Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on October 5, 2017, Camber Energy, Inc. (the “
Company
”, “
we
” and
“
us
”) and an institutional investor (the “
Investor
”), entered into a Stock Purchase Agreement (the “
October
2017 Purchase Agreement
”), pursuant to which the Company agreed to sell, pursuant to the terms thereof,
1,684 shares of our Series C Redeemable Convertible Preferred Stock (the “
Series C Preferred Stock
”) for
$16 million (a 5% original issue discount to the face value of such shares), subject to certain conditions set
forth therein.
On October 5, 2017, in connection with the entry into the October 2017 Purchase Agreement, the
Investor purchased 212 shares of Series C Preferred Stock for $2 million (the “
Initial Closing
”).
On November 21, 2017, pursuant to the terms of the October 2017 Purchase Agreement, we sold
the Investor an additional 106 shares of Series C Preferred Stock for $1 million (the “
Second Closing
”).
On December 27, 2017, pursuant to the terms of the October 2017 Purchase Agreement, we sold
the Investor an additional 105 shares of Series C Preferred Stock for $1 million (the “
Third Closing
”).
On January 31, 2018, pursuant to the terms of the October 2017 Purchase Agreement, we sold the
Investor an additional 105 shares of Series C Preferred Stock for $1 million (the “
Fourth Closing
”).
On February 22, 2018, pursuant to the terms of the October 2017 Purchase Agreement, we sold the
Investor an additional 105 shares of Series C Preferred Stock for $1 million (the “
Fifth Closing
”).
On March 9, 2018, the Company sold the Investor an additional 105 shares of Series C Preferred
Stock for $1 million (the “
Sixth Closing
”).
On April 10, 2018, the Company sold the Investor an additional 105 shares of Series C Preferred
Stock for $1 million (the “
Seventh Closing
”).
The Sixth Closing and Seventh Closing occurred notwithstanding the terms of the October 2017
Purchase Agreement which required the sixth closing to be for a total of $5 million (the “
$5 Million
Closing
”), as the parties mutually agreed to the sales of only $1 million of Series C Preferred Stock to be sold
pursuant to the $5 Million Closing, at both the Sixth Closing and Seventh Closing.
The Company plans to use the proceeds from the sale of the Series C Preferred Stock for working
capital, workovers on existing wells, drilling and completion of additional wells, acquisitions, repayment of
vendor balances and payments to International Bank of Commerce (“
IBC
”), in anticipation of regaining
compliance.
The terms of the October 2017 Purchase Agreement, the conditions which are required to be met
prior to the sale of additional shares of Series C Preferred Stock under the October 2017 Purchase Agreement,
the rights and preferences of the Series C Preferred Stock (which Series C Preferred Stock sold pursuant to
the October 2017 Purchase Agreement currently has a dividend rate of 24.95% per year) and related items
are described in greater detail in the Current Report on Form 8-K filed by the Company with the Securities
and Exchange Commission on October 5, 2017.
The terms of the
October 2017 Purchase Agreement and the Series C Preferred Stock are subject to, and qualified in their entirety by, (a) the form
of October 2017 Purchase Agreement, a copy of which is incorporated by reference hereto as
Exhibit 10.1
; and (b) the Certificate
of Designation of Series C Preferred Stock (the “
Designation
”) incorporated by reference as
Exhibit 3.1
hereto, which are incorporated in this
Item 1.01
by reference in their entirety.