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
”)(notwithstanding
the terms of the October 2017 Purchase Agreement required the sixth closing to be for a total of $5 million, the parties mutually
agreed to the sale of only $1 million of Series C Preferred Stock at the March 9, 2018 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.