March 31, 2022
Mr. Karl Hiller
Branch Chief
Division of Corporation Finance
Office of Energy & Transportation
U.S. Securities and Exchange Commission
Washington, D.C 20549
(202) 551-3686
Dear Mr. Hiller:
Camber Energy, Inc. (“Camber” or the “Company”), pursuant to items discussed with the SEC Staff on March 21, 2022, proposes to take the following steps to bring the open matters to resolution:
1 – Equity Method of Accounting for Camber’s Investment into Viking Energy Group, Inc.
Through extensive analysis and discussion with the staff of the SEC, the Company has concluded to account for its investment in Viking on the Equity Method of accounting effective with its initial investment on December 23, 2020.
2 – Accounting for Series C Preferred Stock
Based on discussions with the SEC staff and review of the accounting literature, we have determined that our initial and subsequent accounting treatment of the Camber Series C preferred shares should be corrected. The Series C preferred shares were initially issued in September, 2016 and should have been recorded with a deemed dividend to recognize the required conversion premium upon issuance and a loss on derivative liability to recognize the variability if the shares were converted to common shares. Subsequent measurement should have included adjustments to the carrying value of the Series C preferred shares to recognize changes in fair value due to changes in the Company’s stock price and recognition of gains or losses on conversion of the Series C preferred shares into common stock. We performed our calculations of the accounting treatment of the Series C preferred stock as follows:
Prior to April 20, 2021
Issuance of the Series C shares
Upon issuance we determined that the Series C preferred shares included an embedded derivative and, because the conversion was generally outside the control of the Company, the Series C preferred shares were required to be recorded as temporary equity. The Series C shares included a provision whereby the shares were immediately convertible into common shares at a value of $3.25 per share plus a “conversion premium” in the amount of the dividends that would have been paid if the preferred share had been held for 7 years. The conversion premium is payable in cash or in a variable number of common shares based on the current VWAP of the Company’s common stock, at the Company’s option. Upon issuance of the Series C preferred shares, we determined the amount to be the allocated to the derivative liability to be the conversion premium, assuming a cash settlement and we determined the redemption value of the Series C preferred shares to be the fair value of the common shares issuable to satisfy the conversion of the Series C preferred shares. To the extent that consideration paid for the Series C preferred shares was less than the redemption value plus the derivative liability, we first allocated the consideration to the derivative liability and recorded the difference as a loss on derivative liability. The consideration received never exceeded the derivative liability. Consequently, no proceeds were allocated to the redemption value. The redemption value was recorded as temporary equity and a deemed dividend.
Mr. Karl Hiller
March 31, 2022
Page | 2
Conversion of the Series C Shares
The Company receives notice of conversion from the holder with a calculation of the number of common shares required to be issued to satisfy the redemption value plus the conversion premium. The Company has never elected to satisfy the conversion premium in cash. The Company then issues the number of common shares determined by the holder. The shares may be issued over time due to ownership limitations of the holder. Upon conversion of the Series C preferred shares, the Company reduced the derivative liability by the amount that was originally recorded for the number of Series C preferred shares converted. Any difference between the current fair value of the common shares issued to satisfy the conversion premium and the originally recorded derivative liability was recorded as a loss on derivative liability. Temporary equity is also reduced by the fair value the common shares issued to satisfy the redemption value (amounts recorded in temporary equity). Any difference is recorded as additional deemed dividend or an equity contribution.
Quarterly Adjustments to the Series C shares
Each quarter, the Company determined the fair value of the common shares required to satisfy the redemption value of the outstanding Series C preferred shares and recorded an additional deemed dividend or an equity contribution for any differences. The cash required to settle the conversion premium was unchanged until the dividend rate of 24.95% was increased in accordance with the terms of the Series C preferred shares to 34.95% due to covenant violations. The increase in the conversion premium was recorded as an increase in the derivative liability and a loss on change in fair value of derivative liability.
April 20, 2021 amendment to the Series C preferred share COD
On April 20, 2021, the company amended the Series C preferred share certificate of designation (COD) to require all conversions to be in common shares, thus removing the cash option for redemption of the conversion premium. We determined that the amendment required reclassification of the redemption value of the Series C preferred shares recorded in temporary equity to be reclassified to permanent equity with no further quarterly adjustments.
Effect on derivative liability
We determined that the removal of the cash option for conversion of the conversion premium changed the cash redemption assumption to assume, in all cases share redemption. Therefore, the derivative liability is required to be recorded at the fair value of the equivalent number of common shares issuable to satisfy the conversion premium. We recorded an adjustment to derivative liability and loss on derivative on April 20, 2021 and we will record changes in fair value of the derivative liability each quarter.
Proposed amended filings
The Company proposes to amend its 10-K/A for the year ended March 31, 2020, the 10-Q/A for the quarterly period ended June 30, 2020 and the 10-Q/A for the quarterly period ended September 30, 2020. The financial statements will reflect cumulative adjustments to recognize the impact on prior periods. We believe, due to the timing of the filings, filing amendments to any prior period would be of marginal benefit.
These proposed restatements will include appropriate disclosures for each of these filings and are contained herein in Exhibits A, B and C, respectively.
Mr. Karl Hiller
March 31, 2022
Page | 3
Sincerely,
/s/ Frank Barker, Jr.
Frank Barker, Jr.
Chief Financial Officer
cc. James Doris, Chief Executive Officer
Mr. Karl Hiller
March 31, 2022
Page | 4
EXHIBIT A
CAMBER – FORM 10-K/A – MARCH 31, 2020 (proposed changes)
EXPLANATORY NOTE – RESTATEMENT OF FINANNCIAL STATEMENTS
The Company is amending this Form 10-K/A to correct the company’s accounting for the Series C preferred stock. After consultations with the SEC staff and our review of the applicable accounting requirements, the Company determined that the accounting for the Series C preferred shares required further amendment from our initial accounting treatment. We believe that the Series C preferred shares are temporary equity and include an embedded derivative due to the potential conversion into a variable number of common shares. The Series C preferred shares are redeemable or convertible, at the company’s option, upon issuance. The face value of the Series C preferred shares is convertible into common shares at a fixed rate. As a result, upon issuance a portion of the Series C preferred shares is recorded as temporary equity with a corresponding amount recorded as a deemed dividend. The carrying value of the portion of the Series C preferred shares recorded in temporary equity is required to be adjusted based on the fair value of the Company’s common shares required to satisfy a conversion with a corresponding recognition of an additional deemed dividend or an equity contribution.
If the Series C preferred shares are redeemed or converted prior to the stated term, the dividends are required to be paid as if the shares were held to maturity. As a result, the Company should have recorded a deemed dividend upon issuance and a derivative liability. Any differences between the consideration paid for the Series C preferred shares and the value of the derivative liability less the portion allocated to temporary equity should have been recorded as a loss on derivative liability at issuance. If the shares are converted into common shares with a value in excess of the recorded value of the derivative liability, an additional loss on the derivative is recognized.
After consultations with the SEC staff and the Company’s accounting advisors, the Company determined: (i) the impact of the error(s) is material for the fiscal years ended March 31, 2019 and 2020; and (ii) to restate its Annual Report on Form 10-K/A for the year ended March 31, 2020, inclusive of comparative financial statements for the year ended March 31, 2019, the previously filed quarterly report on Form 10-Q/A for the three months ended June 30, 2020, and the previously filed quarterly report on Form 10-Q/A for the three and six month periods ended September 30, 2020. See Note 4 to the Consolidated Financial Statements included in Item 8 for additional information and a reconciliation of the previously reported amounts to the restated amounts.
FOOTNOTE ON RESTATEMENT
NOTE 4 – Restatement of previously issued financial statements
The Company is restating the financial statements for the years ended March 31, 2020 and 2019 to correct the Company’s accounting for the Series C preferred stock. After consultations with the SEC staff and our review of the applicable accounting requirements, the Company determined that the accounting for the Series C preferred shares required further amendment from our initial accounting treatment. We believe that the Series C preferred shares are temporary equity and include an embedded derivative due to the potential conversion into a variable number of common shares. The Series C preferred shares are redeemable or convertible, at the company’s option, upon issuance. The face value of the Series C preferred shares is convertible into common shares at a fixed rate. As a result, upon issuance a portion of the Series C preferred shares is recorded as temporary equity with a corresponding amount recorded as a deemed dividend. The carrying value of the portion of the Series C preferred shares recorded in temporary equity is required to be adjusted based on the fair value of the Company’s common shares required to satisfy a conversion with a corresponding recognition of an additional deemed dividend or an equity contribution.
If the Series C preferred shares are redeemed or converted prior to the stated term, the dividends are required to be paid as if the shares were held to maturity. As a result, the Company should have recorded a deemed dividend upon issuance and a derivative liability. Any differences between the consideration paid for the Series C preferred shares and the value of the derivative liability less the portion allocated to temporary equity should have been recorded as a loss on derivative liability at issuance. If the shares are converted into common shares with a value in excess of the recorded value of the derivative liability, an additional loss on the derivative is recognized.
Mr. Karl Hiller
March 31, 2022
Page | 5
The table below sets forth changes to the consolidated balance sheet as of March 31, 2020:
|
| As Previously |
|
|
|
|
|
|
| |||
|
| Restated |
|
| Adjustments |
|
| As Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
TOTAL ASSETS |
|
| 9,695,218 |
|
|
|
|
|
| 9,695,218 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Current liabilities |
|
|
|
|
|
|
|
|
|
|
| |
Accounts payable |
|
| 1,474,221 |
|
|
| - |
|
|
| 1,474,221 |
|
Common stock payable |
|
| 173,000 |
|
|
| - |
|
|
| 173,000 |
|
Accrued expenses |
|
| 348,460 |
|
|
| - |
|
|
| 348,460 |
|
Derivative liability - Series C |
|
| 8,669,831 |
|
|
| 61,329,835 |
|
|
| 69,999,666 |
|
Current ARO |
|
| 30,227 |
|
|
| - |
|
|
| 30,227 |
|
Current income taxes payable |
|
| 3,000 |
|
|
| - |
|
|
| 3,000 |
|
Total current liabilities |
|
| 10,698,739 |
|
|
| 61,329,835 |
|
|
| 72,028,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset retirement obligations |
|
| 41,523 |
|
|
| - |
|
|
| 41,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
| 10,740,262 |
|
|
| 61,329,835 |
|
|
| 72,070,097 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
| - |
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEMPORARY EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Series C |
|
| 39,389,202 |
|
|
| (29,587,756 | ) |
|
| 9,801,446 |
|
STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
| 5,000 |
|
|
| - |
|
|
| 5,000 |
|
Additional paid in capital |
|
| 149,825,528 |
|
|
| 201,287,735 |
|
|
| 351,113,263 |
|
Accumulated deficit |
|
| (190,264,774 | ) |
|
| (233,029,814 | ) |
|
| (423,294,588 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ (Deficit) |
|
| (40,434,246 | ) |
|
| (31,742,079 | ) |
|
| (72,176,325 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
| 9,695,218 |
|
|
| -- |
|
|
| 9,695,218 |
|
Mr. Karl Hiller
March 31, 2022
Page | 6
The table below sets forth changes to the consolidated balance sheet as of March 31, 2019:
|
| As previously |
|
|
|
|
|
|
| |||
|
| Restated |
|
| Adjustments |
|
| As Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
TOTAL ASSETS |
|
| 8,582,672 |
|
|
|
|
|
| 8,582,672 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Current liabilities |
|
|
|
|
|
|
|
|
|
|
| |
Accounts payable |
|
| 1,521,329 |
|
|
| - |
|
|
| 1,521,329 |
|
Common stock payable |
|
| 303,340 |
|
|
| - |
|
|
| 303,340 |
|
Accrued expenses |
|
| 276,133 |
|
|
| - |
|
|
| 276,133 |
|
Current income taxes payable |
|
| 3,000 |
|
|
| - |
|
|
| 3,000 |
|
Derivative liability - Series C |
|
| 3,911,649 |
|
|
| 48,754,825 |
|
|
| 52,666,474 |
|
Total current liabilities |
|
| 6,015,451 |
|
|
| 48,754,824 |
|
|
| 54,770,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset retirement obligations |
|
| 303,809 |
|
|
| - |
|
|
| 303,809 |
|
Derivative liability |
|
| 5 |
|
|
| - |
|
|
| 5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
| 6,319,265 |
|
|
| 48,754,824 |
|
|
| 55,074,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
| - |
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEMPORARY EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Series C |
|
| 28,248,946 |
|
|
| (25,538,266 | ) |
|
| 2,710,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Series B |
|
| 44 |
|
|
| - |
|
|
| 44 |
|
Common Stock |
|
| 13 |
|
|
| - |
|
|
| 13 |
|
Additional paid in capital |
|
| 155,647,904 |
|
|
| 20,224,181 |
|
|
| 175,872,085 |
|
Retained earnings (deficit) |
|
| (181,650,293 | ) |
|
| (44,440,737 | ) |
|
| (225,091,031 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ (deficit) |
|
| (25,985,540 | ) |
|
| (23,216,559 | ) |
|
| (49,202,099 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
| 8,582,672 |
|
|
| - |
|
|
| 8,582,672 |
|
Mr. Karl Hiller
March 31, 2022
Page | 7
The table below sets forth changes to the consolidated statement of operations for the year ended March 31, 2020:
For the Year Ended March 31, 2020 |
| As previously Restated |
|
| Adjustments |
|
| Restated |
| |||
|
|
|
|
|
|
|
|
|
|
|
| |
Operating revenues |
|
| 397,118 |
|
|
|
|
|
| 397,118 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
| |
Lease Operating Expenses |
|
| 479,656 |
|
|
|
|
|
| 479,656 |
| |
Severance and Property Taxes |
|
| 14,440 |
|
|
|
|
|
| 14,440 |
| |
Depreciation, Depletion, Amortization and Accretion |
|
| 20,420 |
|
|
|
|
|
| 20,420 |
| |
Impairment of Oil and Gas Properties |
|
| — |
|
|
|
|
|
| — |
| |
Gain on Sale of Property and Equipment |
|
| — |
|
|
|
|
|
| — |
| |
General and Administrative |
|
| 4,909,871 |
|
|
|
|
|
| 4,909,871 |
| |
Total |
|
| 5,424,387 |
|
|
|
|
|
| 5,424,387 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Income (Loss) |
|
| (5,027,269 | ) |
|
|
|
|
| (5,027,269 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other Expense (Income) |
|
|
|
|
|
|
|
|
|
|
| |
Interest Expense |
|
| 14,771 |
|
|
|
|
|
| 14,771 |
| |
Equity in Earnings of Unconsolidated Entity |
|
| (957,169 | ) |
|
|
|
|
| (957,169 | ) | |
Loss on Derivative liability |
|
| 4,758,182 |
|
|
| 181,823,615 |
|
|
| 186,581,797 |
|
Other (Income) Expense, Net |
|
| (228,572 | ) |
|
|
|
|
|
| (228,572 | ) |
Total Other Expense |
|
| 3,587,212 |
|
|
| 181,823,615 |
|
|
| 190,169,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income Taxes |
|
| (8,614,481 | ) |
|
| (181,823,615 | ) |
|
| (190,169,278 | ) |
Income Tax Benefit (Expense) |
|
| — |
|
|
|
|
|
|
| — |
|
Net Loss |
| $ | (8,614,481 | ) |
|
| (181,823,615 | ) |
| $ | (190,169,278 | ) |
Less preferred dividends |
|
| 6,041,356 |
|
|
| 1,110,512 |
|
|
| 7,151,868 |
|
Net loss attributable to common shareholders |
|
| (14,655,837 | ) |
|
| (182,934,127 | ) |
|
| (197,589,964 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | (6.95 | ) |
|
| (86.71 | ) |
| $ | (93.66 | ) |
Diluted |
| $ | (6.95 | ) |
|
| (86,71 | ) |
| $ | (93.66 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 2,109,622 |
|
|
| 2,109,622 |
|
|
| 2,109,622 |
|
Diluted |
|
| 2,109,622 |
|
|
| 2,109,622 |
|
|
| 2,109,622 |
|
Mr. Karl Hiller
March 31, 2022
Page | 8
The table below sets forth changes to the consolidated statement of operations for the year ended March 31, 2019:
For the Year Ended March 31, 2019 |
| As previously Restated |
|
| Adjustments |
|
| Restated |
| |||
Operating revenues |
|
| 2,742,102 |
|
|
|
|
|
| 2,742,102 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
| |
Lease Operating Expenses |
|
| 2,870,908 |
|
|
|
|
|
| 2,870,908 |
| |
Severance and Property Taxes |
|
| 132,993 |
|
|
|
|
|
| 132,993 |
| |
Depreciation, Depletion, Amortization and Accretion |
|
| 478,770 |
|
|
|
|
|
| 478,770 |
| |
Impairment of Oil and Gas Properties |
|
| 1,304,785 |
|
|
|
|
|
| 1,304,785 |
| |
Gain on Sale of Property and Equipment |
|
| (25,808,246 |
|
|
|
|
|
| (25,808,246 | ) | |
General and Administrative |
|
| 5,152,766 |
|
|
|
|
|
| 5,152,766 |
| |
Total |
|
| (15,868,024 |
|
|
|
|
|
| (15,868,024 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Income (Loss) |
|
| 18,610,126 | ) |
|
|
|
|
| 18,610,126 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Other Expense (Income) |
|
|
|
|
|
|
|
|
|
|
| |
Interest Expense |
|
| 2,438,097 |
|
|
|
|
|
| 2,438,097 |
| |
Equity in Earnings of Unconsolidated Entity |
|
|
|
|
|
|
|
|
| — |
| |
Loss on Derivative liability |
|
| 27,431,824 |
|
|
| 23,610,428 |
|
|
| 51,042,252 |
|
Other (Income) Expense, Net |
|
| (474,124 | ) |
|
|
|
|
|
| (474,124 | ) |
Total Other Expense (Income) |
|
| 23,395,797 |
|
|
| 23,610,428 |
|
|
| 53,006,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income Taxes |
|
| (10,785,671 |
|
|
| (23,610,428 | ) |
|
| (34,396,100 | ) |
Income Tax Benefit (Expense) |
|
| (3,000 | ) |
|
|
|
|
|
| (3,000 | ) |
Net Loss |
| $ | (10,788,671 | ) |
|
| (23,610,428 | ) |
| $ | (34,399,100 | ) |
Less preferred dividends |
|
| 4,224,027 |
|
|
| (3,610,433 | ) |
|
| 613,594 |
|
Net Income (loss) attributable to common shareholders |
|
| 15,012,698 |
|
|
| (19,999,995 | ) |
|
| (35,012,694 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | (3,799.72 | ) |
|
| (5,062.01 | ) |
| $ | (8,861.73 | ) |
Diluted |
| $ | (3,799.72 | ) |
|
| (5,062.01 | ) |
| $ | (8,861.73 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 3,951 |
|
|
| 3,951 |
|
|
| 3,951 |
|
Diluted |
|
| 3,951 |
|
|
| 3,951 |
|
|
| 3,951 |
|
Mr. Karl Hiller
March 31, 2022
Page | 9
EXHIBIT B
VIKING – FORM 10-Q/A – JUNE 30, 2020 (proposed changes)
EXPLANATORY NOTE – RESTATEMENT OF FINANCIAL STATEMENTS
The Company is amending this Form 10-Q/A to correct the company’s accounting for the Series C preferred stock. After consultations with the SEC staff and our review of the applicable accounting requirements, the Company determined that the accounting for the Series C preferred shares required further amendment from our initial accounting treatment. We believe that the Series C preferred shares are temporary equity and include an embedded derivative due to the potential conversion into a variable number of common shares. The Series C preferred shares are redeemable or convertible, at the company’s option, upon issuance. The face value of the Series C preferred shares is convertible into common shares at a fixed rate. As a result, upon issuance a portion of the Series C preferred shares is recorded as temporary equity with a corresponding amount recorded as a deemed dividend. The carrying value of the portion of the Series C preferred shares recorded in temporary equity is required to be adjusted based on the fair value of the Company’s common shares required to satisfy a conversion with a corresponding recognition of an additional deemed dividend or an equity contribution.
If the Series C preferred shares are redeemed or converted prior to the stated term, the dividends are required to be paid as if the shares were held to maturity. As a result, the Company should have recorded a deemed dividend upon issuance and a derivative liability. Any differences between the consideration paid for the Series C preferred shares and the value of the derivative liability less the portion allocated to temporary equity should have been recorded as a loss on derivative liability at issuance. If the shares are converted into common shares with a value in excess of the recorded value of the derivative liability, an additional loss on the derivative is recognized.
After consultations with the SEC staff and the Company’s accounting advisors, the Company determined: (i) the impact of the error(s) is material for the fiscal years ended March 31, 2019 and 2020; and (ii) to restate its Annual Report on Form 10-K/A for the year ended March 31, 2020, inclusive of comparative financial statements for the year ended March 31, 2019, the previously filed quarterly report on Form 10-Q/A for the three months ended June 30, 2020, and the previously filed quarterly report on Form 10-Q/A for the three and six month periods ended September 30, 2020. See Note 4 to the Consolidated Financial Statements included in Item 8 for additional information and a reconciliation of the previously reported amounts to the restated amounts.
FOOTNOTE ON RESTATEMENT
NOTE 4 – Restatement of previously issued financial statements
The Company is restating the financial statements for the three months ended June 30, 2020 and 2019 to correct the Company’s accounting for the Series C preferred stock. After consultations with the SEC staff and our review of the applicable accounting requirements, the Company determined that the accounting for the Series C preferred shares required further amendment from our initial accounting treatment. We believe that the Series C preferred shares are temporary equity and include an embedded derivative due to the potential conversion into a variable number of common shares. The Series C preferred shares are redeemable or convertible, at the company’s option, upon issuance. The face value of the Series C preferred shares is convertible into common shares at a fixed rate. As a result, upon issuance a portion of the Series C preferred shares is recorded as temporary equity with a corresponding amount recorded as a deemed dividend. The carrying value of the portion of the Series C preferred shares recorded in temporary equity is required to be adjusted based on the fair value of the Company’s common shares required to satisfy a conversion with a corresponding recognition of an additional deemed dividend or an equity contribution.
Mr. Karl Hiller
March 31, 2022
Page | 10
If the Series C preferred shares are redeemed or converted prior to the stated term, the dividends are required to be paid as if the shares were held to maturity. As a result, the Company should have recorded a deemed dividend upon issuance and a derivative liability. Any differences between the consideration paid for the Series C preferred shares and the value of the derivative liability less the portion allocated to temporary equity should have been recorded as a loss on derivative liability at issuance. If the shares are converted into common shares with a value in excess of the recorded value of the derivative liability, an additional loss on the derivative is recognized.
The table below sets forth changes to the consolidated balance sheet as of June 30, 2020:
|
| As Previously |
|
|
|
|
|
| ||||
|
| Restated |
|
| Adjustments |
|
| As Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
TOTAL ASSETS |
|
| 13,910,159 |
|
|
| - |
|
|
| 13,910,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
| 1,439,641 |
|
|
|
|
|
|
| 1,439,641 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued expenses |
|
| 192,613 |
|
|
|
|
|
|
| 192,613 |
|
Derivative liability - Series C |
|
| 14,370,827 |
|
|
| 64,559,215 |
|
|
| 78,930,042 |
|
Current ARO |
|
| 52,402 |
|
|
|
|
|
|
| 52,402 |
|
Current income taxes payable |
|
| 3,000 |
|
|
|
|
|
|
| 3,000 |
|
Total current liabilities |
|
| 16,058,483 |
|
|
| 64,559,215 |
|
|
| 80,617,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset retirement obligations |
|
| 19,348 |
|
|
|
|
|
|
| 19,348 |
|
TOTAL LIABILITIES |
|
| 16,077,831 |
|
|
| 64,559,215 |
|
|
| 80,637,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEMPORARY EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Series C |
|
| 40,080,571 |
|
|
| (29,275,371 | ) |
|
| 10,805,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Series A |
|
| - |
|
|
|
|
|
|
| - |
|
Preferred Stock Series B |
|
| - |
|
|
|
|
|
|
| - |
|
Common Stock |
|
| 13,161 |
|
|
|
|
|
|
| 13,161 |
|
Additional paid in capital |
|
| 155,298,998 |
|
|
| 261,207,365 |
|
|
| 416,506,363 |
|
Accumulated Deficit |
|
| (197,560,402 | ) |
|
| (296,491,209 | ) |
|
| (426,294,588 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Deficit |
|
| (42,248,243 | ) |
|
| (35,283,844 | ) |
|
| (77,532,087 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
| 13,910,159 |
|
|
|
|
|
|
| 13,910,159 |
|
The filing will include the consolidated balance sheet as of March 31, 2020 (See Exhibit A).
Mr. Karl Hiller
March 31, 2022
Page | 11
The table below sets forth changes to the consolidated statement of operations for the three-month period ended June 30, 2020:
Three Months Ended June 30, 2020 |
| As Previously Restated |
|
| Adjustments |
|
| Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total Revenues |
|
| 33,689 |
|
|
|
|
|
| 33,689 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
| |
Lease Operating Expenses |
|
| 69,291 |
|
|
|
|
|
| 69,291 |
| |
Severance and Property Taxes |
|
| 1,349 |
|
|
|
|
|
| 1,349 |
| |
Depreciation, Depletion, Amortization, and Accretion |
|
| 2,295 |
|
|
|
|
|
| 2,295 |
| |
General and Administrative |
|
| 686,663 |
|
|
|
|
|
| 686,663 |
| |
Total Operating Expenses |
|
| 759,598 |
|
|
|
|
|
| 759,598 |
| |
Operating Loss |
|
| (725,909 | ) |
|
|
|
|
| (725,909 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other Expense (Income) |
|
|
|
|
|
|
|
|
|
|
| |
Interest Expense |
|
| — |
|
|
|
|
|
| — |
| |
Loss from Unconsolidated Entity |
|
| 1,083,355 |
|
|
|
|
|
| 1,083,355 |
| |
Other Expense (Income), Net |
|
| (214,632 | ) |
|
|
|
|
| (214,632 | ) | |
Loss on Derivative Liability |
|
| 5,700,996 |
|
|
| 63,461,395 |
|
|
| 69,162,391 |
|
Total Other Expenses |
|
| 6,569,719 |
|
|
| 63,461,395 |
|
|
| 70,031,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
| $ | (7,295,628 | ) |
| $ | (63,461,395 | ) |
| $ | (70,757,023 | ) |
Less Preferred Dividends |
|
| 1,680,756 |
|
|
| 1,895,891 |
|
|
| 3,576,647 |
|
Net Loss Attributable to Common Shareholders |
|
| (8,976,384 | ) |
|
| (65,357,286 | ) |
|
| (74,333,670 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
| (1,19 | ) |
|
| (8.68 | ) |
|
| (8.87 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
| 7,527,903 |
|
|
| 7,527,903 |
|
|
| 7,527,903 |
|
Mr. Karl Hiller
March 31, 2022
Page | 12
The table below sets forth changes to the consolidated statement of operations for the three-month period ended June 30, 2019:
Three Months Ended June 30, 2019 |
| As Previously Restated |
|
| Adjustments |
|
| Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total Revenues |
|
| 121,351 |
|
|
|
|
|
| 121,351 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
| |
Lease Operating Expenses |
|
| 123,557 |
|
|
|
|
|
| 123,557 |
| |
Severance and Property Taxes |
|
| 2,574 |
|
|
|
|
|
| 2,574 |
| |
Depreciation, Depletion, Amortization, and Accretion |
|
| 4,242 |
|
|
|
|
|
| 4,242 |
| |
General and Administrative |
|
| 1,331,991 |
|
|
|
|
|
| 1,331,991 |
| |
Total Operating Expenses |
|
| 1,462,364 |
|
|
|
|
|
| 1,462,364 |
| |
Operating Loss |
|
| (1,341,013 | ) |
|
|
|
|
| (1,341,013 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other Expense (Income) |
|
|
|
|
|
|
|
|
|
|
| |
Interest Expense |
|
| 847 |
|
|
|
|
|
| 847 |
| |
Loss from Unconsolidated Entity |
|
| — |
|
|
|
|
|
| — |
| |
Other Expense (Income), Net |
|
| (54,262 |
|
|
|
|
|
| (54,262 |
| |
Loss on Derivative Liability |
|
| 2,163,891 |
|
|
|
|
|
| 2,163,891 |
| |
Total Other Expenses (Income) |
|
| (2,110,476 | ) |
|
|
|
|
| 2,110,476 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Net Loss |
| $ | (3,451,489 | ) |
| $ | - |
|
| $ | (3,451,489 | ) |
Less Preferred Dividends |
|
| 1,453,718 |
|
|
| (1,453,718 | ) |
|
| - |
|
Net Loss Attributable to Common Shareholders |
|
| (4,905,207 | ) |
|
| 1,453,718 |
|
|
| (3,451,489 | )) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
| (319.60 | ) |
|
| 94.72 |
|
|
| (224.88 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
| 15,348 |
|
|
| 15,348 |
|
|
| 15,348 |
|
Mr. Karl Hiller
March 31, 2022
Page | 13
EXHIBIT C
VIKING – FORM 10-Q/A – SEPTEMBER 30, 2020 (proposed changes)
EXPLANATORY NOTE – RESTATEMENT OF
The Company is amending this Form 10-Q/A to correct the company’s accounting for the Series C preferred stock. After consultations with the SEC staff and our review of the applicable accounting requirements, the Company determined that the accounting for the Series C preferred shares required further amendment from our initial accounting treatment. We believe that the Series C preferred shares are temporary equity and include an embedded derivative due to the potential conversion into a variable number of common shares. The Series C preferred shares are redeemable or convertible, at the company’s option, upon issuance. The face value of the Series C preferred shares is convertible into common shares at a fixed rate. As a result, upon issuance a portion of the Series C preferred shares is recorded as temporary equity with a corresponding amount recorded as a deemed dividend. The carrying value of the portion of the Series C preferred shares recorded in temporary equity is required to be adjusted based on the fair value of the Company’s common shares required to satisfy a conversion with a corresponding recognition of an additional deemed dividend or an equity contribution.
If the Series C preferred shares are redeemed or converted prior to the stated term, the dividends are required to be paid as if the shares were held to maturity. As a result, the Company should have recorded a deemed dividend upon issuance and a derivative liability. Any differences between the consideration paid for the Series C preferred shares and the value of the derivative liability less the portion allocated to temporary equity should have been recorded as a loss on derivative liability at issuance. If the shares are converted into common shares with a value in excess of the recorded value of the derivative liability, an additional loss on the derivative is recognized.
After consultations with the SEC staff and the Company’s accounting advisors, the Company determined: (i) the impact of the error(s) is material for the fiscal years ended March 31, 2019 and 2020; and (ii) to restate its Annual Report on Form 10-K/A for the year ended March 31, 2020, inclusive of comparative financial statements for the year ended March 31, 2019, the previously filed quarterly report on Form 10-Q/A for the three months ended June 30, 2020, and the previously filed quarterly report on Form 10-Q/A for the three and six month periods ended September 30, 2020. See Note 4 to the Consolidated Financial Statements included in Item 8 for additional information and a reconciliation of the previously reported amounts to the restated amounts.
FOOTNOTE ON RESTATEMENT
NOTE 4 – Restatement of previously issued financial statements
The Company is restating the financial statements for the three and six months ended September 30, 2020 and 2019 to correct the Company’s accounting for the Series C preferred stock. After consultations with the SEC staff and our review of the applicable accounting requirements, the Company determined that the accounting for the Series C preferred shares required further amendment from our initial accounting treatment. We believe that the Series C preferred shares are temporary equity and include an embedded derivative due to the potential conversion into a variable number of common shares. The Series C preferred shares are redeemable or convertible, at the company’s option, upon issuance. The face value of the Series C preferred shares is convertible into common shares at a fixed rate. As a result, upon issuance a portion of the Series C preferred shares is recorded as temporary equity with a corresponding amount recorded as a deemed dividend. The carrying value of the portion of the Series C preferred shares recorded in temporary equity is required to be adjusted based on the fair value of the Company’s common shares required to satisfy a conversion with a corresponding recognition of an additional deemed dividend or an equity contribution.
If the Series C preferred shares are redeemed or converted prior to the stated term, the dividends are required to be paid as if the shares were held to maturity. As a result, the Company should have recorded a deemed dividend upon issuance and a derivative liability. Any differences between the consideration paid for the Series C preferred shares and the value of the derivative liability less the portion allocated to temporary equity should have been recorded as a loss on derivative liability at issuance. If the shares are converted into common shares with a value in excess of the recorded value of the derivative liability, an additional loss on the derivative is recognized.
Mr. Karl Hiller
March 31, 2022
Page | 14
The table below sets forth changes to the consolidated balance sheet as of September 30, 2020:
|
| As Previously Restated |
|
| Adjustments |
|
| As Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
TOTAL ASSETS |
|
| 11,795,451 |
|
|
| - |
|
|
| 11,795,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
| 1,455,898 |
|
|
|
|
|
|
| 1,455,898 |
|
Accrued expenses |
|
| 107,621 |
|
|
|
|
|
|
| 107,621 |
|
Derivative liability - Series C |
|
| 30,866,933 |
|
|
| 58,247,245 |
|
|
| 89,114,178 |
|
Current ARO |
|
| 25,766 |
|
|
|
|
|
|
| 25,766 |
|
Current income taxes payable |
|
| 3,000 |
|
|
|
|
|
|
| 3,000 |
|
Total current liabilities |
|
| 32,459,218 |
|
|
| 58,247,245 |
|
|
| 32,459,218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset retirement obligations |
|
| 20,017 |
|
|
|
|
|
|
| 20,017 |
|
TOTAL LIABILITIES |
|
| 1,612,302 |
|
|
| 30,866,933 |
|
|
| 32,479,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEMPORARY EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Series C |
|
| 6,000,000 |
|
|
| 32,002,002 |
|
|
| 38,002,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
| 25,000 |
|
|
|
|
|
|
| 25,000 |
|
Additional paid in capital |
|
| 161,157,247 |
|
|
| 270,863,085 |
|
|
| 432,020,332 |
|
Retained (deficit) |
|
| (219,868,033 | ) |
|
| (296,411,466 | ) |
|
| (516,279,499 | ) |
Total stockholders’ (deficit) |
|
| (58,685,786 | ) |
|
| (25,548,381 | ) |
|
| (80,902,192 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
| 11,795,451 |
|
|
| - |
|
|
| 11,795,451 |
|
The filing will include the consolidated balance sheet as of March 31, 2020 (See Exhibit A).
Mr. Karl Hiller
March 31, 2022
Page | 15
The table below sets forth changes to the consolidated statement of operations for the three month period ended September 30, 2020:
Three Months Ended September 30, 2020 |
| As Previously Restated |
|
| Adjustments |
|
| Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total Revenues |
|
| 57,458 |
|
|
|
|
|
| 57,458 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
| |
Lease Operating Expenses |
|
| 27,222 |
|
|
|
|
|
| 27,222 |
| |
Severance and Property Taxes |
|
| 2,126 |
|
|
|
|
|
| 2,126 |
| |
Depreciation, Depletion, Amortization, and Accretion |
|
| 2,837 |
|
|
|
|
|
| 2,837 |
| |
General and Administrative |
|
| 852,915 |
|
|
|
|
|
| 852,915 |
| |
Total Operating Expenses |
|
| 885,100 |
|
|
|
|
|
| 885,100 |
| |
Operating Loss |
|
| (827,642 | ) |
|
|
|
|
| (827,642 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other Expense (Income) |
|
|
|
|
|
|
|
|
|
|
| |
Loss from Unconsolidated Entity |
|
| 1,056,766 |
|
|
|
|
|
| 1,056,766 |
| |
Loss on Derivative Liability |
|
| 20,251,123 |
|
|
| (79,743 | ) |
|
| 20,171,380 |
|
Other Expense, Net |
|
| 172,100 |
|
|
|
|
|
|
| 172,100 |
|
Total Other Expenses |
|
| 21,479,989 |
|
|
| (79,743 | ) |
|
| 21,400,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
| $ | (22,307,631 | ) |
| $ | 79,743 |
|
| $ | (22,227,888 | ) |
Less Preferred Dividends |
|
| 1,651,219 |
|
|
| (1,651,219 | ) |
|
| - |
|
Net Loss Attributable to Common Shareholders |
|
| (23,958,850 | ) |
|
| 1,730,962 |
|
|
| (22,227,888 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
| $ | (1.21 | ) |
| $ | .09 |
|
| $ | (1.12 | ) |
Discontinued Operations |
|
| — |
|
|
|
|
|
|
| — |
|
Total |
| $ | (1.21 | ) |
| $ | .09 |
|
| $ | (1.12 | ) |
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
| $ | (1.21 | ) |
| $ | .09 |
|
| $ | (1.12 | ) |
Discontinued Operations |
|
| — |
|
|
|
|
|
|
| — |
|
Total |
| $ | (1.21 | ) |
| $ | .09 |
|
| $ | (1.12 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding- basic and diluted |
|
| 19,815,872 |
|
|
| 19,815,872 |
|
|
| 19,815,872 |
|
Mr. Karl Hiller
March 31, 2022
Page | 16
The table below sets forth changes to the consolidated statement of operations for the six month period ended September 30, 2020:
Six Months Ended September 30, 2020 |
| As Previously Restated |
|
| Adjustments |
|
| Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total Revenues |
|
| 91,147 |
|
|
|
|
|
| 91,147 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
| |
Lease Operating Expenses |
|
| 96,513 |
|
|
|
|
|
| 96,513 |
| |
Severance and Property Taxes |
|
| 3,475 |
|
|
|
|
|
| 3,475 |
| |
Depreciation, Depletion, Amortization, and Accretion |
|
| 5,132 |
|
|
|
|
|
| 5,132 |
| |
General and Administrative |
|
| 1,539,578 |
|
|
|
|
|
| 1,539,578 |
| |
Total Operating Expenses |
|
| 1,644,698 |
|
|
|
|
|
| 1,644,698 |
| |
Operating Loss |
|
| (1,553,551 | ) |
|
|
|
|
| (1,553,551 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other Expense (Income) |
|
|
|
|
|
|
|
|
|
|
| |
Interest Expense |
|
| — |
|
|
|
|
|
| — |
| |
Loss from Unconsolidated Entity |
|
| 2,140,121 |
|
|
|
|
|
| 2,140,121 |
| |
Loss on Derivative Liability |
|
| 25,952,119 |
|
|
| 63,381,652 |
|
|
| 89,333,771 |
|
Other Expense (Income), Net |
|
| (42,532 |
|
|
|
|
|
|
| (42,532 | ) |
Total Other Expenses |
|
| 28,049,708 |
|
|
| 63,381,652 |
|
|
| 91,431,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Before Discontinued Operations |
|
| (29,603,259 | ) |
|
| (63,381,652 | ) |
|
| (92,984,911 | ) |
Income from Discontinued Operations |
|
| — |
|
|
|
|
|
|
| — |
|
Net Loss |
| $ | (29,603,259 | ) |
| $ | (63,381,652 | ) |
| $ | (92,984,911 | ) |
Less Preferred Dividends |
|
| 3,331,975 |
|
|
| 244,672 |
|
|
| 3,576,647 |
|
Net Loss Attributable to Common Shareholders |
|
| (32,935,234 | ) |
|
| (63,626,324 | ) |
|
| (96,561,558 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
| $ | (2.40 | ) |
| $ | (4.64 | ) |
| $ | (7.04 | ) |
Discontinued Operations |
|
| — |
|
|
|
|
|
|
| — |
|
Total |
| $ | (2.40 | ) |
| $ | (4.64 | ) |
| $ | (7.04 | ) |
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
| $ | (2.40 | ) |
| $ | (4.64 | ) |
| $ | (7.04 | ) |
Discontinued Operations |
|
| — |
|
|
|
|
|
|
| — |
|
Total |
| $ | (2.40 | ) |
| $ | (4.64 | ) |
| $ | (7.04 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding- Basic and diluted |
|
| 13,705,461 |
|
|
| 13,705,461 |
|
|
| 13,705,461 |
|
Mr. Karl Hiller
March 31, 2022
Page | 17
The table below sets forth changes to the consolidated statement of operations for the three-month period ended September 30, 2019:
Three Months Ended September 30, 2019 |
| As Previously Restated |
|
| Adjustments |
|
| Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total Revenues |
|
| 92,753 |
|
|
|
|
|
| 92,753 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
| |
Lease Operating Expenses |
|
| 188,483 |
|
|
|
|
|
| 188,483 |
| |
Severance and Property Taxes |
|
| 4,031 |
|
|
|
|
|
| 4,031 |
| |
Depreciation, Depletion, Amortization, and Accretion |
|
| 3,592 |
|
|
|
|
|
| 3,592 |
| |
General and Administrative |
|
| 940,483 |
|
|
|
|
|
| 940,483 |
| |
Total Operating Expenses |
|
| 1,136,589 |
|
|
|
|
|
| 1,136,589 |
| |
Operating Loss |
|
| (1,043,836 | ) |
|
|
|
|
| (1,043,836 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other Expense (Income) |
|
|
|
|
|
|
|
|
|
|
| |
Interest Expense |
|
| 4,174 |
|
|
|
|
|
| 4,174 |
| |
Loss on Derivative Liability |
|
| 2,767,878 |
|
|
| 167,846,161 |
|
|
| 170,614,039 |
|
Other Expense (Income), Net |
|
| (9,278 | ) |
|
|
|
|
|
| (9,278 | ) |
Total Other Expenses |
|
| 2,762,774 |
|
|
| 167,846,161 |
|
|
| 170,608,935 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Before Discontinued Operations |
|
| (3,806,610 | ) |
|
| (167,846,161 | ) |
|
| (171,652,771 | ) |
Income from Discontinued Operations |
|
| 761,768 |
|
|
|
|
|
|
| 761,768 |
|
Net Loss |
| $ | (3,044,842 | ) |
| $ | (167,846,161 | ) |
| $ | (170,891,003 | ) |
Less Preferred Dividends |
|
| 1,468,328 |
|
|
| (1,363,672 | ) |
|
| 104,656 |
|
Net Loss Attributable to Common Shareholders |
|
| (4,413,170 | ) |
|
| (166,482,489 | ) |
|
| (170,995,659 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
| $ | (10.69 | ) |
| $ | (337.49 | ) |
| $ | (348.18 | ) |
Discontinued Operations |
|
| 1.54 |
|
|
|
|
|
|
| 1.54 |
|
Total |
| $ | (9.15 | ) |
| $ | (337.49 | ) |
| $ | (346.64 | ) |
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
| $ | (10.69 | ) |
| $ | (337.49 | ) |
| $ | (348.18 | ) |
Discontinued Operations |
|
| 1.54 |
|
|
|
|
|
|
| 1.54 |
|
Total |
| $ | (9.15 | ) |
| $ | (337.49 | ) |
| $ | (346.64 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding- Basic and diluted |
|
| 493,300 |
|
|
| 493,300 |
|
|
| 493,300 |
|
Mr. Karl Hiller
March 31, 2022
Page | 18
The table below sets forth changes to the consolidated statement of operations for the six-month period ended September 30, 2019:
Six Months Ended September 30, 2019 |
| As Previously Restated |
|
| Adjustments |
|
| Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total Revenues |
|
| 214,104 |
|
|
|
|
|
| 214,104 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
| |
Lease Operating Expenses |
|
| 312,040 |
|
|
|
|
|
| 312,040 |
| |
Severance and Property Taxes |
|
| 6,605 |
|
|
|
|
|
| 6,605 |
| |
Depreciation, Depletion, Amortization, and Accretion |
|
| 7,834 |
|
|
|
|
|
| 7,834 |
| |
General and Administrative |
|
| 2,272,474 |
|
|
|
|
|
| 2,272,474 |
| |
Total Operating Expenses |
|
| 2,598,953 |
|
|
|
|
|
| 2,598,953 |
| |
Operating Loss |
|
| (2,384,849 | ) |
|
|
|
|
| (2,384,849 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other Expense (Income) |
|
|
|
|
|
|
|
|
|
|
| |
Interest Expense |
|
| 5,021 |
|
|
|
|
|
| 5,021 |
| |
Loss from Unconsolidated Entity |
|
| — |
|
|
|
|
|
| — |
| |
Loss on Derivative Liability |
|
| 4,931,769 |
|
|
| 167,846,161 |
|
|
| 172,777,930 |
|
Other Expense (Income), Net |
|
| (63,540 | ) |
|
|
|
|
|
| (63,540 | ) |
Total Other Expenses |
|
| 4,873,250 |
|
|
| 167,846,161 |
|
|
| (172,719,411 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Before Discontinued Operations |
|
| (7,258,099 | ) |
|
| (167,846,151 | ) |
|
| (175,104,260 | ) |
Income from Discontinued Operations |
|
| 761,768 |
|
|
|
|
|
|
| 761,768 |
|
Net Loss |
| $ | (6,496,331 | ) |
| $ | (167,846,151 | ) |
| $ | (174,342,492, | ) |
Less Preferred Dividends |
|
| 2,922,049 |
|
|
| (2,922,049 | ) |
|
| - |
|
Net Loss Attributable to Common Shareholders |
|
| (9,418,380 | ) |
|
| (164,924,112 | ) |
|
| (174,342,492 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
| $ | (39.24 | ) |
| $ | (635.71 | ) |
| $ | (674.95 | ) |
Discontinued Operations |
|
| 2.94 |
|
|
|
|
|
|
| 2.94 |
|
Total |
| $ | (36.30 | ) |
| $ | (635.71 | ) |
| $ | (672.02 | ) |
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
| $ | (39.24 | ) |
| $ | (635.71 | ) |
| $ | (674.95 | ) |
Discontinued Operations |
|
| 2.94 |
|
|
|
|
|
|
| 2.94 |
|
Total |
| $ | (36.30 | ) |
| $ | (635.71 | ) |
| $ | (672.02 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding- Basic and diluted |
|
| 259,432 |
|
|
| 259,432 |
|
|
| 259,432 |
|