BPH Energy (ASX: BPH) and its investee company Advent Energy will acquire up to 20% in US-based Clean Hydrogen Technologies Corporation.
The initial acquisition of 10% was announced last year and the companies were to be issued one tranche of subscription shares in Clean Energy, with 8% granted to BPH and 2% to Advent.
Under the terms of the deal, BPH and Advent have the right of first refusal to subscribe for a second tranche of shares representing an additional 10% stake – taking the total equity to 20%.
Additional funding
Clean Hydrogen has made requests for additional funding from BPH and Advent.
Advent offered US$250,000 in March in accordance with an unsecured loan agreement and has since offered a further US$250,000 under a second loan agreement.
Both loans have been funded by money loaned to Advent from BPH and are being managed on normal commercial terms.
In return, Clean Hydrogen has agreed to issue Advent with a maximum 1,000 options with an exercise price of US$3,000 each.
A total of 250 options will be issued for every US$250,000 in loans.
They will be exercisable immediately and have the option for conversion into shares in Clean Hydrogen expiring 10 years from the date of issue.
As part of the deal, the companies and Clean Hydrogen have entered into a separate loan conversion agreement that allows the loan amount to be converted into the tranche two subscription shares. This represents BPH and Advent’s second 10% stake in Clean Hydrogen.
Loyalty options
In March, BPH initiated a loyalty option issue to shareholders to raise funds for the exploration and development of its oil and gas investments.
The offer equates to one option for every eight shares held, at a subscription price of $0.004 each.
Each option will have an exercise price of $0.03 and an expiry date of 30 September 2024.
If the offer is fully subscribed, BPH will end up issuing 109.6 million options to raise $438,799, with another $1,658 raised from a placement of 414,600 options with the same exercise price and expiry date.
Use of funds
The company said approximately $298,000 of the funds would be used for exploration activities, while approximately $142,000 would be put towards working capital (including the costs of the offer).
If exercised, the loyalty options will provide BPH with approximately $3.3 million in future capital.
