Delphax Technologies Adopts Shareholder Rights Plan to Preserve Net Operating Loss Carryforwards and Other Tax Benefits

MINNEAPOLIS, MN -- (Marketwired) -- 09/28/16 -- Delphax Technologies Inc. (OTC PINK: DLPX), a global provider of high-speed digital printing equipment, announced today that its Board of Directors has adopted a shareholder rights plan in the form of a Section 382 Rights Agreement ("Rights Agreement") designed to preserve Delphax's tax assets.

Delphax currently has significant tax assets, including net operating loss carryforwards, which could be used in certain circumstances to offset Delphax's future taxable income or otherwise payable taxes and therefore reduce its federal and state income tax liabilities. Delphax's shareholder rights plan is similar to plans adopted by numerous other public companies with significant tax assets.

Delphax's ability to use these tax assets and others which may be generated would be substantially limited in the event of an "ownership change" under Sections 382 and 383 of the Internal Revenue Code and related U.S. Treasury regulations. In general, an ownership change would occur if Delphax's shareholders who own, or are deemed to own, 5% or more of Delphax's common stock increase their collective ownership in Delphax by more than 50% over a rolling three-year period. The shareholder rights plan is intended to reduce the likelihood of an unintended ownership change occurring through the purchase of Delphax common stock.

As part of the plan, Delphax's Board has declared a dividend of one preferred-share-purchase-right for each share of Delphax common stock outstanding at the close of business on September 28, 2016. Effective today, if any person or group acquires 4.99% or more of the outstanding shares of Delphax common stock, or if a person or group that already owns 4.99% or more of Delphax common stock acquires additional shares representing 1.0% or more of the outstanding shares of Delphax common stock, then, subject to certain exceptions, there would be a triggering event under the plan. The rights would then separate from the Delphax common stock and would be adjusted to become exercisable to purchase shares of Delphax Series C Junior Participating Preferred Stock or, at the option of Delphax's Board, shares of Delphax common stock having a market value equal to twice the exercise price, which in either case would result in significant dilution in the ownership interest of the acquiring person or group that caused the triggering event under the plan.

Delphax's Board has the discretion to exempt any acquisition of Delphax common stock from the provisions of the plan if it determines that doing so would not jeopardize or endanger the Company's use of its tax assets. Delphax's Board also has the ability to terminate the plan prior to a triggering event, including but not limited to in connection with a transaction, if it determines that doing so would be in the best interests of the Company's shareholders.

The rights issued under the plan will expire on March 28, 2019. The rights may also expire earlier upon the occurrence of certain events described in the Rights Agreement. A copy of the Rights Agreement is available free of charge from the Company upon written request.

About Delphax Technologies

Delphax Technologies Inc. is a global leader in the design, manufacture and delivery of advanced digital print production systems. For more than 35 years, Delphax Technologies has pioneered high-speed digital imaging innovations that improve throughput and enhance efficiencies for publishers, direct marketers and other commercial print customers where cost and quality are important. The Delphax Technologies portfolio includes specialized full color inkjet or monochrome inkjet and toner technologies that are ideal for a wide range of applications over a broad spectrum of substrates from ultra-lightweight paper to heavy stock in both roll-fed and cut-sheet print environments. Delphax Technologies is headquartered in Minneapolis, Minn., USA with subsidiaries in Canada, the United Kingdom and France. The company's common stock is currently quoted over the counter under the symbol DLPX. Additional information is available on the company's website at www.delphax.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of federal securities laws. These "forward-looking statements" are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by forward-looking statements. These risks and uncertainties include, but are not limited to, the difficulty of determining all of the facts relative to Sections 382 and 383 of the Internal Revenue Code, unreported buying and selling activity by shareholders and unanticipated interpretations of the Internal Revenue Code and related U.S. Treasury regulations. All information in this press release is as of the date of the release, and Delphax undertakes no duty to update this information unless required by law.

Media Contact
Rod Peterson
Delphax Technologies Inc.
1-800-276-6566 ext. 4546

Source: Delphax Technologies Inc.

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