HFC Hampton Financial Corporation

Hampton Financial Corporation (“Hampton” or the “Company”, TSXV:HFC) today announced that it has entered into a non-binding letter of intent, dated as of October 31, 2023, to acquire Oxygen Working Capital Corp.(“OCC”), representing its first foray into the Commercial Lending sector. OCC is a specialized lender focused on the Commercial Factoring business with clients across Canada and prospects for continued growth. The transaction will be subject to various regulatory approvals and certain commercial conditions including remaining due diligence and the approval of Hampton’s Board.

In the transaction’s current format Hampton will acquire from the limited partners of Terra Cotta Strategic Capital - Income Limited Partnership (“Oxygen LP”) all of the issued and outstanding limited partnership units of Oxygen LP (having an aggregate value of $3,460,000 million), along with outstanding debt of OCC in the amount of $4,767,287 in exchange for approximately 14,200,000 subordinate voting shares of Hampton. The number of shares ultimately issued will be determined by a number of factors including the market price of Hampton shares at closing, and satisfactory completion of due diligence. Hampton will assume ownership of assets including loan receivables of approximately $15,657,622 and commercial liabilities of $8,798,118.

Subsequent to closing on the acquisition of the OCC business operations, Hampton will transfer all assets, liabilities, and operations to a newly formed subsidiary (“Newco”), in exchange for 14,184,978 Newco common shares. The former limited partners of Oxygen LP, the Lenders and certain others shall subscribe for 5,146,244 common shares of Newco at an issue price of $0.01 per share, leaving Hampton with a fully diluted 73.3% stake in the subsidiary company.

OCC has been a profitable and growing business since it was established in 2015. Under the leadership of its current management, which is expected to remain in place after closing, and as part of the broader Hampton business platform, the business is expected to contribute to the growth of Hampton’s consolidated revenues and earnings while benefiting from Hampton’s existing Capital Markets capabilities.

“This is a big step for Hampton as we begin the next phase of the Company’s development into a broader financial services group. We expect this transaction to be accretive to fully diluted earnings in the coming year,” said Hampton Executive Chairman & CEO, Peter Deeb.

About Hampton Financial Corporation

Hampton is a unique private equity firm that seeks to build shareholder value through long-term strategic investments. Through its Hampton Securities Limited (“HSL”) subsidiary, Hampton is actively engaged in family office, wealth management, insurance brokerage, institutional services and capital markets activities. HSL is a full-service investment dealer, regulated by IIROC and registered in Alberta, British Columbia, Manitoba, Saskatchewan, Nova Scotia, Northwest Territories, Ontario, and Quebec. In addition, the Company provides investment banking services, which include assisting companies with raising capital, advising on mergers and acquisitions, and aiding issuers in obtaining a listing on recognized securities exchanges in Canada and abroad. the Company is also exploring opportunities to diversify its sources of revenue by way of strategic investments in both complimentary business and non-core sectors that can leverage the expertise of its Board and the diverse experience of its management team.

For more information, please contact:

Olga JuravlevChief Financial OfficerHampton Financial Corporation(416) 862-8701

Or

Peter M. DeebExecutive Chairman & CEOHampton Financial Corporation(416) 862-8651

The TSXV has in no way approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

No securities regulatory authority has either approved or disapproved of the contents of this press release. This press release does not constitute or form a part of any offer or solicitation to buy or sell any securities in the United States or any other jurisdiction outside of Canada. The securities being offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States and may not be offered or sold within the United States or to a U.S. person absent registration or pursuant to an available exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. There will be no public offering of securities in the United States.