Camber Energy, Inc. 2024 10-K Review: Navigating a Challenging Year

Camber Energy, Inc. (OTCQB: CEIN) filed its Form 10-K for the fiscal year ended December 31, 2024, reflecting a tumultuous year marked by strategic acquisitions, heavy write-downs and significant operating losses. In this deep-dive, we cover:

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1. Business Overview and Strategic Acquisitions
2. Segment Results: Power Generation vs. Oil & Gas
3. Balance Sheet & Liquidity: A Going Concern
4. Key Risks & Uncertainties
5. Net Loss & Cash Flow Analysis
6. Outlook and Final Thoughts

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1. Business Overview and Strategic Acquisitions

Camber is a diversified energy company. Through its majority-owned subsidiary Viking Energy Group, Inc. (Viking), Camber has assembled a portfolio spanning:

• Custom Power Generation (Simson-Maxwell, 60.5% owned): Provides combined-heat-and-power (CHP), diesel/natural gas engines, solar, wind and storage solutions across Canada.
• Clean Energy Licensing (ESG Clean Energy System): A bottoming cycle power, carbon capture and distilled-water production patent portfolio licensed exclusively in Canada and to multiple U.S. sites.
• Medical Waste Ozone Technology (Viking Ozone, 51%): Patented, ozone-based ozone treatment for medical/biohazard waste, aimed at replacing incineration.
• Broken-Conductor Protection (Viking Sentinel & Viking Protection, each 51%): Ground-fault detection/termination systems for electric transmission/distribution.

Key M&A Events

Date	Entity	Stake	Consideration	Purpose
Aug 2023	Camber + Viking (“Merger”)	100%	49.3M new Camber shares	Reverse takeover, combined energy franchise
Aug 2021	Simson-Maxwell Ltd.	60.5%	$7.96M cash	Custom power generation, parts & service
Jan 2022	Viking Ozone LLC	51%	3.33M Viking shares	Medical waste ozone treatment IP
Feb 2022	Viking Sentinel & Protection	51%	0.42M Viking shares each	Grid safety/broken-conductor IP

Accounting: The August 2023 Merger was treated as a reverse acquisition: Viking was deemed the acquirer. The purchase accounting recognized assets—including $34.9M of goodwill—and liabilities at fair value and then wrote off the entire goodwill in Q3 2024 (see Goodwill Impairment, below).

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2. Segment Results: Power Generation vs. Oil & Gas

Camber reports in two segments:

1. Power Generation (Simson-Maxwell & licenses)
2. Oil & Gas Production (legacy Viking/Oil assets)

2024 Revenue

• Power Generation: $28.51M (–8.1% YoY)
• Unit & Parts: $15.72M (–18.9% YoY)
• Service & Repairs: $12.79M (+3.3% YoY)
• Oil & Gas: $0.10M (sold out in Feb 2024)
• Total: $28.61M (–10.7% YoY)

2024 Operating Loss

• Power Generation: $(6.85)M
• Oil & Gas: $(4.33)M
• Total: $(11.18)M vs. $(6.99)M in 2023

Drivers:

• Unit sales and margins declined amid raw-material cost pressure and lower Canadian capital projects.
• Service revenues held up, but costs and overhead outstripped revenue.
• Oil & Gas disposals in early 2024 resulted in a $0.76M loss on disposal.

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3. Balance Sheet & Liquidity: A Going Concern

At December 31, 2024:

• Total Assets: $42.32M
• Total Liabilities: $80.14M
• Equity (Deficit): $(37.82)M
• Working Capital Deficit: $(17.66)M
• Debt (net of discount): $40.48M
• Cash: $0.11M

Key debt:

• $26.32M Secured Note to Discover, net of $6.49M discount, maturing Jan 1, 2027
• $12.00M Secured Note to Discover, same terms
• $6.00M Secured Note to Discover, same terms
• $2.50M Secured Note to Discover, same terms
• Small SBA loan maturing 2050

Credit Line:

• CAD $6M facility for Simson-Maxwell; CAD 5.67M drawn as of 12/31/24

Going Concern: Recurring net losses of $(70.26)M, deteriorating equity and a cash burn raise substantial doubt. Management is pursuing new financing and operational turnarounds—but absent new capital, further cutbacks or asset sales may be forced.

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4. Key Risks & Uncertainties

Risk Factors (Item 1A):

• Lack of profitability, going concern uncertainty
• Heavy dilution via convertible notes and preferred stock (Series C: max 34.95% dividend rate, 7-yr floor)
• Complex derivatives; potential for massive share issuances on conversion or true-up adjustments
• Series C Preferred Stock restricts financings, requires substantial common stock issuances on conversion
• No cash dividends; reliant on stock price or debt/equity financings
• CEO key person risk; small management team
• Litigation related to the Merger, derivative claims, oil/gas suits
• Credit facility and debt covenants could impair growth

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5. Net Loss & Cash Flow Analysis

2024 Net Loss: $(70.26)M

Key non-cash charges:

• Goodwill impairment: $34.86M
• Derivative liability FV change: $18.31M
• Debt discount amortization: $3.35M
• Intangible impairment: $2.25M
• D&A: $0.78M
• Loss on extinguishment: $0.81M

Cash Flow

• Operating: $(1.47)M vs. $(5.34)M in 2023 (tax credits, lower working capital drain)
• Investing: +$0.15M vs. +$0.66M in 2023 (property dispositions)
• Financing: +$0.53M vs. +$2.35M in 2023 (note draws/payments)

Cash at 12/31/24: $114K vs. $906K in 2023

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6. Outlook and Final Thoughts

Cambers asset roll-out strategy across custom power solutions, clean-energy licensing and patented niche technologies has scope—but execution has been costly. Recurring losses, liquidity stress and complex capital structure (multiple preferred series, steeply discounted notes, convertible instruments, derivatives) have weighed on the stock and triggered a delisting from the NYSE American.

Bull Case:

• Power solutions revenue base (Simson) could stabilize post-pandemic raw-material slowdowns
• ESG clean-energy patents may win deals amid carbon regulations
• Medical-waste and grid-safety IP are unique growth platforms

Bear Case:

• Heavy debt load; difficulty in raising new capital
• Convertible preferred/write-up entitlements could swamp common equity
• Derivative and impairment volatility continues
• Financial reporting material weakness (see control disclosures)

Bottom Line: Camber is a deeply distressed story that may work for aggressive turnaround investors. Conviction play requires patience, new capital commitments and successful commercialization of niche technologies. Most investors should tread lightly.