Metamaterial Announces $5.5M Bridge Financing and $390,000 Loan from ACOA

- November 30th, 2020

Metamaterial Inc. has announced today that it was entered into a commitment letter with Tom Welch an insider of the Company, pursuant to which the Investor will provide up to $5,500,000 principal amount in debt financing to fund META’s continued operations while the Company completes its previously announced business combination with Torchlight Energy Resources, Inc. . Pursuant to the Commitment Letter, the Company …

Metamaterial Inc. (the ” Company ” or ” META “) (CSE: MMAT) has announced today that it was entered into a commitment letter (the ” Commitment Letter “) with Tom Welch (” Investor “), an insider of the Company, pursuant to which the Investor will provide up to $5,500,000 principal amount in debt financing (the ” Loan “) to fund META’s continued operations while the Company completes its previously announced business combination with Torchlight Energy Resources, Inc. (the ” Transaction “).

Pursuant to the Commitment Letter, the Company will be able to draw up to $500,000 monthly until October 29, 2021 . The funds drawn from time to time by the Company will bear interest at the rate of 8% per annum, payable monthly in arrears. The principal amount and any accrued but unpaid interest will be due and payable on the 10th business day after the closing of the Transaction, or on November 29, 2022 if the Transaction does not close before that date.

The Investor will have the right to convert all or any portion of the Loan and accrued but unpaid interest into common shares of the Company at a conversion price of $0.50 per share, subject to adjustment in the event of certain customary events affecting the outstanding common share. The Company may repay the Loan in whole or in part at any time on or after March 28, 2021 on not less than 10 days’ notice, provided that the Investor may convert the Loan to common shares during the notice period. If the full principal amount of $5,500,000 is drawn on the Loan and converted to common shares, a total of 11,000,000 common shares, or 14.9% of the current number of common shares outstanding, could be issued. Additional common shares could be issued if any accrued but unpaid interest is converted.

“The commitment from our investors both in-market and via today’s Commitment Letter is a testament to the confidence and support META is receiving towards the company.” said George Palikaras, President & CEO of META. “We are also pleased to receive support from ACOA under the RRRF fund. During the COVID-19 pandemic META has increased its number of employees. This assistance will provide working capital to support our plan”.

The Investor currently holds or controls outstanding common shares and convertible debentures representing 16.7% of the outstanding common shares, assuming conversion of the convertible debentures. As a result, the Loan is a related party transaction for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (” MI 61-101 “. The Loan is the result of an arm’s length negotiation between the Company and the Investor, and has been unanimously approved by the Company’s Board of Directors, including its independent directors. The maximum amount of the Loan is less than 25% of the Company’s market capitalization as calculated under MI 61-101, and consequently the Loan is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101.

The Company also announced it has entered into a contribution agreement with the Atlantic Canada Opportunities Agency (“ACOA”) for funding from the Regional Relief and Recovery Fund (“RRRF”) under ACOA’s Regional Economic Growth Through Innovation – Business Scale-up and Productivity stream. The RRRF is part of the Federal government’s COVID-19 economic response plan. Under the contribution agreement, the Company will receive an interest-free loan of up to $390,000 , repayable in 36 monthly installments starting April 1, 2023 to provide working capital assistance to mitigate economic hardships resulting from COVID-19. The amount available to be drawn under the loan is based on eligible expenses incurred by the Company since March 15, 2020 . Eligible expenses include operating expenses such as rent, utilities, certain salaries, cost of additional safety measures, office supplies, insurance and professional fees. The Company expects to draw the full amount of the loan before year end.

About Metamaterial Inc.

META is changing the way we use, interact with, and benefit from light and other forms of energy. META designs and manufactures advanced materials and performance functional films which are engineered at the nanoscale to control light and electromagnetic waves. Metamaterials help support sustainability by doing more with less; they encompass lightweight, sustainable raw materials and processes which consume less energy. META is currently developing new materials with diverse applications in the automotive, aerospace, solar, consumer electronics and medical industries. META has a growing patent portfolio with three core technologies: holography, lithography, and wireless sensing. META is headquartered in Dartmouth, Nova Scotia and has offices in London, UK and Pleasanton, California . www.metamaterial.com

Forward Looking Information

This release includes forward-looking information within the meaning of Canadian securities laws regarding the Company and its business, which may include, but are not limited to, statements with respect to the availability of the Loan and the future closing of the Transaction. Often but not always, forward-looking information can be identified by the use of words such as “expect”, “intends”, “anticipated”, “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “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 companies, including that the Company’s ability to make drawdowns on the Loan is subject to the Company’s continued compliance with the terms of the Loan and the risk that the Transaction remains subject to satisfactory completion of due diligence reviews by each party and negotiation and execution of definitive agreements, and risks regarding the Company’s ability to close the Transaction, should the parties successfully negotiate definitive agreements, including the ability to secure required regulatory or other third party approvals, or the timing of any such closing. 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 forwardlooking 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.

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

SOURCE Metamaterial Inc.

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