United States securities and exchange commission logo
November 5, 2021
James Doris
Chief Executive Officer
Viking Energy Group, Inc.
15915 Kary Freeway, Suite 450
Houston, TX 77094
Re: Viking Energy
Group, Inc.
Form 10-K for the
Fiscal Year ended December 31, 2020
File No. 000-29219
Filed March 25,
2021
Dear Mr. Doris:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2020
Financial Statements
Note 3 - Summary of Significant Accounting Policies, page F-10
1. We note that you filed
a Form 8-K on October 12, 2021 and October 18, 2021 to report
the disposals of your
subsidiaries Ichor Energy Holdings, L.L.C. and Elysium Energy
Holdings, LLC. You
indicate these entities were assigned to TO Ichor 2021, L.L.C. and
TO Elysium 2021,
L.L.C., affiliates of the entities from whom you originally acquired the
assets, in exchange for
the assumption of all related obligations, including the December
28, 2018 Term Loan
Credit Agreement and the February 3, 2020 Term Loan Agreement.
We see that you
included pro forma financial statements depicting both transactions in the
second Form 8-K
referenced above. Please revise both filings to include the pro forma
effects of the
disposition on your oil and gas reserves and the standardized measure of
future net cash flows,
based on the information that you disclosed in your annual report
James Doris
FirstName LastNameJames
Viking Energy Group, Inc. Doris
Comapany 5,
November NameViking
2021 Energy Group, Inc.
November
Page 2 5, 2021 Page 2
FirstName LastName
pursuant to FASB ASC 932-235-50-3 through 932-235-50-11B and FASB ASC
932-235-
50-29 through 932-235-50-36. You may refer to SAB Topic 2: D, Question
4, paragraph
(5), if you require further clarification or guidance.
Please also quantify the obligations assumed by the counterparties in
each instance,
disclose the amount of gain or loss recognized on the dispositions,
and identify the
precipitating events, as may include default or the prospect of
litigation, and which may
otherwise clarify your rationale for each transaction.
Note 6 - Equity, page F-19
2. We note that your 28,092 Series C preferred shares were originally
issued during 2012
with voting rights based on a ratio of 2,000:1 and conversion rights
based on a ratio of 1:1.
We understand that changes were made to the Certificate of Designation
to increase the
voting rights ratio to 10,000:1 in 2017, and to 32,500:1 in 2019,
while the conversion ratio
remained unchanged at 1:1, as reflected in the amended Certificate of
Designation that
you filed with the Form 8-K on September 5, 2019.
We note that you filed a Form 8-K on September 3, 2020 with another
amendment to the
Certificate of Designation in which the conversion ratio appears to
have been changed for
the first time since issuance, to 4,900:1, and we see there was a
corresponding change to
the voting rights ratio. However, you also filed a Form 8-K on
December 28, 2020 with
yet another amendment to the Certificate of Designation, in which both
the voting and
conversion ratios were changed to 37,500:1.
We see that you disclose the voting and conversion rights on pages 14
and F-19 of the
annual report, and on pages 19 and 20 of your subsequent first and
second quarter interim
reports, respectively, although the ratios that you disclose do not
appear to have been
adjusted for the 1:9 reverse stock split that you conducted on January
5, 2021.
Please revise the disclosures in your annual report to clarify how the
voting and
conversion provisions have been affected by the reverse stock split,
based on Sections
4(a), 6(c), 6(d), and 6(e) of the Certificate of Designation, and to
explain the rationale or
justification for each change to the voting and conversion provisions.
3. Given that the number of common shares issuable pursuant to the
conversion provisions
of your Series C preferred stock increased from 28,092 at the
beginning of your 2020
fiscal year to 1,053,450,000 at the end of the year as a result of
your modifications, based
on the pre-reverse-stock-split figures, it appears that you would need
to account for your
changes to the voting and conversion provisions as an extinguishment
and redemption
consistent with the guidance in FASB ASC 260-10-S99-2.
This would generally involve recognizing the difference between the
fair value of the
modified instrument and the carrying amount of the preferred stock in
the balance sheet as
a deemed dividend. FASB ASC 260-10-45-11 provides guidance on the
adjustment
James Doris
Viking Energy Group, Inc.
November 5, 2021
Page 3
required in computing net income or loss attributable to common
shareholders, which
should be presented on the Statements of Operations, and utilized in
computing earnings
or loss per share. Please submit the revisions that you propose to
address the
aforementioned guidance or explain to us why you believe it would not
apply or yield an
appropriate characterization of the value conveyed, if this is your
view.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact John Cannarella, Staff Accountant, at (202) 551-3337 or
Karl Hiller,
Branch Chief, at (202) 551-3686 at with any questions.
FirstName LastNameJames Doris Sincerely,
Comapany NameViking Energy Group, Inc.
Division of
Corporation Finance
November 5, 2021 Page 3 Office of Energy &
Transportation
FirstName LastName