Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 12, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | VIKING ENERGY GROUP, INC. | |
Entity Central Index Key | 0001102432 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Entity Common Stock Shares Outstanding | 119,218,508 | |
Entity File Number | 000-29219 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 98-0199508 | |
Entity Interactive Data Current | Yes | |
Entity Address Address Line 1 | 15915 Katy Freeway | |
Entity Address Address Line 2 | Suite 450 | |
Entity Address City Or Town | Houston | |
Entity Address State Or Province | TX | |
Entity Address Postal Zip Code | 77094 | |
City Area Code | 281 | |
Local Phone Number | 404 4387 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 1,917,855 | $ 3,239,349 |
Accounts receivable, net | 6,486,165 | 5,276,622 |
Inventory | 10,413,666 | 10,276,662 |
Prepaids and other current assets | 265,728 | 158,107 |
Total current assets | 19,083,414 | 18,950,740 |
Oil and gas properties, full cost method | ||
Proved oil and gas properties, net | 1,224,588 | 1,285,918 |
Total oil and gas properties, net | 1,224,588 | 1,285,918 |
Fixed assets, net | 1,667,281 | 1,716,200 |
Right of use assets, net | 4,031,934 | 4,357,328 |
ESG Clean Energy license, net | 4,501,015 | 4,577,131 |
Other intangibles - Simson Maxwell, net | 3,213,239 | 3,254,600 |
Other intangibles - Variable Interest Entities | 15,433,340 | 15,433,340 |
Due from related parties | 327,452 | 327,132 |
Deposits and other assets | 10,300 | 10,300 |
TOTAL ASSETS | 49,492,563 | 49,912,689 |
Current liabilities: | ||
Accounts payable | 5,110,975 | 3,905,247 |
Accrued expenses and other current liabilities | 817,841 | 1,248,301 |
Customer deposits | 5,696,819 | 5,447,025 |
Due to Camber Energy, Inc. | 6,077,300 | 6,572,300 |
Undistributed revenues and royalties | 2,329,939 | 2,378,739 |
Current portion of operating lease liability | 1,255,745 | 1,304,047 |
Due to related parties | 718,435 | 629,073 |
Current portion of notes payable - related parties | 57,892 | 56,916 |
Bank indebtedness - credit facility | 3,429,485 | 3,111,350 |
Derivative liability | 2,810,824 | 0 |
Current portion of long-term debt - net of discount | 96,926 | 637,335 |
Total current liabilities | 28,402,181 | 25,290,333 |
Long term debt - net of current portion and debt discount | 421,571 | 2,106,281 |
Notes payable - related parties - net of current portion | 612,802 | 627,153 |
Operating lease liability, net of current portion | 2,866,140 | 3,160,654 |
Contingent obligations | 1,435,757 | 1,435,757 |
Asset retirement obligation | 1,958,578 | 1,927,196 |
TOTAL LIABILITIES | 35,697,029 | 34,547,374 |
Commitments and contingencies (Note 13) | 0 | 0 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value, 500,000,000 shares authorized, 114,780,967 shares issued and outstanding as of March 31, 2023 and December 31, 2022 | 114,781 | 114,781 |
Additional paid-in capital | 127,687,341 | 127,687,341 |
Accumulated other comprehensive loss | (363,131) | (425,677) |
Accumulated deficit | (123,739,772) | (122,187,673) |
Parent's stockholders' equity in Viking | 3,699,252 | 5,188,805 |
Non-controlling interest | 10,096,282 | 10,176,510 |
TOTAL STOCKHOLDERS' EQUITY | 13,795,534 | 15,365,315 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 49,492,563 | 49,912,689 |
Series C Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, value | 28 | 28 |
Series E Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, value | $ 5 | $ 5 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 114,780,967 | 114,780,967 |
Common stock, shares outstanding | 114,780,967 | 114,780,967 |
Series C Preferred Stock [Member] | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000 | 50,000 |
Preferred stock, shares issued | 28,092 | 28,092 |
Preferred stock, shares outstanding | 28,092 | 28,092 |
Series E Preferred Stock [Member] | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,075 | 2,075 |
Preferred stock, shares issued | 475 | 0 |
Preferred stock, shares outstanding | 475 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue | ||
Power generation units and parts | $ 2,458,295 | $ 2,137,601 |
Service and repairs | 4,540,697 | 2,103,699 |
Oil and gas | 245,197 | 1,678,817 |
Total revenue | 7,244,189 | 5,920,117 |
Operating expenses | ||
Cost of goods sold | 4,786,631 | 2,451,309 |
Lease operating costs | 125,363 | 568,515 |
General and administrative | 3,050,321 | 5,294,161 |
Stock based compensation | 0 | 292,808 |
Depreciation, depletion & amortization | 231,148 | 499,769 |
Accretion - asset retirement obligation | 31,382 | 35,066 |
Total operating expenses | 8,224,845 | 9,141,628 |
Loss from operations | (980,656) | (3,221,511) |
Other income (expense) | ||
Interest expense | (146,671) | (133,762) |
Amortization of debt discount | (53,732) | (92,522) |
Change in fair value of derivatives | (534,607) | 0 |
Loss on extinguishment of debt | (154,763) | 0 |
Interest income | 6,834 | 100,231 |
Other income (expense) | 231,268 | (295,500) |
Total other expense, net | (651,671) | (421,553) |
Net loss before income taxes | (1,632,327) | (3,643,064) |
Income tax benefit (expense) | 0 | 0 |
Net loss | (1,632,327) | (3,643,064) |
Net loss attributable to non-controlling interest | (80,228) | (360,505) |
Net loss attributable to Viking Energy Group, Inc. | $ (1,552,099) | $ (3,282,559) |
Loss per common share, basic and diluted | $ (0.01) | $ (0.03) |
Weighted average number of common shares outstanding, basic and diluted | 114,780,967 | 113,943,002 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Consolidated Statements of Comprehensive Loss (Unaudited) | ||
Net loss | $ (1,632,327) | $ (3,643,064) |
Foreign currency translation adjustment | 62,546 | 200,177 |
Total comprehensive loss | (1,569,781) | (3,442,887) |
Less comprehensive loss attributable to non-controlling interest | ||
Loss attributable to non-controlling interest | (80,228) | (360,505) |
Foreign currency translation adjustment attributable to non-controlling interest | 24,706 | 79,070 |
Comprehensive loss attributable to non-controlling interest | (55,522) | (281,435) |
Comprehensive loss attributable to Viking | $ (1,514,259) | $ (3,161,452) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (1,632,327) | $ (3,643,064) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Change in fair value of derivative liability | 534,607 | 0 |
Stock based compensation | 0 | 292,808 |
Depreciation, depletion and amortization | 231,148 | 499,769 |
Amortization of operational right-of-use assets | 4,884 | 6,228 |
Accretion - asset retirement obligation | 31,382 | 35,066 |
Amortization of debt discount | 53,732 | 92,522 |
Loss on extinguishment of debt | 154,763 | 0 |
Bad debt expense | 0 | 1,800,000 |
Changes in operating assets and liabilities | ||
Accounts receivable | (1,209,543) | 979,049 |
Prepaids and other current assets | (107,621) | (202,668) |
Inventory | (137,004) | (460,423) |
Accounts payable | 1,205,728 | (3,559,925) |
Accrued expenses and other current liabilities | (430,460) | (363,765) |
Due to related parties | 89,042 | 321,844 |
Customer deposits | 249,794 | 412,570 |
Undistributed revenues and royalties | (48,800) | 1,780,726 |
Net cash used in operating activities | (1,010,675) | (2,009,263) |
Cash flows from investing activities: | ||
Proceeds from sale of oil and gas properties | 0 | 22,676 |
Investment in and acquisition of oil and gas properties | 0 | (2,666) |
Acquisition of fixed assets | (25,726) | (16,083) |
Purchase of notes receivable | (960,000) | |
Net cash used in investing activities | (25,726) | (956,073) |
Repayment of long-term debt | (157,399) | (3,618,780) |
Proceeds from non-interest-bearing advances from Camber | (495,000) | 4,297,300 |
Advances from bank credit facility | 318,135 | 1,232,448 |
Repayment of promissory notes, related parties | (13,375) | |
Net cash provided by (used in) financing activities | (347,639) | 1,910,968 |
Effect of exchange rates on cash | 62,546 | 200,177 |
Net decrease in cash | (1,321,494) | (854,191) |
Cash, beginning of period | 3,239,349 | 3,467,938 |
Cash, end of period | 1,917,855 | 2,613,747 |
Cash paid for: | ||
Interest | 146,671 | 133,792 |
Income taxes | 0 | 0 |
Supplemental disclosure of Non-Cash Investing and Financing Activities: | ||
Debt discount on modification of debt for conversion feature | 2,144,068 | 0 |
Amortization of right-of-use asset and lease liability | 325,394 | 332,810 |
Issuance of shares for purchase of VIE interests | 0 | 2,250,000 |
Issuance of preferred shares for purchase of VIE interest | 0 | 4,750,000 |
Contingent obligation associated with acquisition of VIE interests | $ 0 | $ 1,435,757 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity (Unaudited) - USD ($) | Total | Common Stock | Series C Preferred Stock [Member] | Series E Preferred Stock [Member] | Additional Paid-In Capital | (Accumulated Deficit) | Accumulated Other Comprehensive (Loss) | Noncontrolling Interest |
Balance, shares at Dec. 31, 2021 | 111,030,965 | 28,092 | ||||||
Balance, amount at Dec. 31, 2021 | $ 18,028,229 | $ 111,031 | $ 28 | $ 0 | $ 120,246,224 | $ (106,760,344) | $ (177,981) | $ 4,609,271 |
Rounding difference, shares | 2 | |||||||
Rounding difference, amount | 0 | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Shares issued in acquisition of membership interests of Viking Ozone LLC, shares | 3,333,333 | |||||||
Shares issued in acquisition of membership interests of Viking Ozone LLC, amount | 4,420,189 | $ 3,333 | 0 | 0 | 1,996,667 | 0 | 0 | 2,420,189 |
Shares issued in acquisition of membership interests of Viking Sentinel LLC, shares | 416,667 | |||||||
Shares issued in acquisition of membership interests of Viking Sentinel LLC, amount | 457,518 | $ 417 | 0 | $ 0 | 232,917 | 0 | 0 | 224,184 |
Shares issued in acquisition of membership interests of Viking Protection LLC, shares | 475 | |||||||
Shares issued in acquisition of membership interests of Viking Protection LLC, amount | 9,119,876 | 0 | 0 | $ 5 | 4,433,329 | 0 | 0 | 4,686,542 |
Foreign currency translation adjustment | 200,177 | 0 | 0 | 0 | 0 | 0 | 200,177 | 0 |
Net loss | (3,643,064) | $ 0 | $ 0 | $ 0 | 0 | (3,282,559) | (360,505) | |
Balance, shares at Mar. 31, 2022 | 114,780,967 | 28,092 | 475 | |||||
Balance, amount at Mar. 31, 2022 | 28,582,925 | $ 114,781 | $ 28 | $ 5 | 126,909,137 | (110,042,903) | 22,196 | 11,579,681 |
Balance, shares at Dec. 31, 2022 | 114,780,967 | 28,092 | 475 | |||||
Balance, amount at Dec. 31, 2022 | 15,365,315 | $ 114,781 | $ 28 | $ 5 | 127,687,341 | (122,187,673) | (425,677) | 10,176,510 |
Foreign currency translation adjustment | 62,546 | 62,546 | ||||||
Net loss | (1,632,327) | (1,552,099) | (80,228) | |||||
Balance, shares at Mar. 31, 2023 | 114,780,967 | 28,092 | 475 | |||||
Balance, amount at Mar. 31, 2023 | $ 13,795,534 | $ 114,781 | $ 28 | $ 5 | $ 127,687,341 | $ (123,739,772) | $ (363,131) | $ 10,096,282 |
Relationship with and Ownership
Relationship with and Ownership by Camber Energy, Inc. | 3 Months Ended |
Mar. 31, 2023 | |
Relationship with and Ownership by Camber Energy, Inc. | |
Relationship with and Ownership by Camber Energy, Inc. | Note 1 Relationship with and Ownership by Camber Energy, Inc. 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 of subsequent issuances of the Company’s common shares, Camber’s ownership interest is approximately 61% as of September 30, 2022. The December 2020, January 2021 and July 2021 transactions, along with a new merger agreement executed by Viking and Camber in February 2021, and amended on April 28, 2023, are described further below. 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 issued 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 was 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 expired on July 1, 2022. On December 23, 2020, Viking and Camber closed on the Camber 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. Merger Agreement with Camber On February 15, 2021, the Company entered into an Agreement and Plan of Merger with Camber, which was amended on April 18, 2023 (as amended, the “Merger Agreement”). 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 (the “Camber Common Stock”); (ii) of Series C Convertible Preferred Stock of the Company (the “Viking Series C Preferred Stock”) issued and outstanding immediately prior to the Effective Time will be converted into the right to receive one share of Series A Convertible Preferred Stock of Camber (the “Camber Series A Preferred Stock”), and (iii) of Series E Convertible Preferred Stock of the Company (the “Viking Series E Preferred Stock,” and, together with the Viking Series C Preferred Stock, the “Viking Preferred Stock”) issued and outstanding immediately prior to the Effective Time will be converted into the right to receive one share of Series H Preferred Stock of Camber (the “Camber Series H Preferred Stock,” and, together with the Camber Series A Preferred Stock, the “New Camber Preferred Stock”). Each share of Camber Series A Preferred Stock will be convertible into 890 shares of Camber Common Stock (subject to a beneficial ownership limitation preventing conversion into Camber Common Stock if the holder would be deemed to beneficially own more than 9.99% of Camber’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. Each share of Camber Series H Preferred Stock will have a face value of $10,000 per share, will be convertible into a certain number of shares of Camber Common Stock, with the conversion ratio based upon achievement of certain milestones by Viking’s subsidiary, Viking Protection Systems, LLC (provided the holder has not elected to receive the applicable portion of the purchase price in cash pursuant to that certain Purchase Agreement, dated as of February 9, 2022, by and between Viking and Jedda Holdings, LLC), will be subject to a beneficial ownership limitation of 4.99% of Camber Common Stock (but may be increased up to a maximum of 9.99% at the sole election of a holder by the provision of at least 61 days’ advance written notice) and will have voting rights equal to one vote per share of Camber Series H Preferred Stock held on a non-cumulative basis. Holders of Viking common stock and Viking Preferred Stock will have any fractional shares of Camber Common Stock or New Camber Preferred Stock after the Merger rounded up to the nearest whole share. At the Effective Time, each then outstanding option or warrant to purchase Viking Common Stock (a “Viking Option”) will, to the extent unvested, automatically become fully vested and will be converted automatically into an option or warrant (an “Adjusted Option”) to purchase, on substantially the same terms and conditions as were applicable to such Viking Option immediately prior to the effective time of the Merger, except that (i) instead of being exercisable into Viking Common Stock, such Adjusted Option will be exercisable into Camber Common Stock, and (ii) all references to the “Company” in the Viking Option agreements will be references to Camber in the Adjusted Option agreements. At the Effective Time, each promissory note issued by Viking that is convertible into Viking Common Stock (a “Viking Convertible Note”) that, as of immediately prior to the effective time of the Merger, is outstanding and unconverted shall be converted into a promissory note convertible into Camber Common Stock (an “Adjusted Convertible Note”) having substantially the same terms and conditions as applied to the corresponding Viking Convertible Note as of immediately prior to the effective time of the Merger (including, for the avoidance of doubt, any extended post-termination conversion period that applies following consummation of the Merger), except that (i) instead of being convertible into Viking Common Stock, such Adjusted Convertible Note will be convertible into Camber Common Stock, and (ii) all references to the “Company” in the Viking Convertible Note agreements will be references to Camber in the Adjusted Convertible Note agreements. The Merger Agreement provides, among other things, that effective as of the Effective Time, James A. Doris, the current Chief Executive Officer of both the Company and 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 Viking will be subject to certain restrictions on its ability to solicit alternative acquisition proposals from third parties, to provide non-public information to third parties and to engage in discussions with third parties regarding alternative acquisition proposals, subject to customary exceptions. Viking is required to hold a meeting of its stockholders to vote upon the adoption of the Merger Agreement and, subject to certain exceptions, to recommend that its stockholders vote to adopt the Merger Agreement. Camber is required to hold a meeting of its stockholders to approve the issuance of Camber Common Stock and New Camber Preferred Stock (including the shares of Camber Common Stock issuable upon conversion thereof) in connection with the Merger (the “Share Issuances”) and an increase in the number of authorized Camber Common Stock (if not approved in connection with Camber’s special meeting of the stockholders scheduled to be held on April 26, 2023) (the “Increase in Authorized Share Capital”) and, subject to certain exceptions, to recommend that its stockholders approve such proposals. The completion of the Merger is subject to customary conditions, including (i) adoption of the Merger Agreement by Viking’s stockholders and approval of the Share Issuances and Increase in Authorized Share Capital by Camber’s stockholders, (ii) receipt of required regulatory approvals, (iii) effectiveness of a registration statement on Form S-4 for the Camber common stock to be issued in the Merger (the “Form S-4”), and (iv) the absence of any law, order, injunction, decree or other legal restraint preventing the completion of the Merger or making the completion of the Merger illegal. Each party’s obligation to complete the Merger is also subject to certain additional customary conditions, including (i) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (ii) subject to certain exceptions, performance by the other party of its obligations under the Merger Agreement and (iii) the absence of any material adverse effect on the other party, as defined in the Merger Agreement. Additional closing conditions to the Merger include: (i) receipt of fairness opinions from financial advisors of both Camber and Viking that the Merger is fair from a financial point of view to the holders of each company’s common stock, (ii) confirmation from Camber that it is not in default of its outstanding agreements with a certain preferred equity holder and lender, (iii) written agreement from Camber’s warrant holders regarding the number and exercise price of Camber’s outstanding warrants and that the Merger will not trigger any price adjustments in certain outstanding warrant agreements, and (iv) that, in the event the NYSE American determines that the Merger constitutes, or will constitute, a “back-door listing”/”reverse merger”, 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 Viking if any governmental consent or approval required for closing is not obtained, or any governmental entity issues a final non-appealable order or similar decree preventing the Merger; (iii) by either Company or Camber if the Merger shall not have been consummated on or before September 30, 2023; (iv) by Camber or Viking, upon the breach by the other of a term of the Merger, which is not cured within 30 days of the date of written notice thereof by the other; (v) by Camber if Viking is unable to obtain the affirmative vote of its stockholders for approval of the Merger; (vi) by Viking if Camber is unable to obtain the affirmative vote of its stockholders for approval of the Share Issuances and the Increase in Authorized Share Capital; and (vii) by Viking 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. July 29, 2021 Equity Transaction by Camber in Viking: On July 29, 2021, the Company entered into a Securities Purchase Agreement with Camber, pursuant to which Camber acquired an additional 27,500,000 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. Loan Transactions at Camber (Guaranteed by Viking): Camber executed and delivered the following promissory notes (each a “Note” and collectively, the “Notes”) in favor of Discover Growth Fund, LLC: a. Promissory Note dated December 11, 2020 in the principal amount of $6,000,000; b. Promissory Note dated December 18, 2020 in the principal amount of $12,000,000; c. Promissory Note dated April 23, 2021 in the principal amount of $2,500,000; and d. Promissory Note dated December 31, 2021 in the principal amount of $26,315,789. The Notes have the following terms: (i) Maturity Date of January 1, 2027; (ii) interest rate equal to the WSJ Prime Rate, per annum, payable at Maturity, except if Camber is noted in default in which case, at the option of the lender, the principal and interest are due immediately and the interest rate increases to the maximum rate allowed under the laws of Texas; and (iii) all or a portion of the amount owing under the Notes may, at the lender’s option, be converted into shares of common stock of Camber at price of $1.50 per share. Camber granted Discover a first-priority security interest in Camber’s Viking Shares and Camber’s other assets pursuant to various pledge agreements and general security agreements, respectively. Viking entered into Guaranty Agreements, guaranteeing repayment of the Notes (see Note 3). Viking also entered into a Security Agreement in favor of Discover granting Discover a first-priority security interest in any assets purchased by Viking with funds advanced to Viking by Camber that were loaned by Discover. 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 timely file with the Securities and Exchange Commission all reports required to pursuant to the Exchange Act. Any breach under the COD is also a default under the Notes. Camber is currently in compliance with the requirements under the COD. |
Company Overview and Operations
Company Overview and Operations | 3 Months Ended |
Mar. 31, 2023 | |
Company Overview and Operations | |
Company Overview and Operations | Note 2 Company Overview and Operations Viking Energy Group, Inc. (“Viking”, the “Company”, “we”, “us” or “our”) is a growth-oriented diversified energy company. Through various majority-owned subsidiaries, Viking provides custom energy and power solutions to commercial and industrial clients in North America and owns interests in producing oil assets in Kansas. The Company also (i) holds an exclusive license in Canada to a patented carbon-capture system; and (ii) owns a majority interest in (a) an entity with intellectual property rights to a fully developed, patented, proprietary medical & biohazard waste treatment system using ozone technology; and (b) entities with intellectual property rights to fully developed, patent pending, proprietary electric transmission and open conductor detection systems. The Company is also exploring other renewable energy-related opportunities and/or technologies, which are currently generating revenue, or have a reasonable prospect of generating revenue within a reasonable period of time. Custom Energy & Power Solutions: Simson-Maxwell Acquisition On August 6, 2021, the Company acquired approximately 60.5% of the issued and outstanding shares of Simson-Maxwell Ltd. (“Simson-Maxwell”), a Canadian federal corporation, for $7,958,159 in cash. Simson-Maxwell manufactures and supplies power generation products, services and custom energy solutions. Simson-Maxwell provides commercial and industrial clients with efficient, flexible, environmentally responsible and clean-tech energy systems involving a wide variety of products, including CHP (combined heat and power), tier 4 final diesel and natural gas industrial engines, solar, wind and storage. Simson-Maxwell also designs and assembles a complete line of electrical control equipment including switch gear, synchronization and paralleling gear, distribution, Bi-Fuel and complete power generation production controls. Operating for over 80 years, Simson-Maxwell’s seven branches assist with servicing a large number of existing maintenance arrangements and meeting the energy and power-solution demands of the company’s other customers. Clean Energy and Carbon-Capture System: In August 2021, the Company entered into a license agreement with ESG Clean Energy, LLC (“ESG”), to utilize ESG’s patent rights and know-how related to stationary electric power generation and heat and carbon dioxide capture (the “ESG Clean Energy System”). The intellectual property licensed by Viking includes certain patents and/or patent applications, including: (i) U.S. Patent No.: 10,774,733, File date: October 24, 2018, Issue date: September 15, 2020, Titled: “Bottoming Cycle Power System”; (ii) European Patent Application No.: EP18870699.8, International File date: October 24, 2018, Titled: “Bottoming Cycle Power System”; (iii) U.S. Patent Application No.: 17/224,200, File date: April 7, 2021, Titled: “Bottoming Cycle Power System” (which was subsequently approved by the U.S. Patent & Trademark Office in March, 2022 (No. 11,286,832); (iv) U.S. Patent Application No.: 17/358,197, File date: June 25, 2021, Titled: “Bottoming Cycle Power System”; (v) U.S. Patent Application No.: 17/448,943, File date: September 27, 2021, Titled: “Systems and Methods Associated With Bottoming Cycle Power Systems for Generating Power and Capturing Carbon Dioxide”; and (vi) U.S. Patent Application No.: 17/448,938, File date: September 27, 2021, Titled: “Systems and Methods Associated With Bottoming Cycle Power Systems for Generating Power, Capturing Carbon Dioxide and Producing Products. The ESG Clean Energy System is designed to, among other things, generate clean electricity from internal combustion engines and utilize waste heat to capture approximately 100% of the carbon dioxide (CO2) emitted from the engine without loss of efficiency, and in a manner to facilitate the production of certain commodities. Patent No. 11,286,832, for example, covers the invention of an “exhaust-gas-to-exhaust-gas heat exchanger” that efficiently cools - and then reheats - exhaust from a primary power generator so greater energy output can be achieved by a secondary power source with safe ventilation. Another key aspect of this patent is the development of a carbon dioxide capture system that utilizes the waste heat of the carbon dioxide pump to heat and regenerate the adsorber that enables carbon dioxide to be safely contained and packaged. The Company intends to sell, lease and/or sub-license the ESG Clean Energy System to third parties using, among other things, Simson-Maxwell’s existing distribution channels. The Company may also utilize the ESG Clean Energy System for its own account, whether in connection with its petroleum operations, Simson-Maxwell’s power generation operations, or otherwise. Medical Waste Disposal System Using Ozone Technology: In January 2022, the Company acquired a 51% interest in Viking Ozone Technology, LLC (“Viking Ozone”), which owns the intellectual property rights to a patented (i.e., US Utility Patent No. 11,565,289), proprietary medical and biohazard waste treatment system using ozone technology. Simson-Maxwell has been designated the exclusive worldwide manufacturer and vendor of this system. The technology is designed to be a sustainable alternative to incineration, chemical, autoclave and heat treatment of bio-hazardous waste, and for the treated waste to be classified as renewable fuel for waste-to-energy (“WTE”) facilities in many locations around the world. Open Conductor Detection Technologies: In February 2022, the Company acquired a 51% interest in two entities, Viking Sentinel Technology, LLC (“Viking Sentinel”) and Viking Protection Systems, LLC (“Viking Protection”), that own the intellectual property rights to patent pending (i.e., US Applications 16/974,086, 17/672,422 and 17/693,504), proprietary electric transmission and distribution open conductor detection systems. The systems are designed to detect a break in a transmission line, distribution line, or coupling failure, and to immediately terminate the power to the line before it reaches the ground. The technology is intended to increase public safety and reduce the risk of causing an incendiary event, and to be an integral component within grid hardening and stability initiatives by electric utilities to improve the resiliency and reliability of existing infrastructure. Oil & Gas Properties Existing Assets: The Company, through its wholly owned subsidiaries, Mid-Con Petroleum, LLC and Mid-Con Drilling, LLC (collectively, the “Mid-Con Entities”), owns working interests in oil fields in Kansas, which include a combination of producing wells, non-producing wells and water injection wells. Divestitures in 2022: On July 8, 2022, four of the wholly owned subsidiaries of Petrodome, a wholly owned subsidiary of Viking, entered into Purchase and Sale Agreements to sell all of their interests in the oil and gas assets owned by those Petrodome subsidiaries, including in the aggregate, interests in 8 producing wells, 8 shut-in wells, 2 salt water disposal wells and 1 inactive well, to third parties for $3,590,000 in cash. The proceeds from the sale were used to fully repay Petrodome’s indebtedness to CrossFirst Bank under the June 13, 2018 revolving line of credit loan. This transaction resulted in the disposition of most of the Company’s total oil and gas reserves (see Note 6). The Company recorded a loss on the transaction in the amount of $8,961,705, as follows: Proceeds from sale $ 3,590,000 Reduction in oil & gas full cost pool (based on % of reserves disposed) (12,791,680 ) ARO recovered 239,975 Loss on disposal $ (8,961,705 ) Additionally, in July 2022, the Company received an unanticipated refund of a $1,200,000 performance bond as a result of Petrodome ceasing to operate certain assets in the State of Louisiana. The gain from this refund was included in the “loss from the sale of oil and gas properties and fixed assets’ in the Consolidated Statement of Operations. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2023 | |
Going Concern | |
Going Concern | Note 3 Going Concern The Company’s consolidated financial statements included herein have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company generated a net loss of $(1,632,327) for the three months ended March 31, 2023, as compared to a net loss of $(3,643,064) for the three months ended March 31, 2022. The loss for the three months ended March 31, 2023, was comprised of, among other things, certain non-cash items, including: (i) change in fair value of derivatives of $534,607; (ii) loss on extinguishment of debt of $154,763; (iii) depreciation, depletion and amortization of $231,148; (iv) accretion of asset retirement obligation of $31,382, and; (v) amortization of debt discount of $53,732. As of March 31, 2023, the Company has a stockholders’ equity of $13,795,534, long-term debt of $421,571 and a working capital deficiency of $9,318,767. The largest components of current liabilities creating this working capital deficiency is a $6,077,300 million non-interest-bearing loan from Camber Energy, Inc. with no stipulated repayment terms, and drawings against the bank credit facility of $3,429,485. As further described in Note 1, Viking has guaranteed Camber Energy’s indebtedness to Discover, as well as entered into a Security Agreement in favor of Discover granting Discover a first-priority security interest in any assets purchased by Viking with funds advanced to Viking by Camber that were loaned by Discover. In the event of a default by Camber, Viking may be called upon to honor its obligations under the Guaranty and Security Agreements executed by Viking in favor of Discover. The Company believes that the likelihood that it will be required to perform under the guarantee to be remote and has not recognized a liability associated with any performance obligations of the guarantee. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to utilize the resources in place to generate future profitable operations, to develop additional acquisition opportunities, and to obtain the necessary financing to meet its obligations and repay its liabilities arising from business operations when they come due. Management believes the Company may be able to continue to develop new opportunities and may be able to obtain additional funds through debt and / or equity financings to facilitate its business strategy; however, there is no assurance of additional funding being available. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 4 Summary of Significant Accounting Policies a) Basis of Presentation b) Basis of Consolidation In January 2022, the Company acquired a 51% ownership interest in Viking Ozone, and in February 2022, the Company acquired a 51% ownership interest in both Viking Sentinel and Viking Protection. These entities were formed to facilitate the monetization of acquired intellectual properties (see Note 7). These entities are variable interest entities in which the Company owns a controlling financial interest; consequently, these entities are also consolidated. All significant intercompany transactions and balances have been eliminated. c) Foreign Currency Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the balance sheet date. Results of operations and cash flows of businesses conducted in foreign currency are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a component of stockholders’ equity in accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions have been insignificant. d) Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. Significant areas requiring the use of management estimates relate to impairment of long-lived assets, goodwill, fair value of commodity derivatives, stock-based compensation, asset retirement obligations, and the determination of expected tax rates for future income tax recoveries. The estimates of proved, probable and possible oil and gas reserves are used as significant inputs in determining the depletion of oil and gas properties and the impairment of proved and unproved oil and gas properties. There are numerous uncertainties inherent in the estimation of quantities of proved, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks. Actual results could differ from the estimates and assumptions utilized. e) Cash and Cash Equivalents Cash and cash equivalents include cash in banks and highly liquid investment securities that have original maturities of three months or less. Accounts at banks in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, while accounts at banks in Canada are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to CAD $100,000. The Company’s cash balances may at times exceed the FDIC or CDIC insured limits. f) Accounts Receivable Accounts receivable for the Company’s oil and gas operations consist of purchaser receivables and joint interest billing receivables. The Company evaluates these accounts receivable for collectability and, when necessary, records allowances for expected unrecoverable amounts. During the three months ended March 31, 2022, the Company determined that the collectability of certain accounts receivable balances associated with the disposals of Ichor, and Elysium were not collectable and a reserve of $1,800,000 was recorded. These amounts were written off during the year ended December 31, 2022. At March 31, 2023 and December 31, 2022, the Company has not recorded an allowance for doubtful accounts related to oil and gas. The Company extends credit to its power generation customers in the normal course of business. The Company performs ongoing credit evaluations and generally does not require collateral. Payment terms are generally 30 days. The Company carries its trade accounts receivable at invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based upon management’s estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions. At March 31, 2023 and December 31, 2022, the Company had a reserve for doubtful accounts on power generation accounts receivable of $19,412. The Company does not accrue interest on past due accounts receivable. g) Inventory Inventories are stated at the lower of cost or net realizable value, and consist of parts, equipment and work in process. Work-in-process and finished goods included the cost of materials, direct labor and overhead. At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete and slow-moving items. Inventory consisted of the following at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Units and work in process $ 8,796,600 $ 8,749,903 Parts 2,883,172 2,791,626 11,679,772 11,541,529 Reserve for obsolescence (1,266,106 ) (1,264,867 ) $ 10,413,666 $ 10,276,662 h) Prepaid Expenses Prepaid expenses include amounts paid in advance for certain operational expenses, as well as amounts paid 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. j) Limitation on Capitalized Costs Under the full-cost method of accounting, we are required, at the end of each reporting date, to perform a test to determine the limit on the book value of our oil and natural gas properties (the “Ceiling” test). If the capitalized costs of our oil and natural gas properties, net of accumulated amortization and related deferred income taxes, exceed the Ceiling, this excess or impairment is charged to expense. The expense may not be reversed in future periods, even though higher oil and natural gas prices may subsequently increase the Ceiling. The Ceiling is defined as the sum of: (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. k) Oil and Gas Reserves Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation thereof, including evaluations and extrapolations of well flow rates and reservoir pressure. Estimates by different engineers often vary, sometimes significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted by changes in product prices. l) Accounting for Leases The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires an entity to recognize a lease liability and ROU asset on the lease commencement date. A lease liability is measured equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental borrowing rate, as the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease payments include payments made before the commencement date and any residual value guarantees, if applicable. When determining the lease term, the Company includes option periods that it is reasonably certain to exercise as failure to renew the lease would impose a significant economic detriment. For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense where the Company is a lessee on a straight-line basis (“Straight-Line Rent”) over the applicable lease terms. The excess of the Straight-Line Rent over the minimum rents paid is included in the ROU asset where the Company is a lessee. Short-term lease cost for operating leases includes rental expense for leases with a term of less than 12 months. The Company elected the package of practical expedients permitted under the transition guidance for the revised lease standard, which allowed Viking to carry forward the historical lease classification, retain the initial direct costs for any leases that existed prior to the adoption of the standard and not reassess whether any contracts entered into prior to the adoption are leases. The Company also elected to account for lease and non-lease components in lease agreements as a single lease component in determining lease assets and liabilities. In addition, the Company elected not to recognize the right-of-use assets and liabilities for leases with lease terms of one year or less. m) Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. n) Intangible Assets Intangible assets include amounts related to the Company’s license agreement with ESG Clean Energy, LLC, and its investments in Viking Ozone, LLC, Viking Protection Systems, LLC and Viking Sentinel, LLC. Additionally, as part of the acquisition of Simson-Maxwell, the Company identified intangible assets consisting of Simson-Maxwell’s customer relationships and its brand. These intangible assets are described in detail in Note 7. The intangible assets related to the ESG Clean Energy license and the Simson-Maxwell customer relationships are being amortized on a straight-line basis over 16 years (the remaining life of the related patents) and 10 years, respectively. The other intangible assets are not amortized. The Company reviews these intangible assets, at least annually, for possible impairment when events or changes in circumstances that the assets carrying amount may not be recoverable. In evaluating the future benefit of its intangible assets, the Company estimates the anticipated 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. o) 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 three months ended March 31, 2023 and 2022, there were approximately 26,164,368 and 15,499,390 respectively, common stock equivalents that were omitted from the calculation of diluted income per share as they were anti-dilutive. p) Revenue Recognition Oil and Gas Revenues Sales of crude oil, natural gas, and natural gas liquids (NGLs) are included in revenue when production is sold to a customer in fulfillment of performance obligations under the terms of agreed contracts. Performance obligations primarily comprise delivery of oil, gas, or NGLs at a delivery point, as negotiated within each contract. Each barrel of oil, million BTU (MMBtu) of natural gas, or other unit of measure is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated. Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer. The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the hydrocarbons, the transfer of significant risks and rewards, the Company’s right to payment, and transfer of legal title. In each case, the time between delivery and when payments are due is not significant. The following table disaggregates the Company’s oil and gas revenue by source for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Oil $ 182,120 $ 740,281 Natural gas and natural gas liquids - 438,152 Well operations 63,077 500,384 $ 245,197 $ 1,678,817 Power Generation Revenues Through its 60.5% ownership in Simson-Maxwell, the Company manufactures and sells power generation products, services and custom energy solutions. Simson-Maxwell provides commercial and industrial clients with emergency power generation capabilities. Simson Maxwell’s derives its revenues as follows: 1. Sale of power generation units At the request of certain customers, the Company will warehouse inventory billed to the customer but not delivered. Unless all revenue recognition criteria have been met, the Company does not recognize revenue on these transactions until the customer takes possession of the product. 2. Parts Revenue 3. Service and repairs The following table disaggregates Simson-Maxwell’s revenue by source for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Power generation units $ 1,150,343 $ 972,093 Parts 1,307,952 1,165,508 Total units and parts 2,458,295 2,137,601 Service and repairs 4,540,697 2,103,699 $ 6,998,992 $ 4,241,300 q) Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the consolidated financial statements and the tax basis of assets and liabilities by using estimated tax rates for the year in which the differences are expected to reverse. The Company recognizes deferred tax assets and liabilities to the extent that we believe that these assets and/or liabilities are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. If we determine that the Company would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. In assessing the realizability of its deferred tax assets, management evaluated whether it is more likely than not that some portion, or all of its deferred tax assets, will be realized. The realization of its deferred tax assets relates directly to the Company’s ability to generate taxable income. The valuation allowance is then adjusted accordingly. r) Stock-Based Compensation The Company may issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs. The cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. The fair value of stock options and warrants is determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instrument. The dividend yield assumption is based on historical patterns and future expectations for the Company dividends. The following table represents stock warrant activity as of and for the three months ended March 31, 2023: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Warrants Outstanding – December 31, 2022 9,259,261 0.62 4.03 years - Granted - - Exercised - - Forfeited/expired/cancelled - - Warrants Outstanding – March 31, 2023 9,259,261 $ 0.62 3.79 years $ - Outstanding Exercisable – March 31, 2023 9,259,261 $ 0.62 3.79 years $ - s) Impairment of Long-lived Assets The Company, at least annually, is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset’s expected future discounted cash flows or market value. The Company estimates 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 three months ended March 31, 2023 and 2022. t) Accounting for Asset Retirement Obligations Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount the Company will incur to plug, abandon and remediate its producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. The Company determined its ARO by calculating the present value of estimated cash flows related to the obligation. The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties. The following table describes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Asset retirement obligation – beginning $ 1,927,196 $ 2,111,650 Accretion expense 31,382 35,066 Asset retirement obligation – ending $ 1,958,578 $ 2,146,716 u) Derivative Liability We review the terms of convertible debt issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense. The Company has adopted a sequencing approach to allocating its authorized and unissued shares when the number of such shares is insufficient to satisfy all convertible instruments or option type contracts that may be settled in shares. Specifically, the Company allocates it authorized and unissued shares based on the inception date of each instrument, with shares allocated first to those instruments with the earliest inception dates. Instruments with later inception dates for which no shares remain to be allocated are reclassified to asset or liability. v) Undistributed Revenues and Royalties w) Concentration of Credit Risk The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk as a result of any non-performance by the financial institutions. The Company uses procedures including credit approvals, credit limits and terms to manage its credit exposure. Additionally, the Company regularly issues progress billings on longer-term orders to mitigate both credit risk and overall working capital requirements. x) Subsequent events The Company has evaluated all subsequent events from March 31, 2023 through the date of filing of this report. |
Oil and Gas Properties
Oil and Gas Properties | 3 Months Ended |
Mar. 31, 2023 | |
Oil and Gas Properties | |
Oil and Gas Properties | Note 5. Oil and Gas Properties The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the three months ended March 31, 2023: December 31, March 31, 2022 Adjustments Impairments 2023 Proved developed producing oil and gas properties United States cost center $ 3,872,488 $ - $ - $ 3,872,488 Accumulated depreciation, depletion and amortization (2,803,375 ) (50,990 ) - (2,854,365 ) Proved developed producing oil and gas properties, net $ 1,069,113 $ (50,990 ) $ - $ 1,018,123 Undeveloped and non-producing oil and gas properties United States cost center 785,302 - - 785,302 Accumulated depreciation, depletion and amortization (568,497 ) (10,340 ) - (578,837 ) Undeveloped and non-producing oil and gas properties, net $ 216,805 $ (10,340 ) $ - $ 206,465 Total Oil and Gas Properties, Net $ 1,285,918 $ (61,330 ) $ - $ 1,224,588 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets | |
Intangible Assets | Note 6. Intangible Assets ESG Clean Energy License The Company’s intangible assets include costs associated with securing in August 2021 an Exclusive Intellectual Property License Agreement with ESG, pursuant to which the Company received (i) an exclusive license to ESG’s patent rights and know-how related to stationary electric power generation (not in connection with vehicles), including methods to utilize heat and capture carbon dioxide in Canada, and (ii) a non-exclusive license to the intellectual property in up to 25 sites in the United States that are operated by the Company or its affiliates. In consideration of the licenses, 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. With respect to the payments noted in (i) and (ii) above, totaling $3,500,000, on or about November 22, 2021, the Company paid $500,000 to or on behalf of ESG and ESG elected to accept $2,750,000 in shares of Viking’s common stock at the applicable conversion price, resulting in 6,942,691 shares, leaving a balance owing by Viking of $250,000 which was paid by Viking in January 2022. 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”): Minimum Payments Years from the Trigger Date: For Year Ended Year two $ 500,000 Year three 750,000 Year four 1,250,000 Year five 1,750,000 Year six 2,250,000 Year seven 2,750,000 Year eight 3,250,000 Year nine and after 3,250,000 The Company’s management believes that the Trigger Date could occur as early as the third quarter of 2023 but there is no assurance that it will occur at that or any time. If the continuing royalty percentage is adjusted jointly by the parties downward from the maximum of 15%, then the minimum continuing royalty payments for any given year from the Trigger Date shall also be adjusted downward proportionally. The Company recognized amortization expense of $76,116 for the three months ended March 31, 2023. The estimated future amortization expense for each of the next five years is $304,465 per year. The ESG intangible asset consisted of the following at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 ESG Clean Energy License $ 5,000,000 $ 5,000,000 Accumulated amortization (498,985 ) (422,869 ) $ 4,501,015 $ 4,577,131 Other intangibles – Simson-Maxwell – Customer Relationships and Brand The Company allocated a portion of the purchase price of Simson-Maxwell to Customer Relationships with a fair value of $1,677,453 and an estimated useful life of 10 years, and the Simson-Maxwell Brand with a fair value of $2,230,673 and an indefinite useful life. The Company recognized amortization expense for the Customer Relationship intangible of $41,361 for the three months ended March 31, 2022. The estimated future amortization expense for each of the next five years is $167,745 per year. The Company periodically reviews the fair value of the Customer Relationships and Brand to determine if an impairment charge should be recognized. The Company did not record any impairment for the three-month period ended March 31, 2023. For the year ended December 31, 2022 the Company recorded an impairment charge of $83,865 and $367,907, respectively, related to these assets. The Other intangibles – Simson-Maxwell consisted of the following at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Simson-Maxwell Brand $ 2,230,673 $ 2,230,673 Customer Relationships 1,677,453 1,677,453 Impairment of intangible assets (451,772 ) (451,772 ) Accumulated amortization (243,115 ) (201,754 ) $ 3,213,239 $ 3,254,600 |
Intangible Assets - Variable In
Intangible Assets - Variable Interest Entity Acquisitions (VIEs) | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets - Variable Interest Entity Acquisitions (VIEs) | |
Intangible Assets - Variable Interest Entity Acquisitions (VIE's) | Note 7. Intangible Assets - Variable Interest Entity Acquisitions (VIE’s) Medical Waste Disposal System Choppy: On January 18, 2022, Viking entered into a Securities Purchase Agreement to purchase (the “Purchase”) 51 units, representing 51%, of Viking Ozone , from Choppy Group LLC, a Wyoming limited liability company (“Choppy”), in consideration of the issuance of 8,333,333 shares of Viking common stock to Choppy, 3,333,333 of which shares were issued at closing, 3,333,333 of which shares are to be issued to Choppy after 5 units of the System (as defined below) have been sold, and 1,666,667 of which shares are to be issued to Choppy after 10 units of the System have been sold. Viking Ozone was organized on or about January 14, 2022, for the purpose of developing and distributing a medical and biohazard waste treatment system using ozone technology (the “System”), and on or about January 14, 2022, Choppy was issued all 100 units of Viking Ozone in consideration of Choppy’s assignment to Viking Ozone of all of Choppy’s intellectual property and intangible assets, including patent rights, know-how, procedures, methodologies, and contract rights in connection with the System, and specifically the invention entitled “Multi-Chamber Medical Waste Ozone-Based Treatment Systems and Methods (Docket No. RAS-101A) and related patent application. On January 18, 2022 Viking acquired 51 units (51%) of Viking Ozone from Choppy with Choppy retaining the remaining 49 units (49%) of Viking Ozone, and Viking issued 3,333,333 shares of Viking common stock to Choppy. Viking and Choppy then entered into an Operating Agreement on January 18, 2022 governing the operation of Viking Ozone. Based on the closing price of the Company’s stock on January 18, 2022, the fair value was approximately $2,000,000. The Company determined the acquisition of a 51% interest in Viking Ozone was the acquisition of and initial consolidation of a VIE that is not a business. The acquisition was recorded as follows: Purchase Price: Fair value of stock at closing $ 2,000,000 Fair value of contingent consideration 495,868 Total consideration $ 2,495,868 Purchase Price Allocation: Intangible asset - IP $ 4,916,057 Non-controlling interest (2,420,189 ) Viking ownership interest $ 2,495,868 Open Conductor Detection Technologies Virga: On February 9, 2022, Viking entered into a Securities Purchase Agreement to purchase (the “Purchase”) 51 units, representing 51% of Viking Sentinel, from Virga Systems LLC, a Wyoming limited liability company (“Virga”), in consideration of the issuance of 416,667 shares of Viking common stock to Virga. Viking Sentinel was formed on or about January 31, 2022, and Virga was issued all 100 units of Viking Sentinel in consideration of Virga’s assignment to Viking Sentinel of all of Virga’s intellectual property and intangible assets, including patent rights, know-how, procedures, methodologies, and contract rights in connection with an end of line protection with trip signal engaging for distribution system, and related patent application(s). On February 9, 2022 Viking acquired 51 units (51%) of Viking Sentinel from Virga with Virga retaining the remaining 49 units (49%) of Viking Sentinel, and Viking issued 416,667 shares of Viking common stock to Virga. Viking and Virga then entered into an Operating Agreement on February 9, 2022 governing the operation of Viking Sentinel. The Company determined the acquisition of a 51% interest in Viking Sentinel was the acquisition and initial consolidation of a VIE that is not a business. The acquisition was recorded as follows: Purchase Price: Fair value of stock at closing $ 233,334 Total consideration $ 233,334 Purchase Price Allocation: Intangible asset - IP $ 457,518 Non-controlling interest (224,184 ) Viking ownership interest $ 233,334 Jedda: On February 9, 2022, Viking entered into a Securities Purchase Agreement to purchase (the “Purchase”) 51 units (the “Units”), representing 51% of Viking Protection Systems, LLC (“Viking Protection”), from Jedda Holdings LLC (“Jedda”). In consideration for the Units, Viking agreed to issue to Jedda, shares of a new class of Convertible Preferred Stock of Viking with a face value of $10,000 per share (the “Preferred Shares”), or pay cash to Jedda, if applicable, as follows: No. Purchase Price When Due No. of VKIN Pref. Shares Conversion Price No. of Underlying VKIN Common Shares Estimated Revenues if Sales Target Achieved** 1 $ 250,000 On closing N/A $ 0.60 416,667 N/A 2 $ 4,750,000 On closing 475 $ 0.60 7,916,667 N/A 3 $ 1,000,000 Upon the sale of 10k units 100 $ 0.75 1,333,333 $ 50,000,000 4 $ 2,000,000 Upon the sale of 20k units 200 $ 1.00 2,000,000 $ 100,000,000 5 $ 3,000,000 Upon the sale of 30k units 300 $ 1.25 2,400,000 $ 150,000,000 6 $ 4,000,000 Upon the sale of 50k units 400 $ 1.50 2,666,667 $ 250,000,000 7 $ 6,000,000 Upon the sale of 100k units 600 $ 2.00 3,000,000 $ 500,000,000 Total $ 21,000,000 2,075 $ 1.06(avg.) 19,733,334 $ 500,000,000 ___________ * The $5 million due on closing was payable solely in stock of Viking. All other payments, if the subject sales targets are met, are payable in cash or in shares of convertible preferred stock of Viking, at the seller’s option. ** These are estimates only. There is no guarantee any sales targets will be reached. Notwithstanding the above, Viking shall not effect any conversion of any Preferred Shares, and Jedda shall not have the right to convert any Preferred Shares, to the extent that after giving effect to the conversion, Jedda (together with Jedda’s affiliates, and any persons acting as a group together with Jedda or any of Jedda’s affiliates) would beneficially own in excess of 4.99% of the number of shares of the Viking Common Stock outstanding immediately after giving effect to the issuance of shares of Viking Common Stock issuable upon conversion of the Preferred Share(s) by Jedda. Jedda, upon not less than 61 days’ prior notice to Viking, may increase or decrease the beneficial ownership limitation, provided that the beneficial ownership limitation in no event exceeds 9.99% of the number of shares of Viking Common Stock outstanding immediately after giving effect to the issuance of shares of Viking Common Stock upon conversion of the Preferred Share(s) held by Jedda and the beneficial ownership limitation provisions of this Section shall continue to apply. Any such increase or decrease will not be effective until the 61 st Viking Protection was formed on or about January 31, 2022, and Jedda was issued all 100 units of Viking Protection in consideration of Jedda’s assignment to Viking Protection of all of Jedda’s intellectual property and intangible assets, including patent rights, know-how, procedures, methodologies, and contract rights in connection with an electric transmission ground fault prevention trip signal engaging system, and related patent application(s). On February 9, 2022 Viking acquired 51 units (51%) of Viking Protection from Jedda with Jedda retaining the remaining 49 units (49%) of Viking Protection, and Viking issued the 475 Preferred Shares to Jedda. Viking and Jedda then entered into an Operating Agreement on February 9, 2022 governing the operation of Viking Protection. The Company determined the acquisition of a 51% interest in Viking Protection was the acquisition and initial consolidation of a VIE that is not a business. The acquisition was recorded as follows: Purchase Price: Fair value of stock at closing $ 4,433,334 Fair value of contingent consideration 939,889 Total consideration $ 5,373,223 Purchase Price Allocation: Intangible asset - IP $ 10,059,765 Non-controlling interest (4,686,542 ) Viking ownership interest $ 5,373,223 The Company consolidates any VIEs in which it holds a variable interest and is the primary beneficiary. Generally, a VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The Company has determined that it is the primary beneficiary of three VIEs, Viking Ozone, Viking Sentinel and Viking Protection, and consolidates the financial results of these entities, as follows: Viking Viking Viking Ozone Sentinel Protection Total Intangible asset - IP $ 4,916,057 $ 457,518 $ 10,059,765 $ 15,433,340 Non-controlling interest (2,420,189 ) (224,184 ) (4,686,542 ) (7,330,915 ) Viking ownership interest $ 2,495,868 $ 233,334 $ 5,373,223 $ 8,102,425 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | Note 8. Related Party Transactions The Company’s CEO and director, James Doris, renders professional services to the Company through AGD Advisory Group, Inc., an affiliate of Mr. Doris’s. During the three months ended March 31, 2023 and 2022, the Company paid or accrued $90,000 in fees to AGD Advisory Group, Inc. As of March 31, 2023 and December 31, 2022, the total amount due to AGD Advisory Group, Inc. was $370,000, and is included in accounts payable. The Company’s CFO, John McVicar, renders professional services to the Company through 1508586 Alberta Ltd., an affiliate of Mr. McVicar’s. During the three months ended March 31, 2023 and 2022, the Company paid or accrued $60,000 and nil, respectively, in fees to 1508586 Alberta Ltd. Due to Camber Energy, Inc. During 2022 and 2021, Camber Energy, Inc. made various cash advances to the Company. The advances are non-interest bearing and stipulate no repayment terms or restrictions. Camber owns 63% of the Company but does not have a controlling financial interest. As of March 31, 2023 and December 31, 2022, the amounts due to Camber aggregated $6,077,300 and $6,572,300, respectively. Simson-Maxwell At the time of acquisition, Simson-Maxwell had several amounts due to/due from related parties and notes payable to certain employees, officers, family members and entities owned or controlled by such individuals. The Company assumed these balances and loan agreements in connection with the acquisition. The balance of amounts due to and due from related parties as of March 31, 2023 and December 31, 2022 are as follows: Related Party Due from related party Due to related party Net due (to) from March 31, 2023 Simmax Corp. & majority owner $ 327,452 $ (718,435 ) $ (390,983 ) Adco Power Ltd. - - - $ 327,452 $ (718,435 ) $ (390,983 ) December 31, 2022 Simmax Corp. & majority owner $ 327,132 $ (629,073 ) $ (301,941 ) Adco Power Ltd. - - - $ 327,132 $ (629,073 ) $ (301,941 ) Simmax Corp. owns a 17% non-controlling interest in Simson-Maxwell and is majority owned by a Director of Simson-Maxwell. Adco Power Ltd., an industrial, electrical and mechanical construction company, is a wholly owned subsidiary of Simmax Corp., and conducts business with Simson-Maxwell. During the three months ended March 31, 2023 and 2022, Simson-Maxwell recorded sales to Adco Power Ltd. in the amount of $nil and $36,482, respectively. During the three months ended March 31, 2023 and 2022, Simson-Maxwell recorded purchases from Adco Power Ltd. in the amount of $19,726 and nil, respectively. The notes payable to related parties as of March 31, 2023 and December 31, 2022 are as follows: March 31, December 31, 2023 2022 Total notes payable to related parties $ 670,694 $ 684,069 Less current portion of notes payable - related parties (57,892 ) (56,916 ) Notes payable - related parties, net of current portion $ 612,802 $ 627,153 |
Noncontrolling Interests
Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2023 | |
Noncontrolling Interests | |
Noncontrolling Interests | Note 9. Noncontrolling Interests As described in Note 5, on October 18, 2021, the Company acquired 60.5% of Simson-Maxwell. At the time of the acquisition, the fair value of the noncontrolling interest was independently determined by a valuation specialist. The following discloses the effects of changes in the Company’s ownership interest in Simson-Maxwell, and on the Company’s equity for three months ended March 31, 2023: Noncontrolling interest - January 1, 2023 $ 3,013,996 Net loss attributable to noncontrolling interest (40,749 ) Noncontrolling interest – March 31, 2023 $ 2,973,247 As described in Note 8, during January and February 2022, the Company acquired a 51% interest in Viking Ozone, Viking Sentinel and Viking Protection, all of which have been identified as variable interest entities. The following discloses the effects of the Company’s ownership interest in these three entities in the aggregate, and on the Company’s equity for three months ended March 31, 2023: Noncontrolling interest - January 1, 2023 $ 7,162,514 Net loss attributable to noncontrolling interest (39,479 ) Noncontrolling interest – March 31, 2022 $ 7,123,035 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity | |
Equity | Note 10. Equity (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”). Preferred Stock – Series C The Company has designated 50,000 preferred shares as Series C Preferred Stock (the “Series C Preferred Stock”). As of March 31, 2022 there were 28,092 shares of Series C Preferred Stock issued and outstanding, all of which are held by the Company’s CEO, James Doris. Pursuant to the Certification of Designation of the Series C Preferred Stock, as amended (and pursuant to a Certificate of Correction to the Certificate of Designation of the Series C Preferred Stock filed with the State of Nevada on or about January 20, 2022), (i) the holders of the Series C Preferred Stock have no voting rights until the later of July 1, 2022, or the date on which Camber is no longer entitled to own at least 51% of the outstanding shares of Viking’s common stock (the “ Voting Trigger Date Combination Preferred Stock – Series E On February 14, 2022, the Company filed an amendment to its Articles of Incorporation to designate 2,075 of its authorized preferred shares as Series E Convertible Preferred Stock (the “Series E Preferred Stock”), with a par value of $0.001 per share and a stated value equal to $10,000. The holders of the Series E Preferred Stock have voting rights equal to one vote per share. Each share of the Series E Preferred Stock is convertible, at any time after the date of issuance at various conversion prices and subject to certain milestone achievements associated with the acquisition of 51% of Viking Protection as described in Note 8. As of March 31, 2022 there were 475 shares of Series E Preferred Stock issued and outstanding. (b) Common Stock The Company is authorized to issue 500,000,000 shares of Common Stock, par value $0.001 per share. During the three months ended March 31, 2023, the Company did not issue any shares of its common stock. |
Long-Term Debt and Other Short-
Long-Term Debt and Other Short-Term Borrowings | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Debt and Other Short-Term Borrowings | |
Long-Term Debt and Other Short-Term Borrowings | Note 11. Long-Term Debt and Other Short-Term Borrowings Long term debt and other short-term borrowings consisted of the following at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Long-term debt: 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 principal and interest 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. On March 10, 2023, the promissory note was amended to include a conversion feature and to include Viking as an additional obligor. See Note 13. The balance shown is net of unamortized discount of $1,430,320 at March 31, 2023 and $12,224 at December 31, 2022. 243,305 1,766,422 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 principal and interest 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. On March 10, 2023, the promissory note was amended to include a conversion feature and to include Viking as an additional obligor. See Note 13. The balance shown is net of unamortized discount of $661,816 at March 31, 2023 and $12,190 at December 31, 2022. 111,182 813,571 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 matures on July 28, 2050. The loan is payable in monthly installments of $731 with the remaining principal and accrued interest due at maturity. Installment payments were originally due to start 12 months from the date of the note but the date was extended to January 2023. Accrued interest from the original installment due date to January 2023 was capitalized to the loan principal balance. 164,010 163,623 Total long-term debt 518,497 2,743,616 Less current portion and debt discount (96,926 ) (637,335 ) $ 421,571 $ 2,106,281 Principal maturities of long-term debt for the next five years and thereafter are as follows: Twelve-month period ended March 31, Principal Unamortized Discount Net 2024 $ 652,909 $ (555,983 ) $ 96,926 2025 693,208 (590,355 ) 102,853 2026 1,109,052 (945,797 ) 163,255 2027 3,069 - 3,069 2028 3,186 - 3,186 Thereafter 149,208 - 149,208 $ 2,610,632 $ (2,092,135 ) $ 518,497 Bank Credit Facility Simson-Maxwell has an operating credit facility with TD Bank, secured by accounts receivable and inventory, bearing interest at prime plus 2.25% on Canadian funds up to CAD $5,000,000 and the bank’s US dollar base rate plus 2.25% on US funds, plus a monthly administration fee of CAD 500. The balance outstanding under this credit facility is CAD $4,638,917 ($3,429,485) and CAD $4,139,785 ($3,111,350) as of March 31, 2023 and December 31, 2022, respectively. |
Derivative Liability
Derivative Liability | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Debt and Other Short-Term Borrowings | |
Derivative Liability | Note 12. Derivative Liability On March 10, 2023, the terms of the promissory notes held by Mid-Con Petroleum, LLC and Mid-Con Drilling, LLC described in Note 12 were amended to include a conversion feature granting the holder of the note the option to convert the principal balance of the debt, in whole or in part, into common stock of Viking. The conversion price is equal to the lesser of : (i) the average of the 5 lowest individual daily volume weighted average prices (“VWAP”) of Viking common stock during the 30-day period prior to the date of the notice of conversion; or (ii) one dollar ($1.00) per share. All other terms of the promissory notes remained unchanged. The modification to the terms of the promissory notes has been treated as a debt extinguishment and the Company recorded a loss on the extinguishment of debt of $154,763 during the three-month period ended March 31, 2023, determined as follows: Mid-Con Petroleum, LLC Mid-Con Drilling, LLC Total Face value of debt 1,713,066 792,644 2,505,710 less: unamortized debt discount (11,323 ) (11,291 ) (22,614 ) Carrying value of debt 1,701,743 781,353 2,483,096 FV of new debt 1,803,411 834,448 2,637,859 Loss on extinguishment (101,668 ) (53,095 ) (154,763 ) The fair value of the debt was determined as the total number of shares, equal to the face value of the debt on March 10, 2023 divided by the VWAP, multiplied by the closing share price on that day. The value of the conversion option is based upon the fair value of Viking’s common stock. As the option is convertible into a variable number of shares, it is considered to be a derivative to be continuously recognized at fair value, with changes to fair value recorded in the statement of operations. The fair value of the conversion feature at the date of modification was determined to be $2,276,217 using a binomial option pricing model with the following inputs: stock price $0.31, VWAP $0.29, volatility 185.77%, days to maturity 867, risk-free interest rate 5.0%. The derivative liability is classified as a Level 3 liability in the Fair Value Hierarchy. A summary of key balances immediately before and after the modification is as follows: Mid-Con Petroleum, LLC Mid-Con Drilling, LLC Total Balance prior to debt modification: Promissory Note Principal balance 1,713,066 792,644 2,505,710 Unamortized discount at date of modification (11,323 ) (11,291 ) (22,614 ) 1,701,743 781,353 2,483,096 Balance after debt modification: Promissory Note Principal balance 1,713,066 792,644 2,505,710 Unamortized debt discount (1,465,824 ) (678,244 ) (2,144,068 ) 247,242 114,400 361,642 Fair value of conversion feature 1,556,169 720,047 2,276,217 Loss on extinguishment of debt (101,668 ) (53,095 ) (154,763 ) 1,701,743 781,353 2,483,096 At March 31, 2023, the fair value of the conversion feature was remeasured and determined to be $2,810,824 using a binomial option pricing model with the following inputs: stock price $0.35, VWAP $0.27, volatility 188.50%, days to maturity 846, risk-free interest rate 5.0%. Consequently, the Company recorded a loss of $534,607 on the change in fair value of the derivative liability in the statement of operations for the three months ended March 31, 2023. Additionally, the Company recorded amortization of debt discount of $53,732 in the accompanying consolidated statement of operations for the three months ended March 31, 2023. |
Other Commitments and Contingen
Other Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Other Commitments and Contingencies | |
Other Commitments and Contingencies | Note 13. Other Commitments and Contingencies Office lease – Petrodome In April 2018, the Company’s subsidiary, Petrodome entered into a 66-month lease for 4,147 square feet of office space for its corporate office in Houston, Texas. The annual base rent commenced at $22.00 per square foot and escalates at $0.50 per foot each year through expiration of the lease term. Operating lease expense is recognized on a straight-line basis over the lease term. Operating lease expense was $24,096 for the three months ended March 31, 2023 and 2022, respectively. Building, vehicle and equipment leases – Simson-Maxwell The Company has right-of-use assets and operating lease liabilities associated with various operating lease agreements of Simson-Maxwell pertaining to seven business locations, for the premises, vehicles and equipment used in operations in the amount of $5,845,810. These values were determined using a present value discount rate of 3.45% for the premises, and 7.5% for vehicles and equipment. The leases have varying terms, payment schedules and maturities. Operating lease expense is recognized on a straight-line base over each of the lease terms. Payments due in each of the next five years and thereafter at March 31, 2023 under these leases are as follows: Building Vehicle and Equipment Leases Leases Totals 2024 $ 1,090,810 $ 297,453 $ 1,388,263 2025 844,894 91,043 935,937 2026 580,482 7,574 588,056 2027 408,723 2,693 411,416 2028 and thereafter 1,194,181 - 1,194,181 $ 4,119,090 $ 398,763 $ 4,517,853 Less imputed interest (395,968 ) Present value of remaining lease payments $ 4,121,885 Current $ 1,255,745 Non-current $ 2,866,140 Operating lease expense for these leases was $322,387 and $368,740 for the three months ended March 31, 2023 and 2022, respectively. 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 adverse effect on the Company’s consolidated financial position or results of operations. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Taxes | |
Income Taxes | Note 14. Income Taxes The Company has estimated net operating loss carry forwards of approximately $48,000,000 and $38,500,000 as of December 31, 2022 and 2021, respectively. In addition, the Company, through its subsidiary Simson-Maxwell, has estimated foreign loss carryforwards of approximately $6,300,000 and $3,000,000 as of December 31, 2022 and 2021, respectively, which expire between 2038 and 2042. The potential benefit of these net operating losses has not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not that it will utilize the net operating losses carried forward in future years. In December 2017, tax legislation was enacted limiting the deduction for net operating losses from 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. 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 $7,000,000 will expire between 2032 through 2037. The Company files income tax returns on a consolidated basis in the United States federal jurisdiction. As of December 31, 2021, the tax returns for the Company for the years ending 2019 through 2021 remain open to examination by the Internal Revenue Service. The Company and its subsidiaries are not currently under examination for any period. As a result of the Company becoming a majority-owned subsidiary of Camber as discussed in Note 1, the Company has undergone an ownership change as defined in Section 382 of the Internal Revenue Code, and the Company’s tax net operating loss carry forwards generated prior to the ownership change will be subject to an annual limitation, which could reduce or defer the utilization of these losses. |
Business Segment Information an
Business Segment Information and Geographic Data | 3 Months Ended |
Mar. 31, 2023 | |
Business Segment Information and Geographic Data | |
Business Segment Information and Geographic Data | Note 15. Business Segment Information and Geographic Data The Company has two reportable segments: Power Generation and Oil and Gas Exploration. The power generation segment provides custom energy and power solutions to commercial and industrial clients in North America and the oil and gas segment is involved in exploration and production with properties in central and southern United States. We evaluate segment performance based on revenue and operating income (loss). Information related to our reportable segments and our consolidated results for the three months ended March 31, 2023 is presented below. Three Months Ended March 31, 2022 Oil and Gas Power Generation Total Income (Loss) from Operations is as follows: Revenue $ 1,678,817 $ 4,241,300 $ 5,920,117 Operating expenses Cost of goods - 2,451,309 2,451,309 Lease operating costs 568,515 - 568,515 General and administrative 2,585,003 2,709,158 5,294,161 Stock based compensation 292,808 - 292,808 Accretion - ARO 35,066 - 35,066 Depreciation, depletion and amortization 414,204 85,565 499,769 Total operating expenses 3,895,596 5,246,032 9,141,628 Income (loss) from operations $ (2,216,779 ) $ (1,004,732 ) $ (3,221,511 ) Assets Segment Assets $ 18,393,576 $ 25,713,608 $ 44,107,184 Corporate and unallocated assets 24,981,033 Total Consolidated Assets $ 69,088,217 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events | |
Subsequent Events | Note 16. Subsequent Events On April 28, 2023, the Company issued 588,235 common shares pursuant to the assignment and conversion of $200,000 of the convertible promissory note owed by the Company and its subsidiary, Mid-Con Petroleum, LLC, to Cornerstone Bank (Note 11). On May 1, 2023, the Company issued 3,849,306 common shares upon the exercise of warrants with an exercise price of between $0.001 and $0.009. Effective as of May 5, 2023, the Company entered into a securities purchase agreement with FK Venture LLC, a Delaware limited liability company (the “ Investor Note The initial Note purchased by the Investor was funded by the Investor on May 5, 2023, and on such date, the Company received the purchase price of $800,000 and issued a Note in the principal amount of $800,000 to the Investor. Each Note issued to the Investor will (i) mature on the earlier of earlier of July 1, 2025, or 90 days following the date that the Company completes a direct up-listing of its common stock to a national securities exchange (not including any merger or combination of the Company and Camber Energy, Inc. (such combination the “ Camber Merger |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
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 consolidated 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. |
Basis of Consolidation | The consolidated financial statements presented herein reflect the consolidated financial results of the Company, its wholly owned subsidiaries (Mid-Con Petroleum, LLC, Mid-Con Drilling, LLC, Mid-Con Development, LLC, and Petrodome Energy, LLC.), and Simson-Maxwell (a majority owned subsidiary). In January 2022, the Company acquired a 51% ownership interest in Viking Ozone, and in February 2022, the Company acquired a 51% ownership interest in both Viking Sentinel and Viking Protection. These entities were formed to facilitate the monetization of acquired intellectual properties (see Note 7). These entities are variable interest entities in which the Company owns a controlling financial interest; consequently, these entities are also consolidated. All significant intercompany transactions and balances have been eliminated. |
Foreign Currency | Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the balance sheet date. Results of operations and cash flows of businesses conducted in foreign currency are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a component of stockholders’ equity in accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions have been insignificant. |
Use of Estimates in the Preparation of Financial Statements | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. Significant areas requiring the use of management estimates relate to impairment of long-lived assets, goodwill, fair value of commodity derivatives, stock-based compensation, asset retirement obligations, and the determination of expected tax rates for future income tax recoveries. The estimates of proved, probable and possible oil and gas reserves are used as significant inputs in determining the depletion of oil and gas properties and the impairment of proved and unproved oil and gas properties. There are numerous uncertainties inherent in the estimation of quantities of proved, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks. Actual results could differ from the estimates and assumptions utilized. |
Cash and Cash Equivalents | Cash and cash equivalents include cash in banks and highly liquid investment securities that have original maturities of three months or less. Accounts at banks in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, while accounts at banks in Canada are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to CAD $100,000. The Company’s cash balances may at times exceed the FDIC or CDIC insured limits. |
Accounts receivable | Accounts receivable for the Company’s oil and gas operations consist of purchaser receivables and joint interest billing receivables. The Company evaluates these accounts receivable for collectability and, when necessary, records allowances for expected unrecoverable amounts. During the three months ended March 31, 2022, the Company determined that the collectability of certain accounts receivable balances associated with the disposals of Ichor, and Elysium were not collectable and a reserve of $1,800,000 was recorded. These amounts were written off during the year ended December 31, 2022. At March 31, 2023 and December 31, 2022, the Company has not recorded an allowance for doubtful accounts related to oil and gas. The Company extends credit to its power generation customers in the normal course of business. The Company performs ongoing credit evaluations and generally does not require collateral. Payment terms are generally 30 days. The Company carries its trade accounts receivable at invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based upon management’s estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions. At March 31, 2023 and December 31, 2022, the Company had a reserve for doubtful accounts on power generation accounts receivable of $19,412. The Company does not accrue interest on past due accounts receivable. |
Inventory | Inventories are stated at the lower of cost or net realizable value, and consist of parts, equipment and work in process. Work-in-process and finished goods included the cost of materials, direct labor and overhead. At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete and slow-moving items. Inventory consisted of the following at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Units and work in process $ 8,796,600 $ 8,749,903 Parts 2,883,172 2,791,626 11,679,772 11,541,529 Reserve for obsolescence (1,266,106 ) (1,264,867 ) $ 10,413,666 $ 10,276,662 |
Prepaid expenses | Prepaid expenses include amounts paid in advance for certain operational expenses, as well as amounts paid 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. |
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. |
Limitation on Capitalized Costs | Under the full-cost method of accounting, we are required, at the end of each reporting date, to perform a test to determine the limit on the book value of our oil and natural gas properties (the “Ceiling” test). If the capitalized costs of our oil and natural gas properties, net of accumulated amortization and related deferred income taxes, exceed the Ceiling, this excess or impairment is charged to expense. The expense may not be reversed in future periods, even though higher oil and natural gas prices may subsequently increase the Ceiling. The Ceiling is defined as the sum of: (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. |
Oil and Gas Reserves | Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation thereof, including evaluations and extrapolations of well flow rates and reservoir pressure. Estimates by different engineers often vary, sometimes significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted by changes in product prices. |
Accounting for leases | The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires an entity to recognize a lease liability and ROU asset on the lease commencement date. A lease liability is measured equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental borrowing rate, as the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease payments include payments made before the commencement date and any residual value guarantees, if applicable. When determining the lease term, the Company includes option periods that it is reasonably certain to exercise as failure to renew the lease would impose a significant economic detriment. For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized as rent expense where the Company is a lessee on a straight-line basis (“Straight-Line Rent”) over the applicable lease terms. The excess of the Straight-Line Rent over the minimum rents paid is included in the ROU asset where the Company is a lessee. Short-term lease cost for operating leases includes rental expense for leases with a term of less than 12 months. The Company elected the package of practical expedients permitted under the transition guidance for the revised lease standard, which allowed Viking to carry forward the historical lease classification, retain the initial direct costs for any leases that existed prior to the adoption of the standard and not reassess whether any contracts entered into prior to the adoption are leases. The Company also elected to account for lease and non-lease components in lease agreements as a single lease component in determining lease assets and liabilities. In addition, the Company elected not to recognize the right-of-use assets and liabilities for leases with lease terms of one year or less. |
Business Combinations | The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Intangible assets | Intangible assets include amounts related to the Company’s license agreement with ESG Clean Energy, LLC, and its investments in Viking Ozone, LLC, Viking Protection Systems, LLC and Viking Sentinel, LLC. Additionally, as part of the acquisition of Simson-Maxwell, the Company identified intangible assets consisting of Simson-Maxwell’s customer relationships and its brand. These intangible assets are described in detail in Note 7. The intangible assets related to the ESG Clean Energy license and the Simson-Maxwell customer relationships are being amortized on a straight-line basis over 16 years (the remaining life of the related patents) and 10 years, respectively. The other intangible assets are not amortized. The Company reviews these intangible assets, at least annually, for possible impairment when events or changes in circumstances that the assets carrying amount may not be recoverable. In evaluating the future benefit of its intangible assets, the Company estimates the anticipated 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. |
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 three months ended March 31, 2023 and 2022, there were approximately 26,164,368 and 15,499,390 respectively, common stock equivalents that were omitted from the calculation of diluted income per share as they were anti-dilutive. |
Revenue Recognition | Oil and Gas Revenues Sales of crude oil, natural gas, and natural gas liquids (NGLs) are included in revenue when production is sold to a customer in fulfillment of performance obligations under the terms of agreed contracts. Performance obligations primarily comprise delivery of oil, gas, or NGLs at a delivery point, as negotiated within each contract. Each barrel of oil, million BTU (MMBtu) of natural gas, or other unit of measure is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated. Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer. The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the hydrocarbons, the transfer of significant risks and rewards, the Company’s right to payment, and transfer of legal title. In each case, the time between delivery and when payments are due is not significant. The following table disaggregates the Company’s oil and gas revenue by source for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Oil $ 182,120 $ 740,281 Natural gas and natural gas liquids - 438,152 Well operations 63,077 500,384 $ 245,197 $ 1,678,817 Power Generation Revenues Through its 60.5% ownership in Simson-Maxwell, the Company manufactures and sells power generation products, services and custom energy solutions. Simson-Maxwell provides commercial and industrial clients with emergency power generation capabilities. Simson Maxwell’s derives its revenues as follows: 1. Sale of power generation units At the request of certain customers, the Company will warehouse inventory billed to the customer but not delivered. Unless all revenue recognition criteria have been met, the Company does not recognize revenue on these transactions until the customer takes possession of the product. |
Income Taxes | The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the consolidated financial statements and the tax basis of assets and liabilities by using estimated tax rates for the year in which the differences are expected to reverse. The Company recognizes deferred tax assets and liabilities to the extent that we believe that these assets and/or liabilities are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. If we determine that the Company would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. In assessing the realizability of its deferred tax assets, management evaluated whether it is more likely than not that some portion, or all of its deferred tax assets, will be realized. The realization of its deferred tax assets relates directly to the Company’s ability to generate taxable income. The valuation allowance is then adjusted accordingly. |
Stock-Based Compensation | The Company may issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs. The cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. The fair value of stock options and warrants is determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instrument. The dividend yield assumption is based on historical patterns and future expectations for the Company dividends. The following table represents stock warrant activity as of and for the three months ended March 31, 2023: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Warrants Outstanding – December 31, 2022 9,259,261 0.62 4.03 years - Granted - - Exercised - - Forfeited/expired/cancelled - - Warrants Outstanding – March 31, 2023 9,259,261 $ 0.62 3.79 years $ - Outstanding Exercisable – March 31, 2023 9,259,261 $ 0.62 3.79 years $ - |
Impairment of long-lived assets | The Company, at least annually, is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset’s expected future discounted cash flows or market value. The Company estimates 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 three months ended March 31, 2023 and 2022. |
Accounting for Asset Retirement Obligations | Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount the Company will incur to plug, abandon and remediate its producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. The Company determined its ARO by calculating the present value of estimated cash flows related to the obligation. The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties. The following table describes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Asset retirement obligation – beginning $ 1,927,196 $ 2,111,650 Accretion expense 31,382 35,066 Asset retirement obligation – ending $ 1,958,578 $ 2,146,716 |
Derivative Liability | We review the terms of convertible debt issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense. The Company has adopted a sequencing approach to allocating its authorized and unissued shares when the number of such shares is insufficient to satisfy all convertible instruments or option type contracts that may be settled in shares. Specifically, the Company allocates it authorized and unissued shares based on the inception date of each instrument, with shares allocated first to those instruments with the earliest inception dates. Instruments with later inception dates for which no shares remain to be allocated are reclassified to asset or liability. |
Undistributed Revenues and Royalties | The Company records a liability for cash collected from oil and gas sales that have not been distributed. The amounts are distributed in accordance with the working interests of the respective owners. |
Concentration of Credit Risk | The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk as a result of any non-performance by the financial institutions. The Company uses procedures including credit approvals, credit limits and terms to manage its credit exposure. Additionally, the Company regularly issues progress billings on longer-term orders to mitigate both credit risk and overall working capital requirements. |
Subsequent events | The Company has evaluated all subsequent events from March 31, 2023 through the date of filing of this report. |
Company Overview and Operatio_2
Company Overview and Operations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Company Overview and Operations | |
Schedule of Oil and gas reserves | Proceeds from sale $ 3,590,000 Reduction in oil & gas full cost pool (based on % of reserves disposed) (12,791,680 ) ARO recovered 239,975 Loss on disposal $ (8,961,705 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of Inventory | March 31, 2023 December 31, 2022 Units and work in process $ 8,796,600 $ 8,749,903 Parts 2,883,172 2,791,626 11,679,772 11,541,529 Reserve for obsolescence (1,266,106 ) (1,264,867 ) $ 10,413,666 $ 10,276,662 |
Schedule of Company's oil and gas revenue by source | Three Months Ended March 31, 2023 2022 Oil $ 182,120 $ 740,281 Natural gas and natural gas liquids - 438,152 Well operations 63,077 500,384 $ 245,197 $ 1,678,817 |
Schedule of disaggregates Simson-Maxwell's revenue | Three Months Ended March 31, 2023 2022 Power generation units $ 1,150,343 $ 972,093 Parts 1,307,952 1,165,508 Total units and parts 2,458,295 2,137,601 Service and repairs 4,540,697 2,103,699 $ 6,998,992 $ 4,241,300 |
Schedule of stock warrant activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Warrants Outstanding – December 31, 2022 9,259,261 0.62 4.03 years - Granted - - Exercised - - Forfeited/expired/cancelled - - Warrants Outstanding – March 31, 2023 9,259,261 $ 0.62 3.79 years $ - Outstanding Exercisable – March 31, 2023 9,259,261 $ 0.62 3.79 years $ - |
Schedule of changes in the company's asset retirement obligations | Three Months Ended March 31, 2023 2022 Asset retirement obligation – beginning $ 1,927,196 $ 2,111,650 Accretion expense 31,382 35,066 Asset retirement obligation – ending $ 1,958,578 $ 2,146,716 |
Oil and Gas Properties (Tables)
Oil and Gas Properties (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Oil and Gas Properties | |
Schedule of oil and gas activities by classification and geographical cost | December 31, March 31, 2022 Adjustments Impairments 2023 Proved developed producing oil and gas properties United States cost center $ 3,872,488 $ - $ - $ 3,872,488 Accumulated depreciation, depletion and amortization (2,803,375 ) (50,990 ) - (2,854,365 ) Proved developed producing oil and gas properties, net $ 1,069,113 $ (50,990 ) $ - $ 1,018,123 Undeveloped and non-producing oil and gas properties United States cost center 785,302 - - 785,302 Accumulated depreciation, depletion and amortization (568,497 ) (10,340 ) - (578,837 ) Undeveloped and non-producing oil and gas properties, net $ 216,805 $ (10,340 ) $ - $ 206,465 Total Oil and Gas Properties, Net $ 1,285,918 $ (61,330 ) $ - $ 1,224,588 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets | |
Schedule Of Minimum payments of ESG | Minimum Payments Years from the Trigger Date: For Year Ended Year two $ 500,000 Year three 750,000 Year four 1,250,000 Year five 1,750,000 Year six 2,250,000 Year seven 2,750,000 Year eight 3,250,000 Year nine and after 3,250,000 |
Schedule Of Consisted intangible assets | March 31, 2023 December 31, 2022 ESG Clean Energy License $ 5,000,000 $ 5,000,000 Accumulated amortization (498,985 ) (422,869 ) $ 4,501,015 $ 4,577,131 |
Schedule Of Other intangibles | March 31, 2023 December 31, 2022 Simson-Maxwell Brand $ 2,230,673 $ 2,230,673 Customer Relationships 1,677,453 1,677,453 Impairment of intangible assets (451,772 ) (451,772 ) Accumulated amortization (243,115 ) (201,754 ) $ 3,213,239 $ 3,254,600 |
Intangible Assets Variable Inte
Intangible Assets Variable Interest Entity Acquisitions (VIEs) (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets - Variable Interest Entity Acquisitions (VIEs) | |
Schedule Of Following purchase | Purchase Price: Fair value of stock at closing $ 2,000,000 Fair value of contingent consideration 495,868 Total consideration $ 2,495,868 Purchase Price Allocation: Intangible asset - IP $ 4,916,057 Non-controlling interest (2,420,189 ) Viking ownership interest $ 2,495,868 Purchase Price: Fair value of stock at closing $ 233,334 Total consideration $ 233,334 Purchase Price Allocation: Intangible asset - IP $ 457,518 Non-controlling interest (224,184 ) Viking ownership interest $ 233,334 |
Schedule Of Convertible Preferred Stock | No. Purchase Price When Due No. of VKIN Pref. Shares Conversion Price No. of Underlying VKIN Common Shares Estimated Revenues if Sales Target Achieved** 1 $ 250,000 On closing N/A $ 0.60 416,667 N/A 2 $ 4,750,000 On closing 475 $ 0.60 7,916,667 N/A 3 $ 1,000,000 Upon the sale of 10k units 100 $ 0.75 1,333,333 $ 50,000,000 4 $ 2,000,000 Upon the sale of 20k units 200 $ 1.00 2,000,000 $ 100,000,000 5 $ 3,000,000 Upon the sale of 30k units 300 $ 1.25 2,400,000 $ 150,000,000 6 $ 4,000,000 Upon the sale of 50k units 400 $ 1.50 2,666,667 $ 250,000,000 7 $ 6,000,000 Upon the sale of 100k units 600 $ 2.00 3,000,000 $ 500,000,000 Total $ 21,000,000 2,075 $ 1.06(avg.) 19,733,334 $ 500,000,000 |
Schedule Of Acquisition and Initial Consolidation of a VIE that is not a Business | Purchase Price: Fair value of stock at closing $ 4,433,334 Fair value of contingent consideration 939,889 Total consideration $ 5,373,223 Purchase Price Allocation: Intangible asset - IP $ 10,059,765 Non-controlling interest (4,686,542 ) Viking ownership interest $ 5,373,223 |
Schedule Of Viking Sentinel and Viking Protection, and consolidates | Viking Viking Viking Ozone Sentinel Protection Total Intangible asset - IP $ 4,916,057 $ 457,518 $ 10,059,765 $ 15,433,340 Non-controlling interest (2,420,189 ) (224,184 ) (4,686,542 ) (7,330,915 ) Viking ownership interest $ 2,495,868 $ 233,334 $ 5,373,223 $ 8,102,425 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions | |
Schedule Of balances of the related party receivables and payables | Related Party Due from related party Due to related party Net due (to) from March 31, 2023 Simmax Corp. & majority owner $ 327,452 $ (718,435 ) $ (390,983 ) Adco Power Ltd. - - - $ 327,452 $ (718,435 ) $ (390,983 ) December 31, 2022 Simmax Corp. & majority owner $ 327,132 $ (629,073 ) $ (301,941 ) Adco Power Ltd. - - - $ 327,132 $ (629,073 ) $ (301,941 ) |
Schedule of Notes payable to related parties | March 31, December 31, 2023 2022 Total notes payable to related parties $ 670,694 $ 684,069 Less current portion of notes payable - related parties (57,892 ) (56,916 ) Notes payable - related parties, net of current portion $ 612,802 $ 627,153 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Noncontrolling Interests | |
Schedule of Company's ownership interest in Simson-Maxwel | Noncontrolling interest - January 1, 2023 $ 3,013,996 Net loss attributable to noncontrolling interest (40,749 ) Noncontrolling interest – March 31, 2023 $ 2,973,247 |
Schedule of Company's ownership interest | Noncontrolling interest - January 1, 2023 $ 7,162,514 Net loss attributable to noncontrolling interest (39,479 ) Noncontrolling interest – March 31, 2022 $ 7,123,035 |
LongTerm Debt and Other ShortTe
LongTerm Debt and Other ShortTerm Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Debt and Other Short-Term Borrowings | |
Schedule of Long-Term Debt and Other Short-Term Borrowings | March 31, 2023 December 31, 2022 Long-term debt: 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 principal and interest 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. On March 10, 2023, the promissory note was amended to include a conversion feature and to include Viking as an additional obligor. See Note 13. The balance shown is net of unamortized discount of $1,430,320 at March 31, 2023 and $12,224 at December 31, 2022. 243,305 1,766,422 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 principal and interest 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. On March 10, 2023, the promissory note was amended to include a conversion feature and to include Viking as an additional obligor. See Note 13. The balance shown is net of unamortized discount of $661,816 at March 31, 2023 and $12,190 at December 31, 2022. 111,182 813,571 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 matures on July 28, 2050. The loan is payable in monthly installments of $731 with the remaining principal and accrued interest due at maturity. Installment payments were originally due to start 12 months from the date of the note but the date was extended to January 2023. Accrued interest from the original installment due date to January 2023 was capitalized to the loan principal balance. 164,010 163,623 Total long-term debt 518,497 2,743,616 Less current portion and debt discount (96,926 ) (637,335 ) $ 421,571 $ 2,106,281 |
Schedule of Principal Maturities of Long-Term Debt | Twelve-month period ended March 31, Principal Unamortized Discount Net 2024 $ 652,909 $ (555,983 ) $ 96,926 2025 693,208 (590,355 ) 102,853 2026 1,109,052 (945,797 ) 163,255 2027 3,069 - 3,069 2028 3,186 - 3,186 Thereafter 149,208 - 149,208 $ 2,610,632 $ (2,092,135 ) $ 518,497 |
Derivative Liability (Table)
Derivative Liability (Table) | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Debt and Other Short-Term Borrowings | |
Schedule of debt extinguishment | Mid-Con Petroleum, LLC Mid-Con Drilling, LLC Total Face value of debt 1,713,066 792,644 2,505,710 less: unamortized debt discount (11,323 ) (11,291 ) (22,614 ) Carrying value of debt 1,701,743 781,353 2,483,096 FV of new debt 1,803,411 834,448 2,637,859 Loss on extinguishment (101,668 ) (53,095 ) (154,763 ) |
Schedule total number of shares, equal to the face value of the debt | Mid-Con Petroleum, LLC Mid-Con Drilling, LLC Total Balance prior to debt modification: Promissory Note Principal balance 1,713,066 792,644 2,505,710 Unamortized discount at date of modification (11,323 ) (11,291 ) (22,614 ) 1,701,743 781,353 2,483,096 Balance after debt modification: Promissory Note Principal balance 1,713,066 792,644 2,505,710 Unamortized debt discount (1,465,824 ) (678,244 ) (2,144,068 ) 247,242 114,400 361,642 Fair value of conversion feature 1,556,169 720,047 2,276,217 Loss on extinguishment of debt (101,668 ) (53,095 ) (154,763 ) 1,701,743 781,353 2,483,096 |
Other Commitments and Conting_2
Other Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Other Commitments and Contingencies (Tables) | |
Schedule of Payments due in each of the next five years | Building Vehicle and Equipment Leases Leases Totals 2024 $ 1,090,810 $ 297,453 $ 1,388,263 2025 844,894 91,043 935,937 2026 580,482 7,574 588,056 2027 408,723 2,693 411,416 2028 and thereafter 1,194,181 - 1,194,181 $ 4,119,090 $ 398,763 $ 4,517,853 Less imputed interest (395,968 ) Present value of remaining lease payments $ 4,121,885 Current $ 1,255,745 Non-current $ 2,866,140 |
Business Segment Information _2
Business Segment Information and Geographic Data (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Segment Information and Geographic Data | |
Schedule Income (Loss) from Operations | Three Months Ended March 31, 2023 Oil and Gas Power Generation Total Income (Loss) from Operations is as follows: Revenue $ 245,197 $ 6,998,992 $ 7,244,189 Operating expenses Cost of goods - 4,786,631 4,786,631 Lease operating costs 125,363 - 125,363 General and administrative 828,479 2,221,842 3,050,321 Stock based compensation - - - Accretion - ARO 31,382 - 31,382 Depreciation, depletion and amortization 134,535 96,613 231,148 Total operating expenses 1,119,759 7,105,086 8,224,845 Loss from operations $ (874,562 ) $ (106,094 ) $ (980,656 ) Assets Segment assets $ 3,148,445 $ 26,151,981 $ 29,300,426 Corporate and unallocated assets 20,192,137 Total Consolidated Assets $ 49,492,563 Three Months Ended March 31, 2022 Oil and Gas Power Generation Total Income (Loss) from Operations is as follows: Revenue $ 1,678,817 $ 4,241,300 $ 5,920,117 Operating expenses Cost of goods - 2,451,309 2,451,309 Lease operating costs 568,515 - 568,515 General and administrative 2,585,003 2,709,158 5,294,161 Stock based compensation 292,808 - 292,808 Accretion - ARO 35,066 - 35,066 Depreciation, depletion and amortization 414,204 85,565 499,769 Total operating expenses 3,895,596 5,246,032 9,141,628 Income (loss) from operations $ (2,216,779 ) $ (1,004,732 ) $ (3,221,511 ) Assets Segment Assets $ 18,393,576 $ 25,713,608 $ 44,107,184 Corporate and unallocated assets 24,981,033 Total Consolidated Assets $ 69,088,217 |
Relationship with and Ownersh_2
Relationship with and Ownership by Camber Energy Inc (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||||||
Jan. 08, 2021 | Dec. 11, 2020 | Jan. 18, 2022 | Jul. 29, 2021 | Feb. 15, 2021 | Dec. 23, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 23, 2021 | Dec. 18, 2020 | |
Ownership shares issued and outstanding | 73% | |||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Loss on debt settlement | $ (154,763) | $ 0 | ||||||||||
Acquired Shares | 8,333,333 | |||||||||||
Minimum Ownership percentage | 51% | 51% | ||||||||||
Cash payment | $ 325,000 | |||||||||||
July 29, 2021 [Member] | Camber [Member] | ||||||||||||
Ownership interest after july transaction | 73% | |||||||||||
Maturity date | Jan. 01, 2027 | |||||||||||
Additional share acquired | 27,500,000 | |||||||||||
Principal amount of promissory note | $ 26,315,789 | $ 2,500,000 | $ 12,000,000 | |||||||||
Share price | $ 1.50 | |||||||||||
Feburary 3, 2020 [Member] | ||||||||||||
Secured promissory note principal, amount | $ 20,869,218 | |||||||||||
Camber Energy, Inc [Member] | December 23, 2020 [Member] | ||||||||||||
Convertible preferred stock issued | 1,890 | |||||||||||
Acquisition percentage upon outstanding common shares | 62% | |||||||||||
Ownership interest after july transaction | 73% | |||||||||||
December 23, 2020 through July 2, 2022 [Member] | ||||||||||||
Minimum Ownership percentage | 51% | 61% | ||||||||||
EMC Capital Partners [Member] | ||||||||||||
Acquired Shares | 16,153,846 | |||||||||||
Convertible preferred stock issued | 1,890 | |||||||||||
Promissory note issued to related party | $ 6,000,000 | |||||||||||
Securities Purchase Agreement [Member] | ||||||||||||
Acquired Shares | 26,274,510 | |||||||||||
Minimum Ownership percentage | 51% | 51% | ||||||||||
Cash payment | $ 10,900,000 | |||||||||||
Cancelation of promissory notes | $ 9,200,000 | |||||||||||
Merger Agreement [Member] | ||||||||||||
Common stock, par value | $ 0.001 | |||||||||||
Minimum Ownership percentage | 9.99% | |||||||||||
Series H Preferred Stock [Member] | ||||||||||||
Minimum Ownership percentage | 4.99% | |||||||||||
Convertible preferred stock issued | 10,000 | |||||||||||
Series C Redeemable Convertible Preferred Stock [Member] | ||||||||||||
Loss on debt settlement | $ 926,531 | |||||||||||
Convertible preferred stock issued | 1,890 | |||||||||||
Convertible preferred stock, amount | $ 19,622,000 |
Company Overview and Operatio_3
Company Overview and Operations (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Company Overview and Operations | |
Proseeds from sale | $ 3,590,000 |
Reduction in oil & gas full cost pool (based on % of reserves disposed) | (12,791,680) |
ARO Recovered | 239,975 |
Loss on disposal | $ (8,961,705) |
Company Overview and Operatio_4
Company Overview and Operations (Details Narrative) - USD ($) | 3 Months Ended | |||
Aug. 06, 2021 | Mar. 31, 2023 | Feb. 28, 2022 | Jan. 31, 2022 | |
Sale of interest in the oil and gas assets | $ 3,590,000 | |||
Loss on the transaction of oil and gas reserves | (8,961,705) | |||
Recieved unanticipated refund | $ 1,200,000 | |||
Simson-Maxwell Ltd [Member] | ||||
Payment to acquired entity | $ 7,958,159 | |||
Percentage of ownership | 60.50% | |||
Medical Waste Disposal System Using Ozone Technology [Member] | ||||
Ownership interest percantage rate | 51% | |||
Open Conductor Detection Technologies [Member] | ||||
Ownership interest percantage rate | 51% |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Going Concern | ||||
Net loss | $ (1,632,327) | $ (3,643,064) | ||
Accretion of asset retirement obligation | 31,382 | 35,066 | ||
Depreciation, depletion and amortization | 231,148 | |||
Amortization of debt discount | 53,732 | 92,522 | ||
Loss on sale of oil and gas asset | (154,763) | |||
Stockholders' equity | 13,795,534 | 28,582,925 | $ 15,365,315 | $ 18,028,229 |
Long term debt | 421,571 | |||
Working capital deficiency | (9,318,767) | |||
Due to Camber Energy, Inc. | 6,077,300 | $ 6,572,300 | ||
Change in fair value of derivatives | (534,607) | $ 0 | ||
Drawings against bank credit facility | $ 3,429,485 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory | $ 11,679,772 | $ 11,541,529 |
Reserve for obsolescence | (1,266,106) | (1,264,867) |
Inventory net | 10,413,666 | 10,276,662 |
Unit and Work in Progess [Member] | ||
Inventory | 8,796,600 | 8,749,903 |
Inventory Part [Member] | ||
Inventory | $ 2,883,172 | $ 2,791,626 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Oil | $ 182,120 | $ 740,281 |
Natural gas and natural gas liquids | 0 | 438,152 |
Well operations | 63,077 | 500,384 |
Total revenue | $ 245,197 | $ 1,678,817 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Power generation unit | $ 1,150,343 | $ 972,093 |
Parts | 1,307,952 | 1,165,508 |
Total Units and Parts | 2,458,295 | 2,137,601 |
Services and repairs | 4,540,697 | 2,103,699 |
Total Revenue | $ 6,998,992 | $ 4,241,300 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Warrants Outstanding, beginning | 9,259,261 |
Granted | 0 |
Forfeited/expired/cancelled | 0 |
Warrants outstanding, ending | 9,259,261 |
Outstanding, Exercisable, balance | 9,259,261 |
Weighted Average Exercise Price, beginning | $ / shares | $ 0.62 |
Weighted Average Exercise Price, ending | $ / shares | 0.62 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.62 |
Weighted Average Remaining Contractual Life, beginning | 4 years 10 days |
Weighted Average Remaining Contractual Life, ending | 3 years 9 months 14 days |
Weighted Average Remaining Contractual Life, Exercisable | 3 years 9 months 14 days |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Asset retirement obligation, beginning | $ 1,927,196 | $ 2,111,650 |
Accretion expense | 31,382 | 35,066 |
Asset retirement obligation, ending | $ 1,958,578 | $ 2,146,716 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Membership interest percentage | 20% | |
Accounts receivable | $ 19,412 | |
Dilutive common stock equivalents | 26,164,368 | 15,499,390 |
Ownership interest | 51% | |
Remaining life related patents | 16 years | |
Acquisition interest | 51% | |
Description of unconsolidated entity | Through its 60.5% ownership in Simson-Maxwell, the Company manufactures and sells power generation products, services and custom energy solutions. Simson-Maxwell provides commercial and industrial clients with emergency power generation capabilities. Simson Maxwell’s derives its revenues as follows |
Oil and Gas Properties (Details
Oil and Gas Properties (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Total Oil and Gas Properties, Net | $ 1,224,588 | $ 1,285,918 |
Total Oil and Gas Properties, Net, Adjustment | (61,330) | |
Total Oil and Gas Properties, Net, Impairments | 0 | 0 |
Proved Developed Producing [Member] | ||
Total Oil and Gas Properties, Net | 1,018,123 | 1,069,113 |
United States cost center | 3,872,488 | 3,872,488 |
United States cost center, Adjustment | 0 | 0 |
United States cost center, Impairments | 0 | 0 |
Accumulated depreciation, depletion and amortization | (2,854,365) | (2,803,375) |
Accumulated depreciation, depletion and amortization, Adjustment | 0 | (50,990) |
Accumulated depreciation, depletion and amortization, Impairments | 0 | 0 |
Oil and gas properties, net, Adjustment | (50,990) | |
Oil and gas properties, net, Impairments | 0 | 0 |
Undeveloped and Non-producing [Member] | ||
Total Oil and Gas Properties, Net | 206,465 | 216,805 |
United States cost center | 785,302 | 785,302 |
United States cost center, Adjustment | 0 | |
United States cost center, Impairments | 0 | 0 |
Accumulated depreciation, depletion and amortization | (578,837) | (568,497) |
Accumulated depreciation, depletion and amortization, Adjustment | (10,340) | |
Accumulated depreciation, depletion and amortization, Impairments | 0 | 0 |
Oil and gas properties, net, Adjustment | (10,340) | |
Oil and gas properties, net, Impairments | $ 0 | $ 0 |
Intangible Assets (Details)
Intangible Assets (Details) - ESG [Member] | Mar. 31, 2023 USD ($) |
Royalty payments due year two | $ 500,000 |
Royalty payments due year three | 750,000 |
Royalty payments due year four | 1,250,000 |
Royalty payments due year five | 1,750,000 |
Royalty payments due year six | 2,250,000 |
Royalty payments due year seven | 2,750,000 |
Royalty payments due year eight | 3,250,000 |
Royalty payments due year nine and after | $ 3,250,000 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
ESG Clean Energy License, net | $ 15,433,340 | |
ESG [Member] | ||
ESG Clean Energy License | 5,000,000 | $ 5,000,000 |
ESG Clean Energy License, accumulated amortization | (498,985) | (422,869) |
ESG Clean Energy License, net | $ 4,501,015 | $ 4,577,131 |
Intangible Assets (Details 2)
Intangible Assets (Details 2) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
ESG Clean Energy License, net | $ 15,433,340 | |
EMC Capital Partners [Member] | ||
Simmax Brand | 2,230,673 | $ 2,230,673 |
Customer Relationships | 1,677,453 | 1,677,453 |
Impairment of intangible assets | (451,772) | (451,772) |
ESG Clean Energy License, accumulated amortization | (243,115) | (201,754) |
ESG Clean Energy License, net | $ 3,213,239 | $ 3,254,600 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jan. 31, 2022 | Nov. 22, 2021 | Oct. 18, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Simson-Maxwell [member] | ||||||
Impairment charge | $ 83,865 | $ 367,907 | ||||
useful life | 10 years | |||||
Simmax Brand with a fair value | $ 2,230,673 | |||||
ESG [Member] | ||||||
Amortization expense | $ 3,500,000 | 5 | ||||
Total amount paid | $ 500,000 | |||||
Share | 6,942,691 | |||||
Amount paid | $ 250,000 | |||||
Up-front royalty paid | $ 1,500,000 | |||||
Royalty percentage maximum payable, against net revenues | 15% | |||||
Shares issued as payment for ESG Clean Energy license, amount | $ 2,750,000 | |||||
Estimated future amortization expense for each of the next five years | $ 304,465 | |||||
ESG [Member] | On or before January 31, 2022 [Member] | ||||||
Up-front royalty paid | 1,500,000 | |||||
ESG [Member] | On or before April 20, 2022 [Member] | ||||||
Up-front royalty paid | 2,000,000 | |||||
Customer Relationship [Member] | ||||||
Amortization expense | $ 41,361 | |||||
Estimated future amortization expense for each of the next five years | $ 167,745 | |||||
EMC Capital Partners [Member] | ||||||
Amortization expense | $ 76,116 | |||||
Amortization life | $ 1,677,453 |
Intangible Assets Variable In_2
Intangible Assets Variable Interest Entity Acquisitions (VIEs) (Details) - USD ($) | 1 Months Ended | ||
Jan. 18, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Fair value of contingent consideration | $ 0 | $ 0 | |
ESG Clean Energy License, net | 15,433,340 | ||
Non controlling interest | (7,330,915) | ||
Viking ownership interest | $ 8,102,425 | ||
Medical Waste Disposal System [Member] | Choppy [Member] | |||
Fair value of stock at closing | $ 2,000,000 | ||
Fair value of contingent consideration | 495,868 | ||
Total consideration | 2,495,868 | ||
ESG Clean Energy License, net | 4,916,057 | ||
Non controlling interest | (2,420,189) | ||
Viking ownership interest | $ 2,495,868 |
Intangible Assets Variable In_3
Intangible Assets Variable Interest Entity Acquisitions (VIEs) (Details 1) - USD ($) | 1 Months Ended | ||
Jan. 18, 2022 | Mar. 31, 2023 | Feb. 09, 2022 | |
ESG Clean Energy License, net | $ 15,433,340 | ||
Non controlling interest | (7,330,915) | ||
Viking ownership interest | $ 8,102,425 | ||
Open Conductor Detection Technologies [Member] | Virga [Member] | |||
Fair value of stock at closing | $ 233,334 | ||
Total consideration | $ 233,334 | ||
ESG Clean Energy License, net | 457,518 | ||
Non controlling interest | (224,184) | ||
Viking ownership interest | $ 233,334 |
Intangible Assets Variable In_4
Intangible Assets Variable Interest Entity Acquisitions (VIEs) (Details 2) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 09, 2022 | Jan. 18, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
No. of VKIN Pref. Shares | 8,333,333 | |||
Estimated Revenues if Sales Target Achieved** | $ 7,244,189 | $ 5,920,117 | ||
Jedda [Member] | ||||
No. of VKIN Pref. Shares | 475 | |||
Open Conductor Detection Technologies [Member] | Jedda [Member] | Closing [Member] | ||||
Purchase Price | $ 21,000,000 | |||
Estimated Revenues if Sales Target Achieved** | $ 500,000,000 | |||
Open Conductor Detection Technologies [Member] | Jedda [Member] | On Closing [Member] | ||||
No. of VKIN Pref. Shares | 0 | |||
Conversion Price | $ 0.60 | |||
No. of Underlying VKIN Common Shares | 416,667 | |||
Purchase Price | $ 250,000 | |||
Estimated Revenues if Sales Target Achieved** | $ 0 | |||
Open Conductor Detection Technologies [Member] | Jedda [Member] | On Closing 1 [Member] | ||||
No. of VKIN Pref. Shares | 475 | |||
Conversion Price | $ 0.60 | |||
No. of Underlying VKIN Common Shares | 7,916,667 | |||
Purchase Price | $ 4,750,000 | |||
Estimated Revenues if Sales Target Achieved** | $ 0 | |||
Open Conductor Detection Technologies [Member] | Jedda [Member] | Upon The Sale Of 10K Units [Member] | ||||
No. of VKIN Pref. Shares | 100 | |||
Conversion Price | $ 0.75 | |||
No. of Underlying VKIN Common Shares | 1,333,333 | |||
Purchase Price | $ 1,000,000 | |||
Estimated Revenues if Sales Target Achieved** | $ 50,000,000 | |||
Open Conductor Detection Technologies [Member] | Jedda [Member] | Upon The Sale Of 20K Units [Member] | ||||
No. of VKIN Pref. Shares | 200 | |||
Conversion Price | $ 1 | |||
No. of Underlying VKIN Common Shares | 2,000,000 | |||
Purchase Price | $ 2,000,000 | |||
Estimated Revenues if Sales Target Achieved** | $ 100,000,000 | |||
Open Conductor Detection Technologies [Member] | Jedda [Member] | Upon The Sale Of 30K Units [Member] | ||||
No. of VKIN Pref. Shares | 300 | |||
Conversion Price | $ 1.25 | |||
No. of Underlying VKIN Common Shares | 2,400,000 | |||
Purchase Price | $ 3,000,000 | |||
Estimated Revenues if Sales Target Achieved** | $ 150,000,000 | |||
Open Conductor Detection Technologies [Member] | Jedda [Member] | Upon The Sale Of 50K Units [Member] | ||||
No. of VKIN Pref. Shares | 400 | |||
Conversion Price | $ 1.50 | |||
No. of Underlying VKIN Common Shares | 2,666,667 | |||
Purchase Price | $ 4,000,000 | |||
Estimated Revenues if Sales Target Achieved** | $ 250,000,000 | |||
Open Conductor Detection Technologies [Member] | Jedda [Member] | Upon The Sale Of 100K Units [Member] | ||||
No. of VKIN Pref. Shares | 600 | |||
Conversion Price | $ 2 | |||
No. of Underlying VKIN Common Shares | 3,000,000 | |||
Purchase Price | $ 6,000,000 | |||
Estimated Revenues if Sales Target Achieved** | $ 500,000,000 |
Intangible Assets Variable In_5
Intangible Assets Variable Interest Entity Acquisitions (VIEs) (Details 3) - USD ($) | Feb. 09, 2022 | Mar. 31, 2023 | Dec. 31, 2022 |
Fair value of contingent consideration | $ 0 | $ 0 | |
ESG Clean Energy License, net | 15,433,340 | ||
Non controlling interest | (7,330,915) | ||
Viking ownership interest | $ 8,102,425 | ||
Open Conductor Detection Technologies [Member] | Jedda [Member] | |||
Fair value of stock at closing | $ 4,433,334 | ||
Fair value of contingent consideration | 939,889 | ||
Total consideration | 5,373,223 | ||
ESG Clean Energy License, net | 10,059,765 | ||
Non controlling interest | (4,686,542) | ||
Viking ownership interest | $ 5,373,223 |
Intangible Assets Variable In_6
Intangible Assets Variable Interest Entity Acquisitions (VIEs) (Details 4) | Mar. 31, 2023 USD ($) |
ESG Clean Energy License, net | $ 15,433,340 |
Non controlling interest | (7,330,915) |
Viking ownership interest | 8,102,425 |
Viking Sentinel [Member] | |
ESG Clean Energy License, net | 457,518 |
Non controlling interest | (224,184) |
Viking ownership interest | 233,334 |
Viking Protection [Member] | |
ESG Clean Energy License, net | 10,059,765 |
Non controlling interest | (4,686,542) |
Viking ownership interest | 5,373,223 |
Viking Ozone [Member] | |
ESG Clean Energy License, net | 4,916,057 |
Non controlling interest | (2,420,189) |
Viking ownership interest | $ 2,495,868 |
Intangible Assets Variable In_7
Intangible Assets Variable Interest Entity Acquisitions (VIEs) (Details Narrative) - USD ($) | 1 Months Ended | |||
Feb. 09, 2022 | Jan. 14, 2022 | Jan. 31, 2022 | Jan. 18, 2022 | |
Ownership interest acquired percentage | 51% | |||
Securities purchase agreement term description | Viking entered into a Securities Purchase Agreement to purchase (the “Purchase”) 51 units, representing 51%, of Viking Ozone , from Choppy Group LLC | |||
Ownership interest acquired units | 100 | 51 | ||
No. of VKIN Pref. Shares | 8,333,333 | |||
Ownership interest remained units | 49 | |||
Fair value of acquired stock | $ 2,000,000 | |||
Ownership interest remained percentage | 49% | |||
Vigra [Member] | ||||
Ownership interest acquired percentage | 51% | |||
Securities purchase agreement term description | Viking entered into a Securities Purchase Agreement to purchase (the “Purchase”) 51 units, representing 51% of Viking Sentinel, from Virga Systems LLC, a Wyoming limited liability company (“Virga”), in consideration of the issuance of 416,667 shares of Viking common stock to Virga. Viking Sentinel was formed on or about January 31, 2022, and Virga was issued all 100 units of Viking Sentinel in consideration of Virga’s assignment to Viking Sentinel of all of Virga’s intellectual property and intangible assets, including patent rights, know-how, procedures, methodologies, and contract rights in connection with an end of line protection with trip signal engaging for distribution system, and related patent application(s). | |||
Ownership interest acquired units | 51 | |||
No. of VKIN Pref. Shares | 416,667 | 8,333,333 | ||
Jedda [Member] | ||||
Ownership interest acquired percentage | 51% | |||
Securities purchase agreement term description | Viking entered into a Securities Purchase Agreement to purchase (the “Purchase”) 51 units (the “Units”), representing 51% of Viking Protection Systems, LLC (“Viking Protection”), from Jedda Holdings LLC (“Jedda”). In consideration for the Units, Viking agreed to issue to Jedda, shares of a new class of Convertible Preferred Stock of Viking with a face value of $10,000 per share (the “Preferred Shares”) | |||
Ownership interest acquired units | 51 | 100 | ||
No. of VKIN Pref. Shares | 475 | |||
Face value of Convertible Preferred Stock | $ 10,000 | |||
On Closing [Member] | Choppy [Member] | ||||
No. of VKIN Pref. Shares | 3,333,333 | |||
On Closing [Member] | Open Conductor Detection Technologies [Member] | Jedda [Member] | ||||
No. of VKIN Pref. Shares | 0 | |||
On Closing 1 [Member] | Open Conductor Detection Technologies [Member] | Jedda [Member] | ||||
No. of VKIN Pref. Shares | 475 | |||
Upon The Sale Of 10K Units [Member] | Open Conductor Detection Technologies [Member] | Jedda [Member] | ||||
No. of VKIN Pref. Shares | 100 | |||
Upon The Sale Of 20K Units [Member] | Open Conductor Detection Technologies [Member] | Jedda [Member] | ||||
No. of VKIN Pref. Shares | 200 | |||
Upon The Sale Of 30K Units [Member] | Open Conductor Detection Technologies [Member] | Jedda [Member] | ||||
No. of VKIN Pref. Shares | 300 | |||
Upon The Sale Of 50K Units [Member] | Open Conductor Detection Technologies [Member] | Jedda [Member] | ||||
No. of VKIN Pref. Shares | 400 | |||
Upon The Sale Of 100K Units [Member] | Open Conductor Detection Technologies [Member] | Jedda [Member] | ||||
No. of VKIN Pref. Shares | 600 | |||
Upon 5 Unit Sold [Member] | Choppy [Member] | ||||
No. of VKIN Pref. Shares | 3,333,333 | |||
Upon 10 Unit Sold [Member] | Choppy [Member] | ||||
No. of VKIN Pref. Shares | 1,666,667 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Simmax Corp | ||
Amounts receivables | $ 327,452 | $ 327,132 |
Accounts payable | (718,435) | (629,073) |
Net (due to) due from | (390,983) | (301,941) |
Adco Power Limited [Member] | ||
Amounts receivables | 327,452 | 327,132 |
Accounts payable | (718,435) | (629,073) |
Net (due to) due from | $ (390,983) | $ (301,941) |
Related Party Transactions (D_2
Related Party Transactions (Details 1) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Related Party Transactions | ||
Notes payable to related parties, Total | $ 670,694 | $ 684,069 |
Less current portion of notes payable- related parties | (57,892) | (56,916) |
Notes payable- related parties, net of current portion | $ 612,802 | $ 627,153 |
Related Party Transactions (D_3
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Non-Controlling interest percent | 17% | ||
Due to related party | $ 370,000 | $ 370,000 | |
Repayment | 90,000 | $ 90,000 | |
Camber Energy, Inc [Member] | |||
Due to related party | $ 6,077,300 | 6,572,300 | |
Ownership percentage | 63% | ||
1508586 Alberta Ltd. [Member] | |||
Due to related party | $ 60,000 | ||
Adco Power Ltd [Member] | |||
Repayment | 0 | $ 36,482 | |
Sale of loans | $ 19,726 | $ 0 |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - Simson-Maxwell [member] - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Transfers to the noncontrolling interest | $ 2,973,247 | $ 7,162,514 |
Non controlling interest | 3,013,996 | 39,479 |
Net loss attributable to noncontrolling interest | $ (40,749) | $ 7,123,035 |
Noncontrolling Interests (Det_2
Noncontrolling Interests (Details Narrative) | Oct. 18, 2021 |
Simson-Maxwell [member] | |
Non-controlling interest | 51% |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Feb. 14, 2022 | |
Preferred stock designated shares | 5,000,000 | ||
Common Stock Authorised | 500,000,000 | 500,000,000 | 2,075 |
Common stock par value | $ 0.001 | $ 0.001 | |
Preferred stock, par value | $ 0.001 | ||
VIE interest | |||
Stock issued during the period, shares | 3,333,333 | ||
Stock issued during the period, value | $ 2,000,000 | ||
VIE interest 1 | |||
Stock issued during the period, shares | 416,667 | ||
Stock issued during the period, value | $ 250,000 | ||
Series C Preferred Stock [Member] | |||
Reverse Stock Split | common stock at a ratio of 1-for-9 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each nine (9) pre-split shares of common stock outstanding were automatically combined into one (1) new share of common stock. | ||
Preferred stock designated shares | 50,000 | ||
Preferred stock, shares issued | 28,092 | 28,092 | |
Non-assessable common stock issuable upon exercise of preferred stock | 37,500 | ||
Ownership percentage | 51% | ||
Series E Preferred Stock [Member] | |||
Preferred stock, shares issued | 475 | 0 | |
Preferred stock, par value | $ 0.001 | ||
Preferred stock, value | $ 10,000 | ||
Acquisition viking protection | 51% |
LongTerm Debt and Other Short_2
LongTerm Debt and Other ShortTerm Borrowings (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Total long-term debt | $ 518,497 | $ 2,743,616 |
Less current portion | (96,926) | (637,335) |
Long term debt - net of current portion and debt discount | 421,571 | 2,106,281 |
Long-term Debt One [Member] | ||
Total long-term debt | 243,305 | 1,766,422 |
Long-term Debt Two [Member] | ||
Total long-term debt | 111,182 | 813,571 |
Long-term Debt Three [Member] | ||
Total long-term debt | $ 164,010 | $ 163,623 |
LongTerm Debt and Other Short_3
LongTerm Debt and Other ShortTerm Borrowings (Details 1) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
2024 | $ 96,926 | |
2025 | 102,853 | |
2026 | 163,255 | |
2027 | 3,069 | |
2028 | 3,186 | |
Long term debt, Total | 149,208 | |
Unamortized Discount | (2,092,135) | |
Long term debt, Total | 518,497 | $ 2,743,616 |
Principal [Member] | ||
2024 | 652,909 | |
2025 | 693,208 | |
2026 | 1,109,052 | |
2027 | 3,069 | |
2028 | 3,186 | |
Thereafter | 149,208 | |
Long term debt, Total | 2,610,632 | |
2028 [Member] | ||
Unamortized Discount | 0 | |
2024 [Member] | ||
Unamortized Discount | (555,983) | |
2025 [Member] | ||
Unamortized Discount | (945,797) | |
2026 [Member] | ||
Unamortized Discount | 0 | |
2027 [Member] | ||
Unamortized Discount | 0 | |
Thereafter [Member] | ||
Unamortized Discount | $ 0 |
LongTerm Debt and Other Short_4
LongTerm Debt and Other ShortTerm Borrowings (Details Narrative) | 3 Months Ended | ||
Mar. 31, 2023 CAD ($) | Dec. 31, 2022 CAD ($) | Dec. 31, 2022 USD ($) | |
Long-Term Debt and Other Short-Term Borrowings | |||
Bearing interest rate | 2.25% | ||
Accounts receivable and inventory | $ 5,000,000 | ||
Base rate plus | 2.25% | ||
Administration fee | $ 500 | ||
Credit facility amount | 4,139,785 | $ 3,111,350 | |
Credit facility | $ 4,638,917 | $ 3,429,485 |
Derivative Liability (Details)
Derivative Liability (Details) | Mar. 31, 2023 USD ($) |
Unamortized Discount | $ (2,092,135) |
Total [Member] | |
Carrying value of debt | 2,483,096 |
FV of new debt | 2,637,859 |
Unamortized Discount | (22,614) |
Loss on extinguishment | (154,763) |
Face value of debt | 2,505,710 |
Mid-Con Petroleum, LLC [Member] | |
Carrying value of debt | 1,713,066 |
FV of new debt | 1,903,411 |
Unamortized Discount | (11,323) |
Loss on extinguishment | (101,668) |
Face value of debt | 1,701,743 |
Merger Agreement [Member] | |
Carrying value of debt | 781,353 |
FV of new debt | 834,448 |
Unamortized Discount | (11,323) |
Loss on extinguishment | (53,095) |
Face value of debt | $ 792,644 |
Derivative Liability (Details 1
Derivative Liability (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Loss on extinguishment | $ (154,763) | $ 0 |
Balance prior to debt modification [Member] | ||
Promissory Note Principal balance | 2,505,710 | |
Unamortized discount at date of modification | (22,614) | |
Total | 2,483,096 | |
Balance After debt modification [Member] | ||
Promissory Note Principal balance | 2,505,710 | |
Unamortized discount at date of modification | (2,144,068) | |
Total | 361,642 | |
Fair value of conversion feature | 2,276,217 | |
Loss on extinguishment | (154,763) | |
Total of consideration | 2,483,096 | |
Mid-Con Petroleum, LLC [Member] | Balance prior to debt modification [Member] | ||
Promissory Note Principal balance | 1,713,066 | |
Unamortized discount at date of modification | (11,323) | |
Total | 1,701,743 | |
Mid-Con Petroleum, LLC [Member] | Balance After debt modification [Member] | ||
Promissory Note Principal balance | 1,713,066 | |
Unamortized discount at date of modification | (1,465,824) | |
Total | 247,242 | |
Fair value of conversion feature | 1,556,169 | |
Loss on extinguishment | (101,668) | |
Total of consideration | 1,701,743 | |
Mid-Con Drilling, LLC [Member] | Balance prior to debt modification [Member] | ||
Promissory Note Principal balance | 792,644 | |
Unamortized discount at date of modification | (11,291) | |
Total | 781,353 | |
Mid-Con Drilling, LLC [Member] | Balance After debt modification [Member] | ||
Promissory Note Principal balance | 792,644 | |
Unamortized discount at date of modification | (678,244) | |
Total | 114,400 | |
Fair value of conversion feature | 720,047 | |
Loss on extinguishment | (53,095) | |
Total of consideration | $ 781,353 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock price | $ 0.31 | |
Risk-free interest rate | 5% | |
Amortization of debt discount | $ 53,732 | $ 92,522 |
Loss on extinguishment | (154,763) | 0 |
Change in fair value of derivatives | $ (534,607) | $ 0 |
Viking Ozone [Member] | ||
free interest rate | 5% | |
Volatility | 188.50% | |
Fair value of conversion feature | $ 2,276,217 | |
Mid-Con Petroleum, LLC [Member] | ||
Volatility | 185.77% | |
Fair value of conversion feature | $ 2,810,824 | |
Amortization of debt discount | 53,732 | |
Change in fair value of derivatives | $ (534,607) |
Other Commitments and Conting_3
Other Commitments and Contingencies (Details) | Jun. 30, 2022 USD ($) |
2024 | $ 1,388,263 |
2025 | 935,937 |
2026 | 588,156 |
2028 | 1,194,181 |
2027 | 411,416 |
Total operating lease payment | 4,517,853 |
Less imputed interest | (395,968) |
Present value of remaining lease payments | 4,121,885 |
Present value of remaining lease payments, current | 1,255,745 |
Present value of remaining lease payments, non current | 2,866,140 |
Building Leases [Member] | |
2024 | 1,090,810 |
2025 | 844,894 |
2026 | 580,482 |
2028 | 1,194,181 |
2027 | 408,723 |
Total operating lease payment | 4,119,090 |
Vehicle and Equipment Leases [Member] | |
2024 | 297,453 |
2025 | 91,043 |
2026 | 7,574 |
2028 | 0 |
2027 | 2,693 |
Total operating lease payment | $ 398,763 |
Other Commitments and Conting_4
Other Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 30, 2020 | Apr. 30, 2018 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2021 | |
Vehicle Equipment [Member] | Simson-Maxwell [member] | |||||
Operating lease expense | $ 5,845,810 | $ 5,845,810 | |||
Discount rate | 7.50% | ||||
Vehicle Equipment And Premises [Member] | Simson-Maxwell [member] | |||||
Operating lease expense | $ 322,387 | $ 368,740 | |||
Premises [Member] | Simson-Maxwell [member] | |||||
Discount rate | 3.45% | ||||
Petrodome Energy, LLC [Member] | |||||
Annual base rent, per square foot | $ 22 | ||||
Annual escalation of base rent, per foot | $ 0.50 | ||||
Term of lease | 66 months | 5 years | |||
Operating lease expense | $ 24,096 | $ 24,096 | $ 72,288 | ||
Operating lease, area | 4,147 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Limitation of net operating losses deduction | 80% | ||
Net operating loss carry forwards | $ 48,000,000 | $ 38,500,000 | |
Foreign loss carryforwards | $ 3,000,000 | 6,300,000 | |
Description | 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 | ||
Net operating loss carryforwards expire | 2038 and 2042 | ||
Simson-Maxwell [member] | |||
Net operating loss carry forwards | 63,000,000 | $ 3,000,000 | |
Operating Losses [Member] | |||
Net operating loss carry forwards | $ 7,000,000 | ||
Net operating loss carryforwards expire | 2032 through 2037 |
Business Segment Information _3
Business Segment Information and Geographic Data (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Estimated Revenues if Sales Target Achieved** | $ 7,244,189 | $ 5,920,117 |
Cost of goods | 4,786,631 | 2,451,309 |
Lease operating costs | 125,363 | 568,515 |
General and administrative | 3,050,321 | 5,294,161 |
Stock based compensation | 0 | 292,808 |
Accretion - ARO | 31,382 | 35,066 |
Depreciation, depletion and amortization | 231,148 | 499,769 |
Total operating expenses | 8,224,845 | 9,141,628 |
Income (loss) from operations | (980,656) | (3,221,511) |
Segment Assets | 29,300,426 | 44,107,184 |
Corporate and unallocated assets | 20,192,137 | 24,981,033 |
Total Consolidated Asssets | 49,492,563 | 69,088,217 |
Oil and Gas Properties [Member] | ||
Estimated Revenues if Sales Target Achieved** | 245,197 | 1,678,817 |
Cost of goods | 0 | 0 |
Lease operating costs | 125,363 | 568,515 |
General and administrative | 828,479 | 2,585,003 |
Stock based compensation | 0 | 0 |
Accretion - ARO | 31,382 | 0 |
Depreciation, depletion and amortization | 134,535 | 414,204 |
Total operating expenses | 1,119,759 | 3,895,596 |
Income (loss) from operations | (874,562) | (2,216,779) |
Segment Assets | 3,148,445 | 18,393,576 |
Power Generation | ||
Estimated Revenues if Sales Target Achieved** | 6,998,992 | 4,241,300 |
Cost of goods | 4,786,631 | 2,451,309 |
Lease operating costs | 0 | 0 |
General and administrative | 2,221,842 | 2,709,158 |
Stock based compensation | 0 | 0 |
Accretion - ARO | 0 | 0 |
Depreciation, depletion and amortization | 96,613 | 85,565 |
Total operating expenses | 7,105,086 | 5,246,032 |
Income (loss) from operations | (106,094) | (1,004,732) |
Segment Assets | $ 26,151,981 | $ 25,713,608 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event - USD ($) | 1 Months Ended | |
May 01, 2023 | Apr. 28, 2023 | |
Conversion of convertible promissory note | $ 200,000 | |
Issued common shares upon the exercise of warrants | 3,849,306 | |
Issued common shares pursuant to the assignment and conversion | 588,235 | |
Notes provided to Investor | $ 9,600,000 | |
Interest rate | 12% | |
Purchase price received | $ 800,000 | |
Aggregate minimum funding | 4,800,000 | |
Minimum | ||
Note principal amount | $ 800,000 | |
Exercise price | $ 0.001 | |
Maximum | ||
Exercise price | $ 0.009 |