CALGARY, Alberta – Razor Energy Corp. (“Razor” or the “Company”) (TSXV: RZE) is pleased to announce today that it will be entering into subscription agreements with Alberta Investment Management Corporation (“AIMCo”), on behalf of certain of its clients, and certain members of management to purchase common shares of Razor (each, a “Razor Share”) for a subscription price of $0.84 per Razor Share (the “Issue Price”). AIMCo will subscribe for and agree to purchase 2,200,000 Razor Shares with aggregate proceeds of $1,848,000 (the “AIMCo Subscription”). Certain members of management will collectively subscribe for 50,000 Razor Shares at the Issue Price for proceeds of $42,000 (the “Management Subscription”). In addition to the AIMCo Subscription and Management Subscription, the Company also anticipates offering, on a best efforts basis, up to an additional 369,047 Razor Shares for additional proceeds of up to $310,000 (the “Best Efforts Offering” and collectively, with the AIMCo Subscription and Management Subscription, the “Private Placement”). The gross proceeds of the Private Placement are anticipated to be up to $2,200,000 (the “Maximum Gross Proceeds”).
Prior to giving effect to the Private Placement, AIMCo beneficially owns, controls or directs 2,412,728 Razor Shares, representing approximately 11.5% of the issued and outstanding Razor Shares. After giving effect to the AIMCo Subscription and Management Subscription, AIMCo will beneficially own, control or direct 4,612,728 Razor Shares, representing approximately 19.8% of the issued and outstanding Razor Shares. If the Best Efforts Offering is fully subscribed and the Company realizes the Maximum Gross Proceeds, AIMCo will, upon completion of the Private Placement, own, control or direct Razor Shares representing approximately 19.5% of the issued and outstanding Razor Shares. The AIMCo Subscription will be considered to be a related party transaction within the meaning of TSXV Policy 5.9 and Multilateral Instrument 61-101 (“MI 61-101”). The Company intends to rely on exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in Sections 5.5(a) and 5.7(a) in respect of the AIMCo Subscription.
There are no finder’s fees or commission on the AIMCo Subscription or Management Subscription, but the Company may pay certain finder’s fees on the Best Efforts Offering portion of the Private Placement which are not anticipated to exceed 7% of the proceeds from the Best Efforts Offering. The proceeds of the Private Placement will be used by Razor to continue its well reactivation program and for general corporate purposes. The Razor Shares to be issued in connection with the completion of the Private Placement will be subject to a hold period of four months and a day from the date of issuance.
Closing of the Private Placement is expected to occur in October 2021 subject to approval by the TSX Venture Exchange.