CALGARY, Alberta – Razor Energy Corp. (“Razor”) (TSXV: RZE) in conjunction with FutEra Power Corp. (“FutEra”), a wholly owned subsidiary of Razor, is pleased to announce that it has completed its previously announced rights offering to eligible holders of Razor’s common shares (the “Common Shares”) of record at the close of business on April 7, 2022. The Rights Offering expired on May 6, 2022, with the rights trading on the TSX Venture Exchange (the “TSXV”) under the symbol “RZE.RT” being de-listed on that date.
The Rights Offering received support from Razor’s shareholders with exercise of 67% of the rights available under the basic subscription privilege and 100% of the Common Shares available under the additional subscription privilege, resulting in the issuance of 100% of the Common Shares available through the Rights Offering.
At closing, Razor issued approximately 1.96 million Common Shares at a price of $2.55 per Common Share for gross aggregate proceeds of approximately $5.0 million. Following the closing of the Rights Offering, Razor has approximately 25.3 Common Shares issued and outstanding.
To the knowledge of Razor, no person became an insider as a result of the Rights Offering.
The Common Shares issued as a result of the Rights Offering have been issued on a “flow-through” basis in respect of Canadian renewable and conservation expense (“CRCE”) within the meaning of the Income Tax Act (Canada). CRCE receives tax treatment similar to that of Canadian exploration expense under Section 66 of the Income Tax Act (Canada), but is a distinct category for fully deductible expenditures relating to the start-up of renewable energy and energy conservation projects. On closing of the Rights Offering, Razor renounced 100% of the to-be-incurred eligible expenses to the Rights Offering subscribers which can be deducted from ordinary income in calculating the subscriber’s liability for income tax. Razor and its subsidiaries are then committed to incur an amount of eligible expenses equal to the Rights Offering proceeds prior to December 31, 2023.
Razor will use the gross proceeds from the Rights Offering to fund certain eligible expenses yet to be incurred for our current 21 MW geothermal/natural gas power project, and eligible expenses on various early stage power projects including additional geothermal initiatives. Further details can be found in the Rights Offering Circular of Razor dated March 31, 2022, a copy of which is available on Razor’s SEDAR profile at www.sedar.com.
There were no selling fees or commissions paid in connection with the Rights Offering.
FutEra leverages Alberta’s resource industry innovation and experience to create transitional power and sustainable infrastructure solutions to commercial markets and communities, both in Canada and globally. Currently it is developing a 21 MW co-produced geothermal and natural gas hybrid power project in Swan Hills, Alberta.