This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk00: Good morning, everyone. I'm Rob Stone, META's Vice President, Corporate Development and Communications. Joining the presentation today are George Palakaris, META's founding president and CEO, and Ken Rice, META's Chief Operating Officer and Chief Financial Officer. Yesterday, META filed its Form 10-Q for the quarter ending September 30th, 2022, issued a press release with the Q3 2022 results, and published the Q3 shareholder letter. Each of these documents and today's presentation slides will be posted to the investor section of the meta website. A replay of today's presentation will be available via the link provided in the press release and on the IR calendar in the investor section of the meta website. Please note on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views as of today, should not be relied upon as representative about views of any subsequent date, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our annual report on Form 10-K, filed on March 1st, our Form 10-Q, filed on November 9th, and subsequent filings with the SEC. On today's call, George will start with an overview of Meta's expanding technology platform and markets, large and growing IP portfolio, and how we are enabling cleaner, safer transportation with our entry into the large and rapidly growing battery materials market. This will be followed by an update on roll-to-roll production of NanoWeb, Meta's proprietary transparent conductive film, a demonstration of an augmented reality display within an AR fusion cast ophthalmic lens, followed by an update on Meta's GlucoWise non-invasive glucose monitoring system and upcoming preclinical human studies, and finally a progress report on our color optic nano optic security products for banknotes and government documents. Ken will then review our financial results, and we will conclude the call by taking some questions from the analysts who cover the company. With that, I will turn the call over to George.
spk03: Thank you, Rob, and good morning, everyone. So Meta is a platform technology company with a broad range of capabilities and related products and trademarks addressing very large and growing end markets. These include aerospace, augmented reality, automotive, banknotes and brand protection, batteries, clean energy, communication, consumer electronics, as well as health and wellness. The common thread is that our products connect, protect and detect different properties and our materials are able to achieve previously unachievable performance across a range of these kinds of applications. We're actively progressing our technologies, our applications and business plans across all of these markets. Our competitive position is supported by 472 active patent documents, of which about 292 are issued in 112 patent families, of which 63 has at least one issued patent. For comparison, we have added 22 patent documents since last quarter. And we have nearly doubled both our active patent documents and patent families from a year ago. Enhancing performance has been a key part of our business. Electric vehicles are the largest market opportunity that we address today, with EV units projected to grow at 22% CAGR globally. So from 21 to about 23 according to IDTechX. OEMs seek to provide consumers with increased range and faster charging. And to achieve this, battery makers need improved material performance, stability, and particularly safety. As more energy is packed into these batteries to enable longer range, the stress on the battery increases with faster charging rates. The risk of something going wrong also increases. So safety is a major issue, including fires that have started from overheated batteries. Meta is developing solutions to this increasingly prominent issue with two new types of materials and proprietary manufacturing techniques to improve the safety and the efficiency of lithium ion batteries, as well as helping reduce battery cost. It is important to know that these components are used in every lithium ion battery type, regardless of format, the size of it, or chemistry. So first off, our patented NPOR. NPOR means nanoporous. NPOR is kind of the commercial name. It's a nano ceramic battery separator film, which is uniquely heating stable. so it does not expand or contract, and that allows for increased safety. The lithium-ion battery separator market was about $5 billion and uses typically 5.5 billion square meters of material, and that was just in 2021. Demand is expected to grow at about 30% CAGR, And this translates that with each gigawatt of new battery capacity, you would require about 15 new million square meters of battery separator material. Secondly, we are using our proprietary plasma fusion technology that can deposit very thin layers of copper on polyester substrates, reducing the weight of copper and current collectors by about 80%. and that in turn extends the vehicle range while enhancing safety. So first off, NPOR. Let's go a little bit deeper. The separator is a porous membrane, a nanoporous membrane that can be controlled between 100 nanometers down to 30 nanometers. It's placed right in the middle between the anode and the cathode inside the battery stack. It must be thin and light while maintaining thermal and mechanical stability. And controlling these pore sizes down to the nanomaterial scale has never been done before. This is what facilitates the ion transport during the charging and discharging. EnPOR is made with a solid layer of ceramic material at the nanoscale. There is no plastic inner layer. And what we have demonstrated is that even up to 200 degrees centigrade, it has less than 1% heat shrinkage. So it does not fail during a thermal runaway. This was conducted independently by Coolometrics and has confirmed the improvement in safety. And as you can see in the results of a nail penetration test pictured here, we have shown that we have increased that safety aspect. Cells with the NPOR produced no smoke, no fire, and did not dangerously overheat. In comparison, the standard cells exhibit thermal runway to above 600 degrees C and were destroyed. We are currently in discussions and evaluation with various OEMs and tier one suppliers about NPOR. We have showcased our NPOR and NanoWeb solutions for electric vehicles at the 70th annual Canadian APMA Auto Parts Manufacturer Association Show, which included a sneak peek of Project Arrow, a concept car, an SUV electric vehicle concept car. We are excited that Metas technology will be included in the Project Arrow exhibition at CES in Las Vegas in January, 2023. Today, we are expanding our space for the battery materials team, and we are adding some new office and labs in Massachusetts, where we're gonna also outsource some of the coating trials. And this is underway with a partner in the East Coast who can produce ENPOR at very large scales. So let's discuss our next step in significant progress made on copper current collectors. So plasma fusion, which is our branded name, is our patented high-speed energy efficient vacuum coating technology. And it's able to coat any solid material onto any substrate, including plastics. A solid copper foil current collector is used on the anode, which accounts basically for more than 10% of the total weight of a typical battery cell. We demonstrated that the coated copper current collectors deposited on polyester substrates with our plasma fusion technology through a prestigious UK government funded project has been able to reduce the weight by about 80%, improving safety by retarding thermal runaway and improving sustainability by reducing copper content. This was a partnership with DuPont and a couple of universities in the UK. Now, we are developing roll-to-roll capabilities, and we are already working on a mini roll-to-roll system producing 12 centimeter wide webs by 20 meter long rolls that you can see pictured here. This month, we have secured key partners that are global leaders in their respective industries. Specifically, we signed an MOU with DuPont Teijin Films and Mitsubishi Electric for a multi-year, multi-stage project to industrialize this process. We will develop a pilot scale system, followed by industrial scale equipment, and then apply plasma fusion to solid state battery production. What's very important here to state is that plasma fusion is very versatile. It's a platform technology with which we expect to increase productivity, not only for batteries, but also for nanoweb and other applications. So talking about NanoWeb, earlier this year, we installed the world's first 300 millimeter web with roll to roll pilot production line for NanoWeb transpiring conductive film in our Pleasanton office in California. We have been growing our manufacturing capacity, which is the key to launching a wide range of applications for NanoWeb. For Q2, we are making 5G reflector films that were functionally equivalent to the wafer-based standard parts, but they had some cosmetic non-uniformities. I'm very pleased to tell you that we are now making beautiful, uniform 5G reflector films that you can see pictured here. The samples now exceed customer specs, then match and exceed wafer-based parts. Now let's talk a little bit more about some of the applications. Today's sophisticated ADAS, ADAS means advanced driver assistance systems, help to make our safer and easier to drive using a range of cameras, such as cameras you see in electric vehicles, but also radar and other types of sensors like LiDAR. Now, this advanced technology becomes useless if the sensors are obscured by fog or ice or humidity, just general bad weather. To efficiently service the growing number of OEMs who are interested in testing our nanoweb, for example, the transparent heaters, the antenna or electrochromic applications, we have designed a range of standardized demo kits. which use a common controller with multiple programs. So picture on the left, you can see a nano web heater. It's powered by battery in the controller and some logic. The IR camera image that you can see there on the far left shows the heated window in operation. So the controller can also be connected to a USB power supply. And on the right, you can see typical packaging of our enclosure. And moving on to the electrochromic and kind of 5G in the lens, what you see here, you can see basically a different version of the NanoWeb demo kit. This time uses the electrochromic of the antenna application designed and embedded in the lens. So NanoWeb at the electrochromic layer can quickly switch a lens or a surface from transparent to shaded. with applications such as augmented reality eyewear and smart lenses. So by productizing these demo kits, our team can efficiently service a larger number of potential tier one and OEM customers and move them from the application evaluation phase to custom designs and paid programs. With a 300 millimeter wide web pilot line, we can produce NanoWeb for sensor windows and eyewear, as well as other applications. As we grow NanoWeb, the capacity and the width of the web role, we expect to drive down the cost per square meter and address a larger number of applications. So another application with NanoWeb is the smart roof. So now here's where we can add multiple functions. This is very exciting. Has never been done before to have compact functions all within the same layer or stack on top of each other. Having, for example, compact and power efficient deicing and defogging saves battery power and frees up space within the cabin, the dashboard design. An electrochromic sunroof that quickly adjusts its transparency and it's embedded with an invisible nano web antenna can offer high speed connectivity while at the same time protecting you from the sun. So now let's look at some other Metas developing applications. AR Fusion is a meta platform technology for smart augmented reality eyewear. AR Fusion combines precision cast lens fabrication tools with functional metamaterials and volume holograms to provide AR wearable developers with a platform, a one-stop shop, for seamlessly integrating smart technologies into thin, lightweight prescription glasses. On the left, you can see the AR Fusion automated lens cast line, which is our Gen 5 machine. which was recently moved to its own dedicated clean room in our Highfield headquarters facility. And now let me show you a quick demonstration of our holographic free space combiner display. It's embedded within an AR Fusion cast lens. And what you see here is basically a very sneak preview of what it would look like. One of the things that is very high value to say here is that our displays are more efficient than the competitor displays. Efficiency means that you can turn light into information far better, far easier than the competition. But also, nobody has all of these technologies under one roof. This one-stop shop approach that we talked about has been a critical missing piece in the industry. So let's look at some applications beyond AR Fusion. For example, healthcare. So GlucoWise is our non-invasive glucose monitoring system. This uses dual RF radio frequency and optical signals. So these are the types of sensors. We're transmitting signal through the skin non-invasively to measure glucose without penetrating and drawing blood. In the second quarter, we were awarded a key US patent for GlucoWise. And today, the system is covered by 16 active patents, of which five are issued. Picture here on the right, you see Dr. Elena Cano-Garcia. She's a co-inventor and she has served us one of the longest times in the company. We are developing here a new preclinical prototype that she's using. This is not a mock-up. This is a working system. And of course, we expect to make the final design slicker and smaller. This is our desktop version, which will launch as a form factor as a desktop version. So the next round we're doing currently is a preclinical human study, which should be completed before the year end. And we plan to have this desktop version ready for market in the next two and a half to three years. So I will now provide a little bit of an update on our nanosecurity products. As you can see in this slide, we continue to make progress in our development work with these new anti-counterfeiting security features for our confidential central bank. Since September 21, we have been working under a framework agreement for up to 41.5 million US dollars over the next five years. We announced that 4.3 million in purchase orders has been secured in September, bringing the total orders to 13.5 million US dollars under this agreement to date. The customer may choose to expand the scope of the work with new purchase orders. If we are designed into a new banknote with this flagship customer, we expect that this would lead to more denominations, currency denominations, as well as follow on business with other central banks. We're also preparing for the commercial launch of our new unique plasmonic nano optic technology called color optic stripe. We have already delivered 10,000 meters of material for customer trials with good test results for adhesion and durability, which is a critical gate for the product launch. The short video shows color optic stripe samples on the production line. As we have demonstrated, we're making progress We have a lot of things to cover and a strong portfolio of solutions that have very meaningful positive impacts on multiple industries. In the coming years, we'll provide Meta with a path to significant revenue and cash flows in the near future. We see these applications as catalysts, and each one will enable us to gain market traction, big customer contracts, and more importantly, the confidence to continue building up our production capacity. I will now pass the call over to Ken Rice, our COO and CFO.
spk05: Thank you, George, and good morning, everyone. Turning to slide 15. In Q3, our revenues grew meaningfully year to year to $2.5 million versus $600K in the same quarter of last year. While Q3 revenue was lower than in Q1 and Q2, it's important to remember that at this stage, most of our revenue is driven by development and non-recurring engineering. which is generally nonlinear and harder to predict. For the nine months year to date of this year, revenue grew substantially to $8.8 million. The majority of our third quarter revenue was from nano optic security for development work for our central bank client and some other bank note business. Operating expenses were just under $24 million, $23.9 million. in Q3 versus 12 million in the prior year as we continue to invest and assemble a world-class team to support our many business opportunities. Our net loss was 24 and a half million for the quarter compared to 11.4 million in the same quarter a year ago and 21 million in Q2 of 22. The loss per share was seven cents versus four cents last year and seven cents in Q2 22. As of September 30th, we had $32.2 million in cash and cash equivalents. Meta still has no debt except for $2.9 million in interest-free unsecured long-term debt from ACOA, which is the Atlantic Canada Opportunities Agency. During the third quarter, we used $19.5 million in cash for operations compared to $48 million in the first nine months of 2022. Non-cash expenses were 7.2 million in the second quarter, and we used 2.2 million for working capital. We invested 3 million in capital expenditures during the third quarter. We believe the cash on hand, combined with our projected revenues and expense management capabilities, will be sufficient to support our needs for the next 12 months. However, we may need to raise additional capital to expand the commercialization of our products fund our operations, and further our research and development activities. Future capital requirements may vary materially and will depend on many factors, including the timing and extent of our research and development efforts, the capital expansion of our facilities, and the ongoing investments necessary to support the growth of our business. It is our intent to find capital solutions that are effective and timely for the business in the future. Given management's alignment with our shareholders, we're working hard to drive the success of the business in a prudent manner. Now I'll pass the call back to George for some concluding remarks.
spk03: Thank you, Ken. So as you can see today, in summary, Meta is continuing to execute on multiple applications and large market opportunities as we pioneer MetaMaterials at production scale. MetaMaterials enable breakthrough applications to do more with less, more performance, less energy, more sustainable materials, lower cost. We are investing and growing an extremely diverse and talented global team. In the last count, we now have 42 spoken languages within the Meta family, but we only speak as a team. We all speak the same language. Our patent portfolio continues to expand rapidly. We're broadening and progressing on all of our platform technologies, including PlasmaFusion, ARFusion, and EnPOR. I'm excited to mention that our grand opening and big catalyst of our new 68,000 square foot headquarter facility in Highfield Park, which features 12 clean rooms, will take place on November 17th. Due to capacity limitations, unfortunately, this is an invitation-only event today. However, we will, and some other of our influencers, we will be creating content to share with all of you. So we will be able to see and learn more about this beautiful new facility in the near term. Meta is a category defining company. We are all energized to continue to build value as we move ahead as the first metamaterials company on the NASDAQ. So now let's take some questions from our analysts.
spk00: Thank you, George. We'll now take our first question from McMurray Whale of Cormark. Mac, please go ahead.
spk02: Can you hear me?
spk00: Yes, we can.
spk02: Okay, great. Excuse me. You discussed, George, on the ceramic separator projects that you are talking with OEMs. What are those collaborations? What do you expect those to look like in terms of, say, cost sharing or timelines?
spk03: Thank you, Mac. In terms of timelines, we just completed our first production run yesterday. So this particular OEM is a contract manufacturing company. It's a global company. And the way it looks like we provide the chemistry, let's say the special sauce, and they provide the service to coat it in foil or film kind of format. So the way that this is, it's called a slot dye process. So basically you go through it and apply the thickness that you need. And our thickness typically varies from 15 microns down to six microns. So there's different product by different thickness and different chemistry. so we are excited about this because as we saw yesterday not only this was a successful production run but there is a lot of interest from the industry and now we can provide hundreds of kilometers to you know meet the needs and the way that this cost sharing will happen there's a a typical markup on the service. And eventually the technology can be also licensed to very large scale gigafactory type productions. So what we're doing with this OEM, we are seeding the market at very large scales so that they in turn can take this product test thousands, if not tens of thousands of batteries, make sure that they're happy with the chemistry. And then eventually, just doing some basic math, one 40 gigawatt factory would require almost 500 million meters square of product. So there's not a single one contract manufacturer that could handle all of that volume. And this is where the business model can evolve to both a licensing model, And obviously earlier we have roles that you can buy in the small, medium and extra large kind of versions.
spk02: So if I understand that process, then it would be, would you, would it be sort of a year to continue to do sort of the level you're working at now? And then is it another year? Like I'm kind of wondering on the timeline in terms of like a, You've seen a 40 gigawatt hour plant sort of having this embedded in it. Is that like a five-year thing or is it a two-year thing?
spk03: So that's a great question. Different gigafactors are coming online as we speak. And there's others that are coming online in five years. Our chemistry can be tested immediately. We have been testing with very large battery companies since this is an acquisition. The company that developed this technology is called Optodot. They're now part of our group. There has been relationships with companies like LG for a long time. So there's been six or seven years in the making for our first generation material. We're now in the second generation technology of this type. And we see that there's going to be more exciting partnerships. So the chemistry can be customized. We can very quickly customize the chemistry since we have all this experience already. in the team that takes several months of a new engagement once that customer is happy and they have taken the product and tested it there and they can let's say readily put it in their factory the tech transfer that takes place can be as short as one year and we believe that this is not you know, according to our pace, but according to the recipient's pace. But just to give you an idea, you know, if you think of the battery market being valued around, I think about 60 billion US dollars in 2021, the current collectors make up about 25% of the battery cost and the separators about 8%.
spk01: So it gives you an idea from a kind of overall size.
spk02: So just on that copper, that was the second question I just wanted to ask on the copper coating current collector opportunity. If you were to rank them, is that an opportunity? Do you think that that will arise or be adopted more quickly than the ceramic separator just by the nature of the disruption that you're bringing? Or what's your view on that?
spk03: So what I believe is the first thing is that the current collector market is about three times larger than the separator. And that's kind of a fact. And as you may have seen publicly, you know, there's been a huge amount of articles from Bloomberg and other places that there's a up and coming copper shortage that could derail this energy transition to clean tech. And what I believe is that, um, It's not just the current collectors, but all the different raw materials, the availability. This is like the biggest constraint right now for the production of lithium ion batteries. And unfortunately, you know, people think that you can just find more queries and basically dig further and wider and mine more. But when you have a low producing mine, the cost of getting from that lower mine quality mine these raw materials grows almost exponentially. So there has to be a better way. So what we are proposing here, and that's part of the disruption, is that we have not only invented a way to make current collectors more efficient by reducing the copper content, but we have made an actual machine, which we call plasma fusion, that as you saw recently, we announced this beautiful MOU with two exciting companies, one of which is Mitsubishi Electric, the other one is DuPont. And together, we are trying to scale this technology to also address the next generation of batteries, solid state batteries. where the coating process is one of the key areas of innovation. So not only the raw material, but how do you apply that raw material in the most efficient way? So yes, we are excited about this. We believe that the separator market is a must have in every battery for battery safety. And our current collector also adds an additional layer of safety. So you get what we believe will be the safest battery in the world if you include both of our products in the same battery.
spk02: Okay, great. Thanks, George. I'll jump back in the queue. I look forward to seeing the site next week. So we'll talk then. Thanks.
spk00: Thank you, Mac. Our next question will be from Jerry Sweeney of Roth Capital.
spk06: Good morning, George, Ken, Rob. Thanks for taking my questions. I wanted to focus in a little bit on NanoWeb. Congrats for hitting the specs. Just wanted to maybe hear you just talk about the next steps with that technology and process. Obviously, I think you have some build-out projections for Thurso on NanoWeb, and I just want to see where that is going in the short and medium term. Thanks.
spk03: Thank you. Yes, so NanoWeb is a flagship product for us because we have shown and demonstrated that we can charge all the way from thousands of dollars per square meter for the aerospace industry all the way down to tens of dollars for consumer electronics markets and everything in between. So there's a... a platform technology that can be applicable to a wide range of applications, replacing indium tin oxide as a better improved solution. So when it comes to production, we, as I mentioned, we have an operational 300 millimeter line and there is discussions right now with very large Contract manufacturing is similar to our battery separator product. We are looking at how can we scale nanoweb faster and bigger than previously thought of. And so we have a plan for Thurso to put in a new line next year, but also we are exploring how can we go wider? So then the 300 millimeters, either doing it in Thurso or doing it outside under a contract license. We have identified the very important global contract manufacturing company and And I will hope to have more updates probably in Q1 of next year about the direction that we'll take. If we choose to go down the path of contract manufacturing, that means that we can accelerate and go much wider in terms of web width, which will cover even more applications. And if we go on our current production line, we'll depend on some of the key factors with our customers. There's a lineup of customers. They expect volumes. We have a specific product roadmap with product launches next year and the year after. And we try to make sure that we have the volumes to fulfill the demand.
spk06: The decision to go Thurso internal versus third-party manufacturing, does that change? Obviously, I would assume that changed maybe some CapEx projections. And does that decision change? change um timing on thurso meaning um if you wait until q1 or first half of next year what have you for the third party manufacturer make that decision does that hold off on some of the catbacks and push back thurso or are they sort of going hand in hand um i was gonna say something quick and then ken you can um it does not really change um uh
spk03: The CapEx will be for either option similar for the simple reason that Thurso has the capability to host very large machines. We have done that in the banknote business. There's an expertise right there. And what we want to do is make sure that there is... Redundancy. So having, for example, a contract manufacturer with one line is not enough for an automotive application, which needs to have backup. So there's also industry requirements. The good news here is that if we can bring in an additional contractor, production line that is wider in web width than what we currently have, the cost will significantly reduce. And of course, the ability to take on more customers will significantly increase. And I don't know if, Ken, you want to add anything to that.
spk05: Yeah, I think the way to think about it, Jerry, is that we have, our goal here is to come up with a mix of in-house and outside manufacturing. The in-house decisions about new lines and web width and such will drive CapEx, especially in Thurso because we're centralizing things there, as you know. The flip side, though, is to the extent that we minimize or reduce CapEx in Thurso because we buy a smaller line for Thurso and we go with wire web width on the outside for contract manufacturing, we're very likely to have to make financial commitments to the contract manufacturers to get the best pricing. So we'll still spend cash. It'll just be in a different bucket. Got it.
spk06: Great. All right. I appreciate asking my questions and I'll see you in Halifax next week.
spk00: Thank you. Thanks, Jerry. Our next question will be from Graham Madison of Water Tower Research.
spk04: Hi, good morning, everyone. Just a question on the nano optic security products. I know you spoke a little bit about that during the presentation, gave some color there, but are there any milestones that we should be looking for you guys could point to that you're trying to hit to get to the next level in that contract or perhaps see it expand beyond that?
spk03: Thank you. Yes, in fact, there is a major product launch that we are gearing towards. It's for our color optic stripe. The ColorOptic stripe is featuring 5 billion nano-optic features over the size or the width of a banknote in a stripe format. This product has been in development in the last almost three years. It's been a... one of our flagship products. And just like NanoWeb, we have been scaling production and ramping up the quality of that product. Today, we have been sampling our product with what we call in the industry printers. There's about 20 global printers. And we are working with some of the top three, top five printers as we speak. There's been already one full assessment and evaluation process. on the quality and durability of our product which we have passed there's going to be a second run in the coming weeks and we expect over the first half of you know maybe as early as q1 next year to be launching this product And launching means that it's now available for sampling across everyone and as well as every central bank that's out there. So we are very excited. One key thing is that we are producing this nano-optic feature in the kilometer scale already in-house.
spk04: Great. So really after this, it opens you up to all the other banks out there and expands the market considerably for you.
spk03: Absolutely, yes.
spk04: Great. And then just one housekeeping question on the G&A. There was a small bump quarter over quarter. Is it the right way to think about that? Is this a deal or legal spending related to the spinoff rather than for business related?
spk05: Sure. Yeah. And I think that's accurate. G&A this year has been we've been investing in a couple of things. We had a lot of, we did three, actually four, if you count the acqui-hire. We did a number of acquisitions this year that triggered additional expending in the G&A side. And so that's what you're seeing in the bumps. And our plan for next year has that dropping back again to more rational investments levels. And as you know, there's some ongoing investigation from the SEC that's taking legal fees and all that's going to drop in the 23 timeframe from a cost standpoint. Does that answer your question?
spk04: Yeah, no, absolutely. That makes sense. Exactly. Thanks. I'll jump back into you. Appreciate it.
spk00: Okay. Thank you, Graham. We'll now take a question from Chris Sakai of Singular Research. Chris, are you with us?
spk07: Yes. Hi, good morning. Can you hear me? Yes, we can. Okay, great. I guess to go on one of the last analyst question, as far as the nanosecurity is concerned and new orders there, can you provide some color as far as what you're seeing Could there possibly be greater orders in the future?
spk05: I think we have to be a little careful. The new orders that were referenced in the announcements were coming from the frame agreement that George spoke about. That's a $41.5 million agreement, and it's composed of a number of contract line items. And the way that process works, Chris, is that as we progress through the process with this customer, we get releases of new work to get done. And as the work accomplishes internal milestones in the contract, they issue new POs to us. So the short answer is, since we've only delivered or received orders so far for $13.5 million, of that contract, we have the opportunity to get another 30 or so million dollars over the next few years. The timing of that is what's difficult to predict because as we make breakthroughs in the development work we're doing with this customer, they accelerate things. So we're doing everything we can to make sure that we continue to push the process forward with them. And as George mentioned in his comments, what we expect to happen is that as we move the process forward with this particular customer, this is focused on a single currency denomination. We expect a couple of things to be catalyzed by that. First, we'll... this denomination that will trigger the need for other denominations from one customer and as we've done this this is a this is a major central bank we expect that we can get similar work from other central banks and other in other geographies around the world okay thanks for that answer um and as far as that's concerned in revenue generation after the nano security uh
spk07: What would be your next greatest revenue generator in the near future?
spk05: That's a great question. We see driving revenues, especially into 2023, in a couple of the verticals that we play in. We play, as we've mentioned a number of times, in very large vertical markets. and the revenue pace at which we're able to achieve is driven by a few things. One is our ability to produce materials, as George spent a lot of time talking about today, at the volumes that each of the customer sets in those verticals needs. So for example, in the automotive section, we can produce material now for a number of the applications without the wide web width production capability, we can do it better with the wide web width, but we're in a position now where we expect to see some fairly interesting revenues coming out of that sector next year. The next area that we would focus on, it would be another area of nano web, which is in, and we've mentioned a number of times, electronics and communications. And then we are looking forward at this point to having some announceable events second half of next year in the augmented reality space.
spk07: Okay, thanks for your answers.
spk00: Thank you, Chris. Ken, I think you had some closing comments.
spk05: Yeah, I think a couple, we've had a number of our shareholders inquire over the last day or two about a few things, one of which is that we filed an S1 again last night, and that S1 was filed for one purpose and one purpose only. The numbers that were in the original filing, S-1 is related to the spin out of the oil and gas assets. And we filed an update to the S-1 with the SEC last evening to do one thing, which is to roll forward the financials that were in the previous filing to make them current because the financials that were in the previous filing expired yesterday. So we needed to update them to the third quarter. And what we're waiting for now is two things. The SEC will get back to us on that filing. We don't expect anything major there. And then the last piece of the process is once the SEC declares that S-1 effective, then we go with FINRA, who has to help us actually implement The spinoff itself and the major thing that they need to do is ensure that when we do the spinoff, the trading in MMTLP ceases because the stock won't be there anymore. So that's number one. Number two, last night as well, we filed a quarter of a billion dollar shelf registration statement. Now, what I'll say at the very beginning is we said in our comments that there's a likelihood that in the future we'll need to raise more money in the company. We don't need to do that this minute or even this quarter. But what we wanted to do was take advantage of the fact that our business is really growing rapidly. One of the things that sort of escapes folks at times is that we've more than trebled our revenue to 22 over 21. And we did that in spite of COVID and we're doing it in very unique areas. And so what we want to do is we want to have as many tools available to us as possible to to raise capital going forward when the market conditions are right. A shelf registration for a company like ours is one of the best tools we can have. It's the most flexible. It allows us to sell stock that's pre-registered into the primary market It also allows us in certain circumstances to sell stock into the secondary market shares that are already issued. And what we can do in that case is we put that shelf registration up. It doesn't commit us to do anything, but it gives us three years to raise money in as little or as large pieces as the market needs. makes sense for us to do. So since the fourth quarter is always a crazy busy time for us, and we had capacity, we decided we would put the shelf up now. The SEC still has the right to look at it. We expect that they will. And once that's done, then we can use the shelf going forward for the next three years for whatever we need for future capital.
spk00: Great. Thank you, Ken. And thank you all for joining us today. If you have any additional questions, you may reach us at ir.metamaterial.com. This concludes today's call.
Disclaimer