- SEC Filing 

In connection with the continued evaluation of strategic alternatives of Meta Materials Inc. (the "Company") and its subsidiaries, on July 3, 2024, Nanotech Security Corp. ("NSC"), a wholly-owned subsidiary of 1315115 BC Inc., which is a wholly subsidiary of the Company, entered into an Asset Purchase Agreement (the "Purchase Agreement") with Authentix, Inc., a Delaware corporation ("Authentix"), and Authentix Canada Solutions, Inc., a corporation formed under the laws of British Columbia, Canada (together with Authentix, "Buyer"), pursuant to which, subject to the satisfaction or waiver of certain conditions, Buyer agreed to (i) purchase substantially all of the assets owned by NSC and used in the operation of the Company's authentication business unit (the "Authentication Business") and (ii) assume certain liabilities with respect to the Authentication Business (collectively, the "Transaction"). The assets included in the Transaction excludes, among other things, any cash and cash equivalents, any rights to tax refunds or overpayments, insurance policies, employee benefit plans, certain real property, and corporate and personnel records of NSC or the Company.

Under the terms of the Purchase Agreement, Buyer agreed to pay NSC an aggregate of $10 million for the Authentication Business (the "Purchase Price"), which includes the previously announced $4 million of deposits paid by Buyer (the "Deposits"), which will be applied to the Purchase Price at closing. An aggregate of $3 million will also be withheld from the Purchase Price (a) to cover certain amounts to due to the landlord of certain leased properties of NSC and (b) to be held in escrow by Buyer's counsel for the payment of taxes and liens related to the Thurso property.

The Purchase Agreement contains representations, warranties, covenants, indemnification and other terms customary for a similar asset disposition. The Transaction is subject to customary closing conditions and covenants, including the conduct of the authentication business prior to closing. In addition, as a condition to closing of the Transaction, the parties agreed that certain NSC employees would be terminated by NSC prior to closing, and Buyer would make offers of employment to such employees on terms no less favorable than current employment terms with NSC.

The Purchase Agreement may be terminated (i) by mutual written consent by the parties thereto, (ii) by either party upon material breach of the other party of the Purchase Agreement, subject to certain conditions, (iii) by either party if the closing of the Purchase Agreement does not occur by August 15, 2024, subject to certain conditions, and (iv) other customary termination provisions. Other than the repayment of the Deposits or as otherwise set forth in the Purchase Agreement, there are no penalties or obligations due by either party upon termination of the Purchase Agreement.