Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and Gas

8 September 2021

Prospex Energy PLC

Clarification of Share Authorities

Prospex Energy PLC ('Prospex' or the 'Company'), the AIM quoted investment company (AIM:PXEN) focused on European gas and power projects, confirms that it has received correspondence asserting that the then directors of the Company may have exceeded share authorities granted at the 30 June 2020 AGM to issue new Ordinary Shares and rights over new Ordinary Shares in the Company at certain points in the recent past.

The current Directors take this matter seriously and have been working with the Company's UK counsel, as well as relevant past directors of the Company, to establish whether there has been a breach of any share authorities.

The Company is advised that this matter does not affect any shares issued recently or the rights of any warrant or option holder.  In particular, the convertible loan notes and warrants issued in December 2020 as announced in the Company's RNS dated 24 December 2020, were issued correctly using available headroom pursuant to the share authorities granted at the AGM on 30 June 2020.  Therefore, the loan notes and warrants issued in December 2020 which were subsequently converted in July and August 2021, and the outstanding warrants and convertible instruments from December 2020, are not in question.

The Company has also been asked to clarify the warrants issued pursuant to the fundraise announced by the Company on 9 March 2021, further information on which is set out below.

As part of the 9 March 2021 placing, the Company stated that those persons participating in the placing would be issued with one new warrant per two placing shares subscribed for.  This amounted to 25 million warrants to be issued to subscribe for, in aggregate, 25 million new Ordinary Shares.  Representatives of the Company have spoken to the placing Agent, Novum Securities Limited ("Novum"), who have confirmed they understand that the grant of such warrants is dependent on the Company having sufficient share authorities in the future to issue the warrants .  Similarly, the exercise of 1,920,000 Broker Warrants granted to Novum is dependent on such authorities.  As such, until that point, no warrants to be issued pursuant to the March 2021 Placing will be issued and as such the issue of the warrant instruments are conditional upon the Company having share authorities in the future to issue the shares and thus form a future contractual liability with the Company.

As part of the investigation, the Company has also examined the issue of convertible loan notes and warrants as announced on 24 December 2020.  A significant portion of those convertible loan notes and warrants issued in December 2020 were rolled over from convertible loan notes and warrants issued in 2018, for which share authorities had already been granted in 2018, and which the then directors of the Company believed also rolled over.  If the roll-over of share authorities relating to the original 2018 loan notes and warrants into the December 2020 agreements did not occur as assumed, then the Company may not have had sufficient headroom within its share authorities to allot all the new Ordinary Shares issued in the March 2021 placing.  The Company is clarifying with urgency that this was the correct understanding.

The Company expects to report further on this matter well in advance of the forthcoming General Meeting.  

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