Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 9, 2021
Camber Energy, Inc.
(Exact name of registrant as specified in its charter)
Nevada
001-32508
20-2660243
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
15915 Katy Freeway, Suite 450, Houston, Texas, 77094
(Address of principal executive offices)
(281) 404-4387
(Registrant’s telephone number, including area code)
______________________________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☒
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.001 Par Value Per Share
CEI
NYSE American
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01.Entry into a Material Definitive Agreement.
On October 9, 2021, the Company entered into two agreements (collectively, the “Agreements”), one agreement (the “First Agreement”) with an investor (the “First Investor”) that holds shares of Series C Preferred Stock of the Company (the “Preferred Shares”) and another agreement (the “Second Agreement”) with an investor (the “Second Investor”, together with the First Investor, the “Investors”) that holds Preferred Shares along with three promissory notes, with an aggregate principal amount totaling $20,500,000, previously executed by the Company in favor of the Investor (collectively, the “Notes”). The Agreements are identical as to their terms.
The Securities Purchase Agreements between the Company and the Investors regarding the purchase and sale of the Preferred Shares (the “SPAs”) require the Company to, among other things, timely file all reports required to be filed by Company pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and to maintain sufficient reserves from its duly authorized Common Stock for issuance of all Conversion Shares (as defined in the Fourth Amended and Restated Certificate of Designation regarding the Preferred Shares filed by the Company on or about July 10, 2021 (“COD”)). On October 6, 2021, the Company received notice from the Investors that they believed the Company breached the SPAs for failing to comply with the foregoing two items, and the Notes contain a provision stating a breach by the Company of any terms within the SPA or COD is also a breach under the Notes, which would result in an immediate acceleration of the Notes at the holder’s option.
Pursuant to the Agreements, as an accommodation to the Company and in order to help facilitate implementation of the Company’s business plans and continued trading on the NYSE American, although the parties agreed that a Trigger Event had occurred pursuant to the COD, the Investors agreed to refrain from declaring defaults or bringing a breach of contract action under the SPAs, and the Second Investor agreed to refrain from declaring defaults or bringing a breach of contract action under the Notes, in each case provided the Company: (i) files by November 19, 2021 all reports required to be filed by the Company pursuant to the Exchange Act; and (ii) implements and maintains, as soon as possible but no later than December 31, 2021, a sufficient reserve from its duly authorized Common Stock for issuance of all Conversion Shares. The Company does not have sufficient authorized shares of Common Stock for the issuance of all Conversion Shares, and will be required to hold a shareholders’ meeting to approve an amendment to its articles of incorporation to increase its authorized shares of Common Stock in order to comply with the foregoing requirement of the Agreements. The Company also agreed to, within 30 days of the date of the Agreements, amend the COD to provide that holders of the Preferred Shares will vote together with holders of common stock on all matters other than election of directors and shareholder proposals (including proposals initiated by any holders of Preferred Shares), on an as-if converted basis, subject to the beneficial ownership limitation in the COD, even if there are insufficient shares of authorized common stock to fully convert the Preferred Shares. Pursuant to the Agreements, the Company further agreed that due to the occurrence of a Trigger Event the Company would no longer have the right to conduct an early redemption of the Preferred Shares as provided for in the COD.
The foregoing description of the Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Agreements, copies of which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated in this Item 1.01 by reference in their entirety.
Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The disclosure in Item 1.01 is incorporated herein by reference.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CAMBER ENERGY, INC.
Date: October 13, 2021
By:
/s/ James A. Doris
Name:
James A. Doris
Title:
Chief Executive Officer
3
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