META Continues to Burn Through Cash

META Materials Inc, a developer of high performance functional materials and nanocomposites which acquired security feature specialist Nanotech Security Corp in 2021, has announced its results for 2022, and raised concerns about its future viability unless additional funding can be secured.

Sales for the diversified company for 2022 were $10 million, up from $4 million in 2021, reflecting the inclusion of Nanotech for the first time. However, organic growth (ie. minus Nanotech) was just 2%.

The company reported operating expenses of $90 million (for sales, administration, and R&D), resulting in an operating loss of $83 million. It had cash and equivalents of $11.8 million at the end of 2022; net cash utilised in operations during the year was $62.2 million.

In its year end statement, META raised ‘substantial doubt’ about the its ability to continue to operate as a going concern and to achieve compliance with NASDAQ continued listing requirements. It anticipates that it needs to implement expense reduction measures and immediately raise additional capital to expand the commercialisation of its products, fund its operations, further its research and development activities and ensure that it can continue to operate as a going concern.

In February, it entered into a sales agreement with an investment bank with the establishment of an ATM (at-the-market) offering program, under which it may sell up to an aggregate of $100 million of shares of common stock.

META’s main problem is its cash burn, coupled with its over-reliance on one part of the business – security features via Nanotech, which in turn is heavily reliant on one major central bank customer (for which is has a development agreement with a value of up to $41.5 million for a period of up to five years).

Nanotech’s security portfolio include KolourOptik® Stripe and KolourDepth™, which offer effects combining multi-directional movement, 3D stereo depth and multiple colours based on nano-diffraction, along with LumaChrome colour shifting film for threads and patches, which is in use in 30 banknote denominations. It will shortly be launching a new 3D animated feature for banknotes based on plasmonics.