Alpha Metaverse Technologies Inc. has entered a letter of intent to acquire Shape Immersive Entertainment Inc. from its former shareholders for CAD 6.7 million.

Alpha Metaverse Technologies Inc. (CNSX:ALPA) has entered a letter of intent to acquire Shape Immersive Entertainment Inc. from its former shareholders for CAD 6.7 million on January 24, 2022. Under the terms of agreement, Alpha Metaverse Technologies issued 14,840,000 common shares and CAD 1 million in cash. In a related transaction, Alpha has also entered into an agreement with Research Capital Corporation, as sole agent and sole bookrunner, in connection with a best efforts, brokered private placement of up to 16,000,000 units of the Company at a price of CAD 0.25 per Unit for gross proceeds of up to CAD 4 million.

The Company's obligations under the LOI are subject to completion of satisfactory due diligence and successful negotiation of a definitive agreement. On April 13, 2022, the parties entered into a definitive agreement for the transaction. The 14,000,000 Alpha Shares to be issued pursuant to the Acquisition shall be subject to escrow restriction whereby 10% of such Alpha Shares shall be released on the Closing Date, and thereafter, 18% of such remaining Alpha Shares shall be released after each subsequent four month period following the Closing Date.

The Company shall grant a general security interest in favour of the Shape Shareholders for the purposes of securing the payment of the Additional Cash Consideration. In the event the Additional Cash Consideration has not been paid within one-hundred and eighty days following the Closing Date, the Company shall issue an additional aggregate 6,678,000 Alpha Shares to the Shape Shareholders, the Escrow Arrangement shall no longer apply and the Company shall maintain the obligation to pay the Additional Cash Consideration. Upon completion of the Acquisition, Shape will continue to function as a fully operational metaverse creator engaged in the development of non-fungible token technology, augmented reality experiences, and three dimensional products to transform user experiences.

Closing of the Acquisition is subject to customary conditions, including receipt of all necessary regulatory and other approvals.