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LAS VEGAS, NV, June 25, 2020 – Australis Capital Inc. (CSE: AUSA) (OTC: AUSAF) (“AUSA” or the “Company”) is pleased to announce two transactions that are each contingent on the successful conclusion of the other. The Company has entered into an agreement to acquire Passport Technology Inc. (“Passport”), upon the terms set forth below (the “Passport Acquisition”), leveraging Passport’s international footprint in brick and mortar casinos with AUSA’s Cocoon Technology serving cannabis dispensaries in North America and AUSA’s Paytron Merchant Services (“Paytron”). In connection with and contingent on completion of the Passport Acquisition, AUSA also announces a non-brokered private placement of units of the Company (the “Units”) at $0.28 (CAD) per Unit, to raise gross proceeds of a minimum $5,000,000 and maximum $8,000,000 (CAD) (the “Private Placement”).

Passport and Cocoon Technology operate in highly regulated compliance centric environments with growth driven by emerging markets, demographic shifts, and evolving technology. This consolidation adds a unique fintech business to AUSA’s portfolio of assets, poised to capture significant market share through the Platform-as-a-Service (“PaaS”) technology stack delivering recurring revenue through long-term exclusive agreements and highly scalable profitability. Passport and Cocoon Technology’s PaaS resides in the cloud and is easily duplicated to new jurisdictions and markets. The platforms are purpose-built ensuring data analytics, privacy, security, and regulatory compliance are cornerstones emboldening customer confidence.

Closing consideration for the proposed transaction includes 58,651,552 of AUSA common shares valued at $12,200,000 based on a 15-day trading volume-weighted average, $9,600,000 cash, $3,000,000 payable from AUSA’s holdings of shares of Body and Mind, Inc. (“BaM”), and $6,600,000 payable in real property (or cash if the real property is sold prior to closing). If the company achieves over $7 million in revenue in 2021, Passport shareholders will be entitled to $2 million in shares of AUSA and BaM. If the company achieves over $8 million in revenue in 2021, Passport shareholders will earn an additional $2 million in shares of AUSA and BaM. In addition, as long as EBITDA in 2021 is above $3 million, Passport shareholders will receive 25% of revenue in excess of $7 million in 2021.

The Private Placement to be conducted in connection with the Passport Acquisition is an offering of Units in the amount of not less than $5,000,000 nor more than $8,000,000 (CAD). Each Unit consists of one common share in the capital of the Company (the “Shares”) and one-half of a common share purchase warrant (a “Warrant”). Each whole Warrant will entitle the holder to purchase one additional Share at a price of $0.38 (CAD) on or before the Warrant expiry date which will be 2 years following the closing. Finders fees may be payable in connection with the Private Placement.

Closing the Private Placement is expressly contingent on the Company obtaining shareholder approval of the Passport Acquisition at the Company’s next annual general meeting of shareholders (“AGM”). If the Company does not consummate the Passport Acquisition then Passport will be entitled to a break fee payment of $2.5 million (USD). All securities to be issued in connection with the Private Placement will be subject to a statutory hold period of four months plus a day in accordance with applicable securities legislation. The net proceeds from the Private Placement will be used by the Company to close the Passport Acquisition, fund on-going operations, and for investments that adhere to the Company’s Investment Policy.

Passport was formed in 2016 by Scott Dowty and Kurt Sullivan and currently operates in 5 countries, 72 brick and mortar casinos with 124 unattended kiosks installed at some of the world’s most storied casinos. Headquartered in Las Vegas, Nevada, Passport holds privileged gaming licenses and provides custom payment technologies through unattended kiosks and related solutions commercially branded as CashValet®, CashlessValet™, POSpod®, ACMowl®, and ActiveDataRT®. Passport has expanded revenue and EBITDA by double-digits annually since inception characterized by high margins relative to the broader fintech landscape, dependable long-term recurring revenue with significant organic growth prospects, and M&A opportunities. The proposed acquisition results in virtually zero employee and infrastructure overlap with material cost-saving synergies from third party reductions.

Scott Dowty is the Chief Executive Officer (CEO) and a director of AUSA and is the majority shareholder of Passport making the proposed acquisition a “related party transaction” as such term is defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. Accordingly, the Passport Transaction will require AUSA minority shareholder approval and as a related party, Scott Dowty and any other interested parties in the Proposed Transaction will not be eligible to vote their AUSA shares on the Passport Acquisition at the AGM.

“AUSA ensures strong corporate governance guides the Company and with the proposed acquisition of Passport being a related party transaction, the Board of Directors immediately formed a three-member Special Committee comprised of independent board members chaired by myself to oversee negotiations, review the merits of the proposed transaction, and provide oversight on due diligence and complete a thorough examination of Passport’s business,” states Roger Swainson, independent board member of AUSA.

“Passport provides immediate revenue and profitability to AUSA with significant growth opportunities and Passport shareholders enthusiastically support the proposed acquisition and are happy to accept almost half the consideration in AUSA stock. Passport shareholders are committed, excited, and all-in on AUSA’s long term growth trajectory,” states Scott Dowty, the CEO of AUSA and Chairman of Passport.

“The acquisition of Passport allows AUSA to maximize development efforts in these and other high barrier to entry verticals pushing the envelope on unattended kiosk and omnichannel technology, solving pain points for industries through a solution and sales-oriented culture,” states Cleve Tzung, Chief Revenue Officer of AUSA. “With the acquisition of Passport and growth in the Cocoon Technology and Paytron business lines, AUSA expects to be EBITDA positive in 2021 with exciting growth prospects beyond.”

“I’m excited to report Cocoon Technology is open for business in every legal cannabis jurisdiction in North America without excessive overhead and legislative uncertainty,” states Scott Dowty, CEO of AUSA.

Post-closing, the combined business positions AUSA in three complementary verticals within fintech leveraging purpose-built technology for highly regulated industries with a growing need for unattended kiosk solutions with a global market expected to surpass $46 billion by 2026. The COVID-19 virus highlights the importance of providing omnichannel payment optionality and advanced social distancing measures as consumer-facing businesses seek to reassure customers and improve loyalty while reducing labor costs. AUSA’s differentiated revenue strategy is based on a cloud-based, highly portable infrastructure deployed through unattended kiosks into high barrier to entry verticals.

• Passport partners with casino operators to increase gaming revenue by delivering funds to the casino floor through cash and cashless payment portals including CashValet®, CashlessValet™, POSpod®, and ACMowl®. Passport’s proactive approach with customers and regulatory authorities in solution development has proven successful and a cornerstone of the business highlighted by responsible gambling features including self-exclusion, VIP alerts, dynamic pricing, free-play, and the industry’s most robust real-time back-end reporting tools. Since inception, Passport has responsibly delivered over $2 billion in funds to casino floors. The global gambling market is expected to reach revenues of $525 billion by 2023. For more information on Passport Technology, visit www.PassportTechnology.com.

• Cocoon Technology’s CocoonPod™, CocoonCove™, and CocoonRewards™ deliver retail dispensaries similar core competencies by providing interactive unattended kiosks for consumers and retailers with rich feature functionality encompassing mobile, order ahead, online delivery, loyalty, rewards, data analytics, e-wallet, ATM functionality, and cash recycling technology. Cocoon Technology’s platform is agnostic, integrates to leading Enterprise Resource Planning (ERP) systems through proprietary Application Protocol Interfaces (APIs), allowing for transformative operational efficiencies and revenue generation. 2025 revenue for US legal cannabis sales is estimated at $41 billion with numerous associated retail verticals the Cocoon Technology platform can penetrate leveraging proprietary technology and a solution-oriented mandate. For more information on Cocoon Technology, visit www.CocoonTechnology.com.

• Paytron, acquired by AUSA in April 2020, supports both Passport and Cocoon Technology in providing breadth and depth in payment and fulfillment technology as a Merchant Service Provider (MSP). Passport, Cocoon Technology, and Paytron assist customers in increasing revenue, lowering operational costs, and maximizing customer loyalty with a steadfast commitment to privacy, security, and regulatory compliance. Paytron partners with leading payment processors to provide industry-leading payment solutions driven by an in-house sales organization of 1099 sales agents and referral-based lead generation. For more information on Paytron, visit Paytron.com.

For additional information concerning Passport’s business, as well as AUSA’s Cocoon Technology and Paytron Merchant Services businesses, see the AUSA corporate presentation available on the Company’s website at https://ausa-corp.com/investors/.

With the proposed transaction, Scott Dowty will step down as CEO of AUSA and take on responsibilities as Executive Chairman while Cleve Tzung, AUSA’s Chief Revenue Officer, will assume CEO responsibilities. “Cleve’s extensive operational, M&A, corporate development, investment banking and strategic planning experience over two decades with the likes of Mattel and PepsiCo alongside business degrees from the Wharton School of Business and UCLA provide AUSA the leadership required to calibrate and grow the expanded enterprise while Scott is fully engaged on revenue growth,” states Roger Swainson, independent board member of AUSA.

In addition, Alex Han, currently the acting Chief Financial Officer of AUSA, will assume the full-time CFO role. “Alex has proven her ability and value to AUSA over the last few months and the board and management are delighted to have such an accomplished executive in the CFO role in anticipation of accelerated growth,” states Roger Swainson, independent board member of AUSA. “Alex’s experience in highly regulated industries and public entities such as Bally Technologies and Scientific Games along with assurance and advisory services to Ernst & Young coupled with a Master of Science Degree in Accounting further strengthens AUSA’s commitment to corporate governance.”

Closing of the Passport Acquisition is subject to shareholder approval, closing of Private Placement, and customary regulatory approvals.

AUSA will also seek shareholder approval at its upcoming AGM to change the name of the Company to “AUSA Corporation” with the ticker symbols remaining (CSE: AUSA) (OTC: AUSAF). “The name change to AUSA Corporation signifies our move to an operating company model with diverse yet related business lines in the United States and abroad while highlighting our broadly recognized ticker symbol AUSA,” states Scott Dowty, CEO of AUSA.

AUSA is hosting a corporate update call at 1:00 PM EST on Friday, June 26, 2020. The conference call may be accessed by dialing 1.888.664.6392 (Toll-Free North America) or 1.416.764.8659 (Canada). The webcast and presentation materials will be available at https://produceredition.webcasts.com/starthere.jsp?ei=1336822&tp_key=994164692d.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release in the United States. Such securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and, accordingly, may not be offered or sold within the United States, or to or for the account or benefit of persons in the United States or “U.S. Persons”, as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.

About Australis Capital Inc.

AUSA invests in, operates and builds transformative, differentiated companies operating in highly regulated industries. AUSA offers proprietary unattended hardware and software technology to industries with the highest regulatory compliance standards along with supporting payment and fulfillment services. The globally available kiosk platforms are purpose-built in the cloud to deliver custom solutions in complex environments while emboldening customer confidence with features including data analytics, privacy, security, and regulatory compliance. The Platform-as-a-Service (PaaS) technology delivers recurring revenue through long-term exclusive agreements focused on regulated retail environments and casino gaming while portable and scalable to profitably support organic growth and complementary acquisition opportunities.

The Company’s Common shares trade on the CSE under the symbol “AUSA” and on the OTCQB under the symbol “AUSAF”.

For further information about AUSA, please visit the website at ausa-corp.com or contact the Company by e-mail at ir@ausa-corp.com.

ON BEHALF OF THE BOARD OF DIRECTORS

“Scott Dowty”
________________________________
Scott Dowty
Chief Executive Officer

Contact:
Brent Reuter
Senior Vice President, Investor Relations & Strategy
IR@ausa-corp.com

Forward-Looking Information Statement

This news release contains statements and information that, to the extent that they are not historical fact, constitute “forward-looking information” within the meaning of applicable securities legislation, including statements is respect of the completion of the Passport Acquisition, the Private Placement and the Company’s future development plans. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information. Accordingly, readers should not place undue reliance on any such forward-looking information. Further, any forward-looking statement speaks only as of the date on which such statement is made. New factors emerge from time to time, and it is not possible for the Company’s management to predict all of such factors and to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The Company does not undertake any obligation to update any forward-looking information to reflect information, events, results, circumstances or otherwise after the date hereof or to reflect the occurrence of unanticipated events, except as required by law including securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities.

This press release includes financial outlook about the Company’s expectation to be EBITDA positive in the first half of 2021, which is subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. Such estimates contained in this press release were made by management as of the date of this press release and are provided for the purpose of providing readers with an understanding of the Company’s rationale in pursuing the Passport Acquisition. Readers are cautioned that the financial outlook contained in this document should not be used for purposes other than for which it is disclosed herein.

The CSE has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accept responsibility for the adequacy or accuracy of this release.