Meta Materials (NASDAQ:MMAT) stock is in full focus today, as the company recently announced that its board had approved a 100% common stock distribution of wholly-owned subsidiary Next Bridge Hydrocarbons to shareholders of Meta Materials Preferred Shares (OTCMKTS:MMTLP).
Following completion of the spinoff, Next Bridge will be an “independent public reporting company” while shares of the company will not be publicly traded or eligible for electronic transfer through any clearing system, such as the Depository Trust Company () book-entry system.
Next Bridge operates as an energy company with a focus in the exploration, acquisition and development of oil and natural gas properties in the United States. As of Dec. 31, the company had interests in two oil and gas projects in Texas and one project in Oklahoma. It also has two minor well interests in Oklahoma and minor interests in the Eastern edge of the Midland Basin.
Dear MMAT Stock Fans, Mark Your Calendars for Dec. 12
The spinoff date of record for shareholders of MMTLP stock will fall on Dec. 12 at 4:00 p.m. Eastern, pending final FINRA and “blue sky” laws approval. Shareholders will receive one share of Next Bridge for each share of MMTLP owned. Following the record date, shares of Next Bridge will be distributed on Dec. 14 after the market close. After distribution, shares of MMTLP will be “automatically cancelled,” lose all of their rights and cease to trade on the over-the-counter (OTC) market.
MMTLP shareholders who sell their stake on or before the record date will not be entitled to the distribution. Shareholders who sell their stake after the record date but prior to the distribution date will be required to transfer their distribution to the buyer of their stake.
As an oil and natural gas company, Next Bridge will be subject to macroeconomic risks in the energy industry. These include domestic production, imports, demand and federal regulations. Next Bridge also mentioned that it would require “substantial capital” following the spinoff. The company could obtain this through arrangements like equity or debt financing and joint venturing of projects.
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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.