SEC now delays Next Bridge’s public offering of 40m shares

February 22, 2025

Next Bridge Hydrocarbons, Inc., an oil and natural gas exploration company, has announced that it has received additional comments from the Securities and Exchange Commission (SEC) concerning its Annual Report on Form 10-K for the fiscal year 2023.

This development poses further delays for the company’s planned public offering of 40 million shares of common stock, according to the latest press release.

Regulatory Scrutiny Intensifies

The SEC’s recent comments come after a series of communications that have already extended over several months.

Initially, in September 2024, Next Bridge believed it had adequately addressed previous SEC inquiries related to its Registration Statement.

However, the SEC’s latest feedback on the 2023 10-K has halted the company’s ability to file a critical pricing amendment to its Registration Statement, originally submitted on January 23, 2023.

Next Bridge has expressed disappointment, noting that the SEC’s position regarding the impairment of its Orogrande property has been particularly contentious.

The SEC contends that the company should not have restated its 2022 financial statements to reflect a zero valuation for this asset.

Instead, the SEC argues that the impairment should be recognized as of October 2024, causing the company to face potential restatements that could take months and incur hundreds of thousands of dollars in additional costs.

Financial Implications

The company has made it clear that these regulatory hurdles are not only costly but also detrimental to its operational plans.

If required to restate its 2022 financials, Next Bridge would need to amend two Annual Reports on Form 10-K and six Quarterly Reports on Form 10-Q from the past two years.

This could severely impact its ability to raise capital and execute planned transactions, including the Louisiana Heritage Play project and other negotiations that are currently on hold.

Next Bridge emphasizes that it is not publicly traded on any exchange, arguing that the existing, restated 10-K for 2022 could not mislead potential investors.

The company proposed a more efficient solution—simply footnoting the impairment in existing reports—but this suggestion was rejected by the SEC.

Corporate History Under Review

Adding to the complexity of the situation, the SEC has requested that Next Bridge alter its accounting practices concerning its corporate history.

The SEC views the period between the merger of Torchlight Energy Corporation and Meta Materials, Inc. as one where Meta acted merely as a custodian of assets.

Next Bridge strongly disputes this characterization, asserting that the entities differ significantly in management and shareholder structures.

The company is currently exploring its options to address this impasse, refusing to accept what it believes to be a misleading portrayal of its corporate history.

Moving Forward

Next Bridge’s Chairman and CEO, Greg McCabe, stated, “We will continue to advance our business strategies on the oil and gas front while investigating the magnitude of our demonstrable shareholder imbalance.”

He acknowledged the ongoing challenges but reaffirmed the company’s commitment to resolving these issues.

The company plans to maintain transparency regarding its communications with the SEC, making all relevant documents available on its website in the near future.

As Next Bridge navigates these regulatory challenges, it aims to clarify the situation for its shareholders and stakeholders.

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