Jericho Energy Ventures Closes Convertible Debenture Financing

Rhea-AI Summary

Jericho Energy Ventures (OTC:JROOF) has successfully closed a non-brokered private placement of convertible debentures generating gross proceeds of CAD$5.7 million. The debentures, priced at CAD$0.70, are set to mature in 36 months, with an interest rate of 4% annually after one year. Each debenture is accompanied by a warrant to purchase common shares at CAD$1.00 for three years. Insider participation included CAD$1.48 million, exempting certain regulatory approvals. Proceeds will fund working capital and growth initiatives, facilitating potential future opportunities.

Positive

• Raised CAD$5.7 million from private placement, enhancing liquidity.
• Convertible debentures and warrants provide potential for future equity.
• Insider investment of CAD$1.48 million demonstrates confidence in the company.

Negative

• Debentures are unsecured, increasing financial risk.
• Future conversion at CAD$0.70 may dilute existing shareholders.

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

NEWTOWN, PA and VANCOUVER, BC / ACCESSWIRE / January 7, 2022 / Further to its news release dated Dec. 20, 2021, Jericho Energy Ventures (TSXV:JEV) (Frankfurt:JLM0) (OTC:JROOF) ("Jericho" or "JEV" or the "Company"), is pleased to announce that it has closed a non-brokered convertible debentures (the "Debentures") private placement financing (the "Offering") at a price of CAD$0.70 per Debenture for aggregate gross proceeds of CAD$5,703,567.90.

The principal amount of the Debentures will be payable thirty-six (36) months after the closing of the Offering. The Debenture bears interest at 4% per annum, commencing on the first anniversary of the closing date. The Debentures are unsecured. The principal amount of the Debentures will be convertible at CAD$0.70 per common share; and any accrued and unpaid interest will be convertible at the market price per Common Share on the date of any such conversion of interest.

For each principal Debenture amount of CAD$0.70, the Company also issued one share purchase warrant (each, a "Warrant"), totaling 8,147,954 Warrants. Each Warrant entitles the holder to purchase one additional common share (each, a "Warrant Share") at an exercise price of CAD$1.00 per Warrant (the "Exercise Price") for a period of three years after issuance of the Debenture.

Net proceeds from the Offering will be used for working capital as well as other growth-focused initiatives. While the Company does not currently have any binding agreements to enter into any transaction at this time, having funds available will allow it to be agile as opportunities may arise.

Insiders of Jericho purchased CAD$1,485,980.10 of Debentures in the Offering (the "Insider Participation"). The Insider Participation is exempt from the valuation and minority shareholder approval requirements of Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions ("MI 61-101") by virtue of the exemptions contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101 based on that the fair market value of such Insider Participation does not exceed 25% of Jericho's market capitalization.

The Debentures and Warrants are subject to a four month hold period under applicable securities laws in Canada and the rules of the TSX Venture Exchange (the "Exchange"). In connection with the offering, the Company will pay finders' fees in cash, totaling CAD$55,512.48 and in broker Warrants totaling 79,303 Warrants, with each broker Warrant entitling the holder to acquire one common share for a period of thirty-six months at a price per share of $1.00. The Offering has received conditional approval from the Exchange and is subject to final approval.

The securities referred to herein will not be or have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Jericho also announces that it has granted incentive stock options (the "Options"), pursuant to its stock option plan (the "Plan"), of 3,500,000 common shares of the Company, to certain directors and officers of the Company. The Options are exercisable at a price of CAD$0.50 for a period of up to 5 years.

About Jericho Energy Ventures

Jericho Energy Ventures (JEV) is focused on advancing the low-carbon energy transition with investments in hydrogen technologies, energy storage, carbon capture and new energy systems. JEV's wholly owned subsidiary, Hydrogen Technologies, delivers patented, zero-emission boiler technology to the $30 Billion Commercial & Industrial heat and steam industry in addition to its investment in H2U's electrocatalyst and low-cost electrolyser platform. JEV also owns and operates producing oil and gas assets in the US Mid-Continent, predominantly in Oklahoma.

Website: https://jerichoenergyventures.com/
Twitter: https://twitter.com/JerichoEV
LinkedIn: https://www.linkedin.com/company/jericho-energy-ventures
YouTube: https://www.youtube.com/c/JerichoEnergyVentures

CONTACT:

Adam Rabiner
Director of IR
Jericho Energy Ventures
604.343.4534
adam@jerichoenergyventures.com

This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Jericho's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Jericho's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". Although Jericho believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Forward-looking information and statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information and statements which include, but are not limited to: the effects of and risks associated with the ongoing COVID-19 pandemic, the impact of general economic conditions, industry conditions and current and future commodity prices including sustained low oil prices, significant and ongoing stock market volatility, currency and interest rates, governmental regulation of the oil and gas industry, including environmental regulation; geological, technical and drilling problems; unanticipated operating events; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; liabilities inherent in oil and gas exploration, development and production operations; liabilities inherent in Jericho's low-carbon energy transition with investments in hydrogen technologies, energy storage, carbon capture and new energy systems; that Jericho's wholly owned subsidiary, Hydrogen Technologies, will deliver zero-emission boiler technology to the $30 Billion Commercial & Industrial heat and steam industry; the performance of H2U's electrocatalyst and low-cost electrolyser platform and the other factors described in our public filings available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive. The forward-looking information and forward-looking statements contained in this news release are made as of the date of this news release, and Jericho does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.

Neither 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.

SOURCE: Jericho Energy Ventures Inc.

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FAQ

What was the amount raised in the Jericho Energy Ventures convertible debenture offering?

Jericho Energy Ventures raised CAD$5.7 million from the offering.

What is the maturity period for the convertible debentures of JROOF?

The convertible debentures will mature in 36 months.

What is the interest rate for the JROOF convertible debentures?

The interest rate for the convertible debentures is 4% per annum.

What is the exercise price of the warrants issued by Jericho Energy Ventures?

The warrants issued have an exercise price of CAD$1.00 per share.

How will the proceeds from the debenture offering be used?

The proceeds will be used for working capital and growth initiatives.