Metamaterial Releases First Quarter 2021 Results
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Metamaterial Releases First Quarter 2021 Results

Monday, May 31, 2021 8:06 AM
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Topic:
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HALIFAX, NS / ACCESSWIRE / May 31, 2021 / Metamaterial Inc. (the "Company" or "META") (CSE:MMAT) a developer of high-performance functional materials and nanocomposites, today released first quarter 2021 results. Please visit the Investors section of our website to view the Q1 2021 Shareholder Letter.

The interim financial statements and the associated management discussion and analysis for the quarter ended March 31, 2021 are available on the Investors section of our website as well as under the Company's profile on SEDAR at www.sedar.com.

One-time non-cash loss on conversion of debt

In Q1 2021, the Company recorded a $50.1 million (55c per share) one-time, non-cash debt revaluation expense resulting from the conversion of $12.8 million of secured and unsecured debt of the Company into common stock at varying share prices of between $0.50 per share and $0.70 per share. These conversions were announced by the Company at varying dates during Q1 2021 and the creditors included Tom Welsh, Ann Lambert, Dicot Holdings, Lark Investments and BDC Capital. Typically, expenses booked in the profit and loss would flow to shareholder's deficit thereby reducing overall shareholder's equity. The accounting method chosen by the Company for its debt valuations provides, in part, that this non-cash expense be recorded in common stock to reflect the issuance of new shares to the creditors.

The accounting method described above resulted in the Company reporting, for the first time since becoming a public company, positive shareholder's equity of $277,680 at the end of the quarter.

The conversions had the beneficial effect of significantly reducing the Company's liabilities and eliminating broad-based security interests in all of the Company's assets previously held by the creditors. The creditors exchanged their secured and unsecured debt for common stock of the Company at conversion prices that were established at the time the instruments were created and, at which time, represented a conversion above the then market price of the common stock. Had the Company been permitted to pay off the debts in cash at the time of conversion, fewer shares would have been required to be issued and a lower loss would have been recorded. However, the terms of the instruments prevented any pre-payment of the debts by the Company.

As a result of the above one-time non-cash loss on conversion of debt, the Q1 2021 net loss was $55,079,277, 60c per share on 91,277,328 weighted average shares, compared to a Q1:2020 net loss of $5,392,355, 12c per share on 46,587,115 weighted average shares. The total Q1:2021 revenue was $756,144, an increase of 26.5% compared to Q1:2020 revenue of $597,575.

About Metamaterial 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.

The CSE has neither approved nor disapproved the contents of this news release.

Media inquiries:
[email protected]

Investor inquiries:
Mark Komonoski
Investor Relations
phone: 1-877-255-8483
[email protected]

     
     
Metamaterial Inc.
 
 
 
 
 
Interim consolidated statements of financial position (unaudited)
[expressed in Canadian dollars]
 
 
 
As at
 
 
 
March 31, 2021
December 31, 2020
 
$
$
 
 
 
Assets
 
 
Current
 
 
Cash and cash equivalents
15,187,356
1,776,983
Restricted cash
1,000,000
-
Grants receivable
378,058
417,442
Other receivables
175,074
50,330
Due from related party
61,199
-
Inventory
429,026
589,977
Prepaid expenses
396,580
436,909
HST receivable
171,201
196,526
Total current assets
17,798,494
3,468,167
Intangible assets, net
5,657,677
5,699,626
Property and equipment, net
4,954,788
3,515,523
Right-of-use assets
1,554,995
337,441
Total non-current assets
12,167,460
9,552,590
Total assets
29,965,954
13,020,757
Liabilities and shareholders' equity (deficiency)
 
 
Current
 
 
Trade and other payables
3,787,844
3,743,783
Due to related party
-
312,528
Current portion of long-term debt
1,185,756
369,921
Current portion of deferred revenue
2,442,747
1,578,676
Current portion of deferred government assistance
1,156,802
992,560
Secured convertible debentures
-
7,060,493
Unsecured convertible promissory notes
13,307,966
1,531,960
Current portion of lease liabilities
286,279
192,001
Total current liabilities
22,167,394
15,781,922
Deferred revenue
875,868
1,023,835
Deferred government assistance
140,866
186,536
Deferred tax liability
347,865
404,947
Unsecured convertible debentures
-
2,324,085
Funding obligation
1,026,686
989,128
Lease liabilities
1,373,733
152,506
Long-term debt
3,755,862
3,493,029
Total non-current liabilities
7,520,880
8,574,066
Total liabilities
29,688,274
24,355,988
 
 
 
Shareholders' deficiency
 
 
Common shares
100,351,896
34,248,734
Contributed surplus
6,305,182
5,804,292
Warrants
535,442
565,446
Accumulated other comprehensive loss
252,788
134,648
Deficit
(107,167,628)
(52,088,351)
Total shareholders' equity (deficiency)
277,680
(11,335,231)
Total liabilities and shareholders' deficiency
29,965,954
13,020,757
 
 
 
 
 
 
Metamaterial Inc.    
     
Interim consolidated statements of loss and comprehensive loss (unaudited)
[expressed in Canadian dollars]
 
 
 
 
Three months ended March 31
 
2021
2020
 
$
$
Product sales
27,955
2,615
Development revenue
728,189
594,960
Revenue, net
756,144
597,575
Cost of goods sold
508
1,121
Gross Profit
755,636
596,454
 
 
 
Expenses (income)
 
 
Salaries and benefits
1,388,842
1,199,037
Depreciation and amortization
828,360
878,902
Impairment expense
-
-
Travel and entertainment
4,516
72,237
Other expenses
339,235
137,528
Listing expenses
-
3,353,512
Stock exchange fees
4,150
-
Rent and utilities
81,017
116,212
Finance Income
(806)
(16,350)
Finance costs
672,627
263,674
Consulting
451,776
216,959
Investor relations
128,761
19,506
Research and development
709,111
118,458
Professional fees
1,062,802
271,574
Share-based compensation expense
541,151
450,028
Unrealized gain on FVTPL liabilities
(250,456)
(335,259)
Realized (gain) loss on FVTPL liabilities
50,067,114
128,653
Technology license fees
525
13,057
Realized foreign currency exchange loss
124,475
62,163
Unrealized foreign currency exchange loss (gain)
61,811
(850,982)
Government assistance
(323,074)
(45,671)
Other income
(400)
-
 
55,891,537
6,053,238
Net loss before tax
(55,135,901)
(5,456,784)
Income tax recovery
56,624
64,429
Net loss for the period
(55,079,277)
(5,392,355)
 
 
 
Other comprehensive loss, net of income taxes
 
 
Items that may be subsequently reclassified to income:
 
 
Unrealized foreign currency translation adjustment
118,250
(634,668)
Comprehensive loss for the period
(54,961,027)
(6,027,023)
 
 
 
Basic and diluted loss per share
$ (0.60)
$ (0.12)
Weighted average number of shares outstanding
 
 
- basic and diluted
91,277,328
46,587,115
 
 
 
 
 
 
Metamaterial Inc.    
     
Interim condensed consolidated statements of cash flows (unaudited)
[expressed in Canadian dollars]
 
 
 
 
 
 
Three months ended March 31
2021
2020
 
$
$
 
 
 
Operating activities
 
 
Net loss for the period
(55,079,277)
(5,392,355)
Add (deduct) items not affecting cash:
 
 
Non-cash finance income
-
(16,085)
Non-cash finance costs
557,236
225,922
Deferred income tax recovery
(56,624)
(64,429)
Depreciation and amortization
828,360
878,902
Unrealized foreign currency exchange loss
143,649
(900,091)
Listing expenses
-
3,353,512
Unrealized gain on FVTPL liabilities
(250,455)
(335,259)
Realized loss on FVTPL liabilities
50,067,114
128,653
Change in deferred revenue
717,404
(104,305)
Change in deferred government assistance
(158,831)
144,196
Share-based compensation expense
541,151
450,028
Non-cash consulting
-
30,000
Net change in non-cash working capital items
(182,265)
(2,110,991)
Cash used in operating activities
(2,872,538)
(3,712,302)
 
 
 
Investing activities
 
 
Additions to intangible assets
(52,902)
(69,086)
Additions to property and equipment
(1,801,618)
(309,851)
Increase in restricted cash
(1,000,000)
-
Reverse takeover, net cash
-
4,174,979
Cash used in investing activities
(2,854,520)
3,796,042
 
 
 
Financing activities
 
 
Proceeds from long-term debt
1,390,000
50,079
Repayment of long-term debt
(17,856)
(25,658)
Proceeds from unsecured convertible promissory notes
17,704,800
-
Proceeds from exercise of stock options
61,659
-
Proceeds from exercise of warrants
60,657
-
Net proceeds from units
-
814,270
Proceeds from unsecured convertible debentures
-
450,000
Payment of lease liabilities
(57,620)
(25,988)
Cash provided by financing activities
19,141,640
1,262,703
 
 
 
Net (decrease) increase in cash and cash equivalents
13,414,582
1,346,443
Cash and cash equivalents, beginning of the period
1,776,983
528,691
Effects of exchange rate changes on cash and cash equivalents
(4,209)
10,768
Cash and cash equivalents, end of the period
15,187,356
1,885,902
 
 
 
Supplemental cash flow information
 
 
Interest on debt paid
81,818
20,335

SOURCE: Metamaterial Inc.

Metamaterial Inc.
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