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Auston Capital Corp
Symbol ASTN
Shares Issued 6,200,000
Close 2022-08-17 C$ 0.04
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Auston to enter Eastport business combination as QT

2022-09-01 16:39 ET - News Release

Mr. Mark Fekete reports

AUSTON CAPITAL CORP. ANNOUNCES NON-BINDING LETTER OF INTENT FOR QUALIFYING TRANSACTION WITH EASTPORT VENTURES INC.

Auston Capital Corp. has entered into a non-binding letter of intent dated Sept. 1, 2022, with Eastport Ventures Inc. in respect of a proposed business combination. It is anticipated that the proposed transaction will constitute the qualifying transaction of Auston in accordance with Policy 2.4 (Capital Pool Companies) of the exchange.

About Eastport Ventures Inc.

Eastport is a mining house predicated on building and maximizing value from its asset base of investments and projects. Since inception in 2017, the company has methodically assembled a diverse portfolio of projects in Botswana (copper, nickel, uranium and diamonds) with the intention and belief of making multiple discoveries.

In addition to its exploration assets, Eastport has developed an internal investment division with a portfolio worth several million dollars. Having such balance sheet strength gives Eastport the optionality of self-financing its exploration programs, without the requirement of issuing further equity and prematurely diluting the intrinsic value of its project portfolio. Such strategic flexibility ensures that Eastport can navigate market turbulence to maximize the returns generated for its shareholders.

Eastport is intent on building out its investment division through taking positions in new investee companies and projects, and will consider the full spectrum of financing options, from equity, to debt, to royalty acquisitions.

Maximizing value is at the heart of Eastport's business model, and Eastport is committed to crystallizing the maximum return for shareholders, whether that be through the discovery and subsequent production stages for its projects, or the growth of its investment division. Eastport is intent on developing a sustainable model to advance and finance resource projects at all stages of the mining cycle.

Summary of the proposed transaction

Subject to completion of satisfactory due diligence, the LOI contemplates that Auston and Eastport will negotiate the principal terms of the proposed transaction under which all of the issued and outstanding securities of Eastport will be exchanged for securities of Auston on a to be determined basis. The terms and conditions outlined in the LOI are non-binding on the parties. The proposed transaction would be structured as a three-cornered amalgamation, plan of arrangement or other structure based on the advice of the parties' respective advisers and taking into account various securities, tax, operating and other considerations. The board of Auston cannot confirm the exact number of consideration shares that would be issued to the shareholders of Eastport until such time as Auston and Eastport have negotiated and settled the principal terms of the proposed transaction, at which time the parties will enter into a definitive agreement in respect of the proposed transaction. There can be no assurance that a definitive agreement will be negotiated or entered into.

If the proposed transaction completes, the resulting issuer will change its name to a name determined by Eastport and will continue the business of Eastport.

There can be no assurance that the parties will reach agreement on the principal terms of the proposed transaction or execute a definitive agreement or that the proposed transaction will complete as proposed or at all. The LOI may be terminated by a party if, among other things, due diligence is not completed to the satisfaction of that party or the parties do not settle the principal terms of the proposed transaction by Nov. 30, 2022. Until the LOI is terminated or the parties have entered into a definitive agreement, the parties have agreed not to solicit, negotiate or entertain any proposal or offer in competition with the proposed transaction. If the parties execute a definitive agreement, completion of the proposed transaction would be subject to a number of conditions, including, among other things, receipt of the conditional approval of the exchange and, if required, shareholder approval; completion of a consolidation on terms to be determined; completion of a concurrent financing, which would close concurrently with completion of the proposed transaction; and other standard conditions of closing for a transaction in the nature of the proposed transaction.

Eastport financing and concurrent financing

Eastport is currently engaging parties to conduct an equity financing, raising capital to support its costs associated with seeking a go-public transaction, for the development of its internal exploration assets and for general working capital purpose. Eastport's financing will complete regardless of whether the parties enter into a definitive agreement in respect of the proposed transaction or whether the proposed transaction completes.

Should the parties elect to enter into a definitive agreement, the proposed transaction will be subject to Auston or Eastport raising additional financing sufficient to meet the exchange's initial listing requirements, which would close concurrently with the proposed transaction. The concurrent financing will be in addition to Eastport's pending financing. There can be no assurance that such additional financing will be available or that any concurrent financing will complete.

Other information relating to the proposed transaction

The proposed transaction will not constitute a non-arm's-length qualifying transaction (as such term is defined in the policies of the exchange) for Auston. Accordingly, the proposed transaction is not anticipated to require the approval of the shareholders of Auston.

In accordance with the policies of the exchange, the Auston shares are currently halted from trading and will remain so until such time as the exchange determines, which may not occur until completion of the proposed transaction or other qualifying transaction.

Additional information concerning the proposed transaction, Auston, Eastport and the resulting issuer will be provided once determined in one or more subsequent news releases should a definitive agreement be negotiated.

About Auston Capital Corp.

Auston is designated as a capital pool company under exchange Policy 2.4. Auston has not commenced commercial operations and has no assets other than cash. Auston's objective is to identify and evaluate businesses or assets with a view to completing a qualifying transaction. Any proposed qualifying transaction must be approved by the exchange and, in the case of a non-arm's-length qualifying transaction, must also receive majority approval of the minority shareholders. Until the completion of a qualifying transaction, Auston will not carry on any business other than the identification and evaluation of businesses or assets with a view to completing a proposed qualifying transaction.

Completion of the proposed transaction is subject to a number of conditions, including, but not limited to, Auston and Eastport entering into a definitive agreement, exchange acceptance, and, if applicable pursuant to exchange policies, shareholder approval. There can be no assurance that the proposed transaction will be completed as proposed or at all.

Investors are cautioned that any information released or received with respect to the proposed transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

All information contained in this news release with respect to Auston and Eastport was supplied by the parties, respectively, for inclusion herein, and Auston and its respective directors and officers have relied on Eastport for any information concerning such party.

We seek Safe Harbor.

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