Mr. Cleve Tzung reports

AUSTRALIS WARNS THAT THOSE FEIGNING CONCERN WITH PASSPORT TRANSACTION HAVE SELFISH MOTIVATIONS; THEIR INACCURATE AND MISLEADING COMMUNICATIONS SHOULD NOT BE RELIED ON BY AUSTRALIS SHAREHOLDERS

Australis Capital Inc. today warned shareholders about the motivations of a group of shareholders including Roger Sykes, 1703469 Alberta Ltd., Duke Fu, Amy Fu and Green Therapeutics LLC (collectively the concerned shareholders), related to the company's proposed acquisition of Passport Technology Inc.

Australis is concerned about inaccurate and misleading information coming from those with alternative agendas that could harm the interests of all Australis shareholders. Accordingly, the company feels a responsibility to warn shareholders to disregard the information disseminated by the self-professed concerned shareholders.

Shareholders should note that all but one of the members of the dissident group are involved in litigation against Australis alleging breach of contract, the primary remedy sought being the rescission of the disputed contract and the return of Australis's common shares to the company. This group's expressions of concern for the long-term interests of shareholders of the company are spurious at best given that they would no longer be shareholders of the company if their legal manoeuvring is successful. In that regard, Australis shareholders are right to be concerned by the following facts and sequence of events:

• On June 26, Mr. Sykes issued the initial concerned shareholders press release.
• On June 30, Green Therapeutics announced litigation against Australis with an objective to unwind the deal it made with the company and to put its Australis shares back to Australis.
• Concerned shareholders Green Therapeutics, its chief executive officer Duke Fu, and its vice-president Amy Fu hold 9,274,496 of Australis's issued and outstanding shares or about 5.4 per cent of the total 6.2 per cent of shares held by the concerned shareholders, meaning that the majority of the group that purports to be acting in the interest of shareholders is engaged in litigation to directly and negatively impact all the Australis shareholders.
• On July 13, Mr. Sykes and the other concerned shareholders disclosed that they "may be considered to be acting jointly or in concert," calling into question why Mr. Sykes, a former employee of Aurora Cannabis, would be acting in concert with a group that is solely concerned with its own interests at the expense of Australis shareholders.

Based on their actions, it strains credulity for the concerned shareholders to purport to be concerned with the interests of Australis's shareholders, while in the case of the Green Therapeutics Group doing its utmost to cease being shareholders of the company. Its participation in the concerned shareholder group should be seen for what it is, a thinly veiled ploy to ransom the company's future for a favourable resolution of their litigation. The concerned shareholders certainly are concerned about some shareholders; it just happens to be themselves.

To cite but one of the more egregious examples of misinformation from the concerned shareholders, they have incorrectly stated that Passport has run rate monthly revenues of $23,000 (U.S.) and $50,000 (U.S.) in Canada and the United Kingdom, respectively. As noted in the investor presentation available on the company's website, however, these figures represent revenues from a single casino in each region presented only as an example to illustrate profitability rather than an expression of aggregate profitability. By misunderstanding and misrepresenting the magnitude of Passport's Canadian and U.K. businesses, the concerned shareholders are grossly underestimating the value of Passport and the economics of the proposed acquisition and misleading shareholders into believing that the company has overpaid.

The company's board and management team remain focused on operating Australis and on completing the compelling acquisition of Passport, which, pending requisite approvals, will provide immediate revenue and profitability to Australis and create value for all shareholders -- even those who have initiated costly litigation and are providing misleading information to fellow shareholders.

Australis is pleased with the early unsolicited expressions of support it has received from shareholders regarding the Passport acquisition, despite an information circular with all of the background details and supportive financial and economic information not yet having been issued.

Closing of the Passport acquisition is subject to approvals typical for a transaction of this nature, including shareholder approval, closing of a private placement and customary regulatory approvals. The company will issue a management information circular in advance of the AGM, which will include detailed information regarding the proposed Passport transaction and voting instructions.

Advisers

Australis has retained Stikeman Elliott LLP as its legal adviser, Gryphon Advisors Inc. as its strategic shareholder adviser, and Longview Communications & Public Affairs as its strategic communications adviser.

About Australis Capital Inc.

Australis invests in, operates and builds transformative, differentiated companies operating in highly regulated industries. Initially focused on investments in the cannabis industry including Body and Mind Inc., Quality Green, and Cocoon Technology, Australis Capital has expanded its business to offer proprietary unattended hardware and software technology to industries with the highest regulatory compliance standards along with supporting payment and fulfilment services.

We seek Safe Harbor.