Pomerantz Appointed Co-Lead Counsel in Camber Energy Securities Litigation
On March 14, 2022, U.S. District Judge Charles Eskridge of the Southern District of Texas (Houston Division) appointed Pomerantz LLP as Co-Lead Counsel on behalf of Robert Laurent and Ajmal Hussain, Co-Lead Plaintiffs, and the class in Coggins v. Camber Energy, Inc., 21-cv-3574 (S.D. Tex.). This securities action alleges that Camber Energy, Inc. (“Camber” or the “Company”) overstated the financial and business prospects related to its acquisition of Viking Energy Group, Inc. (“Viking”) and downplayed problems arising from that acquisition.
Camber is an energy company that develops and produces crude oil, natural gas, and natural gas liquids. In December 2020, Camber acquired a controlling interest in Viking, and executed a definitive merger agreement with Viking in February 2021 (the “Merger”).
Allegations against Camber include that: (i) the Company overstated the financial and business prospects of Viking as well as the combined company post-Merger; (ii) Camber failed to apprise investors of, and downplayed, the fact that its acquisition of a controlling interest in Viking would exacerbate the Company’s delinquent financial statements and listing obligations with the NYSE; and (iii) an institutional investor was diluting Camber’s shares at a significant rate following the Company’s July 12, 2021 update regarding the number of its shares of common stock issued and outstanding.
Throughout 2021, Camber failed to timely file required financial statements with the U.S. Securities and Exchange Commission (“SEC”). As a result, financial reporting services such as Yahoo! Finance and Bloomberg were forced to rely on infrequent and outdated updates in SEC filings to estimate the Company’s shares of common stock issued and outstanding. For example, before an update by the Company on October 6, 2021, the widely reported estimate of the Company’s shares of common stock issued and outstanding amounted to 104.2 million, which itself was based on a filing the Company made with the SEC on July 12, 2021. When the Company provided an update on October 6, 2021, it reported 249.6 million shares of stock issued and outstanding, a significantly higher figure.
On May 24, 2021, Viking announced its Q1 2021 financial results in which it revealed a 109.35% decrease year-over-year in earnings per share (“EPS”), and first-quarter revenue of $10.49 million, compared to revenue of $11.79 million in the same quarter the year prior, representing an 11% year-over-year decrease. On the same day, Camber announced that the NYSE had notified the Company that it was not in compliance with the NYSE’s continued listing standards because of “issues that have arisen in connection with… finalizing the determination of the fair values of both assets and liabilities associated with the Company’s acquisition of a controlling interest in Viking.”
On this news, Camber’s share price fell $0.06 per share, or 9.5%, to close at $0.57 per share on May 25, 2021.
Then, on August 16, 2021, Viking announced its Q2 2021 financial results, in which it revealed a net loss of $9.85 million for the quarter, and that, “[a]s of June 30, 2021, [Viking] has a stockholders’ deficit of $15,054,324 and total long-term debt of $95,961,611.”
On this news, Camber’s share price fell a further $0.06 per share, or 14%, to close at $0.37 per share on August 17, 2021.
Finally, on October 5, 2021, Kerrisdale Capital released a report alleging, among other issues revealed in earlier disclosures, that the “market is badly mistaken about Camber’s share count and ignorant of [Camber’s] terrifying capital structure,” estimating the Company’s “fully diluted share count is roughly triple the widely reported number.”
On this news, Camber’s share price fell a further $1.56 per share, or 50.5%, to close at $1.53 per share on October 5, 2021.