() (CSE:XOP) has told investors that its board has authorised management to strike deals to issue shares to its non-secured creditors.
It was agreed on May 12 and it will allow accounts receivable to be converted into shares at the same price as agreed in the separate agreement in the recent Yorkville-Riverfort equity placing agreement.
The company, in its financial results statement, noted that at the end of the year it was experiencing liquidity issues which have extended into the current period exacerbated by the coronavirus (COVID-19) pandemic.
It said it currently does not have sufficient working capital, cash inflows and/or adequate financing to continue its operations and to continue them is dependent upon securing additional funding.
A week ago, COPL entered into a £2mln equity-based funding facility with Yorkville and Riverfort. It sees the company issue new shares, priced at 0.07p each, with an initial upfront placing of £750,000.
It will be followed by an ‘equity sharing agreement’ with Riverfort whereby eight monthly subscriptions will provide a total of £300,000. Subsequently, potential extensions to the agreement can unlock further tranches of funds.
At that time, it said the agreement is significant for COPL because, as the company highlighted, it can give confidence to other investors that it will be able to execute its business plan.
In Wednesday’s statement, chief executive Arthur Millholland said: “This has been a difficult time for COPL. We certainly could not foresee the onset of the global COVID-19 pandemic, nor its effect on the global markets at year-end or at the beginning of March.”
“We have taken these steps in difficult times to allow the business to survive. The company will emerge from this with a much-improved balance sheet and enhanced liquidity. In conjunction with the Yorkville-Riverfort financing announced recently, we will be able to move forward on COPL’s key asset in Nigeria.
“Activities will recommence when the COVID-19 situation allows, as Nigeria has not escaped this global pandemic,” he added.