Item 1.01 Entry into a Material Definitive Agreement.
On December 23, 2020, Camber Energy, Inc. (“Camber” or the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Viking Energy Group, Inc. (“Viking”) to acquire (the “Acquisition”) 236,470,588 shares of Viking common stock, constituting 51% of the common stock of Viking (the “Viking Shares”), in consideration of (i) the payment of $10,900,000 in cash by Camber to Viking (the “Cash Purchase Price”), and (ii) Camber canceling $9,200,000 in promissory notes previously issued to Camber by Viking (the February 3, 2020 promissory note for $5,000,000, and the June 25, 2020 promissory note for $4,200,000, collectively the “Viking Notes”). Pursuant to the Purchase Agreement, Viking is obligated to issue additional shares of Viking common stock to Camber to ensure that Camber shall own at least 51% of the common stock of Viking through July 1, 2022.
In connection with the Acquisition, on December 23, 2020, Camber also entered into (i) a termination agreement with Viking terminating the Amended and Restated Agreement and Plan of Merger, dated August 31, 2020, as amended to date (the “Termination Agreement”), and (ii) an Assignment of Membership Interests with Viking assigning Camber’s interests in one of Viking’s subsidiaries, Elysium Energy Holdings, LLC, back to Viking (the “Assignment”). Also in connection with the Acquisition, on December 23, 2020, Camber (i) borrowed $12,000,000 from an institutional investor (the “Investor”); (ii) issued the Investor a promissory note in the principal amount of $12,000,000 (the “Investor Note”), accruing interest at the rate of 10% per annum and maturing December 11, 2022, or immediately if Camber has not either consummated a merger with Viking by March 11, 2021, or increased its authorized capital stock by such date; (iii) granted the Investor a first-priority security interest in the Viking Shares and Camber’s other assets pursuant to a Security Agreement-Pledge (the “Pledge Agreement”), and a general security agreement (the “Security Agreement”), respectively; and (iv) entered into an amendment to Camber’s $6,000,000 promissory note previously issued to the Investor dated December 11, 2020, amending the acceleration provision of the note to provide that the note repayment obligations would also not accelerate if Camber has increased its authorized capital stock by March 11, 2021 (the “Note Amendment”).
On December 23, 2020, the Investor Note was funded, and Camber closed the Acquisition, paying the Cash Purchase Price to Viking and cancelling the Viking Notes.
The foregoing descriptions of the Purchase Agreement, Termination Agreement, Assignment, Investor Note, Pledge Agreement, Security Agreement, and Note Amendment do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement, Termination Agreement, Assignment, and form of Investor Note, Pledge Agreement, Security Agreement and Note Amendment, copies of which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, and 10.7 to this Current Report on Form 8-K, respectively, and incorporated in this Item 1.01 by reference in their entirety.