Meta Materials (MMAT) Releases Board Letter to Shareholders
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Meta Materials Inc. (the "Company" or "META") (NASDAQ: MMAT), an advanced materials and nanotechnology company, today released the following message to shareholders.
From: META Board of Directors
To: META Shareholders
MEMO: Candid Answers to Our Shareholders' Most Pressing Concerns
As a META shareholder, you are among the strongest advocates for the success of the Company and have made your voice heard via the recent outpouring of letters, social media and other correspondence. As members of the Board, we have a fiduciary duty to you and to the company; we recognize the grave responsibilities from both a regulatory and relationship standpoint. It is within this context that we are pointedly addressing outstanding shareholder concerns.
You have rightfully asked for updates on the short-selling/FINRA concerns with respect to shares that previously traded under the ticker MMTLP, while expressing displeasure about management changes and financing options necessary for long-term viability. In the process, any number of unsubstantiated theories have cropped up on social media and elsewhere. As such, we want to set the record straight here, backed by concrete facts, datelines and Board minutes that dispel unfounded rumors that have been circulating.
You deserve clarity not only on the reverse merger, but on the suspected short sellers and dark pools that circulated in December 2022 as suggested in various media outlets. The timeline indicates that these claims were made during the leadership of George Palikaris, as he was CEO from inception to October 2023. Our current management and Board (almost all of whom were not with the company at the time of the reverse merger) are in the unenviable position of addressing these complaints, while seeking to recoup shareholder monies. We have some positive news on that front, and we refer you to an AllNovaScotia ("ANS") article from December 6, 2023, "Meta Aims To Expose ‘Naked' Short Sellers".
At the inception of META, George brought creative heft to an exciting technology that remains the fabric of META's identity. George also brought the company public. But, as with many companies, founding a fledgling tech company differs dramatically from effectively leading the operational, financial and regulatory demands of a public company with shareholders. Essentially, George's founding creativity that began this company clashed with the fiscal health of META.
We believe revenue generation is the root of all successful businesses and happy shareholders, noting the limited progress while under George's tenure. This was most accurately reflected by the earnings reports over the past two years, as capital was broadly allocated to R&D over sales and marketing.
Due to the capital-intensive nature of R&D (which snowballed during George's time as CEO), META experienced increased fund flow requirements. The unpopular recent registered direct offering on December 4, 2023, was a direct byproduct.
The Board requested that a professional with revenue-generation acumen join META as the new CEO to commercialize/sell this cutting-edge technology. We hoped George would continue in the company in a role that allowed him to apply laser focus to his strengths in technology. However, we spent the next six days trying to persuade George to stay with the company in other key roles, namely Chief Technology Officer and Chief Strategy Officer; however, George rejected these positions, and others we suggested over that time period. No compromise was accepted over six days of appeals, resulting in his departure on October 16, 2023. Recorded board minutes and the Company's public filings validate this sequence of events.
A number of lawsuits related to the reverse merger under George's tenure also escalated the need for transition. The Board's responsibility to the company's financial viability and to its shareholders had to supersede all else.
The RDO was a necessary move for additional funding (as detailed above), as we enter the final stages of product commercialization and META business restructuring. We understand and respect the frustrations with this decision, which we did not make lightly, but best positions the company toward profitability.
Our new management, under the guidance of experienced public-company CEO Uzi Sasson, understands the specific steps that need to occur to grow this terrific company. Those steps are solid, and they are already underway. We must focus on sales, and we must do so in an ethical way.
The reverse stock split headlines the agenda for the upcoming shareholder meeting; we have appealed to you to consider the R/S in order to avoid delisting META from the Nasdaq. Share liquidity would likely plummet in an OTC market, making it even more difficult for shareholders to recover prior losses. As a Nasdaq-listed company, META and its loyal shareholders like you may have an avenue to recover.
Contentions that George ultimately opposed a R/S are false. On October 12, 2023, the Board unanimously voted in favor of a reverse split. George was a member of the Board during that timeframe, and in the weeks that followed.
We expect you will have other pointed questions as we approach the annual shareholder meeting; we hope that the more complete facts laid out in this memo begin to address your most pressing concerns and illustrates our efforts as a newly restructured and managed META. We want your questions. We vow to be as transparent as possible about the refocused business lines, sales/licensing objectives and operations overhaul; this is on the backdrop of a very short timeline with a lean management team at the helm. We have only had a few weeks to reveal this new agenda, and it will take time to see true progress; we expect to address our shareholders directly and promptly as future developments arise. You have the voting power to let META fail or flourish in this new era; we hope you will join our META team and fellow shareholders in building a new foundation for collective success.
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