Torchlight Energy Resources (TRCH.Q), an oil and gas exploration company, announced today that it has declared a special dividend of Series A preferred stock to be issued on a one-for-one basis to common stockholders of record as of the close of market trading on June 24, 2021.


For context, a special dividend refers to a non-recurring distribution of company assets to shareholders. Compared to normal dividends, special dividends tend to be larger in size and are associated with a specific event. In this case, Torchlight’s special dividend is to be issued in connection with the previously announced business combination transaction with Metamaterial, a developer of high-performance functional materials and nanocomposite products.


Initially announced on December 14, 2020, Torchlight and Metamaterial signed a definitive agreement outlining a business combination, or merger. In particular, Torchlight will be executing a reverse merger with Metamaterial, where Metamaterial shareholders will get 75% of the new shares, and Torchlight shareholders will receive 25%. A reverse merger refers to merging a private company (Metamaterial) with an existing public shell company (Torchlight), enabling the private company to bypass the arduous process of going public. Torchlight shareholders will also get a distribution that will allow them to receive the proceeds generated from the sale of the Company’s oil and gas assets.


Referring back to Torchlight’s latest announcement, stockholders of record on June 24, 2021, will be entitled to receive the special dividend which will consist of one share of Series A preferred stock for each one share of common stock owned. Put into layman’s terms, Series A preferred stock refers to the cream of the crop of a company’s shares. While common shares are typically bottom of the priority list when it comes to a company’s assets, preferred shares are at the top. With this in mind, preferred shareholders are paid dividends before common shareholders.


Once the merger in completed, Metamaterial will receive a NASDAQ listing for its firm and Torchlight will become the shell company, with Torchlight’s existing ticker changing to Metamaterial’s. Many investors are jumping on this opportunity to invest in Torchlight since Torchlight shareholders will have exclusive access to the proposed special dividends. As a result, Torchlights share price has skyrocketed since the Company announced the issuance of preferred stock.



Torchlight’s shares opened at $4.79, up from a previous close of $3.58. The Company’s shares are up 39.11% and are currently trading at $5.04 as of 10:34AM ET. This indicates that there has been significant change following the news.



Written By:

Kieran Robertson

Kieran Robertson is an experienced writer with a passion for technology, esports, and video games. He graduated from the University of Western Ontario with a Major in English Language and Literature. After graduating, Kieran worked as a freelance writer, managing his own blog and volunteering for La Maza Magazine, a magazine startup focused on collaborating with photographers, writers, models, and designers.

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