Meta Materials Announces Q4 and FY 2022 Results
HALIFAX, NS / ACCESSWIRE / March 23, 2023 / Meta Materials Inc. (the "Company" or "META®") (NASDAQ:MMAT)(FSE:MMAT), a developer of high-performance functional materials and nanocomposites, today announced fourth quarter and FY 2022 results.
The complete Q4 and FY 2022 financial statements, updated risk factors, going concern discussion, summary of progress made on identifying and addressing remaining material weaknesses in META's internal controls and associated management discussion and analysis for the quarter and year ended December 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 Q4:22, total revenue was $1.4MM, compared to $2.3MM in Q4:21. FY 2022 revenue grew 150%, to $10.2MM, compared to $4.1MM in FY 2021. Total operating expenses were $24.8MM, vs. $18.9MM in Q4:21. FY 2022 operating expenses totaled $90.4MM, vs. $41.5MM in FY 2021. The Q4:22 net loss was $15.2MM, or 4c per share on 362.5 million weighted average shares and including a one-time gain of $4.0MM resulting from the deconsolidation of the Next Bridge Hydrocarbons, Inc. assets and liabilities and the recording of the net estimated collectible value of notes receivable of $2.2MM due from Next Bridge Hydrocarbons, Inc., compared to the Q4:21 net loss of $29.5MM, or 13c per share on 232.9 million weighted average shares. The FY 2022 net loss was $79.1MM or $0.24 per share on 328.3 million weighted average shares and including a one-time gain of $4.0MM resulting from the deconsolidation of the Next Bridge Hydrocarbons, Inc. assets and liabilities and the recording of the net estimated collectible value of notes receivable of $2.2MM due from Next Bridge Hydrocarbons, Inc. compared to a FY 2021 net loss of $91.0MM, or $0.39 per share on 232.9 million weighted average shares.
On December 31, 2022, cash and cash equivalents totaled $11.8MM, including $1.7MM in restricted cash. In Q4:22, net cash used in operations totaled $13.7MM, and non-cash expenses were $7.8MM, including $3.9MM in depreciation and amortization and $3.4MM in stock-based compensation. In Q4:22, changes in working capital contributed $4.4MM and capital expenditures were $7.6MM. In FY 2022, net cash used in operations totaled $62.2MM.
META has identified factors that raise substantial doubt about the Company's ability to continue to operate as a going concern and to achieve compliance with NASDAQ continued listing requirements. META anticipates that it needs to implement expense reduction measures under its control and immediately raise additional capital to expand the commercialization of its products, fund its operations, further its research and development activities and ensure that it can continue to operate as a going concern. META may pursue sources of additional capital through various financing transactions or arrangements, including the sale/leaseback of certain properties, joint venturing of projects, debt financing, equity financing, or other means. Meta may not be successful in identifying suitable financing transactions in the time period required or at all, and it may not obtain the capital it requires by other means.
Future capital requirements may vary materially from period to period and will depend on many factors, including the timing and extent of spending on research and development efforts, and capital expenditures. On November 9, 2022, META filed a registration statement (the "Prospectus") no. 333-268282 on form S-3 allowing it to issue securities with aggregate offering price not to exceed $250 million. The Prospectus was declared effective by the SEC on November 18, 2022.
On February 10, 2023, META entered into a sales agreement (the "ATM Agreement") with an investment bank with the establishment of an "at-the-market" offering program under which the Company may sell up to an aggregate of $100 million of shares of common stock (the "ATM Shares") from time to time. The sales agents are entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds of each sale of shares of our common stock.
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, components and systems. 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.
Media Inquiries
Rob Stone
Vice President, Corporate Development and Communications
Meta Materials Inc.
media@metamaterial.com
Investor Contact
Mark Komonoski
Senior Vice President
Integrous Communications
Phone: 1-877-255-8483
Email: ir@metamaterial.com
META MATERIALS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of | As of | |||||||
December 31, 2022 | December 31, 2021 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 10,090,858 | $ | 46,645,704 | ||||
Restricted cash | 1,720,613 | 788,768 | ||||||
Short-term investments | - | 2,875,638 | ||||||
Grants receivable | - | 175,780 | ||||||
Accounts and other receivables | 902,718 | 1,665,700 | ||||||
Notes receivable | 2,211,900 | - | ||||||
Inventory | 468,027 | 265,718 | ||||||
Prepaid expenses and other current assets | 7,202,099 | 3,451,367 | ||||||
Assets held for sale | - | 75,500,000 | ||||||
Due from related parties | 8,461 | 10,657 | ||||||
Total current assets | 22,604,676 | 131,379,332 | ||||||
Intangible assets, net | 56,313,317 | 28,971,824 | ||||||
Property, plant and equipment, net | 42,674,699 | 27,018,114 | ||||||
Operating lease right-of-use assets | 5,576,824 | 6,278,547 | ||||||
Goodwill | 281,748,466 | 240,376,634 | ||||||
Total assets | $ | 408,917,982 | $ | 434,024,451 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities | ||||||||
Trade and other payables | 16,694,211 | 13,335,470 | ||||||
Current portion of long-term debt | 483,226 | 491,278 | ||||||
Current portion of deferred revenues | 730,501 | 779,732 | ||||||
Current portion of deferred government assistance | 799,490 | 846,612 | ||||||
Preferred stock liability | - | 75,500,000 | ||||||
Current portion of operating lease liabilities | 967,126 | 663,861 | ||||||
Asset retirement obligations | - | 21,937 | ||||||
Total current liabilities | 19,674,554 | 91,638,890 | ||||||
Deferred revenues | 479,808 | 637,008 | ||||||
Deferred government assistance | 319,017 | 3,038 | ||||||
Deferred tax liability | 3,253,985 | 324,479 | ||||||
Long-term operating lease liabilities | 3,375,031 | 3,706,774 | ||||||
Funding obligation | 180,705 | 268,976 | ||||||
Long-term debt | 3,070,729 | 2,737,171 | ||||||
Total liabilities | 30,353,829 | 99,316,336 | ||||||
Stockholders' equity | ||||||||
Common stock - $0.001 par value; 1,000,000,000 shares authorized, 362,247,867 shares issued and outstanding at December 31, 2022, and $.001 par value; unlimited shares authorized, 284,573,316 shares issued and outstanding at December 31, 2021 | 340,425 | 262,751 | ||||||
Additional paid-in capital | 590,962,866 | 463,136,404 | ||||||
Accumulated other comprehensive income (loss) | (5,242,810 | ) | (296,936 | ) | ||||
Accumulated deficit | (207,496,328 | ) | (128,394,104 | ) | ||||
Total stockholders' equity | 378,564,153 | 334,708,115 | ||||||
Total liabilities and stockholders' equity | $ | 408,917,982 | $ | 434,024,451 | ||||
META MATERIALS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Three months ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | ||||||||||||||||
Product sales | 277,447 | 86,484 | 1,211,746 | 407,915 | ||||||||||||
Development revenue | 1,168,286 | 2,202,798 | 8,988,421 | 3,674,602 | ||||||||||||
Total Revenue | 1,445,733 | 2,289,282 | 10,200,167 | 4,082,517 | ||||||||||||
Cost of goods sold | 682,797 | 529,764 | 3,036,190 | 675,973 | ||||||||||||
Gross Profit | 762,936 | 1,759,518 | 7,163,977 | 3,406,544 | ||||||||||||
Operating Expenses | ||||||||||||||||
Selling & Marketing | 3,053,932 | 1,144,885 | 6,244,883 | 2,267,354 | ||||||||||||
General & Administrative | 15,801,181 | 13,483,954 | 61,543,282 | 29,699,602 | ||||||||||||
Research & Development | 5,944,871 | 4,266,606 | 22,640,495 | 9,497,427 | ||||||||||||
Total operating expenses | 24,799,984 | 18,895,445 | 90,428,660 | 41,464,383 | ||||||||||||
Loss from operations | (24,037,048 | ) | (17,135,927 | ) | (83,264,683 | ) | (38,057,839 | ) | ||||||||
Other income (expense) | ||||||||||||||||
Interest expense, net | 266,460 | (12,612 | ) | (174,234 | ) | (1,106,445 | ) | |||||||||
Loss on foreign exchange, net | 992,508 | 564,660 | (2,054,447 | ) | (205,882 | ) | ||||||||||
Gain on deconsolidation of wholly-owned subsidiary | 3,990,737 | - | 3,990,737 | |||||||||||||
Loss on financial instruments, net | - | - | (40,540,091 | ) | ||||||||||||
Other (loss) income, net | (2,109,229 | ) | (13,612,192 | ) | (3,433,757 | ) | (11,939,067 | ) | ||||||||
Total other expense, net | 3,140,476 | (13,060,144 | ) | (1,671,701 | ) | (53,791,485 | ) | |||||||||
Loss before income taxes | (20,896,572 | ) | (30,196,071 | ) | (84,936,384 | ) | (91,849,324 | ) | ||||||||
Income tax recovery | 5,686,967 | 665,880 | 5,834,160 | 852,063 | ||||||||||||
Net loss | (15,209,605 | ) | (29,530,191 | ) | (79,102,224 | ) | (90,997,261 | ) | ||||||||
Other Comprehensive Income net of tax | ||||||||||||||||
Foreign currency translation (loss) gain | 1,619,280 | (303,902 | ) | (4,945,874 | ) | (321,663 | ) | |||||||||
Fair value gain on changes of own credit risk | - | - | - | 680,611 | ||||||||||||
Total Other Comprehensive (Loss) Income | 1,619,280 | (303,902 | ) | (4,945,874 | ) | 358,948 | ||||||||||
Comprehensive loss | (13,590,325 | ) | (29,834,093 | ) | (84,048,098 | ) | (90,638,313 | ) | ||||||||
Basic and diluted loss per share | (0.04 | ) | (0.13 | ) | (0.24 | ) | (0.39 | ) | ||||||||
Weighted average number of shares outstanding - basic and diluted | 362,531,231 | 232,898,398 | 328,350,452 | 232,898,398 | ||||||||||||
META MATERIALS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31, | ||||||||
2022 | 2021 | |||||||
$ | $ | |||||||
Cash flows from operating activities: | ||||||||
Net loss | (79,102,224 | ) | (90,997,261 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Non-cash finance income | (135,524 | ) | (471,689 | ) | ||||
Non-cash interest expense | 403,317 | 902,940 | ||||||
Non-cash lease expense | 1,608,992 | 439,791 | ||||||
Deferred income tax | (5,834,160 | ) | (852,063 | ) | ||||
Depreciation and amortization | 9,272,074 | 3,491,493 | ||||||
Impairment of assets | 108,004 | 237,013 | ||||||
Unrealized foreign currency exchange loss | 2,050,029 | 407,352 | ||||||
Loss on financial instruments, net | - | 40,540,091 | ||||||
Gain on deconsolidation of wholly-owned subsidiary | (3,990,737 | ) | ||||||
Change in deferred revenue | (129,679 | ) | (679,541 | ) | ||||
Non-cash government assistance | (3,047 | ) | (544,932 | ) | ||||
Gain on sale of assets | (783 | ) | - | |||||
Loss on debt settlement | - | 19,253 | ||||||
Stock-based compensation | 13,184,396 | 1,576,849 | ||||||
Non-cash consulting expense | 677,638 | 6,513,378 | ||||||
Changes in operating assets and liabilities | (353,090 | ) | 4,652,415 | |||||
Net cash used in operating activities | (62,244,794 | ) | (34,764,911 | ) | ||||
Cash flows from investing activities | ||||||||
Purchases of intangible assets | - | (1,133,894 | ) | |||||
Purchases of property, plant and equipment | (19,587,511 | ) | (11,655,417 | ) | ||||
Proceeds from sale of property, plant and equipment | 39,140 | - | ||||||
Proceeds from (Purchases of) short-term investments | 2,811,152 | (2,889,852 | ) | |||||
Proceeds from below-market capital government loan | 1,071,862 | - | ||||||
Acquisition of business, net of cash acquired | (3,486,906 | ) | (66,131,025 | ) | ||||
Loan advance pursuant to deconsolidation | (319,987 | ) | - | |||||
Proceeds from reverse takeover | - | 146,954,733 | ||||||
Net cash provided by (used in) investing activities | (19,472,250 | ) | 65,144,545 | |||||
Cash flows from financing activities | ||||||||
Proceeds from long-term debt | - | 1,127,151 | ||||||
Proceeds from the issuance of common stock and warrants | 50,000,000 | - | ||||||
Stock issuance costs paid on the issuance of common stock and warrants | (3,680,666 | ) | - | |||||
Repayments of long-term debt | (552,579 | ) | (1,090,047 | ) | ||||
Proceeds from government grants | - | 223,384 | ||||||
Proceeds from unsecured promissory notes | - | 13,963,386 | ||||||
Proceeds from stock option exercises | 448,711 | 1,293,263 | ||||||
Repurchases of common stock for income tax withheld upon settlement of restricted stock units | (18,027 | ) | - | |||||
Proceeds from warrant exercises | 169,574 | 138,726 | ||||||
Net cash provided by financing activities | 46,367,013 | 15,655,863 | ||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (35,350,031 | ) | 46,035,497 | |||||
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 | (272,970 | ) | 3,292 | |||||
Cash, cash equivalents and restricted cash at end of the period | 11,811,471 | 47,434,472 | ||||||
Supplemental cash flow information | ||||||||
Accrued purchases of property, equipment, and patents | 2,270,887 | 1,692,969 | ||||||
Right-of-use assets obtained in exchange for lease liabilities | 288,499 | 3,590,148 | ||||||
Right-of-use assets and prepaid expenses recognized in exchange for common stock | 2,149,381 | |||||||
Settlement of liabilities in common stock | - | 51,992,451 | ||||||
Beneficial conversion feature on convertible 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 reduction in expenses, the ability of the Company to meet its capital needs, 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 23, 2023, 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.
SOURCE: Meta Materials Inc.
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