NEXT-ChemX Restates Q3, Faces Mounting Deficit Amid Auditor Fallout

Ticker: CHMX · Form: 10-Q/A · Filed: Nov 18, 2025 · CIK: 1657045

Sentiment: bearish

Topics: Restatement, Auditor Issues, Going Concern, Intangible Assets, Accumulated Deficit, Preferred Stock, Lithium Extraction

Related Tickers: CHMX

TL;DR

**CHMX is a mess; the restatement reveals deeper financial woes and a desperate need for cash, making it a high-risk bet.**

AI Summary

NEXT-ChemX Corporation (CHMX) filed a 10-Q/A for the quarter ended September 30, 2024, restating previous financial statements due to issues with its former auditor, BF Borgers CPA PC, and subsequent review by new auditor Fruci & Associates II PLLC. The restatement included significant adjustments: the company's technology, previously an indefinite intangible asset, was reevaluated to have a useful life tied to its patent protection, resulting in a $570,484 adjustment to asset value and a $262,119 amortization charge as of September 30, 2024. Retained earnings were readjusted to include $308,365. The issuance of 20,000 Class A and 20,000 Class F Preferred Stock shares was restated as 'to be issued' because payment was never received, despite being subscribed. The company reported a net loss of $1,320,269 for the nine months ended September 30, 2024, compared to a net loss of $1,778,554 for the same period in 2023. Total liabilities increased significantly to $5,690,714 as of September 30, 2024, from $3,932,425 at December 31, 2023, driven by $1,220,004 in non-current notes payable. The company's accumulated deficit grew to $7,832,379 as of September 30, 2024, and it continues to operate with a working capital deficit, relying on existing shareholders for funding.

Why It Matters

This restatement highlights significant financial reporting weaknesses and operational challenges for NEXT-ChemX, stemming from auditor issues and internal accounting errors. For investors, the reclassification of preferred stock and the amortization of intangible assets paint a clearer, albeit less favorable, picture of the company's financial health, revealing a deeper accumulated deficit of $7,832,379. The reliance on existing shareholders for funding and the delay in pilot plant completion raise concerns about future revenue generation and competitive positioning in the iTDE Technology market. Employees and customers might face uncertainty regarding the company's long-term viability and ability to execute its commercialization strategy, especially given the lack of funding for intellectual property protection.

Risk Assessment

Risk Level: high — The company has an accumulated deficit of $7,832,379 as of September 30, 2024, and operates with a working capital deficit, indicating severe liquidity issues. The significant increase in total liabilities to $5,690,714 from $3,932,425 within nine months, coupled with a reliance on existing shareholders for funding and delays in its pilot plant completion, points to substantial financial instability and a high going concern risk.

Analyst Insight

Investors should exercise extreme caution and consider avoiding CHMX given the severe financial distress, ongoing losses, and significant restatement issues. The company's inability to secure external funding and its reliance on existing shareholders suggest a high probability of further dilution or potential bankruptcy if commercialization efforts for its iTDE Technology do not materialize rapidly.

Financial Highlights

total Assets
$3,282,935
total Debt
$5,690,714
net Income
-$1,320,269
cash Position
$35,386

Key Numbers

Key Players & Entities

FAQ

Why did NEXT-ChemX Corporation file a 10-Q/A?

NEXT-ChemX Corporation filed a 10-Q/A because its long-standing auditor, BF Borgers CPA PC, was denied the privilege of appearing before the SEC. This required the company to have its new auditors, Fruci & Associates II PLLC, review two years of quarterly financial statements and reaudit two years of annual financial statements, leading to necessary restatements.

What were the main financial adjustments in NEXT-ChemX's restated 10-Q/A?

The main adjustments included reevaluating the company's technology as an intangible asset with a finite useful life, resulting in a $570,484 adjustment and a $262,119 amortization charge. Additionally, $308,365 was added to retained earnings, and the issuance of 20,000 Class A and 20,000 Class F Preferred Stock shares was restated as 'to be issued' because payment was never received.

What is NEXT-ChemX Corporation's accumulated deficit as of September 30, 2024?

As of September 30, 2024, NEXT-ChemX Corporation's accumulated deficit was $7,832,379, an increase from $6,512,110 at December 31, 2023.

What is the status of NEXT-ChemX's iTDE Technology pilot plant?

NEXT-ChemX is managing the construction of two pilot plant systems in India. The first line of the smaller flexible system is expected to be completed during the fourth quarter of 2025 and ready for sample testing, with actual brine samples from Bolivia expected in Q1 2026.

How has NEXT-ChemX's liquidity changed?

NEXT-ChemX's total liabilities increased significantly to $5,690,714 as of September 30, 2024, from $3,932,425 at December 31, 2023. The company continues to operate with a working capital deficit and has relied extensively on existing shareholders to fund operating expenses.

What are the risks associated with NEXT-ChemX's financial condition?

NEXT-ChemX faces significant going concern risks due to incurred losses since inception, an accumulated deficit of $7,832,379, and a working capital deficit. The company's difficulty in raising capital and reliance on existing shareholders for funding, coupled with anticipated further losses before commercialization, highlight substantial financial instability.

What is the impact of the preferred stock restatement on NEXT-ChemX?

The restatement of 20,000 Class A and 20,000 Class F Preferred Stock shares as 'to be issued' because payment was never received indicates a failure to secure anticipated capital, impacting the company's equity structure and highlighting challenges in fundraising.

What is NEXT-ChemX's strategy for intellectual property protection?

Due to a lack of funding, NEXT-ChemX Corporation has scaled back its intellectual property protection strategy in the near term, which could expose its iTDE Technology to competitive risks.

Who is the new auditor for NEXT-ChemX Corporation?

The new registered public accounting firm appointed by NEXT-ChemX Corporation is Fruci & Associates II PLLC, Certified Public Accountants, based in Spokane, Washington.

What is the primary business focus of NEXT-ChemX Corporation?

The primary business focus of NEXT-ChemX Corporation is the commercialization of its novel innovative Ion-Targeting Continuous-Flow Direct Extraction Technology (iTDE Technology) for extracting lithium from natural brines and geothermal sources, as well as developing systems for mining other metals and water treatment.

Risk Factors

Industry Context

The chemical industry is characterized by intense competition, significant R&D investment, and stringent regulatory oversight. Companies often focus on specialized niches, innovation in materials science, and sustainable practices to gain a competitive edge. NEXT-ChemX appears to be operating in a segment requiring technological innovation, as evidenced by its focus on intangible assets like technology and patents.

Regulatory Implications

The restatement of financial statements due to issues with a former auditor (BF Borgers CPA PC) raises concerns about internal controls and financial reporting accuracy. This could lead to increased scrutiny from the SEC and potential regulatory actions. The company's reliance on shareholder funding and its ongoing working capital deficit also present financial reporting risks.

What Investors Should Do

  1. Scrutinize the details of the restatement and the impact of the intangible asset revaluation on future earnings.
  2. Assess the company's ability to secure future funding, given its reliance on existing shareholders and current working capital deficit.
  3. Monitor the company's progress in addressing the issues that led to the restatement and the auditor change.
  4. Evaluate the long-term viability of the company's technology and its patent protection, given the reclassification of the intangible asset.

Key Dates

Glossary

10-Q/A
An amended quarterly report filed with the SEC, indicating that the original filing contained errors or omissions that needed correction. (This filing is an amendment to NEXT-ChemX's quarterly report, highlighting the need for significant corrections to its financial statements.)
Intangible asset
An asset that lacks physical substance but has value, such as patents, trademarks, or goodwill. (NEXT-ChemX's technology, initially treated as an indefinite intangible asset, was reclassified, impacting its valuation and amortization.)
Amortization
The systematic allocation of the cost of an intangible asset over its useful life. (A $262,119 amortization charge was recognized due to the reevaluation of the technology's useful life.)
Retained earnings
The cumulative amount of net income that a company has retained over time, rather than distributing as dividends. (Retained earnings were readjusted by $308,365 as part of the financial statement restatement.)
Accumulated deficit
The cumulative net losses of a company that have not been offset by net income. (NEXT-ChemX's accumulated deficit grew to $7,832,379, indicating a history of net losses.)
Working capital deficit
A situation where a company's current liabilities exceed its current assets, indicating potential short-term liquidity issues. (NEXT-ChemX continues to operate with a working capital deficit, relying on external funding.)
Preferred Stock
A class of stock that has priority over common stock in dividend payments and asset distribution in case of liquidation, but typically does not carry voting rights. (The company restated the issuance of preferred stock as 'to be issued' due to non-receipt of payment.)

Year-Over-Year Comparison

Compared to the prior period (likely the audited financials for the year ended December 31, 2023), NEXT-ChemX's total liabilities have significantly increased to $5,690,714, driven by new non-current notes payable of $1,220,004. The accumulated deficit has also grown substantially to $7,832,379. While cash has increased from $2,458 to $35,386, the company continues to face a working capital deficit and has undergone a significant financial statement restatement due to auditor issues, impacting asset valuations and profitability recognition.

Filing Stats: 4,561 words · 18 min read · ~15 pages · Grade level 18.2 · Accepted 2025-11-18 14:42:26

Key Financial Figures

Filing Documents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements F-2 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 3 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 6 Item 4.

Controls and Procedures

Controls and Procedures 6

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 7 Item 1A.

Risk Factors

Risk Factors 9 Item 2. Unregistered Sale of Equity Securities and Use of Proceeds 9 Item 3. Defaults Upon Senior Securities 9 Item 4. Mine Safety Disclosures 9 Item 5. Other Information 9 Item 6. Exhibits 9

Signatures

Signatures 10 Caution Regarding Forward-Looking Information This Quarterly Report on Form 10-Q/A, including, without limitation, statements containing the words "believes", "anticipates", "expects" and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; and other factors referenced in this and previous filings, including those previously filed for periods falling after the period reported herein. Given these uncertainties, readers of this Form 10-Q/A and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking 2 NEXT-CHEMX CORPORATION INTERIM

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS Table of Contents Page Condensed Balance Sheets as of September 30, 2024 (restated) and December 31, 2023 (audited) F-2 Condensed Statements of Operations for the three and nine months ended September 30, 2024 (restated) and 2023 (unaudited) F-3 Condensed Statements of Changes in Stockholders' Equity (Deficit) for the three, and nine months ended September 30, 2024 (restated) and 2023 (unaudited) F-4 Condensed Statements of Cash Flows for the nine months ended September 30, 2024 (restated) and 2023 (unaudited) F-5 Notes to Unaudited Condensed Financial Statements F-6 F-1 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS NEXT-ChemX Corporation Condensed Balance Sheets September 30, December 31, 2024 (restated) 2023 (audited) ASSETS Current Assets: Cash $ 35,386 $ 2,458 Financial Assets 68,229 64,944 Prepaid expense and other current assets 591,070 72,925 Total Current Assets 694,685 140,327 Property and equipment, net 8,619 12,621 Intangible asset, net 2,579,631 2,691,967 Total Non-current Assets 2,588,250 2,704,588 Total Assets $ 3,282,935 $ 2,844,915 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable and accrued liabilities $ 3,009,285 $ 2,443,207 Other Current Liabilities 511,980 511,980 Loan payable 845,000 945,000 Due to related party 104,445 32,238 Other Current Liabilities 104,445 32,238 Total Current Liabilities 4,470,710 3,932,425 Non-Current Liabilities: Notes payable 1,220,004 - Total Non-Current Liabilities 1,220,004 - Total Liabilities $ 5,690,714 $ 3,932,425 Commitments and Contingencies - - Stockholders' Equity (Deficit): Preferred stock, $ 0.001 par value, 5,000,000 shares authorized: 20,000 Series A Preferred Stock to be issued as of September 30, 2024 20 - Preferred stock, $0.001 par value, 5,000,000 shares authorized: 20,000 Series A Preferred Stock to be iss

Financial Statements

Financial Statements The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be viewed in conjunction with the audited

financial statements of the Company for the year ended December 31, 2023

financial statements of the Company for the year ended December 31, 2023. The

financial statements are presented in United States dollars

financial statements are presented in United States dollars. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. F-7 Evaluation of Long-Lived Intangible Assets The Company acquired its principal intellectual property asset in the second quarter of 2021. The value of the asset was initially derived from the underlying arms' length transaction in which the company owning the technology transferred the technology to the Company in exchange for a specific number of shares of Common Stock of the Company. The value of the shares was itself derived from the fact that such shares were bought and sold in an arms' length transaction that occurred simultaneously. The technology composed initially of patents and patent applications as well as the Company initially amortized certain knowhow. However, during fiscal year 2021, due to the nature of the technology behind the asset and its application across

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