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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36247

 

Meta Materials Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Nevada

74-3237581

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

1 Research Drive

Dartmouth, Nova Scotia

B2Y 4M9

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (902) 482-5729

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

 

Common Stock, par value $0.001 per share

MMAT

Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of November 9, 2022, the registrant had 361,930,468 shares of common stock, $0.001 par value per share, outstanding.

 


 

TABLE OF CONTENTS

 

FORWARD-LOOKING STATEMENTS

3

 

 

SUMMARY OF RISK FACTORS

4

 

 

PART I—FINANCIAL INFORMATION

6

Item 1. Financial Statements

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

Item 4. Controls and Procedures

34

 

 

PART II—OTHER INFORMATION

36

Item 1. Legal Proceedings

36

Item 1A. Risk Factors

36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

62

Item 3. Defaults Upon Senior Securities

62

Item 4. Mine Safety Disclosures

62

Item 5. Other Information

62

Item 6. Exhibits

63

 

 

SIGNATURES

64

 

2


 

FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include statements about:

our business strategy;
our strategy for protecting our intellectual property;
our ability to obtain necessary funding on favorable terms or at all;
our customers;
our plan and ability to secure revenues;
the risk of competitors entering the market;
our ability to hire and retain skilled staff;
our ability to obtain financing to fund future expenditures and capital requirements;
our plans with respect to new facilities and the scaling of our manufacturing capabilities; and
the impact of adoption of new accounting standards.

 

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

 

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in Part II, Item 1A “(Risk Factors)” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

 

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

 

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

3


 

SUMMARY OF RISK FACTORS

 

Below is a summary of the principal factors that could materially harm our business, operating results and/or financial condition, impair our future prospects or cause the price of our common stock to decline. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission ("SEC") before making an investment decision regarding our common stock.

 

We have a limited operating history, which can make it difficult for investors to evaluate our operations and prospects and may increase the risks associated with investing in us..
We have a history of net losses, and we expect to continue to incur losses for the foreseeable future. If we ever achieve profitability, we may not be able to sustain it.
We will need additional financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all.
Our ability to obtain financing, if and when necessary, may be impaired by such factors as the capital markets and our limited operating history.
We may be unable to develop new products, applications, and end markets for our products.
Our research and marketing development activities and investments may not result in profitable, commercially viable or successfully produced and marketed products.
Disruption in supply from our single source supplier of our holographic raw materials may cause a material adverse effect on our Holography-related products.
Material weaknesses or significant deficiencies in our internal controls could materially and adversely affect our business, results of operations and financial condition.
Impairment of our goodwill or other intangible assets could materially and adversely affect our business, operating results, and financial condition.
We depend on our OEM customers and system integrators to incorporate our products into their systems.
Our revenues may be concentrated in a few customers, and if we lose any of these customers, or these customers do not pay us, our revenues could be materially adversely affected.
Our agreements with various national governments and suppliers to such governments subject us to unique risks.
We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.
We may experience delays in providing sufficient product for future testing of our products due to ongoing supply chain limitations.
Change in laws, regulations or guidelines relating to our business plan and activities could adversely affect our business.
If we are unable to make acquisitions, or successfully integrate them into our business, our results of operations and financial condition could be adversely affected.
The regulatory approval process for our medical products in the United States and other countries around the world is time-consuming and complicated, and we may not obtain the approval required to market a product within the timeline required, or at all. Additionally, we may lose regulatory approval and/or our products may become subject to new and anticipated foreign regulations.
Development of medical devices and related operations are subject to extensive government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could harm our business
Healthcare policy changes, including recently enacted legislation reforming the U.S. healthcare system, could harm our business, financial condition, and results of operations
If coverage and reimbursement from third-party payors for procedures using our medical products significantly decline, physicians, hospitals, and other healthcare providers may be reluctant to use our products and our sales may decline

4


 

If we or our contractors fail to comply with healthcare and other governmental regulations, we could face substantial fines and penalties and our business, results of operations and financial condition could be adversely affected
If we fail to obtain and maintain necessary regulatory clearances, approvals, or certifications for our products, or if clearances, approvals or certifications for future products and indications are delayed or not issued, our commercial operations would be harmed
We are exposed to risks that our employees, consultants, or other commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
Compliance with environmental laws and regulations could be expensive, and failure to comply with these laws and regulations could subject us to significant liability.
Our insurance coverage strategy may not be adequate to protect us from all business risks.
The risk of loss of our intellectual property, trade secrets or other sensitive business or customer confidential information or disruption of operations due to cyberattacks or data breaches could negatively impact our financial results.
Cybersecurity breaches and information technology failures could harm our business by increasing our costs and negatively impacting our business operations.
Changes in laws or regulations relating to privacy, information security and data protection, or any actual or perceived failure by us to comply with such laws and regulations or any other obligations, could adversely affect our business.
The effects of health pandemics, such as the ongoing COVID-19 pandemic, have had, and could in the future have, an adverse impact on our business, financial condition and results of operations.
We are subject to taxation-related risks in multiple jurisdictions, and the adoption and interpretation of new tax legislation, tax regulations, tax rulings, or exposure to additional tax liabilities could materially affect our business, financial condition and results of operations.
Our ability to use our deferred tax assets to offset future taxable income is subject to certain limitations, which may have a material impact on our business, financial condition or results of operations.

5


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

META MATERIALS INC.

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED)

 

 

 

As of

 

 

As of

 

 

 

September 30, 2022

 

 

December 31, 2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

30,608,797

 

 

$

46,645,704

 

Restricted cash

 

 

436,123

 

 

 

788,768

 

Short-term investments

 

 

1,178,685

 

 

 

2,875,638

 

Grants receivable

 

 

26,062

 

 

 

175,780

 

Accounts receivable

 

 

1,977,676

 

 

 

1,665,700

 

Inventory

 

 

274,090

 

 

 

265,718

 

Prepaid expenses and other current assets

 

 

6,466,469

 

 

 

3,451,367

 

Assets held for sale

 

 

71,700,000

 

 

 

75,500,000

 

Due from related parties

 

 

8,552

 

 

 

10,657

 

Total current assets

 

 

112,676,454

 

 

 

131,379,332

 

Intangible assets, net

 

 

51,025,428

 

 

 

28,971,824

 

Property, plant and equipment, net

 

 

34,534,045

 

 

 

27,018,114

 

Operating lease right-of-use assets

 

 

5,366,070

 

 

 

6,278,547

 

Goodwill

 

 

279,052,357

 

 

 

240,376,634

 

Total assets

 

$

482,654,354

 

 

$

434,024,451

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

$

12,818,253

 

 

$

13,335,470

 

Current portion of long-term debt

 

 

742,782

 

 

 

491,278

 

Current portion of deferred revenues

 

 

623,895

 

 

 

779,732

 

Current portion of deferred government assistance

 

 

783,055

 

 

 

846,612

 

Preferred stock liability

 

 

71,700,000

 

 

 

75,500,000

 

Current portion of operating lease liabilities

 

 

864,519

 

 

 

663,861

 

Asset retirement obligations

 

 

21,937

 

 

 

21,937

 

Total current liabilities

 

 

87,554,441

 

 

 

91,638,890

 

Deferred revenues

 

 

503,690

 

 

 

637,008

 

Deferred government assistance

 

 

 

 

 

3,038

 

Deferred tax liability

 

 

161,662

 

 

 

324,479

 

Long-term operating lease liabilities

 

 

3,177,910

 

 

 

3,706,774

 

Funding obligation

 

 

292,749

 

 

 

268,976

 

Long-term debt

 

 

2,137,948

 

 

 

2,737,171

 

Total liabilities

 

$

93,828,400

 

 

$

99,316,336

 

Stockholders’ equity

 

 

 

 

 

 

Common stock - $0.001 par value; 1,000,000,000 shares authorized, 361,377,856 shares issued and outstanding at September 30, 2022, and $0.001 par value; unlimited shares authorized, 284,573,316 shares issued and outstanding at December 31, 2021

 

 

339,555

 

 

 

262,751

 

Additional paid-in capital

 

 

587,635,212

 

 

 

463,136,404

 

Accumulated other comprehensive loss

 

 

(6,862,090

)

 

 

(296,936

)

Accumulated deficit

 

 

(192,286,723

)

 

 

(128,394,104

)

Total stockholders’ equity

 

 

388,825,954

 

 

 

334,708,115

 

Total liabilities and stockholders’ equity

 

$

482,654,354

 

 

$

434,024,451

 

Commitments and contingencies (note 20)

Subsequent events (note 21)

The accompanying notes are an integral part of these condensed consolidated interim financial statements

6


 

META MATERIALS INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

 

 

 

Three months ended
September 30,

 

 

Nine months ended
September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

432,059

 

 

$

297,431

 

 

$

934,299

 

 

$

321,431

 

Development revenue

 

 

2,023,953

 

 

 

275,181

 

 

 

7,820,135

 

 

 

1,471,804

 

Total Revenue

 

 

2,456,012

 

 

 

572,612

 

 

 

8,754,434

 

 

 

1,793,235

 

Cost of goods sold

 

 

696,730

 

 

 

145,103

 

 

 

2,353,393

 

 

 

146,209

 

Gross Profit

 

 

1,759,282

 

 

 

427,509

 

 

 

6,401,041

 

 

 

1,647,026

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling & Marketing

 

 

1,027,886

 

 

 

427,004

 

 

 

3,190,951

 

 

 

1,122,469

 

General & Administrative

 

 

16,674,309

 

 

 

9,776,850

 

 

 

45,743,892

 

 

 

16,217,012

 

Research & Development

 

 

6,233,685

 

 

 

1,816,547

 

 

 

16,693,833

 

 

 

5,229,456

 

Total operating expenses

 

 

23,935,880

 

 

 

12,020,401

 

 

 

65,628,676

 

 

 

22,568,937

 

Loss from operations

 

 

(22,176,598

)

 

 

(11,592,892

)

 

 

(59,227,635

)

 

 

(20,921,911

)

Interest expense, net

 

 

(134,205

)

 

 

(215,116

)

 

 

(440,694

)

 

 

(1,093,833

)

Loss on foreign exchange, net

 

 

(2,223,633

)

 

 

(440,157

)

 

 

(3,046,955

)

 

 

(770,542

)

Loss on financial instruments, net

 

 

 

 

 

 

 

 

 

 

 

(40,540,091

)

Other (loss) income, net

 

 

21,908

 

 

 

739,260

 

 

 

(1,324,528

)

 

 

1,673,124

 

Total other (expense) income, net

 

 

(2,335,930

)

 

 

83,987

 

 

 

(4,812,177

)

 

 

(40,731,342

)

Loss before income taxes

 

 

(24,512,528

)

 

 

(11,508,905

)

 

 

(64,039,812

)

 

 

(61,653,253

)

Income tax recovery

 

 

37,208

 

 

 

83,657

 

 

 

147,193

 

 

 

186,183

 

Net loss

 

$

(24,475,320

)

 

$

(11,425,248

)

 

$

(63,892,619

)

 

$

(61,467,070

)

Other Comprehensive Income net of tax

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

 

(4,413,860

)

 

 

(125,976

)

 

 

(6,565,154

)

 

 

(17,328

)

Fair value gain on changes of own credit risk

 

 

 

 

 

 

 

 

 

 

 

680,178

 

Total Other Comprehensive (Loss) Income

 

 

(4,413,860

)

 

 

(125,976

)

 

 

(6,565,154

)

 

 

662,850

 

Comprehensive loss

 

$

(28,889,180

)

 

$

(11,551,224

)

 

$

(70,457,773

)

 

$

(60,804,220

)

Basic and diluted loss per share (1)

 

$

(0.07

)

 

$

(0.04

)

 

$

(0.20

)

 

$

(0.28

)

Weighted average number of shares outstanding - basic and
   diluted
(1)

 

 

362,260,641

 

 

 

280,080,786

 

 

 

316,661,487

 

 

 

216,135,190

 

(1)
Retroactively restated for the nine months ended September 30, 2021 for the Torchlight RTO (“Reverse Acquisition”) as described in Note 3

The accompanying notes are an integral part of these condensed consolidated interim financial statements

7


 

META MATERIALS INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) (1)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares (1)

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance, July 1, 2022

 

 

360,810,016

 

 

$

338,987

 

 

$

585,045,778

 

 

$

(2,448,230

)

 

$

(167,811,403

)

 

$

415,125,132

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,475,320

)

 

 

(24,475,320

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(4,413,860

)

 

 

 

 

 

(4,413,860

)

Exercise of stock options

 

 

120,269

 

 

 

120

 

 

 

32,352

 

 

 

 

 

 

 

 

 

32,472

 

Settlement of restricted stock units

 

 

224,519

 

 

 

225

 

 

 

(225

)

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

223,052

 

 

 

223

 

 

 

2,557,307

 

 

 

 

 

 

 

 

 

2,557,530

 

Balance, September 30, 2022

 

 

361,377,856

 

 

 

339,555

 

 

 

587,635,212

 

 

 

(6,862,090

)

 

 

(192,286,723

)

 

 

388,825,954

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, July 1, 2021

 

 

279,782,854

 

 

$

257,966

 

 

$

454,961,102

 

 

$

133,946

 

 

$

(87,438,665

)

 

$

367,914,349

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,425,248

)

 

 

(11,425,248

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(125,976

)

 

 

 

 

 

(125,976

)

Exercise of stock options

 

 

1,226,375

 

 

 

1,226

 

 

 

335,271

 

 

 

 

 

 

 

 

 

336,497

 

Exercise of warrants

 

 

48,308

 

 

 

43

 

 

 

(43

)

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

148,368

 

 

 

149

 

 

 

3,833,336

 

 

 

 

 

 

 

 

 

3,833,485

 

Balance, September 30, 2021

 

 

281,205,905

 

 

$

259,384

 

 

$

459,129,666

 

 

$

7,970

 

 

$

(98,863,913

)

 

$

360,533,107

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares (1)

 

 

Amount

 

 

Capital

 

 

(Loss) Income

 

 

Deficit

 

 

Equity

 

Balance, January 1, 2022

 

 

284,573,316

 

 

$

262,751

 

 

$

463,136,404

 

 

$

(296,936

)

 

$

(128,394,104

)

 

$

334,708,115

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(63,892,619

)

 

 

(63,892,619

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(6,565,154

)

 

 

 

 

 

(6,565,154

)

Issuance of common stock and warrants

 

 

37,037,039

 

 

 

37,037

 

 

 

49,962,963

 

 

 

 

 

 

 

 

 

50,000,000

 

Stock issuance costs

 

 

 

 

 

 

 

 

(3,680,666

)

 

 

 

 

 

 

 

 

(3,680,666

)

Exercise of stock options

 

 

1,252,546

 

 

 

1,252

 

 

 

336,541

 

 

 

 

 

 

 

 

 

337,793

 

Settlement of restricted stock units

 

 

224,519

 

 

 

225

 

 

 

(225

)

 

 

 

 

 

 

 

 

 

Exercise of warrants

 

 

1,623,700

 

 

 

1,624

 

 

 

167,950

 

 

 

 

 

 

 

 

 

169,574

 

Issuance of stock in connection with acquisitions

 

 

36,443,684

 

 

 

36,443

 

 

 

67,086,069

 

 

 

 

 

 

 

 

 

67,122,512

 

Stock-based compensation

 

 

223,052

 

 

 

223

 

 

 

10,626,176

 

 

 

 

 

 

 

 

 

10,626,399

 

Balance, September 30, 2022

 

 

361,377,856

 

 

$

339,555

 

 

$

587,635,212

 

 

$

(6,862,090

)

 

$

(192,286,723

)

 

$

388,825,954

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2021

 

 

154,163,975

 

 

$

132,347

 

 

$

29,021,974

 

 

$

(654,880

)

 

$

(37,396,843

)

 

$

(8,897,402

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(61,467,070

)

 

 

(61,467,070

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

662,850

 

 

 

 

 

 

662,850

 

Conversion of promissory notes

 

 

20,391,239

 

 

 

20,391

 

 

 

23,635,974

 

 

 

 

 

 

 

 

 

23,656,365

 

Conversion of secured debentures

 

 

14,155,831

 

 

 

14,156

 

 

 

22,104,626

 

 

 

 

 

 

 

 

 

22,118,782

 

Conversion of unsecured debentures

 

 

5,105,338

 

 

 

5,105

 

 

 

5,764,370

 

 

 

 

 

 

 

 

 

5,769,475

 

Conversion of long-term debt

 

 

124,716

 

 

 

125

 

 

 

221,718

 

 

 

 

 

 

 

 

 

221,843

 

Conversion of payable to related party

 

 

150,522

 

 

 

151

 

 

 

225,835

 

 

 

 

 

 

 

 

 

225,986

 

Exercise of stock options

 

 

1,640,294

 

 

 

1,640

 

 

 

448,012

 

 

 

 

 

 

 

 

 

449,652

 

Exercise of warrants

 

 

287,114

 

 

 

282

 

 

 

93,712

 

 

 

 

 

 

 

 

 

93,994

 

Exercise of broker warrants

 

 

61,331

 

 

 

61

 

 

 

16,194

 

 

 

 

 

 

 

 

 

16,255

 

Effect of reverse acquisition

 

 

82,813,994

 

 

 

82,814

 

 

 

369,548,188

 

 

 

 

 

 

 

 

 

369,631,002

 

Shares issued in lieu of operating lease liability

 

 

1,832,989

 

 

 

1,833

 

 

 

2,780,135

 

 

 

 

 

 

 

 

 

2,781,968

 

Stock-based compensation

 

 

478,562

 

 

 

479

 

 

 

5,268,928

 

 

 

 

 

 

 

 

 

5,269,407

 

Balance, September 30, 2021

 

 

281,205,905

 

 

$

259,384

 

 

$

459,129,666

 

 

$

7,970

 

 

$

(98,863,913

)

 

$

360,533,107

 

 

(1)
Retroactively restated from the earliest period presented for the Torchlight RTO (“Reverse acquisition”) as described in Note 3

The accompanying notes are an integral part of these condensed consolidated interim financial statements

8


 

META MATERIALS INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

Nine months ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

 

 

$

 

 

$

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(63,892,619

)

 

$

(61,467,070

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Non-cash finance income

 

 

(12,433

)

 

 

 

Non-cash interest expense

 

 

419,684

 

 

 

904,749

 

Non-cash lease expense

 

 

1,212,415

 

 

 

256,785

 

Deferred income tax

 

 

(147,193

)

 

 

(186,183

)

Depreciation and amortization

 

 

5,377,470

 

 

 

1,798,607

 

Unrealized foreign currency exchange loss

 

 

2,843,223

 

 

 

279,805

 

Loss on financial instruments, net

 

 

 

 

 

40,540,091

 

Change in deferred revenue

 

 

(199,785

)

 

 

(239,057

)

Non-cash government assistance

 

 

(3,047

)

 

 

(508,730

)

Loss on debt settlement

 

 

 

 

 

19,253

 

Gain on sale of property, plant and equipment

 

 

(783

)

 

 

 

Stock-based compensation

 

 

9,763,627

 

 

 

855,989

 

Non-cash consulting expense

 

 

862,771

 

 

 

3,926,628

 

Changes in operating assets and liabilities

 

 

(4,739,841

)

 

 

(1,764,867

)

Net cash used in operating activities

 

 

(48,516,511

)

 

 

(15,584,000

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of intangible assets

 

 

 

 

 

(838,664

)

Purchases of property, plant and equipment

 

 

(11,975,134

)

 

 

(5,552,268

)

Proceeds from sale of property, plant and equipment

 

 

39,140

 

 

 

 

Proceeds from short-term investments

 

 

1,620,281

 

 

 

 

Acquisition of business, net of cash acquired

 

 

(3,486,906

)

 

 

 

Proceeds from reverse takeover