CALGARY, Oct. 1, 2019 /CNW/ – Razor Energy Corp. (“Razor” or the “Company“) (TSXV: RZE) is pleased to announce it has entered into an agreement with GMP FirstEnergy on behalf of a syndicate of agents (collectively, the “Agents“) pursuant to which the Agents have agreed to market, on a “best efforts” private placement basis, up to 2,702,800 Common Shares that will qualify as “flow-through shares” (within the meaning of subsection 66(15) of the Income Tax Act (Canada)) (“Flow-Through Shares“). The 2,702,800 Flow-Through Shares will be issued at a price of $1.85 per Flow-Through Share, representing an approximate 16% premium to the closing price of the Common Shares on the TSX Venture Exchange (the “TSXV“) on September 30, 2019, for aggregate gross proceeds of up to approximately $5,000,000 (the “Offering“).
The gross proceeds from the sale of Flow-Through Shares will be used by the Company to incur qualifying “Canadian renewable and conservation expenses” (“CRCE“) as defined in the Income Tax Act (Canada) (“Qualifying Expenditures“) related to the Company’s geothermal power projects in Alberta. The Qualifying Expenditures will be renounced in favour of the subscribers of Flow-Through Shares with an effective date on or before December 31, 2019, and in the aggregate amount of not less than the gross proceeds of the Offering.
CRCE is a federal program to encourage investments in clean energy generation and energy conservation projects by providing income tax incentives to investors. In general, expenditures that qualify as CRCE are considered to be Canadian exploration expense under the Income Tax Act.
The Offering is being made by way of private placement in Canada. The Flow-Through Shares will be subject to a four month hold period under applicable securities laws in Canada. The Offering is expected to close on or about October 17, 2019 (the “Closing Date“), subject to customary closing conditions, including the approval of the TSXV.
Razor is a publicly-traded junior oil and gas development and production company headquartered in Calgary, Alberta, concentrated on acquiring, and subsequently enhancing, producing oil and gas properties primarily in Alberta. The Company is led by experienced management and a strong, committed Board of Directors, with a long-term vision of growth and distributions to shareholders, focused on efficiency and cost control in all areas of the business. Razor currently trades on TSXV under the ticker “RZE”.