Torchlight energy resources are gone, but metamaterials look promising after merger

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Torchlight Energy Resources effectively no longer exists after its June 28 merger with Meta Materials (NASDAQ:MMAT) Stock. News of a dividend payout, a TRCH share consolidation and the business combination was enough to drive interest up through June.

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Meta Materials is a company that develops functional materials and nanocomposites. Torchlight Energy Resources was an oil and gas exploration company operating in Texas.

The synergies leading to the business combination are somewhat unclear. The TRCH share has long been considered an acquisition target. Still, the profile of the acquirer appeared to be a larger oil E&P company.

Nonetheless, it appears that the terms of the deal were enough to get shareholders to agree to the merger. Meta Materials shareholders are expected to own 75% of the combined company, while Torchlight shareholders will get 25%. Torchlight CEO John Brda will remain in the new business combination during the divestiture of its oil and gas assets.

The central point for potential investors is whether Meta Materials makes sense as an investment. As a result of the combination, he has $ 160 million in cash with almost zero debt. Apparently this money will be directed only to materials development as its newly purchased oil assets are being sold.

Based on these assumptions, is MMAT stock worth considering?

A closer look at the stock of TRCH

The Meta Materials technology platform enables leading global brands to deliver breakthrough products to their customers in consumer electronics, 5G communications, health and wellness, aerospace, automotive and clean energy.

It is obvious that he is trying to consolidate his position more in the area of ​​health and well-being in particular. When he finalized the business combination with Torchlight Energy Resources, the attached press release said he would discuss recent events and future growth initiatives on July 6.

The company announced the conclusion of a 27-month project on July 6 that aims to commercialize a jointly developed, non-invasive glucose detection prototype.

Meta Materials led the project through its wholly owned subsidiary, META. His metamaterial films were an integral part of the project. They have been shown to increase the transmissibility of normally low glucose signals by 240%.

The project aims to commercialize the META glucoWISE Home Hub system. If successful, this could represent a substantial leap forward in the management of diabetes, removing the painful aspects of the process.

According to the press release, the company is looking for more strategic partners to help bring its products to market as well as ways to make glucoWISE more portable and application friendly.

It’s safe to assume that Meta Materials will allocate some of the $ 160 million in merger capital to accelerate commercialization.

Peer actions

There are at least some parallels between Meta Materials and Senseonics (NYSEAMERICAN:SENSE). Senseonics is a diabetes management company that is moving towards commercialization of an implantable blood glucose monitor. The difference is that Meta Materials’ solution is non-invasive.

Senseonics, like Meta Materials, made a significant loss in the first quarter. It posted a net loss of $ 249.51 million during the period. Meta Materials meanwhile recorded a loss of C $ 55.08 million in the first quarter.

But remember, Meta Materials is almost debt free after the merger. So if investors assume that he is going to focus primarily on the diabetes management industry, then there are important catalysts for stocks.

The company has not specified the timing of the marketing of the glucoWISE products. They may or may not come onto the market, but that’s the bet here.

I’m pretty cautious when it comes to getting into tech pre-commercialization. But this risk profile describes many other investors. For them, Meta Materials could provide big returns at current prices.

At the time of publication, Alex Sirois had (neither directly nor indirectly) positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.

The publication Torchlight Energy Resources Is No More, but Meta Materials looks promising after the merger first appeared on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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