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, 2021December 31, 2020
Cash and cash equivalents15,187,3561,776,983
Restricted cash1,000,000
Grants receivable378,058417,442
Other receivables175,07450,330
Due from related party61,199
Prepaid expenses396,580436,909
HST receivable171,201196,526
Total current assets17,798,4943,468,167
Intangible assets, net5,657,6775,699,626
Property and equipment, net4,954,7883,515,523
Right-of-use assets1,554,995337,441
Total non-current assets12,167,4609,552,590
Total assets29,965,95413,020,757
Liabilities and shareholders’ equity (deficiency)  
Trade and other payables3,787,8443,743,783
Due to related party312,528
Current portion of long-term debt1,185,756369,921
Current portion of deferred revenue2,442,7471,578,676
Current portion of deferred government assistance1,156,802992,560
Secured convertible debentures7,060,493
Unsecured convertible promissory notes13,307,9661,531,960
Current portion of lease liabilities286,279192,001
Total current liabilities22,167,39415,781,922
Deferred revenue875,8681,023,835
Deferred government assistance140,866186,536
Deferred tax liability347,865404,947
Unsecured convertible debentures2,324,085
Funding obligation1,026,686989,128
Lease liabilities1,373,733152,506
Long-term debt3,755,8623,493,029
Total non-current liabilities7,520,8808,574,066
Total liabilities29,688,27424,355,988
Shareholders’ deficiency  
Common shares100,351,89634,248,734
Contributed surplus6,305,1825,804,292
Accumulated other comprehensive loss252,788134,648
Total shareholders’ equity (deficiency)277,680(11,335,231)
Total liabilities and shareholders’ deficiency29,965,95413,020,757
Metamaterial Inc.  
Interim consolidated statements of loss and comprehensive loss (unaudited)
[expressed in Canadian dollars]
 Three months ended March 31
Product sales27,9552,615
Development revenue728,189594,960
Revenue, net756,144597,575
Cost of goods sold5081,121
Gross Profit755,636596,454
Expenses (income)  
Salaries and benefits1,388,8421,199,037
Depreciation and amortization828,360878,902
Impairment expense
Travel and entertainment4,51672,237
Other expenses339,235137,528
Listing expenses3,353,512
Stock exchange fees4,150
Rent and utilities81,017116,212
Finance Income(806)(16,350)
Finance costs672,627263,674
Investor relations128,76119,506
Research and development709,111118,458
Professional fees1,062,802271,574
Share-based compensation expense541,151450,028
Unrealized gain on FVTPL liabilities(250,456)(335,259)
Realized (gain) loss on FVTPL liabilities50,067,114128,653
Technology license fees52513,057
Realized foreign currency exchange loss124,47562,163
Unrealized foreign currency exchange loss (gain)61,811(850,982)
Government assistance(323,074)(45,671)
Other income(400)
Net loss before tax(55,135,901)(5,456,784)
Income tax recovery56,62464,429
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 adjustment118,250(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 diluted91,277,32846,587,115
Metamaterial Inc.  
Interim condensed consolidated statements of cash flows (unaudited)
[expressed in Canadian dollars]
Three months ended March 3120212020
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 costs557,236225,922
Deferred income tax recovery(56,624)(64,429)
Depreciation and amortization828,360878,902
Unrealized foreign currency exchange loss143,649(900,091)
Listing expenses3,353,512
Unrealized gain on FVTPL liabilities(250,455)(335,259)
Realized loss on FVTPL liabilities50,067,114128,653
Change in deferred revenue717,404(104,305)
Change in deferred government assistance(158,831)144,196
Share-based compensation expense541,151450,028
Non-cash consulting30,000
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 cash4,174,979
Cash used in investing activities(2,854,520)3,796,042
Financing activities  
Proceeds from long-term debt1,390,00050,079
Repayment of long-term debt(17,856)(25,658)
Proceeds from unsecured convertible promissory notes17,704,800
Proceeds from exercise of stock options61,659
Proceeds from exercise of warrants60,657
Net proceeds from units814,270
Proceeds from unsecured convertible debentures450,000
Payment of lease liabilities(57,620)(25,988)
Cash provided by financing activities19,141,6401,262,703
Net (decrease) increase in cash and cash equivalents13,414,5821,346,443
Cash and cash equivalents, beginning of the period1,776,983528,691
Effects of exchange rate changes on cash and cash equivalents(4,209)10,768
Cash and cash equivalents, end of the period15,187,3561,885,902
Supplemental cash flow information  
Interest on debt paid81,81820,335