Pulse Oil Corp. (Pulse or "
Pulse") (TSXV: PUL)
announced that it will be issuing rights (the "
Rights
Offering") to holders of its common shares
("
Common Shares") of record at the close of
business on April 6, 2021 (the “
Record Date”) to
shareholders in Eligible Jurisdictions. Pursuant to the Rights
Offering, each holder of Common Shares (a
“
Shareholder”) will receive one (1) transferable
right (each, a “
Right”) for each Common Share held
as of the Record Date. One (1) Right will entitle the holder
thereof to subscribe for one (1) Common Share at a subscription
price of $0.01 per Common Share (the “
Basic Subscription
Privilege”) until 5:00 p.m. (Toronto time) (the
“
Expiry Time”) on April 30, 2021. Assuming the
exercise of all Rights, the Rights Offering will raise gross
proceeds of $1,515,924.
The Rights will be issued to Shareholders
resident in each province and territory of Canada (the
“Eligible Jurisdictions”) and Shareholders
resident outside of the Eligible Jurisdictions who have satisfied
Pulse as to their ability to legally receive the Rights.
Accordingly, and subject to the detailed provisions of the right
offering circular dated March 26, 2021 (the
“Circular”), Rights DRS advice statements
(“Rights DRS”) will not be mailed to Shareholders
resident outside of the Eligible Jurisdictions, unless such
Shareholders are able to establish to the satisfaction of Pulse, on
or before April 19, 2021, that they are eligible to participate in
the Rights Offering. Shareholders who fully exercise their Rights
will be entitled to subscribe pro rata for Common Shares (the
“Additional Shares”) not otherwise subscribed for
by other holders of Rights prior to the expiry time, if any,
pursuant to the Basic Subscription Privilege (the
“Additional Subscription Privilege”).
Neither the Rights being offered or the Common
Shares issuable upon exercise of the Rights have been or will be
registered under the United States Securities Act of
1933, as amended, and may not be exercised, offered or sold, as
applicable, in the United States absent registration or
an applicable exemption from the registration requirements. This
news release shall not constitute an offer to sell or the
solicitation of an offer to buy Common Shares. There shall be no
offer or sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to the
registration or qualification of such securities under the laws of
any such jurisdiction.
Standby Commitment
Agreement
In connection with the Rights Offering, Pulse
has entered into a standby commitment agreement (the
"Standby Commitment Agreement") with Patrick
Harrison (the "Standby Purchaser"), an insider of
Pulse currently owning 16.02% of Pulse’s Common Shares. The Standby
Purchaser has agreed, subject to certain terms and conditions, to
exercise his Basic Subscription Privilege in respect of any Rights
he holds, and, in addition thereto, acquire any additional Common
Shares available as a result of any unexercised Rights under the
Rights Offering (the "Standby Commitment"), such
that Pulse will, subject to the terms of the Standby Commitment
Agreement, be guaranteed to issue 150,000,000 Common Shares in
connection with the Rights Offering for aggregate gross proceeds
of $1,500,000. The Standby Commitment has been approved by the
independent directors of the Company. As consideration for the
Standby Commitment, the Company has agreed to issue 37,500,000
bonus warrants (the “Standby Commitment Warrants”)
to the Standby Purchaser (being 25% of the amount of the Standby
Commitment). Each Standby Commitment Warrant will be exercisable
for sixty (60) months from the date of issuance into one Common
Share at a price of $0.05 per share.
The Standby Purchaser is a "related party" of
Pulse under Multilateral Instrument 61-101 – Protection of
Minority Security Holders in Special Transactions ("MI
61-101") because the Standby Purchaser exercises control
and direction over more than 10% of the issued and outstanding
Common Shares. The Rights Offering is not subject to the
related party rules under MI 61-101 based on a prescribed exception
related to rights offerings.
Early Warning Disclosure
Patrick Harrison is providing the following
additional information pursuant to the early warning requirements
of applicable Canadian securities laws:
Prior to the entering into of the Standby
Commitment Agreement, Patrick Harrison beneficially owned an
aggregate of 24,285,714 Common Shares, representing approximately
16.02% of the issued and outstanding Common Shares. Assuming
none of the holders of Rights (other than Patrick Harrison) take up
their Basic Subscription Privilege and the Standby Purchaser
provides its Standby Commitment in full, Patrick Harrison would
acquire an aggregate of 150,000,000 Common Shares, in connection
with the Rights Offering and 37,500,000 Share Purchase Warrants in
connection with the Standby Commitment. Following closing of the
Rights Offering, Patrick Harrison would beneficially own an
aggregate of 174,285,714 Common Shares, which would represent
approximately 57.79% of the issued and outstanding Common
Shares, an increase in Patrick Harrison’s shareholding percentage
of approximately 41.77%. In addition, if Patrick Harrison exercises
his Share Purchase Warrants, he would own 211,785,714 Common Shares
or approximately 62.46% of the issued and outstanding Common
Shares.
The Common Shares will be acquired for
investment purposes. Patrick Harrison may from time to time acquire
additional securities of Pulse, dispose of some or all of the
existing or additional securities of Pulse, or may continue to hold
the same number of securities of Pulse.
Pulse understands that certain directors and
officers of Pulse who own Common Shares intend to exercise their
rights to purchase Common Shares under the Rights Offering.
Pulse currently has 151,592,357 Common
Shares issued and outstanding. If all Rights issued under the
Rights Offering are validly exercised, an additional 151,592,357
Common Shares would be issued along with another 37,500,000 if the
Share Purchase Warrants are subsequently exercised.
The net proceeds from the Rights Offering will
be used for capital expenditures to grow production and cashflow by
reactivating existing wells within Pulse’s 100% interests in the
Bigoray and Queenstown areas, to pay agreed settlements related to
outstanding vendor payables and for general corporate purposes. The
Rights Offering is subject to receipt of final approval of the TSX
Venture Exchange (the “TSXV”).
The Rights will be listed and posted for trading
on the TSXV under the symbol “PUL.RT” on a “when issued” basis
commencing on April 5, 2021 and will cease trading at 12:00 p.m.
(Toronto time) on April 30, 2021.
Complete details of the Rights Offering are set
out in the Circular and the rights offering notice (the
“Notice”), which are filed under Pulse’s profile
at www.sedar.com. Registered Shareholders who
wish to exercise their Rights must complete and forward the Rights
DRS, together with applicable funds, to Computershare Investor
Services Inc., the depositary for the Rights Offering, on or
before the Expiry Time of the Rights Offering. Shareholders who
own their Common Shares through an intermediary, such as a bank,
trust company, securities dealer or broker, will receive materials
and instructions from their intermediary.
Pulse CEO, Garth Johnson commented, “This is a
big step forward for Pulse. We’ve had to persevere through
financing uncertainty, Covid-19 and a significant drop in commodity
prices. Our team had to cut costs, re-group and take a serious look
at our options to continue as a going-concern. We believe in our
people and our producing assets and we chose to do our best to work
hard and persevere. Today’s announcement is a positive step forward
and with the proceeds of this financing, we will invest in
reactivating oil and gas production, increase cashflow, honour
agreements with vendors that we have negotiated with to settle
their accounts and strengthen our balance sheet. We have worked
hard to find the best way forward and to limit dilution to our
shareholders via this Rights Offering and we appreciate our
shareholders’ support during what has been the most challenging
time we have experienced in this industry to date. We are all
looking forward to getting back to creating value, not just trying
to survive another day. I also would like to thank our small team
of employees, consultants, contractors and vendors who have stuck
with us through these unprecedented times.”
About Pulse
Pulse is a Canadian company incorporated under
the Business Corporations Act (Alberta) that is focused on a 100%
Working Interest Enhanced Oil Project Located in West Central
Alberta, Canada. The project includes two established Nisku
pinnacle reef reservoirs that have been producing sweet light crude
oil for over 40 years. The Company plans to institute a proven
recovery methodology (NGL solvent injection) to further enhance the
ultimate oil recovery from these two proven pools. With under 10
million barrels of oil recovered to date, and representing just 35%
recovery factor from the pools, Pulse is moving forward to execute
the EOR project and unlock significant value for shareholders.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
For further information contact:
Pulse Oil Corp.
Garth
JohnsonCEO604-306-4421garth@pulseoilcorp.com
Drew CadenheadPresident and
COO403-714-2336drew@pulseoilcorp.com
Forward Looking Statements:
This news release contains “forward-looking
information” within the meaning of applicable Canadian securities
legislation. All statements, other than statements of historical
fact, included herein are forward-looking information. In
particular, this news release contains forward-looking information
regarding but not limited to: the Rights Offering, the Standby
Commitment, the potential outstanding Common Shares after the
Rights Offering, and the planned use of proceeds. There can be no
assurance that such forward-looking information will prove to be
accurate, and actual results and future events could differ
materially from those anticipated in such forward-looking
information. This forward-looking information reflects Pulse’s
current beliefs and is based on information currently available to
Pulse and on assumptions Pulse believes are reasonable. These
assumptions include, but are not limited to: the underlying value
of Pulse and its Common Shares; market acceptance of the Rights
Offering; TSXV final approval of the Rights Offering; Pulse’s
general and administrative costs remaining constant; and the
market acceptance of Pulse’s business strategy. Forward-looking
information is subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of Pulse to be materially
different from those expressed or implied by such forward-looking
information. Such risks and other factors may include, but are not
limited to: general business, economic, competitive, political and
social uncertainties; general capital market conditions and market
prices for securities; delay or failure to receive board or
regulatory approvals; the actual results of future operations;
competition; changes in legislation, including environmental
legislation, affecting Pulse; the timing and availability of
external financing on acceptable terms; and loss of key
individuals. A description of additional risk factors that may
cause actual results to differ materially from forward-looking
information can be found in Pulse’s disclosure documents on the
SEDAR website at www.sedar.com. Although Pulse has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
information, there may be other factors that cause results not to
be as anticipated, estimated or intended. Readers are cautioned
that the foregoing list of factors is not exhaustive. Readers are
further cautioned not to place undue reliance on forward-looking
information as there can be no assurance that the plans,
intentions or expectations upon which they are placed will occur.
Forward-looking information contained in this news release is
expressly qualified by this cautionary statement. The
forward-looking information contained in this news release
represents the expectations of Pulse as of the date of this news
release and, accordingly, is subject to change after such date.
However, Pulse expressly disclaims any intention or obligation to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as
expressly required by applicable securities law.
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