Meta Materials (NASDAQ:MMAT) will hold its special meeting of stockholders on April 15. The meeting has one material proposal, which is to increase the total number of authorized shares of MMAT stock to 250 million from 10 million. This would mark a significant increase of 2,400%. Following a 1-for-100 reverse stock split and a $3.4 million direct offering, shareholders weren’t exactly happy to hear about the proposal and its dilutive effects.
Meta Materials CEO and President Uzi Sasson addressed this concern in a letter to shareholders, stressing that “commercialization requires capital.”
“That is a basic premise upon which we are requesting your approval at the upcoming special stockholders’ meeting for an increase in the total number of common shares we are authorized to issue,” said Sasson. “We don’t take this proposal lightly and intend to be judicious in issuing future shares to meet our commercialization and working capital needs.”
MMAT Stock: Meta CEO Uzi Sasson Pens Letter to Shareholders
Sasson believes that Meta’s products have potential and that, in order to meet production and commercialization requirements, the company needs more money. Sasson provided several examples, such as its QUANTUM stripe, NANOWEB film, NPORE and NCORE technology and the expected completion of its VLEPSIS flight testing in March.
“Broad-scale production of our products is capital intensive, replete with long lead-time components, machinery and equipment costs and raw material sourcing unique to each product line,” said the CEO.
Sasson also noted that Meta will hold a question-and-answer session soon to provide insight on its commercialization efforts and authorized share increase proposal. In early April, Meta will host a webcast to discuss its 2023 financial results.
The company has already reported its preliminary fourth-quarter earnings, with revenue growing by 55% year-over-year (YOY) to $2.2 million. Loss from operations is expected to be around $14.9 million compared to a loss of $24 million a year ago. In addition, Meta also incurred an expected non-cash impairment of long-term assets, of which the amount is still to be determined.
Meta added that its focus is currently on increasing revenue, cutting costs and monetizing both core and non-core assets.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
