Update on Convertible Loan

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY SDX TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

4 September 2024

SDX ENERGY PLC ("SDX" or the "Company")

UPDATE ON CONVERTIBLE LOAN

As announced on 25 July 2024, the Company and Aleph Finance Ltd (the "Lender") signed a non-binding term sheet for a proposed new agreement (the "New Facility Agreement") that would refinance the Company's syndicated unsecured convertible loan agreement with the Lender for up to US$3.25 million (the "Existing Convertible Loan").

The syndicated Existing Convertible Loan is unsecured, convertible at any time at the option of the individual lenders and repayable on 24 July 2024 (together with the signing of the term sheet, the Company requested and the Lender consented and agreed to repayment being delayed). The amount payable is US$3.82 million (principal US$3.25 million and interest US$0.57 million).

The Lender and the Company have now entered into the "New Facility Agreement" to refinance the Existing Convertible Loan. The key terms of the New Facility Agreement are:

Under the terms of the New Facility Agreement, the Lender will provide a term loan facility in the amount of up to $6,000,000, such total amount to be confirmed by the Lender (the "Loan"), to the Company to be repaid by 23 July 2025. The Company will apply the monies borrowed under the New Facility Agreement towards the repayment of existing financial indebtedness owed by the Company to the Lender under the Existing Convertible Loan and other agreements. The Company has no current plans to draw on the remaining balance of the Loan following repayment of the Existing Convertible Loan.

The Loan will be available for drawdown within six months of the satisfaction or waiver of the conditions precedent under the New Facility Agreement. The conditions are usual for a facility of this nature and include the Company securing shareholder approval.

In connection with the New Facility Agreement, the Company will grant the Lender the following security package:

(i)            a pledge over the Company's shares in SDX Energy Morocco (Jersey) Ltd;

(ii)           a pledge over the Company's shares in Sea Dragon Energy (Nile) B.V.;

(iii)          a debenture over the Company, including assignment of intercompany loans and security over HSBC bank accounts in England; and

(iv)         a security agreement, in the form of a pledge, granted by SDX Energy Morocco (Jersey) Ltd and/or SDX Energy Morocco (UK) Ltd in respect of rights and receivables that may be derived from Moroccan licences (being Sebou Central, Lalla Mimouna Sud, and Rharb Occidental).

All outstanding amounts under the New Facility Agreement shall accrue interest at a rate of 20% per annum. Interest will be capable of being paid in kind and added to the principal outstanding. A consent fee of US$144,759 in lieu of interest for the period from 24 July 2024 to 20 September 2024 and an arrangement fee of US$168,852 shall be payable and capitalised into the New Facility Agreement.

The Lender will have the right to convert the outstanding Loan, including any accrued, in full or in part, into ordinary shares in the capital of the Company ("Ordinary Shares") at an exercise price (the "Exercise Price") being 80% of the Average Daily Closing Price calculated over 30 trading days preceding the relevant date of notification for conversion, provided that the number of Ordinary Shares issued to the Lender pursuant to the New Facility Agreement does not exceed 200,000,000 Ordinary Shares (the "Threshold"). If the number of Ordinary Shares to be issued, based on the Exercise Price, would mean that the Threshold is met, then the portion of the Loan representing the excess Ordinary Shares will not be converted and will remain outstanding on the terms of the New Facility Agreement.

Together with the signing of the New Facility Agreement, the Company has requested and the Lender has consented and agreed to repayment of the Existing Convertible Loan being delayed, provided that the New Facility Agreement is entered into by the Borrower on or before 20 September 2024.

On 20 September 2024, the Company will convene a general meeting to ask shareholders to vote on the New Facility Agreement (the "General Meeting") and hold its deferred Annual General Meeting. The completion of the New Facility Agreement is conditional upon the Company's shareholders voting in favour of the resolutions at the General Meeting.

The directors consider that the resolutions to be proposed at the General Meeting will promote the success of the Company for the benefit of its shareholders as a whole. Accordingly, the directors intend to recommend that shareholders vote in favour of all of the resolutions, as they intend to do in respect of their own beneficial holdings.

Shareholders should note that, in the event that the resolutions are not passed, the New Facility Agreement will not become unconditional and the Existing Convertible Loan will be due for repayment on 20 September 2024. Therefore, if the resolutions are not passed, the Company will not be able to repay the Existing Convertible Loan and would be in default and, if no alternative arrangements can be agreed with the Lender, may become insolvent.

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About SDX

For further information, please see the Company's website at www.sdxenergygroup.com or the Company's filed documents at www.sedar.com.

Forward-looking information

Certain statements contained in this press release may constitute "forward-looking information" as such term is used in applicable Canadian securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact should be viewed as forward-looking information.