Tom Welch Early Warning Press Release

HALIFAX, March 5, 2020 /CNW/ - Tom Welch (the "Acquiror") announces his intention to file an early warning report in accordance with Multilateral Instrument 62-104 ? Take-Over Bids and Issuer Bids and National Instrument 62-103 ? The Early Warning System and Related Take-Over Bid and Insider Reporting Issues for securities of Metamaterial Inc. (formerly known as Continental Precious Minerals Inc.) (the "Company").

The Acquiror intends to file an early warning report in connection with the acquisition of certain securities of the Company, including 12,422,597 common shares in the capital of the Company ("Common Shares"). These Common Shares, along with the other securities noted below, were acquired in connection with a three-cornered amalgamation pursuant to which Metamaterial Technologies Ltd. ("MTI") amalgamated with Continental Precious Minerals Subco Inc., a wholly owned subsidiary of the Company (the "Transaction").

Pursuant to the Transaction, the common shares of MTI were exchanged for Common Shares at a ratio of 2.75 Common Shares for each MTI common share held by a holder. Immediately prior to the closing of the Transaction, the Acquiror did not, directly or indirectly, hold any shares of the Company, but held: (a) 2,602,868 common shares of Metamaterial Technologies Ltd. ("MTI"), which were exchanged on the basis of 2.75 Common Shares for each MTI common share held; (b) 735,000 Class A-1 preferred shares of MTI, which were exchanged on the basis of 2.75 Common Shares for each MTI Class A-1 preferred share held; and (c) 786,294 Class A-2 preferred shares of MTI, which were exchanged on the basis of 4.125 Common Shares for each MTI Class A-2  preferred share held.

In addition, immediately prior to the closing of the Transaction, the Acquiror held, directly or indirectly, promissory notes of MTI having an aggregate principal and interest amount of $3,439,899, which were converted into 6,955,678 Common Shares (2,529,338 common shares of MTI multiplied with 2.75 exchange ratio) on February 26, 2020.

Immediately following the closing of the Transaction, the Acquiror holds, directly or indirectly or controls: (a) an aggregate of 12,422,597 Common Shares (representing 14.86% of the issued and outstanding Common Shares); (b) 202,207 warrants of the Company (73,530 warrants of MTI multiplied with 2.75 exchange ratio) exercisable to acquire, in the aggregate, 101,104 Common Shares at an exercise price of $0.90 per Common Share (the "Warrants"); and (c) $1,100,000 principal amount of unsecured convertible debentures, which are convertible into Common Shares at the option of the holder at a conversion price of $0.70 per Issuer share at the option of the holder or at the option of the company upon meeting certain conditions at a conversion price of $0.70 or at maturity at a conversion price which is the greater of 80% of 10 day volume- weighted average price of the Issuer's common shares or the closing price on preceding trading day less the maximum permitted discount by the exchange.

The Common Shares and the Warrants held by the Acquiror, directly or indirectly, or controlled by the Acquiror are subject to an applicable escrow time based release schedule, which provides that 10% of the escrow securities will be released on the listing date (anticipated to be on or about March 9, 2020), with the remaining escrow securities being released in equal tranches of 15% every 6 months. 

The Common Shares and Warrants are being held for investment purposes. In accordance with applicable securities laws, the Acquiror may, from time to time and at any time, acquire additional Common Shares and/or other equity, debt or other securities or instruments (collectively, "Securities") of the Company in the open market or otherwise, and reserves the right to dispose of any or all of its Securities in the open market or otherwise at any time and from time to time, and to engage in similar transactions with respect to the Securities, the whole depending on market conditions, the business and prospects of the Company and other relevant factors, subject to applicable escrow restrictions. A copy of the early warning report will be filed by the Acquiror in connection with the Transaction and will be available on SEDAR under the Company's profile.

This press release is issued under the early warning provisions of Canadian securities legislation.

SOURCE Tom Welch