Meta Materials Is Now Liquidating Its Entire Assets Under Bankruptcy

August 10, 2024

Meta Materials is now liquidating its entire assets under bankruptcy provisions of Chapter 7, the company confirmed per a filing.

“As a result of the Bankruptcy Filing, a Chapter 7 trustee will be appointed by the Bankruptcy Court and will administer the Company’s bankruptcy estate, including liquidating the assets of the Company in accordance with the Bankruptcy Code.,” the filing said.

Once a Chapter 7 trustee is appointed, an initial hearing for creditors will be scheduled, and the Notice of Bankruptcy Case Filing will be sent to known creditors.

Investors have expressed their disappointment towards the board of directors on social media.

“No shock. Interesting that they tried a 1:100 dilution and that was the one and only attempt. No communication with investors regarding concerns.

They just want wide open no strings ATM. lol. What a joke. It was all risk vs reward once palikaris was booted no communication,” said one investor on X.

“Absolutely disgusting the fraud and manipulation that destroyed this company. The board of directors are CROOKS absolute disgrace!!!”, said another.

Meta Materials terminated all of its employees and executive officers on August 7, 2024, including Uzi Sasson, its President and Chief Executive Officer, and Dan Eaton, its Chief Legal Officer, with the terminations of Messrs. Sasson and Eaton effective concurrent with the Bankruptcy Filing.

The Company currently does not have any executive officers or employees.

Upon the bankruptcy filing, each of John R. Harding, Allison Christilaw, Steen Karsbo, Kenneth Hannah, Vyomesh Joshi and Philippe Morali tendered their resignations as members of the Board of Directors.

Each of the directors resigned due to the bankruptcy filing, and the resignations were not the result of any disagreements with the company regarding the company’s operations, policies, or practices, per the SEC filing.

“The resignation of the company’s directors effectively eliminates the powers of the Board of Directors, and following the director resignations, the Company does not have directors serving on the Board of Directors.”

Investors were hoping the company would help guide them in seeking justice to the MMTLP fraud that occurred.

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Also Read: The SEC Now Awards A Whistleblower A Whopping $37 Million

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The S&P Global now raises AMC Entertainment’s rating to CCC from SD (selective default), but says the company is “unsustainable”.

“While AMC has extended most of its near-term maturities, we continue to view its capital structure as unsustainable due to its substantial debt burden,” S&P Global said in a statement.

On July 22, AMC Entertainment announced that it had addressed its debt burden by using its theater properties and related intellectual property as collateral to extend the maturity on its 2026 debt obligations out to 2029.

However, according to credit rating agency S&P Global, AMC’s efforts to pay down an estimated $4.5 billion in long-term debt face significant industry-wide challenges, as also stated by CEO Adam Aron.

This is as the company tries to weather the ongoing impact of the COVID-19 pandemic as well as the disruptions caused by the concurrent strikes by Hollywood actors and writers.

So while AMC has succeeded in pushing out its debt maturity timeline, it continues to grapple with macroeconomic headwinds facing the movie theater industry.

The dual strikes in the entertainment sector have further complicated AMC’s efforts to manage its substantial debt load and navigate the recovery from the pandemic’s effects.

“The negative outlook reflects our expectation that AMC’s revenue will decline by 5 percent-7 percent in 2024 due to a limited theatrical release slate, resulting in negative free operating cash flow and leverage in the mid-7x area,” the credit ratings agency added in its commentary about AMC’s overall capital structure.

The credit ratings firm added AMC’s box office performance should improve towards the end of 2024, “but we think that full-year performance will be materially worse than 2023.”

“Through the first half of 2024, the box office has faced significant disruption from the strikes, especially in the second quarter.

We now forecast total domestic box office revenue of around $8.25 billion for 2024, a decline of about 7% compared to 2023,” S&P Global forecasts.

CEO Adam Aron said AMC Entertainment Holdings Inc. had the best Q2 June in its 104-year-old history.

The company was also able to secure more than $770 million in cash equivalents by the end of the second quarter.

The “box office is making a come back”, said Adam Aron during the Q2 earnings call.

In a statement, CEO Adam Aron suggested to continue supporting AMC movie theaters to increase consumer demand.

His optimism and bullish sentiment derives from the $770 million in cash equivalents the company was able to generate.

To further support this sentiment, the CEO cited box office numbers are roaring and anticipates upcoming titles will continue to propel AMC Entertainment forward.

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Also Read: SEC Now Charges CEO For Whopping $170 Million Fraud Scheme

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