Meta Materials (NASDAQ:MMAT) stock is in the spotlight after a shareholder of spinoff Next Bridge Hydrocarbons (NBH) filed a class-action lawsuit against the oil and natural gas company and several of its executives. These include former NBH President George Palikaras and former Chairman and Chief Financial Officer Ken Rice.
The class period spans from July 14, 2022 to Dec. 14, 2022 and is open to all shareholders who acquired shares of NBH around Dec. 14, 2022 and experienced losses. NBH does not trade on an exchange and is a private company in that regard. Its shares are not eligible for electronic transfer.
Torchlight merged with Meta Materials in June 2021, which resulted in legacy shareholders of Torchlight receiving non-voting Meta preferred stock. The preferred stock represented the oil and gas assets that Meta received from Torchlight.
Later on, Meta decided to spin off Torchlight’s oil and gas assets into NBH. In July 2022, NBH filed a Form S-1 registration statement with the U.S. Securities and Exchange Commission (SEC).
MMAT Stock: Next Bridge Hydrocarbons Shareholder Files Class Action Lawsuit
However, the lawsuit alleges that the registration statement was improperly prepared and contained misleading information.
“The Registration Statement contained untrue statements of a material fact and/or omitted to state material facts to make the statements therein not misleading. The Registration Statement also violated specific disclosure provisions within Regulation S-K, which inter alia dictate what must be disclosed by issuers in registration statements,” reads the complaint.
For example, NBH stated that its oil and gas assets were worth $47.29 million as of Sept. 30, 2022 and $45.66 million as of Dec. 31, 2021 when in fact they were actually “substantively worthless.” After the spinoff, Meta disclosed that the value of NBH’s oil and gas assets were “not substantive.” Furthermore, the lawsuit states that NBH failed to disclose information about its relationship with Masterson Hazel Partners.
The lawsuit seeks relief in the form of compensatory damages as a result of the defendants’ actions. The plaintiff in the case has requested a trial by jury.
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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.
