May 12, 2022 - George Lucas
(AMEX:CEI) Camber Energy, Inc. is currently facing a potential delisting. CEI faces several hurdles to overcome the potential delisting. Here is a quick summary of why companies get delisted. Let me be clear, I am trying to present an unbiased view of what might happen with CEI by reviewing the facts and circumstances they are currently facing. I think it is important for investors to know the risk and reward of any investment.
Stock Delisting Overview
A listed company's shares get delisted from exchange for various reasons. These include insufficient market capitalization, a company filing bankruptcy, and failure to comply with exchange regulatory requirements. If your stock falls below $0.20 a share or you don't file your corporate financial documents timely, your stock could be delisted from AMEX.
After AMEX contacts you about delisting, you have 45 days to file a plan to show how you will correct the problem. If AMEX doesn't accept your plan, the exchange will proceed with the delisting process.
There are two main hurdles CEI faces
1. Stock Price - Currently CEI has been trading around $0.61 per share but was trading above $1 only a few months ago.
2. Filing Requirements - CEI needs to submit the 10k (Annual Report) and 10Q to be compliant with the exchange's requirements.
CEI Stock Background
Camber Energy, Inc., an independent oil and natural gas company engages in the acquisition, development, and sale of crude oil, natural gas, and natural gas liquids (NGL) in the Cline shale and upper Wolfberry shale in Glasscock County, Texas.
Camber Energy, Inc. has a little over a week to submit the 10k filings, or they risk being delisted. CEI has missed multiple filing deadlines and this is the most recent notice from an 8-k filing:
The Company intended to remedy the Filing Delinquency on or before April 1, 2022, however, due to certain circumstances requested the Exchange grant the Company an extension of time by which to file the Delayed Reports. The Exchange accepted the Company's request and has allowed the Company until May 20, 2022 to file the Delayed Reports. The Filing Delinquency will be cured via the filing of the Delayed Reports and the filing of the Company's annual report on Form 10-K for the period ended December 31, 2021 (collectively, the “Required Reports”).
So the filing deadline is May 20, 2022. If they miss this deadline, the 8-k filing goes on to state:
If the Company is unable to cure the delinquency by May 20, 2022, Exchange staff will initiate delisting proceedings as appropriate. The Company may appeal a staff delisting determination in accordance with Section 1010 and Part 12 of the Company Guide.
In this scenario, by meeting the filing deadline they would meet the exchange requirements of having all current filings up to date. I would assume the stock price would jump on this news but we would need to see what the 10k says about their current financial standing as a company.
Let's assume the worst-case scenario and CEI doesn't file the 10k before May 20, 2022 then the delisting process would begin. The CEI management team would have 45 days to show the exchange that they have a plan to remedy the situation. This has already been done in the past so I'm not sure if CEI would get another extension from the exchange.
I can't predict the future (otherwise trading and investing would be easy) but based on the most recent history with CEI I think they will be able to avoid being delisted. The one thing that concerns me is the length of time it is taking to complete the filings. I understand that the financials were a mess from the previous management team, but you can only have so many extensions from the exchange before getting delisted. I hope they can file the missing reports and maintain the stock price above $0.20 per share. We will know more on May 20, 2022