Investment company BPH Energy (ASX: BPH) could potentially double its stake in hydrogen technology company Clean Hydrogen Technologies Corporation following an amended term sheet.
Together with its 36.1%-owned investee Advent Energy, the company entered into a binding term sheet to acquire 10% of the total issued share capital of Clean Carbon for a total of US$1 million (A$1.41 million). Shareholders approved this investment last June.
The initial deal gave BPH the right of first refusal, where should the vendor (Clean Carbon) propose to seek additional funding for development and operations of the technology on or before 31 December 2022, it must first offer the right to subscribe for an additional 10% of shares on the same terms and conditions as the first tranche.
However, if Clean Carbon secured more than US$3 million (A$4.24 million) in additional investment on or before 31 December, this right would be relinquished.
In December, the right of first refusal conditions were amended so that it exists if Clean Carbon does not seek a Series A investment in its equity securities comprising a minimum investment of US$3 million by the end of April (where such investment values the company at more than US$20 million) and determines, in its discretion, that it requires at least a further US$1 million investment for continued development and operations.
In this case, BPH will have one month to enact its right of first refusal to Clean Carbon’s request for additional funding.
If so, BPH can increase its total shareholding in Clean Carbon to 20% for a consideration of US$1 million (A$1.41 million).
This stake would comprise a 16% interest held by BPH and 4% held by its investee, Advent Energy.
Placement to fund hydrogen and oil and gas investments
During the December quarter, BPH received binding commitments to raise almost $1.2 million (before costs) through a placement comprising 66.5 million shares priced at $0.018 each.
Placement participants will receive one free attaching option for every new share subscribed, exercisable at $0.03 each with an expiry of 30 September 2024.
About two-thirds of the funds is intended to further invest in clean hydrogen technology, while the remaining is expected to fund exploration and development of the company’s oil and gas investments and be used for working capital including costs of the offer.
BPH also undertook a loyalty option issue of one option for every eight shares held to all shareholders registered on 2 December 2022. This offer has a closing date of 9 February and a subscription price of $0.004 per loyalty option.
These options are expected to raise a maximum of $431,532, which would mainly be used as additional funding for exploration and development of oil and gas investments.
Fight for PEP 11 continues
BPH’s PEP 11 gas and proposed carbon storage project at Baleen offshore New South Wales remains at a standstill after the permit’s renewal was blocked by former prime minister Scott Morrison when he secretly appointed himself to the Resource portfolio between 2020 and 2021.
Asset Energy, a wholly-owned subsidiary of Advent Energy, commenced proceedings in the Federal Court in mid-2022, alleging that Mr Morrison was “biased” and failed to afford procedural fairness in his decision to not grant the permit extension.
Asset has now lodged an amended application, which is listed for a one-day hearing in March.
FDA filing in progress for brain monitoring medical device
Meanwhile, BPH’s neurotechnology investee company Cortical Dynamics is continuing to seek approval by the United States Food and Drug Administration (FDA) for its electrical activity (EEG) brain function monitor, BARM.
BARM has been developed to better detect the effect of anaesthetic agents on brain activity under a general operation, aiding anaesthetists in keeping patients optimally dosed.
The FDA 510K filing process to approve use of the device in the US is being assisted by Washington-based technical advisors MCRA.
This approval is a necessary precursor for sales of BARM to commence in the county.
Get the wire before the market opens.
The ASX small-cap stories that matter, filed before 9am AEST. Curated by the Small Caps desk.