Auston Capital Corp. — Board/Management Information 2021

Mar 1, 2021

AUSTON CAPITAL CORP.

AUSTON TERMINATES MERGER AGREEMENT WITH DIAGNOSTIC LAB CORPORATION; ANNOUNCES CHANGES IN ACCORDANCE WITH NEW CPC POLICY

February 24, 2021 TSX Venture Exchange Trading Symbol: ASTN.P

Auston Capital Corp. (“ Auston ” or the “ Company ”), a capital pool company pursuant to Policy 2.4 of the TSX Venture Exchange (the “ TSX-V ”), announces that the merger agreement dated June 10, 2020 (“ Merger Agreement ”) with Diagnostic Lab Corporation (“ DLC ”), as announced on April 20, 2020 and June 18, 2020, has been mutually terminated as at February 22, 2021.

Auston will continue to seek a qualifying transaction in accordance with the policies of the TSX Venture Exchange and will provide further updates in due course. No deposit or cash advance was made by Auston to DLC in connection with the transactions contemplated by the Merger Agreement. Pursuant to the Merger Agreement, DLC is obligated to reimburse Auston for its expenses associated therewith.

Trading in the common shares of Auston was halted as of April 16, 2020 in connection with the Letter Agreement. Auston anticipates the resumption of trading within 3-5 business days.

The Company also announces that due to changes recently announced by the TSX-V to its Capital Pool Company program and changes to the TSX-V’s Policy 2.4 – Capital Pool Companies, which become effective as at January 1, 2021 (the " New CPC Policy "), the Company intends to implement certain amendments to further align its policies with the New CPC Policy.

Pursuant to the New CPC Policy, in order for the Company to align certain of its policies with the New CPC Policy it is required to obtain the approval of disinterested shareholders of the Company. As a result, the Company will be seeking such approval from its shareholders via written consent for the following matters: (i) to amend the Company's Stock Option Plan (the " Option Plan ") to, among other things, become a "10% rolling" plan prior to the Company completing a Qualifying Transaction (" QT "); (ii) to remove the consequences of failing to complete a QT within 24 months of the Company's date of listing on the Exchange (the " Listing Date "); and (iii) to amend the escrow release conditions and certain other provisions of the Company's Escrow Agreement (the " Escrow Agreement "). These proposed amendments (the “ Proposed Amendments ”) are described in further detail below.

Amendments to the Option Plan

The amendments to the Option Plan, will (i) allow the total number of common shares of the Company (the " Shares ") reserved for issuance as options not to exceed 10% of the Shares issued and outstanding as at the date of grant, rather than at the closing date of the initial public offering (" IPO "), for options issued prior to the QT; (ii) allow the number of Shares reserved for issuance

as options to any individual director or senior officer not to exceed 5% of the Shares outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to the QT; (iii) allow the number of Shares reserved for issuance as option to Consultants, as defined in the Option Plan, not to exceed 2% of the Shares outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to the QT; and (iv) require, prior to the granting of options, the optionee to first enter into an escrow agreement agreeing to deposit the options, and the Shares acquired pursuant to the exercise of such options, into escrow as described in the escrow agreement.

Removal of the Consequences of Failing to Complete a QT within 24 Months of the Listing Date

Currently, under the Exchange's Policy 2.4 – Capital Pool Companies (as at June 14, 2010) (the " Former Policy ") there are certain consequences if a QT is not completed within 24 months of the Listing Date. These consequences include a potential for Shares to be delisted or suspended, or, subject to the approval of the majority of the Company's shareholders, transferring Shares to list on the NEX and cancelling certain seed shares. The New CPC Policy has removed these consequences assuming disinterested shareholder approval is obtained. The Company’s 24 month deadline will occur on March 28, 2021.

Amendments to the Escrow Agreement

The Company will ask disinterested shareholders to approve the Company amending the Escrow Agreement in order to allow the Company's escrowed securities to be subject to an 18 month escrow release schedule as detailed in the New CPC Policy, rather than the current 36 month escrow release schedule in the Former Policy.

Other Changes

Under the New CPC Policy, the Company is permitted to implement certain other changes from the Former Policy without obtaining shareholder approval. As a result, the Company wishes to have the option to take advantage of all the changes under the New CPC Policy that do not require shareholder approval, which became effective on January 1, 2021, including, but not limited to:

(i) increasing the maximum aggregate gross proceeds to the treasury that the Company can raise from the issuance of Shares in the IPO, seed shares and private placement to the new maximum of $10,000,000, rather than $5,000,000 which was the limit under the Former Policy;

(ii) removing the restriction which provided that no more than the lesser of 30% of the gross proceeds from the sale of securities issued by the Company and $210,000 may be used for purposes other than identifying and evaluating assets or businesses and obtaining shareholder approval for a proposed QT, and implementing the restrictions on the permitted use of proceeds and prohibited payments under the New CPC Policy, under which reasonable general and administrative expenses not exceeding $3,000 per month are permitted;

(iii) removing the restriction on the Company issuing new agent's options in connection with a private placement;

(iv) removing the restriction such that now one person has the ability to act as the chief executive officer, chief financial officer and corporate secretary of the Company at the same time.

The Company intends to seek approval for the Proposed Amendments at its annual general meeting of shareholders to be held on March 23, 2021. The Company believes implementing the proposed changes will improve the Company’s position following termination of the transaction with DLC.

On behalf of the board of directors of the Company:

Mark Fekete Chief Executive Officer, Chief Financial Officer and Corporate Secretary

Telephone: (604) 642.0115 Suite 608 - 409 Granville Street Vancouver, British Columbia V6C 1T2

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.