DelphX Closes Over-Subscribed Non-Brokered Unit Financing

Toronto, Ontario--(Newsfile Corp. - April 14, 2021) - DelphX Capital Markets Inc. (TSXV: DELX) ("DelphX") announced today that it has closed its previously announced private placement (the "Offering") of 5,700,000 units (the "Units") at a subscription price of C$0.10 per Unit, for gross proceeds of C$570,000. Each Unit consists of one common share ("Common Share") of DelphX and one share purchase warrant ("Warrant"). Each Warrant entitles the holder to purchase one Common Share at a price of $0.15, for a period of 5 years from the date of issue.

Insiders participated in the Offering subscribing for 1,600,000 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 $21,000 and issue 210,000 finders' warrants (the "Finders' Warrants"). The Finders' Warrants will be exercisable at $0.10 each for a period of 5 years after issuance.

Completion of the Offering is subject to the final approval of the TSXV. The securities issued pursuant to the Offering are subject to a hold period of four months and a day from the date of closing.

The funding is expected to be adequate to complete the final steps for the launch of the Company's industry-first Covered Put Options (CPOs) and Covered Reference Notes (CRNs).

Operational Update

Management is also pleased to announce additional corporate measures as part of a long-term strategic plan to build shareholder value. In order to increase the existing shareholder base and trading volume, DelphX is in the process of establishing Depository Trust Company (DTC) clearing for the common shares. This will give US investors greater access to the Company's shares and improve liquidity. Establishing a wider North American shareholder base and increased institutional ownership are key first steps as part of a long-term goal to list on the major North American exchanges.

"Our product suite is essentially complete at this point, but there are still legal and corporate expenses prior to launch, along with our basic maintenance budget for the organization," said DelphX CEO Patrick Wood. "With our development work largely behind us, we have an exceptionally low burn-rate. So, we are managing our cash flow well as we approach the live launch of our platform. Post launch, we believe we can be cash flow positive very quickly, potentially within one quarter if we scale up fast enough. We are in advanced discussions with potential strategic partners who have the ability to bring large bond portfolios and customer traffic onto our facility. This will be a high priority as bond managers begin to use our products to gain significant yield and protection in their existing portfolios."

About DelphX:

DelphX is a technology and financial services company focused on bringing new and exciting alternatives to structured product and credit markets. Through its special purpose vehicle Quantem and its broker-dealer DelphX Services Corp, it enables fixed income dealers to offer new Rule 144A securities that optimally transfer and diffuse credit risk, while allowing the enhancement of yield. The new DelphX platform will be regulated by the SEC and enable dealers to competitively structure, sell and make markets in:

  • Covered Put Options (CPOs) that provide secured default protection for underlying corporate, municipal and sovereign securities, with each CPO strike-price equaling the par value of its underlying security
  • Covered Reference Notes (CRNs) that enable credit investors to take on the default exposure of a single underlying security or optionally participate in a pool of diversified risks that broadly diffuses the impact of credit events.

All CPOs and CRNs will be collateralized and held in custody by an independent custodian. CPOs and CRNs are proprietary products created and owned by DelphX Capital Markets Inc.

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

Contact:
Patrick Wood, President & CEO
DelphX Capital Markets Inc.
416.473.9133

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. The results or events depicted in these forward-looking statements may differ materially from actual results or events. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding and are implicit in, among other things: the state of the capital markets, tax issues associated with doing business internationally, 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 securities laws, DelphX disclaims any intent or obligation to update 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.

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