common shares of the Company at $0.175 per share, and provide for the issuance of 150,000 common shares of the Company for every $100,000 exchanged or advanced. As security, the holders received, pari passu with all other holders, a pledge of the Company’s membership interest in Elysium Energy Holdings, LLC, and, as soon as the Company’s obligations to EMC Capital Partners, LLC are satisfied, a pledge of the Company’s membership interest in Ichor Energy Holdings, LLC. Any unpaid principal and interest is due on the maturity date of February 11, 2022. The balance shown is net of unamortized discount of $1,665,130 as of September 30, 2020. On April 18, 2020, the Company entered into an unsecured promissory note with Crossfirst Bank in the principal amount of $149,600 related to the CARES Act Payroll Protection Program. This note is fully guaranteed by the Small Business Administration and may be forgivable provided that certain criteria are met. The interest rate on the loan is 1%, and the note has a two-year maturity. The Company is required to make payments on the remaining principal of the note net of any loan forgiveness beginning November 18, 2020. On July 1, 2020 the Company received a loan of $150,000 from the U.S. Small Business Administration. The loan bears interest at 3.75%, and is payable in monthly installments of at $731 monthly beginning 12 months from the date of the note, with the remaining principal and accrued interest due 30 years from the date of the note. Total long-term debt and other short-term borrowings Less current portion Principal maturities of long-term debt for the next five years and thereafter are as follows: Twelve-month period ended September 30, Principal Unamortized Discount Net Principal Unamortized Discount Net 2021 2022 2023 2024 2025 2026 Thereafter Loan Covenants Pursuant to the terms of the Revolving Line of Credit Facility executed on June 13, 2018 with CrossFirst Bank for a maximum principal amount of $30,000,000, the Company is required to provide on a quarterly basis, certain information to the Bank relative to operational performance of the Borrowers, to include internally prepared consolidated financial statements, hedge reports, and a compliance certificate. At September 30, Pursuant to the terms of the Term Loan Credit Agreement executed on December 28, 2018 with various lenders in the initial amount of Pursuant to the terms of the Term Loan Credit Agreement executed on February 3, 2020 with various lenders in the initial amount of $36,458,333, the Company is required to periodically provide the lenders certain information (including restrictive financial ratios) regarding the financial and operational performance of the related assets, accompanied by a compliance certificate. The Company Note Office lease In April 2018, the Company’s subsidiary, Petrodome Energy, LLC entered into a 66-month lease for 4,147 square feet of office space for the Company’s 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 Legal matters From time to time the Company may be a party to litigation involving commercial claims against the Company. Management believes that the ultimate resolution of these matters will not have a material effect on the Company’s financial position or results of operations. In April of 2019, the staff (the “Staff”) of the SEC’s Division of Enforcement notified the Company that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against the Company, as well as against its CEO and its CFO, for alleged violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder during the period from early 2014 through late 2016. The Staff’s notice is not a formal allegation or a finding of wrongdoing by the Company, and the Company has communicated with the Staff regarding its preliminary determination. The Company believes it has adequate defenses and intends to vigorously defend any enforcement action that may be initiated by the SEC. Note During October 2021, the Company issued During October During October 2021, a holder of a convertible promissory note in the amount of $75,000 converted $50,000 of the principal into 66,667 shares of common stock. During October 2021, the Company ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis in conjunction with the financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. In preparing the management’s discussion and analysis, the registrant presumes that you have read or have access to the discussion and analysis for the preceding fiscal year. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This document includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 or the Reform Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earning, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions of performance; and statements of belief; and any statements of assumptions underlying any of the foregoing. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: our ability to raise capital and the terms thereof; ability to gain an adequate player base to generate the expected revenue; competition with established gaming websites; adverse changes in government regulations or polices; and other factors referenced in this Form 10-Q. The use in this Form 10-Q of such words as “believes”, “plans”, “anticipates”, “expects”, “intends”, and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements present the Company’s estimates and assumptions only as of the date of this Report. Except for the Company’s ongoing obligation to disclose material information as required by the federal securities laws, the Company does not intend, and undertakes no obligation, to update any forward-looking statements. Although the Company believes that the expectations reflected in any of the forward-looking statements are reasonable, actual results could differ materially from those projected or assumed or any of the Company’s forward-looking statements. The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. PLAN OF OPERATIONS Company Overview Viking Energy Group, Inc. (i) Power Generation & Solutions; (ii) Clean Energy; and (iii) Natural Resources. Power Generation & Solutions: Through its approximately 60.5% majority-owned subsidiary, Simson-Maxwell Ltd. (“Simson-Maxwell”), the Company provides power generation products, services and custom energy solutions to commercial and industrial clients. Clean Energy: The Company recently 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 Company intends to sell, lease, sub-license the ESG Clean Energy System to third parties using, among others, Simson-Maxwell’s existing distribution channels, and 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. The Company is also exploring other renewable energy-related opportunities and/or technologies, which are currently generating revenue, or have a reasonable prospect of Natural Resources: Through wholly-owned subsidiaries, Viking owns interests in oil and The following overview provides a background Previous Acquisitions: The Company’s previous acquisitions in the oil & gas sector include the following: · · · · Disposals of Oil & Gas Properties On October 5, 2021, the Company transferred all of membership interests of Ichor Energy Holdings to a third party, and the third party assumed all of the rights and obligations associated with such membership interests, including the debt associated with Ichor Energy Holdings. On October 12, 2021, the Company transferred all of the membership interests of Other Acquisitions Simson-Maxwell Acquisition On ESG Clean Energy License On The Company intends to sell, lease, sub-license the Intellectual Property to third parties using, among others, Simson-Maxwell’s existing distribution channels, and the Company may also utilize the ESG Clean Energy System for its own account, whether in Potential Merger with Camber Energy, Inc. On February Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share: (i) of common stock, par value $0.001 per share, of the Company (the “Viking Common Stock”) issued and outstanding immediately prior to the Effective Time, other than shares owned by Camber, At the Effective Time, each outstanding Company 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 The Merger Agreement provides, among other things, that The Merger Agreement also provides that, during the period from the date of the Merger Agreement until the Effective Time, each of Camber and 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. Company 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. Camber 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 “Share Issuance”). The completion of the Merger is subject to Additional closing conditions to the Merger include The Merger Agreement can be terminated The Merger deadline of August 1, 2021, has passed, but the Merger Agreement Going Concern Qualification As of September 30, As described in Note 2, in October 2021 the Company transferred its interest in each of Ichor Energy Holdings and Elysium Energy Holdings to third parties. As a result, the Company no longer has the assets and liabilities (including debt and derivatives mentioned in the above paragraph) within such entities. Management believes it will be able to leverage the expertise and relationships of its operational and technical teams to enhance existing assets and identify new development and acquisition opportunities in order to improve operations. RESULTS OF CONTINUING OPERATIONS The following discussion of the financial condition and results of operation of the Company for the three and nine months ended September 30, Liquidity and Capital Resources As of September 30, Restricted cash in the amount of Pursuant to the Term Loan Credit Agreement to which Pursuant to the Term Loan Credit Agreement to which Three months ended September 30, Revenue The Company had gross revenues of $9,680,661 for the three months ended September 30, 2021, as compared to $10,149,387 for the three months ended September 30, 2020, Expenses The Company’s operating expenses Income (Loss) from Operations The Company generated an income from operations for the three months ended September 30, 2021 of $413,664, when compared to loss from operations of $(4,460,448) for the three months ended September 30, 2020. Other Income (Expense) The Company had other expense of $(9,492,979) for the three months ended September 30, 2021, as compared to other expense of $(13,574,359) for the three months ended September 30, 2020. Interest expense decreased by $2,147,465 to $3,180,460 for the three-month period ended September 30, 2021 as compared to $5,327,925 for the three months ended September 30, 2020 due to a reduction in long term debt resulting from the transactions with Camber and EMC Capital Partners, LLC, described in Note 1 to the Company’s consolidated financial statements. As a result of the fluctuating commodities markets, changes in the fair value of our commodity derivatives reflected a loss to the consolidated financial statements of $(3,425,097) for the three-month period ended September 30, 2021 as compared to a loss of $(5,018,338) for the three month-period ended September 30, 2020. Net Income (Loss) The Company had a net loss of $(9,079,315) during the three-month period ended September 30, 2021, compared with a net loss of $(17,006,494) for the three-month period ended September 30, 2020, a $7,927,179 difference primarily as a result of the items discussed above. Nine months ended September 30, 2021 compared to the Nine months ended September 30, 2020 Revenue The Company had gross revenues of $30,871,373 for the nine months ended September 30, 2021, as compared to $31,487,202 for the nine months ended September 30, 2020. This consistency of revenue when comparing the two periods is primarily a result of the protection provided by the Company’s hedge contracts on oil and gas production as well as recovering oil and gas market prices as compared to the sharp decline that occurred in 2020 during the same period. Expenses The Company’s operating expenses decreased by $4,854,611 to $26,904,123 for the nine-month period ended September 30, 2021, from $31,758,734 in the corresponding prior period. Lease operating costs increased by $1,715,654 to $14,863,294 for the nine-month period ended September 30, 2021 as compared to $13,147,640 for the nine-month period ended September 30, 2020, due to additional wells purchased by the Company in February 2020 and increased workover costs associated with underperforming and shut-in wells. DD&A expense decreased by $1,827,040 to $6,844,553 for the nine-month period ended September 30,2021 as compared to $8,671,593 for the period ended September 30, 2020 primarily as a result of the impairment charge for the year ended December 31, 2020 decreasing the amortization base used for the calculation. General and administrative expenses reflected an increase of $895,471 to 4,287,453, when compared to $3,391,982 in the corresponding prior period. Income (loss) from Operations The Company generated Other Income (Expense) The Company had other expense of Net Income (Loss) The Company had a net loss of CRITICAL ACCOUNTING POLICIES AND ESTIMATES We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our financial statements, as well as the sufficiency of the disclosures pertaining to our accounting policies in the footnotes accompanying our financial statements. Described below are the most significant policies we apply in preparing our consolidated financial statements, some of which are subject to alternative treatments under GAAP. We also describe the most significant estimates and assumptions we make in applying these policies. See “Note 2 - Summary of Significant Accounting Policies” to our consolidated financial statements. 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. 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: i. the quality and quantity of available data; ii. the the iv. 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 depreciation, depletion, amortization and accretion (“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. Commodity derivatives The Company does not designate its commodities derivative instruments as hedges and therefore does not apply hedge accounting. Changes in fair value of derivative instruments subsequent to the initial measurement are recorded as change in fair value on derivative liability, in other income (expense). The estimated fair value amounts of the Company’s commodity derivative instruments have been determined at discrete points in time based on relevant market information which resulted in the Company classifying such derivatives as Level 2. Although the Company’s commodity derivative instruments are valued using public indices, as well as the Black-Sholes model, the instruments themselves are traded with unrelated counterparties and are not openly traded on an exchange. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item. ITEM 4. CONTROLS AND PROCEDURES Disclosure Controls and Procedures The Company does not currently maintain controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms. Disclosure controls and procedures would include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of management, including the Company’s Chief Executive Officer, the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, Changes in Internal Control over Financial Reporting Management will continue to monitor and evaluate the effectiveness of the Company's internal controls and procedures and the Company's internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. There were no changes in Internal Control Over Financial Reporting during the quarter ended September 30, From time to time, the Company may be involved in litigation relating to claims arising out of commercial operations in the normal course of business. As of September 30, In April of 2019, the staff (the “Staff”) of the SEC’s Division of Enforcement notified the Company that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against the Company, as well as against its CEO and its CFO, for alleged violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder during the period from early 2014 through late 2016. The Staff’s notice is not a formal allegation or a finding of wrongdoing by the Company, and the Company As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item. Investing in our securities involves a high degree of risk. You should carefully consider the risk factors described below before deciding whether to purchase any of the securities being registered pursuant to the registration statement of which this prospectus is a part. Each of the risk factors described below could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our securities. The occurrence of any of these risks might cause you to lose all or part of your investment. Moreover, the risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, and results of operations. If any of these risks actually occurs, our business, financial condition and results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. Risks Related to Our Industry and Our Company Readers should carefully consider the risks and uncertainties described below. Our failure to successfully address the risks and uncertainties described below would have a material adverse effect on our business, financial condition and/or results of operations, and the trading price of our common stock may decline and investors may lose all or part of their investment. We cannot assure you that we will successfully address these risks or other unknown risks that may affect our business. As an enterprise engaged oil and gas exploration and production, power generation, and the development of new technology, our business is inherently risky. Our common shares are considered speculative during the development of our business operations. Prospective investors should carefully consider the risk factors set out below. We need to continue as a going concern if our business is to succeed. Our independent registered public accounting firm reports on our audited financial statements for the years ended December 31, 2020, and 2019, indicate that there are a number of factors that raise substantial risks about our ability to continue as a going concern. Such factors identified in the report are our recurring losses from operations since inception and our working capital deficiency. If we are not able to continue as a going concern, investors could lose their investments. If we lose the services of our Chief Executive Officer, our operations could be disrupted, and our business could be harmed. We rely heavily on the day-to-day involvement of our CEO, James Doris, in managing the Company’s affairs. Mr. Doris is an integral part of all material elements of our existing operations and immediate growth initiatives. We do not have a long-term employment or other agreement with Mr. Doris. If he ceases to be involved with us for any reason, our operations would likely be disrupted, and our business would likely be harmed. We only own approximately 60.5% of Simson-Maxwell, and other Simson-Maxwell stakeholders are able to exercise some control over its operations. We do not own 100% of Simson-Maxwell, but rather we own approximately 60.5% of Simson-Maxwell’s issued and outstanding shares. We are a party to a Shareholders’ Agreement regarding the ownership and governance of Simson-Maxwell, and although we are entitled to elect the majority of the directors of Simson-Maxwell, we have to obtain approval from at least one other shareholder of Simson-Maxwell in connection with the following matters: · any fundamental change to the corporate structure of the Simson-Maxwell and/or any subsidiary of Simson-Maxwell if such fundamental change is dilutive to the existing shareholders, including without limitation, in respect of each such entity: any amendment, modification, repeal or other variation to its articles, any amendment to its authorized share capital, or any proposal to create, reclassify, re-designate, subdivide, consolidate, or otherwise change any shares (whether issued or unissued) or partnership units, as the case may be; · · · · · · · · · · Profitability & Expansion initiatives at Simson-Maxwell are not guaranteed. The Company’s majority-owned subsidiary, Simson-Maxwell, provides power generation products, services and custom energy solutions to commercial and industrial clients, primarily in Canada. Simson-Maxwell is not currently operating at a profit and the Company’s objective is to assist Simson-Maxwell with becoming profitable and expanding Simson-Maxwell’s business throughout North America. There can be no assurance either will occur as both initiatives are subject to a number of risks and influences, including several beyond the Company’s control. The Camber Energy merger may not ever be consummated. There is no guaranty we will complete the Merger with Camber Energy. If the Merger is not consummated, we intend to up-list directly to a national stock exchange, but there is no guaranty any such up-listing will occur. As at the date hereof, Camber Energy owns approximately 70% of our outstanding shares of common stock, and as such has significant influence over matters requiring the approval of our stockholders. Further, pursuant to an existing agreement between the Company and Camber Energy, if at any time until July 1, 2022, the Company issues shares of its common stock to one or more persons such that Camber Energy’s percentage ownership of the Company’s issued and outstanding common stock is less than 51%, the Company is obligated to issue additional shares of common stock to Camber Energy to ensure that Camber Energy owns at least 51% of the issued and outstanding common stock of the Company. This adjustment entitlement, which expires on July 1, 2022, may, among other things, limit the Company’s ability to raise capital. Changes to the management, ownership and/or capitalization of Camber Energy may influence how Camber Energy manages or otherwise deals with its ownership of shares of common stock of the Company. Camber Energy’s interests may not always be aligned with the interests of the Company. We have guaranteed Camber Energy’s indebtedness to Camber Energy’s senior secured lender, and we have executed security agreements to secure such guaranty. If there is a default under any of the promissory notes issued by Camber Energy in favor of its senior secured lender, we may be forced to pay amounts due to the lender pursuant to those Camber Energy promissory notes, and we may not have sufficient resources on hand to satisfy those obligations. Oil and gas price fluctuations in the market may adversely affect the results of our operations. Our profitability, cash flows and the carrying value of our oil and natural gas properties are highly dependent upon the market prices of oil and natural gas. A significant portion of our sales of oil and natural gas, if any, are made in the spot market, or pursuant to contracts based on spot market prices, and not pursuant to long-term, fixed-price contracts. Accordingly, the prices received for our oil and natural gas production are dependent upon numerous factors beyond our control. These factors include the level of consumer product demand, governmental regulations and taxes, the price and availability of alternative fuels, the level of foreign imports of oil and natural gas and the overall economic environment. Historically, the oil and natural gas markets have proven cyclical and volatile as a result of factors that are beyond our control. Any additional declines in oil and natural gas prices or any other unfavorable market conditions could have a material adverse effect on our financial condition. Actual quantities of recoverable oil and gas reserves and future cash flows from those reserves most likely will vary from our estimates. Estimating accumulations of oil and gas is complex. The process relies on interpretations of available geological, geophysical, engineering and production data. The extent, quality and reliability of this data can vary. The process also requires certain economic assumptions, some of which are mandated by the SEC, such as oil and gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. 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; and • the judgment of the persons preparing the estimate. Estimates of proved reserves prepared by others might differ materially from our estimates. Actual quantities of recoverable oil and gas reserves, future production, oil and gas prices, revenues, taxes, development expenditures and operating expenses most likely will vary from our estimates. Any significant variance could materially affect the quantities and net present value of our reserves. In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development and prevailing oil and gas prices. Our reserves also may be susceptible to drainage by operators on adjacent properties. Our operations may require significant expenditures of capital that may not be recovered. We may require significant expenditures of capital to locate and develop producing properties and to drill new oil and gas wells. In conducting exploration, exploitation and development activities for a particular well, the presence of unanticipated pressure or irregularities in formations, miscalculations or accidents may cause our exploration, exploitation, development and production activities to be unsuccessful, potentially resulting in abandonment of the well. This could result in a total loss of our investment. In addition, the cost and timing of drilling, completing and operating wells is difficult to predict. Compliance with, or breach of, environmental laws can be costly and could limit our operations. Our operations will be subject to numerous and frequently changing laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Any properties we might own for the exploration and production of oil and gas and the wastes disposed on these properties may be subject to the Comprehensive Environmental Response, Compensation and Liability Act, the Oil Pollution Act of 1990, the Resource Conservation and Recovery Act, the Federal Water Pollution Control Act, similar state laws, and similar Canadian laws. Under such laws, we could be required to remove or remediate previously released wastes or property contamination. Laws and regulations protecting the environment have generally become more stringent and may, in some cases, impose “strict liability” for environmental damage. Strict liability means that we may be held liable for damage without regard to whether we were negligent or otherwise at fault. Environmental laws and regulations may expose us to liability for the conduct of or conditions caused by others or for acts that were in compliance with all applicable laws at the time they were performed. Failure to comply with these laws and regulations may result in the imposition of administrative, civil and criminal penalties. Although we believe that our operations are in substantial compliance with existing requirements of governmental bodies, our ability to conduct continued operations is subject to satisfying applicable regulatory and permitting controls. Our current permits and authorizations and ability to get future permits and authorizations may be susceptible on a going forward basis, to increased scrutiny, greater complexity resulting in increased costs, or delays in receiving appropriate authorizations. The oil and gas we produce may not be readily marketable at the time of production. Crude oil, natural gas, condensate and other oil and gas products are generally sold to other oil and gas companies, government agencies and other industries. The availability of ready markets for oil and gas that we might discover and the prices obtained for such oil and gas depend on many factors beyond our control, including: • the extent of local production and imports of oil and gas; • the proximity and capacity of pipelines and other transportation facilities; • fluctuating demand for oil and gas; • the marketing of competitive fuels; and • the effects of governmental regulation of oil and gas production and sales. Natural gas associated with oil production is often not marketable due to demand or transportation limitations and is often flared at the producing well site. Pipeline facilities do not exist in certain areas of exploration and, therefore, we intend on utilizing trucks to transport any oil that is discovered. The price of oil and natural gas has historically been volatile. If it were to decrease substantially, our projections, budgets and revenues would be adversely affected, potentially forcing us to make changes in our operations. Our future financial condition, results of operations and the carrying value of any oil and natural gas interests we acquire will depend primarily upon the prices paid for oil and natural gas production. Oil and natural gas prices historically have been volatile, during calendar 2020 significantly decreased, and likely will continue to be volatile in the future, especially given current world geopolitical conditions. Our cash flows from operations are highly dependent on the prices that we receive for oil and natural gas. This price volatility also affects the amount of our cash flows available for capital expenditures and our ability to borrow money or raise additional capital. The prices for oil and natural gas are subject to a variety of additional factors that are beyond our control. These factors include: • the level of consumer demand for oil and natural gas; • the domestic and foreign supply of oil and natural gas; • the ability of the members of the Organization of Petroleum Exporting Countries (“OPEC”) to agree to and maintain oil price and production controls; • the price of foreign oil and natural gas; • domestic governmental regulations and taxes; • the price and availability of alternative fuel sources; • weather conditions; • market uncertainty due to political conditions in oil and natural gas producing regions, including the Middle East; and • worldwide economic conditions. These factors as well as the volatility of the energy markets generally make it extremely difficult to predict future oil and natural gas price movements with any certainty. Declines in oil and natural gas prices affect our revenues and could reduce the amount of oil and natural gas that we can produce economically. Accordingly, such declines could have a material adverse effect on our financial condition, results of operations, oil and natural gas reserves and the carrying values of our oil and natural gas properties. If the oil and natural gas industry experiences significant price declines, we may be unable to make planned expenditures, among other things. If this were to happen, we may be forced to abandon or curtail our business operations, which would cause the value of an investment in us to decline in value or become worthless. Downturns and volatility in global economies and commodity and credit markets may materially adversely affect our business, results of operations and financial condition. Viking’s results of operations are materially adversely affected by the conditions of the global economies and the credit, commodities and stock markets. Among other things, Viking has recently been adversely impacted, and anticipates continuing to be adversely impacted, due to a global reduction in consumer demand for oil and gas, and consumer lack of access to sufficient capital to continue to operate their businesses or to operate them at prior levels. In addition, a decline in consumer confidence or changing patterns in the availability and use of disposable income by consumers can negatively affect the demand for oil and gas and as a result Viking’s results of operations. We may be forced to write-down material portions of our assets if oil prices decline. The COVID-19 outbreak and other geopolitical conditions in 2020 led to a rapid decline in oil prices. A decline of oil prices in the future and/or a continued period of low oil and gas prices in the future may force us to incur material write-downs of our oil and natural gas properties, which could have a material effect on the value of our properties and cause the value of our securities to decline in value. If oil or natural gas prices decrease or drilling efforts are unsuccessful, we may be required to record write-downs of our oil and natural gas properties. We could be required to write down the carrying value of certain of our oil and natural gas properties. Write-downs may occur when oil and natural gas prices are low, or if we have downward adjustments to our estimated proved reserves, increases in our estimates of operating or development costs, deterioration in drilling results or mechanical problems with wells where the cost to re-drill or repair is not supported by the expected economics. Accounting rules require that the carrying value of oil and natural gas properties be periodically reviewed for possible impairment. Under the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion, net of deferred income taxes, may not exceed a ceiling amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, which is tested on a quarterly basis, an impairment is recognized. While an impairment charge reflects our long-term ability to recover an investment, reduces our reported earnings and increases our leverage ratios, it does not impact cash or cash flow from operating activities. Because of the inherent dangers involved in oil and gas operations, there is a risk that we may incur liability or damages as we conduct our business operations, which could force us to expend a substantial amount of money in connection with litigation and/or a settlement. The oil and natural gas business involve a variety of operating hazards and risks such as well blowouts, pipe failures, casing collapse, explosions, uncontrollable flows of oil, natural gas or well fluids, fires, spills, pollution, releases of toxic gas and other environmental hazards and risks. These hazards and risks could result in substantial losses to us from, among other things, injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities, regulatory investigation and penalties and suspension of operations. In addition, we may be liable for environmental damages caused by previous owners of property purchased and leased by us. As a result, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could reduce or eliminate the funds available for exploration, development or acquisitions or result in the loss of our properties and/or force us to expend substantial monies in connection with litigation or settlements. We currently have no insurance to cover such losses and liabilities, and even if insurance is obtained, there can be no assurance that it will be adequate to cover any losses or liabilities. We cannot predict the availability of insurance or the availability of insurance at premium levels that justify our purchase. The occurrence of a significant event not fully insured or indemnified against could materially and adversely affect our financial condition and operations. We may elect to self-insure if management believes that the cost of insurance, although available, is excessive relative to the risks presented. In addition, pollution and environmental risks generally are not fully insurable. The occurrence of an event not fully covered by insurance could have a material adverse effect on our financial condition and results of operations, which could lead to any investment in us becoming worthless. We may encounter operating hazards that may result in substantial losses. We will be subject to operating hazards normally associated with the exploration and production of oil and gas, including hurricanes, blowouts, explosions, oil spills, cratering, pollution, earthquakes, labor disruptions and fires. The occurrence of any such operating hazards could result in substantial losses to us due to injury or loss of life and damage to or destruction of oil and gas wells, formations, production facilities or other properties. We do not maintain insurance coverage for matters that may adversely affect our operations, including war, terrorism, nuclear reactions, government fines, treatment of waste, blowout expenses, wind damage and business interruptions. Losses and liabilities arising from uninsured or underinsured events could reduce our revenues or increase our costs. There can be no assurance that any insurance we do obtain will be adequate to cover losses or liabilities associated with operational hazards. We cannot predict the continued availability of insurance, or its availability at premium levels that justify its purchase. We face strong competition from larger oil and gas and power companies, which could result in adverse effects on our business. The petroleum exploration and production and power business is highly competitive. Many of our competitors have substantially larger financial resources, staffs and facilities. Our competitors include numerous major oil and gas exploration and production companies, as well as large power generation and industrial engine manufacturing companies and conglomerates such as General Electric. Additionally, other companies engaged in our line of business may compete with us from time to time in obtaining capital from investors. Competitors include larger companies which, in particular, may have access to greater resources, may be more successful in the recruitment and retention of qualified employees and may conduct their own refining and petroleum marketing operations, which may give them a competitive advantage. Actual or potential competitors may be strengthened through the acquisition of additional assets and interests. Additionally, there are numerous companies focusing their resources on creating fuels and/or materials which serve the same purpose as oil and gas but are manufactured from renewable resources. Our estimates of the volume of petroleum reserves could have flaws, or such reserves could turn out not to be commercially extractable. as a result, our future revenues and projections could be incorrect. Estimates of petroleum reserves and of future net revenues prepared by different petroleum engineers may vary substantially depending, in part, on the assumptions made and may be subject to adjustment either up or down in the future. Our actual amounts of production, revenue, taxes, development expenditures, operating expenses, and quantities of recoverable oil and gas reserves may vary substantially from the estimates. Oil and gas reserve estimates are necessarily inexact and involve matters of subjective engineering judgment. In addition, any estimates of our future net revenues and the present value thereof are based on assumptions derived in part from historical price and cost information, which may not reflect current and future values, and/or other assumptions made by us that only represent our best estimates. If these estimates of quantities, prices and costs prove inaccurate, we may be unsuccessful in expanding our oil and gas reserves base with our acquisitions. Additionally, if declines in and instability of oil and gas prices occur, then write downs in the capitalized costs associated with any oil and gas assets we obtain may be required. Because of the nature of the estimates of our reserves and estimates in general, we can provide no assurance that reductions to our estimated proved oil and gas reserves and estimated future net revenues will not be required in the future, and/or that our estimated reserves will be present and/or commercially extractable. If our reserve estimates are incorrect, the value of our common stock could decrease, and we may be forced to write down the capitalized costs of our oil and gas properties. Our business will suffer if we cannot obtain or maintain necessary licenses. Our operations will require licenses, permits and in some cases renewals of licenses and permits from various governmental authorities. Our, or our partners’, ability to obtain, sustain or renew such licenses and permits on acceptable terms is subject to change in regulations and policies and to the discretion of the applicable governments, among other factors. Our inability to obtain, or our loss of or denial of extension of, any of these licenses or permits could hamper our ability to produce revenues from our operations. Our operations may be subject to various litigation matters in the future that could have an adverse effect on our business. From time to time, we may become a defendant in various litigation matters. The nature of our operations exposes us to further possible litigation claims, including litigation relating to climate change in the future. There is risk that any matter in litigation could be adversely decided against us regardless of our belief, opinion and position, which could have a material adverse effect on our financial condition and results of operations. Litigation is highly costly and the costs associated with defending litigation could also have a material adverse effect on our financial condition. We may be affected by global climate change or be legal, regulatory, or market responses to such change. The growing political and scientific sentiment is that increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere are influencing global weather patterns. Changing weather patterns, along with the increased frequency or duration of extreme weather conditions, could impact the availability or increase the cost to produce our products. Additionally, the sale of our products can be impacted by weather conditions. Concern over climate change, including global warming, has led to legislative and regulatory initiatives directed at limiting greenhouse gas emissions. For example, proposals that would impose mandatory requirements on greenhouse gas emissions continue to be considered by policy makers in the provinces, states or territories where we operate. Laws enacted that directly or indirectly affect our oil and gas production could impact our business and financial results. Our future success depends on our ability to replace reserves that are produced. Because the rate of production from oil and natural gas properties generally declines as reserves are depleted, our future success depends upon our ability to economically find or acquire and produce additional oil and natural gas reserves. Except to the extent that we acquire additional properties containing proved reserves, conduct successful exploration and development activities, or, through engineering studies, identify additional behind-pipe zones or secondary recovery reserves, our proved reserves will decline as our reserves are produced. Future oil and natural gas production, therefore, is highly dependent upon our level of success in acquiring or finding additional reserves that are economically recoverable. We cannot assure you that we will be able to find or acquire and develop additional reserves at an acceptable cost. We may acquire significant amounts of unproved property to further our development efforts. Development and exploratory drilling and production activities are subject to many risks, including the risk that no commercially productive reservoirs will be discovered. We may acquire both proved and producing properties as well as undeveloped acreage that we believe will enhance growth potential and increase our earnings over time. However, we cannot assure you that all of these properties will contain economically viable reserves or that we will not abandon our initial investments. Additionally, we cannot assure you that unproved reserves or undeveloped acreage that we acquire will be profitably developed, that new wells drilled on our properties will be productive or that we will recover all or any portion of our investments in our properties and reserves. Our lack of industry and geographical diversification may increase the risk of an investment in our company. Our oil and gas leases are located in North America, primarily in the Texas and Louisiana region. This lack of geographic diversification may make our holdings more sensitive to economic developments within a regional area, which may result in reduced rates of return or higher rates of default than might be incurred with a company that is more geographically diverse. Our business depends on oil and natural gas transportation and processing facilities and other assets that are owned by third parties. The marketability of our oil and natural gas depends in part on the availability, proximity and capacity of pipeline systems, processing facilities, oil trucking fleets and rail transportation assets owned by third parties. The lack of available capacity on these systems and facilities, whether as a result of proration, physical damage, scheduled maintenance or other reasons, could result in the delay or discontinuance of development plans for our properties. The curtailments arising from these and similar circumstances may last from a few days to several months. Our leasehold acreage is subject to leases that will expire over the next several years unless production is established or maintained or the leases are extended. Some of our acreage is currently held by production or held by operations, but some is not. Unless production in paying quantities is established or operations are commenced on units containing these latter leases during their terms, those leases may expire. Likewise, if we are unable to maintain production on acreage held by production or operations, those leases may expire. If our leases expire and we are unable to renew the leases, we will lose our right to develop or utilize the related properties. Deficiencies of title to our leased interests could significantly affect our financial condition. We, or our partners, often incur the expense of a title examination prior to acquiring oil and natural gas leases or undivided interests in oil and natural gas leases or other developed rights. If an examination of the title history of a property reveals that an oil or natural gas lease or other developed rights have been purchased in error from a person who is not the owner of the mineral interest desired, our interest would substantially decline in value or be eliminated. In such cases, the amount paid for such oil or natural gas lease or leases or other developed rights may be lost. We have not established an effective system of internal control over our financing reporting, and if we fail to maintain such internal control, we may not be able to accurately report our financial results, and current and potential stockholders may lose confidence in our financial reporting. We have not established and maintained adequate and effective internal control over financial reporting that would provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. We are, however, required to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses in those internal controls. Any failure to maintain adequate internal controls could adversely impact our ability to report our financial results on a timely and accurate basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations. Likewise, if our financial statements are not filed on a timely basis as required by the SEC, we could face severe consequences from those authorities. In either case, there could result a material adverse effect on our business. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock. Because of the unique difficulties and uncertainties inherent in technology development, we face a risk of not being able to capitalize on our license of intellectual property from ESG Clean Energy. Potential investors should be aware of the difficulties normally encountered by companies developing new technology and the high rate of failure of such enterprises. The likelihood of our successful ability to commercialize intellectual property we have licensed from ESG Clean Energy must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the development of new technology with limited personnel and financial means. These potential problems include, but are not limited to, unanticipated technical problems that extend the time and cost of product development, or unanticipated problems with the operation of the licensed technology. Technology development involves significant time and expense and can be uncertain. The development of technology associated with our licensed ESG Clean Energy intellectual property will be costly, complex and time-consuming. Any investment into technology development and commercialization often involves a long wait until a return, if any, is achieved on such investment. We plan to make investments in research and development relating to our licensed intellectual property and technology. Investments in new technology and processes are inherently speculative. Successful technical development of technologies associated with intellectual property licensed from ESG Clean Energy does not guarantee successful commercialization. We may successfully complete the technical development of technologies associated with intellectual property licensed from ESG Clean Energy, but we may still fail to commercialize that technology at scale or at a cost attractive to the power generation industry. Our success will depend largely on our ability to prove the capabilities and cost-effectiveness of the developed technology. Upon demonstration, the technology may not have the capabilities they were designed to have or that we believed they would have, or they may be more expensive than anticipated. Furthermore, even if we do successfully demonstrate the technology’s capabilities, potential customers may be more comfortable doing business with a larger, more established, more proven company than us. Moreover, competing technologies may prevent us from gaining wide market acceptance of the technology. Significant revenue from new technology investments may not be achieved for a number of years, if at all. If we fail to protect our intellectual property rights, we could lose our ability to compete in the market. Our intellectual property and proprietary rights are important to our ability to remain competitive and for the success of our products and our business. Our intellectual property rights may be challenged, invalidated or circumvented by third parties. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by employees or competitors. Furthermore, our competitors may independently develop technologies and products that are substantially equivalent or superior to our technologies and/or products, which could result in decreased revenues. Moreover, the laws of foreign countries may not protect our intellectual property rights to the same extent as the laws of the U.S. Litigation may be necessary to enforce our intellectual property rights which could result in substantial costs to us and substantial diversion of management attention. If we do not adequately protect our intellectual property, our competitors could use it to enhance their products. Our inability to adequately protect our intellectual property rights could adversely affect our business and financial condition, and the value of our brand and other intangible assets. Other companies may claim that we infringe their intellectual property, which could materially increase our costs and harm our ability to generate future revenue and profit. We do not believe that we infringe the proprietary rights of any third party, but claims of infringement are becoming increasingly common, and third parties may assert infringement claims against us. It may be difficult or impossible to identify, prior to receipt of notice from a third party, the trade secrets, patent position or other intellectual property rights of a third party, either in the United States or in foreign jurisdictions. Any such assertion may result in litigation or may require us to obtain a license for the intellectual property rights of third parties. If we are required to obtain licenses to use any third-party technology, we would have to pay royalties, which may significantly reduce any profit on our products. In addition, any such litigation could be expensive and disruptive to our ability to generate revenue or enter into new market opportunities. If any of our products were found to infringe other parties’ proprietary rights and we are unable to come to terms regarding a license with such parties, we may be forced to modify our products to make them non-infringing or to cease production of such products altogether. Renewable energy investments may be linked to government subsidies. Profitability of any investments we make in renewable and/or clean energy opportunities may depend on the availability of government subsidies, tax credits or other types of incentives, and there is no guaranty such subsidies, tax credits or incentives will be available in the future. Risks Related to Our Securities An investment in our securities is extremely speculative, and there can be no assurance of any return on the investment. An investment in our securities is extremely speculative, and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks, including the risk of losing their entire investment in our securities. For example, the market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market and other factors, many of which we have little or no control over. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance. Because the Company is a “smaller reporting company,” we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less Company information than they would receive from a public company that is not a smaller reporting company. We are a “smaller reporting company” as defined in the Exchange Act. As a smaller reporting company, we may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter. To the extent we take advantage of any reduced disclosure obligations, it may make it harder for investors to analyze the Company’s results of operations and financial prospectus in comparison with other public companies. To fund its operations, the Company may conduct further securities offerings in the future, in which case our common stock will be diluted. To fund its business operations, the Company anticipates continuing to rely on sales of its securities, which may include common stock, preferred stock, convertible debt and/or warrants convertible or exercisable into shares of common stock. Common stock may be issued in return for additional funds or upon conversion or exercise of outstanding convertible debentures or warrants. If additional common stock is issued, the price per share of the common stock could be lower than the price paid by existing holders of common stock, and the percentage interest in the Company of those shareholders will be lower. This result is referred to as “dilution,” which could result in a reduction in the per share value of your shares of common stock. The Company’s failure or inability to raise capital when needed or on terms acceptable to the Company and our shareholders could have a material adverse effect on the Company’s business, financial condition and results of operations and would also have a negative adverse effect on the price of our common stock. The Company may utilize debt financing to fund its operations. If the Company undertakes debt financing to fund its operations, the financing may involve significant restrictive covenants. In addition, there can be no assurance that such financing will be available on terms satisfactory to the Company, if at all. The Company’s failure or inability to obtain financing when needed or on terms acceptable to the Company and our shareholders could have a material adverse effect on the Company’s business, financial condition and results of operations and would also have a negative adverse effect on the price of our common stock. The trading price of our common stock may fluctuate significantly. Volatility in the trading price of shares of our common stock may prevent shareholders from being able to sell shares of common stock at prices equal to or greater than their purchase price. The trading price of our common stock could fluctuate significantly for various reasons, including: • our operating and financial performance and prospects; • our quarterly or annual earning or those of other companies in the same industry; • sales of our common stock by management of the Company; • public reaction to our press releases, public announcements and filing with the SEC; • changes in earnings estimates or recommendations by research analysts who track the Company’s common stock or the stock of other companies in the same industry; • strategic actions by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidance, interpretations or principles; and • changes in general economic conditions in the U.S. and in global economies and financial markets, including changes resulting from war or terrorist incidents. In addition, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility has had a substantial impact on the trading price of securities issued by many companies. The changes frequently occur irrespective of the operating performance of the affected companies. As a result, the trading price of our common stock could fluctuate based upon factors that have little or nothing to do with our business. Because we are a small company with a limited operating history, holders of common stock may find it difficult to sell their stock in the public markets. The number of persons interested in purchasing our common stock at any given time may be relatively small. This situation is attributable to a number of factors. One factor is that we are a small company that is still relatively unknown to stock analysts, stock brokers, institutional investors, and others in the investment community that generate or influence sales volume. Another factor is that, even if the Company came to the attention of these persons, they tend to be risk-averse and would likely be reluctant to follow an unproven company such as ours. Furthermore, many brokerage firms may not be willing to effect transactions in our securities, including our common stock. As a consequence, there may be periods when trading activity in our common stock is minimal or even non-existent, as compared to trading activity in the securities of a seasoned issuer with a large and steady volume of trading activity. We cannot give you any assurance that an active public trading market for our common stock or other securities will develop or be sustained, or that, if developed, the trading levels will be sustained. Our shares of common stock are subject to the SEC’s “penny stock” rules that limit trading activity in the market, which may make it more difficult for holders of common stock to sell their shares. Penny stocks are generally defined as equity securities with a price of less than $5.00. Because our common stock trades at less than $5.00 per share, we are subject to the SEC’s penny stock rules that require a broker-dealer to deliver extensive disclosure to its customers before executing trades in penny stocks not otherwise exempt from the rules. The broker-dealer must also provide its customers with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, and provide monthly account statements showing the market value of each penny stock held by the customer. Under the penny stock regulations, unless the broker-dealer is otherwise exempt, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction before the sale. As a general rule, an individual with a net worth over $1,000,000 or an annual income over $200,000 individually or $300,000 together with his or her spouse, is considered an accredited investor. The additional burdens from the penny stock requirements may deter broker-dealers from effecting transactions in our securities, which could limit the liquidity and market price of shares of our common stock. These disclosure requirements may reduce the trading activity of our common stock, which may make it more difficult for shareholders of our common stock to resell their securities. FINRA sales practice requirements may also limit a shareholder’s ability to buy and sell our stock. In addition to the “penny stock” rules described above, FINRA has adopted Rule 2111 that requires a broker-dealer to have reasonable grounds for believing that an investment is suitable for a customer before recommending the investment. Before recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell shares of common stock and may have an adverse effect on the market for our securities. The Company does not anticipate paying dividends in the future. We have never declared or paid any cash dividends on our common stock. Our current policy is to retain earnings to reinvest in our business. Therefore, we do not anticipate paying cash dividends in the foreseeable future. The Company’s dividend policy will be reviewed from time to time by the Board of Directors in the context of its earnings, financial condition and other relevant factors. Until the Company pays dividends, which it may never do, the holders of shares of common stock will not receive a return on those shares unless they are able to sell those shares at the desired price, if at all, of which there can be no assurance. In addition, there is no guarantee that our common stock will appreciate in value or even maintain the price at which holders purchased their common stock. We will continue to incur significant costs to ensure compliance with United States securities and corporate governance and accounting requirements. We will continue to incur significant costs associated with our public company reporting requirements, including costs associated with applicable securities and corporate governance requirements, such as those required by the Securities Exchange Act of 1934, as amended, and the Sarbanes-Oxley Act of 2002, and with other rules issued or implemented by the SEC. We expect all of these applicable rules and regulations will result in significant legal and financial compliance costs and to make some activities more time consuming and costly. We are currently evaluating and monitoring developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. During the three months ended September 30, On July On July On On The issuances of the foregoing On On On September 24, 2021, the Company issued 378,000 shares of the Company’s common stock with a fair value of $502,740 to a third-party investor pursuant to a conversion of debt in the amount of $283,500. On September 23, 2021, the Company issued 200,000 shares of the Company’s common stock with a fair value of $250,000 to a third-party investor pursuant to a conversion of debt in the amount of $150,000. On September 23, 2021, the Company issued 133,333 shares of the Company’s common stock with a fair value of $166,666 to a third-party investor pursuant to a conversion of debt in the amount of $100,000. On September 23, 2021, the Company issued 54,000 shares of the Company’s common stock with a fair value of $67,500 to a third-party investor pursuant to a conversion of debt in the amount of $40,500. On September 23, 2021, the Company issued 13,333 shares of the Company’s common stock with a fair value of $16,666 to a third-party investor pursuant to a conversion of debt in the amount of $10,000. On September 23, 2021, the Company issued 66,667 shares of the Company’s common stock with a fair value of $83,334 to a third-party investor pursuant to a conversion of debt in the amount of $50,000. On September 23, 2021, the Company issued 16,000 shares of the Company’s common stock with a fair value of $20,000 to a third-party investor pursuant to a conversion of debt in the amount of $12,000. On September 23, 2021, the Company issued 57,639 shares of the Company’s common stock with a fair value of $72,049 to a third-party investor pursuant to a conversion of debt in the amount of $43,229. On September 24, 2021, the Company issued 8,000 shares of the Company’s common stock with a fair value of $10,640 to a third-party investor pursuant to a conversion of debt in the amount of $6,000. On September 25, 2021, the Company issued 133,333 shares of the Company’s common stock with a fair value of $177,333 to a third-party investor pursuant to a conversion of debt in the amount of $100,000. On September 25, 2021, the Company issued 133,333 shares of the Company’s common stock with a fair value of $177,333 to a third-party investor pursuant to a conversion of debt in the amount of $100,000. On September 25, 2021, the Company issued 133,333 shares of the Company’s common stock with a fair value of $177,333 to a third-party investor pursuant to a conversion of debt in the amount of $100,000. On September 25, 2021, the Company issued 200,000 shares of the Company’s common stock with a fair value of $266,000 to a third-party investor pursuant to a conversion of debt in the amount of $150,000. On September 25, 2021, the Company issued 266,667 shares of the Company’s common stock with a fair value of $354,667 to a third-party investor pursuant to a conversion of debt in the amount of $200,000. On September 27, 2021, the Company issued 266,667 shares of the Company’s common stock with a fair value of $397,334 to a third-party investor pursuant to a conversion of debt in the amount of $200,000. On September 29, 2021, the Company issued 100,000 shares of the Company’s common stock with a fair value of $246,000 to a third-party investor pursuant to a conversion of debt in the amount of $75,000. On September 29, 2021, the Company issued 20,000 shares of the Company’s common stock with a fair value of $49,200 to a third-party investor pursuant to a conversion of debt in the amount of $15,000. On September 29, 2021, the Company issued 40,000 shares of the Company’s common stock with a fair value of $98,400 to a third-party investor pursuant to a conversion of debt in the amount of $30,000. On September 30, 2021, the Company issued 66,667 shares of the Company’s common stock with a fair value of $161,334 to a third-party investor pursuant to a conversion of debt in the amount of $50,000. On September 30, The issuances of the foregoing ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES None. On October 18, 2021, the Company’s shareholders agreement with the other shareholders of Simson-Maxwell was amended to (i) increase the number of Simson-Maxwell directors the Company can nominate from two to three (of five total directors), and (ii) reduce the number of and revise the types of events requiring 66.67% supermajority approval of Simson-Maxwell’s shareholders as follows: (a) eliminate the supermajority approval requirement for the following events; material business changes; material operating budget changes including capital expenditure plans; changes to dividend policies; the creation of subsidiaries; payment of bonuses, profit sharing, retirement allowances or similar distributions to officers, directors or employees; hiring or dismissing certain officers; capital expenditures in excess of $250,000; borrowing transactions; granting security interests; and changing auditors or accountants; (b) revise the supermajority approval requirement for the following events to only require supermajority approval if such events are dilutive to the shareholders: fundamental changes to the company’s corporate structure; issuing shares of stock or other securities exchangeable for stock; converting or exchanging existing shares for other shares; and acquiring a new business or entering into a merger or other combination; (c) revise the supermajority approval requirement in connection with the declaration or payment of dividends to clarify that dividends to all common shareholders or issued preferred shares would not require supermajority approval, but other dividends to all shareholders would require supermajority approval; and (d) eliminate the additional requirement that Simmax Corp. consent to fundamental changes to the company’s structure; issuing shares of stock or other securities exchangeable for stock; the redemption of stock; or converting or exchanging existing shares for other shares. The foregoing description of the amendment to the shareholders agreement does not purport to be complete and is subject to, and qualified by, the full text of the amendment, which is filed as Exhibit 10.32 to this Quarterly Report on Form 10-Q and incorporated herein by reference. Number Description 101.INS** Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). 101.SCH** Inline XBRL Taxonomy Extension Schema 101.CAL** Inline XBRL Taxonomy Extension Calculation Linkbase 101.DEF** Inline XBRL Taxonomy Extension Definition Linkbase 101.LAB** Inline XBRL Taxonomy Extension 101.PRE** Inline XBRL Taxonomy Extension Presentation Linkbase 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). * Filed herewith ** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. ITEM 7. OFF BALANCE-SHEET ARRANGEMENTS None. SIGNATURES In accordance with the requirements of Section 13 or 15(d) of the Securities Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. VIKING ENERGY GROUP, INC. (Registrant) /s/ James Doris Date: November Principal Executive Officer /s/ Frank W. Barker, Jr. Date: November Principal Financial and Accounting Officer (281) 404 4387☐ ☒ 14, 2020,5, 2021, the registrant had 225,977,584101,971,563 shares of common stock outstanding.20202021 (unaudited) and December 31, 201920202531334133413442345741594159415942602 Table of Contents $ 2,330,846 $ 1,761,495 $ 2,893,877 $ 3,976,783 3,620,426 3,877,229 3,721,993 3,862,756 3,806,746 2,864,114 7,708,223 4,050,631 33,178 168,994 1,135,445 0 9,791,196 8,671,832 15,459,538 11,890,170 84,852,456 68,924,441 60,749,028 64,703,753 56,221,132 50,817,675 35,331,225 37,452,683 141,073,588 119,742,116 96,080,253 102,156,436 443,513 509,934 319,368 433,168 4,376,174 - 0 1,220,209 8,005,931 0 4,963,633 0 121,196 2,821,594 57,896 57,896 $ 155,805,667 $ 131,745,476 $ 124,886,619 $ 115,757,879 $ 2,351,493 $ 3,791,894 $ 7,490,898 $ 4,475,519 4,298,851 3,229,594 3,857,655 3,415,990 2,247,678 5,836,958 4,115,462 965,903 5,158,822 16,074,519 893,458 573,562 590,555 0 559,122 61,614,657 19,225,045 41,945,548 32,977,368 73,220,456 34,243,588 75,280,959 46,878,584 66,891,550 84,988,117 51,062,299 78,775,796 258,948 308,279 185,308 241,431 5,413,902 3,538,637 6,474,028 6,164,231 145,784,856 123,078,621 133,002,594 132,060,042 0 0 28 28 28 28 225,243 124,198 99,363 51,495 55,536,901 38,825,392 112,042,473 75,920,811 (44,558,409 ) (30,282,763 ) (120,257,839 ) (92,274,497 ) 11,203,763 8,666,855 (1,182,952 ) - 10,020,811 8,666,855 $ 155,805,667 $ 131,745,476 (8,115,975 ) (16,302,163 ) $ 124,886,619 $ 115,757,879 3 Table of Contents $ 10,149,387 $ 9,000,591 $ 31,487,202 $ 27,081,506 4,991,648 3,547,662 13,147,640 9,004,334 1,190,145 1,076,287 3,391,982 3,367,591 3,235,200 402,451 3,686,582 444,533 2,573,183 2,379,725 8,671,593 6,978,604 2,500,000 - 2,500,000 - 119,659 72,042 360,937 230,269 14,609,835 7,478,167 31,758,734 20,025,331 (4,460,448 ) 1,522,424 (271,532 ) 7,056,175 (5,327,925 ) (3,278,555 ) (16,821,040 ) (9,602,522 ) (3,228,124 ) (2,364,357 ) (6,005,728 ) (6,947,607 ) (5,018,338 ) 5,539,255 8,569,093 267,688 - - (931,894 ) - 28 363 2,503 6,261 (13,574,359 ) (103,294 ) (15,187,066 ) (16,276,180 ) (18,034,807 ) 1,419,130 (15,458,598 ) (9,220,005 ) - - - - (18,034,807 ) 1,419,130 (15,458,598 ) (9,220,005 ) 1,028,313 - 1,182,952 - $ (17,006,494 ) $ 1,419,130 $ (14,275,646 ) $ (9,220,005 ) $ (0.08 ) $ 0.02 $ (0.09 ) $ (0.10 ) 203,843,871 92,586,983 154,476,293 91,632,904 The accompanying notes are an integral part of these unaudited consolidated financial statements.4Table of ContentsVIKING ENERGY GROUP, INC.$ (15,458,598 ) $ (9,220,005 ) (8,569,093 ) (267,688 ) 3,686,582 444,533 8,671,593 6,978,604 1,442 2,997 360,937 230,269 2,500,000 - 6,005,728 6,947,607 931,894 - 2,178,356 - (942,632 ) (2,307,266 ) 86,214 26,639 (1,440,401 ) (806,594 ) 2,058,495 1,753,034 1,168,312 538,650 1,238,829 4,320,780 (1,527,473 ) (4,641,453 ) (34,075 ) - 84,816 552,966 (1,476.732 ) (4,088,487 ) 11,467,688 6,372,383 (10,946,169 ) (3,859,025 ) - 195,000 7,925 - 38,000 - - 693,706 (16,993 ) - 550,451 3,402,064 312,548 3,634,357 5,638,724 4,009,892 $ 5,951,272 $ 7,644,249 $ 12,683,119 $ 7,664,537 $ - $ - $ 1,514,328 $ 94,796 $ - $ 367,365 $ 49,331 $ 43,723 $ - $ 56760 $ - $ 3,800,000 $ - $ 1,361,106 $ 115,958 $ 620,508 $ 699,819 $ 167,151 $ 183,214 $ 3,129,012 $ - $ 3,310,000 $ 15,000 $ - $ 4,350,146 $ - $ 2,375,501 $ - $ 6,839,345 $ - $ 29,496,356 $ - $ 1,929,978 $ - $ 141,985 $ - $ 4,110,250 $ - $ 9,680,661 $ 10,149,387 $ 30,871,373 $ 31,487,202 4,888,546 4,991,648 14,863,294 13,147,640 1,966,519 1,190,145 4,287,453 3,391,982 82,055 3,235,200 470,598 3,686,582 2,181,326 2,573,183 6,844,553 8,671,593 0 2,500,000 0 2,500,000 148,551 119,659 438,225 360,937 9,266,997 14,609,835 26,904,123 31,758,734 413,664 (4,460,448 ) 3,967,250 (271,532 ) (3,180,460 ) (5,327,925 ) (9,612,335 ) (16,821,040 ) (1,261,618 ) (3,228,124 ) (3,406,654 ) (6,005,728 (3,425,097 ) (5,018,338 ) (16,401,270 ) 8,569,093 47,772 0 47,772 0 (1,847,810 ) 0 (2,774,341 ) (931,894 ) 174,234 28 196,236 2,503 (9,492,979 ) (13,574,359 ) (31,950,592 ) (15,187,066 ) (9,079,315 ) (18,034,807 ) (27,983,342 ) (15,458,598 ) 0 0 0 (9,079,315 ) (18,034,807 ) (27,983,342 ) (15,458,598 ) 0 1,028,313 0 1,182,952 $ (9,079,315 ) $ (17,006,494 ) $ (27,983,342 ) $ (14,275,646 ) $ (0.10 ) $ (0.75 ) $ (0.38 ) $ (0.83 ) 87,741,024 22,649,319 74,222,359 17,164,033 54Table of Contents Changes in Stockholders’ EquityCash Flows (Unaudited)28,092 $ 28 124,198,309 $ 124,198 $ 38,825,392 $ (30,282,763 ) $ - $ 8,666,855 20,949,410 20,949 2,965,814 2,986,763 423,238 423 37,577 38,000 150,000 150 14,850 15,000 - 699,819 699,819 183,214 183,214 20,355,911 20,356 2,355,145 2,375,501 99,064 99 7,826 7,925 - - - - 760,012 760 115,198 115,958 32,155,829 32,156 4,317,990 4,350,146 1,929,978 1,929,978 26,151,286 26,152 4,084,098 4,110,250 (14,275,646 ) (1,182,952 ) (15,458,598 ) 28,092 $ 28 225,243,059 $ 225,243 $ 55,536,901 $ (44,558,409 ) $ (1,182,952 ) $ 10,020,811 28,092 $ 28 90,989,025 $ 90,989 $ 32,015,913 $ (10,891,913 ) $ - $ 21,215,017 1,637,876 1,638 275,144 276,782 3,650,046 3,650 616,858 620,508 167,751 167,751 3,129,012 3,129,012 (9,220,005 ) (9,220,005 ) 28,092 $ 28 96,276,947 $ 96,277 $ 36,204,678 $ (20,111,918 ) $ - $ 16,189,065 $(27,983,342) $(15,458,598) 16,401,270 (8,569,093) 470,598 3,686,582 6,844,553 8,671,593 (113) 1,442 438,225 360,937 0 2,500,000 3,406,654 6,005,728 2,774,341 931,894 0 2,178,356 (149,600) 0 (47,772) 0 (3,657,592) (942,632) 0 86,214 3,015,379 (1,440,401) (313,058) 2,058,495 1,721,496 1,168,312 2,921,039 1,238,829 (1,709,253) (1,527,473) 0 (34,075) (1,500,000) 0 (7,958,159) 0 906,613 84,816 (10,260,799) (1476,732) 510,000 11,467,688 (5,333,066) (10,946,169) 11,000,000 0 0 7,925 0 38,000 (60,843) (16,993) 6,116,091 550,451 (1,223,669) 312,548 7,839,539 5,638,724 $6,615,870 $5,951,272 $9,755,850 $12,683,119 $0 $0 $0 $1,514,328 $47,772 $0 $36,872 $49,331 $0 $115,958 $388,662 $2,986,763 $29,881 $699,819 $0 $183,214 $0 $15,000 $3,800,164 $4,350,146 $141,321 $2,375,501 $0 $6,839,345 $0 $29,496,356 $0 $1,929,978 $0 $141,985 $0 $4,110,250 $18,900,000 $0 $1,187,500 $- $149,600 $0 65Table of Contents 28,092 $ 28 51,494,956 $ 51,495 $ 75,920,811 $ (92,274,497 ) $ 0 $ (16,302,163 ) 1,770 2 2 490,689 490 388,172 388,662 169,336 169 141,152 141,321 29,881 29,881 16,153,846 16,154 19,605,846 19,622,000 27,500,000 27,500 10,972,500 11,000,000 2,603,139 2,603 3,797,561 3,800,164 950,000 950 1,186,550 1,187,500 (27,983,342 ) (27,983,342 ) 28,092 $ 28 99,363,736 $ 99,363 $ 112,042,473 $ (120,257,839 ) $ 0 $ (8,115,975 ) 28,092 $ 28 13,799,812 $ 13,800 $ 38,935,790 $ (30,282,763 ) $ 0 $ 8,666,855 2,327,712 2,327 2,984,436 2,986,763 47,026 47 37,953 38,000 699,819 699,819 16,667 17 14,983 15,000 183,214 183,214 11,007 11 7,914 7,925 2,261,768 2,262 2,373,239 2,375,501 84,446 84 115,874 115,958 3,572,870 3,573 4,346,573 4,350,146 1,929,978 1,929,978 2,905,699 2,906 4,107,344 4,110,250 (14,275,646 ) (1,182,952 ) (15,458,598 ) 28,092 $ 28 25,027,007 $ 25,027 $ 55,737,117 $ (44,558,409 ) $ (1,182,952 ) $ 10,020,811 6 Table of Contents Nature of Business Relationship with and Going ConcernOwnership by Camber Energy, Inc.7 Table of Contents 8 Table of Contents 9 Table of Contents 10 Table of Contents exploration,and development and production of oil and natural gas properties both individuallyin the Gulf Coast and through collaborative partnershipsMid-Continent regions of the United States, with other companiesthe Company’s petroleum-focused subsidiaries owning oil and gas leases in this field of endeavor. Since the beginning of 2019,Texas, Louisiana, Mississippi and Kansas.has hadthrough its newly formed Ichor Energy Holdings, LLC subsidiary (“Ichor Energy Holdings”), completed an acquisition of working interests in oil and gas leases in Texas (primarily in Orange and Jefferson Counties) and Louisiana (primarily in Calcasieu Parish), which included 58 producing wells and 31 salt water disposal wells. On October 5, 2021, the following related activities:Company transferred all of the membership interests of Ichor Energy Holdings to a third party, and the third party assumed all of the rights and obligations associated with such membership interests, including the debt and derivatives associated with Ichor Energy Holdings and all of its entities. The consideration for the conveyance of the membership interests of Ichor Energy Holdings was the assumption by the third party of all of the rights and obligations associated with Ichor Energy Holdings and all of its entities. The assignment agreement contains a right of first refusal, and provides that if the third party receives an arms-length bona fide offer from any third party to purchase any of the membership interests in Holdings, such interests shall first be offered to the Company, who shall have the right, exercisable within thirty (30) calendar days, to elect to purchase such membership interests upon substantially the same terms and conditions as are contained in the offer.·On May 1, 2019, the Company’s subsidiary, Mid-Con Development, LLC sold all of its interests in the oil and gas assets Mid-Con Development, LLC owned in Ellis and Rooks Counties, Kansas, consisting of working interests in approximately 41 oil leases comprising several thousand acres.11Table of Contents $ 91,008,735 $ 120,501,052 $ 110,681,581 $ 88,917,536 $ 27,756,694 $ 28,555,823 $ (21,935,805 ) $ (22,337,966 ) $ (8,587,349 ) $ (8,456,370 ) $ (2,138,508 ) $ (1,778,540 ) $ (16,401,270 ) $ 8,312,386 These accompanyingESG Clean Energy License$15,458,598$27,983,342 for the nine months ended September 30, 20202021, as compared to a net loss of $9,220,005$14,275,646 for the nine months ended September 30, 2019. 2020. The loss for the nine months ended September 30, 2021 was comprised of, among other things, certain non-cash items, including: (i) stock-based compensation of $470,598; (ii) accretion of asset retirement obligation of $438,225; (iii) depreciation, depletion & amortization of $6,844,553; (iv) amortization of debt discount of $3,406,654; (v) change in fair value of derivatives of $(16,401,270); and (vi) loss on financing settlements of $2,774,341.2020,2021, the Company has a stockholders’ deficit of $8,115,975 and total long-term debt of $93,007,847. As of September 30, 2021, the Company has a working capital deficiency of approximately $63,000,000.$60,000,000. The largest components of current liabilities creating this working capital deficiency are (a)(i) notes payable with a face value aggregating approximately $6.4$4.7 million as of September 30, 20202021 due in DecemberFebruary of 2020, (b)2022; (ii) a revolving credit facility with a balance of $6,790,000$5,665,000 as of September 30, 20202021 due in MayJanuary of 2021, (c)2022; (iii) a note payablederivative liability of approximately $15.6 million as of September 30, 2020 due in June of 2021,$16,074,519; and (d) a(iv) Elysium Energy Holdings’ term loan agreement with a face value of approximately $34.3$30.7 million as of September 30, 2020.2021, with a maturity date of August 3, 2022.ManagementAs described in Note 2, in October 2021 the Company transferred its interest in each of Ichor Energy Holdings and Elysium Energy Holdings to third parties. As a result, the Company no longer has evaluated these conditionsthe assets and has developed a plan which,liabilities (including debt and derivatives mentioned in part, address these obligations as follows:the above paragraph) within such entities.·The acquisition of Petrodome Energy LLC in 2017 and the oil and gas expertise retained by Petrodome at the end of 2017 provided an internal lease operating company to efficiently evaluate development opportunities.·The Ichor Energy Acquisition at the end of 2018 is believed to provide cash flow sufficient to not only satisfy the Company’s debt service associated with this acquisition, but to also fund a work over program to increase this purchased production beyond its current average daily production of 2,000 BOE and provide a quicker principal reduction, resulting in an increased equity position relative to these assets. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the associated term loan, and distributions to Viking of $65,000 per month for general and administrative expenses, and a quarterly tax distribution at the current statutory rates if applicable. On a quarterly basis after appropriate distributions to the Company, any cash in excess of $2,000,000 plus unfunded approved development projects is swept by the term loan lender as an additional principal payment on the debt.7Table of Contents·The Company has a revolving credit facility with CrossFirst Bank, which was approved for $30,000,000. The balance outstanding at September 30, 2020 is approximately $6,790,000 with a maturity date of May 10, 2021. Additional funds could be made available from this facility for projects reviewed and approved by the lender.·The Elysium Energy Acquisition on February 3, 2020 is believed to provide cash flow sufficient to not only satisfy the Company’s debt service associated with this acquisition, but to also fund a development program to increase this purchased production beyond its current average daily production of 2,700 BOE and provide a quicker principal reduction, resulting in an increased equity position relative to these assets. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the associated term loan, certain oil and gas development projects approved by the lender, and a cost allocation for general and administrative expenses of $150,000 per month. Additionally, to the extent that Elysium has excess cash flow (as specified in the term loan agreement), the Company is required to make mandatory prepayments of the term loan, without penalty or premium, equal to seventy-five percent (75%) of such excess cash flow.Additionally, recentFurther, oil and gas price volatility as a resultand the impact of geopolitical conditions and the global COVID-19 pandemic have already had and are expected tomay 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 our oilits products and gas production,services, reduction in the selling price of the Company’s oilproducts and gas, failure of a counterparty to make required hedge payments,services, possible disruption of production as a result of worker illness or mandated production shutdowns, the Company’s ability to maintain compliance with loan covenants and/or refinance existing indebtedness, and access to new capital and financing.13 Table of Contents Thesewillmay be able to continue to develop new opportunities and willmay be able to obtain additional funds through debt and / or equity financings to facilitate its developmentbusiness 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.24 Summary of Significant Accounting Policies8Table of Contentsand its majority owned (70%) subsidiary, Elysium Energy Holdings, LLC, and its wholly owned subsidiaries, Elysium Energy, LLC, Elysium Energy TX, LLC, Elysium Energy LA, LLC, Pointe A La Hache, L.L.C., Potash, L.L.C., Ramos Field, L.L.C., and Turtle Bayou, L.L.C., all based in Houston, Texas which provides a base of operations to facilitate property acquisitions in Texas, Louisiana and Mississippi. The noncontrolling (30%) interest of Elysium Energy Holdings, LLC and its subsidiaries is separately stated in stockholders’ equity in the consolidated balance sheet and the net income attributable to the noncontrolling interest is stated separately in the consolidated statement of operations. All significant intercompany transactions and balances have been eliminated.14 Table of Contents d)e) Financial InstrumentsAccounting Standards Codification, “ASC” Topic 820-10, “Fair Value Measurement” requires disclosure ofThe Company discloses the fair value of its financial instruments held by the Company. ASC Topic 820-10, defines fair value, and establishesunder a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measurement.hierarchy. 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 three levels of valuation hierarchy are defined as follows:Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.Level 2: 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.Level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement.9Table of Contentsand for the nine months ended September 30, 20202021 are classified below based on the three fair value hierarchy described above:- 4,376,174 - 9,534,996 0 0 0 0 $ - $ 4,376,174 $ - $ 9,534,996 - 965,903 - (965,903 ) 0 16,074,519 0 (16,401,270 ) $ - $ 965,903 $ - $ (965,903 ) $ 0 $ 16,074,519 $ 0 $ (16,401,270 ) 15 Table of Contents 20192020 are classified below based on the three fair value hierarchy described above:- - - - 0 1,220,209 0 6,227,390 $ 0 $ 1,220,209 $ 0 $ 6,227,390 5,158,822 - (3,308,880 ) 893,458 0 (741,818 ) $ - $ 5,158,822 $ - $ (3,308,880 ) $ 0 $ 893,458 $ 0 $ (741,818 ) 10Table of Contents16 Table of Contents $4,376,174$0 and $0$1,220,209 as of September 30, 20202021 and December 31, 20192020, respectively, and the derivative liabilities were $965,903$16,074,519 and $5,158,822$893,458 as of September 30, 20202021 and December 31, 20192020, respectively. The change in the fair value of the derivative assets and liabilities for the nine months ended September 30, 20202021 consisted of an increase of $9,534,996$12,976,173 associated with commodity derivatives existing at the beginning of 2020 and an decrease of $965,903 associated with the new commodity derivative related to Elysium’s acquisition on February 3, 2020.2021.2020:2021:118,936 $ 2.715 196,078 $ 24,600 $ 50.85 16,278 $ 10,135 $ 6,934 $ 118,936 $ 2.715 196,078 24,600 $ 50.85 10,135 6,934 e)The derivatives above were all held by Ichor Energy Holdings and Elysium Energy Holdings. As described in Note 2, in October 2021 these derivative contracts were assumed by third parties20202021 and December 31, 2019,2020, the Company has cash deposits in excess of FDIC insured limits in the amounts of $3,176,970$5,343,503 and $4,163,360$3,726,783, respectively.11Table of Contents$3,620,426$3,721,993 as of September 30, 20202021 consists of $2,588,182$2,145,796 held by Ichor Energy, LLC and/or its subsidiaries and $1,032,244$1,576,197 held Elysium Energy, LLC and/or its subsidiaries.six monthsix-month period by an approved plan of development (“APOD Capex Amount”). At September 30, 2020,2021, the restricted cash did not exceed the MLR and the APOD Capex Amount.17 Table of Contents f)g) Accounts receivable20202021 and December 31, 2019.2020.g)h) Prepaid expenses12Table of Contentsh)j) Limitation on Capitalized Costs18 Table of Contents i)k) Oil and Gas Reservesj)l) Investment in Unconsolidated Entity$ 0 8,058,771 47,772 $ 8,106,543 19 Table of Contents three and nine months ended September 30, 20202021 there were approximately 125,890,78448,182,727 common stock equivalents that were omitted from the calculation of diluted income per share as they were not dilutivek)o) Revenue Recognition13Table of Contents20202021 and 2019:2020:$ 8,041,917 $ 7,481,016 $ 25,107,672 $ 22,407,578 $ 9,518,232 $ 6,372,765 $ 24,460,736 $ 18,837,695 2,107,470 1,519,575 6,379,530 4,673,928 4,206,625 2,107,471 12,929,513 6,378,731 (3,819,148 ) 1,134,927 (6,896,901 ) 5,547,192 (225,048 ) 534,224 378,025 723,584 $ 10,149,387 $ 9,000,591 $ 31,487,202 $ 27,081,506 $ 9,680,661 $ 10,149,387 $ 30,871,373 $ 31,487,202 20 Table of Contents l)p) Income TaxesThe Company has estimated net operating loss carryforwards in excessIn assessing the realizability of $20,000,000 at September 30, 2020. The potential benefit of these net operating losses has not been recognized in these financial statements because the Company cannot be assuredits deferred tax assets, management evaluated whether it is more likely than not that itsome portion, or all of its deferred tax assets, will utilizebe realized. The realization of its deferred tax assets relates directly to the net operating losses carried forward in future years. In December 2017, tax legislation was enacted limiting the deduction for net operating losses fromCompany’s ability to generate taxable years beginning after December 31, 2017 to 80% of current year taxable income, eliminating net operating loss carrybacks for losses arising in taxable years ending after December 31, 2017, and allowing net operating losses to be carried forward indefinitely. On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act was enacted which modified the prior legislation to allow 100% of the net operating losses arising in tax years 2018, 2019, and 2020 to be carried back five years.income. The Company does not have taxable income available in the carryback period. Net operating losses originating in taxable years beginning prior to January 1, 2018 are still subject to former carryover rules. The net operating loss carryforwards generated prior to this date of approximately $11,000,000 will expire between 2020 through 2038.valuation allowance is then adjusted.14Table of Contentsm)q) Stock-Based Compensation21 Table of Contents 2020:2021:
of Shares
Average
Exercise
Price
Average
Remaining
Contractual Life
Intrinsic
Value
of Shares
Average
Exercise
Price
Average
Remaining
Contractual Life
Intrinsic
Value44,629,939 0.26 - 7,111,021 0.99 - 7,072,747 0.07 - - 100,000 .57 - 703,500 - - - - - - - - - - (104,167 ) - - - 50,999,186 $ 0.25 $ - 7,106,854 $ 0.76 $ - 50,999,186 $ 0.25 $ - 7,106,854 $ 0.76 $ - The Company issued 573,375 common shares from the exercise of 703,500 warrants during the nine months ended September 30, 2020.n)r) Impairment of long-lived assetsthree and nine months ended September 30, 20202021 and 2019.2020.15Table of Contentso)s) Accounting for Asset Retirement Obligations2020: 2021:$ 3,538,637 $ 6,164,231 1,514,328 0 1,800 (130,228 ) 360,937 438,225 $ 5,413,902 $ 6,474,028 22 Table of Contents p)t) Undistributed Revenues and Royaltiesq)u) Subsequent events20202021 through the date of filing of this report.16Table of Contents3.Business AcquisitionAs discussed in Note 1, on February 3, 2020, the Company, through its subsidiary Elysium Energy, LLC (“Elysium Energy”) completed an acquisition of working interests in certain oil and gas leases in Texas and Louisiana. The aggregate consideration transferred for the working interests of $29,496,356 substantially consisted of (i) the net proceeds from the Company’s borrowings on February 3, 2020 with various lenders represented by 405 Woodbine, LLC and Camber Energy, Inc., less (ii) the net effect of the resolution of February 3, 2020 on all amounts outstanding under the Company’s December 2018 promissory note with RPM Investments in exchange for a new note with EMC Capital Partners, LLC (including the pay-down of such new note as a result of the post-closing adjustments). See Note 7 to the consolidated financial statements for further information on all of these borrowings. The aggregate consideration has been provisionally allocated to the fair value of assets and liabilities as follows:$ 31,010,684 (1,514,328 ) $ 29,496,356 Proforma unaudited condensed selected financial data for the three and nine months ended September 30, 2019 as though the Elysium Energy Acquisition had taken place at January 1, 2019 are as follows:$ 16,531,298 $ 44,731,386 $ 4,240,249 $ (4,625,242 ) $ 0.04 $ (0.10 ) Note 4.5. Oil and Gas Properties2020:2021:$ 76,532,985 $ 23,054,130 $ (1,500,000 ) $ 98,087,115 $ 81,352,074 $ 363,833 $ 0 $ 81,715,907 (7,608,544 ) (5,626,115 ) - (13,234,659 ) (16,648,321 ) (4,318,558 ) 0 (20,966,879 ) $ 68,924,441 $ 17,428,015 $ (1,500,000 ) $ 84,852,456 $ 64,703,753 $ (3,954,725 ) $ 0 $ 60,749,028 $ 56,168,428 $ 9,399,212 $ (1,000,000 ) $ 64,567,640 $ 47,209,269 $ 310,379 $ 0 $ 47,519,648 (5,350,753 ) (2,995,755 ) - (8,346,508 ) (9,756,586 ) (2,431,837 ) 0 (12,188,423 ) $ 50,817,675 $ 6,403,457 $ (1,000,000 ) $ 56,221,132 $ 37,452,683 $ (2,121,458 ) $ 0 $ 35,331,225 $ 119,742,116 $ 23,831,472 $ (2,500,000 ) $ 141,073,588 $ 102,156,436 $ (6,076,183 ) $ 0 $ 96,080,253 During the three months ended September 30, 2020,Note 6. Intangible Assetsrecognizedreceived (i) an impairment of oilexclusive license to ESG’s patent rights and gas properties of $2,500,000 which is includedknow-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 accompanying Consolidated Statement of Operations.United States that are operated by the Company or its affiliates. 1723Table of Contents $ 500,000 $ 750,000 $ 1,250,000 $ 1,750,000 $ 2,250,000 $ 2,750,000 $ 3,250,000 $ 3,250,000 $ 5,000,000 $ 0 (36,367 ) 0 $ 4,963,633 $ 0 24 Table of Contents 5. 7.Related Party Transactionshas incurred expenses on behalf of, and made advancesrenders professional services to the Company through AGD Advisory Group, Inc., an affiliate of Mr. Doris’s. As of September 30, 2021, the total amount due to AGD Advisory Group, Inc. is $180,000 and is included in order to provide the Company with funds to carry on its operations.accounts payable. Additionally, Mr. Doris has made several loans through promissory notes to the Company, all accruing interest at 12%, and payable on demand. During the nine months ended September 30, 2021, the Company made payments totaling $63,319 toward principal and interest associated with these loans, and Mr. Doris in separate transactions sold $506,000 of his loans to independent third parties. As of September 30, 2020, the total amount2021, there are no remaining balances due to Mr. Doris for these loans is $573,562.loans.2020,2021, the total amount due to FWB Consulting, Inc. is $161,968$281,968 and is included in accounts payable.As of September 30, 2020, Troy Caruso and various entities affiliated with Mr. Caruso owned in aggregate more than 10% of the Company’s outstanding common stock. Mr. Caruso and/or his affiliates have provided funding to the Company from time to time, including under certain of the Company’s private placements, and one of the affiliates has provided consulting services to the company. Such activity during the nine months ended September 30, 2020 includes the following: 1.During the three months ended March 31, 2020, certain of the entities affiliated with Mr. Caruso increased their respective loans to the Company by $204,851, and along with accrued interest thereon of $21,149, exchanged their entire balance of $550,000 into the Company’s offering of a subordinated, secured, convertible debt instrument with equity features, and received 825,000 common shares in the exchange.2.During the three months ended June 30, 2020, the Company repaid all obligations associated with short-term funding arrangements advanced by Mr. Caruso and certain of his affiliated entities between September 30, 2019 and February 7, 2020. Such repayments, including applicable fees, consisted of $5,370,066 in cash and the issuance of 17,954,565 common shares at a fair value of $2,748,504.3.During the three months ended September 30, 2020, certain of these affiliated entities made two loans to the Company in the form of convertible promissory notes totaling $2,089,000. The Company issued 1,108,500 common shares upon execution of one of the notes. The affiliates elected to convert the entire principal amount owing under each convertible promissory note, and the Company issued 17,081,529 common shares in connection with such conversions.4.During the nine months ended September 30, 2020, the Company issued 5,547,394 common shares for consulting services to one of Mr. Caruso’s affiliates valued at $747,264As of September 30, 2020, Mr. Caruso and affiliated entities hold $550,000 of the Company’s convertible debt on the terms of the offering commenced by the Company on February 18, 2020, and such amount is included in long-term debt. 6.8. EquityAugust 31,December 22, 2020, each share of Series C Preferred Stock entitles the holder thereof to 4,90037,500 votes on all matters submitted to the vote of the stockholders of the Company. Notwithstanding, so long as Camber Energy, Inc. owns or is entitled to own at least 51% of the outstanding shares of common stock of the Company and James Doris remains a director and Chief Executive Officer of Camber, each share of Preferred Stock shall not be entitled to any votes on matters submitted to a vote of the stockholders of the Company. Each share of Series C Preferred Stock is convertible, at the option of the holder, at any time after the date of issuance of such share, at the office of the Company or any transfer agent for such stock, into 4,90037,500 shares of fully paid and non-assessable common stock. However, upon any business combination or merger between Camber and Viking such that Camber acquires substantially all of the outstanding common stock or substantially all of Viking’s assets, the Company shall ensure that the Preferred Stock is convertible into the greater of:(i) 25,000,000 common shares of Camber (or a number of preferred shares of Camber convertible into such number of common shares of Camber); or (ii) that number of common shares of Camber that 25,000,000 shares of common stock would be convertible or exchange into in the Combination (or a number of preferred shares of Camber convertible into such number of common shares of Camber).NovemberJanuary 5, 2018,2021 the Company amended its Articlesfiled a Certificate of IncorporationAmendment with the Secretary of State of the State of Nevada to increaseeffect a reverse split of our common stock at a ratio of 1-for-9 (the “Reverse Stock Split”). As a result of the number ofReverse Stock Split, each nine (9) pre-split shares of common stock outstanding were automatically combined into one (1) new share of common stock. All share and per shares numbers have been adjusted to reflect the Reverse Stock Split.25 Table of Contents is authorized to issue from 100,000,000 to 500,000,000.issued shares of its common stock as follows:490,689 shares of common stock issued for services valued at fair value on the date of the transactions, totaling $388,662. 169,336 shares of common stock issued as discount on debt valued at fair value on the date of the transaction totaling $141,321. 16,153,846 shares of common stock issued pursuant to a subscription agreement for $18,900,000 (see Note 1) 27,500,000 shares of common stock issued pursuant to a Securities Purchase Agreement for $11,000,000 (see Note 1) 2,603,139 shares of common stock issued in settlement of debt and short-term borrowings, valued at fair value on the date of the transaction totaling $3,800,164, and resulting in a loss on financing settlements of $1,847,810. 950,000 shares of common stock issued as prepaid equity-based compensation, totaling $1,187,500. 20,949,4102,327,712 shares of common stock issued for services valued at fair value on the date of the transactions, totaling $2,986,763.$2,986,76318Table of Contents·573,37547,026 shares of common stock pursuant to the exercise of 703,000 warrants. 20,355,91116,667 shares of common stock issued for exercise of warrants as discount ona reduction of debt valued at fair value on the date of the transaction totaling $2,693,428.$15,000.99,06411,007 shares of common stock issued pursuant to a subscription agreement for $7,925.760,0122,261,768 shares of common stock issued for interestas discount on debt valued at fair value on the date of the transaction totaling $115,959.$2,375,501.32,155,82984,446 shares of common stock issued pursuant tofor payment of interest, totaling $115,9583,572,870 shares of common stock issued for various debt conversions at stipulated contract rates totaling $4,350,146.26,151,2862,905,699 shares of common stock issued as reductionin settlement of debt and accrued expenses, valued at fair value on the date of the transaction totaling $4,110,250, and resulting in a loss on financing settlements of $931,894.During the nine months ended September 30, 2019, the Company issued shares of its common stock as follows:·1,637,876 shares of common stock issued for servicesshort-term borrowings, valued at fair value on the date of the transaction totaling $276,782.$4,110,250 and resulting in a loss on financing settlements of $931,894.·3,650,046 shares of common stock issued for accrued interest on promissory notes (c) Noncontrolling InterestAs described in Note 7 to the consolidated financial statements, on February 3, 2020 and June 26, 2020, Viking borrowed $5.0 million and $4.2 million respectively from Camber Energy, Inc. As additional consideration for each loan, Viking assigned Camber 25% and 5% (respectively) of the membership interests in Elysium Holdings. At the time of assignments, the fair value of each such interest was zero. The following schedule discloses the effects of changes in the Company’s ownership interest in its subsidiaries on the Company’s equity for the nine months ended September 30, 2020:Noncontrolling interest - December 31, 2019 $ - Transfers to the noncontrolling interest Recognition of noncontrolling interest at fair value - Net loss attributable to noncontrolling interest 1,182,952 Change from net income attibutable to Viking Energy Group, Inc and transfers to from noncontrolling interest $ 1,182,952 1926Table of Contents 7.9. Long-Term Debt and Other Short-Term Borrowings and other short-term borrowings consisted of the following at September 30, 20202021 and December 31, 2019:2020:6,420,020 11,163,357 6,790,000 7,655,589 51,974,377 53,699,940 5,665,000 6,490,000 50,467,725 51,400,794 2027Table of Contents - 23,777,948 40,956 48,658 2,218,799 2,215,221 1,035,783 1,032,215 9,200,000 - 29,999 38,397 2,223,566 2,220,001 1,040,537 1,036,982 0 15,591,629 4,365,480 4,182,136 0 149,600 150,000 150,000 93,007,847 111,753,164 (41,945,548 ) (32,977,368 ) $ 51,062,299 $ 78,775,796 2128Table of Contents15,591,629 - 30,677,339 - 3,671,874 - 149,600 150,000 127,920,377 99,592,928 22Table of ContentsOther short-term borrowings – with related parties:Table of Contents On September 30, 2019, the Company received $910,000 under an agreement that requires the Company to make 28 weekly payments aggregating $1,237,600 through April 13, 2020. On December 23, 2019, the Company received an additional $242,750 under a replacement agreement that requires the Company to make 25 weekly payments aggregating $1,620,000 through June 15, 2020. The balance shown is net of the maximum discount of $413,445 at December 31, 2019.-1,141,755On December 23, 2019, the Company received $2,939,970 under an agreement that requires the Company to make 25 weekly payments aggregating $4,050,000 through June 15, 2020. The balance shown is net of the maximum discount of $1,110,030 at December 31, 2019.-2,855,368Other short-term borrowings:On October 3, 2019, the Company received $480,200 under an agreement that requires the Company to make 28 weekly payments aggregating $666,400 through April 20, 2020. The balance shown is net of the maximum discount of $132,289 at December 31, 2019.-423,111On November 26, 2019, the Company received $200,000 from an individual. The advance was non-interest bearing and payable on demand.-200,000During May and June 2020, the Company received $350,000 from short-term unsecured promissory notes payable in six months from date of issue. The notes bear interest at 13.25% payable monthly and provide for the issuance of 500,000 common shares of the Company for every $100,000 invested. The balance shown is net of unamortized discount of $40,610 as of September 30, 2020.309,390-On July 3, 2020 the Company received $500,000 under a short-term promissory note payable in six months form the date of issue. The note bears interest at 12%, and provides for the issuance of 1,600,00 common shares of the Company. The balance shown is net of unamortized discount of $223,560 as of September 30, 2020.276,440-128,506,207 104,213,162 (61,614,657 ) (19,225,045 ) $ 66,891,550 $ 84,988,117 $ 67,592,232 $ 5,977,575 $ 61,614,657 18,088,867 1,375,297 16,713,570 $ 44,885,099 $ 2,939,551 $ 41,945,548 3,593,351 888,057 2,705,294 3,825,075 888,057 2,937,018 46,815,929 222,175 46,593,754 46,757,517 222,659 46,534,858 708,643 7,739 700,904 1,456,504 7,747 1,448,757 3,520 0 3,520 178,028 - 178,028 138,146 0 138,146 $ 136,977,050 $ 8,470,843 $ 128,506,207 $ 97,065,861 $ 4,058,014 $ 93,007,847 2020,2021, the Company is in compliance with these loan covenants.$63,592,000 (and$63,592,000(and as amended in June 2020), the Company is required to provide, periodically to the lenders, certain information (including restrictive financial ratios) regarding the financial and operational performance of the related assets, accompanied by a compliance certificate. At September 30, 2020,2021, the Company is in compliance with these loan covenants.was in compliance with all loan covenants except certain mid-year financial ratios at June 30, 2020; in August 2020, the Company (i) obtained a waiver from the lenders of such noncompliance as of June 30, 2020 and (ii) modified and added certain covenants to the Term Loan Credit Agreement. The Company is in compliance with all applicable covenants in the agreement at September 30, 2020. Given current difficult and volatile economic conditions,2021 except for a default in meeting the maximum leverage ratio. The Company has continued to classifyclassified this debt as a current liability in the accompanying Consolidated Balance SheetSheets (i) due to this default at September 30, 2020 as the Company is uncertain as to2021 and (ii) its ability to comply with all of the covenantsmaturity in the future.August 2022. 2329Table of Contents 8.10. Other Commitments and contingenciesContingencies$48,192 and $72,228$72,288 for the nineniner months ended September 30, 20202021 and 2019.Pending MergerOn February 3, 2020, the Company entered into an Agreement and Plan of Merger with Camber Energy, Inc. The Merger Agreement provides that a newly-formed wholly-owned subsidiary of Camber will merge with and into Viking, with Viking surviving the merger as a wholly-owned subsidiary of Camber. The proposed merger contemplates Camber issuing newly-issued shares of common stock, with the equity holders of Viking having an 80% interest in the post-closing entity. The merger, if completed, will provide the opportunity for our common stock to be listed on the NYSE American.The Merger Agreement provides, among other things, that the board of directors of the combined company will be comprised of five directors, one to be appointed by Camber and four to be appointed by Viking. The Merger Agreement also provides that James A. Doris, the Chief Executive Officer of Viking, shall serve as the Chief Executive Officer of the combined company. The combined company will have its headquarters in Houston, Texas.The completion of the Merger is subject to numerous conditions including (i) the effectiveness of a registration statement registering the shares of Camber common stock to be issued to Viking’s shareholders in the merger and (ii) shareholder approval of the merger transactions by Camber’s shareholders and Viking’s shareholders. Additional closing conditions include (i) that in the event the NYSE American determines that the merger constitutes, or will constitute, a “back-door listing”/”reverse merger”, Camber (and its common stock) is required to qualify for initial listing on the NYSE American, and (ii) that the only loan obligations with a maturity date in 2020 that Viking shall have at closing shall be the 2018 Convertible Notes.The Merger can be terminated under various conditions or circumstances. The Merger Agreement contains customary indemnification obligations of the parties and representations and warranties. Upon consummation of the merger, Viking will be deemed the acquirer for accounting purposes.2020.9.11.Other Subsequent Subsequent EventsIn a series of separate transactions subsequent to September 30, 2020,Equity Issuances:359,5255,495 shares of common stock in exchange for services rendered by two separate parties.services.2020,2021, holders of convertible promissory notes aggregating $1,901,750 converted the entire principal amount into 2,535,665 shares of common stock.executed two new promissory notes totaling $250,000, and concurrently issued 375,000a warrant agreement entitling the holder to purchase up to 200,000 shares of its common shares pursuant to the termsstock at a fixed conversion price of the notes. $1.00 per share. The warrant agreement has a term of 2 years. 2430Table of Contents (“Viking”(the” Company,” “we,” “us” or the “Company”“our”) is an independent exploration and productionenergy company, engagedcurrently targeting opportunities in the salefollowing sectors:31 Table of Contents crude oil, natural gas and natural gas liquids, focused on the acquisition and developmentgenerating revenue within a reasonable period of time.natural gas properties in the Gulf Coast and Mid-Continent regions of the United States. TheStates, specifically in Texas, Louisiana and Kansas, and the Company ownssells oil and gas leases in Texas, Louisiana, Mississippi and Kansas. Theproduced from such properties. Within the oil & gas sector, the Company targets under-valued assets with existing hydrocarbon production and with realistic appreciation potential.The Company's business plan is to engage in the acquisition, exploration, development of and production from oil and natural gas properties, both individually and through collaborative partnerships with other companies in this field of endeavor. Viking has relationships with industry experts and formulated an acquisition strategy, with emphasis on acquiring under-valued, producing properties from distressed vendors or those deemed as non-core assets by larger sector participants. The Company does not focus on speculative exploration programs, but rather targets oil and gas properties with current production and untapped reserves. The Company’s growth strategy includes the following key initiatives:•Acquisition of under-valued producing oil and gas assets•Employ enhanced recovery techniques to maximize production: and•Implement responsible, lower-risk drilling programs on existing assets•Aggressively pursue cost-efficiencies•Opportunistically explore strategic mergers and/or acquisitions•Actively hedge to mitigate commodity risk25Table of Contentsforrelated to various operations and acquisition efforts over the current strategy being implemented by managementlast several years:Acquisitions – Texas, Louisiana and MississippiOil & Gas ActivityOn December 22, 2017, the Company completed an acquisition of 100% of the membership interests of Petrodome Energy, LLC (“Petrodome”), a privately-owned company, with working interests in multiple oil and gas fields across Texas, Louisiana and Mississippi, comprising approximately 11,700 acres. As a part of this acquisition, the Company retained an operational office and staff in Houston, Texas, which provided the Company the capability of operating many of its own wells internally. This expertise has since been utilized to evaluate potential oil and gas acquisitions, evaluate the management of the Company’s oil and gas assets, and evaluate and develop new drilling prospects. On December 28, 2018, the Company, through its then newly formed Ichor Energy Holdings, LLC subsidiary (“Ichor Energy Holdings”), completed an acquisition of working interests in oil and gas leases in Texas (primarily in Orange and Jefferson Counties) and Louisiana (primarily in Calcasieu Parish), which included 58 producing wells and 31 salt water disposal wells. On May 10, 2019, Petrodome Louisiana Pipeline LLC (“Petrodome LA”), a subsidiary of Petrodome, acquired a majority working interest in 6 gas wells (including 2 producing gas wells), 1 producing oil well and 1 salt water disposal well located in the East Mud Lake Field in Cameron Parish, Louisiana, with leases to mineral rights (oil and gas) concerning approximately 765 acres. On February 3, 2020, the Company, through its then newly formed majority-owned Elysium Energy Holdings, LLC subsidiary (“Elysium Energy Holdings”), acquired interests in oil and gas properties located in Texas and Louisiana, which included leases, working interests, and over-riding royalty interests in oil and gas properties in Texas (approximately 72 wells in 11 counties) and Louisiana (approximately 55 wells in 6 parishes), along with associated equipment. 32 Table of Contents PetrodomeElysium Energy LLC,Holdings to a privately-owned company, with working interests in multiple oilthird party, and gas fields across Texas, Louisiana and Mississippi, comprising approximately 11,700 acres.As a part of this acquisition, the Company retained an operational office in Houston, Texas that includes several senior level professionals with over 100 years of combined oil and gas experience which provides the Company the capability of operating many of its own wells internally. This expertise has since been utilized to evaluate potential oil and gas acquisitions, evaluate the managementthird party assumed all of the Company’s oilrights and gas assets, and evaluate and develop new drilling prospects.obligations associated with such membership interests, including the debt associated with Elysium Energy Holdings. – Texas and LouisianaDecember 28, 2018,August 6, 2021, the Company through its newly formed Ichor Energy subsidiaries completed an acquisition (the “Ichor Energy Acquisition”) of working interests in oil and gas leases in Texas (primarily in Orange and Jefferson Counties) and Louisiana (primarily in Calcasiue Parish), which included 58 producing wells and 31 salt water disposal wells. The properties produce hydrocarbons from known reservoirs/sands in the on-shore Gulf Coast region, with an average well depth in excess of 10,600 feet, and daily production volumes averaging in excess of 2,000 BOE. This acquisition of these assets is consistent with the locationacquired approximately 60.5% of the Company’s Petrodome assetsissued and outstanding shares of Simson-Maxwell, a Canadian federal corporation. Simson-Maxwell is a leading manufacturer and supplier of industrial engines, power generation products, services and custom energy solutions. The company integrates innovative technology with superior products to contribute to global energy sustainability. Operating for over 80 years, Simson-Maxwell’s diverse group of employees at seven branch locations service over 4,000 maintenance contracts and assist with satisfying the acquired assets are effectively managed fromenergy and power-solution demands of the Company’s Houston office.company’s entire customer-base.May 10, 2019, Petrodome Louisiana Pipeline LLC ("Petrodome LA")August 18, 2021, the Company entered into a license agreement with ESG, a Delaware limited liability company, pursuant to which Viking received (i) an exclusive license to ESG Clean Energy’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 (the “Intellectual Property”) in Canada, and (ii) a subsidiary ofnon-exclusive license to the Company’s subsidiary, Petrodome Energy, LLC, acquired a majority working interestIntellectual Property in 6 gas wells (including 2 producing gas wells), 1 producing oil well and 1 salt water disposal well locatedup to 25 sites in the East Mud Lake FieldUnited States that are operated by Viking or its affiliates.Cameron Parish, Louisiana,connection with leases to mineral rights (oil and gas) concerning approximately 765 acres.its petroleum operations, Simson-Maxwell’s power generation operations, or otherwise.33 Table of Contents 3, 2020, the subsidiary of the Company’s 75% owned subsidiary, Elysium Energy Holdings, LLC , acquired interests in oil and gas properties located in Texas and Louisiana, which included leases, working interests, and over-riding royalty interests in oil and gas properties in Texas (approximately 72 wells in 11 counties) and Louisiana (approximately 55 wells in 6 parishes), along with associated equipment. On February 4, 2020, Elysium hedged 75% of the estimated oil and gas production associated with the newly acquired assets for 2020, 60% of the estimated production for15, 2021, and 50% of the estimated production for the period between January, 2022 to July, 2022. Theses hedges have a floor of $45 and a ceiling ranging from $52.70 to $56.00 for oil, and a floor of $2.00 and a ceiling of $2.425 for natural gas.26Table of ContentsPending MergerOn August 31, 2020, The Company entered into an Amended and Restated Merger with Camber Energy, to amend and restate the Original Agreement. In addition to restating the Merger Amendments, the A&R Merger Agreement amended the agreement to: (a) provide for Viking to continue to have 28,092 shares of its Series C Preferred Stock issued and outstanding as of the closing of the Merger; (b) provide for such Series C Preferred Stock of Viking to be exchanged, on a one-for-one basis for a series of Series A Convertible Preferred Stock of Camber, which have substantially similar terms as the Viking Series C Preferred Stock (as recently amended), but with the holder thereof having the right to convert such Series A Convertible Preferred Stock into, and the right to vote a number of voting shares equal to, the number of shares of common stock of Camber which would have been issuable to the holder of such Series C Preferred Stock of Viking upon the closing of the Merger, had such preferred stock been fully converted into common stock prior to closing; (c) make other amendments throughout the Original Merger Agreement to provide for the concept of the exchange of Viking preferred stock for Camber preferred stock; (d) remove the closing conditions related to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which the parties have determined will not apply to the Merger; (e) provide for Viking’s consent to the Company’s payment of an aggregate of $600,000 in consideration to each non-executive member of the Camber Board of Directors and each Camber executive officer (which had previously been approved in concept by Viking pursuant to the Merger Amendments); (f) provide for Camber’s consent to an amendment to the designation of the terms of Viking’s Series C Preferred Stock, subject to applicable law and the approval of the holder thereof; (g) remove certain closing conditions to the Merger which have already occurred to date; (h) include as a closing condition that Viking must receive an opinion, from legal counsel or an independent public or certified accountant, in form and substance reasonably satisfactory to Viking, dated as of the closing date of the Merger, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, for U.S. federal income tax purposes, the Merger will be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code; (i) provide that Viking shall not have more than 28,092 shares of Series C Preferred Stock issued and outstanding at the time the Merger closes; (j) clarify that if the merger is not completed because Camber’s shareholders do not approve the merger, Camber would retain a 15% membership interest in Elysium Energy Holdings, LLC; and (k) make certain other clarifying changes and updates to the Original Merger Agreement.On February 3, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Camber Energy, Inc. (“Camber” or “Camber Energy”), the majority owner of the Company’s common stock. 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 Company (the “Merger”), with Vikingthe Company surviving the mergerMerger as a wholly-ownedwholly- owned subsidiary of Camber. The proposed merger contemplatesissuing newly-issuedthe Company and Merger Sub, will be converted into the right to receive one share of common stock of Camber; and (ii) of Series C Convertible Preferred Stock of the Company (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 Camber (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 Camber’s common stock), will be treated equally with Camber’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 Camber’s share capital; (b) on a resolution to approve the equity holdersterms of a buy-back agreement; (c) on a proposal to wind up Camber; (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 having an 80% interestCommon 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.post-closing entity. The merger, if completed, will provide the opportunity for our commoncase of Company stock tooptions, be listedconverted into vested Camber stock options based on the NYSE American.merger exchange ratio calculated as provided above (the “Exchange Ratio”).the board of directorseffective as of the combined company will be comprised of five directors, one to be appointed by Camber and four to be appointed by Viking. The Merger Agreement also provides thatEffective Time, James A. Doris, the current Chief Executive Officer of Viking,both the Company and Camber, shall serve as thePresident and Chief Executive Officer of the combined company.Combined Company following the Effective Time. The combined companyMerger Agreement provides that, as of the Effective Time, the Combined Company will have its headquarters in Houston, Texas.34 Table of Contents numerouscustomary conditions, including (i) adoption of the Merger Agreement by Camber’s stockholders and approval of the Share Issuance by Camber’s stockholders, (ii) receipt of required regulatory approvals, (iii) effectiveness of a registration statement registeringon Form S-4 for the shares of Camber common stock to be issued to Viking’s shareholders in the mergerMerger (the “Form S-4”), and (ii) shareholder approval(iv) the absence of any law, order, injunction, decree or other legal restraint preventing the completion of the merger transactionsMerger 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 Camber’s shareholdersthe other party of its obligations under the Merger Agreement and Viking’s shareholders. (iii) the absence of any material adverse effect on the other party, as defined in the Merger Agreement. (i) that in the event the NYSE American determines that the mergerMerger constitutes, or will constitute, a “back-door listing”/”reverse “reverse merger”, Camber (and its common stock) is required to qualify for initial listing on the NYSE American, pursuant to the applicable guidance and (ii) thatrequirements of the only loan obligations with a maturity date in 2020 that Viking shall have at closing shall beNYSE as of the 2018 Convertible Notes.Effective Time.27Table of Contentsunder various conditions(i) at any time with the mutual consent of the parties; (ii) by either Camber or circumstances. Company 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 Camber if the Merger shall not have been consummated on or before August 1, 2021; (iv) by Camber or Company, 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 Camber if Company is unable to obtain the affirmative vote of its stockholders for approval of the Merger; (vi) by Company if Camber is unable to obtain the affirmative vote of its stockholders required pursuant to the terms of the Merger Agreement; and (vii) by Company or Camber if there is a willful breach of the Merger Agreement by the other party thereto.contains customary indemnification obligations of the parties and representations and warranties. Upon consummation of the merger, Viking will be deemed the acquirer for accounting purposes.has not been terminated by either party.These accompanyingThe 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 $15,458,598$27,983,342 for the nine months ended September 30, 20202021, as compared to a net loss of $9,220,005$14,275,646 for the nine months ended September 30, 2019. 2020. The loss for the nine months ended September 30, 2021 was comprised of, among other things, certain non-cash items, including: (i) stock-based compensation of $470,598; (ii) accretion of asset retirement obligation of $438,225; (iii) depreciation, depletion & amortization of $6,844,553; (iv) amortization of debt discount of $3,406,654; (v) change in fair value of derivatives of $(16,401,270); and (vi) loss on financing settlements of $2,774,341.2020,2021, the Company has a stockholders’ deficit of $8,115,975 and total long-term debt of $93,007,847. As of September 30, 2021, the Company has a working capital deficiency of approximately $63,000,000.$60,000,000. The largest components of current liabilities creating this working capital deficiency are (a)(i) notes payable with a face value aggregating approximately $6.4$4.7 million as of September 30, 20202021 due in DecemberFebruary of 2020, (b)2022; (ii) a revolving credit facility with a balance of $6,790,000$5,665,000 as of September 30, 2020,2021 due in MayJanuary of 2021, (c)2022; (iii) a note payablederivative liability of approximately $15.6 million as of September 30, 2020, due in June of 2021,$16,074,519; and (d) a(iv) Elysium Energy Holdings’ term loan agreement with a face value of approximately $30.7 million as of September 30, 2020.2021, with a maturity date of August 3, 2022.35 Table of Contents Management has evaluated these conditions and has developed a plan which, in part, address these obligations as follows:·The acquisition of Petrodome Energy LLC in 2017 and the oil and gas expertise retained by Petrodome at the end of 2017 provided an internal lease operating company to efficiently evaluate development opportunities.·The Ichor Energy Acquisition at the end of 2018 is believed to provide cash flow sufficient to not only satisfy the Company’s debt service associated with this acquisition, but to also fund a work over program to increase this purchased production beyond its current average daily production of 2,000 BOE and provide a quicker principal reduction, resulting in an increased equity position relative to these assets. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the associated term loan, and distributions to Viking of $65,000 per month for general and administrative expenses, and a quarterly tax distribution at the current statutory rates if applicable. On a quarterly basis after appropriate distributions to the Company, any cash in excess of $2,000,000 plus unfunded approved development projects is swept by the term loan lender as an additional principal payment on the debt.·The Company has a revolving credit facility with CrossFirst Bank, which was approved for $30,000,000. The balance outstanding at September 30, 2020 is approximately $6,790,000 with a maturity date of May 10, 2021. Additional funds could be made available from this facility for projects reviewed and approved by the lender.·The Elysium Energy Acquisition on February 3, 2020 is believed to provide cash flow sufficient to not only satisfy the Company’s debt service associated with this acquisition, but to also fund a development program to increase this purchased production beyond its current average daily production of 2,700 BOE and provide a quicker principal reduction, resulting in an increased equity position relative to these assets. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the associated term loan, certain oil and gas development projects approved by the lender, and a cost allocation for general and administrative expenses of $150,000 per month. Additionally, to the extent that Elysium has excess cash flow (as specified in the term loan agreement), the Company is required to make mandatory prepayments of the term loan, without penalty or premium, equal to seventy-five percent (75%) of such excess cash flow.Additionally, recentFurther, oil and gas price volatility as a resultand the impact of geopolitical conditions and the global COVID-19 pandemic have already had and are expected tomay 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 our oilits products and gas production,services, reduction in the selling price of the Company’s oilproducts and gas, failure of a counterparty to make required hedge payments,services, possible disruption of production as a result of worker illness or mandated production shutdowns, the Company’s ability to maintain compliance with loan covenants and/or refinance existing indebtedness, and access to new capital and financing.28Table of ContentsTheseNonetheless, 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 willmay be able to continue to develop new opportunities and willmay be able to obtain additional funds through debt and / or equity financings to facilitate its developmentbusiness 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.20202021 and 2019,2020, should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019,2020, filed with the SEC on March 30, 2020.25, 2021.2020,2021, and December 31, 2019,2020, the Company had $5,951,272$6,615,870 (of which $3,620,426$3,721,993 is restricted) and $5,638,724$7,839,539 (of which $3,877,229$3,862,756 is restricted) in cash holdings, respectively.$3,620,426$3,721,993 as of September 30, 20202021, consists of $2,588,182$2,145,796 held by Ichor Energy, LLC and/or its subsidiaries and $1,032,244$1,576,197 held Elysium Energy, LLC, and/or its subsidiaries. the Company’s subsidiary, Ichor Energy LLC and its subsidiaries are parties, following March 31, 2019 the company is required at all times to maintain a minimum cash balance of $2,000,000 (the “MLR”). Within 30 days of the end of each quarter, commencing with the quarter ended June 30, 2019, the borrowercompany is required to pay the lenders, as an additional principal payment on the debt, any cash in excess of (i) the MLR and (ii) any funds necessary for the capital expenditures contemplated to be expended in the next six monthsix-month period by an approved plan of development (“APOD Capex Amount”). At September 30, 2020,2021, the restricted cash did not exceed the MLR and the APOD Capex Amount.36 Table of Contents the Company’s majority-owned subsidiary, Elysium Energy, LLC and its subsidiaries are parties, all receipts are to be deposited to a lockbox account under the control of the administrative agent, and then subsequently transferred for operations to the company’s bank accounts, all of which are subject to deposit account control agreements. The aggregate amount of unencumbered cash held in any Operating Account is not to be less than (a) $1,000,000 for the period commencing on December 31, 2020 through and including April 29, 2020, (b) $1,750,000 for the period commencing on April 30, 2021 through and including June 29, 2021, and (c) $2,500,000 for the period commencing June 30, 2021 through and including the Maturity Date. Commencing with the quarter ended September 30, 2020, the company is required to make mandatory prepayments of principal equal to 75% of excess cash flowExcess Cash Flow as specifieddefined in the agreement.As of September 30, 2020,On July 29, 2021, the Company has total long-term debtissued 27.5 million shares of common stock to Camber for $11 million in cash. Subsequently, on August 6, 2021, the Company acquired a 60.5% interest in Simson-Maxwell Ltd. For approximately $8 million in cash. Simson-Maxwell Ltd. is a leading manufacturer and other short-term borrowingssupplier of $128,506,207,industrial engines, power generation products, services and custom energy solutions with a current portion of $61,614,657. The current portion consists primarily of (a) notes payable with a face value aggregating approximately $6.4 million as of September 30, 2020, dueseven branches and over 4,000 maintenance contracts in December of 2020, (b) a revolving credit facility with a balance of $6,790,000 as of September 30, 2020, due in May of 2021, (c) a note payable of approximately $156 million as of September 30, 2020, due in June of 2021, and (d) a term loan agreement of approximately $30.7 million as of September 30, 2020. (see Going Concern Qualification in Note 1 to the consolidated financial statements included elsewhere herein).Canada.29Table of Contents20202021 compared to the three months ended September 30, 20192020as compared to $9,000,591 for the three months ended September 30, 2019, reflecting an increase in excessa decrease of 12%4.6% or $1,148,796.$468,726. This increasedecrease in revenue is primarily a result of the increased production from therecovering oil and gas assets acquiredmarket prices as compared to the sharp decline that occurred in February2020 during the same period, and the increased cost of 2020.our hedging contracts.increaseddecreased by approximately 95%, or $7,131,668$5,342,838 to $9,266,997 for the three-month period ended September 30, 2021, from $14,609,835 in the corresponding prior period. Lease operating costs decreased by $103,102 to $4,888,546 for the three-month period ended September 30, 2021 as compared to $4,991,648 for the three-month period ended September 30, 2020, from $7,478,167 in the corresponding prior period. A significant portion of this increase is due to an increase in stock-based compensation of $2,832,749cost saving initiatives being implemented. DD&A expense decreased by $428,224 to $3,235,200 during$2,181,326 for the three monthsthree-month period ended September 30,2021 as compared to $2,573,183 for the period ended September 30, 2020 primarily as compared to $402,451a result of the impairment charge for the corresponding period in 2019, and a $2,500,000 impairment charge against oil and gas assets duringyear ended December 31, 2020 decreasing the three months ended September 30, 2020. The increases in lease operating costs and DD&A are primarily attributable to the acquisition of additional oil and gas assets during the quarter ended March 31, 2020. Lease operating costs increased by approximately 40%, or $1,443,986, to 4,991,648 from $3,547,662 as compared to the three months ended September 30, 2019. DD&A expense, a non-cash expense, increased by $193,458, to $2,573,183 from $2,379,725amortization base used for the corresponding period in 2019.calculation. General and administrative expenses reflected an increase of approximately 10%,$776,374 to $1,190,145,$1,966,519, when compared to $1,076,287$1,190,145 in the corresponding prior period.37 Table of Contents a lossan income from operations for the threenine months ended September 30, 20202021 of $(4,460,448),$3,967,250, when compared to incomeloss from operations of $1,522,424$(271,532) for the threenine months ended September 30, 2019.2020.$(13,574,359) for the three months ended September 30, 2020, as compared to other expense of $(103,294) for the three months ended September 30, 2019. This significant difference is primarily a result of a loss on the Company’s commodity derivatives, stock-based interest expense related to certain financing transactions and amortization of debt discount due to increased debt associated with acquisitions.Net Income (Loss)The Company had net loss of $(18,034,807) during the three-month period ended September 30, 2020, compared with a net income of $1,419,130 for the three-month period ended September 30, 2019, a $19,453,937 difference primarily as a result of the items discussed above.Nine months ended September 30, 2020, compared to the nine months ended September 30, 2019RevenueThe Company had gross revenues of $31,487,202$31,950,592) for the nine months ended September 30, 2020,2021, as compared to $27,081,506 for the nine months ended September 30, 2019, reflecting an increase in excess of 16% or $4,405,696. This increase in revenue is primarily a result of the increased production from the oil and gas assets acquired in February of 2020, and to a lesser extent enhancement to existing wells.ExpensesThe Company’s operating expenses increased by approximately 59%, or $11,733,403 to $31,758,734 for the nine-month period ended September 30, 2020, from $20,025,331 in the corresponding prior period. A significant portion of this increase is due to an increase in stock-based compensation of $3,242,049 to $3,686,582 during the nine months ended September 30, 2020 as compared to $444,533 for the corresponding period in 2019 , and a $2,500,000 impairment charge against oil and gas assets during the three months ended September 30, 2020. The increases in lease operating costs and DD&A are primarily attributable to the acquisition of additional oil and gas assets during the quarter ended March 31, 2020. Lease operating costs increased by approximately 46%, or $4,143,306, to 13,147,640 from $9,004,334 as compared to the nine months ended September 30, 2019. DD&A expense, a non-cash expense, increased by $1,692,989, to $8,671,593 from $6,978,604 for the corresponding period in 2019. General and administrative expenses reflected a decrease of $24,391 to $3,391,982, when compared to $3,367,591 in the corresponding prior period.30Table of ContentsIncome (loss) from OperationsThe Company, generated a loss from operations for the nine months ended September 30, 2020 of $(271,532), when compared to income from operations of $7,056,175 for the nine months ended September 30, 2019.Other Income (Expense)The Company had other expense of $(15,187,066) for the nine months ended September 30, 2020,2020. Interest expense decreased by $7,208,705 to $9,612,335 for the nine-month period ended September 30, 2021 as compared to other expense of $(16,276,180)$16,821,040 for the nine months ended September 30, 2019. The components2020 due to a reduction in long term debt resultant from the transactions with Camber and EMC Capital Partners, LLC, described in Note 1 to the Company’s consolidated financial statements. As a result of this difference consistthe fluctuating commodities markets, changes in the fair value of our commodity derivatives reflected a loss to the consolidated financial statements of $16,401,270 for the nine-month period ended September 30, 2021 as compared to a gain onof $8,569,093 for the Company’s commodity derivatives offset by stock-based interest expense related to certain financing transactions, a loss on financing settlements and increased interest expense and amortization of debt discount due to increased debt associated with acquisitions.nine month-period ended September 30, 2020.$(15,458,598)$(27,983,342) during the nine-month period ended September 30, 2020,2021, compared with a net loss of $(9,220,005)$(14,275,646) for the nine-month period ended September 30, 2019,2020, a $6,238,593$13,707,696 difference primarily as a result of the items discussed above.38 Table of Contents 31Table of Contentsquality and quantityinterpretation of availablethat data;ii.iii.interpretationaccuracy of that data;various mandated economic assumptions; andiii.the accuracy of various mandated economic assumptions; and39 Table of Contents 32Table of Contents40 Table of Contents 2020,2021, have been evaluated, and, based upon this evaluation, the Company’s Chief Executive Officer has concluded that these controls and procedures are not effective in providing reasonable assurance of compliance.2020.2021. 3341Table of Contents 2020,2021, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of operations.has communicated with the Staff regarding its preliminary determination. The Company believes it has adequate defenses and intends to vigorously defend any enforcement action that may be initiated by the SEC.42 Table of Contents 43 Table of Contents the issuance of any shares in the capital of the Simson-Maxwell and/or any subsidiary of Simson-Maxwell or any securities, warrants, options or rights convertible into, exchangeable for, or carrying the right to subscribe for or purchase, shares in the capital of the Simson-Maxwell and/or any subsidiary of Simson-Maxwell, as the case may be, if such issuance is dilutive to the existing shareholders; the redemption or purchase for cancellation of any shares in the capital of the Simson-Maxwell and/or any subsidiary of Simson-Maxwell, or any other return of capital by the Simson-Maxwell and/or any subsidiary of Simson-Maxwell, other than any purchase of shares in accordance with the Shareholders’ Agreement; the conversion, exchange, reclassification, re-designation, subdivision, consolidation, or other change of or to any shares in the capital of the Simson-Maxwell and/or any subsidiary of Simson-Maxwell if any such action is dilutive to the existing shareholders; the acquisition or commencement of any business other than Simson-Maxwell’s current business or the entering into of any amalgamation, merger, partnership, joint venture, or other combination, or any agreement with respect to any of the foregoing, with any person or business by the Simson-Maxwell and/or any subsidiary of Simson-Maxwell if any such action is dilutive to the existing shareholders; any dissolution, liquidation, or winding-up of the Simson-Maxwell and/or any subsidiary of Simson-Maxwell or other distribution of the assets of the Simson-Maxwell and/or any subsidiary of Simson-Maxwell for the purpose of winding-up its affairs, whether voluntary or involuntary, except where such dissolution, liquidation, or winding-up or other distribution is done voluntarily by the Simson-Maxwell and/or any subsidiary of Simson-Maxwell in order to reorganize its corporate structure, provided that the board of directors of Simson-Maxwel determines (without inquiring into or giving effect to the personal circumstances of any individual shareholder) that the interests of no one shareholder shall be disproportionately adversely affected vis-à-vis the interests of any other shareholder by such reorganization; any declaration or payment of dividends by the Simson-Maxwell or other similar payment or distribution by the Simson-Maxwell to all of the shareholders, except for payment or distribution to all common shareholders or the payment of dividends on any issued preferred shares as required under their terms; any sale, proposed sale, lease, exchange, or other disposition of all or a substantial portion of the property, assets, or business of the Simson-Maxwell and/or any subsidiary of Simson-Maxwell, other than in the ordinary course of business; any provision of any guarantee, indemnity, or other financial support by the Simson-Maxwell and/or any subsidiary of Simson-Maxwell; any transaction not in the ordinary course of business between the Simson-Maxwell and/or any subsidiary of Simson-Maxwell and any person not dealing at arm’s length with the Simson-Maxwell and/or any subsidiary of Simson-Maxwell or any of the shareholders. For the avoidance of doubt, entering into employment agreements with employees, hiring decisions, and compensation arrangements are excluded from this provision; or any change in the registered office of the Simson-Maxwell and/or any subsidiary of Simson-Maxwell. 44 Table of Contents 45 Table of Contents 46 Table of Contents 47 Table of Contents 48 Table of Contents 49 Table of Contents 50 Table of Contents 51 Table of Contents 52 Table of Contents 53 Table of Contents 54 Table of Contents 55 Table of Contents 56 Table of Contents 2020,2021, the Company issued unregistered equity securities as described below:Convertible Promissory Note Exchanges3, 2020,20, 2021, the Company issued 150,000 shares of common stock of the Company and a $100,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 6, 2020, the Company issued 425,250 shares of common stock of the Company and a $283,500 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 7, 2020, the Company issued 75,000 shares of common stock of the Company and a $50,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 7, 2020, the Company issued 112,500 shares of common stock of the Company and a $75,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 8, 2020, the Company issued 9,000 shares of common stock of the Company and a $6,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 11, 2020, the Company issued 75,000 shares of common stock of the Company and a $50,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.34Table of ContentsOn July 12, 2020, the Company issued 75,000 shares of common stock of the Company and a $50,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 12, 2020, the Company issued 121,500 shares of common stock of the Company and a $81,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 13, 2020, the Company issued 112,500 shares of common stock of the Company and a $75,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 15, 2020, the Company issued 121,500 shares of common stock of the Company and a $81,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 16, 2020, the Company issued 66,825 shares of common stock of the Company and a $44,550 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 20, 2020, the Company issued 300,000 shares of common stock of the Company and a $200,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 21, 2020, the Company issued 30,375 shares of common stock of the Company and a $20,250 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 21, 2020, the Company issued 60,750 shares of common stock of the Company and a $40,500 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 21, 2020, the Company issued 75,000 shares of common stock of the Company and a $50,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 26, 2020, the Company issued 75,000 shares of common stock of the Company and a $50,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 29, 2020, the Company issued 60,750 shares of common stock of the Company and a $40,500 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 29, 2020, the Company issued 37,500 shares of common stock of the Company and a $25,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 29, 2020, the Company issued 1,110,000 shares of common stock of the Company and a $740,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On July 30, 2020, the Company issued 60,750 shares of common stock of the Company and a $40,500 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.35Table of ContentsOn August 3, 2020, the Company issued 150,000 shares of common stock of the Company and a $100,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On August 3, 2020, the Company issued 91,125 shares of common stock of the Company and a $60,750 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On August 3, 2020, the Company issued 15,000 shares of common stock of the Company and a $10,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On August 5, 2020, the Company issued 151,875 shares of common stock of the Company and a $101,250 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On August 5, 2020, the Company issued 30,375 shares of common stock of the Company and a $20,250 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On August 7, 2020, the Company issued 12,150 shares of common stock of the Company and a $8,100 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On August 10, 2020, the Company issued 75,000 shares of common stock of the Company and a $50,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On August 18, 2020, the Company issued (i) 150,000 shares of Company common stock, and (ii) a $100,000 convertible promissory note maturing February 11, 2022, to a third-party investor in consideration for cash in the amount of $100,000, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On August 25, 2020, the Company issued 36,450 shares of common stock of the Company and a $24,300 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.On September 2, 2020, the Company issued 90,000 shares of common stock of the Company and a $60,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount.The issuances of the foregoing shares were made in reliance on the exemptions from registration provided by either (i) Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as each of the investors were prior investors of the Company, there was no general solicitation to the investors, the investors were accredited, and the transactions with the investors did not involve a public offering; or (ii) Rule 506(c) promulgated under Section 4(a)(2) as the investors were accredited.Convertible Promissory Note Exchanges and Immediate ConversionsOn July 7, 2020, the Company issued 37,500 shares of common stock of the Company and a $25,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 166,667 shares of common stock of the Company in the conversion.36Table of ContentsOn July 23, 2020, the Company issued 75,000 shares of common stock of the Company and a $50,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 333,333 shares of common stock of the Company in the conversion.On July 23, 2020, the Company issued 37,500 shares of common stock of the Company and a $25,000 convertible promissory note with a maturity date of February 11, 2022. and immediately thereafter, the noteholder converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 166,667 shares of common stock of the Company in the conversion.On July 23, 2020, the Company issued 243,000 shares of common stock of the Company and a $162,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 1,080,000 shares of common stock of the Company in the conversion.On July 27, 2020, the Company issued 150,000 shares of common stock of the Company and a $100,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 666,667 shares of common stock of the Company in the conversion.On July 27, 2020, the Company issued 22,200 shares of common stock of the Company and a $14,800 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 98,667 shares of common stock of the Company in the conversion.On July 27, 2020, the Company issued 52,800 shares of common stock of the Company and a $35,200 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 234,667 shares of common stock of the Company in the conversion.On July 27, 2020, the Company issued 75,000 shares of common stock of the Company and a $100,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 333,333 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 225,000 shares of common stock of the Company and a $150,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 1,000,000 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 136,080 shares of common stock of the Company and a $90,720 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 604,800 shares of common stock of the Company in the conversion.37Table of ContentsOn July 28, 2020, the Company issued 106,500 shares of common stock of the Company and a $71,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 473,333 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 30,375 shares of common stock of the Company and a $20,250 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 135,000 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 60,750 shares of common stock of the Company and a $40,500 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 270,000 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 298,313 shares of common stock of the Company and a $198,875 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 1,325,833 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 121,500 shares of common stock of the Company and a $81,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 540,000 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 121,500 shares of common stock of the Company and a $81,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 540,000 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 48,600 shares of common stock of the Company and a $32,400 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 216,000 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 75,000 shares of common stock of the Company and a $50,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 333,333 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 30,375 shares of common stock of the Company and a $20,250 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 135,000 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 30,375 shares of common stock of the Company and a $20,250 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 135,000 shares of common stock of the Company in the conversion.38Table of ContentsOn July 28, 2020, the Company issued 60,750 shares of common stock of the Company and a $40,500 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 270,000 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 182,250 shares of common stock of the Company and a $121,500 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 810,000 shares of common stock of the Company in the conversion.On July 28, 2020, the Company issued 24,300 shares of common stock of the Company and a $16,200 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 108,000 shares of common stock of the Company in the conversion.On July 29, 2020, the Company issued 537,600 shares of common stock of the Company and a $358,400 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 2,389,333 shares of common stock of the Company in the conversion.On July 29, 2020, the Company issued 30,375 shares of common stock of the Company and a $20,250 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 135,000 shares of common stock of the Company in the conversion.On July 29, 2020, the Company issued 157,950 shares of common stock of the Company and a $105,300 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 702,000 shares of common stock of the Company in the conversion.On July 30, 2020, the Company issued 30,000 shares of common stock of the Company and a $20,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 133,333 shares of common stock of the Company in the conversion.On July 30, 2020, the Company issued 150,000 shares of common stock of the Company and a $100,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 666,667 shares of common stock of the Company in the conversion.On July 30, 2020, the Company issued 150,000 shares of common stock of the Company and a $100,000 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 666,667 shares of common stock of the Company in the conversion.39Table of ContentsOn July 31, 2020, the Company issued 91,125 shares of common stock of the Company and a $60,750 convertible promissory note with a maturity date of February 11, 2022, to a third party investor in consideration of the cancellation of a prior convertible promissory note held by the investor in the same amount, and immediately thereafter the investor converted the entire principal amount into shares of common stock of the Company at $0.15 per share and was issued 405,000 shares of common stock of the Company in the conversion.The issuances of the foregoing shares were made in reliance on the exemptions from registration provided by either (i) Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as each of the investors were prior investors of the Company, there was no general solicitation to the investors, the investors were accredited, and the transactions with the investors did not involve a public offering; or (ii) Rule 506(c) promulgated under Section 4(a)(2) as the investors were accredited.Consulting IssuancesOn July 15, 2020, the Company issued 51,829 shares of Company common stock to a consultant for $8,293 of consulting services rendered to the Company. On July 20, 2020, the Company issued 1,150,000 shares of Company common stock to consultants for $178,250 of consulting services rendered to the Company. On July 20, 2020, the Company issued 1,000,000 shares of Company common stock to an employee for $155,000. On July 20, 2020, the Company issued 210,000 shares of Company common stock to a consultant for $32,550 of consulting services rendered to the Company. On July 20, 2020, the Company issued 435,55015,772 shares of the Company’s common stock to a consultant affiliated with the Company for $67,510. On July 31, 2020, the Company issued 57,432 shares of Company common stock to a consultant for $28,328$10,000 of consulting services rendered to the Company.31, 2020,29, 2021, the Company issued a total of 10,000,00027,500,000 shares of Companythe Company’s common stock to Camber Energy, Inc. pursuant to a group of consultantssubscription agreement for $1,450,000 of consulting services rendered to the Company. $11,000,000.July 31, 2020,September 16, 2021, the Company issued 2,000,000 shares of Company common stock to a group of consultants for $290,000f of consulting services rendered to the Company. On July 31, 2020, the Company issued 250,000 shares of Company common stock to a consultant for $36,250 consulting services rendered to the Company. On August 21, 2020, the Company issued 2,139,34423,041 shares of the Company’s common stock to a consultant affiliated withfor $10,000 of consulting services rendered to the Company for $256,721 Company.August 27, 2020,September 21, 2021, the Company issued 210,00023,809 shares of Companythe Company’s common stock to a consultant for $27,300 of consulting services rendered to the Company. On September 1, 2020, the Company issued 4,500,000 shares of Company common stock as additional consideration to a lender for a first amendment to term loan agreement, at a fair value of $472,500. On September 27, 2020, the Company issued 210,000 shares of Company common stock to a consultant for $25,179$10,000 of consulting services rendered to the Company.sharessecurities were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as there was no general solicitation to the consultants, the shareholders were accredited, and the transactions with the shareholders did not involve a public offering.Other IssuancesJuly 3, 2020,September 21, 2021, the Company issued (i) 1,600,00013,500 shares of Companythe Company’s common stock and (ii)with a $500,000 convertible promissory note maturing January 3, 2021,fair value of $13,635 to a third-party investor in consideration for cashpursuant to a conversion of debt in the amount of $500,000.$10,125.July 9, 2020, July 15, 2020, July 23, 2020 and July 31, 2020,September 22, 2021, the Company issued 760,012169,334 shares of the Company’s common stock of the Company to various third-party investors as payment for interest on indebtedness with a total fair value of $115,958.$169,334 to a third-party investor pursuant to a conversion of debt in the amount of $127,000.57 Table of Contents 58 Table of Contents 2020,2021, the Company issued 99,064133,333 shares of the Company’s common stock with a fair value of the Company$322,666 to a third-party investor pursuant to a conversion of debt in considerationthe amount of a cash payment of $7,925.$100,000.sharessecurities were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as there was no general solicitation to the investors, the investors were accredited, and the transactions with the shareholders did not involve a public offering.40Table of ContentsOn July 31, 2020, the Company issued 7,125 shares of common stock of the Company to a third-party investor pursuant to the exercise of warrants. The issuance of these shares was made in reliance on the exemptions from registration provided byoffering, as well as Section 3(a)(9) and Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as the common stock wasshares were issued in exchange for warrantsdebt securities held by the investor,shareholders, there was no additional consideration for the exchange,exchanges, and there was no remuneration for the solicitation of the exchange, there was no general solicitation to the investor, the investor was accredited, and the transaction did not involve a public offering.On July 3, 2020, the Company issued to an affiliated Troy Caruso entity a $1,350,000 promissory note maturing November 2, 2020. On or about July 7, 2020, the parties executed an amendment to the note to include a conversion feature allowing conversion of up to 100% of the balance of the note into shares of common stock of the Company at a rate of $0.122 per share. On July 13, 2020 the noteholder converted the entire principal amount into shares of common stock of the Company at $0.122 per share and was issued 11,065,574 shares of common stock of the Company in the conversion. The issuance of these shares was made in reliance on the exemptions from registration provided by Sections 3(a)(9) and 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as the common stock was issued in exchange for debt of the Company held by the lender, there was no additional consideration for the exchange, there was no remuneration for the solicitation of the exchange, there was no general solicitation to the lender, the lender was an accredited investor, and the transaction did not involve a public offering.On August 25, 2020, the Company issued to an affiliated Troy Caruso entity a $739,000 promissory note maturing February 25, 2021, which included a conversion feature allowing the noteholder to convert up to 100% of the balance of the note into shares of common stock of the Company at a rate of $0.1228 per share. The Company issued 1,108,500 shares of Company common stock as additional consideration to the lender for the proceeds of the note. Concurrently with the execution of the promissory note, the noteholder elected to convert the entire principal amount into shares of common stock of the Company and was issued 6,015,955 shares of Company common stock in the conversion. The issuances of these shares were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as there was no general solicitation to the lender, the lender was accredited, and the transactions did not involve a public offering.exchanges. 4159Table of Contents 60 Table of Contents 42Table of Contents61 Table of Contents DocumentDocument.DocumentDocument.DocumentDocument.LabelLabels Linkbase DocumentDocument.DocumentDocument._________ 4362Table of Contents 16, 202015, 202116, 202015, 2021 4463