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Raser Signs $15 Million Line of Credit Agreement

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  Published in Stocks and Investing on Friday, January 30th 2009 at 7:43 GMT by Market Wire
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PROVO, Utah--([ BUSINESS WIRE ])--Raser Technologies, Inc. (NYSE: RZ) announced today the signing of a line of credit agreement, pursuant to which Raser may borrow up to $15 million. Raser signed the credit agreement with a syndicate of four lenders, including an entity controlled by the Company's Chairman, Kraig Higginson. The Company obtained the line of credit in order to provide working capital for general corporate purposes. The Company expects that borrowings under the line of credit will be repaid primarily with proceeds from other financing arrangements the Company intends to close in connection with the development of its geothermal power projects.

Under the agreement, advances to Raser are subject to the final approval of the lenders and accrue interest at the rate of 10% per annum. Unless the lenders agree to a later date, the line of credit will mature and amounts borrowed must be repaid by November 15, 2009 or earlier if certain financing arrangements for the development of Raser's geothermal power projects are completed and put in place. Under the agreement, each lender will also receive warrants to purchase Raser's common stock for each advance of funds made under the line of credit. The number of warrants will be equal to 50% of the total amounts funded by the lender divided by the price of our common stock at the time of the advance. The warrants will have an exercise price of $6.00 per share of common stock.

"This credit agreement helps to prudently fund our growth and development during these challenging economic times," said Martin Petersen, Raser's Chief Financial Officer. "We will continue to explore other non-equity based financial structures to provide the capital to complete our 2009 projects and initiate the development of additional future projects. Our ability to continue to access capital in this economy underscores the importance of renewable energy projects and our ability to complete geothermal projects quickly."

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities. The securities to be issued to the lenders and the shares of Raser common stock issuable upon exercise of the securities have not been registered under the Securities Act of 1933 or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

About Raser Technologies

Raser (NYSE: RZ) is an environmentally focused technology licensing and development company operating in two business segments. Raser's Power Systems segment is seeking to develop clean, renewable geothermal electric power plants and bottom-cycling operations, incorporating licensed heat transfer technology and Raser's Symetron™ technology developed internally by its Transportation and Industrial Technology segment. Raser's Transportation and Industrial Technology segment focuses on extended-range plug-in-hybrid vehicle solutions and using Raser's Symetron™ technology to improve the torque density and efficiency of the electric motors and drive systems used in electric and hybrid-electric vehicle powertrains and industrial applications.

Cautionary Note Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements regarding: our beliefs about the potential for geothermal power generation on our leased properties and its qualification for certain federal tax credits; our beliefs about our ability to exploit the available geothermal resources; our beliefs about the ability of the lenders to provide cash under the terms of the line of credit agreement; our beliefs about our ability to obtain adequate development and permanent project funding or other financing arrangements for our geothermal power projects; our beliefs about our ability to utilize our technology and other available technologies to produce electric power from the available resources; and our beliefs about the geothermal market in general. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ, including, without limitation, the competitive environment and our ability to compete in the industry; our ability to adapt our technology and third-party technology for the intended applications; our ability to secure necessary permits; the strength of our intellectual property; our ability to attract, train and retain key personnel; and such other risks as identified in our quarterly report on Form 10-Q for the quarter ended September 30, 2008, as filed with the Securities and Exchange Commission, and all subsequent filings.

All forward-looking statements in this press release are based on information available to us as of the date hereof, and we undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.