Meta Materials Announces Q1 FY 2022 Results

Topic:

HALIFAX, NS / ACCESSWIRE / May 10, 2022 / Meta Materials Inc. (the "Company" or "META®") (NASDAQ:MMAT), (FSE:MMAT) a developer of high-performance functional materials and nanocomposites, today announced first quarter FY 2022 results. Please visit the Investors section of our website to view the Q1 2022 Shareholder Letter. The Company will host a webcast on Wednesday, May 11, 2022, at 8:00 AM EDT.

The Q1 2022 financial statements and the associated management discussion and analysis for the quarter ended March 31, 2022 are available on the Investors section of our website as well as on Nasdaq.com or on the SEC EDGAR website at www.sec.gov.

In Q1:22, total revenue grew 399%, to $2,974,695, compared to $596,303 in Q1:21. The Q1:22 net loss was $18,434,541, or $0.06 per share on 285,224,469 weighted average shares, compared to a Q1:21 net loss of $44,158,519 (which included a $40 million, non-cash loss on financial instruments), or $0.26 per share on 168,864,762 weighted average shares.

Net cash used in operating activities during the quarter ended March 31, 2022, was $18,745,199, compared to $2,393,475 in Q1:21. In Q1:22, capital expenditures for purchases of property, plant, and equipment were $1,746,936. As of March 31, 2022, cash and cash equivalents totaled approximately $30.2 million, including about $0.5 million in restricted cash. The Company has no debt, except for approximately $3.3 million in various interest-free loans from ACOA (Atlantic Canada Opportunities Agency), and common shares outstanding were 296,614,994.

Webcast Details:
Date: May 11, 2022
Time: 8:00 AM EDT / 5:00 AM PDT
To register, please use the link below:
https://audience.mysequire.com/webinar-view?webinar_id=10e4bdaa-d8a2-4da2-a6fe-f7176d417a2c

About Meta Materials Inc.
META® delivers previously unachievable performance, across a range of applications, by inventing, designing, developing, and manufacturing sustainable, highly functional materials. Our extensive technology platform enables leading global brands to deliver breakthrough products to their customers in consumer electronics, 5G communications, health and wellness, aerospace, automotive, and clean energy. Our nano-optic technology provides anti-counterfeiting security features for government documents and currencies and authentication for brands. Our achievements have been widely recognized, including being named a Lux Research Innovator of the Year in 2021. Learn more at www.metamaterial.com.

META MATERIALS INC.
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED)


	As of March 31, 2022			As of December 31, 2021

Assets
Current assets
Cash and cash equivalents	$	29,749,773		$	46,645,704
Restricted cash		478,897			788,768
Short-term investments		-			2,875,638
Grants receivable		29,150			175,780
Accounts receivable		2,514,443			1,665,700
Inventory		366,959			265,718
Prepaid expenses and other current assets		3,843,663			3,451,367
Assets held for sale		72,000,000			75,500,000
Due from related parties		10,314			10,657
Total current assets		108,993,199			131,379,332
Intangible assets, net		28,306,272			28,971,824
Property, plant and equipment, net		29,977,784			27,018,114
Operating lease right-of-use assets		6,230,735			6,278,547
Goodwill		240,769,981			240,376,634
Total assets	$	414,277,971		$	434,024,451

Liabilities and stockholders' equity (deficit)
Current liabilities
Trade and other payables		9,944,822			13,335,470
Current portion of long-term debt		363,654			491,278
Current portion of deferred revenues		695,160			779,732
Current portion of deferred government assistance		858,942			846,612
Preferred stock liability		72,000,000			75,500,000
Current portion of operating lease liabilities		782,901			663,861
Asset retirement obligations		21,937			21,937
Total current liabilities		84,667,416			91,638,890
Deferred revenues		660,297			637,008
Deferred government assistance		-			3,038
Deferred tax liability		329,205			324,479
Long-term operating lease liabilities		3,676,258			3,706,774
Funding obligation		286,182			268,976
Long-term debt		2,920,931			2,737,171
Total liabilities		92,540,289			99,316,336

Stockholders' equity (deficit)
Common stock - $0.001 par value; 1,000,000,000 shares authorized, 286,927,265 shares issued and outstanding at March 31, 2022, and $Nil par value; unlimited shares authorized, 284,573,316 shares issued and outstanding at December 31, 2021		265,106			262,751
Additional paid-in capital		467,692,775			463,136,404
Accumulated other comprehensive income (loss)		608,446			(296,936	)
Accumulated deficit		(146,828,645	)		(128,394,104	)
Total stockholders' equity		321,737,682			334,708,115
Total liabilities and stockholders' equity	$	414,277,971		$	434,024,451

META MATERIALS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	Three months ended
	March 31,
	2022			2021

Revenue
Product sales		168,127			22,047
Development revenue		2,806,568			574,256
Total Revenue		2,974,695			596,303
Cost of goods sold		778,712			400
Gross Profit		2,195,983			595,903
Operating Expenses
Selling & Marketing		1,035,986			396,594
General & Administrative		14,597,913			2,592,885
Research & Development		3,971,139			1,779,256
Total operating expenses		19,605,038			4,768,735
Loss from operations		(17,409,055	)		(4,172,832	)
Other income (expense)
Interest expense, net		(164,434	)		(450,908	)
Gain (Loss) on foreign exchange, net		148,391			(166,444	)
Loss on financial instruments, net		-			(40,004,921	)
Other (loss) income, net		(1,009,443	)		591,907
Total other income (expenses)		(1,025,486	)		(40,030,366	)
Loss before income taxes		(18,434,541	)		(44,203,198	)
Income tax recovery		-			44,679
Net loss		(18,434,541	)		(44,158,519	)
Other Comprehensive Income net of tax
Foreign currency translation gain		905,382			21,128
Fair value gain on changes of own credit risk		-			671,600
Total Other Comprehensive Income		905,382			692,728
Comprehensive loss		(17,529,159	)		(43,465,791	)
Basic and diluted loss per share		(0.06	)		(0.26	)
Weighted average number of shares outstanding - basic and diluted		285,224,469			168,864,762

META MATERIALS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three months ended
	March 31, 2022			March 31, 2021
		$			$

Cash flows from operating activities:
Net loss		(18,434,541	)		(44,158,519	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash finance income		(12,920	)		-
Non-cash interest expense		126,714			358,562
Non-cash lease expense		240,548			73,383
Deferred income tax		-			(44,679	)
Depreciation and amortization		1,672,969			590,201
Unrealized foreign currency exchange (gain) loss		(140,902	)		31,339
Loss on financial instruments, net		-			40,004,921
Change in deferred revenue		(79,146	)		565,801
Non-cash government assistance		(3,047	)		(348,650	)
Loss on debt settlement		-			19,253
Stock-based compensation		3,995,442			426,794
Non-cash consulting expense		196,541			-
Changes in operating assets and liabilities		(6,306,857	)		88,119
Net cash used in operating activities		(18,745,199	)		(2,393,475	)
Cash flows from investing activities
Purchases of intangible assets		-			(128,209	)
Purchases of property, plant and equipment		(1,746,936	)		(1,477,329	)
Proceeds from short-term investments		2,884,999
Net cash provided by (used in) investing activities		1,138,063			(1,605,538	)
Cash flows from financing activities
Proceeds from long-term debt		-			1,096,262
Repayments of long-term debt		(91,641	)		(12,098	)
Proceeds from government grants		-			223,384
Proceeds from unsecured promissory notes		-			13,963,386
Proceeds from stock option exercises		197,167			48,629
Proceeds from warrants exercises		169,575			47,839
Net cash provided by financing activities		275,101			15,367,402

Net (decrease) increase in cash, cash equivalents and restricted cash		(17,332,035	)		11,368,389
Cash, cash equivalents and restricted cash at beginning of the period		47,434,472			1,395,683
Effects of exchange rate changes on cash, cash equivalents and restricted cash		126,233			108,578
Cash, cash equivalents and restricted cash at end of the period		30,228,670			12,872,650

Supplemental cash flow information
Accrued purchases of property, equipment, and patents		1,772,821			127,456
Right-of-use assets obtained in exchange for lease liabilities		146,822			1,300,573
Settlement of liabilities in common stock		-			52,063,431
Interest paid on debt		-			64,528

Forward-Looking Information
This press release includes forward-looking information or statements within the meaning of Canadian securities laws and within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, regarding the Company, which may include, but are not limited to, statements with respect to the business strategies, product development, expansion plans and operational activities of the Company . Often but not always, forward-looking information can be identified by the use of words such as "pursuing", "potential", "predicts", "projects", "seeks", "plans", "expect", "intends", "anticipated", "believes" or variations (including negative variations) of such words and phrases, or statements that certain actions, events or results "may", "could", "should", "would" or "will" be taken, occur or be achieved. Such statements are based on the current expectations and views of future events of the management of the Company and are based on assumptions and subject to risks and uncertainties. Although the management of the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, the capabilities of our facilities and the expansion thereof, research and development projects of the Company, the market potential of the products of the Company , the market position of the Company, the scalability of the Company's production ability, capacity for new customer engagements, material selection programs timeframes, the ability to reduce production costs, enhance metamaterials manufacturing capabilities and extend market reach into new applications and industries, the ability to accelerate commercialization plans, the possibility of new customer contracts, the continued engagement of our employees, the technology industry, market strategic and operational activities, and management's ability to manage and to operate the business. More details about these and other risks that may impact the Company's businesses are described under the heading "Forward-Looking Information" and under the heading "Risk Factors" in the Company's Form 10-K filed with the SEC on March 1, 2022, with SEC filing date of March 2, 2022, in the Company's Form 10-Q filed with the SEC on May 10, 2022, and in subsequent filings made by Meta Materials with the SEC, which are available on SEC's website at www.sec.gov. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements or information. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and the Company does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except to the extent required by law.