ham pton financial corporation

H A M P T O N F IN A N C IA L C O RPO RA T IO N

June 2018

CVE: HFC 29MM$0.41$11.6MM

Ticker: Shareso/s: Price: Mcap:

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DISCLAIMER

This presentation provides a summary description of Hampton Financial Corporation (“HFC”) and its business, but does not purport to be complete. Prospective investors are encouraged to obtain independent legal advice concerning any investment in securities of HFC and should not base their decision on whether to invest in HFC upon material provided herein. There are no representations or warranties made herein by HFC or any financial advisors and agents of HFC (the “Agents”).

There are certain risks inherent in an investment in the securities of HFC which prospective investors should carefully consider before investing. This presentation is not, and under no circumstances is it to be construed as, an advertisement or a public offering of securities of HFC. No securities regulatory authority or similar authority has reviewed or in any way passed upon the presentation or the merits of these securities and any representation to the contrary is anoffence.

This presentation has been prepared for discussion purposes only and is confidential. No representation, warranty, orundertaking, express or implied, is made and no responsibility or liability is accepted by HFC or any of its Agents asto the accuracyorcompleteness of the information contained herein.

Neither this presentation or any of its contents may be disclosed or used without the prior written consent ofHFC.

This is not an Offering Memorandum.

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Hampton Financial Corporation owns and operates a full service

IIROC regulated wealth management firm with a 20 year history.

Our systems, processes, and credit arrangements provide the

optimal platform for tax efficient yieldgeneration.

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2007

GROWTH

Continued to grow AUA and # of

advisors andassociates

1996

COMPANY FOUNDATION

Started as a small family office with $150

million AUA and 4employees

Hampton Securities Timeline

2008

GLOBAL FINANCIALCRISIS

While many of our competitors closed

their doors, we kept moving forward

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2016

PUBLICLISTINGRaised additional $3 millionand began

trading on the TSX Venture Exchange

(CVE:HFC)

TODAY

ACQUSITIONS AND CAPITALRAISING

With approx. $900 million in AUM/A and

50+ advisors and associates, we are

evaluating potential acquisitions and

preparing to expand our capital base for

our proprietary investmentstrategy

2014

PRIVATE PLACEMENTFINANCING

Raised $4 million in equity capital to

prepare for next phase of growth and

role out proprietary investment

operations

6Management & Directors

PETER M.DEEBCHAIRMAN &CEO

As founder and Chairman of Hampton Securities, Mr. Deeb has spent the last 20 years growing and operating Hampton

Securities into a leading investment dealer. He has built a career developing proprietary investment strategies for individual

and institutional clients. He brings with him a wealth of international markets experience and operational skills derived from

years spent as an entrepreneur in a number of industries, including energy, shipping, real-estate, and finance.

ROBERTSHERMANVICECHAIRMAN

Mr. Sherman is a Senior Vice-President and investment advisor of Hampton Securities with over 25 years in the investment

industry. Prior to entering the investment industry, Mr. Sherman was employed in the treasury and finance departments for

a group of Canadian mining companies

JOHN H.SUNUNUDIRECTOR

Governor Sununu is a graduate of the Massachusetts Institute of Technology and has a Ph.D. in mechanical engineering. He

served three terms as Governor of New Hampshire before being commissioned Chief of Staff to President George H.W.

Bush, serving in the White House until March 1, 1992.

DR. STEVEN SMALLDIRECTOR

Dr. Small has decades of experience as an entrepreneur, investor and founder/co-founder of several public and private

companies across many sectors. Dr. Small was an initial investor and co-founder of Element Financial Corp and Newcourt

Credit Group.

7Management & Directors

RICHARD CARL,CFADIRECTOR

Mr. Carl has a wide breadth of expertise and experience in a number of industries including capital markets, financial

services, oil and gas, mining, asset management and real estate. His previous roles included the President of Credit Suisse

First Boston Canada and Senior Vice President and Director of Equity Sales and Trading for BMO Nesbitt Burns.

WILLIAMTHOMSONDIRECTOR

Mr. Thomson is the Managing Partner of Mercana Growth Partners, a merchant banking business focused on providing

strategic advice, operational experience and financial acumen to develop and execute business plans and attract capital to

enable entrepreneurial businesses to succeed. Mr. Thomson has 35 years’ experience in completing business turnarounds

and sourcing private equity for emerging growth companies and management consulting.

JOEPAVAOPRESIDENT & CHIEF OPERATING OFFICER

Mr. Pavao has served in executive positions in the financial community for more than 25 years. Most recently he served as

President of Solium Financial (SUM/TSX), and as Chief Strategy Officer at JitneyTrade Inc. Prior to this he has served in

senior executive capacities at TD Greenline, CT Securities, ETrade and Sunlife Securities.

JASON MACKEYCHIEF FINANCIAL OFFICER

Mr. Mackey began his career at the public accounting firm, KPMG. He was a senior manager in the firm’s Investment Dealer

Practice, performing assurance and advisory services. In 2000, Mr. Mackey left KPMG to aid in the start-up and registration

of MGI Securities Inc., a full service investment dealer as its Chief Financial Officer. In 2003, he became the Chief Financial

Officer of Jovian Capital Corporation, a publicly traded investment holding company, where he was made responsible for

the accounting and reporting process of the Jovian Group of Companies.

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Cash Flow Generation

Our proprietary investment strategy focuses on our substantial spreadbetween cost of funds and market yields togenerate predictable cash flow

* Create earnings stability and fund a return of capital to our shareholders

Economies of Scale

Industry upheaval has created a highly fragmented marketplace with deeply discounted valuations resulting in attractive acquisition and advisor recruitment opportunities

* Drive margin expansion and improve profitability

Strategic Overview

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Investment Highlights

Safety

5 Year term

Convertible at$0.60/share

with additional warrantat

$0.60 for 5years

Low volatility, income

generating investments.

Redeemable at investor’s discretion after 3years

9% coupon paidsemi annually

toshareholders

CouponMaturity & Upside

Hampton is offering up to $20 million of convertible debentures to expand its

proprietary investment strategy:

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Flow of Funds

Pubco invests$20MM via subordinated

note receivable from Dealer

$20MM invested in proprietary portfolio to generate tax free

yield

9% coupon paid to investors quarterly. Principal repaid at

maturity

9% coupon paid semi annually to

Pubco fromDealer

Investors

Hampton Financial

(Pubco)

100%

Hampton Securities

(IIROC Dealer)

$20MM inConvertibleDebentures issued byPubco

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PROPRIETARY

INVESTING

Our proprietary investment strategy aims to leverage low-cost borrowing rates and provide stable cash flows in an uncertain economic environment; HFC will invest in dividend-paying securities with low volatility and risk of default

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CASH FLOW

Predictable cash flows from preferredshares with proven track records

LEVERAGE

Conservative use of leverage coupledwith low borrowing costs to maximizeinterest spread

PLATFORM

Capitalize on Hampton Securities’ systems, staff, and licensing

Key SuccessFactors

HAMPTON FINANCI AL 40

PREFERRED INCOME STRATEGY

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Our top40 picksfromFinancialServices,Telecomm, CharteredBanks,Energy, Split Share

Corporations, andInsurance

BPO.N

BAM.T

BAM.X

LCS.A

BAM.Z

BCE.OBCE.T

AIM.A

BCE.A

BCE.Z

BMO.L

BNS.N

BNS.Q

CPX.ABPO.R

CPX.C

BCE.C

ENB.A

LFE.B

CPX.E FTN.A

MFC.H

GMP.B

FFH.C

DF.A BMO.K BCE.Q DFN.A BNS.O RY.Z MFC.O

FFN.A BCE.R BCE.F BCE.K BRF.A DGS.A PIC.A

SLF.I

RY.Q

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Preferred SharesThe Sensible Choice for Income

BETAMuch less volatile than the market ortheir

common share counterparts

YIELDAveraging 8%, these instruments have priority

over common share dividends

DIVERSITYA portfolio of over 40 securities balanced across

an array of sectors

STABILITYThe current low interest rate environment means

minimal rate-reset risk or risk of default

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RISK/RETURNWe select preferred shares with

the highest Sharpe ratios, a

measure of excess return per

unit of risk. The moderate

yields of these instruments

combined with their relatively

low betas gives them very

attractive risk/return profiles for

conservative investors.

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Our PlatformAdvantage

Type II Introducer status with IIROC allows for margin at the call loan rate (currently 1%) on firm inventories

Up to 4:1 leverage available on portfolio securities

Dividend income generated from the portfolio is tax free to Hampton Securities Limited

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CDN Prime NBCN Call-loanRate

3.45% 1.25%

1 Year CDN Gov’t

2.26% 1.00%

1. Year LIBOR

Cost of Funds

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Interest Spread

TARGET YIELD

8%

Less 3% Blended Cost of Funds NET INTERESTSPREAD

5%

19Base Case Projection

Assumptions

No growth in AUM

1% borrowing rate from NBCN

Net Proceeds of $10 million

Gross Yield of 8%

Annual reinvestment of netearnings

(in $ millions)

Assets Under Management/Admin 900 900 900 900 900

Starting Portfolio 40 49 60 73 89

Projected Income

Fees and CommissionIncome 9.0 9.0 9.0 9.0 9.0

Net InterestSpread 2.80 3.43 4.20 5.12 6.24

Other Income 0.5 0.5 0.5 0.5 0.5

Total Revenue 12.3 13.0 13.7 14.6 15.8

ProjectedCosts

Variable Compensation 4.5 4.5 4.5 4.5 4.5

Overhead Expenses:

Variable 0.7 0.7 0.7 0.7 0.7

Fixed 3.2 3.2 3.2 3.2 3.2

Total Expenses 8.4 8.4 8.4 8.4 8.4

EBITDA 3.9 4.5 5.3 6.2 7.3

Tax Expense 0.00 0.00 0.00 0.00 0.00

Net Income 3.9 4.5 5.3 6.2 7.3

*Acquisition AmortizationCost 0.00 0.00 0.00 0.00 0.00

9% Coupon 0.9 0.9 0.9 0.9 0.9

Net Free Cash for Reinvestment 3.0 3.6 4.4 5.3 6.4

*Model assumes no growth in AUM

20Bear Case Projection

Assumptions

No growth in AUM

1.25% borrowing rate from NBCN


Gross Yield of 7%


(in $ millions)



Projected Income



Other Income 0.5 0.5 0.5 0.5 0.5

Total Revenue 10.7 11.0 11.4 11.8 12.3

ProjectedCosts


Overhead Expenses:

Variable 0.7 0.7 0.7 0.7 0.7

Fixed 3.2 3.2 3.2 3.2 3.2

Total Expenses 8.4 8.4 8.4 8.4 8.4

EBITDA 2.3 2.6 2.9 3.3 3.9

Tax Expense 0.00 0.00 0.00 0.00 0.00

Net Income 2.3 2.6 2.9 3.3 3.9


9% Coupon 0.5 0.5 0.5 0.5 0.5



21Reduced Bear Case Projection

Assumptions

No growth in AUM

1.5% borrowing rate from NBCN


Gross Yield of 6%


(in $ millions)



Projected Income



Other Income 0.5 0.5 0.5 0.5 0.5

Total Revenue 9.9 10.1 10.3 10.5 10.7

ProjectedCosts


Overhead Expenses:

Variable 0.7 0.7 0.7 0.7 0.7

Fixed 3.2 3.2 3.2 3.2 3.2

Total Expenses 8.4 8.4 8.4 8.4 8.4

EBITDA 1.5 1.6 1.8 2.0 2.3

Tax Expense 0.00 0.00 0.00 0.00 0.00

Net Income 1.5 1.6 1.8 2.0 2.3


9% Coupon 0.2 0.2 0.2 0.2 0.2



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Address

Hampton Financial Corporation

141 Adelaide St. West.Suite 1800

Toronto, ON. M5H 3L5

Phone & Email

Direct Line: (416) 862-8651

[email protected]

SocialMedia

LinkedIn/Hampton Securities

Contact Us

mailto:[email protected]

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THANK YOU

We appreciate the opportunity to be your partner! Please

don’t hesitate to contact us with any comments, concerns,

or questions. We look forward to taking the first step in

our journey together.

ham pton financial corporation

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