Small Company Champion & Lemming Investors Research and Newsletter Updates

Saturday, 7 November 2020

PowerHouse Energy Group Archives


Wednesday, 9 September 2020

Powerhouse Energy Group - Fully Funded - How Do You Like Those Apples!


 £5 million Placing and Subscription
Grant of Peel Holdings Warrant for 10% of the Company

Powerhouse Energy Group plc (PHE), the UK technology company pioneering hydrogen production from waste plastic, has poked the naysayers in the eye with a dirty stick. There have been two major bones of contention for them; first placing ahoy, major dilution claiming mug investors will be diluted to oblivion, second, there is no commercial DMG, we don't know it works. OK, partly true, though we know the test rig works and it has been independently validated by people that actually know what they are doing...I suggest JakNife looks up DNV GL - it has a history of validating technology for multi $bl corps; thus, one suspects may know a thing or two about validating the technology. It appears 6 years of trashing Powerhouse Energy has resulted in a blinkered POV for the resident troll.  

Like it or not, the company has the funding to crack on with its ambitions in concert with major backers supporting the company all the way to profitability, investors should feel much more at ease after the recent news of the merger with Waste2Tricity, and now £5m funding has been secured. Peel appears to be locked in, but what of Turner Pope? Will they dump their 5,395,260 warrants as soon as they get them banked? So what, it is not a huge sum. 

Now let's get the share consolidation sorted because there are just too many shares in issue for my liking.

RNS states:

Powerhouse Energy says it is pleased to announce that it has raised £5 million, before expenses, by way of a Placing and Subscription (“Fundraising”) at 2.5p per share (“Issue Price”). The Placing was arranged by Turner Pope Investments (TPI) Ltd (“Turner Pope”), the Company’s broker, and was oversubscribed.

The Directors believe the Fundraising will provide the necessary cash resources for Powerhouse to reach profitability and to implement its wider strategy for international growth.

In addition, the Company has granted a warrant to Peel Holdings (IoM) Limited (“Peel”), providing a conditional right to subscribe up to approximately £10.2 million for up to 10% of the Company at a 10% premium to the Issue Price.

The Fundraising

A total of 160,000,000 new Ordinary Shares of 0.5p in the capital of the Company (“Ordinary Shares”) have been placed at the Issue Price (“Placing Shares”) with an international institutional investor and a small number of private shareholders, including the White Family (the Company’s largest shareholder), raising £4 million, before expenses. A further 40,000,000 Ordinary Shares (“Subscription Shares”) will be issued to Peel, which is subscribing £1 million at the Issue Price (“Subscription Agreement”).

Grant of Warrant to Peel

Under the terms of the Subscription Agreement, Powerhouse has agreed to grant to Peel a warrant to subscribe for 371,510,069 new Ordinary Shares (representing 10% of the Company’s issued share capital immediately following Admission of the Placing Shares) ("Peel Warrant"). The Peel Warrant is exercisable (in whole or in part) within 6 months of the financial close of Protos, subject to a long-stop date of 2 years from the date of the grant. The exercise price of the Peel Warrant is 2.75p per share (being a 10% premium to the Issue Price).  Peel will be prohibited from trading shares issued upon exercise of the Peel Warrant for a period of 12 months from the date of Admission (subject to customary carve-outs).

Peel is part of a group of companies with whom the Company has exclusivity and licensing agreement in place for developments using its proprietary technology in the UK, the first being at the Protos Energy Park near Ellesmere Port, Cheshire. Between its £1 million subscription and potential investment of up to approximately £10.2 million through the exercise of the Peel Warrant, Peel is expected to become a cornerstone industrial investor in the Company.

The Subscription Agreement and Peel Warrant are independent of and in addition to the payment of the one-off £500,000 exclusivity fee as described in previous news releases.

Related Party Transaction

The White Family is a long-term supporter of the Company and is investing approximately £1.3 million in the Placing. The participation by the White Family is considered a related party transaction under the AIM Rules as the White Family (constituting Howard WhiteBen WhiteJosh White and Serena Eden Reyes-White) currently holds 26% per cent of the share capital. Following the Fundraising the White Family will hold  Ordinary Shares representing 26% held by the individual White Family members as follows:

Josh White – 360,122,122 Ordinary Shares

Ben White – 236,214,785  Ordinary Shares

Serena White-Reyes – 201,593,059 Ordinary Shares

Howard White – 169,757,066 Ordinary Shares

The Directors of the Company having consulted with WH Ireland, the Company’s Nominated Adviser, consider the terms of this transaction to be fair and reasonable insofar as shareholders are concerned.

Use of Funds

The Company will apply the net funds to refine technical aspects and assist Peel to deliver the first commercial-scale DMG® installation at Protos, the first of a number of potential developments alongside Peel, as well as investment in personnel, office and other resources to capitalise on the further UK and international sales and partnership opportunities.

The Directors consider that the respective investments of Peel and the institutional investor serve as further endorsement of the DMG technology and enhance Powerhouse’s credibility to advance its development strategy in and outside of the UK. A further and critical element of the agreement with Peel is that it also permits Powerhouse access to and use of the full design and engineering details of the entire plant being built at Protos, above and beyond that relating to the DMG technology, as well as unrestricted access to the site during and after construction. This will be of significant value and benefit to Powerhouse in relation to developing its international partnering and licensing agreements.

Commenting, David Ryan, CEO of Powerhouse, said:

“We are delighted to have attracted an international institutional fund as an investor and that Peel, already a key commercial partner, has also chosen to engage in this fundraise and demonstrated commitment by taking a warrant over 10% of the Company and become a cornerstone investor in Powerhouse. The investment cements the already close relationship between the two companies.”

Dr Cameron Davies, Chairman of Powerhouse, said:

“We are particularly pleased to have attracted a high-quality institutional investor to our shareholder register. The fact that the fundraising was oversubscribed demonstrates market confidence in our execution strategy. The Board is confident this funding will facilitate Powerhouse to complete the first projects, reach profitability and roll out its international growth strategy.”

Chris Eves, Finance Director of Peel Holdings IOM, said:

“We are pleased that Powerhouse has passed this key milestone and look forward to working with the Company going forward. The next stage is to secure the funding for the Protos project, which will be achieved in due course. The commercialisation of the Protos project and the development of the UK pipeline, which could be over 70 facilities, will form the springboard for the international expansion of the Powerhouse business model.”

Admission to Trading on AIM

Application has been made for the admission of 200,000,000 Ordinary Shares to trading on AIM (“Admission”), and it is expected that this will occur on or around 15th September 2020. These shares will rank pari passu in all respects with the Company's existing issued Ordinary Shares.

Subsequent to the issue of new Ordinary Shares, the Company will have 3,715,100,693 Ordinary Shares in issue. Powerhouse has no shares in Treasur. Thereforee this figure may be used by shareholders, from Admission, as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Broker Warrants

Turner Pope has been issued with 5,395,260 warrants to subscribe for new Ordinary Shares at the Issue Price, exercisable for a period of three years from Admission.

Monday, 24 August 2020

PowerHouse Group - Just a Little Closer to Protos Build


Peel reports successful completion of Engineering Definition phase at Protos.

Powerhouse Energy Group plc (AIM: PHE), the UK technology company pioneering hydrogen production from waste plastic, is pleased to report that Peel L&P (“Peel”) has now completed the Engineering Definition stage of the contractors’ work for the DMG plant at Protos on schedule.

The shares responded with a 15% gain, closing at 3.34p, though 1p shy of 2020 high, which is to be expected and warned of ahead of the merger with Waste2Tricity.

This is, of course, good news and with the weight of the Waste2Tricity merger now also out of the way, the company can look forward to developing Protos. Since my last update, the company issued 1,437,440,277 Ordinary Shares to the Sellers of Waste2Tricity. Application to AIM and trading of which commenced on 15 July 2020. Subsequent to the issue of Ordinary Shares, the Company will have 3,515,100,693 Ordinary Shares in issue with voting rights.

The engineering phase has been undertaken for the overall site and developed for the DMG application to provide a detailed level with the site definition drawings and the procurement packages for equipment and components from suppliers. This will enable the delivery contractors to price their contracts for constructing the plant and the associated on-site buildings.

The engineering work has provided further technical and commercial validation of the DMG technology by international contractors. The completion represents a significant step towards plant construction commencing as planned in Q4 2020 and will facilitate Peel’s progressing to finalising the project financing. In addition, the Company expects the payment of the one-off £500,000 exclusivity fee from Peel L&P Environmental for the exclusive rights to develop the DMG plants in the UK to be completed before the finalisation of project financing.

The progress made towards the commencement of plant construction of Protos, the first of many UK DMG plants envisaged by Peel, augurs well for the Powerhouse business. Each plant completed will not only generate further engineering services work for Powerhouse at the front end and during construction, but would also provide the Company with a substantial ongoing royalty income.

Asset out in the Company’s announcement of its financial results published on 30 June 2020, the Company is managing its working capital position, and its existing cash resources are now expected to be sufficient until into early quarter-four 2020. The Company is in discussions regarding raising further financ,e and it is confident that these will be concluded shortly.

It is planned to hold the Company’s Annual General Meeting in September 2020 by video conference and notification, and full details will be issued to shareholders in due course.

Commenting, David Ryan, CEO of Powerhouse, said:

“I would like to congratulate Peel L&P Environmental on bringing the phase for the DMG plant at Protos to successful completion to their schedule through the lockdown period – this was a significant achievement. The involvement of experienced engineering contractors defining the application at Protos has provided further commercial and technical validation of our DMG technology.

“We are confident that the delivery of this first commercial plant can provide a community based distributed source of hydrogen to further the hydrogen economy in the UK and I welcome today's announcement that in addition to the 11 agreed initial projects  Peel envisage the rollout of  many more plastic-to-hydrogen facilities across the UK.”

Richard Barker, Director at Peel L&P Environmental, said:

“This FEED phase is an important step forward in delivering this innovative technology at Protos. Working with Powerhouse, we’re creating a blueprint for this UK first plastic-to-hydrogen facility, with plans to roll out many more across the UK. With hydrogen increasingly being seen as an important part of our journey to net-zero the time is now.”

Thursday, 13 February 2020

PowerHouse Energy - Excitable Investors

Those of you paying attention (Zippo and Tidy2) were clearly have not - I took the plunge and bought two tranches of shares in PowerHouse Energy (PHE) late Tuesday afternoon and Wednesday AM. 80% up isn't a bad start. I did so because of the update on Tuesday and the thought of the excitement building up to the March planning approval for the first of a proposed eleven plastic park in Ellesmere Port, which I think is in the first week, perhaps the 5th.

I fully expect planning approval for the Protos site to be a formality, not least because it will be a boost for the area, and of course environmentally friendly. And no, I am not one of these foolish climate fraud activists, it all BS of the highest order - nothing short of wholesale fraud you and I will be lumbered with through higher taxes for the benefit of Al Gore and his cronies. I digress! 

Why do I expect planning approval to be a formality? Peel is very good at this sort of thing, honest, so to me, its a no brainer because a gasification DMG isn't viewed as a toxic pollutant, but a green necessity.

PowerHouse has had an excellent run these past three months. I was initially cautious due to the proposed merger with Waste2Tricity on a 60-40 basis - I cautioned on dilution due to this. However, on reflection, I came by the opinion the market had factored this into the share price, though I did note when I cautioned about the dilution, there was a retrace, though I suspect this was merely the share price taking a breather for the next leg. 

With the shares now at 1.6p, the market cap is now £32m, so I am now getting a little twitchy because there is not commercial DMG to speak of yet, and all we have to trust in is the small demo version at Chester University, and data on how long it has been running is not readily available. My point being, a full commercial unit running in real-world environmental stresses of commercial gate receipts, and the pressure this poses is very different to that of a test rig in Chester. Yes, we have the independent validation from DVL GL, but the commercial unit has yet to be commissioned and built. Yes, I am confident the company will commission the right skill set to build a larger scale DMG, and so does Peel, these are no mugs. While I accept this is not a commercial venture until commissioned and built, the fact Peel is invested in the project should suggest commercial reality is not too far off, even if the 6 residenttrollsl (JAKNIFE) doesn't understand this concept, some of us do.

So, while I feel PowerHouse has legs past 2p as we approach planning approval, which itself should provide another boost, we just need to be mindful where we were before the run-up to 1.6p...It's a triple bagger for some, and revenues are not around the corner.

Tuesday, 11 February 2020

PowerHouse Energy - Four DMGs Fast Track

PowerHouse Energy Group plc (PHE), the UK technology company pioneering hydrogen production from waste plastic, is pleased to announce that it has entered into a supplemental collaboration agreement with Peel Environmental (part of Peel L&P) (“Peel”) which aims to accelerate the development of the Protos Energy Park and four further DMG® sites in the UK.

This is obviously great news for PowerHouse, which underlines the confidence Peel has in the company's technology - it is eager to ensure there are no delays to commercialising four DMG as quickly as possible. The added bonus is £100,000 from Peel for historical costs, this is a 60-40 split with W2T. There is still the merger question and how this will affect the final fully diluted share coun; thus I wait with patience before piling in.  Having said that, there is a case to say this is now in the market, or at least that is what the market appears to be telling me. 

PowerHouse also reports the ongoing trialling of the proposed plastic waste stream in the process demonstrator is continuing, with excellent gas production results for the output levels expected; hence today's excellent news.
There has been some conspiracy talk; "with W2T relinquishing its entitlement to UK exclusivity for the technology and development rights of PowerHouse's DMG® technology." Imply Howard White has a masterplan to grab another 40% of PowerHouse. I may appear rather stupid here, but surely given W2T will be part of the combined merger, surely it follows PowerHouse have complete control over the ROW!
In case of I am a little naive, I have asked Howard to explain, of course, Howard informs me I am correct. 

And what about the share dilution funding all these DMG's? Well, actually, there is no dilution, the funding of each site is not a problem for PowerHouse because there is alternative funding in place, so there will be investor funding requirement.

It should be noted the £500,000 annual licence is in addition to royalties from each DMG.

RNS Continued
Powerhouse has entered into an agreement (the “Supplemental Agreement”) with Peel, Waste2Tricity Limited (“W2T”) and Waste2Tricicty (Protos) Limited following the collaboration contract announced on 12 August 2019 (the “Collaboration Contract”).
The Supplemental Agreement allows Peel to act as the developer of Protos and four further DMG® sites in the UK pending finalising the proposed acquisition of W2T by PowerHouse, with W2T relinquishing its entitlement to UK exclusivity for the technology and development rights of PowerHouse’s DMG® technology.
The Supplemental Agreement is intended to prevent any delays in the development of Protos and four further DMG® sites in the UK which have been identified as the most likely to be developed first.  The remaining six sites under the Collaboration Contract remain unaffected by the Supplemental Agreement; however, the technology and development rights will all revert to PowerHouse on completion of the proposed acquisition of W2T.
The Supplemental Agreement contains arrangements for the monetisation of the DMG® Technology at Protos, which will include a £500,000 annual license fee payable to PowerHouse per project upon each project being commissioned. Peel has also agreed to pay PowerHouse £100,000 in historic back costs.  The PowerHouse license fees will include a 60:40 fee split with W2T pending completion of the proposed PowerHouse acquisition of W2T.  In this context, due diligence and negotiations for the acquisition of W2T are proceeding.  An announcement will be made, and a circular convening a General Meeting to approve the necessary resolutions to effect the acquisition is expected to be posted to shareholders as soon as the arrangements are finalised.
David Ryan, CEO of PowerHouse, said:
“We very much welcome Peel Environmental taking on the role of developer for the Protos site. Their well-reported skills and experience of successfully developing major infrastructure projects will now be fully brought to bear on the roll-out of the first commercial DMG® plastic to hydrogen facility at Protos and at future sites in the UK.
The current trialling of the proposed plastic waste stream in the process demonstrator is continuing, with excellent gas production results for the output levels expected.  This has facilitated our license fee negotiations resulting in this Supplemental Agreement.”
Tim Yeo, Chair of W2T, commented:
“I am pleased to see the momentum continuing as the details of the acquisition are being finalised. Peel’s Plastic Parks and the PowerHouse exclusive technology will be vital to help the UK tackle its unrecyclable waste plastic problem, so the acceleration of this activity is very much welcome.d”
Myles Kitcher, Managing Director of Peel, commented:
“Hydrogen is set to play a major role in the UK’s clean growth strategy, and we’re leading the way in the North West. This agreement cements our relationship with PowerHouse and our support for their pioneering plastic to hydrogen technology. Working together, we will now be commercialising the technology at our Protos development in Cheshire before looking at other sites across the country where it could be rolled out.
“This is all part of Peel L&P’s contribution to the UK’s journey to zero carbon, where we can not only find a more sustainable way to treat plastic waste but also create a local source of low carbon transport fuel which will help tackle air quality issues in our communities.

Tuesday, 14 January 2020

PowerHouse Energy Group - Caution

Since I picked PowerHouse Energy PLC (PHE) as one of my picks for 2020, it has put on a little spurt - 35% up. However, I fear the warning on dilution due to the nature of the proposed merger with the consultancy partner, Waste2Tricity (W2T) is being ignored. 

Guys, there is some truth in dilution ahead if the merger with W2T goes ahead. However, I am less certain about his math because we have no value for W2T at this stage, so the figures quoted are wild BB speculation from long term serving bears.

Although I did say PHE is one of my picks for 2020, I also warned of the dilution. The shares have raced ahead ignoring the glaringly obvious. As I type, the shares are running out of steam, let this be a signal for you.

Tuesday, 7 January 2020

PowerHouse Energy Group - Protus Grant Award

Grant for DMG Hydrogen from Waste Development at Protos PowerHouse Energy Group plc (AIM: PHE), the UK technology company pioneering hydrogen production from waste plastic, is delighted to announce that a grant of £1.25m has been awarded to, Waste2tricity Protos Ltd, for the DMG® Hydrogen from Waste development at Protos, near Ellesmere Port, in Cheshire. 

I have been arguing for some time PowerHouse have alternative sources of funding, other than massively dilutive share placings, this could still be an issue with the merger with Waste2Tricity. However, for now, let us focus on funding for the Protus plant, which could be replicated across all of the UK sites if this proves a success. Perhaps today's new at least in part answer Shareprophets question what Waste2Tricity bring to the table. Perhaps not!

The Company's development partner Waste2Tricity (W2T) have secured the grant for the development on behalf of its subsidiary following a successful application to the GBP4.1m Energy Fund competition, run by Cheshire and Warrington Local Enterprise Partnership (LEP) as part of the Local Growth Fund (LGF), which awards capital grants for projects that can support the objectives of the LEP's Energy and Clean Growth Strategy. The £1.25m grant is to fund the purchase of the thermal conversion chamber, a core element of the DMG® hydrogen from plastic waste plant and will be subject to the DMG development at Protos achieving planning approval and funding by the end of March 2020. David Ryan, CEO of PowerHouse Energy said: "We congratulate W2T and Peel on securing this award from Cheshire and Warrington Local Enterprise Partnership, representing confidence in our DMG process as an important technology to deliver clean energy from unrecyclable waste plastic. Furthermore, we are delighted and encouraged to be recognised as a component in the North West Region's strategy to provide clean growth." 

Robert Mee DL, LEP Board Member and Chair of the Strategy Board said: "The LEP is clear in its ambition to be a leader in clean growth and developed the Energy Fund to support the sector in accelerating the pace and scale of innovation in energy technology and distribution. W2T's application to the fund clearly made the case for the benefits of plastics recycling in the creation of hydrogen fuel, with their proposed GBP20m plant in Ellesmere Port set to be the UK leader in this field." Tim Yeo, Chairman of Waste2Tricity said: "This grant offer recognises the importance of the PHE DMG technology and the impact it may have on assisting Cheshire and Warrington and potentially the country to the target of net-zero emissions - through the creation of hydrogen fuel from waste plastic. Cheshire and Warrington's Energy and Clean Growth Strategy shows leadership in this area, one that the rest of the country should look to". 

Thursday, 19 December 2019

PowerHouse Energy - Key Developments

PowerHouse Energy PLC (PHE) served up a very encouraging announcement today regarding the proposed Protus Energy Park currently being developed by Peel Environmental. There is also a small matter of funding, which appear to be as I have continually reported as 3rd party funding, thus not hugely dilutive placing, which essentially would wipe out investors. I have called it right, the resident naysayers have called it wrong. 

PowerHouse is now motoring towards the business end of their strategy, which should have potential investors taking note and also the wider market. With new management in place, the signs look more positive the current strategy will pay handsomely for the patient investors. There can be no doubt there have been a number of false dawns, but this is a new dawn with new experience management in place with key partners with the will to succeed. 

Peel L&P Environmental, have completed their review of the completed engineering work and moved to a commitment to the next stage of development and engineering for the Protos Energy ParkPeel is committing to fund the next stage of development of the DMG® plant at Protos up to a financial close, the point at which full project third party funding is secured.
With preliminary engineering for the site having been completed, the design has progressed such that the DMG® facilities at Protos would now have the capacity to process 35 tonnes per day of waste plastics, targeting to produce 3.8MWe on-site and exporting 3.4MWe electricity and up to 2 tonnes of hydrogen per day from the site. The planning permission application is currently under review.
In the next stage, Peel will place contracts with engineering contractors for the management, civil and plant engineering design all of which are expected to be placed in January 2020. The Peel commitment will extend to other site planning, feedstock and site infrastructure activities, including the provision of engineering services by PHE.
This next stage in the project forms part of the collaboration agreement signed in August 2019 with Peel Environmental and Waste2tricity to develop a minimum of 11 sites in the UK for DMG® facilities. All parties in the collaboration have also been involved in developing the future deployment plans across the other 10 sites and further announcements will be made when these commitment contracts are completed.
Peel has a strategy to develop “Plastic Parks” where waste plastics are recycled and regenerated. Peel’s plans are to bring together potential counterparties for waste, power and hydrogen with a nett negative CO2 contribution for each site. PHE’s DMG® process will be an enabling technology to ensure no plastic is sent to landfill from these sites by regenerating the waste plastic into power and hydrogen.
David Ryan, CEO of PowerHouse Energy, commented:
“This agreement represents the completion of the preliminary engineering stage and I am most encouraged that the PHE team have achieved a major uplift in the performance of the DMG process, including almost doubling the hydrogen output to 2 tonnes, significantly enhancing our partner's commercial drivers. The commitment demonstrates significant commercial confidence from Peel L&P Environmental to the immediate and long-term deployment of the process in the UK.”
Myles Kitcher, Managing Director of Peel L&P Environmental commented:
“This further agreement reflects the confidence we have in the DMG Technology which will enable us to tackle the plastic challenge head-on with an integrated approach to recycling and energy recovery. DMG allows us to eliminate landfill from our site, by regeneration of wasted plastic into power and hydrogen.
“We are excited to be implementing our strategy in partnership with PowerHouse Energy and for Protos to be the first application of their ground-breaking technology to improve the waste management process and the environment in the UK.”
Tim Yeo, Chairman of Waste2Tricity commented:
“We are delighted with this significant step forward to the deployment of an environmentally important technology. We warmly welcome the closer involvement of Peel L&P Environmental in the development of the DMG Technology.”

There is a brief comment on PHE and more detailed comment on OptiBiotix Health via the soundcloud.

Monday, 14 October 2019

PowerHouse Energy Group - Ready To Build Full-Scale DMG

Although I am not yet a holder of PowerHouse Energy Groups (PHE) shares, I feel I am close to taking an initial venture. The signal will almost certainly be on a full-scale version of the DMG and commercial location. An assurance on the cash position and confirmation nothing has changed since I last spoke to the company when I was informed they are funded for the first 6 or 6 DMG's. 

Little promo via CNN out today with a short video of CEO. David Ryan.  
Britain produces about 5 million metric tons of plastic waste every year, but less than a third of that is recycled. Roughly half ends up in landfills.
UK company Powerhouse Energy wants to turn this plastic deluge into an opportunity by producing energy from non-recyclable plastics and other waste.
Powerhouse Energy has developed a process where it shreds the waste and then heats it to around 1,800 degrees Fahrenheit to produce syngas — a mixture of hydrogen, methane and carbon monoxide. Syngas can either be burned to produce electricity, or the hydrogen can be separated out to power fuel cells in vehicles. 

Read more on PowerHouse Energy via this blog here.