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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:
media@metamaterial.com
Investor inquiries:
Mark Komonoski
Investor Relations
phone: 1-877-255-8483
mark@metamaterial.com
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.
View source version on accesswire.com:
https://www.accesswire.com/649776/Metamaterial-Releases-First-Quarter-2021-Results
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