Delphax Technologies Announces Workforce Reduction and Estimates for Fourth Quarter

As a result of the anticipated fourth quarter loss, the company expects to be out of compliance with the financial covenants in its current loan agreement, which is scheduled to expire in April 2007. The company is in discussions with potential lenders, including its current lender, to structure a new financing arrangement. The company estimates that its cash availability under the current loan agreement will be approximately $1.0 million to $2.0 million as of Sept. 30, 2006.