Next Bridge Hydrocarbons Restates Q1, Eliminates $618K Gain

TL;DR

**Next Bridge Hydrocarbons' restatement wipes out a key gain, confirming deep financial woes and making it a high-risk bet for traders.**

AI Summary

Next Bridge Hydrocarbons, Inc. filed a 10-Q/A to amend and restate its financial statements for the three months ended March 31, 2024, and comparative periods. The restatement primarily corrected errors related to impairment expense and the accounting for the subsequent sale of mineral properties acquired in March 2024. Initially, a gain on sale of $618,502 was reported, based on an independent valuation of common stock issued for the Wildcat acquisition. However, after reconsideration, the cash received from the subsequent sales was used as the basis for initial valuation, reducing the gain on sale to $-0-. For the three months ended March 31, 2024, the company reported a net loss of $775,003, a significant improvement from the $2,478,426 net loss in the prior year period. Oil and natural gas sales decreased to $3,567 from $10,924 year-over-year. General and administrative expenses also saw a substantial reduction, falling to $751,502 from $2,472,749. The company's total current liabilities stood at $50,413,038 as of March 31, 2024, contributing to a working capital deficit of $47,709,211, which raises substantial doubt about its ability to continue as a going concern. Next Bridge Hydrocarbons, Inc. is actively seeking debt or equity funding, loans, or joint venture transactions to address its financial challenges.

Why It Matters

This restatement is critical for investors as it corrects a material accounting error that previously overstated a gain on property sales by $618,502, impacting the company's reported financial health. The elimination of this gain, coupled with a working capital deficit of $47,709,211, underscores significant financial instability and raises substantial doubt about Next Bridge Hydrocarbons' ability to continue as a going concern. For employees and customers, this signals potential operational challenges and uncertainty. In a competitive energy market, a company with such financial vulnerabilities may struggle to secure necessary capital for its Orogrande Project and other interests, potentially falling behind more stable competitors.

Risk Assessment

Risk Level: high — The company reported a net loss of $775,003 for the three months ended March 31, 2024, and a working capital deficit of $47,709,211 as of the same date. These conditions, explicitly stated in Note 2, 'raise substantial doubt about the Company’s ability to continue as a going concern,' indicating a severe financial risk.

Analyst Insight

Investors should exercise extreme caution and consider divesting, given the substantial doubt about Next Bridge Hydrocarbons' ability to continue as a going concern and the material accounting restatement. The company's reliance on future financing or joint ventures, without clear assurances, presents an unacceptably high risk profile.

Financial Highlights

debt To Equity

N/A

revenue

$3,567

operating Margin

N/A

total Assets

$57,575,243

total Debt

$50,667,592

net Income

$-775,003

eps

$-0.00

gross Margin

N/A

cash Position

$2,174,661

revenue Growth

-67.3%

Revenue Breakdown

Key Numbers

• $775,003 — Net Loss (for the three months ended March 31, 2024, an improvement from $2,478,426 in 2023)
• $47,709,211 — Working Capital Deficit (as of March 31, 2024, indicating significant liquidity issues)
• $618,502 — Gain on Sale of Properties (initially reported, then reduced to $-0- due to accounting correction)
• $3,567 — Oil and Natural Gas Sales (for the three months ended March 31, 2024, a decrease from $10,924 in 2023)
• $751,502 — General and Administrative Expenses (for the three months ended March 31, 2024, a decrease from $2,472,749 in 2023)
• 264,387,563 — Common Shares Outstanding (as of October 9, 2025)
• $50,413,038 — Total Current Liabilities (as of March 31, 2024)
• $2,174,661 — Cash (as of March 31, 2024)
• $1,243,565 — Common Stock Issued for Lease Interest (non-cash investing and financing activity for the three months ended March 31, 2024)
• $42,499,082 — Note Payable - Related Party (as of March 31, 2024)

Key Players & Entities

• Next Bridge Hydrocarbons, Inc. (company) — registrant of the 10-Q/A filing
• U.S. Securities and Exchange Commission (regulator) — regulatory body for the filing
• $618,502 (dollar_amount) — gain on sale of properties initially reported and subsequently reduced to $-0-
• $775,003 (dollar_amount) — net loss for the three months ended March 31, 2024
• $2,478,426 (dollar_amount) — net loss for the three months ended March 31, 2023
• $47,709,211 (dollar_amount) — working capital deficit as of March 31, 2024
• Wildcat acquisition (company) — acquisition for which stock was issued and subsequently sold
• Orogrande Basin (location) — primary focus of the company's oil and natural gas development
• March 31, 2024 (date) — end of the reporting period for the restated financial statements
• July 31, 2024 (date) — original filing date of the Form 10-Q

FAQ

Risk Factors

• Substantial Going Concern Doubt [high — financial]: As of March 31, 2024, the company has a working capital deficit of $47,709,211 and total current liabilities of $50,413,038. This severe liquidity constraint raises substantial doubt about its ability to continue as a going concern.
• Dependence on External Financing [high — financial]: The company is actively seeking debt or equity funding, loans, or joint venture transactions to address its financial challenges. Failure to secure adequate funding could impede operations and future development.
• Restatement of Financial Statements [medium — operational]: The company restated its financial statements for the three months ended March 31, 2024, due to errors in impairment expense and accounting for mineral property sales. This indicates potential weaknesses in internal controls and accounting processes.
• Volatile Commodity Prices [medium — market]: As an oil and natural gas producer, the company's revenue and profitability are highly sensitive to fluctuations in global oil and gas prices. The decrease in sales from $10,924 to $3,567 year-over-year highlights this sensitivity.
• Significant Related Party Debt [medium — financial]: The company has a substantial 'Note payable - related party' of $42,499,082 as of March 31, 2024. The terms and conditions of this debt could pose risks if not managed appropriately.

Industry Context

The oil and natural gas industry is characterized by high capital intensity, cyclical commodity prices, and significant regulatory oversight. Companies face ongoing challenges related to exploration, production, environmental compliance, and market volatility. Next Bridge Hydrocarbons operates within this dynamic environment, where success depends on efficient resource extraction, cost management, and strategic financing.

Regulatory Implications

As a publicly traded entity, Next Bridge Hydrocarbons is subject to SEC regulations and accounting standards. The restatement of financial statements highlights the importance of accurate and timely reporting. Any future non-compliance or accounting misstatements could lead to SEC scrutiny, fines, or delisting.

What Investors Should Do

1. Monitor the company's progress in securing debt or equity financing, as this is critical for its survival.
2. Analyze the terms and conditions of the significant related party debt to understand potential risks and obligations.
3. Evaluate the company's ability to improve operational efficiency and reduce costs to mitigate the impact of volatile commodity prices.
4. Assess the credibility of management's strategy to address the going concern issue, given the substantial working capital deficit.

Key Dates

• 2024-03-31: Quarterly Financial Statements (Restated) — The company filed an amended 10-Q, restating financial results for the period ended March 31, 2024, primarily due to accounting errors related to impairment and property sales.
• 2024-03-31: Working Capital Deficit — As of this date, the company reported a working capital deficit of $47,709,211, highlighting severe liquidity issues and raising going concern doubts.
• 2024-03-31: Significant Reduction in G&A Expenses — General and administrative expenses decreased to $751,502 from $2,472,749 in the prior year, indicating cost-cutting measures.
• 2024-03-31: Oil and Natural Gas Sales Decline — Sales dropped to $3,567 from $10,924 year-over-year, reflecting a challenging operating environment or reduced production.

Glossary

10-Q/A

An amended quarterly report filed with the SEC, used to correct or supplement information previously filed in a 10-Q. (This filing indicates the company is correcting prior financial reporting errors.)

Impairment Expense

A reduction in the carrying value of an asset when its market value or recoverable amount falls below its book value. (Errors in accounting for impairment expense were a primary reason for the restatement.)

Working Capital Deficit

Occurs when current liabilities exceed current assets, indicating a company may struggle to meet its short-term obligations. (The company's significant deficit of $47,709,211 raises substantial doubt about its ability to continue as a going concern.)

Going Concern

An accounting assumption that a business will continue to operate for the foreseeable future. (The company's financial condition raises substantial doubt about its ability to continue as a going concern.)

Common Stock Issued for Lease Interest

A non-cash transaction where the company issues its own stock in exchange for rights to oil and gas leases. (This was a non-cash investing and financing activity noted in the period, valued at $1,243,565.)

Note Payable - Related Party

A debt obligation owed to an entity that has a close relationship with the reporting company, such as a parent company, subsidiary, or key management personnel. (The company has a significant balance of $42,499,082 in related party notes payable.)

Year-Over-Year Comparison

Compared to the prior year period, Next Bridge Hydrocarbons has seen a significant reduction in its net loss, from $2,478,426 to $775,003, largely driven by a substantial decrease in general and administrative expenses from $2,472,749 to $751,502. However, oil and natural gas sales have also declined sharply, from $10,924 to $3,567. The company's financial position remains precarious, with a substantial working capital deficit of $47,709,211, raising significant going concern doubts, a risk that appears to have intensified.

Key Financial Figures

• $0 — the registrants common stock, par value $0.0001, as of October 9, 2025 was 264,387
• $618,502 — ed in a gain on sale of those assets of $618,502. After subsequently reconsidering, the

Filing Documents

• nbh-10q.htm (10-Q/A) — 849KB
• nbh-ex31_1.htm (EX-31.1) — 18KB
• nbh-ex31_2.htm (EX-31.2) — 18KB
• nbh-ex32_1.htm (EX-32.1) — 9KB
• 0001199835-25-000340.txt ( ) — 4318KB
• nbh-20240331.xsd (EX-101.SCH) — 31KB
• nbh-20240331_cal.xml (EX-101.CAL) — 42KB
• nbh-20240331_def.xml (EX-101.DEF) — 101KB
• nbh-20240331_lab.xml (EX-101.LAB) — 187KB
• nbh-20240331_pre.xml (EX-101.PRE) — 195KB
• nbh-10q_htm.xml (XML) — 711KB

Financial Information

PART I. Financial Information 8

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited): 8 Condensed Consolidated Balance Sheets as of March 31, 2024 (restated), and December 31, 2023 8 Condensed Consolidated Statements of Operations – for the three months ended March 31, 2024 and 2023, as restated 9 Condensed Consolidated Statements of Stockholders Deficit – for the three months ended March 31, 2024 and 2023, as restated 10 Condensed Consolidated Statements of Cash Flows – for the three months ended March 31, 2024 and 2023, as restated 11 Notes to Condensed Consolidated Financial Statements, as restated 12

Managements Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations 30

Quantitative and Qualitative Disclosure About Market Risk

Item 3. Quantitative and Qualitative Disclosure About Market Risk 36

Controls and Procedures

Item 4. Controls and Procedures 36

Other Information

PART II. Other Information 37

Legal Proceedings

Item 1. Legal Proceedings 37

Risk Factors

Item 1A. Risk Factors 37

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 37

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 37

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 37

Other Information

Item 5. Other Information 37

Exhibits

Item 6. Exhibits 38 3 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking can, could, estimate, expect, forecast, goal, intend, may, pending, plan, potential, projected, will, and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts included in this report are forward-looking statements. Forward-looking statements appear throughout this report, and include statements about such matters as: amount and timing of future production of oil and natural gas; amount, nature and timing of capital expenditures; the number of anticipated wells to be drilled after the date hereof; the availability of exploration and development opportunities; our financial or operating results; our cash flow and anticipated liquidity; operating costs including lease operating expenses, administrative costs and other expenses; finding and development costs; our business strategy; and other plans and objectives for future operations. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason. They can be affected by a number of factors, including, among others: the risks described in Risk Factors in Part I, Item 1A of our annual report on Form 10-K/A for the year ended December 31, 2023; the volatility of prices and supply of, and demand for, oil and natural gas; the timing and success of our drilling activities; the numerous uncertainties inherent in estimating quantities of oil and natural gas reserves and actual future production rates and associated costs;

FINANCIAL STATEMENTS (UNAUDITED)

FINANCIAL STATEMENTS (UNAUDITED) NEXT BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Restated March 31 December 31 2024 2023 ASSETS Current assets: Cash $ 2,174,661 $ 1,668,847 Accounts receivable 243,113 207,470 Production receivable 1,382 1,412 Prepayments - development costs 228,367 131,340 Prepaid expenses 56,304 76,741 Total current assets 2,703,827 2,085,810 Oil and natural gas properties 54,766,237 53,672,579 Other assets 105,179 105,179 TOTAL ASSETS $ 57,575,243 $ 55,863,568 LIABILITIES AND STOCKHOLDERS DEFICIT Current liabilities: Accounts payable $ 1,341,084 $ 3,777,685 Prepayments, working interest owners - 311,281 Note payable - related party 42,499,082 41,221,028 Note payable 2,000,000 - Accrued interest payable - related party 4,552,205 3,870,175 Accrued interest payable 20,667 - Total current liabilities 50,413,038 49,180,169 Asset retirement obligations 254,554 248,651 Total liabilities 50,667,592 49,428,820 Commitments and contingencies Stockholders deficit: Preferred stock, par value $ 0.0001 , 50,000,000 shares authorized; - 0 - issued and outstanding March 31, 2024 and December 31, 2023 - - Common stock, par value $ 0.0001 ; 500,000,000 shares authorized; 251,830,516 issued and outstanding at March 31, 2024 248,830,516 issued and outstanding at December 31, 2023; 25,183 24,883 Additional paid-in capital 107,590,866 106,343,260 Accumulated deficit ( 100,708,398 ) ( 99,933,395 ) Total stockholders deficit 6,907,651 6,434,748 TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT $ 57,575,243 $ 55,863,568 The accompanying notes are an integral part of these condensed consolidated financial statements. 8 NEXT BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Restated Three Three Months Ended Months Ended March 31, 2024 March

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