Meta Materials Announces Q3 FY 2022 Results

Topic:

HALIFAX, NS / ACCESSWIRE / November 9, 2022 / Meta Materials Inc. (the "Company" or "META®") (NASDAQ:MMAT)(FSE:MMAT), a developer of high-performance smart materials and nanocomposites, today announced third quarter FY 2022 results. Please visit the Investors section of our website to view the Q3 2022 Shareholder Letter. The Company will host a webcast on Thursday, November 10, 2022, at 8:00 AM EST.

The Q3 2022 financial statements and associated management discussion and analysis for the quarter ended September 30, 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 Q3:22, total revenue grew 329% Y/Y, to $2,456,012, compared to $572,612 in Q3:21. For the nine months ended September 30, 2022, total revenue grew 388%, to $8,754,434, compared to $1,793,235 in the first nine months of FY 2021. The Q3:22 net loss was $24,475,320, or 7c per share on 362,260,641 weighted average shares, compared to the Q3:21 net loss of $11,425,248, or 4c per share on 280,080,786 weighted average shares. For the first nine months of FY 2022, the net loss was $63,892,619, or 20c per share on 316,661,487 weighted average shares, compared to a net loss in the first nine months of FY 2021 of $61,467,070 (which included a $40,540,091 non-cash loss on financial instruments), or 28c per share on 216,135,190 weighted average shares.

Net cash used in operating activities during the quarter ended September 30, 2022 was $19,513,100, and net cash used in operating activities during the nine months YTD was $48,516,511. In Q3:22, capital expenditures for purchases of property, plant and equipment were $3,003,699. As of September 30, 2022, cash and equivalents totaled approximately $32.2 million, including about $0.4 million in restricted cash. The Company has no debt, except for approximately $2.9 million in various interest-free, unsecured loans from ACOA (Atlantic Canada Opportunities Agency). As of November 9, 2022, common shares outstanding were 361,930,468.

Webcast Details:

Date: November 10, 2022
Time: 8:00 AM EST / 5:00 AM PST
To register, please use the link below:
https://audience.mysequire.com/webinar-view?webinar_id=a00e56cc-e589-4119-a7fb-a33db87c6498

About Meta Materials Inc.

META® delivers previously unachievable performance, across a range of applications, by inventing, designing, developing, and manufacturing sustainable, high-performance, 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 metamaterial 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 September 30, 2022			As of December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	30,608,797		$	46,645,704
Restricted cash		436,123			788,768
Short-term investments		1,178,685			2,875,638
Grants receivable		26,062			175,780
Accounts receivable		1,977,676			1,665,700
Inventory		274,090			265,718
Prepaid expenses and other current assets		6,466,469			3,451,367
Assets held for sale		71,700,000			75,500,000
Due from related parties		8,552			10,657
Total current assets		112,676,454			131,379,332
Intangible assets, net		51,025,428			28,971,824
Property, plant and equipment, net		34,534,045			27,018,114
Operating lease right-of-use assets		5,366,070			6,278,547
Goodwill		279,052,357			240,376,634
Total assets	$	482,654,354		$	434,024,451

Liabilities and stockholders' equity
Current liabilities
Trade and other payables		12,818,253			13,335,470
Current portion of long-term debt		742,782			491,278
Current portion of deferred revenues		623,895			779,732
Current portion of deferred government assistance		783,055			846,612
Preferred stock liability		71,700,000			75,500,000
Current portion of operating lease liabilities		864,519			663,861
Asset retirement obligations		21,937			21,937
Total current liabilities		87,554,441			91,638,890
Deferred revenues		503,690			637,008
Deferred government assistance		-			3,038
Deferred tax liability		161,662			324,479
Long-term operating lease liabilities		3,177,910			3,706,774
Funding obligation		292,749			268,976
Long-term debt		2,137,948			2,737,171
Total liabilities		93,828,400			99,316,336

Stockholders' equity
Common stock - $0.001 par value; 1,000,000,000 shares authorized, 361,377,856 shares issued and outstanding at September 30, 2022, and $.001 par value; unlimited shares authorized, 284,573,316 shares issued and outstanding at December 31, 2021		339,555			262,751
Additional paid-in capital		587,635,212			463,136,404
Accumulated other comprehensive income (loss)		(6,862,090	)		(296,936	)
Accumulated deficit		(192,286,723	)		(128,394,104	)
Total stockholders' equity		388,825,954			334,708,115
Total liabilities and stockholders' equity	$	482,654,354		$	434,024,451

META MATERIALS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

	Three months ended						Nine months ended
	September 30,						September 30,
	2022			2021			2022		2021
Revenue
Product sales		432,059			297,431		934,299		321,431
Development revenue		2,023,953			275,181		7,820,135		1,471,804
Total Revenue		2,456,012			572,612		8,754,434		1,793,235
Cost of goods sold		696,730			145,103		2,353,393		146,209
Gross Profit		1,759,282			427,509		6,401,041		1,647,026
Operating Expenses
Selling & Marketing		1,027,886			427,004		3,190,951		1,122,469
General & Administrative		16,674,309			9,776,850		45,743,892		16,217,012
Research & Development		6,233,685			1,816,547		16,693,833		5,229,456
Total operating expenses		23,935,880			12,020,401		65,628,676		22,568,937
Loss from operations		(22,176,598	)		(11,592,892	)	(59,227,635	)	(20,921,911	)
Other income (expense)
Interest expense, net		(134,205	)		(215,116	)	(440,694	)	(1,093,833	)
Loss on foreign exchange, net		(2,223,633	)		(440,157	)	(3,046,955	)	(770,542	)
Loss on financial instruments, net		-					-		(40,540,091	)
Other (loss) income, net		21,908			739,260		(1,324,528	)	1,673,124
Total other expense, net		(2,335,930	)		83,987		(4,812,177	)	(40,731,342	)
Loss before income taxes		(24,512,528	)		(11,508,905	)	(64,039,812	)	(61,653,253	)
Income tax recovery		37,208			83,657		147,193		186,183
Net loss		(24,475,320	)		(11,425,248	)	(63,892,619	)	(61,467,070	)
Other Comprehensive Income net of tax
Foreign currency translation (loss) gain		(4,413,860	)		(125,976	)	(6,565,154	)	(17,328	)
Fair value gain on changes of own credit risk		-			-		-		680,178
Total Other Comprehensive (Loss) Income		(4,413,860	)		(125,976	)	(6,565,154	)	662,850
Comprehensive loss		(28,889,180	)		(11,551,224	)	(70,457,773	)	(60,804,220	)
Basic and diluted loss per share		(0.07	)		(0.04	)	(0.20	)	(0.28	)
Weighted average number of shares outstanding - basic and diluted		362,260,641			280,080,786		316,661,487		216,135,190

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

	Nine months ended
	September 30, 2022			September 30, 2021
		$			$

Cash flows from operating activities:
Net loss		(63,892,619	)		(61,467,070	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash finance income		(12,433	)		-
Non-cash interest expense		419,684			904,749
Non-cash lease expense		1,212,415			256,785
Deferred income tax		(147,193	)		(186,183	)
Depreciation and amortization		5,377,470			1,798,607
Unrealized foreign currency exchange loss		2,843,223			279,805
Loss on financial instruments, net		-			40,540,091
		(199,785	)		(239,057	)
Non-cash government assistance		(3,047	)		(508,730	)
Loss on debt settlement		-			19,253
Gain on sale of property, plant and equipment		(783	)
Stock-based compensation		9,763,627			855,989
Non-cash consulting expense		862,771			3,926,628
Changes in operating assets and liabilities		(4,739,841	)		(1,764,867	)
Net cash used in operating activities		(48,516,511	)		(15,584,000	)
Cash flows from investing activities
Purchases of intangible assets		-			(838,664	)
Purchases of property, plant and equipment		(11,975,134	)		(5,552,268	)
Proceeds from sale of property, plant and equipment		39,140
Proceeds from short-term investments		1,620,281
Acquisition of business, net of cash acquired		(3,486,906	)
Proceeds from reverse takeover		-			146,954,733
Net cash provided by (used in) investing activities		(13,802,619	)		140,563,801
Cash flows from financing activities
Proceeds from the issuance of common stock and warrants		50,000,000
Costs paid on the issuance of common stock and warrants		(3,680,666	)
Proceeds from long-term debt		-			1,127,151
Repayments of long-term debt		(467,767	)		(938,496	)
Proceeds from government grants		-			223,384
Proceeds from unsecured promissory notes		-			13,963,386
Proceeds from stock option exercises		337,793			374,652
Proceeds from warrants exercises		169,574			93,993
Proceeds from broker warrants exercises					16,255
Net cash provided by financing activities		46,358,934			14,860,325

Net (decrease) increase in cash, cash equivalents and restricted cash		(15,960,196	)		139,840,126
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		(429,356	)		(17,940	)
Cash, cash equivalents and restricted cash at end of the period		31,044,920			141,217,869

Supplemental cash flow information
Accrued purchases of property, equipment, and patents		536,778			799,305
Right-of-use assets obtained in exchange for lease liabilities		142,378			892,003
Right-of-use assets and prepaid expenses recognized in exchange for common stock					2,149,381
Settlement of liabilities in common stock		-			52,063,432
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 ability of the Company to continue to meet the Nasdaq requirements to maintain a Nasdaq listing, 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 total available market and market potential of the products of the Company, the market position of the Company, the need to raise more capital and the ability to do so, 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 an SEC filing date of March 2, in the Company's Form 10-Q filed with the SEC on November 9, 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.