Item 1.01 Entry into a Material Definitive Agreement.
On April 14, 2023, Meta Materials Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Ladenburg Thalmann & Co. Inc. and A.G.P./Alliance Global Partners (collectively, the “Underwriters”), relating to the public offering by the Company (the “Offering”) of (i) 83,333,334 shares of the Company’s common stock, par value $0.001 (“Common Stock”) and (ii) warrants to purchase up to an aggregate of 83,333,334 shares of Common Stock (referred to individually as a “Warrant” and collectively as the “Warrants”). The shares of Common Stock and Warrants will be sold together as a fixed combination, consisting of one share of Common Stock and a Warrant to purchase one share of Common Stock, but are immediately separable and will be issued separately in the offering. Each Warrant is exercisable to purchase one share of Common Stock at a price of $0.3.75 per share and expires five years from the date of issuance. The combined price to the public in the offering for each share of Common Stock and accompanying Warrant was $0.30.
In addition, pursuant to the Underwriting Agreement, the Company granted the Underwriters a 30-day option (the “Overallotment Option”) to purchase up to (i) 12,500,000 additional shares of Common Stock and/or (ii) additional Warrants to purchase up to 12,500,000 additional shares of Common Stock, solely to cover over-allotments.
The closing of the Offering is expected to occur on April 18, 2023, subject to satisfaction of customary closing conditions. After deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, and excluding the proceeds, if any, from the exercise of the Warrants or the Underwriters’ exercise of the Overallotment Option, the net proceeds to the Company are expected to be approximately $22.1 million.
The Offering was made under a registration statement on Form S-3 (File No. 333-268282) that was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on November 18, 2022, and a related prospectus supplement, which the Company filed with the SEC on April 14, 2023. The Company does not plan to apply to list the Warrants on The Nasdaq Capital Market, any other national securities exchange or any other nationally recognized trading system.
Pursuant to the Underwriting Agreement, the Company agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments that the Underwriters may be required to make because of such liabilities. In addition, the Underwriting Agreement also contains customary representations, warranties and agreements by the Company and customary conditions to closing, obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by such parties.
The Underwriting Agreement, and form of Warrant are filed as Exhibit 1.1 and Exhibit 4.1, respectively, and incorporated by reference herein. The foregoing description of the Underwriting Agreement, and form of Warrant does not purport to be complete and is qualified in its entirety by reference to such exhibits. The Underwriting Agreement contains representations and warranties that the parties made to, and solely for the benefit of, the other in the context of all of the terms and conditions of the Underwriting Agreement and in the context of the specific relationship
