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conversions part of the deal!

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WiseTrader   Wednesday, 03/31/21 09:39:53 AM
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conversions part of the deal!

BEAVERTON, Ore., March 30, 2021 /PRNewswire/ -- Metro One Telecommunications, Inc. (OTCMKTS: WOWI) ("Company" or "Metro One") announced today that its newly-formed, wholly-owned Israeli subsidiary, Stratford Ltd. ("Subsidiary"), received notification of approval from the Lod District Court in Israel for its winning bid to acquire assets of Royal App Ltd. ("Royal App") out of insolvency proceedings (the "Acquisition") for the equivalent of approximately USD $2.4 million in cash as well as certain equity in the Company. Royal App, based in Israel, is the developer of Shelfy, a white label, headless mobile commerce software platform that helps retailers and fast moving consumer goods companies become growth companies ("Shelfy"). Shelfy incorporates sophisticated artificial intelligence and machine learning in its algorithms to markedly improve online shopping metrics through mobile phones for large consumer retailers such as supermarket chains, food and other prominent clients.

To finance the Acquisition as well as general working capital, Metro One is raising $3.5 million of financing in the form of puttable Simple Agreements for Future Equity ("Safes") from institutional investors and family offices.

The Safes are to convert into common stock of the Company following the conversion of all outstanding Series A Convertible Preferred Stock ("Preferred Stock") into common stock ("Common Stock", and collectively with the Safes, the Preferred Stock, and any other Company securities, the "Securities") of the Company in a transaction that the Company intends to undertake later this year (the "Preferred Conversion" and the resulting capitalization immediately following the Safe conversion and the Preferred Conversion calculated on an as-converted to Common Stock basis, without duplication, the "Company Capitalization").

In addition, as part of the Acquisition consideration, Metro One has agreed that upon the Preferred Conversion it will issue Common Stock equivalent to 8% of the Company Capitalization for the benefit of certain creditors of Royal App, to issue Common Stock in an aggregate amount up to 2% of the Company Capitalization to Everest Corporate Finance as partial compensation for the Acquisition, as well as to issue equity incentives to certain employees. Pending the issuance of 8% of the Company Capitalization, a trustee for certain creditors of Royal App will have a lien on certain Shelfy assets for the benefit of such creditors.

Certain of the transactions described above are subject to Board approval as well as shareholder approval, of which there can be no assurance. The Company intends to prepare and mail a proxy statement to its shareholders which will have further details on the Acquisition, the Company Capitalization and the various issuances of Company Securities.

The Company anticipates that the closing of the Acquisition may occur by mid-April. Prior to its recent insolvency filing, approximately USD $20 million has been invested in Royal App since 2018 with the most significant pre-money valuation totaling approximately USD $48 million.

Metro One Chairman, Nani Maoz said, "we are very pleased with the acquisition of this technology company. Royal App has a novel artificial intelligence technology which has received praise from its customers. We look forward to working with the team at Royal App to grow their international client base into the U.S. market. Despite making substantial progress on the business side during 2019-2020 the company experienced setbacks, some of which due to Covid-19 restrictions. The company's clients include such major European retailers as A.S Watson, Super Pharm, Yohananof, and Kruidvat."

Mr. Maoz continued, "In the next few months, Metro One is endeavoring to bring our public filings current with the SEC and to become a fully reporting company. We believe that the acquisition of Royal App will be accretive to our shareholders."

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