November 2 2017 / TheNewswire / Seaside Exploration Partners Corp. (“Seaside” or the “Company”), a capital pool company pursuant to Policy 2.4 of the TSX Venture Exchange (the “TSX-V”), announces that it has entered into a binding letter agreement dated October 29, 2017 with DelphX Corporation (“DelphX”) whereby Seaside will acquire all of the issued and outstanding securities of DelphX by way of a share exchange, amalgamation or such other form of business combination as the parties may determine.

Upon successful completion of the proposed acquisition of the securities of DelphX (the “Transaction”), it is anticipated that the Company will be listed as a Tier 2 Technology issuer on the TSX-V and will carry on the business of DelphX.  

Transaction Summary

Pursuant to the Transaction, the Company will issue common shares in the capital of Seaside (“Seaside Shares”) to the holders of common shares in the capital of DelphX (“DelphX Shares”) on the basis of one Seaside Share for each DelphX Share. The Transaction is an arm’s length transaction.  There are currently 56,714,249 DelphX Shares outstanding. Upon the completion of the Transaction, it is expected that DelphX will become a wholly-owned subsidiary of the Company (the “Resulting Issuer”).  

The Company currently has 4,000,000 Seaside Shares issued and outstanding, as well as 400,000 stock options and 160,000 broker warrants to acquire Seaside Shares, each exercisable at $0.10 per share.  

The Transaction is subject to a number of terms and conditions, including, but not limited to, the parties entering into a definitive agreement with respect to the Transaction on or before November 30, 2017 (such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature), the completion of satisfactory due diligence investigations, the completion of a private placement by DelphX of subscription receipts for gross proceeds of up to $3,500,000, as further described below, and the approval of the TSX-V and other applicable regulatory authorities. All dollar figures referenced herein, unless otherwise specified, refer to Canadian dollars.

Trading in the Seaside Shares will remain halted pending the satisfaction of all applicable requirements of Policy 2.4 of the TSX-V.  There can be no assurance that trading of Seaside Shares will resume prior to the completion of the Transaction.  Further details concerning the Transaction (including additional financial information) and other matters will be announced if and when a definitive agreement is reached.

Information Concerning DelphX

DelphX is incorporated under the laws of the State of Delaware, with offices in Malvern, Pennsylvania and Waterloo, Ontario, and is a financial services, data and Blockchain technology company dedicated to optimizing liquidity and risk-management in the global credit market.  DelphX is working to implement a digital global market, providing investors with a proprietary platform for trading bonds and a new form of linked Smart Contract securities that provide guaranteed risk protection and higher yields, and the ability to convert outstanding corporate, municipal, sovereign and other bonds and fixed income securities to credit investments.

As of September 30, 2017, DelphX had approximately US$16,958.00 in cash, and liabilities of approximately US$252.00 (unaudited).

Entre Global Services Inc., a Delaware corporation controlled by Larry Fondren, holds 25,010,000 DelphX Shares, representing 44.10% of the outstanding DelphX Shares, and 165174 Canada Inc., a Canada corporation controlled by Keith Ainsworth, holds 14,797,392 DelphX Shares, representing 26.09% of the outstanding DelphX Shares.

Management and Board of Directors of Resulting Issuer

All of the current members of the Company board of directors will resign and the following individuals will be appointed as management and directors of the Resulting Issuer:

Larry E. Fondren, Chairman and Chief Executive Officer

Mr. Fondren has designed and implemented a variety of facilities that provide transparency, liquidity and lower costs to financial markets. In the 1990s, he developed and operated the first regulated market for electronic trading of corporate bonds and asset-backed securities, and the first Internet-based auction facility for sales of new debt instruments.

Mr. Fondren has also testified before the U.S. Congress regarding the need for greater efficiency and transparency in the credit markets and the adverse impact of those inefficiencies upon investors.

More information is available at: http://en.wikipedia.org/wiki/Larry_Fondren

 

Keith Ainsworth, Non-Executive Director

Mr. Ainsworth is an electrical engineer who retired from the role of President and CEO of Com Dev International in 2002, after being with the company for 27 years. He continued as Chairman of the Board of Directors of the company until 2009.

He is currently the President of Technology Horizons Ltd., a privately held company that invested at an early stage in many successful companies, including Research in Motion, Radarsat International and Orion Network Systems.

He is also Chair of the Board for the rare Charitable Research Reserve and is a member of The Board of Governors for Junior Achievement of Waterloo Region.

Stephen R. Bacso, Director & Chief Technology Officer

Mr. Bacso is a serial technology entrepreneur whose first start-up, PixStream, developed a video networking platform for telecommunication and cable television companies that was acquired by Cisco Systems, Inc. More recently, he has founded start-ups based in Waterloo, Ontario and focused on healthcare analytics, computer-aided patient diagnostics, Blockchain technology, financial asset trading, and document analytics. Mr. Bacso has also developed controls and graphics/video display suite applications for the U.S. Air Force’s Advanced Tactical Fighter and U.S. Army’s Apache and Light Helicopter Experimental program helicopters with Litton Systems, McDonnell Douglas and Bell Labs.

Shant V. Harootunian, Chief Operating Officer

Mr. Harootunian has broad experience in the fixed income data, analytics, trading, pricing and evaluation sectors, having built and managed BARRA’s Bond Express trading platform and Mergent’s Pricing and Evaluation Services, and later heading the strategic direction and operations of the end-of-day and intra-day evaluation units of Interactive Data Corp.

At Reuters America, Mr. Harootunian negotiated and managed the firm’s strategic partnerships with fixed income data providers and redistributors, and piloted each firm’s acquisitions of related databases and lines of complementary business.

Alexander Gordon Jardin, Director & Chief Actuary

Mr. Jardin is a Fellow and past Board Member of the Society of Actuaries, a Fellow of the Canadian Institute of Actuaries and a Member of the American Academy of Actuaries. He has been Chief Executive Officer and Chief Operating Officer of reinsurance companies - Generali USA, Partner Re Life/Winterthur Life Re and Sun Life of Canada.

More recently, Mr. Jardin was the CEO of residential mortgage acquisition and servicing company, Franklin Credit Management Corporation.

 

John Lunz, Non-Executive Director

Mr. Lunz is owner of Arca Financial Group, a large independent financial planning company.  His expertise in the areas of tax and estate planning enable him to develop comprehensive financial plans with the use of tax-efficient investment and insurance portfolios specifically suited to his clients’ unique needs and goals.  Mr. Lunz works closely with tax and legal advisors to develop cohesive plans using creative products and planning concepts at the leading edge of the industry.  In 2000, Mr. Lunz and Arca Financial Group were one of the founders of the first producer groups in Canada and established the first owner-operated Managing General Agency, Barrington Wealth Partners.  Mr. Lunz also sits on the Advisory Board of Manulife Bank.

Private Placement

Pursuant to the letter agreement, it is a condition of the Transaction that DelphX completes a private placement (the “Private Placement”) of up to 10,000,000 subscription receipts of DelphX (the “Subscription Receipts”) at a price of $0.35 per Subscription Receipt (the “Issue Price”) for aggregate gross proceeds to DelphX of up to $3,500,000.  DelphX has entered into an engagement letter with Beacon Securities Limited, on its own behalf and on behalf of Haywood Securities Inc. (collectively, the “Agents”), to carry out the Private Placement on a best efforts basis. DelphX intends to use the net proceeds of the Private Placement to fund the Transaction, to develop its business and for working capital and general corporate purposes.

Each Subscription Receipt will be deemed to be exercised, without payment of any additional consideration and without further action on the part of the holder thereof, for one DelphX Share upon satisfaction of the Escrow Release Conditions (as defined below).

Upon closing of the Private Placement, DelphX will pay to the Agents a fee equal to 7% of the gross proceeds of the Private Placement payable, at the Agents’ instruction, in: (i) cash; (ii) DelphX Shares to be issued at a deemed price of $0.35 per DelphX Share; or any combination thereof (the “Agents’ Fee”), and will issue to the Agents that number of compensation options (“Compensation Options”) equal to 7% of the aggregate number of Subscription Receipts issued by DelphX under the Private Placement, each Compensation Option entitling the holder thereof to purchase one DelphX Share or one common share of the Resulting Issuer at an exercise price equal to the Issue Price for a period of 24 months following the satisfaction of the Escrow Release Conditions.

The Subscription Receipts will be issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”) to be entered into among DelphX, the Agents and a subscription receipt agent to be determined. Pursuant to the Subscription Receipt Agreement, the gross proceeds from the Private Placement (less: (i) 50% of the Agents’ Fee; and (ii) the reasonable costs and expenses of the Agents, including the fees and disbursements of the Agents’ legal counsel (the “Net Escrowed Funds”)) will be held in escrow pending satisfaction of certain escrow release conditions (the “Escrow Release Conditions”), including: (i) confirmation from DelphX and the Company that all conditions for completion of the Transaction have been satisfied or waived, other than the release of the Net Escrowed Funds and the closing of the Transaction; and (ii) the receipt of all shareholder and regulatory approvals required for the Transaction. Upon satisfaction of the Escrow Release Conditions, the remaining 50% of the Agents’ Fee will be released to the Agents and the balance of the Net Escrowed Funds, together with any interest earned thereon, will be released to DelphX.

If the Escrow Release Conditions have not been satisfied by 5:00 p.m. (Vancouver time) on the date that is no later than 90 days following the closing date of the Private Placement, or DelphX advises the Agents or announces to the public that it does not intend to satisfy the Escrow Release Conditions, the subscription receipt agent will return to the holders of Subscription Receipts an amount equal to the aggregate Issue Price of the Subscription Receipts held by them and their pro rata portion of any interest earned thereon, net of any applicable withholding tax. DelphX will be responsible for any shortfall in the amount returnable to holders of Subscription Receipts and such holders will be made whole.

Certain insiders and affiliates of DelphX may subscribe for up to 1,500,000 Subscription Receipts under the Private Placement.

The Private Placement is to close on a date to be mutually agreed to between the Agents and DelphX.

The DelphX Shares issued pursuant to the conversion of the Subscription Receipts, any DelphX Shares issued pursuant to the Agents’ Fee, and upon the exercise of the Compensation Options will be acquired by the Company pursuant to the Transaction on the same terms as the other outstanding securities of DelphX, being on the basis of one Seaside Share issuable for each DelphX Share.

This news release does not constitute an offer to sell and is not a solicitation of an offer to buy any securities in the United States. The securities of the Company and DelphX have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws unless pursuant to an exemption from such registration.

Sponsorship

The Transaction is subject to the sponsorship requirements of the TSX-V, unless an exemption from those requirements is granted.  The Company intends to apply for an exemption from the sponsorship requirements; however, there can be no assurance that an exemption will be obtained.  If an exemption from the sponsorship requirements is not obtained, a sponsor will be identified at a later date.  An agreement to act as sponsor in respect of the Transaction should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of its completion.

Trading Halt

Trading in the Seaside Shares has been halted as of October 30, 2017 and will remain halted pending the satisfaction of all applicable requirements pursuant to Policy 2.4 of the TSX-V.

Name Change

Upon completion of the Transaction, the Company intends to change its name to “DelphX Capital Markets Inc.” or such other name as DelphX and the Company may determine, and the parties expect that the TSX-V will assign a new trading symbol for the Resulting Issuer

Forward-Looking Statements

This news release contains certain “forward looking statements” including, for example, statements relating to the completion of the Transaction and Private Placement and the Resulting Issuer’s anticipated share capital.  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: receipt of regulatory approvals, the Company’s ability to complete the Transaction and Private Placement, the state of the capital markets, tax issues associated with doing business internationally, the ability of the Resulting Issuer to successfully manage the risks inherent in pursuing business opportunities in the Blockchain industry, and the ability of the Resulting Issuer 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 the Company as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.

On behalf of the board of directors of the Company:

  

Toby Pierce

President and Chief Executive Officer

 

Telephone: (604)-653-9718

Suite 2040-885 West Georgia Street

Vancouver, B.C. V6C 3E8

All information contained in this news release relating to DelphX was provided by DelphX to the Company for inclusion herein. The Company has not independently verified such information and shall bear no liability for any misrepresentation contained therein.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance and if applicable pursuant to TSX-V requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. 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 management information circular or 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.

The TSX-V has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release.

 

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