Bastion Square Receives TSX Venture Exchange Conditional Approval for Qualifying Transaction and Announces Additional Financing

Victoria, British Columbia--(Newsfile Corp. - April 13, 2023) - Bastion Square Partners Inc. (TSXV: BASQ.P) ("Bastion Square" or the "Company"), is pleased to provide an update regarding its Qualifying Transaction (the "Transaction") with ALUULA Composites Inc. ("ALUULA"), as previously announced on December 21, 2022 and February 22, 2023.

ALUULA is a Canadian-based manufacturer of innovative soft composite materials that deliver extremely durable, light and strong composites to a wide range of applications across a broad range of industries. ALUULA has customers in wind sports, sailing, outdoor packs and tents, and aerospace, with plans to expand to other market sectors. For more information regarding ALUULA, please see the Company's news release dated December 21, 2022.

Conditional Approval Granted

The Company received conditional approval for the Transaction from the TSX Venture Exchange (the "Exchange") on April 10, 2023. A disclosure document in connection with the Transaction is available on the Company's SEDAR profile. The parties anticipate closing the Transaction on or about April 14, 2023.

Concurrent Financings

In connection with the Transaction, the Company and its wholly owned subsidiary ("BSP SubCo") will conduct financings to raise up to $3,000,000. $2,186,799.60 was raised by the issuance of subscription receipts (the "Subscription Receipts") which will be converted into free trading common shares of the resulting issuer (the "Resulting Issuer") on completion of the Transaction, and the balance will be issued as common shares subject to a four month hold period in accordance with Canadian securities laws.

The BSP SubCo financing closed on April 6, 2023 and consisted of 18,223,330 Subscription Receipts at an offering price of $0.12 per Subscription Receipt for gross proceeds of $2,186,799.60. Each Subscription Receipt entitles the holder thereof to receive one common share of BSP SubCo, which will, upon completion of the Transaction, then immediately be exchanged for one common share of the Resulting Issuer. If the Transaction is not completed prior to June 30, 2023, BSP SubCo will return to holders of Subscription Receipts an amount equal to the aggregate issue price of the Subscription Receipts held by them.

The Company's financing will be completed by way of a private placement of common shares of the Resulting Issuer at an offering price of $0.12 per share which is expected to close concurrently with completion of the Transaction.

A company controlled by a director of the Company participated in the BSP SubCo financing in the amount of $246,299.76. This participation in the BSP SubCo financing constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Bastion Square is relying on the exemptions from the formal valuation and minority shareholder approval requirements under section 5.5(b) (as the issuer is not listed on specified markets) and section 5.7(1)(b) as the fair market value of the Subscription Receipts issued to the related party and the consideration paid by the related party under the financing does not exceed $2.5 million. The Company did not file a material change report in respect of the related party transaction at least 21 days before the closing of the financing, as the participation therein by the related party was not settled at that time.

Directors and Officers

It is expected that the following individuals will be the directors and officers of the Resulting Issuer upon completion of the Transaction.

Richard Myerscough - Director & CEO. As the founder of three businesses and named in over 20 patents, Mr. Myerscough has been a serial entrepreneur and inventor over the span of his 30-year business career. In 1992, Mr. Myerscough co-founded Whites Manufacturing Ltd., which became a world leading manufacturer of dry suits. Whites Manufacturing Ltd. was sold to the Aqualung Group / Aire Liquid in 2010. Ocean Rodeo kiteboarding was launched in 2001 as a sister company to Whites Manufacturing Ltd. and has become a leading innovator and global brand in kitesurfing. In an effort to further improve the performance of the Ocean Rodeo kites and wings, the opportunity to develop lighter and stronger materials was identified in 2017. From the pioneering efforts of the Ocean Rodeo design team, new technologies to manufacture a new class of ultra-light and strong materials was discovered. With vast opportunities identified beyond just wind sports, ALUULA was created as a standalone business in 2019.

Peter Dorrius - CFO and Corporate Secretary. Mr. Dorrius is a senior finance executive with experience spanning start-up manufacturers to multinational software companies. For 5 years from 2011 to 2016, he served as the Chief Financial Officer at Blackline Safety, a leading North American provider of safety solutions to the oil and gas industry. Over a 26-year professional career focused on the technology industry, Mr. Dorrius held management roles at Oracle (Hyperion), and SMART Technologies, among others, before joining Blackline. In recent years, Mr. Dorrius has provided senior finance leadership to publicly traded companies with revenues ranging from $100 million to $600 million annually. Mr. Dorrius holds a Bachelor of Science degree from the University of British Columbia and is a member of the Chartered Professional Accountants of British Columbia.

John Zimmerman - Chief Operations Officer and President. Mr. Zimmerman started in business while in university, starting his own computer consulting company which he sold five years later, prior to joining Ocean Rodeo. A vital part of Ocean Rodeo for the last 19 years, Mr. Zimmerman oversees and manages the daily operations of both ALUULA and Ocean Rodeo.

Peter Berrang - Director. Mr. Berrang is a scientist and serial entrepreneur who has founded and run multiple successful high technology companies. Mr. Berrang was a founding member and a shareholder in the Axys Group of companies which had business in chemical analysis, marine instrumentation, and the production of pure acids and inorganics. In 1995, as company President, Mr. Berrang sold the advanced laser company Seastar Optics Inc. to a public firm in the United States. Mr. Berrang holds an undergraduate degree in Chemistry, Physics and Mathematics, and a graduate degree in Chemistry. He holds over 30 patents in a broad array of disciplines including magnetics, fiber optics, semiconductor lasers, neural implants, chemical structures, and high strength fabrics. Mr. Berrang is a co-founder and President of Xlynx Materials and continues to be active in other business and high technology research activities.

Peter Gustavson - Director. Mr. Gustavson, FCPA, FCA, is the founder, CEO and sole director of Gustavson Capital Corporation ("GCC"), a private equity firm with a head office in Victoria, BC. Peter is also the founder, former President and CEO of Custom House Ltd. one of the world's largest non-bank foreign exchange companies with offices in seven countries, customers in 115 countries, more than $35 billion in transactions and more than 40,000 corporate customers worldwide. In September 2009, Custom House was purchased by Western Union for US$370 million. Under Peter's leadership Custom House was named one of the 50 best-managed companies in Canada eight years in a row by Deloitte. Peter is a recipient of an Ernst & Young Distinguished Entrepreneur of the Year Award in 2002 and a Lifetime Achievement Award from the Vancouver Island Business Excellence Society in 2005. Peter is a commerce graduate with honours from the University of Manitoba in 1979 and obtained his Chartered Accountancy designation in 1982, and was awarded the title "Fellow Chartered Accountant" by the Institute of Chartered Accountants of BC in 2005. Mr. Gustavson's past board membership and community service include Member of the Board of the Canadian Chamber of Commerce, President of the Canadian Foreign Exchange Dealers' Association, Member of the University of Victoria School of Business Advisory Board, Participant in the Prime Minister's Federal Trade missions (Moscow /Berlin /Munich and China, respectively) in 2002 and 2005, consultant to the federal government on the creation of anti-money laundering and proceeds of crime legislation, Director and Chair Finance and Audit Committee Member of the Royal BC Museum, Chair of the Gustavson School of Business Distinguished Entrepreneur of the Year Awards Committee and Governor of the University of Victoria Board of Governors. In 2010 the University of Victoria recognized Peter's contributions to the University by renaming the Faculty of Business to the Peter B. Gustavson School of Business.

Dr. Hannes Blum - Director. Dr. Hannes Blum, PhD, is a seasoned executive with a broad know-how in the digital world from start-ups to large scale operations. He started his career with The Boston Consulting Group working with multinationals in the Financial and Industrial Goods sector after finishing his Masters in Business and Engineering in Germany. In 1999, Hannes founded his first internet company in Europe and merged it with Canada based AbeBooks Inc. in 2001. Hannes then took over as CEO of AbeBooks in 2003, scaled the business and acquired five companies before selling AbeBooks to Amazon.com in 2008. Hannes continued to serve as a VP for Amazon.com for seven years before joining Munich based Growth Venture Fund Acton Capital Partners as a Venture Partner for North America in 2015. Hannes has served on the board of directors of a number of private companies, including Codename Entertainment, Maple Telehealth, Mobify, Chef's Plate and Knix Wear.

Briony Bayer - Director. Ms. Bayer has over 15 years' experience in senior finance roles. Ms. Bayer is currently the Chief Financial Officer of Gustavson Capital Corporation where she has oversight responsibility for its assets, including securities portfolios, alternative investments, real estate assets, and subsidiaries. Ms. Bayer is also responsible for due diligence and investment recommendation on the various private equity opportunities presented to Gustavson Capital Corporation. Prior to joining Gustavson Capital Corporation, Briony held senior finance roles at Custom House Ltd. (2005 - 2010) and ACD Systems International Inc., a publicly traded company listed on the TSX (2003 - 2005). Ms. Bayer has also held board positions with privately held companies and not-for-profit organizations.

Jeremy South - Director. Mr. South, CA, ICD.D, is a senior finance and M&A professional with over 35 years of experience with leading global organizations including Deutsche Bank and Deloitte. He has held senior positions with leading private equity and investment banking firms in North America, Europe, Asia and Australia. Mr. South is a qualified chartered accountant and was joint Managing Partner and Co-Founder at Second City Capital where he successfully invested in a number of private businesses across North America. From 2006 to 2016 Jeremy was an M&A partner at Deloitte where he founded the British Columbia mid-market M&A practice. While at Deloitte he spent four years in Beijing, where he built a global M&A practice and assembled a strong network of investors and corporate relationships across Asia. Mr. South has deep experience in the C suite across multiple sectors including technology, consumer business, financial services and mining. In 2017, Mr. South co-founded SouthPac Partners Inc., a private investment group focused on operating businesses and real estate assets. He is an experienced corporate director and board Chair, with both public and private companies, and he holds the ICD.D designation.

Insider

In addition to the board of the Company, it is anticipated that on the completion of the Transaction, Laurie Clarke will be considered an Insider under applicable securities laws as she will hold more than 10% of the issued and outstanding shares of the Resulting Issuer.

Trading Halt

In accordance with Exchange policies, the common shares of Bastion Square are currently halted from trading and, assuming the completion of the Transaction, will resume trading at the market open on April 19, 2023. The Transaction is intended to constitute Bastion Square's Qualifying Transaction. The Transaction is an Arm's Length Qualifying Transaction, as defined in the policies of the Exchange, and is therefore not subject to shareholder approval by Bastion Square's shareholders.

Closing the Transaction

The Transaction will be completed by way of three-cornered amalgamation, pursuant to which BSP SubCo will amalgamate with ALUULA, and the combined company will change its name to "ALUULA Composites Canada Inc." and continue as a wholly-owned subsidiary of Bastion Square, which will also change its name to "ALUULA Composites Inc.". Upon completion of the Transaction, Bastion Square will have acquired all of the issued and outstanding shares of ALUULA and the shareholders of ALUULA will have received 26.05 common shares of the Resulting Issuer in exchange for each ALUULA share held by such holder.

Closing and the resumption of trading is conditional upon, among other things, receipt of all required regulatory, corporate, and third-party approvals, including Exchange approval, and completion of the concurrent financings.

For further information about ALUULA, see www.ALUULA.com.

For further information on Ocean Rodeo, see www.oceanrodeo.ca.

ALUULA is proud to have been awarded BEST PRODUCT of the soft equipment category at 2021/22 ISPO for our ALUULA Gold™ composite.

For further information about the Company, please contact:

Mr. Peter Gustavson, CEO, Chairman & Director
Email: pgustavson@gustavsoncapital.com

Ms. Briony Bayer, CFO, Corporate Secretary & Director
Telephone: 250-412-1292
Email: bbayer@gustavsoncapital.com

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the 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.

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

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward-looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Forward-looking statements in this news release include, but are not limited to, the closing of the Transaction the proposed business of the Company after completion of the Transaction, the amount of the financings and the resumption of trading. Because of these risks and uncertainties and as a result of a variety of factors, including with respect to the closing of the Transaction, the timing and receipt of all applicable regulatory, corporate and third party approvals, and the satisfaction of other conditions to Closing, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward-looking statements. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statement will prove to be correct. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company will not update any forward-looking statements or forward-looking information that is incorporated by reference herein, except as required by applicable securities laws.

The securities described herein have not been registered under the U.S. Securities Act or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the U.S. Securities Act and any applicable state securities laws.

Not for distribution to United States newswire services or for dissemination in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/162221