Razor Energy Corp. Announces Flow-Through Rights Offering for up to $5 Million

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 is offering rights (the “Rights Offering”) to eligible holders of its common shares (the “Common Shares”) of record at the close of business on April 7, 2022 (the “Record Date”).

Pursuant to the Rights Offering, each holder of Common Shares resident in a province or territory in Canada (the “Eligible Jurisdictions”) will receive one right (a “Right”) for each 1 Common Share held. Each whole Right will entitle the holder to subscribe for 0.0841016 of a Common Share. As a result, holders of Common Shares will need to exercise 11.8903796 Rights to acquire one Common Share. A holder of Rights must pay $2.55 to purchase one Common Share. No fractional Common Shares will be issued and, where the exercise of Rights would otherwise entitle the holder of Rights to fractional Common Shares, the holder’s entitlement will be reduced to the next lowest whole number of Common Shares and no cash or other consideration will be paid in lieu thereof.

Razor expects to raise gross proceeds of up to $5 million from the Rights Offering and intends to use the proceeds 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. The expected closing date of the Rights Offering is May 9, 2022.

The Common Shares issued as a result of the Rights Offering will be 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. Upon issuing the Common Shares to shareholders of Razor at the closing of the Rights Offering, Razor will renounce 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.

The Rights will trade on the TSX Venture Exchange (“TSXV”) under the symbol RZE.RT commencing on April 6, 2022. Common Shares purchased on or following the Record Date will not be entitled to receive Rights under the Rights Offering. The Rights Offering expires at 5:00 p.m. (Calgary time) (the “Expiry Time”) on May 6, 2022. Rights are exercisable until the Expiry Time, after which time unexercised Rights will be void and of no value.

Directors and officers of Razor, have indicated their intention to exercise some or all of their Rights, subject to market conditions.

The Rights Offering includes an additional subscription privilege under which eligible holders of Rights who fully exercise their Rights will be entitled to subscribe for additional Common Shares, if available, that are not otherwise subscribed for in the Rights Offering.

There are currently 23,314,466 Common Shares outstanding. An aggregate of 23,314,466 Rights are expected to be issued to subscribe for up to 1,960,784 Common Shares pursuant to the Rights Offering. The final number of Rights to be issued will depend on the actual number of issued and outstanding Common Shares on the Record Date. Following completion of the Rights Offering and assuming the exercise of all Rights, Razor expects that there will be approximately 25,275,250 Common Shares outstanding.

Alberta Investment Management Corporation, which currently holds approximately 19.78% of Razor’s issued and outstanding Common Shares, has indicated that it does not intend to participate in the Rights Offering. Razor does not anticipate that any holder will hold more than 20% of the issued and outstanding Common Shares on closing of the Rights Offering.

The Rights Offering will be conducted only in the Eligible Jurisdictions. Accordingly, and subject to the detailed provisions of Razor’s Rights Offering circular (the “Circular”), Rights will not be delivered to, nor will they be exercisable by, persons resident outside of the Eligible Jurisdictions (“Ineligible Holders”), unless an Ineligible Holder satisfies Razor that their participation in the Rights Offering is lawful and in compliance with all applicable securities and other laws, in which case Razor will direct the depositary and subscription agent, Alliance Trust Company (“Alliance”), to issue its Rights. After 5:00 p.m. on April 26, 2022 (10 days prior to the Expiry Time), such Rights may be sold on their behalf by Alliance.

Details of the Rights Offering are set out in Razor’s Rights Offering notice (the “Notice”) and Circular, which will be available under Razor’s profile on SEDAR at The Notice and accompanying Rights Certificate and subscription form (the “Rights Certificate”) and a subscription and renunciation agreement (the “Subscription Agreement”) will be mailed to each eligible shareholder of Razor as at the Record Date. To subscribe, registered shareholders must forward the completed Subscription Agreement and Rights Certificate together with the applicable funds to Alliance prior to the Expiry Time. Shareholders who hold their Common Shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

The Rights and the Common Shares issuable upon exercise of the Rights have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and, accordingly, the Rights and the Common Shares are not being publicly offered for sale in the “United States” or to “U.S. persons” (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended). This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. There shall be no sale of the securities in any jurisdiction in which an offer to sell, a solicitation of an offer to buy or a sale would be unlawful.

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