0000950170-23-054401.txt : 20231020 0000950170-23-054401.hdr.sgml : 20231020 20231020163530 ACCESSION NUMBER: 0000950170-23-054401 CONFORMED SUBMISSION TYPE: PRE 14A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20221231 FILED AS OF DATE: 20231020 DATE AS OF CHANGE: 20231020 FILER: COMPANY DATA: COMPANY CONFORMED NAME: META MATERIALS INC. CENTRAL INDEX KEY: 0001431959 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 743237581 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-36247 FILM NUMBER: 231337481 BUSINESS ADDRESS: STREET 1: 1 RESEARCH DRIVE CITY: DARTMOUTH STATE: A5 ZIP: B2Y 4M9 BUSINESS PHONE: 1-902-482-5729 MAIL ADDRESS: STREET 1: 1 RESEARCH DRIVE CITY: DARTMOUTH STATE: A5 ZIP: B2Y 4M9 FORMER COMPANY: FORMER CONFORMED NAME: TORCHLIGHT ENERGY RESOURCES INC DATE OF NAME CHANGE: 20110303 FORMER COMPANY: FORMER CONFORMED NAME: Pole Perfect Studios, Inc. DATE OF NAME CHANGE: 20080409 PRE 14A 1 meta_fy2022_proxy_pre14a.htm PRE 14A PRE 14A

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant Filed by a Party other than the Registrant

Check the appropriate box:

 

 

 

Preliminary Proxy Statement

Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

 

Meta Materials Inc.

 

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

 

 

 

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(p) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 


 

 

META MATERIALS INC.

60 Highfield Park Drive, Suite 102

Dartmouth, Nova Scotia

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD DECEMBER 11, 2023

We hereby give notice that the 2023 Annual Meeting of Stockholders of Meta Materials Inc. will be held on December 11, 2023, at 12:00 p.m. Eastern Time (the "Annual Meeting").

The Annual Meeting will be held in a virtual meeting format at https://web.lumiagm.com/231241931.

If you hold shares of Meta Materials Inc., in addition to voting by submitting your proxy prior to the Annual Meeting, you also will be able to vote your shares electronically during the Annual Meeting. If you are a stockholder of Metamaterial Exchangeco Inc., please refer to the section titled “If you are a Holder of Record of the Exchangeable Shares” included in the accompanying proxy statement for information regarding voting in the Annual Meeting. Further details regarding the virtual meeting are included in the accompanying proxy statement. The Annual Meeting will be held for the following purposes:

(1)

To elect eight (8) director nominees named in the proxy statement;

(2)

To ratify the appointment of KPMG LLP ("KPMG") as our independent registered public accounting firm for fiscal year ending December 31, 2023 ("fiscal year 2023");

 

(3)

To approve a reverse stock split of our common stock at a ratio within the range of 1-for-5 to 1-for-35, with such ratio to be determined in the discretion of our Board and with such reverse stock split to be effected at such time and date as determined by our Board in its sole discretion;

(4)

To approve the potential issuance of shares of common stock to Lincoln Park Capital Fund, LLC ("Lincoln Park") in excess of 19.99% of our outstanding common stock pursuant to the Nasdaq Listing Rules;

 

(5)

To approve the amendment to the 2021 Equity Incentive Plan to increase the maximum aggregate number of shares that may be subject to awards and sold under the 2021 Equity Incentive Plan by 50,000,000 shares; and

 

(6)

To transact such other business as may properly come before the meeting.

Under Nevada law, only stockholders of record on the record date ("Record Date"), which is October 16, 2023, are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. It is important that your shares be represented at this meeting so that the presence of a quorum is assured.

Your vote is important. Even if you plan to attend the live webcast of the Annual Meeting, please date and execute the proxy card or voting instruction form and return it promptly as soon as possible. If you attend the live webcast of the Annual Meeting, you may revoke your proxy and vote your shares during the live webcast of the Annual Meeting.

IF YOU PLAN TO ATTEND:

To be admitted to the Annual Meeting at https://web.lumiagm.com/231241931 you must have your control number available and follow the instructions found on your proxy card or, if you have a voting instruction form, you will be admitted as a guest. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting. Please allow sufficient time before the Annual Meeting to complete the online check-in process. Your vote is very important.

 

 

 

 

By Order of the Board of Directors,

 

 

/s/ Uzi Sasson

October [●], 2023

Uzi Sasson

Chief Financial Officer and Chief Operating Officer

 

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Stockholders to be held on December 11, 2023

The Proxy Statement, form of proxy card and 2022 Annual Report on Form 10-K (as amended), are being made available on or about October [●], 2023, at: http://www.astproxyportal.com/ast/24438. We are providing access to our proxy materials over the Internet under the “notice and access” rules adopted by the Securities and Exchange Commission.

 


 

 

 

META MATERIALS INC.

60 Highfield Park Drive, Suite 102

Dartmouth, Nova Scotia

PROXY STATEMENT

FOR THE

2023 ANNUAL MEETING OF STOCKHOLDERS

To be held on December 11, 2023

The Board of Directors (the “Board”) of Meta Materials Inc., a Nevada corporation (the “Company,” “we,” “us,” or “our”), is soliciting your proxy to vote at the 2023 Annual Meeting of Stockholders to be held on December 11, 2023, at 12:00 p.m. Eastern Time and at any adjournment thereof. The Annual Meeting will be held in a virtual format online at https://web.lumiagm.com/231241931.

This Proxy Statement contains information relating to the Annual Meeting and the matters to be voted upon. Stockholders attending the live webcast of the Annual Meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. If you hold common shares of the Company, in addition to voting by submitting your proxy prior to the Annual Meeting, you also will be able to vote your shares electronically during the Annual Meeting. If you are a stockholder of Metamaterial Exchangeco Inc. (“Exchangeco”), please refer to the section titled “If you are a Holder of Record of the Exchangeable Shares” below for information regarding voting in the Annual Meeting.

Whether or not you expect to attend the live webcast of the Annual Meeting, we urge you to vote your shares via proxy at your earliest convenience. This will ensure the presence of a quorum at the Annual Meeting. Promptly voting your shares will save us the expenses and extra work of additional solicitation. Submitting your proxy now will not prevent you from voting your shares at the Annual Meeting if you desire to do so, as your proxy is revocable at your option as described elsewhere in this Proxy Statement. Your vote is important, so please act today!

INFORMATION CONCERNING THE ANNUAL MEETING

Mailing and Solicitation. This Proxy Statement and accompanying form of proxy card will first be made available to stockholders on or about October [●], 2023. The cost of the solicitation of proxies will be paid by us.

Annual Report. A copy of our 2022 Annual Report on Form 10-K, as amended (the "2022 Annual Report"), has been made available with this Proxy Statement to all stockholders entitled to vote at the Annual Meeting.

 

Proxies. Whether or not you plan to attend the live webcast of the Annual Meeting, we request that you promptly submit the proxy card or voting instruction form and vote your shares pursuant to the voting instructions therein. A control number, located on the proxy card, is designed to verify your identity, allow you to vote your shares, and confirm that your voting instructions have been properly recorded.

If your shares are registered in the name of a bank, broker, or other nominee, follow the proxy instructions on the form you receive from your bank, broker or other nominee. The availability of telephone and internet proxy will depend on your bank, broker or other nominee’s proxy processes. Under the rules of the New York Stock Exchange, brokers who hold shares in “street name” for customers are precluded from exercising voting discretion with respect to the approval of non-routine matters (so called “broker non-votes”) where the beneficial owner has not given voting instructions. For more information on broker non-votes, please read the section titled ”Effect of Abstentions and Broker Non-Votes” below.

Voting in Accordance with Instructions. The shares represented by your properly completed proxy will be voted in accordance with your instructions marked on it. If you properly sign, date, and deliver to us your proxy but you mark no instructions on it, the shares represented by your proxy will be voted FOR the election of each of the eight (8) director nominees named in this Proxy Statement (Proposal 1); FOR the ratification of KPMG as our independent registered public accounting firm for fiscal year 2023 (Proposal 2); FOR the approval of a reverse stock split of our common stock at a ratio within the range of 1-for-5 to 1-for-35, with such ratio to be determined in the discretion of our Board and with such reverse stock split to be effected at such time and date as determined by our Board in its sole discretion (Proposal 3); FOR the approval of the potential issuance of shares of common stock to Lincoln Park in excess of 19.99% of our outstanding common stock pursuant to the Nasdaq Listing Rules (Proposal 4); and FOR the approval of the amendment of the 2021 Equity Incentive Plan to increase the maximum aggregate number of shares that may be subject to awards and sold under the 2021 Equity Incentive Plan by 50,000,000 (Proposal 5). The Board of Directors is not aware of any other matters to be presented for action at the Annual Meeting, but if other matters are properly brought before the Annual Meeting, shares represented by properly completed proxies received by mail will be voted in accordance with the judgment of the persons named as proxies.

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Quorum and Voting Rights. The presence during the live webcast of the Annual Meeting or by proxy of one-third or more of the outstanding shares entitled to vote on the record date constitutes a quorum for purposes of voting on a particular matter and conducting business at the meeting. We currently have two classes of stock issued and outstanding: common stock and Series B Special Voting Preferred Stock. Each share of common stock entitles its holder to one vote on all matters to be voted upon at the Annual Meeting. As of the record date for the Annual Meeting, there was one outstanding share of Series B Special Voting Preferred Stock, which entitles its holder to one vote on all matters to be voted upon at the Annual Meeting plus up to an additional 38,543,840 votes on each matter, which represents the votes entitled to be cast by the Exchangeable Shares (the “Exchangeable Shares”) of Exchangeco, pursuant to that certain Voting and Exchange Trust Agreement (the “Trust Agreement”) by and between the Company (formerly Torchlight Energy Resources, Inc.), Exchangeco, and the trustee thereunder (the “Trustee”).

The following shows our capitalization table as of Record Date:

 

 

Common Stock

 

 

Preferred Stock

 

Status

 

Common Stock
(MMAT)

 

 

Exchangeable Shares of Exchangeco
(MMAX)

 

 

Total Common Stock

 

 

Series B Special Voting
Preferred Stock

 

Number of Shares Issued and Outstanding

 

 

37,293,840

 

 

 

452,120,767

 

 

 

489,414,607

 

 

 

1

 

Number of Voting Shares

 

 

37,293,840

 

 

 

452,120,767

 

 

 

489,414,607

 

 

 

1

 

Required Vote. Nominees for director will be elected by a plurality (i.e., a simple majority of the votes cast at the Meeting) of the votes cast by stockholders entitled to vote on the election of directors at a meeting at which a quorum is present (Proposal 1). As a result, any shares not voted “FOR” a particular nominee (whether as a result of a withhold vote or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election. You may vote “For” or “Withhold” on each of the nominees for election as a director.

The affirmative vote of a majority of the shares entitled to vote, present in person via live webcast or represented by proxy at a meeting at which a quorum is present is required for the (i) ratification of KPMG as our independent registered public accounting firm for fiscal year 2023 (Proposal 2), (ii) the approval of the potential issuance of shares of common stock to Lincoln Park Capital Fund, LLC in excess of 19.99% of our outstanding common stock pursuant to the Nasdaq Listing Rules (Proposal 4); and (iii) the approval of the amendment of our 2021 Equity Incentive Plan to increase the maximum aggregate number of shares that may be subject to awards and sold under the Equity Incentive Plan to 50,000,000 (Proposal 5). The approval of the reverse stock split of our common stock at a ratio within the range of 1-for-5 to 1-for-35, with such ratio to be determined in the discretion of our Board and with such reverse stock split to be effected at such time and date as determined by our Board in its sole discretion (Proposal 3) requires the number of votes cast in favor of this proposal exceed the number of votes cast in opposition of this proposal.

Effect of Abstentions and Broker Non-Votes. Abstentions and broker non-votes will be counted for purposes of determining the presence or absence of a quorum. We expect that Proposal 2 and Proposal 3 will be considered “routine” matters. Accordingly, the bank, broker or other nominee that holds your shares may vote your shares without receiving instructions from you and, as a result, we do not expect there to be any broker non-votes. If there are broker non-votes, they will have no effect on the outcome of such proposals.

The following table summarizes the votes required for passage of each proposal and the effect of abstentions and uninstructed shares held by brokers (Broker Non-Votes).

Proposals

 

Votes Required for Approval

 

Abstentions

 

Broker Non-Votes

Election of 8 director nominees (Proposal 1)

 

Plurality of votes cast

 

No effect

 

No effect

Ratification of the appointment of KPMG as our independent registered public accounting firm for fiscal year 2023 (Proposal 2)

 

Majority of shares present and entitled to vote

 

Same as a vote "Against"

 

Broker or custodian may vote using its discretion

Approval of a reverse stock split of our common stock at a ratio within the range of 1-for-5 to 1-for-35 (Proposal 3)

 

Majority of votes cast

 

No effect

 

Broker or custodian may vote using its discretion

Approval of the potential issuance of shares of common stock to Lincoln Park Capital Fund, LLC in excess of 19.99% of our outstanding common stock pursuant to the Nasdaq Listing Rules (Proposal 4)

 

Majority of shares present and entitled to vote

 

Same as a vote "Against"

 

No effect

Approval of the amendment of our 2021 Equity Incentive Plan (Proposal 5)

 

Majority of shares present and entitled to vote

 

Same as a vote "Against"

 

No effect

Record Date. The close of business on October 16, 2023 has been fixed as the record date of the Annual Meeting, and only stockholders of record at that time will be entitled to vote. As of October 16, 2023, there were 489,414,607 shares of common stock and

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one share of Series B Special Voting Preferred Stock issued and outstanding and entitled to vote at the Annual Meeting. As of October 16, 2023, Exchangeco is the holder of 37,293,840 Exchangeable Shares, entitling the single share of Series B Special Voting Preferred Stock to cast, in addition to the single vote the holder of the share of Special B Voting Preferred Stock is entitled to cast up to 37,293,840 votes pursuant to the Trust Agreement. Only record holders and beneficial owners who held shares of our common stock, Series B Special Preferred Stock, holders of record of Exchangeable Shares on the record date, or their duly authorized proxies, may attend the live webcast of the Annual Meeting.

Questions and Answers about Virtual Meeting Format

How do I attend the Annual Meeting?

The Annual Meeting will be held on December 11, 2023, at 12:00 p.m. Eastern Time in a virtual format online by accessing https://web.lumiagm.com/231241931.

Do I have any dissenters’ or appraisal rights with respect to any of the matters to be voted on at the Annual Meeting?

No. None of the stockholders has any dissenters’ or appraisal rights with respect to the matters to be voted on at the Annual Meeting.

How Do I Vote?

The proxy card or voting instruction form contains instructions on how to vote your shares by mail, facsimile, Internet or telephone, in advance of the Annual Meeting. The voting instructions you receive may be different depending on whether you are a registered stockholder or a “street name” stockholder. If you are a street name stockholder, your bank, broker or other nominee firm is the legal, registered owner of the shares, and the voting instructions allow you to instruct such bank, broker or other nominee how to vote your shares.

Additionally, if you are a registered stockholder, you will be able to vote your shares electronically during the Annual Meeting. If you are a street name stockholder, please check your proxy card and voting instructions or contact your broker or other nominee to determine whether, if you attend the live webcast of the Annual Meeting, you will be able to vote your shares electronically during the meeting.

Shares Registered in Your Name

If you are a stockholder of record, you may vote in one of four ways:

 

 

 

Vote via the internet. You may submit a proxy over the Internet at www.voteproxy.com 24 hours a day, seven days a week. You will need the 16-digit control number included on your proxy card (if you received a printed copy of the proxy materials);

 

 

 

 

 

 

Vote by telephone. You may submit a proxy using a touch-tone telephone by calling 1-866-745-0269 in the United States or 1-201-299-4446 from foreign countries, 24 hours a day, seven days a week. You will need the 16-digit control number included on your proxy card (if you received a printed copy of the proxy materials);

 

 

 

 

 

 

Vote by Mail. If you received printed proxy materials, you may direct how your shares are voted at the Annual Meeting by completing, signing, and dating each proxy card received and returning it in the prepaid envelope. Sign your name exactly as it appears on the proxy card. Your completed, signed and dated proxy card must be received prior to the Annual Meeting; or

 

 

 

 

 

 

Vote during the Annual Meeting live via the internet by following the instructions posted at www.voteproxy.com.

For holders of our common stock, votes submitted via the internet or by telephone must be received by 11:59 p.m., Eastern Time, on December 10, 2023. Submitting your proxy via the internet, by telephone or by mail will not, except as to holders of the Exchangeable Shares, affect your right to vote during the Annual Meeting live via the internet. For additional information, please see “Revocability of Proxies” below.

 

For holders of Exchangeable Shares, votes submitted via the internet or by telephone must be received by 9:00 a.m., Eastern Time, on December 5, 2023. For additional information, please see “If you are a Holder of Record of the Exchangeable Shares” below.

Shares Registered in the Name of a Broker, Bank or Other Agent

Most beneficial owners holding stock in “street name” will receive instructions for voting their shares from their bank, broker or other nominee. A number of brokers and banks participate in a program provided through Broadridge Financial Solutions, Inc. (“Broadridge”) that allows stockholders to grant their proxy to vote shares by means of the telephone or internet. If your shares are held in an account with a broker or bank participating in the Broadridge program, you may vote by telephone by calling the number shown on the voting instruction form received from your broker or bank, or you may vote via the internet at Broadridge’s website at http://www.proxyvote.com and use your control number and other information as requested. However, since you are not the stockholder of record, you may not vote your shares live via the internet at the Annual Meeting unless you obtain a valid proxy from your broker, bank or other nominee.

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Holder of Record of the Exchangeable Shares

Holders of Exchangeable Shares are receiving these proxy materials in accordance with the provisions of the Exchangeable Shares and the Trust Agreement. The Exchangeable Shares are exchangeable for shares of the Company’s common stock on a one-for-one basis.

In accordance with the Trust Agreement, holders of Exchangeable Shares are effectively provided with voting rights for each Exchangeable Share that are nearly equivalent to the voting rights applicable to a share of the Company’s common stock, and holders are entitled to instruct the Trustee as to how to vote their Exchangeable Shares. The Trustee holds one share of the Company’s Series B Special Voting Preferred Stock designated as the “Special Voting Share.” The Special Voting Share entitles the Trustee to vote on matters in which holders of the Company’s common stock are entitled to vote. The Special Voting Share is entitled to a number of votes equal to the number of Exchangeable Shares outstanding on the record date for determining holders of the Company’s common stock entitled to vote and for which the Trustee has received voting instructions from the holders of such Exchangeable Shares. The Special Voting Share shall vote together with the holders of the Company’s common stock as a single class.

In accordance with the terms of the Trust Agreement, the Company has undertaken to perform the obligations of the Trustee and has authorized TSX Trust Company (“TSX”) to collect and receive directly the votes from the holders of the Exchangeable Shares on its behalf. Based upon the foregoing, holders of Exchangeable shares are entitled to cast up to 37,293,840 votes at the Annual Meeting. However, TSX will receive and tabulate each vote attached to the Exchangeable Shares only on the basis of instructions received from the holders of record of the Exchangeable Shares. In the absence of instructions from a holder as to voting, TSX will not include the Exchangeable Shares held by such holder in the vote.

Holders of Exchangeable Shares may not vote during the live webcast of the Annual Meeting. Holders of Exchangeable shares must instruct TSX how they wish to vote.

By Telephone or the Internet

Holders of Exchangeable Shares of record can vote their shares via telephone or the Internet as instructed on their voter information card. The telephone and Internet procedures are designed to authenticate a stockholder’s identity, to allow stockholders to vote their shares and confirm that their instructions have been properly recorded.

The telephone and Internet voting facilities will close at 9:00 a.m., Eastern Time, on December 5, 2023.

By Mail

Holders of Exchangeable Shares who wish to vote by mail should contact TSX Trust Company at 1-888-433-6443 for further instructions on receiving, completing, and returning a voter instruction card.

Revocability of Proxies

If you are a stockholder of record, once you have submitted your proxy by mail, telephone or internet, you may revoke it at any time before it is voted at the Annual Meeting (or any adjournment thereof). You may revoke your proxy in any one of the following three ways:

 

 

 

You may submit another proxy marked with a later date by mail (which must be received before the polls close at the Annual Meeting), or by mail or telephone or via the internet by the applicable deadline as described above, which will automatically revoke your earlier proxy;

 

 

 

 

 

 

You may provide written notice that you wish to revoke your proxy to our Corporate Secretary at Meta Materials Inc., Attn: Corporate Secretary, 60 Highfield Park Drive, Suite 102, Dartmouth, Nova Scotia, Canada, NS B3A 4R9 by no later than the close of business on Tuesday, December 5, 2023; or

 

 

 

 

 

 

You may attend the live webcast of the Annual Meeting and submit your vote live via the internet. Attendance at the Annual Meeting live via the internet will not, by itself, cause your previously granted proxy to be revoked.

If you are a beneficial owner holding shares in “street name,” you may change your vote by submitting new voting instructions to your broker, bank or other nominee in accordance with the instructions they provided (see “Voting Shares Registered in the Name of a Broker, Bank or Other Agent” above).

If you are a holder of Exchangeable Shares, you may revoke your voting instructions to TSX in accordance with the voting direction provided by TSX.

Tabulation of Votes

A representative from Equiniti Trust Company, LLC will act as inspector of elections and tabulate the votes at the Annual Meeting. All shares represented by valid proxies received before the Annual Meeting will be voted. If you submit a valid proxy containing instructions regarding how to vote with respect to any matter to be acted upon, your shares will be voted in accordance with those

4


 

instructions. If you submit a valid proxy with no instructions, then your shares will be voted by the individuals we have designated as proxies for the Annual Meeting in the following manner:

 

 

 

FOR” the election of each of the eight (8) director nominees named in this proxy statement (Proposal 1);

 

 

 

 

 

 

FOR” the ratification of the appointment of KPMG as our independent registered public accounting firm for fiscal year 2023 (Proposal 2);

 

 

 

 

 

 

FOR” the approval of a reverse stock split of our common stock at a ratio within the range of 1-for-5 to 1-for-35, with such ratio to be determined in the discretion of our Board and with such reverse stock split to be effected at such time and date as determined by our Board in its sole discretion. (Proposal 3);

 

 

 

 

 

 

FOR” the approval of the potential issuance of shares of common stock to Lincoln Park in excess of 19.99% of our outstanding common stock pursuant to the Nasdaq Listing Rules (Proposal 4); and

 

 

 

 

 

 

FOR” the approval of the amendment to the 2021 Equity Incentive Plan to increase the maximum aggregate number of shares that may be subject to awards and sold under the 2021 Equity Incentive Plan by 50,000,000 shares (Proposal 5).

 

 

 

 

In addition, the individuals that we have designated as proxies for the Annual Meeting will have discretionary authority to vote your shares with respect to any other business that may properly come before the Annual Meeting or any adjournment or postponement thereof.

Voting Results

Preliminary voting results are expected to be announced at the Annual Meeting. Voting results will be tallied by the inspector of elections and reported in a Current Report on Form 8-K (the “Form 8-K”) that we will file with the SEC within four business days of the Annual Meeting. If the voting results reported in the Form 8-K are preliminary, we will subsequently file an amendment to the Form 8-K to report the final voting results within four business days of the date on which the final voting results are known.

 

Proxy Solicitation

This proxy solicitation is made by the Board, and we will bear the entire cost of soliciting proxies for the Annual Meeting, including costs associated with the preparation, assembly, printing and mailing of the proxy materials and any additional information furnished to stockholders. We will provide copies of the proxy materials to brokers, banks and other nominees holding shares of our common stock in their name for the benefit of others for forwarding to the beneficial owners. We may reimburse such brokers, banks or other agents for their costs associated with forwarding the proxy materials to the beneficial owners. We have retained D.F. King to assist with the solicitation of proxies and provide related advice and informational support, for a services fee, plus customary disbursements, which are not expected to exceed $60,000 in total. Proxy solicitations will be made primarily through the mail, but may be supplemented by telephone, email, or other electronic means by Broadridge, or by our directors, executive officers, employees or other agents without additional compensation to such individuals.

Householding of Proxy Materials

The SEC has adopted rules that permit brokers, banks and other nominees to satisfy the delivery requirements for proxy statements and annual reports, or notice of their availability, by delivering a single proxy statement and annual report to two or more stockholders sharing the same address. This process, which is commonly referred to as “householding,” can provide added convenience for our stockholders and additional cost savings for us.

This year, a number of brokers, banks and other nominees with account holders who are our stockholders will be “householding” our proxy materials. A single proxy statement and annual report or notice of internet availability will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker, bank or other agent that they will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent to the householding of communications. If at any time you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report or notice of availability, please either (i) notify your broker, bank or other agent, (ii) direct your written request to Meta Materials Inc., Attn: Investor Relations, 60 Highfield Park Drive, Suite 102, Dartmouth, Nova Scotia, Canada, NS B3A 4R9., or (iii) contact us by phone at (877) 255-8483. Upon receipt of any such written or oral request, we undertake to promptly deliver free of charge a separate copy of the proxy statement, annual report and/or notice of availability, as applicable, to a stockholder at a shared address to which a single copy of these documents was delivered. Stockholders who currently receive multiple copies of the proxy statement and annual report, or notices of availability, at their address and would like to request householding of their communications should notify us by mail or phone as described above or, if shares are held in “street name”, their broker, bank or other agent.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table presents certain information with respect to the beneficial ownership of our common stock as of October 18, 2023 by (i) each person we know to be the beneficial owner of 5% or more of our outstanding shares of common stock, (ii) each named executive officer and director and (iii) all executive officers and directors as a group. Information with respect to beneficial ownership is based on a review of our stock transfer records and on the Schedules 13D and 13G that have been filed with the SEC by or on behalf of the stockholders listed below. Except as indicated by the footnotes below, we believe, based on the information available to us, that the persons named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.

Percentage of beneficial ownership is calculated based on 489,414,607 shares of common stock outstanding as of October 18, 2023. We have determined beneficial ownership in accordance with SEC rules. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed as outstanding shares of common stock subject to stock options ("Options") held by that person that are currently exercisable or exercisable within 60 days of October 18, 2023. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Except otherwise indicated in the footnotes below, the address of each beneficial owner listed in the table is Meta Materials Inc., 60 Highfield Park Drive, Suite 102, Dartmouth, Nova Scotia, Canada, NS B3A 4R9.

Name and principal position

 

Common Stock Shares

 

% of Class

Greater than 5% stockholders

 

 

 

 

 

 

 

 

George Palikaras

 

 

34,118,109

 

 (1)

 

 

7.0

 

 %

Thomas Welch

 

 

44,629,033

 

 (2)

 

 

9.1

 

 %

Anne Lambert

 

 

44,629,033

 

 (3)

 

 

9.1

 

 %

Executive Officers and Directors

 

 

 

 

 

 

 

 

John R. Harding

 

 

222,195

 

 (4)

 

*

 

 

Chairman of the Board of Directors

 

 

 

 

 

 

 

 

Allison Christilaw

 

 

650,640

 

 (5)

 

*

 

 

Director

 

 

 

 

 

 

 

 

Steen Karsbo

 

 

653,957

 

 (6)

 

*

 

 

Director

 

 

 

 

 

 

 

 

Kenneth Hannah

 

 

96,894

 

 (7)

 

*

 

 

Director

 

 

 

 

 

 

 

 

Vyomesh Joshi

 

 

 

 

 

*

 

 

Director

 

 

 

 

 

 

 

 

Eugenia Corrales

 

 

 

 

 

*

 

 

Director

 

 

 

 

 

 

 

 

Philippe Morali

 

 

 

 

 

*

 

 

Director

 

 

 

 

 

 

 

 

Jim Fusaro

 

 

 

 

 

*

 

 

Director and CEO

 

 

 

 

 

 

 

 

All directors and executive officers as a group (10 persons)

 

 

1,623,686

 

 (8)

 

*

 

 

 

 

 

 

 

 

 

 

 

* Represents less than 1%

 

 

 

 

 

 

 

 

 

6


 

(1)

Includes (a) 4,036,482 shares of common stock held by Mr. Palikaras, (b) 22,982,397 shares of common stock held by Lamda Guard Technologies LTD ("Lamda Guard"), (c) 3,320,022 shares of common stock held by Mr. Palikaras’ wife, (d) 1,824,338 shares of common stock that Mr. Palikaras has the right to acquire from us within 60 days of October 18, 2023 pursuant to the exercise of Options, (e) 168,910 shares of common stock that Mr. Palikaras’ wife has the right to acquire from us within 60 days of October 18, 2023 pursuant to the exercise of Options, (f) 1,461,240 shares of common stock that Mr. Palikaras has the right to acquire from us within 60 days of October 18, 2023 pursuant to the redemption of deferred stock units ("DSUs"), and (g) 324,720 shares of common stock that Mr. Palikaras’ wife has the right to acquire from us within 60 days of October 18, 2023 pursuant to the redemption of DSUs.

(2)

Includes (a) 20,812,551 shares of common stock held by Mr. Welch, (b) 22,391,482 shares held by Mr. Welch’s wife, Anne Lambert, and (c) 1,425,000 shares held by a charity in which Mr. Welch holds decision making influence. The address for the principal business and principal office, as applicable, of each of Mr. Welch and Ms. Lambert is 47 Pleasant Street, PO Box 40, Chester, Nova Scotia, Canada B0J 1J0.

(3)

Includes (a) 22,391,482 shares of common stock held by Ms. Lambert, (b) 20,812,551 shares of common stock held by Ms. Lamberts' husband, Thomas Welch, and (c) 1,425,000 shares held by a charity in which Ms. Lambert holds decision making influence. The address for the principal business and principal office, as applicable, of each of Ms. Lambert and Mr. Welch is 47 Pleasant Street, PO Box 40, Chester, Nova Scotia, Canada B0J 1J0.

(4)

Includes (a) 96,195 shares of common stock held by Mr. Harding, and (b) 126,000 shares of common stock held by Harding Partners LP in which Mr. Harding is a General Partner.

(5)

Includes (a) 15,000 shares of common stock held by Ms. Christilaw, (b) 553,500 shares of common stock that Ms. Christilaw has the right to acquire from us within 60 days of October 18, 2023 pursuant to the exercise of Options and (c) 82,140 shares of common stock that Ms. Christilaw has the right to acquire from us within 60 days of October 18, 2023 pursuant to the redemption of DSUs.

(6)

Includes (a) 18,317 shares of common stock held by Mr. Karsbo, (b) 553,500 shares of common stock that Mr. Karsbo has the right to acquire from us within 60 days of October 18, 2023 pursuant to the exercise of Options, and (c) 82,140 shares of common stock that Mr. Karsbo has the right to acquire from us within 60 days of October 18, 2023 pursuant to the redemption of DSUs.

(7)

Includes 96,894 shares of common stock that Mr. Hannah has the right to acquire from us within 60 days of October 18, 2023, pursuant to the redemption of DSUs.

(8)

Includes 1,856,807 shares of common stock that executive officers and directors have the right to acquire by exercise of stock options and excludes 2,084,185 unvested RSUs and DSUs held by executive officers and directors.

7


 

 

CORPORATE GOVERNANCE

Director Independence

Our Board has undertaken a review of the independence of the directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our Board has determined that John R. Harding, Allison Christilaw, Steen Karsbo, Ken Hannah, Eugenia Corrales, Vyomesh Joshi and Philippe Morali representing seven of our eight directors, are “independent directors” as defined under the rules of the Nasdaq Capital Market (“Nasdaq”). Jim Fusaro is not considered independent due to his current services as our executive officer.

In determining whether directors were independent under Nasdaq rules, the Board considered the matters discussed in the section entitled “Certain Relationships and Related Transactions” below. There are no family relationships between any of our directors and executive officers. There are currently no legal proceedings, and during the past ten years there have been no legal proceedings, which are material to the evaluation or the ability or integrity of any of our directors or director nominees.

Leadership Structure of the Board of Directors

The Board has the following general leadership structure:

 

 

The positions of Chief Executive Officer and Chair of the Board are separate but may be held by the same individual. The positions of Chief Executive Officer and Chair of the Board are currently held by Mr. Fusaro and Mr. Harding, respectively. At any time when the chair of our Board is not independent, one of our independent directors should serve as our lead independent director.

 

 

The Chief Executive Officer and the Chair of the Board may jointly establish the agenda for each meeting of the Board, though any director may request the inclusion of items on the agenda.

Pursuant to our corporate governance guidelines, our independent directors meet on a regular basis throughout the year without the participation of our other directors who are not independent. Our management believes that having a majority of independent, experienced directors, including a lead independent director with specified responsibilities on behalf of the Board, provides the right leadership structure for the Company and is best for the Company and its stockholders at this time.

Board Committees

Currently, the Board has an Audit Committee, a Human Resources and Compensation Committee, and a Corporate Governance and Nominating Committee. Each of these committees operate under written charters, which are available on our website at https://investors.metamaterial.com/governance-documents. The Board has determined that all members of these committees satisfy the applicable independence requirements under Nasdaq rules. The current members of the committees are identified in the table below.

Name

Audit Committee

 

Human Resources and Compensation Committee

 

Corporate Governance and Nominating Committee

 

John Harding

͞

 

͞

 

 

͞

 

Jim Fusaro

͞

 

͞

 

 

͞

 

Allison Christilaw

͞

 

Chair

 

 

Member

 

Steen Karsbo

͞

 

Member

 

 

Chair

 

Ken Hannah

Chair

 

͞

 

 

͞

 

Vyomesh Joshi

͞

 

͞

 

 

Member

 

Eugenia Corrales

Member

 

͞

 

 

͞

 

Philippe Morali

Member

 

Member

 

 

͞

 

Audit Committee

The Audit Committee is responsible primarily for overseeing (i) the services provided by our independent registered public accounting firm, (ii) the integrity of our financial statements and internal control over financial reporting, and (iii) risk management, internal audit and our compliance with legal and regulatory requirements. Mr. Hannah, the Chair of the Audit Committee, has been determined by the Board to be an Audit Committee financial expert. The Audit Committee held five (5) meetings in 2022.

Human Resources and Compensation Committee

The Human Resources and Compensation Committee is responsible primarily for evaluating and approving all compensation plans, policies and programs as they affect our executive officers, administering our equity compensation plans, and reviewing the compensation of the Board. The Human Resources and Compensation Committee held nine (9) meetings in 2022.

 

8


 

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee is responsible primarily for identifying, evaluating and recommending to the Board nominees for election or appointment to the Board and committees of the Board, evaluating the performance and independence of the Board and of individual directors, and evaluating the adequacy of our corporate governance practices. The Corporate Governance and Nominating Committee held two (2) meetings in 2022.

Meetings of the Board of Directors

The Board has regularly scheduled meetings at least quarterly. Our independent directors hold executive sessions without management present at least once per quarter. The Board held eighteen (18) meetings in 2022. Each director attended at least 75% of the aggregate number of meetings held by the Board and all applicable committees of the Board during the period that he or she served. It is our policy to encourage members of the Board to attend our annual meetings of stockholders. All of our directors serving at the time attended the 2022 Annual Meeting of Stockholders.

Role of the Board of Directors in Risk Oversight

Management is responsible for day-to-day risk management at our company. The role of the Board is to provide oversight of the processes designed to identify, assess and monitor key risks and risk mitigation activities. The Board fulfills its risk oversight responsibilities through (i) the receipt of reports directly from management and (ii) the receipt of reports from each committee chair regarding such committee’s oversight of specific risk topics.

Delegation of Risk Oversight

The Board has delegated oversight of specific risk areas to its committees. For example, the Audit Committee is tasked with overseeing risk management at our company with respect to financial matters and the adequacy of our internal control over financial reporting. Pursuant to its charter, the Audit Committee is required, among other things, to discuss with management our policies with respect to risk assessment and risk management, including guidelines and procedures to govern the process by which risk assessment and risk management are handled, and to review our major risk exposures and the steps management has taken to monitor, control and report such exposures. The Audit Committee typically has these discussions with management at least once per quarter, and the Chair of the Audit Committee subsequently reports on these discussions to the full Board. Similarly, the Human Resources and Compensation Committee assists the Board in overseeing risks arising from our compensation policies and practices, and the Corporate Governance and Nominating Committee assists the Board in overseeing risks associated with corporate governance, director and executive officer succession planning, board membership and board structure. Chief Information Officer reports to the Board twice a year to report cyber security matters. The Board then discusses significant risk management issues with the Chief Executive Officer and recommends appropriate action.

Communications with the Board of Directors

The Company’s contact information is available on our website at https://investors.metamaterial.com/. Interested parties may send communications to the non-management members of the Board. Communications to the Board must be in writing and sent care of our Corporate Secretary by mail to our offices Meta Materials Inc., Attn: Corporate Secretary, 60 Highfield Park Drive, Suite 102, Dartmouth, Nova Scotia, Canada, NS B3A 4R9. This centralized process will assist the Board in reviewing and responding to stockholder and interested party communications in an appropriate manner. The name of any specific intended recipient should be noted in the communication. All communications must be accompanied by the following information:

 

 

if the person submitting the communication is a security holder, a statement of the type and amount of securities of our company the person holds;

 

 

if the person submitting the communication is not a security holder and is submitting the communication to the non-management directors as an interested party, the nature of the person’s interest in our company;

 

 

any special interest, meaning an interest not in the capacity of a stockholder of our company, of the person in the subject matter of the communication; and

 

 

the address, telephone number and e-mail address, if any, of the person submitting the communication.

Communications should be addressed to the attention of our Corporate Secretary and should not exceed 500 words in length, excluding the information required to accompany the communication as described above. The Board has instructed our Corporate Secretary to forward such correspondence to the Board.

9


 

Consideration of Director Nominees

Director Qualifications

The Corporate Governance and Nominating Committee evaluates all incumbent, replacement or additional nominees for election as directors, taking into account (i) all factors the committee considers appropriate, which may include career specialization, relevant technical skills or financial acumen, diversity of viewpoint and industry knowledge, and (ii) the following minimum qualifications:

 

 

Each director nominee must have displayed the highest personal and professional ethics, integrity and values, and sound business judgment;

 

 

Each director must be highly accomplished in his or her respective field, with superior credentials and recognition and broad experience at the administrative and/or policy making level in business, government, education, technology or public interest;

 

 

Each director must have relevant expertise and experience, and be able to offer advice and guidance to the Chief Executive Officer based on that expertise and experience;

 

 

Each director must be able to represent all of our stockholders and be committed to enhancing long-term stockholder value; and

 

 

Each director must have sufficient time available to devote to activities of the Board and to enhance his or her knowledge of our business.

In determining whether to recommend a director for re-election to the Board, the Corporate Governance and Nominating Committee also considers the director’s past attendance at meetings and participation in and contributions to the activities of the Board and any applicable committees of the Board.

Although the Board does not maintain a formal policy with respect to board diversity, the Board believes that it should be a diverse body and the Nominating and Governance Committee considers a broad range of backgrounds and experiences.

Stockholder Recommendations and Nominees

The Corporate Governance and Nominating Committee has not received director candidate recommendations from our stockholders and does not have a formal policy regarding consideration of such recommendations. The Board believes this is appropriate, as any recommendations received from stockholders will be evaluated in the same manner as potential nominees suggested by members of the Board or management. Stockholders wishing to recommend a candidate for director should write to our Corporate Secretary at Meta Materials Inc., Attn: Corporate Secretary, 60 Highfield Park Drive, Suite 102, Dartmouth, Nova Scotia, Canada, NS B3A 4R9.

To be considered, the recommendation of a director candidate must include the following written information: (i) the stockholder’s name and contact information; (ii) a statement that the writer is a stockholder and is proposing a candidate for consideration by the Corporate Governance and Nominating Committee; (iii) the name of, and contact information for, the candidate and a statement that the candidate is willing to be considered and serve as a director, if nominated and elected; (iv) a statement of the candidate’s business, educational experience and qualifications; (v) information regarding each of the factors listed under “Director Qualifications” above sufficient to enable the Corporate Governance and Nominating Committee to evaluate the candidate; (vi) a statement of the value that the candidate would add to the Board; (vii) a statement detailing any relationship between the candidate and any customer, supplier or competitor of the Company; (viii) detailed information about any relationship or understanding between the proposing stockholder and the candidate; and (ix) a list of three character references, including complete contact information for such references. To give the Corporate Governance and Nominating Committee sufficient time to evaluate a recommended director candidate for the 2024 Annual Meeting of Stockholders, the recommendation should be received by our Corporate Secretary at our principal executive offices no later than [●] which is the 120th calendar day before the first anniversary of the date our proxy statement was mailed to stockholders in connection with the 2023 Annual Meeting, or at such earlier or later date should the date of the 2024 Annual Meeting of Stockholder cause recommendations to be received at another time, in which case we will provide proper notice to its stockholders.

Identification and Evaluation of Nominees for Director

The Corporate Governance and Nominating Committee uses a variety of methods for identifying and evaluating nominees for directors. The Corporate Governance and Nominating Committee regularly assesses the appropriate size and composition of the Board, the needs of the Board and each committee of the Board, and the qualifications of candidates in light of these needs. Candidates may come to the attention of the Corporate Governance and Nominating Committee through stockholders, management, current members of the Board or search firms. The evaluation of these candidates may be based solely upon information provided to the Corporate Governance and Nominating Committee or may also include discussions with persons familiar with the candidate, an interview of the candidate or other actions the Corporate Governance and Nominating Committee deems appropriate, including the use of third parties to review candidates.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own beneficially more than ten percent of our common stock, to file reports of ownership and changes of ownership with the SEC. Based solely upon a review of Forms 3, 4 and 5 and amendments thereto filed electronically with the SEC during 2022, and upon representations from each of the reporting

10


 

persons, we believe that the directors, executive officers, and greater than ten percent beneficial owners have complied with all applicable filing requirements during 2022, except for (i) two untimely Form 4s by our former Chief Technology Officer, or CTO, Jonathan Waldern on May 12, 2022 with respect to three transactions on February 15, 2022 and two transactions on March 3, 2022, and on November 1, 2022 with respect to one transaction occurring on October 21, 2022; (ii) two untimely Form 4s by former Chairman Ramkumar Ramamritham on February 8, 2022 with respect to two transactions on February 1, 2022 and on April 28, 2022 with respect to one transaction on December 22, 2021; (iii) two untimely Form 4s by former Director Maurice Guitton on April 28, 2022 with respect to one transaction on December 22, 2021 and on April 6, 2023 with respect to one transaction on December 5, 2022; (iv) one untimely Form 4 by former CFO and COO Kenneth Rice on May 12, 2022 with respect to two transactions on March 3, 2022; (v) three untimely Form 4s by 10% or more stockholders Thomas Welch and Anne Lambert on February 11, 2022 with respect to two transactions on January 25, 2022, on February 14, 2022 with respect to two transactions on January 27, 2022, and on October 6, 2022 with respect to two transactions on September 12, 2022 and two transactions on September 16, 2022, each subject to voluntary reporting on Form 4, as well as two transactions on October 3, 2022, and two transactions on October 4, 2022; (vi) one untimely Form 4 by CEO George Palikaras on May 12, 2022 regarding two transactions on March 3, 2022; (vii) two untimely Form 4s by Director Steen Karsbo on April 28, 2022 with respect to one transaction on December 22, 2021 and on April 6, 2023 with respect to one transaction on December 5, 2022; (viii) two untimely Form 4s by Director Eric Leslie on April 28, 2022 with respect to one transaction on December 22, 2021 and on April 6, 2023 with respect to one transaction on December 5, 2022; (ix) two untimely Form 4s by Director Ken Hannah on April 28, 2022 with respect to one transaction on December 22, 2021 and on April 6, 2023 with respect to one transaction on December 5, 2022; and (x) two untimely Form 4s by Director Allison Christilaw on April 28, 2022 with respect to one transaction on December 22, 2021 and on April 6, 2023 with respect to one transaction on December 5, 2022.

 

Code of Business Conduct and Ethics

We have adopted a written Code of Business Conduct and Ethics applicable to the Board and our officers and employees, including our principal executive officer, principal financial officer and principal accounting officer, in accordance with the rules of the Nasdaq and the SEC. The Code of Business Conduct and Ethics is available on our website at https://investors.metamaterial.com/esg.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Audit Committee reviews all related party transactions (as defined by Item 404 of Regulation S-K) in accordance with Nasdaq listing standards. In addition, the charter of the Audit Committee requires the Audit Committee to review a summary of any director’s or officer’s related-party transactions and potential conflicts of interest on a yearly basis. The charter also requires the Audit Committee to review our conflict of interest policy (which is part of our Code of Business Conduct and Ethics) and compliance with that policy on an annual basis.

The following includes a summary of transactions since January 1, 2021 to which we have been a party, in which the amount involved in the transaction exceeded $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, and other arrangements, which are described under the section entitled “Executive Compensation.”

Thomas Welch and Anne Lambert, beneficial owners of more than 5%

On February 18, 2021, Thomas Welch and his wife, Anne Lambert, converted certain debt instruments into common stock of Metamaterial Inc. ("MMI"), which, together resulted in Thomas Welch and Anne Lambert holding shares of our common stock pursuant to the merger transaction with Torchlight Energy Resources, Inc, or Torchlight, (the "Arrangement"). Prior to the issuance of these debt instruments, Thomas Welch and Anne Lambert were each an investor in and lender to MMI.

Lamda Guard Technologies Ltd, a company controlled by a former President and CEO and his wife

On March 16, 2021, Lamda Guard converted an amount of CA$290,230 into common stock of MMI.

Gregory McCabe, a former Chairman of Torchlight Energy Resources, Inc.

Following the closing of the Arrangement, we issued a loan in the amount of $21,000,000 to Next Bridge Hydrocarbons, Inc. ("Next Bridge"), which was our wholly-owned subsidiary until December 2022. $15,000,000 of such loan was secured by shares of Common Stock held by Gregory McCabe, a former Chairman of Torchlight's Board of Directors, and by Mr. McCabe’s interest in the development of the Orogrande Project.

Mr. McCabe had controlling interests in Masterson Hazel Partners, LP (“MHP), McCabe Petroleum Corporation (“MPC”), Wolfbone Investments, LLC (“Wolfbone”), and ORRI – Magdalena Royalties, LLC (“Magdalena” and together with MHP, MPC and Wolfbone, the “McCabe Entities”). Mr. McCabe holds, at his option, a 10% working interest after payout and a reversionary interest in the approximately 172,000 predominately contiguous acres in the Orogrande Basin in West Texas held by Hudspeth if drilling obligations are not met, all under the terms and conditions of a participation and development agreement among Hudspeth, MPC and Mr. McCabe. Mr. McCabe also held a 4.5% overriding royalty interest in the Orogrande acreage, which he obtained prior to, and was not a part of the August 2014

11


 

transaction involving the Company and Hudspeth. Wolfbone and Magdalena together held a 23.25% revenue interest and a 25% working interest in the Orogrande Project as of December 31, 2021. We disposed of the Orogrande Project property as part of a deconsolidation of Next Bridge in December 2022.

On August 7, 2023, we entered into the Loan Sale Agreement with Gregory McCabe.

The Loan Sale Agreement provides for the nonrecourse transfer and assignment to Mr. McCabe of all of our rights and interests, and the assumption by Mr. McCabe of all of our obligations, under (i) the loan and extension of credit (the “Secured Loan”) made under and pursuant to, and evidenced by, that certain 8% Secured Promissory Note made by Next Bridge, in favor of us, with an original issue date of October 1, 2021 (as amended and in effect on August 7, 2023, the “Secured Note”), with an aggregate balance of principal and accrued interest of $17,109,444.52, (ii) certain loans under the Loan Agreement, dated as of September 2, 2022 (as amended from time to time, the “Loan Sale Agreement”) among NBH, Torchlight, Torchlight Hazel LLC, a Texas limited liability company, or Hazel, Hudspeth Oil Corporation, a Texas corporation, or Hudspeth Oil, Wolfbone and Hudspeth Operating, LLC, a Texas limited liability company, or Hudspeth Operating, and together with NBH, Torchlight Energy, Hazel, Hudspeth Oil and Wolfbone, the Borrowers, with an aggregate balance of principal and accrued interest of $6,847,521.43, and (iii) the Loan Documents (as defined in the Loan Sale Agreement, and collectively with the Secured Note and the Loan Agreement, or the Assigned Loan Interests). Under the terms of the Loan Sale Agreement, Mr. McCabe acquired the Assigned Loan Interests without warranty or recourse and has assumed all risks of non-collection.

The Assigned Loan Interests were assigned to Mr. McCabe in consideration of the payment to us by Mr. McCabe of $6,000,000. In connection with the Loan Sale Agreement, we entered into a common stock purchase agreement (the “Purchase Agreement”) with Mr. McCabe providing for the purchase by Mr. McCabe of an aggregate of $6 million of the Common Stock. We also entered into a registration rights agreement with Mr. McCabe, providing for the registration of the shares of the Common Stock issuable with respect to the Purchase Agreement on behalf of us (the “Registration Rights Agreement”).

The Purchase Agreement has a term of 15 months (the “Investment Period.”) During the Investment Period, we can sell up to $6 million of our Common Stock to Mr. McCabe with up to 15 drawdowns. For the first six months, each drawdown will be $250,000, and for the remaining nine months, each drawdown will be $500,000. Additionally, Mr. McCabe has the option to pay more than the specified drawdown amounts at any point, up to the full $6 million, thereby accelerating the full payments. If Mr. McCabe fails to complete the full $6 million purchase within the Investment Period, Mr. McCabe must forfeit any previously acquired shares of Common Stock. Mr. McCabe shall pay a price per share equal to a 120% of the 5-day volume-weighted average price. The shares sold under this the Purchase Agreement are classified as "restricted securities" under the Securities Act of 1933 and can only be transferred following registration under the Securities Act or an exemption therefrom.

 

EXECUTIVE OFFICERS

Our executive officers are appointed by, and serve at the discretion of, the Board. Each executive officer is a full-time employee of the Company. The names of our executive officers and their ages, titles and biographies are set forth below:

Name

 

Age

 

Position

Jim Fusaro

 

61

 

Chief Executive Officer and Director

 

Uzi Sasson

 

61

 

Chief Financial Officer and Chief Operating Officer

 

Dan Eaton

 

59

 

Chief Legal Officer

 

Jim Fusaro has served as our Chief Executive Officer, or CEO, as well as a member of the Board, since October 2023. From June 2018 to April 2022, Mr. Fusaro held the position of CEO of Array Technologies, Inc. (“Array”), a leading global technology company providing solar tracking solutions and services for utility-scale solar energy projects. During Mr. Fusaro’s tenure with Array, he successfully restored growth and profitability, increased revenue by approximately 300%, an eight-times growth in EBITDA, and more than doubled market share from 2018 to 2020. Prior to joining Array, Mr. Fusaro managed a number of large-scale global businesses at Avnet, Inc. (“Avnet”), Honeywell Performance Materials & Technology (“PTM”) and Aerospace of Honeywell International, Inc. (“Honeywell”), and Amkor Technology (“Amkor”). From June 2017 to June 2018, Mr. Fusaro was employed as Sr. Vice President, IoT Business Unit, of Avnet. During his time with Honeywell, he served as President of Advanced Materials of Honeywell PTM from June 2016 to June 2017, Vice President & Chief Commercial Officer of Honeywell Aerospace from December 2014 to June 2016, and Vice President & General Manager of Mechanical Subsystems from June 2011 to December 2014. From 1997 to 2011, Mr. Fusaro held various leadership roles with Amkor, including Executive Vice President of Amkor. Mr. Fusaro has a Master of Science in Mechanical Engineering from Rensselaer Polytechnic Institute and a Bachelor of Science in Mechanical Science from Arizona State University.

Uzi Sasson has served as our Chief Financial Officer, or CFO, and Chief Operating Officer, or COO, since April 2023. From January 2022 to March 2023, Mr. Sasson held the position of CFO of Katena Computing Technologies, Inc. From August 2019 to August 2021, Mr. Sasson was employed as Executive Vice President and CFO of Eat Just, Inc. From November 2004 through August 2019, Mr. Sasson was CFO and Secretary, COO, Director and President and CEO of IXYS Corporation. Prior to joining IXYS Corporation, Mr. Sasson worked in tax, accounting and finance for technology and accounting firms. Mr. Sasson currently serves on the board of directors of VTool Ltd and on the board of trustees of World Affairs Council, where he also serves as chair of the audit committee. Mr. Sasson has a M.S. in Taxation and a B.S. in Accounting from Golden Gate University and is a Certified Public Accountant in California.

12


 

D. Daniel ("Dan") Eaton has served as our Chief Legal Officer since July 2023 and as our Secretary since October 2023. With previous General Counsel roles at Katena Computing Technologies, Inc., Netronome Systems, Inc., and Zilog Inc., Mr. Eaton brings a strong background in the technology industry and a wealth of expertise in legal affairs and corporate governance. Beyond his legal expertise, Mr. Eaton has a successful track record in managing several 8-figure acquisitions, including significant transactions with Zilog, Inc. and IXYS Corporation, showcasing his strategic vision and ability to drive business growth through acquisition activities. Mr. Eaton is licensed to practice law in the State of California and the United States Patent and Trademark Office and is well-versed in intellectual property rights and protection strategies. He also holds 12 issued patents on a variety of technical innovations. Mr. Eaton's education encompasses both legal and technical knowledge, having received a Juris Doctor from Santa Clara University and a Bachelor of Science degree from New Mexico State University.

None of our executive officers has any family relationships with any of our other executive officers or directors. Except as set forth below, there are no legal proceedings, and during the past ten years there have been no legal proceedings, that are material to the evaluation of the ability or integrity of any of our executive officers. As previously disclosed, on July 20, 2023, the enforcement staff of the SEC provided us, our former CEOs, John Brda, and George Palikaras, with “Wells Notices” relating to the merger involving Torchlight Energy Resources, Inc. and Metamaterial Inc. The Wells Notices allege violations of certain provisions of U.S. federal securities laws. Although a Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law, it is a formal notice that the SEC intends to bring an enforcement action against the recipients.

 

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table summarizes the total compensation earned by our named executive officers in fiscal years 2022 and 2021.

Name and Principal Position

 

Year

Salary ($)

 

 

Bonus ($)

 

Option Awards ($) (1)

 

 

Stock Awards ($) (1)

 

 

Non-Equity Incentive Plan Compensation ($)

 

 

All Other Compensation ($)

 

Total ($)

 

George Palikaras (2)

 

2022

 

$

424,333

 

 

$

 

 

 

$

800,000

 

 

$

800,000

 

 

$

 

 

$

 

 

 

$

2,024,333

 

Former President and CEO

 

2021

 

$

300,558

 

 

$

682,500

 

 (5)

 

$

 

 

$

 

 

$

 

 

$

 

 

 

$

983,058

 

Kenneth Rice (3)

 

2022

 

$

293,333

 

 

$

 

 

 

$

322,309

 

 

$

250,000

 

 

$

106,313

 

 

$

19,290

 

 (7)

 

$

991,245

 

Former CFO and COO

 

2021

 

$

231,100

 

 

$

200,000

 

 (6)

 

$

 

 

$

 

 

$

104,850

 

 

$

19,290

 

 (7)

 

$

555,240

 

Jonathan Waldern (4)

 

2022

 

$

250,000

 

 

$

 

 

 

$

3,663,601

 

 

$

200,000

 

 

$

200,000

 

 

$

 

 

 

$

4,313,601

 

Former CTO

 

2021

 

$

238,078

 

 

$

 

 

 

$

 

 

$

 

 

$

182,500

 

 

$

 

 

 

$

420,578

 

(1)

The amounts reported in the Option Awards and Stock Awards columns represent the grant date fair value of the stock options and restricted stock units granted to the named executive officers as of the grant date as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, not including any estimates of forfeitures. The assumptions used in calculating the grant date fair value of the stock options reported in the Option Awards column and restricted stock units reported in the Stock Awards column are set forth in Note 13 to our financial statements included in our 2022 Annual Report for option awards in 2022 and in Note 15 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 3, 2022 (as amended on May 2, 2022) for options awards in 2021. Note that the amounts reported in this column reflect the accounting cost for these stock options, and do not correspond to the actual economic value that may be received by the named executive officers from the options.

(2)

Mr. Palikaras’ employment as our President and CEO ceased on October 10, 2023.

(3)

Mr. Rice’s employment as our CFO and COO terminated on April 20, 2023.

(4)

Dr. Waldern’s employment as our CTO terminated on April 21, 2023.

(5)

On July 9, 2021, Mr. Palikaras was awarded a bonus of $300,000 based upon the successful completion of the reverse merger with Torchlight. On March 28, 2022, Mr. Palikaras was awarded a bonus of $382,500 based on 2021 performance.

(6)

On July 9, 2021, Mr. Rice was awarded a bonus of $200,000 based upon the successful completion of the reverse merger with Torchlight.

(7)

Represents medical expense reimbursement.

 

13


 

Overview of Executive Compensation

Our executive compensation program has been designed to encourage executives to make decisions and take actions that will result in the improvement of long-term stockholder value as reflected in the growth in assets and increase in value of the shares of our common stock. The focus of our current compensation policy is to:

 

 

strengthen the relationship between compensation and enhancement of stockholder value by focusing on variable compensation, such as annual performance incentives and ownership of common stock of the Company, primarily by using options for acquiring common stock of the Company;

 

 

enhance the Company’s ability to attract, encourage and retain knowledgeable and experienced executives; and

 

 

balance the short-term and long-term business goals of the Company.

 

The key components of executive compensation include: (1) base salary; (2) a short-term incentive comprised of quarterly bonus awards paid in cash and/or stock options; and (3) long-term incentives comprised primarily of stock option incentives, which are reviewed annually based on job performance as well as corporate performance and external competitive practices.

The Board has utilized the Human Resources and Compensation Committee that works with the CEO to establish annual and quarterly performance measures for each executive along with assessing the overall performance of the Company and its executives and relies on its experience and judgment in determining the overall compensation package for executives. Compensation of executives as detailed herein is linked to the achievement of corporate and individual objectives, and not to improvements of the market value of the Company’s securities.

Employment Agreements

George Palikaras

On July 1, 2021, Metamaterial Technologies Canada Inc., or Meta Canada, a wholly owned subsidiary ours, entered into an executive employment contract with George Palikaras, or the Palikaras Employment Agreement, pursuant to which we agreed to employ Mr. Palikaras as our CEO, effective as of July 1, 2021, for an indefinite term in consideration of an annual base salary of CAD $553,500. Pursuant to the terms and conditions of the Palikaras Employment Agreement, Mr. Palikaras was granted a stock option award with a grant date value of $800,000, subject to the terms of our Employee Stock Option Plan, and a grant of restricted stock units under our 2021 Equity Incentive Plan with a value of $800,000 (prorated for partial years of employment). In the event Mr. Palikaras’ employment is terminated by us without Cause (except in the case of death or disability) or Mr. Palikaras resigns for Good Reason (as defined in the Palikaras Employment Agreement) and subject to Mr. Palikaras signing a release that becomes effective within 60 days following the termination, the Palikaras Employment Agreement provides that Mr. Palikaras will receive continued payment of his base salary for 1 year; payment of four quarterly bonuses to be made quarterly following the termination date; any earned unpaid bonus for the fiscal year to the termination; a prorated amount of the quarterly bonus for the calendar quarter in which the termination occurs based on the date of termination; continued Company benefits, excluding disability coverage, for the severance period, if such benefits are available under the terms of our benefits plans, or an amount equal to the Company’s contribution for these benefits; any earned but unpaid base salary through the termination date, accrued but unpaid vacation pay, and reimbursement of expenses incurred through the termination date; and 12 months’ accelerated vesting of the stock options. If Mr. Palikaras is terminated for Cause, we may terminate his employment immediately and without notice, and he will only be entitled to earned but unpaid salary, accrued but unpaid vacation pay and reimbursement of expenses incurred through the termination date.

The Palikaras Employment Agreement provides that Mr. Palikaras may resign without Good Reason by providing us with six months’ advance written notice. During the notice period, Mr. Palikaras will be entitled to continue to receive his base salary and benefits but will not be entitled to quarterly bonuses for any calendar quarter that ends or begins during that 6-month period.

Kenneth Rice

On December 14, 2020, we entered into an executive employment agreement with Kenneth Rice, or the Rice Employment Agreement pursuant to which we agreed to employ Mr. Rice as our CFO and Executive Vice President, effective as of December14, 2020, for an indefinite term. The Rice Agreement provided for an initial annual base salary of $156,000, scheduled to increase to $216,000 on March 1, 2021. Under the terms of the Rice Agreement, Mr. Rice is eligible to receive a quarterly bonus up to a target of $27,000 based on his achievement of a balanced scorecard, at the sole discretion of our Board of Directors. In the first two years following the effective date of the Rice Employment Agreement, 25% of any quarterly bonus shall be issued in an amount of fully vested stock options. In addition, the Rice Employment Agreement provided for a grant to Mr. Rice of an option to acquire 300,000 shares under our Amended and Restated Employee Stock Option Plan.

In the event Mr. Rice’s employment is terminated by us without Cause or Mr. Rice resigns for Good Reason (as defined in the Rice Employment Agreement) and subject to Mr. Rice signing a release within 60 days of termination, the Rice Employment Agreement provides that Mr. Rice will receive continued payment of his base salary for 6 months; payment of two quarterly bonuses to be made quarterly following the termination date; a prorated amount of the quarterly bonus for the calendar quarter in which the termination occurs

14


 

based on the date of termination; continued Company benefits, excluding disability coverage, for the severance period, if such benefits are available under the terms of our benefits plans; and six months’ accelerated vesting of the initial option grant described above. If Mr. Rice is terminated for Cause, he will only be entitled to earned but unpaid salary, vacation pay and reimbursement of expenses.

Jonathan Waldern

On December 16, 2020, we entered into an executive employment agreement with Jonathan Waldern, or the Waldern Employment Agreement pursuant to which we agreed to employ Dr. Waldern as our CTO, effective as of December16, 2020, for an indefinite term. The Waldern Employment Agreement provided an initial annual base salary of $150,000, scheduled to increase to $250,000 on March 1, 2021. Pursuant to the Waldern Agreement, Dr. Waldern is eligible to receive a quarterly cash bonus up to a target of $50,000 based on achievement of a balanced scorecard, at the sole discretion of the Company or the Board of Directors. In the first two years of employment, Mr. Waldern is also eligible to receive up to 0.25% per quarter of our then outstanding common stock as fully vested stock options. In addition, the agreement provided for a grant to Dr. Waldern of an option to acquire 1,115,000 shares under our Amended and Restated Employee Stock Option Plan.

In the event Dr. Waldern’s employment is terminated by us without Cause or Dr. Waldern resigns for Good Reason (each as defined in the Waldern Employment Agreement), and subject to Dr. Waldern signing a release within 60 days of termination, the Waldern Employee Agreement provides that Dr. Waldern will receive continued payment of base salary for 6 months; payment of two quarterly bonuses to be made quarterly following the termination date; continued benefits, excluding disability coverage, for a period of twelve (12) months, if such benefits are available under the terms of our benefits plans; and six months’ accelerated vesting of the initial option grant described above.

The Waldern Employment Agreement provides that Dr. Waldern may resign without Good Reason (as defined in the Waldern Employment Agreement) by providing us with six months’ advance written notice. During the notice period, Dr. Waldern will be entitled to continue to receive his base salary and benefits, but will not be entitled to quarterly bonuses for any calendar quarter that ends or begins during that 6-month period.

Executive Terminations

Effective as of (i) April 20, 2023, Kenneth Rice was terminated as our CFO and COO and decided to retire, and (ii) April 21, 2023, Jonathan Waldern was terminated as our CTO. In connection with their departures, each of Mr. Rice and Mr. Waldern received the severance payments and benefits provided under their respective employment agreements for a termination without Cause (as defined therein), subject to his execution of a release and discharge agreement and compliance with post-termination restrictive covenants.

On October 10, 2023, the Board removed George Palikaras as our President and CEO, effective immediately. As a result, Mr. Palikaras ceased to be classified as a Section 16 officer or executive officer of the Company. On October 16, 2023, the Board terminated the employment of George Palikaras from all positions with the Company. Under the employment agreement between Mr. Palikaras and the Company, upon his termination of his employment, Mr. Palikaras is required to immediately resign as a director as of the date of termination. Mr. Palikaras will receive benefits outlined in his employment agreement in connection with his termination.

15


 

Outstanding Equity Awards at Fiscal Year End

The following table sets forth information regarding outstanding equity awards held by our named executive officers as of December 31, 2022.

 

 

Option Awards

 

Stock Awards

Name

 

Number of Securities Underlying Unexercised Options (#) Exercisable

 

Number of Securities Underlying Unexercised Options (#) Unexercisable

 

Option Exercise Price ($)

 

Option Expiration Date

 

Market Number of Shares or Units of Stock that have Not Vested (#)

 

Market Value of Shares or Units of Stock that have Not Vested ($) (1)

 

 

George Palikaras

 

 

1,476,000

 

(2)

 

 

 

 

 

0.27

 

23-Mar-30

 

 

 

 

 

 

 

 

Former President and CEO

 

 

 

 

 

 

696,675

 

(3)

 

1.58

 

3-Mar-32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

506,329

 

(3)

 

$

602,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,461,240

 

(7)

 

$

1,738,876

 

 

Kenneth Rice (6)

 

 

553,500

 

(4)

 

 

 

 

 

0.27

 

14-Dec-30

 

 

 

 

 

 

 

 

Former CFO and COO

 

 

 

 

 

 

217,711

 

(3)

 

1.58

 

3-Mar-32

 

 

 

 

 

 

 

 

 

 

 

110,252

 

(4)

 

 

 

 

 

1.21

 

10-May-32

 

 

 

 

 

 

 

 

 

 

 

41,759

 

(4)

 

 

 

 

 

1.17

 

27-Jun-32

 

 

 

 

 

 

 

 

 

 

 

68,830

 

(4)

 

 

 

 

 

1.31

 

11-Nov-32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

158,228

 

(3)

 

$

188,291

 

 

Jonathan Waldern (6)

 

 

385,718

 

(5)

 

 

1,028,588

 

(5)

 

0.27

 

14-Dec-30

 

 

 

 

 

 

 

 

Former CTO

 

 

699,457

 

(4)

 

 

 

 

 

1.97

 

15-Feb-32

 

 

 

 

 

 

 

 

 

 

 

702,048

 

(4)

 

 

 

 

 

1.97

 

15-Feb-32

 

 

 

 

 

 

 

 

 

 

 

492,606

 

(4)

 

 

 

 

 

1.97

 

15-Feb-32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

174,169

 

(3)

 

1.58

 

3-Mar-32

 

 

 

 

 

 

 

 

 

 

 

662,603

 

(4)

 

 

 

 

 

1.58

 

10-May-32

 

 

 

 

 

 

 

 

 

 

 

741,987

 

(4)

 

 

 

 

 

1.51

 

27-Jun-32

 

 

 

 

 

 

 

 

 

 

 

904,826

 

(4)

 

 

 

 

 

1.31

 

11-Nov-32

 

 

 

 

 

 

 

 

 

 

 

902,394

 

(4)

 

 

 

 

 

0.89

 

21-Oct-32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

126,582

 

(3)

 

$

150,633

 

 

(1)

Represents the market value of the unvested shares underlying the share awards as of December 31, 2022, based on the closing price of our common shares on such date, as reported on the Nasdaq Capital Market, which was $1.19 per share. These amounts do not reflect the actual economic value that will be realized by the named executive officer upon the vesting of the share awards or the sale of the common stock underlying such share awards.

(2)

Vested annually over two years commencing on March 23, 2020.

(3)

Vests annually over four years commencing on March 3, 2022, subject to the terms, conditions and restrictions of the award agreement governing the grant.

(4)

Fully vested at grant dates.

(5)

Vests at 25% one year after grant date and 75% in equal monthly installments over three years after, subject to the terms, conditions and restrictions of the award agreement governing the grant.

(6)

Each outstanding vested stock option held by Mr. Rice terminates 90 days from April 20, 2023, the date of his separation from us and each outstanding vested stock option held by Dr. Waldern terminates 90 days from April 21, 2023, the date of his separation from us.

(7)

Represents fully vested DSUs, which were granted on March 28, 2013. Each unit is convertible at the option of the holder into one common share upon its settlement; however, DSUs are unable to be settled until the holder ceases to be a service provider to the Company. The holder is entitled to settle all DSUs, including dividends and other adjustments, no later than December 1 of the first calendar year commencing after the time of his termination.

Setting Executive Compensation

In establishing compensation packages for executive officers, numerous factors are considered, including the particular executive’s experience, expertise, and performance, our company’s overall performance, compensation packages available in the marketplace for similar positions, such as benchmarking information provided by Frederic W. Cook & Co., Inc. (the "Compensation Consultant"). In arriving at amounts for each component of compensation, our Human Resources and Compensation Committee strives to strike an appropriate balance between base compensation and incentive compensation. The Human Resources and Compensation Committee also endeavors to properly allocate between cash and non-cash compensation (including without limitation stock and stock option awards) and between annual and long-term compensation.

16


 

Role of the Compensation Consultant

The Compensation Consultant provides executive compensation consulting services to the Human Resources and Compensation Committee. The Compensation Consultant may review the peer group of companies used for compensation purposes in the preceding year, conduct a review of the competitiveness of our total direct compensation and assess our incentive structure for executive officers and the alignment of that structure with market practice, our compensation philosophy and key management objectives. The Human Resources and Compensation Committee reviewed the independence of the Compensation Consultant and the work that it performed in 2022 and 2021 did not raise any conflicts of interest.

Pay Versus Performance

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (as defined by SEC rules) for our principal executive officer ("PEO") and non-PEO named executive officers ("Non-PEO NEOs"), and certain financial and operational performances of the Company. As a smaller reporting company, we are permitted and have elected to provide scaled pay versus performance information for our named executive officers.

The following table presents the pay versus performance information for our named executive officers.

 

Year

 

Summary Compensation Table Total for PEO (1)

 

 

Compensation Actually Paid to PEO (2)

 

 

Average Summary Compensation Table Total for Non-PEO NEOs (3)

 

 

Average Compensation Actually Paid to Non-PEO NEOs (4)

 

 

Value of Initial Fixed $100 Investment Based on Total Shareholder Return (5)

 

 

Net Loss

 

Fiscal 2022

 

$

2,024,333

 

 

$

1,590,126

 

 

$

2,652,423

 

 

$

2,530,302

 

 

$

101

 

 

$

(79,102,224

)

Fiscal 2021

 

$

983,058

 

 

$

983,058

 

 

$

487,909

 

 

$

487,909

 

 

$

208

 

 

$

(90,997,261

)

 

(1)

The dollar amounts reported in column (1) are the amounts of total compensation reported for Mr. Palikaras (our Former President and CEO or PEO) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table.”

(2)

The dollar amounts reported in column (2) represent the amount of “compensation actually paid” to Mr. Palikaras, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Palikaras during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to Mr. Palikaras’ Summary Compensation Table Total compensation for each year to determine the compensation actually paid:

 

Year

 

Reported Summary Compensation Table Total for PEO (a)

 

 

Deduct
Grant Date Fair Value
of Stock Awards
Granted in Fiscal Year
($) (b)

 

 

Add Fair Value
 at Fiscal Year-End of
Outstanding and
Unvested Stock Awards
Granted in Fiscal Year
($) (c)

 

 

Add/(Subtract)
Change in Fair Value of
Outstanding and
 Unvested Stock Awards
Granted in Prior Fiscal
Years ($) (d)

 

 

 

Add Fair Value at
Vesting of Stock Awards
Granted in Fiscal Year
 that Vested During
 Fiscal Year
($) (e)

 

 

 

Compensation Actually Paid to PEO

 

 

2022

 

$

2,024,333

 

 

$

(1,600,000

)

 

$

1,165,793

 

 

$

 

 

 

$

 

 

 

$

1,590,126

 

 

2021

 

$

983,058

 

 

$

 

 

$

 

 

$

 

 

 

$

 

 

 

$

983,058

 

 

 

(a)

Represents total compensation of Mr. Palikaras as reported in the Summary Compensation Table for the indicated fiscal year.

(b)

Represents the aggregate grant date fair value of stock awards granted to Mr. Palikaras reported in the Summary Compensation Table during the indicated fiscal years, computed in accordance with FASB ASC Topic 718.

(c)

Represents the aggregate fair value as of the indicated fiscal year-end of Mr. Palikaras outstanding and unvested stock awards granted during such fiscal year. The year-end fair value of the outstanding and unvested option equity awards was measured using the same methodology and assumptions in accordance with ASC 718. The valuation assumptions used to measure the year-end fair value of the outstanding and unvested option equity awards was not materially differ from those disclosed at grant date.

(d)

There were no outstanding stock awards which were granted in prior fiscal years and held by Mr. Palikaras as of the last day of the indicated fiscal year since we acquired Torchlight Energy Resources, Inc. ("Torchlight") via reverse-takeover (the “Merger”).

(e)

There were no outstanding stock awards which were granted and vested within the respective fiscal year.

 

(3)

The dollar amounts reported in column (3) are the average of total compensation reported for our non-PEO NEOs, Mr. Rice and Dr. Waldern for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table.”

17


 

(4)

The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Rice and Dr. Waldern during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to Mr. Rice and Dr. Waldern’s Summary Compensation Table Total compensation for each year to determine the compensation actually paid. The dollar amounts reported in column (c) represent the average “compensation actually paid” to Mr. Rice and Dr. Waldern, as computed in accordance with Item 402(v) of Regulation S-K:

 

Year

 

Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) (a)

 

 

Deduct
Grant Date Fair Value
of Stock Awards
Granted in Fiscal Year
($) (b)

 

 

Add Fair Value
 at Fiscal Year-End of
Outstanding and
Unvested Stock Awards
Granted in Fiscal Year
($) (c)

 

 

Add/(Subtract)
Change in Fair Value of
Outstanding and
 Unvested Stock Awards
Granted in Prior Fiscal
Years ($) (d)

 

 

 

Add Fair Value at
Vesting of Stock Awards
Granted in Fiscal Year
 that Vested During
 Fiscal Year
($) (e)

 

 

 

Compensation Actually Paid to Non-PEO NEOs

 

 

2022

 

$

2,652,423

 

 

$

(2,217,955

)

 

$

327,879

 

 

$

 

 

 

$

1,767,955

 

 

 

$

2,530,302

 

 

2021

 

$

487,909

 

 

$

 

 

$

 

 

$

 

 

 

$

 

 

 

$

487,909

 

 

 

(a)

Represents average total compensation of Mr. Rice and Dr. Waldern as reported in the Summary Compensation Table for the indicated fiscal year.

(b)

Represents the aggregate grant date fair value of stock awards granted to Mr. Rice and Dr. Waldern reported in the Summary Compensation Table during the indicated fiscal year, computed in accordance with FASB ASC Topic 718.

(c)

Represents the aggregate fair value as of the indicated fiscal year-end of Mr. Rice and Dr. Waldern's outstanding and unvested stock awards granted during such fiscal year. The year-end fair value of the outstanding and unvested option equity awards was measured using the same methodology and assumptions in accordance with ASC 718. The valuation assumptions used to measure the year-end fair value of the outstanding and unvested option equity awards was not materially differ from those disclosed at grant date.

(d)

There were no outstanding stock awards which were granted in prior fiscal years and held by Mr. Rice and Dr. Waldern as of the last day of the indicated fiscal year since we acquired Torchlight.

(e)

Represents the fair value at vesting of the stock awards that were granted and vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. The vesting date fair value of the vested option equity awards was measured using the same methodology and assumptions in accordance with ASC 718. The valuation assumptions used to measure the year-end fair value of the vested option equity awards was not materially differ from those disclosed at grant date.

 

(5)

The Value of Initial Fixed $100 Investment Based on Total Shareholder Return depicts a hypothetical $100 investment in MMAT common stock on December 31, 2020, and shows the value of that investment over time (assuming the reinvestment of dividends) for each calendar year. Because fiscal years are presented in the table in reverse chronological order (from top to bottom), the table should be read from bottom to top for purposes of understanding cumulative returns over time. Historical stock performance is not necessarily indicative of future stock performance.

 

18


 

Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Net Income

The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average Compensation Actually Paid to our other NEOs, and our Net Income during the two most recently completed fiscal years.

img233759744_0.jpg 

Director Compensation Policy and Programs

Our Board makes its director compensation decisions in consultation with our Human Resources and Compensation Committee, or HRCC, as well as the independent compensation consulting firm retained by our HRCC, or the Compensation Consultant. In addition, our Board and HRCC, in consultation with our compensation consultant, periodically review our director cash and equity compensation policies and programs, including our Outside Director Compensation Plan, and seek to ensure that our cash compensation and equity incentives for non-employee directors are competitive with our peer group and that they offer appropriate incentives to continued service as a director or, for prospective directors, to join our Board.

19


 

Cash Compensation

The following table summarizes the cash compensation payable to our non-employee directors under our current compensation program effective January 1, 2023.

 

 

 

Annualized cash fee (1)

 

Base Retainer

 

 

$

50,000

 

Non-Employee Chairperson

 

 

$

35,000

 

Audit Committee Chair

 

 

$

20,000

 

Human Resources and Compensation Committee Chair

 

 

$

15,000

 

Governance and Nominating Committee Chair

 

 

$

15,000

 

(1) All fees are payable on a quarterly basis.

 

 

 

 

Equity Compensation

Under the terms of our Outside Director Compensation Plan effective January 1, 2023, new outside directors receive an initial award of shares of restricted stock units having a fair value at issuance of $100,000, vesting in equal installments over four years. In addition, our Outside Director Compensation Plan provides for an annual award to outside directors of shares of restricted stock units with a fair value at issuance of $100,000. Prior to the effective date of the Outside Director Compensation Plan, outside directors received an initial award of shares of restricted stock units having a fair value at issuance of $90,000 and an annual equity award of shares of restricted stock units with a fair value at issuance of $90,000. In 2022, the Compensation Consultant conducted a review of our non-employee director compensation program and non-employee director stock ownership guidelines.

Our Chairman, John Harding, also received a grant of 96,195 shares of our common stock, which was equal to $90,000 based on the fair market value of our common stock at the grant date, in connection with his appointment to our Board.

Our outside directors are permitted to elect to defer delivery of the vested shares of common stock subject to the restricted stock unit awards until the termination of their service as directors.

2022 Director Compensation

The following table presents the total compensation for each person who served as a non-employee director of our Board during fiscal year 2022. Other than as set forth in the table and described more fully below, we did not pay any compensation, reimburse any expense of, make any equity awards or non-equity awards to, or pay any other compensation to any of the other members of our Board in such period.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name (1)

 

Fees Earned or Paid in Cash ($)

 

 

Stock Awards ($)

 

Option Awards ($) (2)

 

Non-Equity Incentive Plan Compensation ($)

 

 

Non-qualified Deferred Compensation Earnings ($)

 

 

All Other Compensation ($)

 

 

Total ($)

 

John Harding
Chair of the Board of Directors

 

$

22,500

 

 

$

90,000

 

 (3)

 

 

 

 

 

$

 

 

$

 

 

$

 

 

$

112,500

 

Ram Ramkumar (4)
Former Chairman of the Board of Directors

 

$

37,500

 

 

$

 

 

 

 

 

 

 

$

 

 

$

 

 

$

 

 

$

37,500

 

Allison Christilaw
Director

 

$

45,000

 

 

$

90,000

 

 (6)

 

 

 

(5)

 

$

 

 

$

 

 

$

 

 

$

135,000

 

Steen Karsbo
Director

 

$

53,125

 

 

$

90,000

 

 (8)

 

 

 

(7)

 

$

 

 

$

 

 

$

 

 

$

143,125

 

Eric Leslie (11)
Former Director

 

$

45,000

 

 

$

90,000

 

(10)

 

 

 

(9)

 

$

 

 

$

 

 

$

 

 

$

135,000

 

Ken Hannah
Director

 

$

45,000

 

 

$

90,000

 

(12)

 

 

 

 

 

$

 

 

$

 

 

$

 

 

$

135,000

 

Maurice Guitton (15)
Former Director

 

$

45,000

 

 

$

90,000

 

(14)

 

 

 

(13)

 

$

 

 

$

 

 

$

 

 

$

135,000

 

20


 

(1)

Does not include two non-employee directors who joined our Board in April 2023 and one non-employee director who joined our Board in October 2023.

(2)

In accordance with SEC rules, this column reflects the aggregate fair value of stock or option awards granted during fiscal year 2022, computed as of their respective grant dates in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 for share-based compensation transactions. The assumptions used in calculating the grant date fair value of the stock options reported in the Option Awards column are set forth in Note 13 to our financial statements included in our 2022 Annual Report.

(3)

Represents his initial equity award of 96,195 RSUs fully vested shares granted on August 16, 2022.

(4)

Effective August 14, 2022, Mr. Ramkumar resigned from the Board

(5)

As of December 31, 2022, Ms. Christilaw had outstanding options representing the right to purchase of 553,500 shares of common stock at an exercise price of $0.27 per share.

(6)

Represents 2022 annual equity award of 52,632 DSUs granted on December 5, 2022. As of December 31, 2022, Ms. Christilaw had outstanding 82,140 DSUs.

(7)

As of December 31, 2022, Mr. Karsbo had outstanding options representing the right to purchase of 553,500 shares of common stock at an exercise price of $0.27 per share.

(8)

Represents 2022 annual equity award of 52,632 DSUs granted on December 5, 2022. As of December 31, 2022, Mr. Karsbo had outstanding 82,140 DSUs.

(9)

As of December 31, 2022, Mr. Leslie had outstanding options representing the right to purchase of 1,083,804 shares of common stock at an exercise price of $0.27 per share.

(10)

Represents 2022 annual equity award of 52,632 DSUs granted on December 5, 2022. As of December 31, 2022, Mr. Leslie had outstanding 82,140 DSUs.

(11)

Effective September 13, 2023, Mr. Leslie resigned from the Board.

(12)

Represents 2022 annual equity award of 52,632 DSUs granted on December 5, 2022. As of December 31, 2022, Mr. Hannah had outstanding 96,894 DSUs.

(13)

As of December 31, 2022, Mr. Guitton had outstanding options representing the right to purchase of 1,214,197 shares of common stock at an exercise price of $0.27 per share.

(14)

Represents 2022 annual equity award of 52,632 DSUs granted on December 5, 2022. As of December 31, 2022, Mr. Guitton had outstanding 417,006 DSUs.

(15)

Effective April 19, 2023, Mr. Guitton resigned from the Board.

The Human Resources and Compensation Committee, in consultation with its independent Compensation Consultant, recommends director compensation to its board of directors based on factors it considers appropriate, and market conditions and trends.

21


 

PROPOSAL 1: ELECTION OF DIRECTORS

Board Composition

As of the date of this proxy statement, the Board consists of eight (8) members. Our bylaws provide that the number of directors will be fixed from time to time by resolution of the Board. All directors hold office until the next annual meeting of stockholders and their successors have been elected and qualified or until their earlier death, resignation, disqualification or removal.

The name of each current member of the Board (each of which is a nominee for election of the Board) and his or her age as of October 18, 2023, the position and length of service on the Board are as follows:

Name

 

Age

 

Position(s)

 

Director Since

Jim Fusaro

 

61

 

Director and Chief Executive Officer

 

October 2023

John Harding

 

68

 

Chairman of the Board of Directors

 

August 2022

Allison Christilaw

 

60

 

Director

 

June 2021

Steen Karsbo

 

64

 

Director

 

June 2021

Ken Hannah

 

55

 

Director

 

June 2021

Eugenia Corrales

 

58

 

Director

 

April 2023

Vyomesh Joshi

 

69

 

Director

 

April 2023

Philippe Morali

 

62

 

Director

 

October 2023

Nominees for Election at the Annual Meeting

The Nominating and Corporate Governance Committee recommended, and the Board nominated each of John R. Harding, Allison Christilaw, Steen Karsbo, Ken Hannah, Eugenia Corrales, Vyomesh Joshi, Philippe Morali and Jim Fusaro as nominees for election to the Board at the Annual Meeting. If elected, each of the director nominees will serve as directors until the 2024 Annual Meeting of Stockholders and until the election and qualification of his or her successor, or such director’s earlier death, resignation or removal.

Information about the Board of Directors Nominated for Election

The names and certain information regarding each member of the Board nominated for election to the Board at the Annual Meeting, are set forth below. The following information has been furnished to us by the directors. For more information concerning the nominees, please see the section entitled “Corporate Governance” above.

Jim Fusaro’s business background information is set forth under “Executive Officers” above. We believe that Mr. Fusaro possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his experience in transforming businesses and delivering superior financials and developing and deploying a number of differentiated technologies, products and services.

John R. Harding has served as a director and Chair of the Board since August 2022. Mr. Harding has also served on the board of directors of Qorvo, Inc. since January 2015. From 2006 until 2015, he served as a director of RF Micro Devices, Inc. Mr. Harding has served as a consultant in the fabless semiconductor design and manufacturing field as the General Partner of Harding Partners, LP since January 2020. Mr. Harding co-founded eSilicon Corporation (“eSilicon”), a privately held company that designed and manufactured complex, custom chips for a broad portfolio of large and small firms. He served as President and Chief Executive Officer of eSilicon from its inception in March 2000 until it was acquired by Inphi Corporation (and concurrently sold certain assets to Synopsys, Inc.) in January 2020. Before starting eSilicon Corporation, Mr. Harding served as President, Chief Executive Officer and a director of publicly traded Cadence Design Systems, Inc., which acquired his former employer, Cooper & Chyan Technology, Inc. Mr. Harding held a variety of senior management positions at Zycad Corporation, and his career also includes positions with TXL and IBM Corporation. From 2012 to 2016, Mr. Harding served on the board of directors of Advanced Micro Devices, Inc. Mr. Harding has also held leadership roles at Drew University, where he was Vice Chairman of the Board of Trustees, and Indiana University, where he was a member of the Advisory Board for the School of Public and Environmental Affairs and currently serves as a Research Follow for the Institute of Development Strategies at the School of Public and Environmental Affair. We believe that Mr. Harding possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his executive experiences and his expertise in the semiconductor industry.

Allison Christilaw has served as a director of the Company since June 2021 and had previously served as a director of MMI from March 2020 to June 2021. From November 2014 to November 2018, Ms. Christilaw was CEO of Reddin Global Inc., a management consulting company. From November 2018 to present, Ms. Christilaw has been an independent consultant. Since 2019, she has also held a position on the Haltech Regional Innovation Centre Board of Directors. Ms. Christilaw holds a Bachelor of Arts in Honors Business Administration and a Master's degree in Business Administration from the Richard Ivey School of Business at Western University. We believe that Ms. Christilaw possesses specific attributes that qualify her to serve as a member of our Board of Directors, including her experience in corporate management and human resources consulting.

Steen Karsbo has served as a director of the Company since June 2021 and had previously served as a director of MMI from March 2020 to June 2021. From July 1980 through June 2019 Mr. Karsbo was employed at Satair A/S/Airbus in a variety of senior management roles. Mr. Karsbo holds no other directorships than his role as a director of the Company. We believe that Mr. Karsbo possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his experience in the aerospace industry.

22


 

Ken Hannah has served as a director of the Company since June 2021. Mr. Hannah previously held the positions of Senior Vice President, Chief Financial Officer of Caleres from February 2015 to September 2022. Executive Vice President and Chief Financial Officer of JC Penney Company, Inc. from May 2012 to March 2014. Mr. Hannah does not hold any Board positions in public companies other than META. Mr. Hannah holds a Master's degree in Business Administration from Saint Louis University and a Bachelor of Science from Southern Illinois University, Carbondale. We believe that Mr. Hannah possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his significant public company experience.

Eugenia Corrales has served as our director since April 2023. Ms. Corrales has also served as CEO and a member of the board of directors of Nefeli Networks Inc., a privately held software company, since January 2018, where she has been leading extended team strategic and business planning, establishing business development capabilities and developing innovative products. She has also served as General Manager and a chairman of the board of directors for Ingenieria Nautilius SRL since March 2017. Ms. Corrales previously served as Senior Vice President of Solution Group of Shoretel from July 2015 to October 2017, where she was responsible for product management and development and cloud operations, leading transformation of its product portfolio to the Cloud. Form July 2013 to July 2015, she also served as General Manager and Vice President of Cisco Systems, where she led integration of infrastructure into Cloud and Big Data solutions. Other leadership roles include CEO and a member of the board of Nanosolar, CEO and co-founder of Sunmodular, vice president of engineering for SolFocus, as well as vice president of product operations at Cisco. Ms. Corrales has a B.A in physics from Grinnell College and an M.S. in mechanical engineering from Stanford University. We believe that Ms. Corrales possesses specific attributes that qualify her to serve as a member of our Board of Directors, including her experience in roll-to-roll, thin film and semiconductor processing and her skills to build new business capabilities and transform business models.

Vyomesh Joshi has served as our director since April 2023. Prior to joining our Board, Mr. Joshi served as CEO for 3D Systems Corp. from 2016 to 2020. Mr. Joshi also served as a director of Harris Corporation, a defense technology company, from 2013 to 2019, where he also served as a member of the compensation, technology and governance committees. He has also served as a director of Wipro from 2012 to 2016 and a director of Yahoo! Inc. from 2005 to 2012. Mr. Joshi holds a B.S., Engineering, from L.D. College of Engineering and an M.S. Electrical and Electronics Engineering from Ohio State University. We believe that Mr. Joshi possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his experience of leading strategic development, business transformation and global technology operations in large, growing tech companies.

Philippe Morali has served as our director since October 2023. Prior to joining our Board, Mr. Morali served as CFO for eSilicon Corporation from 2016 to 2020, a fabless ASIC and IP solutions vendor that was acquired by Inphi Corporation. Mr. Morali also served as CFO for Quantenna Communications, Inc., a fabless developer of Wi-Fi solutions from 2014 to 2016. Mr. Morali has also held leadership positions at Micron Technology, Inc., SanDisk Corporation, Palm, Inc., and 3Com Corporation; he started his professional career at the Hewlett Packard Company. Mr. Morali holds an MBA in Finance/International Business from the Columbia Business School, and a License ès Sciences Commerciales et Industrielles from the University of Geneva, Switzerland. We believe that Mr. Morali possesses specific attributes that qualify him to serve as a member of our Board of Directors, including his experience in financial leadership from strong technology companies and his extensive international operational experience in Europe and Asia.

Board Diversity Matrix

The following matrix summarizes voluntary disclosure of diversity characteristics of our Board:

Board Diversity Matrix (As of October 18, 2023)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Number of Directors

 

8

 

 

 

 

Female

 

 

Male

 

 

Non-Binary

 

 

Did Not Disclose Gender

 

 

Part I: Gender Identity

 

 

 

 

 

 

 

 

 

 

 

 

 

Directors

 

 

2

 

 

 

6

 

 

 

 

 

 

 

 

Part II: Demographic Background

 

 

 

 

 

 

 

 

 

 

 

 

 

African American or Black

 

 

 

 

 

 

 

 

 

 

 

 

 

Alaskan Native or Native American

 

 

 

 

 

 

 

 

 

 

 

 

 

Asian

 

 

 

 

 

1