At the closing on 24-June-2022, Meta Materials Inc. ($Meta Materials Inc.(MMAT)$,MMAT) share price experience a plunge of 38.74%. This is very likely due to the direct offering from the company.
On 24-June-2022, on its website, MMAT announced that it has entered into a securities purchase agreement with certain institutional investors for the purchase and sale in a registered direct offering of 37,037,039 shares of the Company’s common stock at a purchase price of $1.35 per share and warrants to purchase 37,037,039 shares at an exercise price of $1.75 per share. The gross proceeds to the Company from the offering are expected to be approximately $50 million, before deducting placement agent fees and other estimated offering expenses. The warrants will become exercisable six months after the issuance date and expire five and a half years after the initial issuance date. The closing of the offering is expected to occur on or about June 28, 2022, subject to the satisfaction of customary closing conditions.
MMAT had 285.2mil share at its Q1 2022 financial reporting. This direct offering is about 13% of Q1 total share count.
According to corporatefinanceinstitute.com, “A direct offering is a type of offering that allows companies to raise capital by selling securities directly to the public. A company may opt to use the direct public offering method rather than an IPO when it lacks financial resources to pay underwriters, or it does not want to dilute existing shares by issuing new shares to the public. The company sells stocks directly to the public without using any middlemen or brokers.”
In Q1 2022 shareholder letter, MMAT has mentioned it is scaling up NANOWEB production and it had acquired Plasma App Ltd. which has developed the PLASMAfusion technology, that enables high speed coating of any solid material on any substrate. This will help to significantly accelerate line speed and increase annual capacity of MMAT current technologies like NANOWEB and KolourOptik. This will also offer MMAT the opportunity to enter to other high volume potential applications such as solid state batteries and battery materials. It is no surprise MMAT will need more capital.
MMAT revenue in Q1 2022 has increased 399% to about $3mil from $0.6mil in Q1 2021, however, most revenue was from a G10 central bank. Loss from operation was widen also from $4.1mil loss to $17.4mil loss. One good thing is it does not have much debt ($2.9mil) compare to its cash and cash equivalent ($29.7mil), as of 31 March 2022.
Comments