NUOG.L Regulatory News (NUOG)

8 March 2021

Nu-Oil and Gas plc

("the Company" or "NUOG")

Corporate Update on Transformational Acquisition

Proposed Transaction highlights:

· Acquisition of a cash generating company focused on the defence sector

· Appointment of new Board members and Leadership Team

· Restructuring of debt with Major Creditors

· Repositioning of the Company, including name change

· Intention to list on the Standard Segment of the LSE

· New equity funding to provide working capital to close the transaction secured

Nu-Oil and Gas PLC (AIM:NUOG), the AIM Rule 15 cash shell, is pleased to announce that it has signed a Heads of Terms in relation to the proposed acquisition of Guardian Maritime Limited and Guardian Barriers IP Limited, which envisages the enlarged group applying to be listed on the Standard Segment of the LSE. The Company is also proposing to change its name, a number of board changes and a new senior executive team. In addition, the Company has reached agreements in principle with its major creditors, as well as secured new equity funding.

Heads of Terms and Proposed Name Change

The Company has signed a heads of terms to acquire up to 100% of Guardian Maritime Limited ("GML") and 100% of Guardian Barriers IP Limited ("GBI") (together the "Proposed Transaction"). GML is an established company which is involved in the marketing and sales of GBI's patent protected product, GUARDIAN. The GUARDIAN product is an award winning design and system that can be retro-fitted onto the guard rails of maritime vessels and not only serves as a visual deterrent for pirates but also has, to date, proven to be impregnable for pirates to board vessels fitted with this technology by using the tools and tactics they employ.

The terms of the Proposed Transaction involve the payment by the Company of £650,000 to acquire GML ("GML Consideration") and up to £3.35 million to acquire GBI ("GBI Consideration").

The GML Consideration shall be satisfied through the issue of new ordinary shares in NUOG ("Ordinary Shares") on Main Market Admission (as defined below).

The GBI Consideration shall be satisfied through £350,000 in cash plus a deferred consideration of up to £2 million through the issue of Ordinary Shares, of which up to £1 million will be issued on each of the first and second anniversary of Main Market Admission, subject to the 12 month and 24 month post Proposed Transaction closing sales performance of GUARDIAN meeting stated growth targets. A six per cent cash royalty will also be paid on the net cash received on sales of the GUARDIAN product up to a maximum level of £1 million.

The initial roll out of this product, which mitigates the risk of boarding and consequently reduces risk of loss of life, cargo and vessel, has enjoyed success on a limited marketing budget and driven by the passion of the product inventors alone. Investment into a cohesive marketing campaign alongside co-ordination of new sales channels, as well as the establishment of inventory to dry-store units at pre-identified docks for rapid deployment, have all been identified as areas that can be scaled materially to provide immediate catalysts for sales growth post completion of the Proposed Transaction.

As part of the Proposed Transaction, the Company intends to apply to be admitted to the Standard Segment of the Official List of the FCA and to trading on the Main Market for listed securities of the London Stock Exchange ("Main Market Admission"). As such, at the appropriate time, the Company's admission to trading on AIM will be cancelled either as a result of the Main Market Admission or, unless an extension is given, on or around 4th May 2021 as a result of its AIM Rule 15 cash shell status.

As part of the Proposed Transaction, the Company intends to undertake a placing in order to provide the enlarged group with the necessary working capital for at least 12 months from Main Market Admission. The Company will also seek shareholder authority to, inter alia, change the Company name to Guardian Global Security Plc.

Closing of the Proposed Transaction, and admission of the Company's enlarged share capital to the Standard Segment, remains subject to a number of factors, including receipt of shareholder approvals (as required) and the necessary regulatory approvals. Whilst the Board is confident of completing the Proposed Transaction, there can be no certainty of that at this stage.

A presentation outlining the Proposed Transaction will be published shortly on the Company's website at www.nu-oilandgas.com.

Proposed Board Changes and New Leadership Team

The Company is pleased to announce that Mr Gary Smith has agreed to join the Company as Chief Executive Officer on completion of the Proposed Transaction and until such time he will assist the Company to help facilitate the close of the Proposed Transaction where appropriate. Gary has over 30 years' experience in the security industry and has significant experience in maritime security.

The Company also intends to appoint Mr. Philip Campion to the Board as a Non-Executive Director on completion of the Proposed Transaction. Philip is a well known expert in the security industry having spent over 30 years in a distinguished career which has included active operations, public speaking including appearing on Sky News as a commentator in the defence sector and producing "Big Phils" documentary.

Additionally, it is intended that the founders of GML and GBI, Mr. David and Mrs. Teresa Stevens will be retained as part of the future team and appointed as Chief Sales and Chief Technical Officers, respectively.

To support the new Leadership team, Mr. Jay Bhattacherjee has today been appointed as Executive Chairman (formerly Non-executive Chairman) and Mr. Frank Jackson has been appointed as Chief Financial Officer (formerly Non-executive Director) with immediate effect.

Due to current market conditions and the global economic crisis created by the COVID-19 pandemic, the Directors confirm that strict cost discipline continues to be maintained by the Company and that, additionally, the Directors will continue to defer all their cash-based remuneration due until completion of the Proposed Transaction.

Agreement with Major Creditors

The Company is also pleased to announce it has agreed, in principle, with C4 Energy Ltd ("C4"), the Company's largest creditor, as part of this transaction to restructure the outstanding debt obligation of £2.5 million. C4 remains supportive of the Company and the Proposed Transaction and has therefore agreed a material write down of the debts face value, which will then be settled through the issue of new Ordinary Shares on completion of the Proposed Transaction alongside new warrants, both in lieu of cash repayment. Consequently, this agreement provides flexibility and further headroom for the Company to advance the Proposed Transaction.

The Company is pleased to further announce it has reached agreement with YA II Ltd ("YA"), formerly YA Global Master SPV, Ltd, to restructure its outstanding historical debt obligation. Under the restructuring, the repayment term has been extended and provides the Company, at its discretion and subject to certain conditions, to repay the debt in cash or in new Ordinary Shares should the proposed transaction complete.

New Equity Funding

In order to formally engage advisors, and to provide sufficient working capital to commence the Proposed Transaction, the Company is pleased to announce that it has raised £215,000 (gross) through the issue of 1.075 billion new Ordinary Shares (the "Placing Shares") at a placing price of £0.0002 per Placing Share (the "Placing Price") from existing and new private investors. The Company will seek to have the Placing Shares qualify for Enterprise Investment Scheme (EIS) relief.

Each Placing Share will be issued with one warrant exercisable at any time over the next two years with an exercise price set equal to £0.00025 pence per new warrant share ("Warrants"). A further 4.8 million Warrants are being issued to a third party company who have acted in the capacity of introducers for the financing.

It is expected that completion of the Placing will take place on 11 March 2021, when the Placing Shares will be issued and allotted. Application for the admission of the Placing Shares to trading will be made as part of the Main Market Admission. The Warrants will not be admitted to trading on any exchange.

Total Voting Rights

Following the issue of the Placing Shares, the Company will have 4,465,393,217 Ordinary Shares in issue. The Company also holds 12,445,378 Ordinary Shares in treasury. Therefore the figure of 4,452,947,839 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Interim Accounts Reporting

In line with the guidance issued by AIM Regulation, the Company is extending the date by which it is required under AIM Rule 18 to publish its interim results for the six months ended 31 December 2020. Accordingly, the Company will publish such interim results on or before 30 April 2021.

Jay Bhattacherjee, Executive Chairman, comments;

"This is a transformational transaction for the Company as it looks to expand in this sector. I look forward to working with your new leadership team to expand the Company both organically and inorganically as opportunities present themselves. We would also like to extend our appreciation to shareholders who have been supportive and patient during this unprecedented period and look forward to rewarding their continued trust."

Gary Smith, Chief Executive Officer on completion of the Proposed Transaction, comments;

"As a significant shareholder in the Company, I am extremely pleased to be joining the Company in the capacity of CEO in a sector that I have spent my entire career and with a product that has the potential that Guardian has. I look forward to working with David and Teresa, who have done a wonderful job in developing a solid footing for the product and to help them with driving forward the sales initiative by supplementing their networks with both Phil's and mine."

Enquiries

Disclaimer

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").