Alpha Metaverse Technologies Inc. a technology company that focuses on emerging markets in gaming, NFTs, blockchain gaming, esports, ecommerce, and other high growth opportunities, is pleased to announce that it has entered into an amending agreement (the “Amending Agreement”) with Shape Immersive Entertainment Inc. (“Shape”) and the former shareholders of Shape (the “Former Holders”) to amend the share purchase agreement among Alpha, Shape and the Former Holders dated April 12, 2022 (the “SPA”) to provide for a deferred payment schedule for the $500,000 remaining payable by Alpha to the Former Holders under the SPA (the “Remaining Consideration”). Pursuant to the Amending Agreement, Alpha paid $100,000 of the Remaining Consideration on the date of the Amending Agreement, and has agreed to pay the remaining $400,000 through either the financial performance of Shape or a financing in Alpha no later than September 28, 2023.

Brian Wilneff, Chief Executive Officer of Alpha, commented, “Restructuring the Remaining Consideration payment to the Former Holders allows Alpha additional operating flexibility while honouring our financial commitments to the Former Holders. The Amending Agreement better aligns its financial obligations with current and future performance objectives of Shape and or any future financings of the Company. Simultaneously, this also ensures the Former Holders benefit from positive financial developments at Alpha and Shape.”

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Details of the Amending Agreement

Pursuant to the Amending Agreement, Alpha has agreed to pay the Remaining Consideration to the Former Holders as follows:

• $100,000 of the Remaining Consideration was paid by Alpha on the date of the Amending Agreement; and
• The remaining $400,000 of the Remaining Consideration will be repaid on or before September 28, 2023 (the period from the date of the Amending Agreement to such date being referred to herein as the “Post-Amendment Period”), provided that:
  • In the event that Shape’s earnings before interest expense, tax expense and non-cash items (“EBITDA”) for any calendar month during the Post-Amendment Period is greater than $0, Alpha shall pay the lesser of (x) the amount of positive EBITDA generated by Shape in such calendar month and (y) the amount of cash and cash equivalents in Shape’s bank accounts on the date payment is required, to the Former Holders in partial or complete satisfaction of Alpha’s obligation to pay the Remaining Consideration;
  • In the event that Alpha closes a debt or equity financing during the Post-Amendment Period pursuant to which Alpha raises gross proceeds of:
    • $500,000 to $1,000,000, Alpha shall pay all or the maximum possible portion of the Remaining Consideration to the Former Holders to the extent that, after accounting for such payment, Alpha’s available cash balances measured at the closing date of any such financing (including the net proceeds of such financing) remain greater than $750,000; or
    • Greater than $1,000,000, Alpha shall pay the Remaining Consideration required to be paid by Alpha to the Former Holders; and
  • In the event that any share purchase warrant of Alpha outstanding on the date of the Amending Agreement is exercised during the Post-Amendment Period, the exercise price of any such warrant shall be paid by Alpha to the Former Holders in partial or complete satisfaction of Alpha’s obligation to pay the Remaining Consideration.

Pursuant to the Amending Agreement, any amounts paid by Alpha to the Former Holders during the Post-Amendment Period shall reduce the amount of the Remaining Consideration required to be paid by Alpha prior to the expiry of the Post-Amendment Period. In the event that Alpha fully pays the Remaining Consideration to the Former Holders prior to the expiry of the Post-Amendment Period, the requirement for Alpha to make payment to the Former Holders upon the occurrence of the events discussed above will be of no further force or effect.

In addition, pursuant to the Amending Agreement, Alpha shall not be required to deliver the additional 6,678,000 common shares of Alpha required to be delivered to the Former Holders under the SPA in the event of non-payment of the Remaining Consideration in accordance with the SPA, unless and until Alpha fails to repay the Remaining Consideration prior to the expiry of the Post-Amendment Period.

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