Chapter 4:
The Private Trap & The Asset Reality
When the FINRA U3 halt froze trading in MMTLP, 165.5 million shares were transferred into Next Bridge Hydrocarbons, Inc.—an unlisted, non-DTC eligible Delaware corporation with zero commercial oil reserves.
This chapter examines the sworn S-1/A prospectus disclosures, the geological ground truth of the Orogrande Basin in West Texas, Gregory McCabe's 17.09% executive ownership and personal loans, and the total failure of the 40-million-share settlement offering.
The Spin-Off Trap: Unlisted, Illiquid & Non-DTC
While retail influencers pitched MMTLP as an impending multi-thousand-dollar “infinite squeeze,” Next Bridge Hydrocarbons was filing sworn prospectuses with the SEC stating the exact opposite.
On July 15, 2022, Meta Materials initiated the registration process to spin off its oil and gas assets into a newly formed Delaware corporation called Next Bridge Hydrocarbons, Inc. Under the terms of the corporate reorganization, each holder of Meta Series A Preferred Stock (trading under the symbol MMTLP) would receive one share of Next Bridge common stock on a strict 1-for-1 basis.
However, on November 18, 2022, the SEC declared the final amended registration statement (Form S-1/A, File No. 333-266144) effective. The disclosures contained inside that document were devastating to any thesis of a perpetual secondary market squeeze.
No Public Market Will Ever Exist
“There is currently no public market for our common stock, and we do not expect a public market to develop. We do not intend to list our common stock on any securities exchange or automated quotation system.”
Direct Registration & Non-DTC
“Shares of our common stock will be issued in uncertificated book-entry form through our transfer agent, American Stock Transfer & Trust Company (AST)... they will not be eligible for clearance through DTC.”
Complete Illiquidity & Substantial Risk
“Holders of our common stock may not be able to liquidate their investment readily, or at all... investors should be prepared to hold their shares indefinitely and bear the risk of total loss.”
Retail investors were told that short sellers could never deliver private, unlisted stock to lenders, and therefore prime brokers would be legally forced to close out every short position on the open OTC market during the final trading hours, paying whatever price shareholders demanded.
Under standard securities lending agreements, when a shorted security spins off into an unlisted private company, the short liability simply carries over as an unlisted private obligation between the borrower and the lender on the broker's internal ledger. There was never any regulatory mandate forcing a public buy-in of an unlisted asset.
Imagine holding a ticket that you could trade with other people in line. But the event organizer officially announces: “On December 12, all tickets will turn into private club memberships. The club will never open to the public, you can never sell your membership, and you cannot trade it on any app.” Anyone buying tickets on the final days wasn't buying a golden ticket to a short squeeze—they were buying permanent entry into an unlisted illiquid private company with no exit door.
The 40,000,000 Share Offering: Why Nobody Bought
When Next Bridge attempted a 40-million-share primary settlement offering through Roth Capital expressly aimed at trapped short sellers, the response was total silence.
Retail influencers had promised that short sellers were desperately hunting for tens of millions of Next Bridge shares, and that opening a window for them to buy would yield massive cash windfalls. When Next Bridge officially opened that exact window on May 28, 2024 via underwriter Roth Capital, the market response was complete silence.
When a trader borrows a share, their debt is owed to the lender (the investor or prime broker who lent it), not to the company's corporate treasury. Buying newly issued primary stock from Next Bridge does not satisfy a contractual borrow obligation to a third-party lender unless that lender agrees to accept brand-new unlisted stock.
Official FINRA Electronic Blue Sheet (EBS) data confirmed the actual aggregate short position across all clearing firms was only 2.65 million shares (~1.6% of the float)—not the 50 million to 300 million shares claimed on social media. Most shorts had already closed or converted to internal ledger entries.
For nearly two years, community leaders argued: “Hedge funds are trapped! If Next Bridge offers them shares, they will pay hundreds of dollars each!” Next Bridge listened and officially offered 40 million shares with an investment bank (Roth Capital) standing by. Not a single short seller stepped forward. Why? Because the legendary “trapped naked shorts” simply did not exist at the scale claimed, and hedge funds had no legal reason to buy private illiquid stock.
The Orogrande Basin: $0.00 Proved Reserves
Retail influencers promoted the Orogrande Basin as a “3.2 billion barrel monster find.” Sworn SEC filings and Texas Railroad Commission records reveal an entirely different reality.
Zero Proved Commercial Reserves
Under SEC Rule 4-10 of Regulation S-X, an oil company can only book reserves if extraction is economically producible under existing economic conditions. In every Form 10-K filed by Torchlight and Next Bridge, proved reserves were officially audited at exactly $0.00.
Leasehold Expiration & Forfeiture
The 134,066.10 acres under DUA 2837 were leased from the University of Texas System (University Lands). When Next Bridge drilled zero wells in 2024, the agreement and all 192 underlying leases expired by their own terms on December 31, 2024, triggering state court forfeiture actions.
Shut-In Wells & Liabilities
Public production logs from the Texas Railroad Commission confirm that wells drilled across the Orogrande (such as the Founders and University test bores) produced minimal hydrocarbon flow, were shut in, and carry statutory plugging and abandonment liabilities.
The Orogrande Basin leases were not discovered by Torchlight Energy or Next Bridge Hydrocarbons. They originated in April 2013 when Jason Hoisager's Arabella Petroleum Company, LLC acquired the foundational acreage from University Lands. Greg McCabe financed Arabella through McCabe Petroleum Corporation (MPC) with oral credit lines and joint ventures.
Arabella leased the Orogrande acreage from University Lands. McCabe provided operational funding and held security interests in Arabella's West Texas plays.
As Arabella neared financial collapse, it transferred the Orogrande acreage to McCabe Petroleum in March 2014. In July–August 2014, McCabe flipped the acreage into Torchlight Energy for stock and debt, becoming its Chairman and largest shareholder.
In federal bankruptcy court (Weiss v. Arabella Exploration, W.D. Tex.), the Trustee won an $8.8 million judgment for fraudulent transfers and fiduciary breaches against Hoisager. McCabe faced intense scrutiny to settle clawbacks and protect the transferred acreage.
Origin: Consulting Geologist Rich Masterson (2014) • Evaluation: Stimulation Petrophysics Consulting (April 2019)
Midland consulting geologist Richard “Rich” Masterson (ex-Texaco, credited with originating the Delaware Basin Wolfbone play) brought the Orogrande Basin play to Torchlight in 2014. He mapped a 1,300-ft gross column of Pennsylvanian/Wolfcamp-equivalent pay (“WolfPenn”) across 134,066 University Lands acres, modeling up to 2,500 vertical well locations and an 80/20 oil to high-BTU gas mix.
On April 15, 2019, Torchlight published a report by Denver-based Stimulation Petrophysics Consulting (Mike Mullen) evaluating 134,000 net acres across unconventional zones. The report calculated recoverable resources: Low Case: 2.321B BOE (7% recovery); Mean Case: 3.678B BOE (11% recovery); Best Case: 4.975B BOE (15% recovery). Disaggregated volume modeled ~3.2B barrels of oil and ~5.8 TCF of gas.
Original Oil In Place (OOIP) measures theoretical hydrocarbon molecules trapped in rock, ignoring natural reservoir pressure, pipeline connectivity, or commercial extraction economics. Under SEC Regulation S-K Item 1202, companies cannot book proved reserves without commercial flow tests. Every audited 10-K booked 0 proved barrels and $0.00 PV-10.
| Hydrocarbon Stream | Theoretical In-Place (OOIP) | Stimulation Petrophysics (Mean) | Commercial Flow Test Reality | Audited SEC Proved Reserves | Texas State Legal Standing (2025–2026) |
|---|---|---|---|---|---|
| Crude Oil / Condensate | ~3.2 Billion Barrels (BO) | 3.678 Billion BOE (Oil + Gas) | Trace shows, 90%+ formation water | 0 Barrels ($0.00 PV-10) | 18 delinquent shut-in wells ($4.27M liability) |
| Natural Gas / Liquids | ~5.8 Trillion Cu. Ft. (TCF) | ~966.7 Million BOE Equivalent | Sub-commercial gas, zero pipeline connections | 0 Mcf ($0.00 PV-10) | DUA 2837 leases expired Dec 31, 2024 |
394th Judicial District Court, Hudspeth County, Texas • Filed September 1, 2026
DUA 2837 and all 192 underlying oil and gas leases covering 134,066.10 acres expired by their own terms on December 31, 2024 after Next Bridge drilled zero wells in 2024.
Sworn Paragraph 29 confirms: From April 10, 2013 to expiration, no production was ever reported to University Lands or the Railroad Commission, and $0.00 in commercial royalties were ever paid.
Next Bridge defaulted on annual minimum royalties ($134,000/yr) from 2019 through 2024. As of May 3, 2024, University Lands calculates Next Bridge owes $1,144,780.09 in delinquent royalties, interest, and penalties.
University Lands seeks specific performance to compel Next Bridge to plug and abandon all 18 inactive wells, remove abandoned surface debris, grade open pits, and release all public title encumbrances.
The University of Texas System (University Lands) & Railroad Commission of Texas (RRC)
“Per Brian Owen, Sr. VP Land, the Hudspeth development agreement and associated leases terminated under their own terms on December 31, 2024 and March 1, 2025, respectively.”
Forensic Takeaway: Written proof from the state land administrator confirming that DUA 2837 and all 192 leases automatically terminated by contract terms in early 2025. Next Bridge possessed zero operating leasehold rights when corporate PR continued claiming active development.
Under Texas Statewide Rule 14, operators must plug inactive wells within 12 months unless granted an extension. The Railroad Commission of Texas DENIED plugging extensions for all 18 Hudspeth Operating wells, calculating a statutory plugging liability of $4,268,958.00.
Inactivity Duration: Wells have sat dead in the desert for up to 11 years and 3 months (e.g. University Rich A11 #1 shut in May 2015). Not a single well is producing commercial oil.
On YouTube and Twitter Spaces, influencers told retail investors that oil majors like Exxon or Chevron were in a bidding war to purchase the Orogrande Basin for billions of dollars. But in the oil industry, companies do not pay billions for unproved desert wildcats with zero pipelines, high water cut, and no commercial flow rates. In over 10 years of marketing, not a single major oil company ever submitted a buyout bid for the acreage.
Greg McCabe on “Going Rogue with Lara Logan”
After 3.5 years of strict public silence following the U3 halt, Next Bridge Chairman & CEO Gregory McCabe stepped in front of the camera on Episode 99.2 to address shareholders, FINRA, and the future of the Orogrande Basin.
Full Broadcast: Going Rogue with Lara Logan (Episode 99.2)
Runtime: 01:38:16 • Broadcast September 26, 2026 • Unedited Investigative Sit-Down
Jump directly to certified on-air statements, concessions, and admissions:
High-speed direct video download hosted on local infrastructure:
Who Is Gregory McCabe?
Unlike former Torchlight CEO John Brda or promoter George Palikaras, Gregory McCabe is a veteran Midland, Texas independent oil and gas operator. McCabe originally provided the ~172,000-acre Orogrande Basin leasehold to Torchlight Energy in 2014, served as Chairman of the Board, and remains by far the largest individual shareholder of Next Bridge Hydrocarbons—owning over seven times more stock than John Brda.
Why Did He Refuse to Speak?
McCabe acknowledged that retail shareholders felt abandoned by his silence. He explained that his attorneys ordered total radio silence to prevent securities litigation, avoid allegations of market manipulation, and allow legal and regulatory discovery to run its course unimpeded.
Boardroom Separation
McCabe drew a clear operational boundary between himself and John Brda. While Brda led the promotional Twitter blitz that triggered the SEC's July 2024 securities fraud indictment, McCabe emphasized that his focus was solely on field operations, lease retention, and geological evaluations.
Admitting the Short Offering Flopped
McCabe conceded on camera that the May 2024 Form S-1 offering through Roth Capital failed to compel short sellers to settle. He acknowledged that unlisted private shares cannot simply be sold to borrowers to extinguish third-party stock borrow debts.
Massive Capital Requirements
While maintaining optimism about the basin's subsurface hydrocarbons, McCabe admitted that commercial horizontal development requires tens or hundreds of millions in capital expenditures—infrastructure, pipelines, and drilling—which Next Bridge cannot self-fund without a major industry partner.
Greg McCabe's interview proved that Next Bridge is not run by an anonymous ghost, but by an experienced oilman whose own fortune is tied to the exact same shares retail holds. However, it also demolished the social media fantasy: there is no secret pot of billions waiting to be paid out tomorrow, short sellers aren't begging to buy shares, and extracting oil from West Texas requires hard cash, heavy iron, and years of patient industrial development.
Chapter 4 Regulatory & Geological Evidence
Every statement in this chapter is verified by primary SEC EDGAR submissions and Texas regulatory records. Direct links to unredacted primary records.
Stimulation Petrophysics Orogrande Final Evaluation Report
Public disclosure of petrophysical report prepared by Stimulation Petrophysics Consulting (Mike Mullen) for 134,000 acres in the Orogrande Basin: estimated 3.678 billion BOE mean recoverable case (11% recovery factor) comprising ~3.2 billion barrels of oil and ~5.8 TCF of gas. Formally credited with $0.00 proved reserves in SEC filings.
Next Bridge Hydrocarbons Final Prospectus
SEC registration prospectus declaring shares non-DTC eligible, unlisted, and issued directly through AST book-entry.
Next Bridge Annual Report (Orogrande Basin Status)
Audited disclosures regarding Hudspeth County University Lands leases, drilling commitments, and lack of proved commercial oil reserves.
Next Bridge 40,000,000 Share Settlement Offering
Primary SEC registration statement offering up to 40M newly issued common shares through underwriter Roth Capital to short sellers.
Audited Form 10-K (Note 1 Corporate Admission)
Sworn corporate disclosure in Note 1 confirming: "Certain holders of the shares of the Series A Preferred Stock of Meta caused such shares to trade... under MMTLP."
University Lands v. Next Bridge Hydrocarbons Original Petition
394th Judicial District Court of Hudspeth County, Texas (Cause No. CV-06244-394): Sworn petition confirming DUA 2837 expired Dec 31, 2024, zero oil was produced across 134,066 acres (2013–2024), and demanding $1,144,780.09 in back royalties plus plugging of 18 inactive wells.
Going Rogue with Lara Logan: Greg McCabe Breaks His Silence (Ep 99.2)
Broadcast September 26, 2026: A 1-hour 38-minute sit-down interview with Greg McCabe. McCabe discusses his $10M+ in personal loans keeping Next Bridge afloat, his 17.09% controlling equity, boardroom estrangement from John Brda, and the failure of the 40M share settlement offering.