Metamaterial Technologies Inc. entered into a letter of intent to acquire Continental Precious Minerals Inc. (TSXV:CZQ.H) in a reverse merger transaction on June 21, 2019. Metamaterial Technologies Inc. entered into amalgamation agreement to acquire Continental Precious Minerals Inc. in a reverse merger transaction on August 14, 2019. Pursuant to the letter of intent, the existing holders of shares of Metamaterial will receive common shares of the resulting issuer in exchange for their Metamaterial shares at a ratio of 2.75 resulting issuer common shares for each Metamaterial share. Following the completion of the transaction, all of Metamaterial's outstanding convertible notes, options and other securities exercisable or exchangeable for, or convertible into, and any other rights to acquire Metamaterial common shares will be exchanged for securities exercisable or exchangeable for, or convertible into, or other rights to acquire resulting issuer common shares on economically equivalent terms. The final form of the transaction is subject to the terms of a definitive agreement to be entered into among the parties.

Upon completion of the transaction, the security holders of Metamaterial will own approximately 84.6% of the resulting issuer common shares, on a fully diluted basis. It is expected that Lamda Guard Technologies Ltd., a company owned by certain founders of Metamaterials, and Innovacorp will own more than 10% of the resulting issuer common shares upon completion of the transaction. In connection with the transaction, Continental intends to voluntarily de-list the common shares of Continental from the facilities of the NEX board of the TSX Venture Exchange (“TSXV”) prior to the completion of the transaction. Pursuant to the agreement, the holders of common shares of Metamaterial and holders of Class A-1 preferred shares of Metamaterial will receive resulting issuer common shares in exchange for their Metamaterial shares at a ratio of 2.75 resulting issuer common shares for each Metamaterial share or Class A-1 preferred shares of Metamaterial held.

The terms of the agreement also provide for the exchange of Class A-2 preferred shares of Metamaterial, whereby holders will receive 4.125 resulting issuer common shares for each Class A-2 preferred share of Metamaterial held. Under the agreement, approximately 67 million resulting issuer common shares will be issued to the shareholders of Metamaterial. Under the agreement, Metamaterial may issue convertible promissory notes for aggregate gross proceeds of up to CAD 0.6 million per month, equity under a private placement for aggregate gross proceeds of up to CAD 6 million and a senior secured convertible debenture from a leading Canadian bank for aggregate gross proceeds of up to CAD 5 million. In connection with the closing, and subject to receipt of all required approvals, Continental Precious Minerals intends to change its name to “Metamaterial Inc.”. In case of termination, Metamaterial and Continental Precious Minerals will pay termination fees of CAD 0.25 million and CAD 0.25 million respectively, under certain specified circumstances.

The letter of intent contemplates that the board of directors of the Resulting Issuer will consist of six directors nominated by Metamaterial and one director nominated by Continental viz. George Palikaras, Ram Ramkumar, Eric Leslie, Maurice Guitton, Steen Karsbo and Allison Christilaw. The executive officers of the resulting issuer are anticipated to include the existing executive officers of Metamaterial, which are: George Palikaras-President and Chief Executive Officer; Mayank Mahajan- Chief Financial Officer; Themos Kallos- Chief Science Officer and Gardner Wade- Chief Product Officer. Continental Precious Minerals also intends to change the address of its registered office to 199 Bay Street, Suite 4000, Toronto, Ontario, M5L 1A9, or such other address as the Board, in its sole discretion, deems appropriate which is also subject to shareholder approval.

In connection with the transaction, Continental entered into voting support agreements with shareholders of Metamaterial that hold an aggregate of approximately (66 2/3%) of the issued and outstanding Metamaterial common shares. The proposed de-listing of the common shares of Continental from the facilities of the TSXV is subject to the approval of a majority of the minority shareholders of Continental Precious Minerals. Subject to the final structure of the transaction, it is not expected that the transaction itself will be subject to shareholder approval of Continental Precious Minerals. The completion of the transaction is subject to the execution of the definitive agreement, the approval of the listing of resulting issuer common shares on the facilities of Canadian Stock Exchange (CSE), the approval of the transaction by shareholders of Metamaterial, approval of matters ancillary to the transaction by shareholders of Continental, Metamaterial raising gross proceeds of not less than CAD 1 million in connection with a private placement, receipt of all regulatory and third party approvals, authorizations and consents as are required to be obtained by Continental Precious Minerals or Metamaterial, including the approval of the TSX Venture and the CSE and any other applicable regulatory authorities, Continental Precious Minerals having no debt and a cash position of CAD 4.8 million less any amounts required to be paid in connection with professional fees and expenses incurred as a result of the transaction, and fees and expenses incurred in the ordinary course of business between the date hereof and the effective date in the maximum aggregate amount of CAD 0.06 million, the holders of Continental Precious Minerals management option shall have agreed to terminate or exercise such Continental Precious Minerals management options within 6 months following the completion of the transaction, all Metamaterial Notes that are convertible into or exchangeable for Metamaterial shares as well as all permitted issuances that are convertible into or exchangeable for Metamaterial shares issued by Metamaterial following the date hereof and prior to effective date that that are convertible into or exchangeable for Metamaterial shares shall have converted into Metamaterial shares in accordance with their terms and certain standard closing conditions. As of October 10, 2019, shareholders of Continental Precious Minerals approved the merger.

The transaction is expected to close in October 2019. As of March 2, 2020, Continental Precious Minerals commenced delisting of its shares from the NEX Board of the TSX Venture Exchange and the transaction is expected to be completed on or about March 5, 2020. Christopher Jones of Blake, Cassels & Graydon LLP acted as legal advisor to Metamaterial. John M. Sabetti, Mitchell L. Thaw and Tracy L. Hooey of Fasken Martineau DuMoulin LLP acted as legal advisors to Continental Precious Minerals.