DelphX Secures CAD$675,600 Over-Subscribed Private Placement, Priced at a Premium to Market; New Funding Bolsters Balance Sheet Ahead of Planned Market Expansion

Toronto, Ontario–(Newsfile Corp. – August 25, 2022) – DelphX Capital Markets Inc. (TSXV: DELX) (OTCQB: DPXCF) (“DelphX“), a leader in the development of new classes of structured products for the fixed income market, announced today a non-brokered private placement of 4,825,715 units of the Company (the “Units”), at a premium to market subscription price of CAD$0.14 per Unit, for aggregate gross proceeds of approximately CAD$675,600 (the “Offering”).

Each Unit consists of one (1) common share of the Company (a “Common Share”) and one Common Share purchase warrant (“Warrant”). Each Warrant will be exercisable at CAD$0.30 and entitle the holder thereof to acquire one Common Share for a period of two years from the date of issuance. The use of proceeds will be for operational purposes to support the launch of the Company’s proprietary Collateralized Put Options (CPOs) and Collateralized Reference Notes (CRNs).

Insiders participated in the Offering subscribing for 1,429,286 Units, and as a result the Offering is considered a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). DelphX has relied on the exemptions from the formal valuation and minority approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of related party participation, as neither the fair market value of the securities issued to insiders nor the cash consideration paid for such securities exceeded 25% of DelphX’s market capitalization. A material change report was not filed more than 21 days prior to closing of the Offering as the participation of insiders in the Offering and the extent of such participation was not finalized until shortly prior to the completion of the Offering.

In connection with the Offering, DelphX will pay cash finder’s fees of $7,007 and issue 50,050 finders’ warrants (the “Finders’ Warrants”) to AlphaNorth Asset Management, an eligible finder. The Finders’ Warrants will be exercisable at CAD$0.30 each for a period of two years after issuance.

Completion of the Offering is subject to the final approval of the TSXV. The Shares issued pursuant to the Offering will be subject to a hold period of four months plus one day from the date of issuance.

“Since going live, DelphX has entered an exciting new phase where we can now demonstrate the effectiveness of our proprietary products with actual as opposed to simulated results,” said DelphX CEO Patrick Wood. “The last few months have been a busy time, where we have been engaging with managers of large bond portfolios and Broker-Dealers to demonstrate the advantages of our proprietary products over traditional Credit Default Swaps (CDSs) and other historically flawed solutions for managing yield and risk. The recent difficulties in settling CDSs connected to Russian Bond defaults provided a perfect backdrop to the significant advantages built into our product offerings, which are fully collateralized at inception and have built-in settlement terms in the case of default. This offering has been sized appropriately in order to maintain a strong balance sheet ahead of anticipated revenue streams from adoption of our products. We are excited by the quality of the relationships we are forging and look forward to providing additional updates in coming months.”

About DelphX Capital Markets Inc.

DelphX is a technology and financial services company focused on developing and distributing the next generation of structured products. Through its special purpose vehicle Quantem LLC, the Company enables fixed income dealers to offer new private placement securities that optimally transfer and diffuse credit risk, while allowing the enhancement of yield. The new DelphX securities will enable dealers and their qualified institutional investors (QIBs) accounts to competitively structure, sell and make markets in:

• Collateralized put options (CPOs) that provide secured default protection for underlying corporate, municipal and sovereign securities;

• Collateralized reference notes (CRNs) that enable credit investors to take on the default exposure of an underlying security in exchange for enhanced yield.

All CPOs and CRNs are fully collateralized and held in custody by BNY Mellon. CPOs and CRNs are proprietary products created and owned by DelphX Capital Markets.

For more information about DelphX, please visit www.delphx.com.

Mark Forney, Corporate Development
DelphX Capital Markets Inc.
mark.forney@delphx.com
(718) 509-2160

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Forward-Looking Statements

This news release contains certain “forward-looking statements” including, without limitation, statements regarding the launch of the DelphX platform. Such forward-looking statements involve risks and uncertainties, both known and unknown, that may cause actual results or events to be materially different from those expressed or implied by such forward-looking statements, including but not limited to, business, economic and capital market conditions, regulatory uncertainties, and the demand for our products. The forward-looking statements in this news release are based on factors and assumptions regarding, among other things, the state of the capital markets, the ability of DelphX to successfully manage the risks inherent in pursuing business opportunities in the financial services industry, and the ability of DelphX to obtain qualified staff, equipment and services in a timely and cost-efficient manner to develop its business. Any forward-looking statement reflects information available to DelphX as of the date of this news release and, except as may be required by applicable laws, DelphX undertakes no intent or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or results or otherwise.

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/134924