The purchase price does increase by $0.5 million per month, so the final purchase price could be as much as $14.7 million, or approximately $1,500 per net acre. However, the purchase deadline has now been extended to September 30, 2021. I had previously assumed that the Hazel Project would be sold to Masterton Hazel Partners for $12.7 million, or approximately $1,300 per net acre. Any less than that, and it would make more sense to own MMATF going into the merger unless the goal was to do short-term trading on Torchlight. With Torchlight trading at $5.07 recently, that means that around $3.47 in value would need to come from Torchlight's oil and gas dividend. This is based on MMATF's $5.75 share price, divided by 3.6. If the exchange rate is 1 Metamaterial share for 3.6 Torchlight shares (as mentioned in the proxy filing), that would imply that each Torchlight share would get around $1.60 in value from the Metamaterial merger. That could allow shareholders to sell their stake in the oil and gas assets if the spin-off company ends up trading OTC later on. Since I believe the chances of a significant ($1+) per share cash dividend payout is quite low, it may be better for shareholders if they end up with ownership of the oil and gas assets instead. As well, I had assumed that the Hazel Project sale was going to go through, but that appears less certain now. Despite a strong increase in commodity prices, the value of undeveloped assets remains less than a few years ago, with more focus being put on the value of current production (of which Torchlight has none). However, I believe that Torchlight shareholders will be disappointed in the value of any dividend they receive in relation to the sale of the oil and gas assets. That situation would allow Metamaterial to raise any funds it needs to support/expand its business, which was a main goal in seeking a NASDAQ listing in the first place. Various meme stocks have seen their share prices supported for lengthy amounts of time and generally at significantly higher levels than what they previously traded at. Metamaterial should be in decent shape going forward due to the investor attention it has received. Torchlight Energy Resources ( TRCH) has seen its share price soar as it nears its merger with Metamaterial ( MMATF).
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