Hampton Financial Corporation to Acquire Oxygen Working Capital Corp.

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TORONTO, March 28, 2024 (GLOBE NEWSWIRE) -- Hampton Financial Corporation (“Hampton” or the “Company”, TSXV:HFC) advises that it has concluded its negotiations of the terms upon which it will acquire a controlling interest in Oxygen Working Capital Corp.(“OCC”) of Oakville, Ontario, representing Hampton’s first foray into the Commercial Lending sector.   Hampton anticipates closing the acquisition of OCC on April 1, 2024. OCC is a specialized lender focused on the commercial factoring business with clients across Canada, with prospects for expanded reach and continued growth. The definitive purchase agreement will be executed on closing.

Pursuant to the terms of the acquisition, which differ from those of the non-binding letter of intent described in the Company’s November 7, 2023 press release, the Company will acquire from the shareholders of OCC 100% of the outstanding common shares of OCC, having an aggregate value of $9,783,250 in exchange for 21,755,071 subordinate voting shares of the Issuer to be issued to OCC shareholders at $0.45 per share, together with approximately 5,438,779 warrants of OCC, each such warrant entitling the holder thereof to purchase one common share of OCC at the price of $0.50 per share for a period of 36 months. If all of the OCC warrants are exercised Hampton will own a fully diluted 80% equity stake in OCC. The acquisition will not result in a change of control of Hampton. The acquisition is not subject to approval by shareholders of Hampton, though it is subject to final approval by the TSX Venture Exchange.

OCC has assets including loan receivables of approximately $12,400,000 and commercial liabilities of approximately $9,000,000. OCC unaudited financial results for the 12-month period ending April 2023 are as follows:

• Total Assets of $10,068,000
• Total Liabilities of $17,060,000
• Revenue of $2,418,000
• Net Loss of $3,953,000

The commercial factoring business of OCC has grown since it was established in 2015. Under the leadership of its experienced and current management team, and as part of the broader Hampton business platform, OWC is expected to contribute to the growth of Hampton’s consolidated revenues and earnings while benefiting from Hampton’s existing capital markets capabilities to further grow its lending capacity while being able to service a broader range of commercial lending clients.