Alpha Virtual, Inc. Executes Definitive Agreement to Purchase EssTec, Inc. and Adds New Board Member.

Business Editors

LOS ANGELES--(BUSINESS WIRE)--April 29, 2003

Alpha Virtual, Inc. (OTCBB:AVRT) today announced that it has signed an Agreement and Plan of Merger to acquire EssTec, Inc. The transaction was structured as a merger and 4,276,162 shares of Alpha Virtual, Inc. will be issued to acquire 100% of EssTec, Inc. The acquisition is subject to due diligence and the approval of the EssTec, Inc.'s shareholders. The closing is scheduled for approximately May 8, 2003.

"This acquisition serves as yet another step towards our strategy to restructure our Company and to move from a Research and Development enterprise to a product driven, revenue generating software business," stated Bill Cheung, a Board member and Managing Director of Manhattan Capital Partners, LLC., a corporate strategy and consulting firm engaged by Alpha Virtual, Inc. EssTec, Inc. is a software solutions provider that has developed a comprehensive workflow management system called EssFlow. A medical industry version of the system is being marketed under the MedFlow name and has modules for patient records, billing, and scheduling.

As part of the acquisition, Alpha Virtual, Inc. will also increase its Board of Directors by adding Mr. Wajid Mirza to its Board. Mr. Mirza is a Director at Answerthink Inc., a global provider of Management, Benchmarking, and Information Technology consulting services. Mr. Mirza is part of Answerthink's Technology Integration practice where he specializes in IT & Business Strategy, and Finance Transformation Services. Prior to Answerthink, Mr. Mirza was part of Accenture's Process Architect Center of Excellence group. Mr. Mirza has a Masters in Business Administration from Northwestern University's Kellogg School of Management and a Bachelors of Science in Computer Information Systems from California State University.

EssTec, Inc. shareholders have been mailed a proxy to vote on the approval of the merger and can receive additional information by contacting Mr. A.L. Saquib at [e-mail] or by calling the company at 562/867-1232.

About Alpha Virtual, Inc.

Alpha Virtual, Inc. designed and developed an innovative Web collaboration software system. Its OneView technology allows businesses to quickly and easily add real-time Web cruising, rich media sharing, groupware, and chat/messaging features to existing Web sites. Alpha Virtual was formerly known as Perceptronics, a predecessor with a thirty-year-old track record in international defense industry software development. Visit www.alphavirtual.com for more information. Through the acquisition of EssTec, Inc., Alpha Virtual is now also positioned as a hybrid information technology and services company that will have expertise in software application development, mobile data communications technology and the understanding of the needs of targeted businesses' issues to develop mobile enterprise and workforce management solutions in several industry segments including Financial Services, Field Service Automation, and Health Care.

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in demand for products, the timing and amount or cancellation of orders and other risks detailed from time to time in Alpha Virtual's filings and reports with the Securities Exchange Commission, and published on the Edgar system.