Nova Scotia nanotechnology company Metamaterial secures $10-million loan from proposed merger partner
Dartmouth-based Metamaterial Inc. has secured a $10-million loan from the American company it's due to merge with, pending the outcome of a vote.
According to a news release, Metamaterial intends to use about half of the $10-million from Torchlight Energy Resources on its high-performance materials and nanocomposite products. That includes accelerating the purchase of equipment needed to expand its roll-to-roll product family production output, supporting development of optical products for life sciences applications, and expanding its metaOptix™ product line for its e-commerce business.
Torchlight Loans Metamaterial US$10,000,000, Allowing Metamaterial to Execute on Business Plan in Advance of Shareholder Votes - META https://t.co/ZSB5TmW7VM— Metamaterial Inc. (@Metamaterialtec) February 22, 2021
The remainder of the funds will aid corporate business, including working capital and costs linked to the proposed Torchlight merger. That process has been ongoing since last year, and directly ties in with Metamaterial's goal of getting listed on the Nasdaq exchange.
Metamaterial has scheduled an annual general and special meeting for March 12, when holders of its securities will be asked to pass a special resolution related to the Plano, Texas oil and gas company's proposed reverse takeover transaction. The deal would give Metamaterial shareholders 75 per cent equity in the combined company, with Torchlight shareholders obtaining a 25 per cent equity stake.
The $10-million loan announced Monday carries an annual interest rate of eight per cent. If the deal between Metamaterial and Torchlight falls through, the latter company can convert the loan and interest into common shares of Metamaterial at a conversion price of C$2.80 per share. Otherwise, Metamaterial would need to pay back the balance of the principal and interest as a lump sum by Feb. 18, 2022.