Item 3.01.
|
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of
Listing.
|
On October 5, 2017, Camber
Energy, Inc. (the “
Company
”) received notification (the “
Deficiency Letter
”) from the NYSE
AMERICAN LLC (“
NYSE American
”) that it is not in compliance with certain NYSE American continued listing standards
(the “
Listing Standards
”). This was in addition to our prior disclosed non-compliance with Sections 1003(a)(i)
through (iii) of the NYSE American Company Guide.
The Deficiency Letter indicated
that the Company’s securities have been selling for a low price per share for a substantial period of time and most recently
the average price of the Company’s common stock had been below $0.20 on a 30-day average price as of October 5, 2017. Pursuant
to Section 1003(f)(v) of the NYSE American Company Guide, the NYSE American staff determined that the Company’s continued
listing is predicated on it effecting a reverse stock split of its common stock or otherwise demonstrating sustained price improvement
within a reasonable period of time, which the staff determined to be until April 5, 2018. The Company intends to regain compliance
with the Listing Standards by undertaking a measure or measures that are for the best interests of the Company and its shareholders.
The Company’s common
stock will continue to be listed on the NYSE American while it attempts to regain compliance with the Listing Standards, subject
to the Company’s compliance with other continued listing requirements, as described in prior filings. The NYSE American notification
does not affect the Company’s business operations or its reporting obligations under the Securities and Exchange Commission
regulations and rules and does not conflict with or cause an event of default under any of the Company’s material agreements.
The Company issued a press
release on the same day of this report announcing that it had received the Deficiency Letter. A copy of the press release is attached
hereto as
Exhibit 99.1
.
Item 3.02.
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Unregistered Sales of Equity Securities.
|
On October 4, 2017, the
Company entered into an agreement with a digital marketing advisor pursuant to which the advisor agreed to create original content
with the goal of increasing public awareness about the Company and the Company agreed to pay the advisor (a) $20,000 per month
beginning in October 2017 and ending on February 28, 2018, (b) $50,000 per month thereafter through October 4, 2018, the end of
the term of the agreement, and (c) 3,750,000 shares of restricted common stock, with 2.5 million shares payable within 15 days
of the parties’ entry into the agreement and the remainder due on May 1, 2018 (the “
Advisory Shares
”).
On October 4, 2017, the
Company entered into a consulting agreement with a third party consultant which consultant agreed to provide investor relations
and public relations services to the Company. As consideration pursuant to the agreement, the Company agreed to issue the consultant
1,000,000 shares of restricted common stock (the “
Consulting Shares
”), with piggy-back registration rights.
We claim an exemption from
registration for the issuance and sale of the Advisory Shares and Consulting Shares pursuant to Section 4(a)(2) and/or Rule 506
of Regulation D of the Securities Act of 1933, as amended (the “
Securities Act
”), since the foregoing issuances
did not involve a public offering, the recipients were “
accredited investors
” and/or had access to similar information
as would be included in a Registration Statement under the Securities Act. The securities were offered without any general solicitation
by us or our representatives. No underwriters or agents were involved in the foregoing issuance and we paid no underwriting discounts
or commissions. The securities are subject to transfer restrictions, and the certificates evidencing the securities contain an
appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold
absent registration or pursuant to an exemption therefrom. The securities were not registered under the Securities Act and such
securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities
Act and any applicable state securities laws.
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective October 6, 2017,
Alan W. Dreeben and Robert D. Tips resigned as members of the Board of Directors of the Company (the “
Resignations
”).
Such Resignations were not in connection with a disagreement with the Company or in connection with any matter relating to the
Company’s operations, policies or practices.
Effective October 6, 2017,
Robert Schleizer, who currently serves as our Interim Chief Financial Officer, and Donnie B. Seay, were appointed as members of
the Board of Directors of the Company to fill the vacancies created by the Resignations. Additionally, Mr. Seay was appointed as
a member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee (as the sole member of
each such Committee after the Resignations). Moving forward the Company plans to appoint additional independent director(s) and
appoint such person(s) to the committees described above in order to meet applicable NYSE American listing requirements and rules
which generally require that each of our committees have at least two members who are required to be independent members of the
Board of Directors. The biographical information of Mr. Seay is included below. Mr. Schleizer’s biographical information
is set forth in the Company’s Annual Report on Form 10-K for the year ended March 31, 2017, filed with the Commission on
July 14, 2017, under the headings “
Item 10. Directors, Executive Officers and Corporate Governance
” –
“
Robert Schleizer, Interim Chief Financial Officer
”.
Donnie B. Seay, age 76
Mr. Seay does not have
any family relationships with any other director or officer of the Company. However, Mr. Seay was an affiliate (the Manager of
the General Partner) of DBS Investments, Ltd., which was one of the sellers under that certain Asset Purchase Agreement dated December
30, 2015, as amended from time to time (the “
Asset Purchase Agreement
”), pursuant to which the Company purchased
working interests in producing properties and undeveloped acreage in Texas and Oklahoma, including varied interests in two largely
contiguous acreage blocks in the liquids-rich Mid-Continent region of the United States, and related wells, leases, records, equipment
and agreements associated therewith. In consideration for such purchase, the Company agreed, among other things, to issue 1,783,775
shares of common stock to DBS Investments, Ltd. Additionally, Mr. Seay is a guarantor under our August 25, 2016, $40 million Loan
Agreement with International Bank of Commerce (“
IBC
”). On September 8, 2017, the Company received a Notice of
Default and Opportunity to Cure (the “
Notice
“) from IBC, stating that the Company was in default under its
loan with IBC. The Notice was also sent to the guarantors under the loan agreement. The Notice is described in greater detail in
the Current Report on Form 8-K filed by the Company with the Commission on September 12, 2017.
Mr. Seay has been a self-employed
investor over the last five years. Mr. Seay, is a 60 year veteran of the oil and gas industry and a former partner of Altex Resources,
which developed the Hunton Limestone Play and drilled the first horizontal well there in southeast Oklahoma. Mr. Seay is also a
former president of Guaranty State Bank and the founder and Chairman of the Board of Citizens Bank, both of New Braunfels, Texas.