Next Bridge Restates Q2, Erases $618K Gain Amid Going Concern Doubts

TL;DR

**Next Bridge's restatement confirms its dire financial state, with a massive working capital deficit and minimal revenue, making it a high-risk bet for any investor.**

AI Summary

Next Bridge Hydrocarbons, Inc. (NBH) filed a 10-Q/A on October 22, 2025, to amend and restate its financial statements for the six months ended June 30, 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 $618,504 was reported, which has now been reduced to $-0- after reconsidering the valuation method for stock issued in the Wildcat acquisition. For the six months ended June 30, 2024, NBH reported a net loss of $998,342, a significant improvement from the $5,531,037 net loss for the same period in 2023. Oil and natural gas sales decreased substantially to $5,206 in H1 2024 from $15,765 in H1 2023. General and administrative expenses also saw a sharp decline to $1,207,555 in H1 2024 from $5,519,158 in H1 2023. The company's cash position decreased from $1,668,847 at December 31, 2023, to $1,133,622 at June 30, 2024, and it continues to operate with a working capital deficit of $48,648,858 as of June 30, 2024, raising substantial doubt about its ability to continue as a going concern.

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 $618,504, painting a more accurate, albeit less favorable, financial picture. The persistent working capital deficit of $48,648,858 and the explicit 'going concern' warning signal significant financial instability, directly impacting investor confidence and the company's ability to fund future operations. For employees and customers, this raises questions about the long-term viability of Next Bridge Hydrocarbons in a competitive energy market, especially given its minimal oil and natural gas sales of $5,206 in H1 2024. The company's reliance on consultants and lack of full-time employees also highlights its precarious operational structure.

Risk Assessment

Risk Level: high — The company explicitly states a 'working capital deficit as of June 30, 2024, of $48,648,858' and that 'These conditions raise substantial doubt about the Company’s ability to continue as a going concern.' This, coupled with a net loss of $998,342 for the six months ended June 30, 2024, and negligible oil and natural gas sales of $5,206, indicates severe financial distress and high operational risk.

Analyst Insight

Investors should exercise extreme caution and consider divesting any holdings in Next Bridge Hydrocarbons. The explicit 'going concern' warning and significant working capital deficit suggest a high probability of further financial deterioration or potential bankruptcy. Avoid new investments until the company demonstrates a clear path to profitability and resolves its liquidity issues.

Financial Highlights

debt To Equity

7.47

revenue

$5,206

operating Margin

-253.57%

total Assets

$57,182,953

total Debt

$50,436,401

net Income

$-998,342

eps

N/A

gross Margin

N/A

cash Position

$1,133,622

revenue Growth

-66.9%

Revenue Breakdown

Key Numbers

• $998,342 — Net loss for six months ended June 30, 2024 (Improved from $5,531,037 net loss in H1 2023, but still a significant loss.)
• $5,531,037 — Net loss for six months ended June 30, 2023 (Previous net loss, indicating a reduction in losses year-over-year.)
• $48,648,858 — Working capital deficit as of June 30, 2024 (Raises substantial doubt about the company's ability to continue as a going concern.)
• $618,504 — Previously reported gain on sale of properties (Reduced to $-0- due to accounting correction.)
• $1,133,622 — Cash balance as of June 30, 2024 (Decreased from $1,668,847 at December 31, 2023.)
• $5,206 — Oil and natural gas sales for six months ended June 30, 2024 (Significantly lower than $15,765 in H1 2023, indicating minimal revenue generation.)
• $1,207,555 — General and administrative expenses for six months ended June 30, 2024 (Reduced from $5,519,158 in H1 2023, contributing to lower net loss.)
• 264,387,563 — Common shares outstanding as of October 21, 2025 (Reflects the total shares outstanding.)
• $1,243,565 — Common stock issued in property acquisition (non-cash) (Non-cash investing activity for the six months ended June 30, 2024.)
• $2,000,000 — Proceeds from promissory note for six months ended June 30, 2024 (Part of financing activities, indicating reliance on debt.)

Key Players & Entities

• Next Bridge Hydrocarbons, Inc. (company) — Registrant filing 10-Q/A
• U.S. Securities and Exchange Commission (regulator) — Recipient of the 10-Q/A filing
• Meta Materials, Inc. (company) — Parent company from which Next Bridge spun off
• Torchlight Energy Resources, Inc. (company) — Previous parent of Next Bridge's subsidiaries
• Wildcat acquisition (company) — Acquisition whose accounting treatment was corrected
• Orogrande Basin (context) — Primary focus of Next Bridge's oil and natural gas development
• Hudspeth County, Texas (context) — Location of the Orogrande Project
• Midland Basin (context) — Location of the Hazel Project
• Oklahoma (context) — Location of the Hunton wells
• Torchlight Energy, Inc. (company) — Wholly owned subsidiary of Next Bridge

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company has a significant working capital deficit of $48,648,858 as of June 30, 2024. This, coupled with a decrease in cash from $1,668,847 to $1,133,622, raises substantial doubt about its ability to continue as a going concern.
• Reliance on Related Party Debt [medium — financial]: A substantial portion of current liabilities is comprised of related party notes payable ($42,499,082) and accrued interest payable ($5,228,244) as of June 30, 2024. This indicates a significant reliance on related parties for financing.
• Volatile Revenue Streams [high — operational]: Oil and natural gas sales have drastically decreased from $15,765 in H1 2023 to $5,206 in H1 2024. This sharp decline highlights the volatility and low generation of revenue from core operations.
• Accounting Restatements [medium — financial]: The company restated its financial statements due to errors in impairment expense and the accounting for mineral property sales. A previously reported gain of $618,504 was reduced to $0, indicating potential issues with valuation and accounting practices.
• High General and Administrative Expenses [medium — operational]: Despite a reduction from $5,519,158 in H1 2023 to $1,207,555 in H1 2024, general and administrative expenses remain a significant cost. Further reductions may be necessary to improve profitability.

Industry Context

The oil and natural gas industry is characterized by volatile commodity prices, significant capital requirements, and complex regulatory environments. Companies in this sector face challenges related to exploration, production, and market access. Next Bridge Hydrocarbons operates in a highly competitive landscape where operational efficiency and effective cost management are crucial for survival and growth.

Regulatory Implications

The restatement of financial statements due to accounting errors highlights potential weaknesses in internal controls and financial reporting processes. This could attract scrutiny from regulatory bodies like the SEC, potentially leading to further investigations or penalties if systemic issues are identified.

What Investors Should Do

1. Review the notes to the financial statements thoroughly.
2. Assess the company's ability to secure future financing.
3. Monitor management's strategy for addressing the working capital deficit.

Key Dates

• 2024-06-30: Six months ended June 30, 2024 financial statements — Shows a reduced net loss compared to the prior year, but highlights a significant working capital deficit and decreased cash position.
• 2023-06-30: Six months ended June 30, 2023 financial statements — Represents the prior period's performance, showing a larger net loss and higher revenue, providing a basis for year-over-year comparison.
• 2025-10-22: 10-Q/A filing — Amended and restated financial statements for the six months ended June 30, 2024, correcting prior period errors.

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 is an amendment to NBH's quarterly report, indicating corrections to previously reported financial data.)

Impairment expense

A reduction in the carrying value of an asset when its fair value is less than 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 potential short-term liquidity problem. (NBH has a substantial working capital deficit of $48,648,858, raising concerns about its ability to meet short-term obligations.)

Going concern

The assumption that a company 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.)

Mineral properties

Assets related to the extraction of minerals, including oil and natural gas reserves. (The sale and accounting of these properties were a key area of the financial restatement.)

Year-Over-Year Comparison

Compared to the prior year's six-month period, Next Bridge Hydrocarbons has significantly reduced its net loss from $5,531,037 to $998,342, largely driven by a drastic reduction in general and administrative expenses from $5,519,158 to $1,207,555. However, revenue from oil and natural gas sales has also sharply declined from $15,765 to $5,206. The company's cash position has decreased, and it continues to face substantial doubt regarding its ability to continue as a going concern due to a large working capital deficit of $48,648,858.

Key Financial Figures

• $0 — the registrants common stock, par value $0.0001, as of October 21, 2025 was 264,38
• $618,504 — ed in a gain on sale of those assets of $618,504. After subsequently reconsidering the v

Filing Documents

• nbh-10q.htm (10-Q/A) — 850KB
• nbh-ex31_1.htm (EX-31.1) — 18KB
• nbh-ex31_2.htm (EX-31.2) — 18KB
• nbh-ex32_1.htm (EX-32.1) — 9KB
• 0001199835-25-000356.txt ( ) — 4464KB
• nbh-20240630.xsd (EX-101.SCH) — 32KB
• nbh-20240630_cal.xml (EX-101.CAL) — 45KB
• nbh-20240630_def.xml (EX-101.DEF) — 98KB
• nbh-20240630_lab.xml (EX-101.LAB) — 189KB
• nbh-20240630_pre.xml (EX-101.PRE) — 198KB
• nbh-10q_htm.xml (XML) — 766KB

Financial Information

PART I. Financial Information 8

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited): 8 Condensed Consolidated Balance Sheets as of June 30, 2024, restated, and December 31, 2023 8 Condensed Consolidated Statements of Operations - for the three and six months ended June 30, 2024 and 2023, as restated 9 Condensed Consolidated Statements of Stockholders Equity - for the three and six months ended June 30, 2024 and 2023, as restated 10 Condensed Consolidated Statements of Cash Flows - for the three and six months ended June 30, 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 37

Other Information

PART II. Other Information 38

Legal Proceedings

Item 1. Legal Proceedings 38

Risk Factors

Item 1A. Risk Factors 38

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 38

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 38

Other Information

Item 5. Other Information 38

Exhibits

Item 6. Exhibits 39 3 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This quarterly report on Form 10-Q/A 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 Audited June 30 December 31 2024 2023 ASSETS Current assets: Cash $ 1,133,622 $ 1,668,847 Accounts receivable 176,679 207,470 Production receivable - 1,412 Prepayments - development costs 212,619 131,340 Prepaid expenses 31,454 76,741 Total current assets 1,554,374 2,085,810 Oil and natural gas properties 55,523,400 53,672,579 Other assets 105,179 105,179 TOTAL ASSETS $ 57,182,953 $ 55,863,568 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 298,377 $ 3,777,685 Accounts payable - related party 97,027 - 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 5,228,244 3,870,175 Accrued interest payable 80,502 - Total current liabilities 50,203,232 49,180,169 Asset retirement obligations 233,169 248,651 Total liabilities 50,436,401 49,428,820 Commitments and contingencies Stockholders' Equity: Preferred stock, par value $ 0.0001 , 50,000,000 shares authorized; - 0 - issued and outstanding June 30, 2024 and December 31, 2023 - - Common stock, par value $ 0.0001 ; 500,000,000 shares authorized; 251,930,516 issued and outstanding at June 30, 2024 issued and 248,830,516 outstanding at December 31, 2023; 25,193 24,883 Additional paid-in capital 107,653,096 106,343,260 Accumulated deficit ( 100,931,737 ) ( 99,933,395 ) Total stockholders' equity 6,746,552 6,434,748 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 57,182,953 $ 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 Restated Three Month

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