Scan Through BPH and its Investees’ Key Operational Achievements in FY 2020

Summary

• BPH posted a Net Profit After Tax of ~$1.37 million for the financial year 2020.
• During the year, BPH completed a one for ten share consolidation and acquired a stake in PG Aust.
• Advent continued to focus on the development of PEP 11 permit and RL 1, while Cortical emphasised on the commercialisation of BARM during the year.
• Cortical is currently waiting for final approval of its registration application to the Korean Ministry of Food and Drug Safety.
• BPH appears to be in a good stead to tap additional opportunities in different fields, backed by its solid investment portfolio.

Australia-based BPH Energy Limited (ASX:BPH) has published its preliminary final report for the year ended June 2020. The consolidated entity has posted a Net Profit After Tax (NPAT) of ~$1.37 million for the financial year 2020, in comparison to a loss of $3.01 million noted in FY 2019.

BPH is a diversified entity, which holds investments across multiple sectors, including biotechnology, medicinal cannabis and resources. The Company intends to achieve long-term value creation via the growth of its key investments, including Cortical Dynamics Ltd (16.1 per cent stake), Advent Energy Ltd (22.3 per cent stake), Patagonia Genetics Pty Ltd (10 per cent stake), MEC Resources Limited (0.8 per cent stake) and Molecular Discovery Systems (20 per cent stake).

That being said, let us quickly gaze through the key developments reported by BPH and its major investee players during the past financial year:

BPH Energy Limited

BPH completed a one for ten share consolidation in April 2020, along with a corresponding consolidation of share options post shareholder approval.

During the year, the Company also agreed to acquire an initial investment of 10 per cent in PG Aust or Patagonia Genetics Pty Ltd, which owns 100 per cent stake in Chilean entity Patagonia Genetics SPA (PG). The move enabled the Company to make an investment in the medical cannabis sector, which has been demonstrating significant growth over the past few years.

Subsequent to the financial year, BPH completed a share placement activity to raise ~$450k and announced the completion of non-renounceable rights issue on 23^rd July 2020. The Company’s capital raising activities were aimed at supporting Advent’s developments in PEP 11 permit.

Advent Energy Limited: BPH’s Investee in Resources Sector

BPH’s key investee company, Advent continued to focus on the development of its core assets – PEP 11 permit and RL 1 – during the financial year. Advent holds 85 per cent interest in PEP 11 via Asset Energy Pty Ltd and 100 per cent stake in RL 1 through Onshore Energy Pty Ltd.

Advent observed the following major operational changes during FY 2020:

• An application was submitted to the National Offshore Petroleum Titles Administrator (NOPTA) by Advent to enable the drilling of the Baleen drill target in the PEP 11 permit offshore NSW (New South Wales). The application has now reached its final phase of decision, with the result expected shortly.
• Onshore Energy applied for suspension and extension of the permit conditions in EP386 during the period, which was not accepted by the Department of Mines, Industry Regulation and Safety.
• Thereafter, the Minister of Resources suggested setting out a course of action regarding the Department’s decision. In response to this suggestion, Onshore will be lodging an appeal against the Department’s decision with the SAT (State Administrative Tribunal).
• Advent terminated the RL Energy Joint Venture Agreement for the PEP 11 permit by mutual consent.
• Advent executed a Deed of Settlement and Release with BPH, MEC Resources Limited, Trandcorp, Grandbridge Limited and Mr David Breeze and other relevant parties in August 2019.
• The Northern Territory (NT) Department of Primary Industry and Resources granted a renewal of RL 1 in the NT for a five-year term closing July 2023.

Cortical Dynamics Limited: BPH’s Investee in Biotech Sector

During the past financial year, medical device technology firm Cortical continued to emphasise on the commercialisation of its core product, BARM or Brain Anaesthesia Response Monitor. BARM is an industry disruptive brain function monitor developed by Cortical, which has been recognised by prominent world experts in anaesthesia for its competitive advantage.

Cortical reported a number of developments during FY 2020, as stated below:

• Announced the trialing of BARM technology at UK’s Southampton University Hospital in July 2019.
• South Korean distributor of BARM, Globaluck confirmed receipt of Korean KGMP certification in September 2019.
• Secured an investment of $250k from Gentium Partners and IntuitiveX (IX) by the issue of 12.5 million shares at $0.02 per share.
• Entered into a non-exclusive Licence and Co-operation Agreement with Philips.
• Commenced the FDA 510K filing process for BARM in the USA, backed by its strategic investor IX.

Cortical has already attained both the Therapeutic Goods Administration (TGA) approval (Australia) and the CE mark (Europe) for BARM and has now initiated its sales campaign. Cortical is presently waiting for an ultimate approval of its registration application to the Korean Ministry of Food and Drug Safety.

Patagonia Genetics Pty Ltd: BPH’s Investee in Medicinal Cannabis Sector

BPH’s investee, Patagonia Genetics bought its first 1,300 litres of Wonderland Agronutrients products in September 2019. PG purchased these products to send samples to key licensed producers and expand shops internationally.

Undeniably, BPH and its key investee companies have progressed substantially well during the last financial year, focussing on growth capacity and value-creation. BPH seems to be in a good stead to tap additional opportunities in different fields, backed by its solid investment portfolio.

BPH traded at $0.033 mid-day on 2 September 2020.