Camber Energy Inc. (NYSE: CEI) provides custom energy solutions to commercial and industrial clients but has interests in oil and natural gas assets across the US. As one of retail investors’ favorite meme stocks, CEI stock is seeing renewed momentum as the company is preparing for a reverse split to regain compliance with NYSE American. With the reverse split approaching, CEI stock could be one to watch this week as it could soar upon the reverse split.
CEI Stock News
*Written October 1st, 2021
CEI shocked investors with a surprising announcement in August which helped launch CEI stock from $0.48 per share to $4.32. In the announcement CEI shared that it has signed through its subsidiary an exclusive intellectual property license agreement with ESG Clean Energy. This agreement has brought notable gains to CEI’s shareholders because it gives CEI the rights to a system which captures 100% of the CO2 generated by internal combustion engines.
ESG Clean Energy
If the system lives up to expectations, then this potentially groundbreaking technology could place CEI at the top of the carbon capture game. While other systems may reduce a part of the CO2 generated, CEI’s intellectual property could shape the industry as a whole.
According to ESG, the Clean Energy System generates clean electricity directly from internal combustion engines. This process uses “waste heat to capture 100% of the carbon dioxide emitted from car engines without loss of efficiency”. This is definitely an incredible asset for CEI and its shareholders will likely see returns on their investment as the company utilizes its intellectual property in new ways. A lucrative byproduct of this system is the distilled or deionized water, ammonia, ethanol, and methanol which is created as a result. These are all valuable commodities which can be sold for additional profits.
CEI’s technology is especially appealing because it can be applied to a range of industries such as plastics recycling, nitrogen removal, microgrids, data centers, and crypto mining operations. However new applications for the system are sure to emerge which could present additional revenue streams for CEI.
It appears that the system will allow operations to run conventional gasoline or natural gas engines while reducing the operation’s carbon footprint to zero percent. Not only is this good for the environment, but given increasing regulatory pressure many companies could benefit from the services CEI now offers.
CEI is well aware of this edge as its CEO James Doris shared, “this transaction positions us as an industry leader in terms of being able to assist with the power generation needs of commercial and industrial organizations while at the same time helping them reduce their carbon footprint to satisfy regulatory requirements”
Momentum
However, momentum has also been a major factor of CEI stock’s success. The FinTwit and WallStreetBets community took CEI to the next level but Atlas trading group was particularly influential in CEI stock’s runup. Together, this combined momentum was enough to push CEI stock over the top. But, given CEI’s incredible 822% increase over the month of September, CEI has now become one of the most heavily shorted stocks on the market. In just two weeks, raw short interest in CEI stock jumped by a whopping 298% – from 6 million shares at the end of August to 24.4 million by mid-September.
Fraudulent Draft Prospectus
Whether this creates a short squeeze remains to be seen. But shorts are under significant pressure because CEI stock momentum did not die down as early as expected. In an undoubtedly illegal ploy- a fraudulent ‘draft prospectus’ from CEI was released and shared widely across social media. Discussing an offering of up to $150 million worth of shares at $1.80 a share, the fake press release triggered a massive selling frenzy among investors on September 29th. The perpetrators even took it a step further by creating fake FinTwit influencer accounts telling followers they were dumping their shares.
CEI has already announced that this offering is fake and news of the deception is being shared between investors. This attempt to flush the stock was designed for the benefit of major shorts who appear to be becoming desperate.
*Updated March 7th, 2022
$25 Million Loan
CEI announced an agreement to cut down 46% of its outstanding pref. stock with a loan of $25 million from an institutional investors. The loan will reach its maturity in 2027 and is convertible into common shares at $1.50 per share. At the same time, CEI closed a deal with an institutional investor for 10,544 shares of newly designated convertible preferred stock at a purchase price of $100 million.
The sum will be paid with $5 million in cash and four Promissory Notes for $23.75 million payable on March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022. This loan will provide some much needed liquidity and CEI’s CEO – James Doris – shared that the company “can confidently pursue new acquisitions and other important value-added initiatives throughout 2022,” with this funding. He added that CEI has the “option of redeeming all or a portion of the shares and not accept the funds if we do not believe it is in the best interest of the company to do so at the particular time.”
Lawsuits
Unfortunately, CEI faced other difficulties including a number of class action lawsuits from law firms alleging that CEI made misleading statements regarding its connection with Viking Energy Group, Inc. and the financial strain that investing in it would put on the company’s financial stability. Because CEI has routinely failed to update its filings, miscalculations could have been made regarding the company’s SS and financial state as well.
Recently, CEI received a letter from the NYSE detailing its incompliance with the exchange’s listing standards after the company requested an extension to the deadline for filing its outstanding financial reports. It appears, CEI is missing several quarterly reports for 2021 as well as an annual report for 2020. While this notification bears no immediate impact, CEI has until April 1st to cure the delinquency and can request a maximum extension up to May 20th.
VKIN Stock
However, in the heat of rising oil prices and increasing energy demand, it looks like CEI could be on a rebound. After its subsidiary – Viking Energy Group Inc. – acquired a 51% interest in two entities which have intellectual property rights to fully developed, patent pending electric transmission and distribution open conductor detection systems the stock began to see more interest. But by February 23rd, CEI stock increased 83% due to the increasing popularity of energy plays.
*Updated April 18th, 2022
Ban on Russian Oil
With EU officials discussing a potential ban on Russian oil, oil prices surged on this news reaching nearly $110 per barrel which led oil stocks to soar – with CEI stock increasing 57% as a result. Having previously banned Russian coal – with a 4 month transition period following the decision – the EU could follow a similar pattern by banning Russian oil while looking for alternative suppliers. Negotiations are expected to occur after the final round of the French elections on April 24th which leaves room for oil and energy stocks to run on speculation in anticipation.
Preferred Share Redemption
On top of this, CEI made headlines after redeeming 2,636 series G preferred shares issued as part of a $100 million financing commitment from an institutional investor. In this way, CEI was able to cancel a $23.7 million promissory note associated with these shares. At the same time, CEI reduced its series C preferred shares by 59% since last December through redemptions and conversions. Although CEI needs these funds to finance its operations, repaying its debt could be a strategic long-term move for the company.
Filing Financials
However, many investors have been anticipating CEI’s annual report and the company’s failure to file its financials with the SEC during the required period was a disappointment for its shareholders. To become compliant with the SEC and NYSE, CEI requested more time to file these missing reports and will have until May 20th to comply.
However, CEI’s CEO assured investors that the company will release its 2021 report in addition to the missing filings by April 22nd. With anticipation brewing for this annual report, many investors are bullish CEI stock could run if it delivers a solid report to investors.
Institutional Investment
Another promising catalyst could be Susquehanna International Group‘s investment in 674 thousand shares as well as Cutler Group‘s purchase of 317 thousand shares. While these institutions are hedging their positions, investors are bullish that this institutional buying and bullish market for energy plays as well as CEI’s anticipated financial reports, could push CEI higher. The momentum and investor interest behind CEI has put it at the top of Fintel’s Gamma Squeeze leaderboard – a sign that there’s more to come for CEI stock.
*Updated December 20th, 2022
Reverse Split
With CEI stock constantly dropping to new all-time lows, the company received a letter from NYSE American since the stock has been trading below $.20 for a period of more than 30 days. As a result, NYSE American determined that CEI has until May 7, 2023 to regain compliance with the listing requirements. Looking to regain compliance, CEI’s board approved a 1-for-50 reverse split accompanied by a reduction in authorized shares following its annual shareholders’ meeting. While the company intended to effect this reverse split on December 30th, CEI announced an earlier date of December 21 to effect the reverse split.
Through this reverse split, CEI’s AS will be reduced from 1 billion to 20 million and its OS will be reduced from 814.4 million to 16.3 million. Considering that reverse split plays have witnessing strong momentum recently, CEI soared more than 130% upon announcing the effective date of the reverse split. Given that CEI would have a small float upon the reverse split, many investors are bullish CEI could further surge upon effecting the reverse split. In light of this, CEI stock could be one to watch closely this week as it could be set for a strong run.
CEI Stock Financials
Annual Report
Looking to regain compliance with the NYSE, CEI began releasing its late financials with an aim to release all missing filings by May 20th. The company succeeded in its mission which means that more institutions can start investing in the company and with greater transparency from the company, CEI could attract more shareholders and investments from other parties.
The company mentioned in its annual report ending December 2021, that according to a redemption agreement between CEI and the prior owners of Lineal, it had entered into a new unsecured promissory note for the amount of $1,539,719 with Lineal. Following other transactions between the two parties, Lineal notified CEI that due to the impact of COVID-19 on its operations it currently has insufficient liquidity to make scheduled interest payments due under the notes. On this note, CEI shared that “Lineal owes us a substantial amount of money which may not be timely repaid, if at all.”
CEI also noted as a risk factor that it currently has outstanding indebtedness and it may incur additional indebtedness which could reduce its financial flexibility, increase interest expense and adversely impact its operations in the future.
Regarding its oil and gas reserves, the company shared that as of the end of 2020, the company had working interests which were producing an average of approximately 43.7 net barrels of oil equivalent per day from 18 active well bores. This means that its production sales totaled 7,994 Barrels of Oil Equivalent for this nine month period. By the end of 2021, CEI’s total estimated proved producing reserves were approximately 73,800 Barrels of Oil Equivalent, of which 48,400 Bbls were crude oil and natural gas liquids reserves. Meanwhile, 152,400 Mcf were natural gas reserves.
In this way, the company produced 4,242 barrels of oil, 13 thousand Mcf of natural gas, and 131 thousand gallons of natural gas liquids.
With $5.8 million in cash – a dramatic increase from 2020 – CEI’s current assets amount to $5.9 million. It is also due $4.1 million from Viking Energy which brings its total assets to $46 million – 175% increase from the year before.
However, its total current liabilities amount to $96 million while its total liabilities are $118 million. It reported only $401 thousand in sales of oil and gas which is a 236% increase from the year before. Total operating expenses have remained roughly the same at $5.8 million contributing to its net loss of $169 million – a notable increase from its net loss of only $52 million in 2020.
Now that CEI has become compliant with the SEC, its merger with Viking Energy which CEI is already majority shareholder of will likely move ahead and this could boost the company’s revenues. The company has also regained compliance with the NYSE listing standards.
While these financials may be underwhelming for some investors, it marks an important step forward for the company which can now move forward with its plans and potentially attract more institutional investors. Already the company has seen a ramp up in its institutional ownership and the transparency these filings bring could lead to a further increase. As is 27,627,911 shares are held by institutions.
Q3 Financials
Looking into CEI’s Q3 report, the company appears to be performing better than last year as it reported revenues of $158.5 thousand in Q3 and $466.5 thousand in the 9 month period. These revenues represent a significant YOY increase where the company reported $103.1 thousand and $266 thousand respectively. Moreover, operating costs increased to $1.3 million compared to $1 million last year. Meanwhile, CEI reported a net loss of $23.2 million compared to $264.5 million mainly due to a decline in loss on derivative liability from $256.8 million to only $14.2 million.
As for its balance sheet, CEI’s assets declined from $46.4 million at the beginning of the year to $37.5 million – with cash also decreasing to $2.4 million compared to $5.8 million. However, CEI has $6.8 million due from its subsidiary VKIN which would represent a boost to the company’s cash balance. In terms of liabilities, CEI reported a substantial decline to $70.5 million compared to $118.2 million. This decline could be attributed to the company reducing its current liabilities from $96.6 million to $37.4 million.
On the other hand, CEI’s long-term debt increased from $21.5 million to $33.1 million. With the company showing financial growth compared to the previous year, CEI stock could be poised for significant growth especially as investors anticipate the closing of its merger with VKIN.
Media Sentiment
@stockplaymaker1 is excited over CEI stock’s recent run.
@Retro1upArmy believes CEI stock could have a similar run to COSM stock.
Technical Analysis
CEI stock is currently trading at $.1072 and has supports near .1048, .0822, and .0597. The stock also shows resistances near .1211 and .1538. Following the stock’s parabolic run on the reverse split date announcement, CEI cooled off as profit taking took place. In this way, the stock retested its support multiple times. As this support appears to be a major support, investors could find entries on retests of this support. However, if the stock breaks through its support, CEI could drop significantly to fill the gap near $.065. In that case, it could be a smart investment to accumulate shares at this low PPS as CEI stock could witness a strong run upon its reverse split.
In light of the CEI’s recent run, accumulation plunged which could be attributed to investors taking profits. Meanwhile, the MACD remains bullish to the upside. The RSI has cooled down significantly from 81 to 62 which leaves enough room for the stock to run if it continues to witness high trading volume. Considering the bullish sentiment surrounding the company’s upcoming reverse split, CEI stock could be poised to soar this week following the reverse split.
CEI Stock Forecast
CEI represents an intriguing investment given the increasing momentum it is currently witnessing. Since reverse split plays are considered to be some of the hottest plays lately, CEI has the potential to soar this week following its reverse split. With the company’s reverse split approaching, CEI stock could be one to accumulate in anticipation. In addition to the reverse split, many investors are watching CEI stock in anticipation of closing the merger with VKIN. As this merger could add significant value to the company, CEI stock could be well-positioned to appreciate in value once the merger is finalized. In light of these catalysts, it could be a profitable investment to accumulate CEI stock at its current low PPS.
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