Formation Fluid Technology Inc. Announces Private Placement of Convertible Debentures
CALGARY, ALBERTA--(Marketwired - Sept. 21, 2015) - Formation Fluid Technology Inc. (formerly Formation Fluid Management Inc.) (TSX VENTURE:FFM) ("FFT" or the "Corporation") is pleased to announce that it intends to undertake a non-brokered private placement of up to $3,000,000 convertible unsecured subordinated debentures (the "Debentures") of the Corporation (the "Debenture Offering"). The Debentures will mature twenty four (24) months from the date of issue (the "Maturity Date") and will bear interest at a rate of 8.00% per annum payable semi-annually in arrears on December 31 and June 30 in each calendar year commencing on December 31, 2015. The Corporation will have the right to repay the entire outstanding principal and interest to date of the Debentures in advance of the Maturity Date by giving the Debentureholder thirty (30) days' notice of the Corporation's intention to repay. The Debentureholder will have the right to accept the repayment or convert the outstanding principal and interest of the Debentures into common shares of the Corporation (the "Common Shares") at $0.20 per Common Share (the "Conversion Price") prior to the expiration of the thirty (30) days' notice. If, at any time following the closing date, the simple average closing price of the Common Shares on the TSX Venture Exchange (the "TSXV"), if the Common Shares are listed, exceeds $0.26 at the Conversion Price for a minimum of twenty (20) consecutive trading days (whether or not trading of Common Shares occurs on such days, provided that the Common Shares trade on at least five of such trading days), the Corporation may, in its sole discretion, for a period of thirty (30) days thereafter, be entitled to issue a notice in writing whereupon the Debentures will be forced to convert at the date that is thirty (30) days following delivery of such notice.
The Corporation may engage finders or agents to act as agents of the Corporation in connection with the Debenture Offering, and in connection therewith may pay finders and agents a cash commission of up to 5% of the proceeds of the Debenture Offering that result from such parties efforts, subject to compliance with applicable securities laws.
The Corporation intends to use the proceeds from the Debenture Offering to build an additional Hydro-sep unit which will expand our capacity to process frac flow back water and produced water and for general working capital.
Closing of the proposed Debenture Offering is anticipated to occur in or about October, 2015 and will be conditional upon among other things, the receipt of all necessary regulatory approvals (including from the TSXV). All securities issued pursuant to the Debenture Offering will be subject to a statutory hold period.
FFT has recently commissioned additional equipment, completed a pilot for multiple oil and gas companies, initiated regulatory advancement for water cleaning with Alberta Energy Regulator ("AER") and cleaned 1000m3 on a remediation project.
The additional equipment which has been commissioned and field tested includes a Hydro-clear and a combination unit (Hydro-pure and Hydro-clear). FFT now has 2.5 times the capacity it had for the year ended June 30, 2014.
In August, a Duvernay pilot project resulted in cleaned frac flow back water being successfully reused for frac. A second pilot to clean expanded volumes is being initiated with expanded test parameters, when successful this will prove cleaning capabilities for significant volumes in the Duvernay area.
Throughout the pilot and commercial operations AER has been actively helping FFT to navigate the regulatory framework and to assist oil and gas companies getting approvals to clean water.
About the Corporation
Formation Fluid Technology Inc. has developed a three stage waste water treatment plant (Hydro- Cycle) that uses a proprietary process to clean waste water. Each plant is mobile and can process up to 1000 m3 of water per day. This system treats water to meet or exceed CCME Guidelines (Canadian Environmental Quality Guidelines), resulting in reusable water that can be used for: Boilers, Frac Water, Water Floods, and Drilling Operations. Formation Fluids has identified commercial applications for the Hydro-Cycle system within the oil and gas industry. The waste water treatment system has a primary use to reduce producers' costs of dealing with produced water. The system also satisfies the need to reuse and recycle an increasing valuable resource.
Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The securities of the Corporation being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Statements in this news release may contain forward-looking information including the use of proceeds from the Debenture Offering and the timing of closing of the Debenture Offering. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements. The Corporation believes that the expectations reflected in the forward-looking statements contained in this news release are reasonable, but no assurance can be given that they will prove to be correct. Actual results and future events may differ materially from those anticipated and accordingly forward-looking statements should not be unduly relied upon. Forward-looking statements contained in this document speak only as of the date of this news release. Except as required by applicable law, the Corporation disclaims any obligation to update any forward-looking information.
Source: Marketwired (Canada)
(September 21, 2015 - 9:00 AM EDT)
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