Next Bridge Restates Q3, Cuts Asset Sale Gain to Zero Amid Deepening Losses

TL;DR

**Next Bridge's restatement wiping out a $618K gain is a red flag, confirming their 'going concern' warning and signaling deep financial trouble for this cash-strapped energy play.**

AI Summary

Next Bridge Hydrocarbons, Inc. filed a 10-Q/A to amend and restate its financial statements for the nine months ended September 30, 2024, primarily correcting errors related to impairment expense and the accounting for the subsequent sale of mineral properties acquired in March 2024. The restatement reduced a previously reported gain on sale of assets by $618,504 to $0. The company reported a net loss of $1,417,903 for the nine months ended September 30, 2024, a significant improvement from the $9,043,543 net loss for the same period in 2023. Oil and natural gas sales decreased substantially to $7,261 for the nine months ended September 30, 2024, down from $23,496 in the prior year. General and administrative expenses also saw a sharp decline to $1,660,713 in 2024 from $9,028,536 in 2023. The company's cash balance decreased from $1,668,847 at December 31, 2023, to $147,054 at September 30, 2024, and it continues to operate at a net loss, raising going concern issues. Total liabilities increased to $51,004,406 at September 30, 2024, from $49,428,820 at December 31, 2023, largely due to an increase in related party notes payable and accrued interest. The company issued 2,500,000 shares of common stock for lease interest, valued at $1,243,565, during the nine months ended March 31, 2024.

Why It Matters

This restatement by Next Bridge Hydrocarbons, Inc. is critical for investors as it reveals significant accounting errors, specifically the overstatement of a gain on asset sales by $618,504. The correction to a $0 gain highlights potential weaknesses in internal controls and financial reporting accuracy, which can erode investor confidence. For employees and customers, the company's continued net losses and declining cash balance, coupled with a 'going concern' warning, signal instability and potential operational challenges. In a competitive energy market, such financial missteps and persistent unprofitability make it difficult for Next Bridge to attract capital or compete effectively, potentially impacting its long-term viability and market position.

Risk Assessment

Risk Level: high — The company explicitly states it 'had not yet achieved profitable operations' and includes a 'GOING CONCERN' warning, indicating substantial doubt about its ability to continue as a going concern. The cash balance plummeted from $1,668,847 at December 31, 2023, to $147,054 at September 30, 2024, representing a 91.1% decrease, while total liabilities increased to $51,004,406. The restatement itself, correcting a $618,504 gain on sale of properties to $0, points to significant internal control deficiencies.

Analyst Insight

Investors should exercise extreme caution and consider divesting any holdings in Next Bridge Hydrocarbons, Inc. The 'going concern' warning, coupled with a rapidly depleting cash balance and a history of restatements, indicates a high probability of further financial distress or even bankruptcy. Do not invest in this company.

Financial Highlights

debt To Equity

7.9

revenue

$7,261

operating Margin

-248.3%

total Assets

$57,343,897

total Debt

$51,004,406

net Income

($1,417,903)

eps

($0.00)

gross Margin

-1972.1%

cash Position

$147,054

revenue Growth

-68.7%

Revenue Breakdown

Key Numbers

• $1,417,903 — Net loss for nine months ended Sept 30, 2024 (Improved from $9,043,543 net loss in prior year)
• $618,504 — Reduction in gain on sale of assets (Original gain reduced to $0 due to restatement)
• $147,054 — Cash balance as of Sept 30, 2024 (Decreased from $1,668,847 at Dec 31, 2023)
• $51,004,406 — Total liabilities as of Sept 30, 2024 (Increased from $49,428,820 at Dec 31, 2023)
• $7,261 — Oil and natural gas sales for nine months ended Sept 30, 2024 (Decreased from $23,496 in prior year)
• $1,660,713 — General and administrative expenses for nine months ended Sept 30, 2024 (Decreased from $9,028,536 in prior year)
• 251,930,516 — Common shares outstanding as of Oct 28, 2025 (Increased from 248,830,516 at Dec 31, 2023)
• $1,243,565 — Value of common stock issued for lease interest (Issued 2,500,000 shares during Q1 2024)
• $42,500,832 — Note payable - related party as of Sept 30, 2024 (Increased from $41,221,028 at Dec 31, 2023)
• $5,228,244 — Accrued interest payable - related party as of Sept 30, 2024 (Increased from $3,870,175 at Dec 31, 2023)

Key Players & Entities

• Next Bridge Hydrocarbons, Inc. (company) — registrant
• U.S. Securities and Exchange Commission (regulator) — filing recipient
• Meta Materials, Inc. (company) — former parent company
• Torchlight Energy Resources, Inc. (company) — previous parent of subsidiaries
• Hudspeth County, Texas (location) — location of Orogrande Project
• Torchlight Energy, Inc. (company) — wholly owned subsidiary
• Hudspeth Oil Corporation (company) — wholly owned subsidiary
• Wildcat Panther, LLC (company) — wholly owned subsidiary
• Wildcat Valentine, LLC (company) — wholly owned subsidiary
• Wildcat Cowboy, LLC (company) — wholly owned subsidiary

FAQ

Risk Factors

• Going Concern and Liquidity Risk [high — financial]: The company reported a net loss of $1,417,903 for the nine months ended September 30, 2024, and its cash balance significantly decreased to $147,054 from $1,668,847 at year-end 2023. Total liabilities increased to $51,004,406, primarily due to related party debt, raising substantial going concern issues.
• Restatement and Accounting Errors [medium — financial]: The company restated its financial statements due to errors in impairment expense and accounting for mineral property sales. This resulted in a $618,504 reduction in a previously reported gain on sale of assets, which was ultimately reduced to $0. This indicates potential weaknesses in internal controls and financial reporting processes.
• Dependence on Related Party Financing [medium — financial]: A significant portion of the company's liabilities consists of notes payable and accrued interest payable to related parties, totaling $47,729,076 as of September 30, 2024. This heavy reliance on related party financing introduces concentration risk and potential conflicts of interest.
• Declining Oil and Gas Sales [high — operational]: Oil and natural gas sales plummeted to $7,261 for the nine months ended September 30, 2024, a sharp decline from $23,496 in the prior year. This indicates a significant reduction in the company's core revenue-generating activities.
• High General and Administrative Expenses [medium — operational]: Despite a significant reduction from $9,028,536 to $1,660,713 for the nine months ended September 30, 2024, general and administrative expenses remain a substantial cost. The restatement also impacted these expenses, highlighting the need for efficient cost management.

Industry Context

The oil and natural gas sector is characterized by volatile commodity prices, significant capital requirements, and complex regulatory environments. Companies in this industry face ongoing challenges related to exploration success, production costs, and environmental compliance. Next Bridge Hydrocarbons appears to be operating in a challenging segment, with declining sales and a focus on asset management rather than significant production growth.

Regulatory Implications

The restatement of financial statements due to accounting errors suggests potential deficiencies in internal controls, which could attract scrutiny from regulatory bodies like the SEC. Companies are required to maintain accurate financial reporting, and repeated restatements can lead to increased oversight and potential penalties.

What Investors Should Do

1. Review the notes to the financial statements for details on the restatement and related party transactions.
2. Monitor cash burn rate and future financing activities.
3. Assess the company's strategy for revenue generation and cost management.

Key Dates

• 2024-09-30: Nine months ended September 30, 2024 — Period for which financial results were restated, showing a reduced net loss but significantly lower revenue and cash balance.
• 2023-09-30: Nine months ended September 30, 2023 — Prior period financial results used for comparison, showing a much larger net loss and higher revenue.
• 2024-12-31: As of December 31, 2023 — Prior year-end balance sheet figures used for comparison, showing a higher cash balance and lower total liabilities.
• 2024-03-31: During the nine months ended March 31, 2024 — Period when mineral properties were acquired and subsequently sold, leading to restatement of gains.
• 2024-03-31: During the nine months ended March 31, 2024 — Period when 2,500,000 shares of common stock were issued for lease interest, valued at $1,243,565.

Glossary

Restated

Financial statements that have been revised and reissued to correct errors or reflect changes in accounting principles. (Indicates that the reported financial figures for the periods presented have been corrected due to prior errors, impacting comparability and reliability.)

Accumulated deficit

The cumulative net losses of a company that have not been offset by net income or other gains. (Shows the company's history of unprofitability, with a deficit of $101,351,298 as of September 30, 2024.)

Going concern

The assumption that a company will continue to operate for the foreseeable future without the threat of liquidation. (The company's financial condition raises substantial doubt about its ability to continue as a going concern.)

Oil and natural gas properties

Assets representing the company's investments in the exploration, development, and production of oil and natural gas. (These are the company's primary long-term assets, valued at $56,511,682 as of September 30, 2024.)

Related party

An entity or individual that has the ability to control or significantly influence the operating decisions of another entity. (The company has significant financial dealings with related parties, particularly in notes payable and accrued interest, totaling $47,729,076.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Next Bridge Hydrocarbons has significantly reduced its net loss from $9,043,543 to $1,417,903, largely driven by a drastic decrease in general and administrative expenses from $9,028,536 to $1,660,713. However, this improvement is overshadowed by a severe contraction in revenue, with oil and natural gas sales falling from $23,496 to $7,261. The company's cash position has also deteriorated substantially, and total liabilities have increased, primarily due to related party debt, while new risks related to accounting restatements have emerged.

Key Financial Figures

• $0 — the registrants common stock, par value $0.0001, as of October 28, 2025 was 264,38
• $618,504 — ed in a gain on sale of those assets of $618,504. After subsequently reconsidering, the

Filing Documents

• nbh-10q.htm (10-Q/A) — 882KB
• nbh-ex31_1.htm (EX-31.1) — 18KB
• nbh-ex31_2.htm (EX-31.2) — 18KB
• nbh-ex32_1.htm (EX-32.1) — 9KB
• 0001199835-25-000361.txt ( ) — 4549KB
• nbh-20240930.xsd (EX-101.SCH) — 31KB
• nbh-20240930_cal.xml (EX-101.CAL) — 43KB
• nbh-20240930_def.xml (EX-101.DEF) — 97KB
• nbh-20240930_lab.xml (EX-101.LAB) — 189KB
• nbh-20240930_pre.xml (EX-101.PRE) — 195KB
• nbh-10q_htm.xml (XML) — 792KB

Financial Information

PART I. Financial Information 8

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited): 8 Condensed Consolidated Balance Sheets as of September 30, 2024, as restated, and December 31, 2023 8 Condensed Consolidated Statements of Operations - for the three and nine months ended September 30, 2024 and 2023, as restated 9 Condensed Consolidated Statements of Stockholders Equity - for the three and nine months ended September 30, 2024 and 2023, as restated 10 Condensed Consolidated Statements of Cash Flows - for the three and nine months ended September 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 September 30 December 31 2024 2023 ASSETS Current assets: Cash $ 147,054 $ 1,668,847 Accounts receivable 178,513 207,470 Production receivable - 1,412 Prepayments - development costs 325,744 131,340 Prepaid expenses 75,725 76,741 Total current assets 727,036 2,085,810 Oil and natural gas properties 56,511,682 53,672,579 Other assets 105,179 105,179 TOTAL ASSETS $ 57,343,897 $ 55,863,568 LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Accounts payable $ 115,379 $ 3,777,685 Accounts payable - related party 97,027 - Prepayments, working interest owners - 311,281 Note payable - related party 42,500,832 41,221,028 Note payable 2,000,000 - Accrued interest payable - related party 5,228,244 3,870,175 Accrued interest payable 824,470 - Total current liabilities 50,765,952 49,180,169 Asset retirement obligations 238,454 248,651 Total liabilities 51,004,406 49,428,820 Commitments and contingencies Stockholders equity: Preferred stock, par value $ 0.0001 , 50,000,000 shares authorized; - 0 - issued and outstanding September 30, 2024 and December 31, 2023 - - Common stock, par value $ 0.0001 ; 500,000,000 shares authorized; 251,930,516 issued and outstanding at September 30, 2024 issued and 248,830,516 outstanding at December 31, 2023; 25,193 24,883 Additional paid-in capital 107,665,596 106,343,260 Accumulated deficit ( 101,351,298 ) ( 99,933,395 ) Total stockholders equity 6,339,491 6,434,748 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 57,343,897 $ 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 Thr

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