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META Announces Second Quarter and H1 2021 Results

HALIFAX, NS / ACCESSWIRE / August 12, 2021 / Meta Materials Inc. (the "Company" or "META®") (NASDAQ:MMAT) a developer of high-performance functional materials and nanocomposites, today announced second quarter 2021 results. Please visit the Investors section of our website to view the Q2 2021 Shareholder Letter .

The interim financial statements and the associated management discussion and analysis for the quarter ended June 30, 2021 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 Q2 2021, total revenue grew 197%, to $624,320, compared to $210,344 in Q2 2020. For H1 2021, total revenue increased by 88%, to $1,220,623, versus $650,683 in H1 2020. The Q2 2021 net loss was $5,181,392, 3c per share on 197,911,144 weighted average shares, compared to a net loss of $1,816,741, 1c per share on 155,931,625 weighted average shares in Q2 2020. For H1 2021, the net loss was $49,339,912, 27c per share on 183,485,933 weighted average shares, compared to a loss of $3,234,029, 3c per share on 120,093,443 weighted average shares in H1 2020.

The H1 2021 net loss included a one-time, non-cash loss of $40,540,091 on financial instruments. Net cash used in operating activities during H1 2021 was $5,607,851, compared to $4,461,287 in H1 2020. Capital expenditures for purchases of property, plant, and equipment and intangible assets totaled $3,314,875. As of June 30, 2021, cash and cash equivalents totaled $154,634,423, and common shares outstanding were 279,782,854.

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 achievements have been widely recognized, including being named a Global Cleantech 100 company. Learn more at www.metamaterial.com .

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

As of
June 30, 2021
As of
December 31, 2020

ASSETS
Current assets
Cash and cash equivalents$154,634,423$1,395,683
Restricted cash433,627-
Grants receivable407,523327,868
Accounts receivable207,76022,833
Inventory368,293463,382
Prepaid expenses and other current assets1,604,710514,204
Assets held for sale72,797,392-
Due from related parties57,658-
Total current assets230,511,3862,723,970
Intangible assets, net4,389,6074,476,614
Property, plant and equipment, net5,382,1962,761,171
Operating lease right-of-use assets2,994,424270,581
Goodwill217,613,966-
Total assets$460,891,579$10,232,336

Liabilities and stockholders' equity (deficit)
Current liabilities
Trade and other payables5,377,3752,940,452
Due to related party-245,467
Current portion of long-term debt1,349,274290,544
Current portion of deferred revenue1,453,5561,239,927
Current portion of deferred government assistance866,011779,578
Preferred stock liability77,906,354
Current portion of operating lease liabilities279,832150,802
Asset retirement obligations21,937
Unsecured convertible promissory notes-1,203,235
Secured convertible debentures-5,545,470
Total current liabilities87,254,33912,395,475
Deferred revenue681,625804,143
Deferred government assistance76,807146,510
Deferred tax liability219,962318,054
Unsecured convertible debentures-1,825,389
Long-term operating lease liabilities1,145,049119,779
Funding obligation859,828776,884
Long-term debt2,739,6202,743,504
Total liabilities92,977,23019,129,738

Stockholders' equity (deficit)
Common stock - $0.001 par value; 1,000,000,000 shares authorized, 279,782,854 shares issued and outstanding at June 30, 2021, and $Nil par value; unlimited shares authorized, 154,236,692 shares issued and outstanding at December 31, 2020257,966132,347
Additional paid-in capital454,259,19229,021,974
Accumulated other comprehensive income (loss)133,946(654,880)
Accumulated deficit(86,736,755)(37,396,843)
Total stockholders' equity (deficit)367,914,349(8,897,402)
Total liabilities and stockholders' equity (deficit)$460,891,579$10,232,336

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

Three months ended
June 30,
Six months ended
June 30,
202120202021 2020
Revenue
Product sales1,953-24,0001,922
Development revenue622,367210,3441,196,623648,761
Total Revenue624,320210,3441,220,623650,683
Cost of goods sold7061,3361,1062,160
Gross Profit623,614209,0081,219,517648,523
Operating Expenses
Selling & Marketing298,871153,962695,465324,528
General & Administrative3,145,3671,553,1185,738,2523,157,652
Research & Development1,633,653960,4303,412,9091,892,601
Total operating expenses5,077,8912,667,5109,846,6265,374,781
Other income (expense)
Interest expense, net(427,809)(324,421)(878,717)(516,225)
(Loss) Gain on foreign exchange, net(163,941)(323,172)(330,385)256,673
(Loss) Gain on financial instruments, net(535,170)1,042,928(40,540,091)1,285,765
Other income, net341,958236,001933,864411,669
Total other income (expenses)(784,962)631,336(40,815,329)1,437,882
Loss before income taxes(5,239,239)(1,827,166)(49,442,438)(3,288,376)
Income tax recovery57,84710,425102,52654,347
Net loss(5,181,392)(1,816,741)(49,339,912)(3,234,029)
Other Comprehensive Income (Loss) net of tax
Foreign currency translation gain (loss)87,087160,012108,648(159,248)
Fair value gain (loss) on changes of own credit risk9,011(388,332)680,178(365,208)
Total Other Comprehensive Income (Loss)96,098(228,320)788,826(524,456)
Comprehensive loss(5,085,294)(2,045,061)(48,551,086)(3,758,485)
Basic and diluted loss per share(0.03)(0.01)(0.27)(0.03)
Weighted average number of shares outstanding - basic and diluted197,911,144155,931,625183,485,933120,093,443

META MATERIALS INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED)

Six months ended
June 30, 2021 June 30, 2020
$ $
Cash flows from operating activities:
Net loss(49,339,912)(3,234,029)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash finance income-(14,002)
Non-cash interest expense742,174378,485
Non-cash lease expense160,437-
Deferred income tax(102,526)(54,347)
Depreciation and amortization1,173,8841,197,123
Unrealized foreign currency exchange loss (gain)230,837(304,973)
Loss (gain) on financial instruments, net40,540,091(1,285,765)
Change in deferred revenue18,302(232,986)
Non-cash government assistance(472,499)(182,664)
Loss on debt settlement19,253-
Stock-based compensation651,718708,468
Non-cash consulting expense12,00943,673
Changes in operating assets and liabilities758,381(1,480,270)
Net cash used in operating activities (5,607,851 ) (4,461,287 )
Cash flows from investing activities
Purchases of intangible assets(274,579)(46,977)
Purchases of property, plant and equipment(3,040,296)(538,893)
Proceeds from reverse takeover146,954,7333,072,136
Net cash provided by investing activities 143,639,858 2,486,266
Cash flows from financing activities
Proceeds from long-term debt1,127,15125,783
Repayments of long-term debt(53,331)(190,633)
Proceeds from government grants223,384198,286
Proceeds from unsecured promissory notes13,963,386-
Proceeds from secured convertible debentures-3,630,019
Proceeds from unsecured convertible debentures-693,784
Proceeds from issuance of common stock and warrants, net-598,546
Proceeds from stock option exercises113,155-
Proceeds from warrants exercises93,993-
Proceeds from broker warrants exercises16,255-
Net cash provided by financing activities 15,483,993 4,955,785

Net increase in cash, cash equivalents and restricted cash 153,516,000 2,980,764
Cash, cash equivalents and restricted cash at beginning of the period1,395,683407,061
Effects of exchange rate changes on cash, cash equivalents and restricted cash156,3673,931
Cash, cash equivalents and restricted cash at end of the period 155,068,050 3,391,756

Supplemental cash flow information
Accrued purchases of property, equipment, and patents297,34535,724
Right-of-use assets obtained in exchange for lease liabilities1,730,743-
Right-of-use assets and prepaid expenses recognized in exchange for common stock2,149,381-
Settlement of liabilities in common stock52,063,432-
Interest paid on debt64,52818,124

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, Nanotech, their businesses and the proposed transaction, 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 and Nanotech, and the benefits to the Company of the potential acquisition of Nanotech. Often but not always, forward-looking information can be identified by the use of words such as "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, including risks related to the potential benefits of the transaction with Nanotech, the capabilities of Nanotech's facility and the expansion thereof, research and development projects of the Company, the market potential of the products of the Company and Nanotech, the market position of the Company, the completion of the transaction, 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 Nanotech's team, 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" in the Company's Form 8-K filed with the SEC on July 23, 2021, and under the heading "Risk Factors" in the Company's Form 10-Q filed with the SEC on May 14, 2021, in the Company's Form 10-K filed with the SEC on March 18, 2021, 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.

Contact

Mark Komonoski
Senior Vice President
Integrous Communications
Phone: 1-877-255-8483
Email: ir@metamaterial.com

Media inquiries:

media@metamaterial.com

SOURCE: Meta Materials Inc.



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