Earnings Transcript for MMAT - Q4 Fiscal Year 2021

Operator: Good morning ladies and gentlemen and welcome to the Meta Materials Inc. Call to discuss Q4 and Fiscal Year 2021 Results. My name is Mark Komonoski with Integrous Communications Meta Materials Inc. Meta's Investor Relation Advisor and I will be introducing management on today's call. The presentation is being recorded today March 2, 2022 and a replay will be available by the link provided in Meta's press release announcing the webcast and on the IRR calendar in the investor's section of the Meta website. Joining me on today's call are George Palikaras, Meta's Founder, President and CEO; Ken Rice, Meta's COO and CFO; and Jonathan Waldern, Meta's Chief Technology Officer. On today's call, we will start with George Palikaras providing some color on three transformative acquisitions which closed in 2021. An overview of Meta's intellectual property and human capital and some operational updates regarding Meta's expanding global facilities. Jonathan Waldern will then describe a major milestone and Meta's manufacturing scale up. The first pilot scale roll-to-roll production line of Nanoweb at the company's Pleasanton, California facility. Provide some color on Meta's presence at the two major trade shows in January, the CSE and the Photonics West. Ken Rice will then cover the development roadmap for Glucowise, Meta's non-invasive glucose monitoring technology and summarize the Q4 and fiscal 2021 financial results. Following management's prepared remarks. We will then take questions from analyst and respond to some of the questions which you submitted by the SEI Technologies Platform prior to this call. Before we begin, I would like to remind you that today's presentation may include forward-looking information or statements within the meaning of the Canadian Securities Law and within the meaning of Section 27A of the Securities Act of 1933 as amended, Section 21E of the Securities Exchange Act of 1934 as amended, and the Private Securities Litigation Reform Act of 1995, regarding the company and its business, and including statements with respect to the business strategies, product development, expansion plans and operational activities of the company, and the benefits of the company of further investment in product development and manufacturing capacity. We caution you to not put undue reliance on these forward-looking statements. As they involve risk and uncertainties that can cause actual results to differ materially from those anticipated by these statements as described in our risk factors in a reported filing -- file with the SEC. Any forward-looking statements made on this call reflect our analysis as of today only, and we have no plans or duty to update them except by required law. Yesterday we described or distributed a press release detailing the announcement of Q4 and fiscal year 2021 results which include a link to the 2021 Annual Report and Letter to Shareholders, which we encourage you to review. And we have -- the Meta files the 10-K for the fiscal 2021 year as well. For your convenience, a copy of the press release is available on our website, and a replay of today's webcast regarding this announcement will be available following the presentation in the Investor Relations section of our website. Unless otherwise stated all dollar amounts referred to today are in U.S. dollars. I would now like to pass the call to George Palikaras, Meta's Founder, President and CEO. George?

George Palikaras: Thank you very much, Mark. Good morning ladies and gentlemen, I'm delighted to share with you our first annual report and since we became the first NASDAQ listed Meta Materials company. When I founded Meta in 2011, I had the vision for how a new class of materials called Meta Materials might be used to improve human lives. Now, we are pioneering the production of Metal Materials at commercial scales. We are poised to bring nanostructured intelligence to surfaces enabling applications that go beyond what was previously possible, delivering sustainable performance across a wide range of applications and end markets. In 2021, our company was transformed three acquisitions and significant capital raising. We have used that to expand our capabilities, intellectual property facilities, as well as the size of our multi-national team of subject matter experts. On June 28 of last year 2021, we completed the reverse takeover of Torchlight Energy Resources becoming a NASDAQ listed company approximately 15 months after we first began trading on the Canadian Securities Exchange in March 2020. The Torchlight transaction was a long process. It started in September of 2020. Ultimately bringing significant benefits to our company. Now I will review some of the important points. Number one, prior to completing the transaction Torchlight and Meta converted nearly all outstanding debt to equity. Today, we have no debt, except for $3.2 million in various interest-free loans from the Atlantic Canadian Opportunities Agency to federal agency from the government of Canada. So very friendly. Number two, the RTO the reverse takeover generated $147 million in cash. Number three, more than $100 million remains available under an existing ATM at the market equity program. Number four, Torchlight shareholders on the record date immediately preceding the transaction received a special dividend of Series A preferred shares. Number six, shareholders of Meta Material Inc., the Canadian listed company under the CSE had the option to exchange their shares for MMAT i.e., the NASDAQ listed shares or MMAX, the wholly owned subsidiary that's still listed on the CSE. In addition, on December 31, 2021, there were 88.3 million MMAX shares included in the total of 284 million 500,000 shares issued an outstanding. During 2021, we took steps to preserve the value of the oil and gas assets in preparation for disposition. This included drilling four wells in Q4 in order to maintain compliance with the oil and gas leases. In February 2021, and as you can see here in this slide, we acquired the assets and IP of a Swiss Lens Manufacturer called Interglass, forming the foundation of our AR fusion platform technology for smart augmented reality eyewear with prescription lenses. To be successful, we believe that any augmented reality eyewear solution must deliver two things. Number one, a thin lightweight display with a wide field of view that is comfortable and fashionable. So you don't look like a robot. And number two, an integrated prescription lens with more than half the adult population requires. We believe that Meta is one of the very few companies who can deliver both of these in a one stop shop solution for AR eyewear OEMs. As you know, we have partnered with Covestro in support of our holographic materials that helped us enable a new range of solutions. The AR fusion processes is highly sustainable using less energy, no water, and less material and conventional less cancelling and grinding. We are able to embed a number of smart technologies into the cast prescription lens including optical combiners, waveguides, eye tracking sensors, and active layers based on our Nanoweb transparent conductive film. For example, an antenna that is made out of Nanoweb could be included in the lens. Next slide please. On October 5, 2021, we closed the acquisition of Nanotech Security Corporation. Nanotech is a developer and manufacturer of secure and memorable nano-optic security features used for anti-counterfeiting for banknotes, government documents, and to provide protection for brands. Nanotech contributed to our Q4 results as Ken will detail later in his presentation. On the top right of the slide, you can see an image of our color optic stripe and new technology, which we previewed at the Banknote & Currency Conference in Washington DC a few days ago. Color optic is a patented visual technology that is exclusive to the government and Banknote markets, and it combines subwavelength nanostructures and microstructures also known as Meta Materials, to create modern avert security features with a unique and customizable optical effects. When introduced color optics stride will be the latest in a line of plasmonic technology products following the M2 and color depths and is expected to be one of the highest volume applications in the history of optical Meta Materials. We invested $66.1 million in the Nanotech acquisition. Net of cash we acquired to accelerate and de-risk our own manufacturing scale up. We added an approximately 8,000 square foot facility in R&D in Burnaby, Vancouver, British Columbia and a 105,000 square foot production facility in Thurso, Quebec, on 11 acres of land. We gained access to e-beam lithography and nano imprint, roll-to-roll lithography equipment, UV castings, roll-to-roll coating equipment and a team with decades of roll-to-roll production experience with nanostructures. Just before the acquisition closed, Nanotech renewed its frame agreement with a confidential G10 central bank for up to $41.5 million in development over a period of five years. I will come over some of them in details of our plans for expansion of Nanotech later in this presentation. Next slide please. Meta has come a long way since filing its first patent application 2011. As you know, in September 2021, we added a highly experienced Chief Intellectual Property Officer, Dr. Turner to the executive team. Today we own a large and rapidly growing portfolio of 269 active utility and design patent documents of which 163 patents have already been issued. In the United States, we have 37 issued patents and 26 pending applications. And in 24 other countries around the world we have 126 issued patents and 80 pending applications. Our IP portfolio is intended to enhance and protect our competitive and leadership position as we pioneer Meta Materials production at scale. At the top level, Meta has 263 active utility patent documents of which 163 have been issued. And we have additional design patent applications roughly six. A utility patent is directed to the composition of matter, Article of manufacture and methods of making and using the same. While a design pattern is directed to the ornamental let's say non-functioning characteristics of a composition or article of manufacture. Meta's utility patterns are in basically 74 different pattern families, of which 47 include at least one issue patterns. A pattern family is a collection of patterns, and pattern applications covering the same or similar technical contents. The documents in a patent family are related to each other by priority claims. The number of different patent families relative to the total number of patent documents is one measure of the breadths of content covered. Since 2020, Meta has added 46 patent families. Since the last quarter report in Q3. Seven patents have been issued, and 19 new applications were filed in the US, Canada, Europe, China, and Hong Kong. Amongst these new filed applications, three are directed to designs, 11 to devices and components, one in fabrication origination, and four are directed to scale manufacturing. Now, very important to highlight the human capital. Our people are a key strength of Meta and I feel very fortunate to lead such a talented and diverse multi-disciplinary and multi-national team. As a company we have 37 spoken languages. As a team we all speak the same language to develop and deliver functionality driven by curiosity and guided by sustainability to improve the world as we execute. As of February 28, we have 135 employees, approximately 90% of whom are located in Canada and the United States. We have 48 people in research and development, 28 employees involved in operations manufacturing, service and quality assurance. And 54 employees are involved in sales and marketing, finance, IT, general management and other admin functions. So in this slide, there's a couple of floor plans. What's important to state here is that we have already outgrown our current headquarters facility at one research drive, which was about 8,800 square feet. While renovations at our new 68,000 square foot state-of-the-art facility in Highfield Park are being completed. Some of our financing administration teams, our temporary officers provided by our landlord at another location. And I'm very much looking forward to moving everyone in a single location, which is custom designed for our purposes, which you see depicted here. The lower level includes 11 clean rooms, labs, and the 15,000 square foot customer center for demonstrations, which has the cleanroom number 12 training and technology transfer. On the upper level, we have plenty of offices, conference rooms, and common areas to accommodate their current team and plans for future growth. Now, as I mentioned before, the Nanotech acquisition added 105,000 square foot of production facility. This is a company owned building on 11 acres of land in Thurso, Quebec, about 35,000 square feet are currently occupied by the secure production facility with a balance configured as a warehouse space. The Nanotech facility has capacity to produce about 7.5 million square meters of nano-optic security films per year. We plan to double that to about 15 million meter square per year. We have begun renovations to add about 15,000 square feet of production space, which will also provide room for future capacity expansion as we scale up Nanoweb roll-to-roll equipment from 300 millimeters to 500 millimeters wide substrates. In November 2021, we signed a 10 year lease on about 15,500 square feet of space in Athens, Greece for a new European R&D and sales head office facility. It is a multi-level building which we will accommodate labs, offices, demonstration and conference areas as you see we illustrated here. We are planning, we are sorry, we are in the planning process for renovations and we secured the nine months’ rent free period while the work is underway. Locating an operation in Athens provides us access to European and Greek government support programs. It broadens our talent pool at competitive costs. And very importantly, Athens is also one of five European platform cities for showcasing the 5G network innovations. I will now pass the call to Jonathan Waldern, our Chief Technology Officer.

Jonathan Waldern: Great, well good morning everybody. And it's a pleasure to be with you today. In Pleasanton, California, we've expanded operations by nearly four times to 19,500 square feet. We've recently reached an important milestone that's installing a first of its kind roll-to-roll line to produce Nanoweb transparent conductive film. Scaling up Meta's proprietary Rolling Mask Lithography that is RML process from wafer scale substrates, we were previously to a 300 millimeter wide Web Fed system enables much higher volume, greatly reduces cost per square meter, and supports large area applications for a wide range of end markets. The Nanoweb line comprises six process steps, which are illustrated here. The first is loading. And here our substrate is pre-recorded with photoresistant loaded onto a spool. The second is exposure. Now a patent is transferred into the photoresist via RML, Rolling Mask Lithography. Step three baking, stabilizes the printed design in the photoresist and the development of Step four creates 3D structures in the photoresist. Metalization fills the 3D pattern creating continuous metal mesh and finally lift off, which removes residual metal and photoresist. All the equipment passed factory acceptance tests prior to the delivery and installation, and the line is now in the process of being optimized. Now let's look at some photos of the equipment in the next slide. In the photos, on the top row of the slide, you can see the RML machine. In the center image, you could see where the UV lamp inside the rolling, rotating RML mass transfers the patent into the photoresist. The pictures on the bottom row show the baking and development stages of the line. We're developing a number of Nanoweb applications which should be enabled by higher volume roll-to-roll production capability, including 5G reflective films, de-icing and defogging for automotive windshields, highlights and headlights and sensors, and EMI shielding for LIDAR sensors and transparent microwave oven doors. From this pilot line systems, we intend to next scale web width to 500 millimeters and then ultimately to reach one meter or more further driving down costs and enlarging our addressable markets. On the top left of this slide, you can see the metallization machine metal from a sources evaporated inside the vacuum chamber, where it fills the grooves in the photoresist creating the 3D metal mesh. The liftoff stage, shown in the top right involves two large tanks in the background, which remove the residual metal and the photoresist. And finally, finished Nanoweb is inspected for quality with a microscope and tested also for sheet resistance. Due to the flexibility of the mesh pattern design, Nanoweb has superior conductivity, one to 10 ohms per square and transparency 95% to 99% transparent compared to alternative technologies and provides optimum performance for transparent heaters and EMI shielding application. As in the case with all transparent conductors, there's a control tradeoff between the conductivity and the optical quality. Nevertheless, the two key advantages of Nanoweb compared to conventional transparent conductors are firstly, higher optical transparency in the visible spectrum for a given conductivity or sheet resistance. And importantly, for a desired set of optical properties like haze and transparency, Nanoweb offers higher conductivity. Secondly, the ability to customize and optimize the fill function for different application areas. And this is possible because the Nanoweb has a controlled precisely engineered structure, rather than being a uniform homogeneous material without degrees of freedom to control. In January, despite the challenges of COVID-19, we at Meta exhibited in-person and demonstrated a wide range of applications of two major changes. One in Las Vegas, CES 2022 and then followed by SPIE Photonics West 2022 in San Francisco. We met with major OEMs across all of our verticals and generated nearly 300 leads, picture here is a booth from CES where you can see six demonstrations featured, one for ARfusion, one for Nanoweb 5G reflectors, EMI shielding for consumer electronics, medical wireless sensing, and our Glucowise non-invasive glucose monitoring technology. Nanoweb for automotive and other de-icing and de-fogging applications and finally transparent 5G and digital TV antennas. A perfect example of the promise of Meta Materials to help our customers produce products that do more with less using sustainable materials and consuming less energy. This is our Nanoweb 5G reflector, for which Meta was named a Lux Research Innovator of the Year in 2021. It is perfectly transparent, yet the visible metal mesh structures reflect radio waves as effectively and as efficiently as a solid metal plate. Changing the patent Meta Materials structure allows signals to be generated at unusual design specific angles and our solution can aesthetically improve outdoor and indoor network coverage without requiring power, or a network connection, and it's faster to deploy the wiring in additional network hardware. We demonstrated all of our technologies live at CES. In the two top photos, you can see that the signal strength from the transparent Nanoweb reflector exactly matches the same signal reflected from a solid aluminum plate. And of course, you can't cover a building windows and interiors with metal reflectors, it's impossible. The true power of Meta Materials is illustrated in the bottom two photos. Notice that when the signal reaches the reflector, at a nearly perpendicular angle, the signal from the metal reflector is almost entirely lost. But by using the specially designed Nanoweb reflector, simply by engineering the design of the invisible metal mesh, we're able to redirect the signal so that it reaches the receiver at full strength. As illustrated in the diagram on the left, transparent Nanoweb reflectors may be placed throughout the inside of the building like a factory or a hospital, all to guide the signals from the tower and ensure good reception for all. Now I will pass the call over to Ken Rice, Meta's COO and CFO.

Kenneth Rice: Thank you. [Indiscernible]. So good morning all and thank you for joining us today. Meta's wireless medical wireless sensing platform uses infrared and radio frequency otherwise known as RF transmitters, and receivers to collect and measure a variety of biological information. This collection enables non-invasive and safe medical diagnostics. The platform requires the ability to cancel reflections, anti-reflection from the skin and to reduce the natural impedance the skin provides to such signals, while at the same time increasing the signal to noise ratio of certain diagnostic instruments that are used in connection with platform. This reflection canceling requirement is satisfied using our proprietary Meta Material films that employ pattern designs printed on metal dielectric structures, or flexible substrates that act as an anti-reflection Impedance Matching coating when placed over human skin in combination with medical diagnostic modalities, such as MRI, scanners and non-invasive glucometers. We're developing a number of medical products that employ this proprietary technology. Glucowise is in development as a completely non-invasive glucose monitoring device. It's being developed first as a bench top medical device product to be followed by a portable pocket sized product and ultimately, as a wearable and magnetic resonance imaging increasing the signal to noise ratio by orders of magnitude has been demonstrated to produce much higher resolution images with significant increases in imaging speed. This results in better patient throughput, potentially more accurate diagnosis in imaging clinics. For example, the company is developing Meta surface which we also referred to as radiWISE. This is an innovation which allows an improvement in signal to noise ratio of up to 40 times for MRI scans. The metal surface device consists of proprietary non-ferrous, metallic and dielectric layers that are exactly designed to interact or resonate with radio waves increasing the signal to noise ratio. Meta is also researching the use of this radio wave imaging technology in breast cancer and stroke diagnosis, companies developing wireless sensing and radio wave imaging applications from its London U.K. office and its newly established Athens, Greece office. In 2021, we completed a 27 month long U.K. funded project to develop a non-invasive glucose sensing prototype, this combined radio wave and optical sensors to improve accuracy in predicting glucose level changes. The developed bio-sensor prototype is a critical step towards a home hub system targeted at monitoring biological parameters, initial human studies have been completed, and the next phase of prototypes are in development. Now I'll provide a few highlights of our Q4 and FY '21 results. Meta is an early growth stage platform company, we're moving toward volume production for applications in multiple markets. In 2021, our total revenues grew 264% to $4.1 million compared to $1.1 million in 2020. Our fourth quarter '21 revenues of $2.3 million, compared to about $300,000 in 2020. This reflects a contribution of $1.8 million from Nanotech and the remainder from growth in Meta's other offerings. The company relies on a few key customers for a significant portion of its revenues. For the year-ended December 31, '21, three customers accounted for about $3.3 million or 81% of total revenue. For the year ended December 31, 2020 three customers accounted for $800,000 or 72% of total revenue. We expect that development programs, including the contract with a confidential G10 central bank will account for most of our revenues over the next 12 months. Meta is currently pursuing multi-year multi-million dollar contracts with several OEMs. For 2021, the net loss was approximately $91 million or $0.39 per share on 232.9 million weighted average shares, compared to a 2020 net loss of $11.6 million or $0.08 per share on 137 million shares. Operating expenses and other expenses for '21 included several non-cash items, a $40.5 million loss on financial instruments, most of which were related to our debt conversions as was mentioned earlier, $6.5 million of non-cash consulting expenses, $3.5 million of depreciation and amortization, $1.6 million of stock based compensation, $400,000 of non-cash lease expenses, and our net cash used in operating activities for the year 2021 totaled $34.7 million compared to $7.9 million in 2020. At the end of 2021, our cash and cash equivalents totaled $50.3 million, including $800,000 of restricted cash and $2.8 million of short-term investments. As George mentioned, we have no debt except for the $3.2 million in various interest free loans from ACOA. The company believes that its existing cash will be sufficient to meet our working capital and capital expenditure needs as production capacity begins to come online for at least the next 12 months and probably longer. The company may need to raise additional capital to expand the commercialization of its products, fund its operations and further its R&D activities. Future capital requirements may vary materially from period to period and that will depend on many factors, including the timing and extent of spending on research and development activities, the capital expansion of our facilities in Halifax and California and ongoing investments to support the growth of our business. At Meta, inventing, designing, developing and manufacturing Meta Materials much of what we do is too small to see, as we scale up to reproduce these tiny structures in high volume and low cost bringing intelligence to surfaces all around us, I believe the world is beginning to see our potential. We'll now take some questions from the research analysts that are on the call with us. And then we'll respond to some of the questions which were submitted on the technology platform.

A - Kenneth Rice: Our first question comes from MacMurray Whale of Cormark. Mac, please go ahead. Mac, are you muted? Hey, we seem to be having technical difficulty with MacMurray Whale. Our next questions would come from would come from Gerry Sweeney of Roth Capital. Gerry, are you there?

Gerard Sweeney: Ken, I am, can you hear me?

Kenneth Rice: Yes.

Gerard Sweeney: Thanks for taking my question. So and just a question for you and the team. A couple questions. But obviously scaling down costs are a critical component of success. And I think the boulder roll technology that you're working on is in Pleasanton is key to this. Can you give us a little bit of insight into, where costs are today for just generally for the technology and where the roll-to-roll technology can't take it, as well as maybe some of the key critical steps that you still think of it to approve the line out?

Kenneth Rice: Sure, Jonathan, can you handle that?

Jonathan Waldern: Yes, Ken. Delighted to you to a certain extent, we are kind of quoting range of costs at the moment, as we're locking things down and improving the process. But what I can say on cost is that it's substantially supported by our retailers, if you like our sellers of our materials to the end market. So in the case, for example of the functional film, the 5G film, for telecommunications applications, there's the cost of the production of the film with the roll-to-roll role film that we're producing is likely already well south of the anticipated cost of its launch onto the market. And that is calculated by the replacement costs for alternative methods to achieve similar 5G improvement in buildings, and as I mentioned earlier. So without being too specific on the costs, we're very confident with regard to the margin, and also the cost of the product to market as substantiated by our third-party partners in bringing it to market.

Gerard Sweeney: And maybe, Jonathan, if you can maybe make a comment about what our partners bring to the table with regards to cost reduction strategies?

Kenneth Rice: Yes with respect to that. Our partners bring substantial opportunity with regard to scaling volume, pre-ordering, and stocking, and also partnering their customers, which are the major carriers in terms of proactive deployment into situ. So the value add is not only in being industry acknowledged experts in functional film, which in the case of our publicly announced company partner at Sekisui, but also to their customers, which again, publicly announced, one is Docomo, in there we're working between the three of us to ensure that we support a pipeline to get the product to market as fast as possible. And so as you heard, the status is that the roll-to-roll is coming up online. And as we produce that functional film, it will go straight through that pipeline, enabled by that partnership. So we think that's substantial value, and overcoming any form of impediment to get it to market and institute as quickly as possible.

Gerard Sweeney: Perfect. So actually, that was really helpful. Especially I know, you couldn't give any specifics on costs, but the top will just understand relatively, where they stand with where your partners are looking for it. But just taking the next step further, are there any key hurdles left in the roll-to-roll line in getting it up and running and proving it out? Or you deserve a degree of confidence that it should be operational and work appropriately?

Kenneth Rice: Yes, I think one of the important things to appreciate is that our roll-to-roll line is or has been evolved from a wafer baseline. Now, although a wafer baseline versus roll-to-roll might seem a million miles away, the actual fact is, those specific steps that are outlined in the earlier introduction are copied if you like or replicate it directly. And so in terms of the process of making our functional film and the metallization of the Nanoweb, we don't expect too much difficulty and I think right now, we remain pretty confident having tested the individual steps. So it's quite another thing in manufacturing, though, to be overly bullish before you actually achieved the requisite goal. And also, it's worth saying that not-withstanding production meets, what we call our golden sample quality from the wafer line. As we go forward, clearly, the speed of the line, think of it like a printing press of newspapers you -- the more faster you go, the more newspapers you produce, and hence more product for us. So the speed of the line, and the quality and what we call the roll yield from the line, meaning that it has very high yield. These are important steps for us yet to go through and verify. So this is where we do differ from the wafer line. And I'm sorry, that was a little bit of a complex and long answer. But I wanted to be very specific with you.

Gerard Sweeney: Actually, the details actually excellent gets a little bit better view and vision as to what you're working on. So I do appreciate that. And then maybe one more than and then maybe, well, we can get back online. But you know, it's a little bit newer to the story, or I shouldn't say that exactly. But it appears that you bring forward some of the medical equipment's like the Glucowise products. One point I think it was a little bit further out on horizon, but it feels as though you're accelerating that development, anything specific driving that speed and speed up and development? If that is a correct assumption, I'm not sure if it's partners or demand opportunity to just curious on that front?

Kenneth Rice: Sure. It's a combination, Gerry. The medical products, if you go back in the history of the company, the medical products were at the core of the company's foundation. That said is, until last year, when we were able to get the company public and have access to significant amount of capital. We were going a bit more slowly on the development of the medical products in favor of products that might have felt a little bit closer to the market within -- from an OEM standpoint. So I think it's fair to say that the reason we're accelerating them now is because we've at the end of the Diabet project, which I described as the U.K. funded project, we can't -- we concluded that Glucowise was not only important product, but it was highly feasible. And you may or may not know, but a non-invasive glucose monitoring is a very tough space to play, there's been a lot of attempts at it. And what we think differentiates us from the rest of the companies that didn't quite make it is the whole Meta Material. Ability to make the skin lower the increased signal to noise ratio and remove impedance. So we prove to ourselves that we could actually do this. And now we can do it in a world where we have resources. And as we spoke preliminarily with potential partners and/or distribution partners last year, we found that they were quite interested as well. So that's basically what prompted the acceleration.

Gerard Sweeney: Okay. Then one more quick one, I think is kind of important that I always interested in itself. Obviously, you're building I believe, a library of maybe this may be unscientific, we'll call it designs or prototypes, as that library builds, how does that sort of position you for. Other areas, or other technologies that you can build into adjacent markets over time?

Kenneth Rice: George, could you take that?

George Palikaras: Yes. And Gerry, if you could refine that a little bit more. Can I ask?

Gerard Sweeney: Sure.

George Palikaras: Is your question related to kind of near-term opportunities, long-term?

Gerard Sweeney: I think maybe for more of a strategic first mover advantage. I mean, we've had a couple of discussions, just as you build this library, I think you get a better understanding of some designs that can maybe be used in adjacent markets, and it could help future efforts in different markets. Is that does that help?

George Palikaras: Yes, make sense. Yes. So our extensive technology platform has been built on three core capabilities, holography, lithography, and wireless sensing. And because we use software and AI designed to develop this library of solutions, it's very fast for us to build functional prototypes, and at a reduced cost than traditional chemical synthesis. What happens is, once we have an application, typically we go and tested in aerospace and defense, and aerospace and defense, a very interesting industry, because number one, they actually understand the value of Meta Materials better than any other industry I have ever come across. Because, at the beginning 20 years ago, Meta Materials had applications in reducing the radar signature making things invisible to radar and stealth applications. So early on 20 years ago, aerospace and defense hired as many Meta Material scientists as they can get. So today, this programs have existed, let's say in all kinds of companies. And one example I can offer you is our EMI shielding application. So we developed one of the best performing materials to block EMI radiation, electromagnetic interference, EMI. And we did that with a very transparent material that met and exceeded the expectations of a large OEM aerospace manufacturer. The OEM paid us about $10,000 per part, it was a small sized part. And then we took that forward into the consumer electronics market, where we are currently working with one of the largest home appliance companies to take basically the same film the same technology and apply it on one of the most commonly used items in the kitchen, the microwave oven. And this is going to obviously much larger volumes. But obviously at unexpected price point that's not $10,000. So the good news here is that we are testing our performance. We are getting investments from the aerospace and defense industry to advance prototypes, and then quickly go to the adjacent markets, whether it's automotive, where LIDAR, for example, has the same issue with EMI shielding, where a home appliance has the same issue. These are the key elements where we start thinking strategically. And recently, we hired the Ms. Elsa Keïta from Corporate Strategy of Airbus, she's helping us map these portfolios of products. And once we have one category, we can very quickly with obviously partners move into adjacent markets. And that's really the exciting thing, that library, as it gets developed, the next industry comes along. We are faster even then the first time around, because we are now have validation at the aerospace quality level. And that gets us through the door in many situations because they understand that if we pass aerospace standards, for safety, for environmental properties, et cetera, then we have something that's valuable enough, that has been proven enough. And that makes the conversations move faster. And then the question, of course, becomes cost. And that's one of the key focus areas right now, scaling the volumes, reducing the cost. And we have our targets, which we believe will open up every industry that we go for. I hope that covers.

Gerard Sweeney: No, that's the end. This is actually very good. Sheds a little bit more light on pent detail on some of my thoughts. So I appreciate it. I'll jump back in queue. Thank you Ken and Jonathan.

Kenneth Rice: Thank you, Gerry. Next, Chris Sakai. Do you have any questions for us?

Christopher Sakai: Hi, yes. Good morning. I have a question. Just basically, for 2022, what are the main catalysts or revenue drivers, which of your products is closest to revenue generation? And can you provide any timing on that?

Kenneth Rice: Okay, well, I'm going to this question came up a couple, couple different ways. So I'll answer yours. And then I have when I get to the next set of questions, I'll even provide more color. But the short answer to your question, Chris is 2022 for us is about a few focus areas. As you know, we're not in a position yet to give financial guidance. We're still in a lot of ways in an early stage company in that sense. What we see the revenues being generated predominantly from in '22 is the ongoing work that's going on with the G10 banknote company. And that's a big portion of '22 revenue. And we're excited about it, because it's already booked, and we're delivering it on a routine basis. From the meta platforms of 5G is likely to be generating some revenue. We don't know exactly how much yet in '22. But that's that that would be sort of next. And I think, as George just mentioned, some of the work that we're doing in EMI is also likely to generate some revenue in '22. But the primary focus of '22 for us is operational. We want to as Jonathan described, we want to make sure that our roll-to-roll line is optimized and running and producing equivalent product to what we produce on our wafer line. We want to do that as fast as we can. And that's going to take it to a certain degree precedence. The other revenues that we will have in '22 are more along the development line of non-recurring engineering. I hope that helps.

Christopher Sakai: Okay. Great. Thanks. And then I've got a question on your G&A and R&D expense for the quarter? And how, I mean, what level do you see this expense in the future in next quarter and the year, are we at the levels about what you think will be or can you shed any light there?

George Palikaras: No, I think in particular, R&D is probably a little bit high in '21, relative to what we're expecting in '22. Again, we did some things up front to make sure that the roll-to-roll line was designed in place at a time when COVID was blocking supply lines and things and we needed to accelerate some stuff to make sure that we got what we needed there. G&A for the Lion's share of 2021 was driven by the cost of converting our debt to equity and the acquisition related costs, we did two major merger transactions in 2022, that brought with them millions of dollars of legal fees, and auditing fees, and all kinds of things like that. And so I would expect that the fixed burn rate in G&A in '22 is likely to drop, it won't be at the level that you saw in '21.

Christopher Sakai: Okay, great. And then one last question for me, as far as the patent pending applications, and that are, do you have any idea on that and any -- and how many are going to come to fruition in 2022?

Kenneth Rice: Well, as George mentioned, we have more than 160 pending applications in various jurisdictions, it's very difficult to predict the pace at which the patent offices around the world will work. When we submitted those applications, we think we did a very, very good job of laying the claims out, the typical timeframe for an application to come to issuance is anywhere from two years to five to six years. And most of these are relatively recent filings. So we really have no way to sit here today and predict what's going to be issued in 2022. What we can do is and we do this every quarter is we update our investors in the street on where we are from a status standpoint, and how many applications we've received office actions on and that sort of thing, but I can't sit here today, and predict how many will get issued in '22.

Christopher Sakai: Okay, all right, great. Thanks.

Kenneth Rice: Okay. So with a little bit of time we have left, Mac, are you here?

MacMurray Whale: I am here, yes.

Kenneth Rice: Good, okay. So if you had questions, we'll take some questions from you and…

MacMurray Whale: Yes, I was actually, it was a little bit late getting on. So I don't want to, I didn't want to ask stuff that have been asked already. But it's but so far most of the questions I have had written down have actually been answered since I logged on.

Kenneth Rice: Okay, great, then if it's okay, we have about five minutes left in the call, many of the people listening took time and asked questions on the Say platform in advance of the meeting. And we had multiple hundreds of questions come through that platform. And so what we did was we went through them with the help of that software and grouped them into categories. And there's about seven categories of questions that I'm going to try to answer. And what you have to understand is that these are not just single questions. These are groups and groups of questions. So, I'll start with one that actually was very, very recent. It came in last night. For any of you listening to the call, there is a question that came up, which is why was Meta's 10-K filed late and why did we apply for an extension to file. After the merger with Torchlight occurred, the company was deemed to be a large accelerated filer based on our market value at June 30 of '21. That status in the U.S. mandates that we be fully compliant with SOX 404, which are the rules governing internal controls for U.S. listed companies. When we planned the merger with Torchlight, we were planning to be fully compliant with SOX 404 by the end of 2022, on the assumption that we wouldn't be classified as a large accelerated filer, that's a very large market cap, but we were there. So although, we made and we continue to make progress on the compliance requirements, we found that the internal controls of the company at year-end did have material deficiencies. These are reported in the 10-K that we filed. And the finding resulted in significant additional audit work very late in the schedule. So, although the target filing was 5

Mark Komonoski: Thank you, Ken and thanks to all for joining us today. We appreciate your interest in Meta. You can reach us by e-mail at ir@metamaterial.com. This concludes today's presentation. Thank you very much.

Kenneth Rice: Thank you.