Meta Materials (MMAT) Stock Heats Up Ahead of Spinoff
Shares of Meta Materials (NASDAQ:MMAT) stock have been in full focus, as the company will soon spin off its fully-owned subsidiary Next Bridge Hydrocarbons to shareholders of Meta Materials Preferred Shares (OTCMKTS:MMTLP). The date of record will fall on Dec. 12, while the distribution date will be on Dec. 14.
Next Bridge engages in the acquisition, exploration, and development of oil and natural gas. The company’s primary project is an oil and gas project in the Orogrande Basin in West Texas. As of Dec. 31, Next Bridge has interests in three projects, with the remaining two projects in Texas and Central Oklahoma.
Following the distribution, shares of MMTLP will not be tradable on the over-the-counter (OTC) market and lose all of their rights. Meanwhile, Next Bridge will operate as an independent reporting company with shares that will not be tradable on public exchanges or eligible for electronic transfer through clearing corporations.
MMAT Stock: MMTLP Shareholders Prepare for Spinoff
Shareholders of MMTLP who sell their shares on or before Dec. 12 will not be eligible for the spinoff. Shareholders who sell their shares after Dec. 12 but before Dec. 14 will be required to transfer their shares of Next Bridge to the buyer of the MMTLP shares. A total of 165,472,241 shares will be distributed and shareholders will receive one share of Next Bridge for each share of MMTLP owned
For the nine months that ended Sept. 30, the energy company reported revenue of just $30,124, while operating expenses totaled $3.84 million. During that period, Next Bridge reported a net loss of $4.76 million, bringing its total accumulated deficit to $72.95 million. In addition, the company had a cash and cash equivalents balance of $2.1 million and short-term debt of $21.15 million as of Sept. 30.
Next Bridge has also warned that it will need to raise capital in the immediate future. These could be collected through joint venturing of projects or equity or debt financing. This will provide the company with funds but dilute existing shareholders in the process. Next Bridge’s consistent losses have also caused its auditors to issue a “‘going concern’ audit qualification.”
It seems that Next Bridge is just getting off the ground and investing heavily in projects while collecting minimal revenue. Investors would be better off putting their capital in a less speculative company.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.
More from InvestorPlace