Walk Through BPH and its Investees’ Glorious Journey in Q2 2020

Summary

• Diversified player, BPH marked several significant developments during the quarter, including share consolidation and capital raising.
• Investee Advent Energy marked progress in NOPTA approval process, while Cortical enters into license agreement with Philips.
• BPH closed June 2020 quarter with a decent cash balance of $258k.
• The Company estimates its available funding to serve for around 2.13 quarters.
• BPH’s stock generated an outstanding return of ~185 per cent during June quarter.

In a latest update, BPH Energy Limited (ASX:BPH) has published its quarterly operations report for June 2020 quarter on the ASX. BPH closed June 2020 quarter with a decent cash balance of $258k and estimates its total available funding to serve for around 2.13 quarters.

The quarter appeared to have ended on a good note for BPH and its key investee firms - Advent Energy Ltd and Cortical Dynamics Limited - as evident from several significant developments reported by the Company during the period.

At present, BPH holds net interest of ~16 per cent in Cortical and ~23 per cent in Advent. In July this year, BPH announced a Placement and Non-Renounceable Rights Issue to advance its shareholding in Advent from 23 per cent to 36 per cent. The increase in shareholding is contingent on any required approvals or through an underwriting of an offer by BPH.

Let us swiftly gaze through the key developments reported by BPH and its investee firms during June 2020 quarter:

BPH Completed Share Consolidation and Equity Raising

Following the shareholders meeting held on 27^th March 2020, BPH concluded the consolidation of its issued capital on a one for ten basis during the quarter. Subsequent to the consolidation, BPH’s total number of fully paid ordinary shares on issue were reduced from ~3.34 billion to ~334.14 million.

Besides, the share options were also consolidated on a one for ten basis, with the relevant exercise price for the options adjusted in inverse proportion to the consolidation ratio.

After the share consolidation, BPH issued ~37 million shares at $0.009 per share to raise ~$334k cash and a further ~2 million shares to satisfy ~$18k in consulting fees. The capital raised was targeted to be utilised for the following purposes:

Advent Marked Progress in NOPTA Approval

BPH’s investee Advent marked progress in NOPTA approval during the quarter. Advent submitted an application to NOPTA (National Offshore Petroleum Titles Administrator) in January 2020 to enable the drilling of the Baleen drill target in PEP 11 permit.

Advent, through wholly owned subsidiary Asset Energy Pty Ltd and Bounty Oil and Gas NL (ASX:BUY), made application to NOPTA to alter the current Permit conditions to continue with the drilling. The application has now reached its final decision phase, as validated by NOPTA.

Additionally, Advent’s wholly owned subsidiary Onshore Energy also made an application for suspension and extension of the permit conditions in EP386 that was not accepted by Department of Mines, Industry Regulation and Safety (DMIRS). Subsequently, Onshore sought a review of DMIRS’ decision by the Minister of Resources who responded defining a course of action concerning that decision which Onshore is following.

In addition to these developments, BPH also reported Advent’s key findings from PEP 11 literature review on 30^th June 2020 and 7^th July 2020, highlighting Santos and Ampolex study outcomes, respectively.

Advent also received applications for additional 300k shares at $0.05 per share ($15k) during the quarter.

Cortical Signed License Agreement with Philips

BPH’s investee Cortical entered into a non-exclusive Licence and Co-operation Agreement with Philips Healthcare North America Corp during the quarter. The agreement was targeted at enabling Cortical interface its BARM (Brain Anaesthesia Response Monitor) into the Philips IntelliVue and Patient Information Center (PIC iX) Monitoring Systems using the IntelliBridge integration product line.

Subsequently, Cortical also confirmed the filing of a new international patent application in July this year for “Apparatus and process for measuring brain activity”. Cortical has patents already awarded in Australia, New Zealand, Japan, the People’s Republic of China, Europe and the USA.

Cortical has now started the FDA 510K filing process for BARM in the USA backed by its strategic investor Intuitive X (“IX”). The approval from US FDA is a necessary precursor to commence sales of BARM in the US. Cortical has already attained both CE (Europe) and TGA (Australian) registration and is presently waiting for final approval of its registration application to the Korean Ministry of Food and Drug Safety.

Cortical raised $12.5k cash during the quarter via issue of 100k shares at 12.5 cents per share.

During the quarter, BPH converted ~$1.5 million of debt owing by Cortical into equity via issue of ~15 million shares in Cortical at $0.10 per share. Besides, Cortical issued ~1.25 million shares to Grandbridge on conversion of $125k owing to that company.

In a nutshell, BPH and its investee companies delivered a remarkable performance in June 2020 quarter, marking numerous significant developments throughout the period. Backed by such notable performance, BPH’s stock generated an exceptional return of ~185 per cent during June quarter.

As on 10 August 2020, BPH is trading at $0.022 (11:45 AM AEST).