Tomco Energy Regulatory News (TOM)

1 September 2022

TOMCO ENERGY PLC

("TomCo" or the "Company")

Convertible Loan Note Facility and Proposed Issue of Associated Warrants

and Further Extension of Valkor Loan

TomCo Energy plc (AIM: TOM), the US operating oil development group focused on using innovative technology to unlock unconventional hydrocarbon resources, is pleased to announce that the Company has obtained an unsecured facility of up to £750,000 via a convertible loan note instrument and associated subscription and put option agreement (together, the "Convertible Loan") entered into with certain subscribers introduced by Novum Securities Limited ("NSL"), the Company's broker, as further detailed below.

The proceeds from the initial tranche of the Convertible Loan will be utilised to repay a principal amount of US$250,000 of the unsecured US$1.5 million loan from Valkor Oil & Gas LLC ("Valkor") advanced to the Company's wholly owned subsidiary, Greenfield Energy LLC ("Greenfield"), as announced on 16 November 2021 and for general corporate purposes. The Convertible Loan is intended to bridge the Company's financing requirements as the Board seeks to further progress and finalise negotiations with a potential financing party for a larger debt funding package to enable the Company to execute on its development plans for Greenfield and the Tar Sands Holdings II LLC ("TSHII") site. There can be no certainty that such larger funding arrangements will ultimately be successfully secured or as to the terms of any such debt facility.

The Convertible Loan

The Convertible Loan facility comprises two equal tranches of £375,000. The Company has already drawn down the initial tranche of £375,000 and has at its sole election, an option to draw down all of the remaining £375,000 on or before 30 September 2022. If the option lapses, the second tranche may thereafter still be drawn down by mutual consent of the parties. Interest equating to a fixed amount of five per cent. of the principal amount drawn down shall accrue until repayment, conversion or redemption of the notes.

Amounts drawn down under the facility and the associated accrued interest are convertible at any time at the election of a noteholder via service of a conversion notice. Alternatively, they may be repaid in cash before 30 November 2022 at the election of the Company by way of the Company giving five business days' notice in writing during which period the noteholder(s) concerned remain entitled to serve a conversion notice prior to such repayment.

If any amounts drawn down under the Convertible Loan are not repaid or converted prior to the scheduled redemption date of 30 November 2022, the noteholder(s) concerned shall be deemed to have served a conversion notice to convert the outstanding balance and the associated accrued interest into new ordinary shares of no-par value in the capital of the Company ("Ordinary Shares").

The conversion price per new Ordinary Share under the facility shall be determined as the lower of: (i) 0.75 pence; and (ii) the volume-weighted average price of an Ordinary Share during any five of the fifteen business days prior to service or deemed service of a conversion notice, as selected by the noteholder(s) concerned and sourced from Bloomberg L.P., discounted by 15%. 

Warrants

In connection with the initial £375,000 already drawn down, the Convertible Loan subscribers will be issued with 50,000,000 warrants, with each warrant affording the holder the right to subscribe for one new Ordinary Share at an exercise price of 0.75 pence per share, for a period of two years from 31 August 2022 (the "First Subscriber Warrants"). If such First Subscriber Warrants were to subsequently be exercised in full, it would result in the issue of 50,000,000 new Ordinary Shares raising a further £375,000 towards the development of the Company's business.

If the second tranche of £375,000 of the Convertible Loan is drawn down (the "Second Drawdown"), the Convertible Loan subscribers will be issued with a further 50,000,000 warrants by the Company, with each warrant affording the holder the right to subscribe for one new Ordinary Share at an exercise price of 0.75 pence per share, for a period of two years from the date of such Second Drawdown (the "Second Subscriber Warrants"). If such Second Subscriber Warrants were to subsequently be exercised in full, it would result in the issue of 50,000,000 new Ordinary Shares raising a further £375,000 towards the development of the Company's business.

NSL will also be issued 5,000,000 warrants, with each warrant affording the right to subscribe for one new Ordinary Share at an exercise price of 0.75 pence per share, for a period of two years from 31 August 2022 (the "Broker Warrants"). If the Broker Warrants were to subsequently be exercised in full, it would result in the issue of 5,000,000 new Ordinary Shares raising a further £37,500 towards the development of the Company's business.

Further Extension of the Valkor Loan

On 16 November 2021, the Company announced details of an unsecured US$1.5 million loan from Valkor to the Company's wholly owned subsidiary, Greenfield (the "Valkor Loan"), which was used for the acquisition of the initial 10% of the Membership Interests in TSHII.

On 31 May 2022, 28 June 2022 and 1 August 2022, the Company announced that the terms of the Valkor Loan had been varied in order to extend the repayment date, with the last extension being to on or before 31 August 2022. The Company announces that the terms of the Valkor Loan have now been further varied to extend the repayment date for the remaining US$1,250,000 principal amount of the loan, following the envisaged repayment of US$250,000 detailed above, to on or before 14 October 2022.

As a former joint venture partner, Valkor is considered to be a related party of the Company (as defined in the AIM Rules for Companies) and, accordingly, the further variation of the Valkor Loan's terms is deemed to constitute a related party transaction pursuant to AIM Rule 13. The TomCo directors, having consulted with Strand Hanson Limited, the Company's Nominated Adviser, consider that the further variation of the Valkor Loan's terms is fair and reasonable insofar as the Company's shareholders are concerned.

Commenting John Potter, CEO of TomCo, said: "This Convertible Loan provides the Company with bridge financing whilst we seek to further progress and finalise negotiations with a potential financing partner for a larger debt funding package that, if secured, would enable the Company to execute on its development plans for Greenfield and the TSHII site. Whilst there can be no certainty that a suitable funding package will ultimately be secured, these are very exciting times for TomCo and I look forward to making further announcements in due course."

Enquiries:

TomCo Energy plc

Malcolm Groat (Chairman) / John Potter (CEO) +44 (0)20 3823 3635

Strand Hanson Limited (Nominated Adviser)

James Harris / Matthew Chandler +44 (0)20 7409 3494

Novum Securities Limited (Broker)

Jon Belliss / Colin Rowbury +44 (0)20 7399 9402

IFC Advisory Limited (Financial PR)

Tim Metcalfe / Florence Chandler +44 (0)20 3934 6630

For further information, please visit www.tomcoenergy.com.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended.