Metamaterial Releases Second Quarter 2020 Results

- September 1st, 2020

Metamaterial Inc. a developer of high-performance functional materials and nanocomposites, today released second quarter 2020 results.

Metamaterial Inc. (“Company” or “META”) (CSE:MMAT) a developer of high-performance functional materials and nanocomposites, today released second quarter 2020 results. Please visit the Investors section of our website to view the Q2 2020 Shareholder Letter.

The interim financial statements and the associated management discussion and analysis for the quarter and six months ended June 30, 2020 are available on the Investors section of our website as well as under the Company’s profile on SEDAR at www.sedar.com.

“We are excited to advance toward our next phase of volume production, having signed a ten-year lease for an approximately 53,000 square foot facility, which will host holography and lithography R&D labs and Intel’s first-of-a-kind, high-volume, roll-to-roll holographic manufacturing equipment for AR and other Applications. In 2020 YTD, we have 16 active, customer-funded development programs, and we are engaged with a strong pipeline of more than 50 project opportunities with global companies,” said George Palikaras, President and CEO.

About Metamaterial Inc.

META is changing the way we use, interact and benefit from light. META designs and manufactures advanced materials and performance functional films which are engineered at the nanoscale to control light and electromagnetic waves. META is currently developing new materials with diverse applications in the automotive, aerospace, consumer electronics and medical industries. META has a growing patent portfolio with three core technologies; holographic, lithographic, and wireless sensing, designed for high volume applications. META is headquartered in Dartmouth, Nova Scotia and has offices in London, UK and Pleasanton, California. To learn more visit 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 business strategies and operational activities of the Company. 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 risks regarding the technology industry, market strategic and operational activities, and management’s ability to manage and to operate the business. 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.

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

Metamaterial Inc. (formerly Continental Precious Minerals Inc.)
Interim condensed consolidated statements of financial position (unaudited)
[expressed in Canadian dollars]
As at
June 30, 2020 December 31, 2019
$ $
Assets
Current
Cash and cash equivalents 4,622,284 528,691
Grants receivable 112,066 242,705
Other receivables 89,907 79,072
Inventory 638,384 438,726
Prepaid expenses 272,664 365,602
HST receivable 110,586 262,512
Right-of-use assets 26,250 66,951
Total current assets 5,872,141 1,984,259
Intangible assets, net 5,928,188 6,404,812
Property and equipment, net 3,240,262 3,558,675
Total non-current assets 9,168,450 9,963,487
Total assets 15,040,591 11,947,746
Liabilities and shareholders’ equity (deficiency)
Current
Trade payables 1,053,777 3,176,642
Due to related parties 339,824 345,033
Current portion of long-term debt 92,588 104,376
Current portion of deferred revenue 1,721,817 1,819,797
Derivative liability 1,175,056
Promissory notes 4,595,975
Current portion of lease liabilities 29,262 71,947
Total current liabilities 3,237,268 11,288,826
Deferred revenue 2,979,116 3,089,921
Deferred government assistance 277,879 369,221
Deferred tax liability 549,927 658,481
Unsecured convertible debenture 1,118,194 760,145
Secured convertible debentures 4,501,779
Funding obligation 871,138 808,298
Long-term debt 3,138,452 3,139,301
Total non-current liabilities 13,436,485 8,825,367
Total liabilities 16,673,753 20,114,193
Shareholders’ deficiency
Common shares 34,296,403 7,598,670
Preferred shares 12,748,100
Contributed surplus 4,752,133 3,753,211
Warrants 571,555 175,095
Accumulated other comprehensive loss (593,609) (159,512)
Deficit (40,659,644) (32,282,011)
Total shareholders’ deficiency (1,633,162) (8,166,447)
Total liabilities and shareholders’ deficiency 15,040,591 11,947,746
Metamaterial Inc. (formerly Continental Precious Minerals Inc.)
Interim condensed consolidated statement of loss and comprehensive loss (unaudited)
[expressed in Canadian dollars]
Three months ended June 30 Six months ended June 30
2020 2019 2020 2019
$ $ $ $
Product sales 10,686 2,615 10,686
Development revenue 289,728 257,243 884,688 448,205
Revenue, net 289,728 267,929 887,303 458,891
Cost of goods sold 1,840 4,023 2,961 4,023
Gross Profit 287,888 263,906 884,342 454,868
Expenses (income)
Salaries and benefits 914,549 782,610 2,113,586 1,510,165
Depreciation and amortization 842,998 747,492 1,721,900 1,437,241
Travel and entertainment 15,948 121,670 88,185 224,042
Other expenses 172,049 153,246 309,577 288,086
Listing expenses 3,370,249
Stock exchange fees 3,750 3,750
Rent and utilities 98,848 87,933 215,060 178,062
Interest and bank charges 314,139 107,663 434,413 194,868
Consulting 142,218 122,555 359,177 226,523
Investor related expense 49,321 68,827
Research and development 106,669 154,081 225,127 309,709
Professional fees 571,373 132,864 842,947 186,652
Non-cash interest accretion 140,726 112,834 284,128 30,890
Share-based compensation expense 503,803 282,745 953,831 582,584
Unrealized loss on derivative liability (901,642) (5,073) (1,108,248) 236,021
Technology license fees 12,828 12,796 25,885 25,832
Realized foreign currency exchange loss (gain) 2,343 1,643 64,507 5,362
Interest income (6,356) (153) (6,621) (490)
Unrealized foreign currency exchange (gain) loss 417,678 189,788 (450,046) 362,896
Government assistance (88,714) (254,440) (150,470) (721,607)
3,312,528 2,750,254 9,365,764 5,076,836
Net loss before tax (3,024,640) (2,486,348) (8,481,422) (4,621,968)
Income tax recovery 39,360 53,139 103,789 83,415
Net loss for the period (2,985,280) (2,433,209) (8,377,633) (4,538,553)
Other comprehensive loss, net of income taxes
Items that may be subsequently reclassified to income:
Unrealized foreign currency translation adjustment 200,570 (50,586) (434,097) 63,545
Comprehensive loss for the period (2,784,710) (2,483,795) (8,811,730) (4,475,008)
Basic and diluted loss per share (0.04) (0.25) (0.13) (0.47)
Weighted average number of shares outstanding
– basic and diluted 83,597,092 9,724,476 65,092,122 9,724,476
Metamaterial Inc. (formerly Continental Precious Minerals Inc.)
Interim condensed consolidated statement of cash flows (unaudited)
[expressed in Canadian dollars]
Six months ended June 30 2020 2019
$ $
Operating activities
Net loss for the period (8,377,633) (4,538,553)
Add (deduct) items not affecting cash:
Government assistance (110,426) (596,784)
Deferred income tax (103,789) (208,238)
Depreciation 1,721,900 1,437,241
Non-cash interest accretion 284,128 30,890
Unrealized foreign currency exchange loss (490,390) 384,713
Interest expense 234,377 100,080
Impairment of intangible assets
Listing expenses 3,370,249
Unrealized loss on derivative liability (1,108,249) 236,021
Change in deferred revenue (208,784) (422,203)
Share-based compensation expense 1,005,629 582,584
Net change in non-cash working capital items (1,964,859) 377,046
Cash used in operating activities (5,747,847) (2,617,203)
Investing activities
Employee receivable
Additions to intangible assets (67,720) (48,321)
Additions to property and equipment (767,312) (548,418)
Reverse takeover, net cash 4,174,979
Cash used in investing activities 3,339,947 (596,739)
Financing activities
Proceeds from long-term debt 45,897 837,907
Repayment of long-term debt (262,258) (35,715)
Proceeds from promissory notes 2,505,750
Proceeds from units, net 814,270
Proceeds from unsecured convertible debentures 950,000
Proceeds from secured convertible debentures 5,000,000
Payment of lease liabilities (46,416) (35,102)
Cash provided by financing activities 6,501,493 3,272,840
Net (decrease) increase in cash and cash equivalents 4,093,593 58,898
Cash and cash equivalents, beginning of the period 528,691 850,622
Cash and cash equivalents, end of the period 4,622,284 909,520
Supplemental cash flow information
Interest on debt paid 127,303 10,221

SOURCE Metamaterial Inc.

Cision View original content to download multimedia: http://www.newswire.ca/en/releases/archive/September2020/01/c8537.html

Media inquiries: Cindy Roberts, VP Marketing & Communications, Metamaterial Inc., 902-222-3658, Cindy.roberts@metamaterial.com; Investor inquiries: Mark Komonoski, Director Capital Markets and IR, Metamaterial Inc., phone: 1-877-255-8483, mark@metamaterial.comCopyright CNW Group 2020

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