BPH ENERGY LTD — Capital/Financing Update 2019

Nov 6, 2019

BPH ENERGY LIMITED ACN 095 912 002

PROSPECTUS

For an offer to Eligible Shareholders of up to 428,400,069 Shares at an issue price of $0.00140056 per Share to raise up to $600,000 ( SPP Offer ).

IMPORTANT INFORMATION

All SPP Applications will be determined on a first in first served basis.

This is an important document that should be read in its entirety. If after reading this Prospectus you have any questions about the securities being offered under this Prospectus or any other matter, then you should consult your stockbroker, accountant or other professional adviser.

The Shares offered by this Prospectus should be considered highly speculative.

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TABLE OF CONTENTS

1.	CORPORATE DIRECTORY .......................................................................................... 1
2.	SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES ................................... 2
3.	DETAILS OF THE OFFER .............................................................................................. 6
4.	PURPOSE AND EFFECT OF THE OFFER ..................................................................... 10
5.	RIGHTS ATTACHING TO SECURITIES ....................................................................... 12
6.	RISK FACTORS ........................................................................................................ 16
7.	ADDITIONAL INFORMATION .................................................................................. 26
8.	DIRECTORS’ AUTHORISATION ................................................................................ 32
9.	GLOSSARY .............................................................................................................. 33

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1. CORPORATE DIRECTORY

Directors

Share Registry*

David Breeze Chairman and Managing Director

Charles Maling Non-Executive Director Anthony Huston Non-Executive Director

Company Secretary

Advanced Share Registry Limited 110 Stirling Highway NEDLANDS WA 6009

Legal Advisers

Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000

David Breeze

Auditor*

Registered Office

14 View Street NORTH PERTH WA 6006

HLB Mann Judd Level 4 130 Stirling Street PERTH WA 6000

Telephone: +61 89328 8366 Facsimile: +61 8 9328 8733

Email: admin@bphenergy.com.au Website: www.bphenergy.com.au

ASX Code

BPH

*This entity is included for information purposes only. It has not been involved in the preparation of this Prospectus and has not consented to being named in this Prospectus.

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2. SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES

2.1 Indicative Timetable

Event	Date (WST)
Record Date	24 October 2019
Announcement of SPP Offer	25 October 2019
Lodgement of Prospectus with ASIC and ASX	6 November 2019
Opening Date of SPP Offer	6 November 2019
Closing Date for SPP Offer**	29 November 2019
Issue of Shares pursuant to the SPP Offer	2 December 2019
Trading commences for Shares issued pursuant to the Offer	3 December 2019

*These dates are indicative only and may change without prior notice.

** Subscribers under the SPP Offer should ensure that they have lodged their SPP Application Form by this date.

2.2

Important Notes

This Prospectus is dated 6 November 2019 and was lodged with the ASIC on that date. The ASIC, the ASX and their officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

No Shares may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

It is important that investors read this Prospectus in its entirety and seek professional advice where necessary. The Shares the subject of this Prospectus should be considered highly speculative.

This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.

2.3

ASIC Class Order on Share Purchase Plans

In certain circumstances, a listed company may undertake a share purchase plan in accordance with ASIC Class Order CO 09/547 ( Class Order ). This Class Order allows a share purchase plan to be conducted without the use of a prospectus once in any consecutive 12 month period.

The Class Order only applies to the offer of securities under a share purchase plan where a company’s securities have not been suspended from quotation on ASX for more than a total of five days during the shorter of:

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• (a) the period during which the class was quoted; and

• (b) the period of 12 months before the day on which the offer is made.

As the Company’s securities were suspended from quotation for more than five days in the previous 12 months, the Company is unable to rely on the relief granted by the Class Order and, therefore, is undertaking the share purchase plan under this Prospectus.

2.4 ASX waiver

ASX has granted the Company a waiver from the requirements of ASX Listing Rules 7.1 and 10.11 to enable the Company to undertake the share purchase plan, which technically does not satisfy the exceptions to those rules, due to the Company’s suspension for over five trading days within the last 12 months.

The SPP Offer is otherwise consistent with the requirements of the Class Order.

2.5 Investment Advice

This Prospectus does not provide investment advice and has been prepared without taking account of your financial objectives, financial situation or particular needs (including financial or taxation issues). You should seek professional investment advice before subscribing for securities under this Prospectus.

2.6

Risk factors

Potential investors should be aware that subscribing for Shares in the Company involves a number of risks. The key risk factors of which investors should be aware are set out in Section 6 of this Prospectus. These risks together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the Shares in the future. Accordingly, an investment in the Company should be considered highly speculative. Investors should consider consulting their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

A summary of some of the Company’s key specific risks include:

• (a) the Company has a “going concern” emphasis of matter in its financial report for the year ended 30 June 2019( Annual Financial Report ). Details of the “going concern” emphasis is set out below and in Section 6 of this Prospectus; and

• (b) the Company has a material uncertainty emphasis in relation to the its ability to realise the carrying value of its investment in and recoverability of loans to Advent Energy Limited ( Advent ).

Notwithstanding the “going concern” and uncertainty in relation to the Company’s ability to realise the carrying value of its investment in Advent, as included in the Annual Financial Report, the Directors have stated that they have reviewed their expenditure and commitments and have implemented methods of cost reductions. The Directors are satisfied that the going concern basis of preparation is appropriate.

The funds raised under the Offer are considered sufficient to meet the current proposed objectives of the Company. Additional funding will be required to effectively implement its business and operations plans in the future, to take advantage of opportunities for acquisitions, joint ventures or other business

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opportunities, and to meet any unanticipated liabilities or expenses which the Company may incur.

2.7

Taxation implications

The Directors do not consider it appropriate to give Shareholders advice regarding the taxation consequences of applying for Securities under this Prospectus.

The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to Shareholders. As a result, Shareholders should consult their professional tax adviser in connection with applying for Shares under this Prospectus.

2.8 Applicants outside Australia

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Prospectus does not constitute an offer of Shares in any jurisdiction where, or to any person to whom, it would be unlawful to issue in this Prospectus.

2.9

Disclaimer

No person is authorised to give information or to make any representation in connection with the offer described in this Prospectus, which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer. You should rely only on information in this Prospectus.

2.10

Forward-looking statements

This Prospectus contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the Directors and our management.

The Company cannot and do not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.

The Company has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this prospectus, except where required by law.

These forward looking statements are subject to various risk factors that could cause our actual results to differ materially from the results expressed or

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anticipated in these statements. These risk factors are set out in Section 6 of this Prospectus.

2.11 Website

No document or information included on the Company’s website is incorporated by reference into this Prospectus.

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3. DETAILS OF THE OFFER

3.1 The SPP Offer

The Company is undertaking an offer of Shares to existing Shareholders pursuant to a share purchase plan ( SPP or Share Purchase Plan ).

By this Prospectus the Company invites Eligible Shareholders to apply for a total of 428,400,069 Shares at an issue price of $0.00140056 per Share in order to raise $600,000 (before costs) ( SPP Offer or Offer ). The maximum amount which may be raised under this SPP Offer is $600,000.

The issue price of $0.00140056 per Share is not more than a 20% discount to the volume weighted average price for Shares calculated over the last 5 days on which sales in Shares were recorded before the announcement.

Eligible Shareholders are entitled to apply for a maximum of $30,000 worth of Shares.

All of the Shares offered under this Prospectus will rank equally with the Shares on issue at the date of this Prospectus. Please refer to Section 5.1 for further information regarding the rights and liabilities attaching to the Shares.

The purpose of the SPP Offer and the intended use of funds raised are set out in Section 4.1.

3.2 Eligibility

Only Eligible Shareholders may participate in the SPP Offer. ‘Eligible Shareholders’ for the purpose of the SPP Offer are Shareholders:

• (a) who were registered holders of Shares on the Record Date; and

• (b) whose registered address was in Australia or New Zealand.

If you are the only registered Shareholder of a holding of Shares, but you receive more than one SPP Offer (for example because you hold Shares in more than one capacity), you may only apply for one parcel of Shares with a value of up to $30,000. The Company reserves the right to reject any application for Shares under this Prospectus to the extent it considers that the application (whether alone or in conjunction with other applications) does not comply with these requirements.

Participation in the SPP Offer is optional and is subject to the terms and conditions set out in this Prospectus.

3.3

Minimum subscription

The minimum subscription for the Offer is $1,000.

3.4

Oversubscriptions

The Company reserves the right to accept oversubscriptions of up to $200,000 under the SPP Offer.

3.5 Applications

An application for the SPP Offer must be made on the SPP Application Form accompanying this Prospectus. Eligible Shareholders may participate by

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selecting one of the options ( SPP Application Amount ) to purchase Shares under the SPP Offer set out in the table below.

	Total amount payable	Number of Shares which may be purchased
Offer A	$30,000	21,420,004
Offer B	$20,000	14,280,003
Offer C	$10,000	7,140,002
Offer D	$5,000	3,570,001
Offer E	$2,500	1,785,001
Offer F	$1,000	714,001

Fractional entitlements will be rounded up to the nearest whole number.

Any application monies received for more than an Applicant’s final allocation of Shares (only where the amount is $1.00 or greater) will be refunded.

Eligible Shareholders may apply for the SPP Offer by completing the SPP Application Form accompanying this Prospectus in accordance with the instructions outlined on the SPP Application Form. Applications pursuant to the SPP Offer must only be made by those Eligible Shareholders invited to make an application under the SPP Offer.

The SPP Offer is non-renounceable, which means that Eligible Shareholders may not transfer their rights to any Shares offered under the SPP Offer.

The Company reserves the right to close the SPP Offer early.

If you require assistance in completing an SPP Application Form, please contact the Company on +61 (8) 9328 8366.

All SPP Applications will be determined on a first in first served basis.

3.6 By cheque/bank draft

All cheques must be drawn on an Australian bank or bank draft made payable in Australian currency to “ BPH Energy Limited Trust Account ” and crossed “ Not Negotiable ”.

Your completed SPP Application Form and cheque must reach the Company’s share registry no later than 5:00pm (WST) on the Closing Date.

3.7

By BPAY®

For payment by BPAY®, please follow the instructions on the SPP Application Form. You can only make a payment via BPAY® if you are the holder of an account with an Australian financial institution that supports BPAY® transactions. Please note that should you choose to pay by BPAY®:

• (a) you do not need to submit the SPP Application Form but are taken to have made the declarations on that SPP Application Form; and

• (b) if you do not pay for your SPP Application in full, you are deemed to have applied for the whole number of Shares which is covered in full by your application monies.

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It is your responsibility to ensure that your BPAY® payment is received by the share registry by no later than 5:00pm (WST) on the Closing Date. You should be aware that your financial institution may implement earlier cut-off times with regards to electronic payment and you should therefore take this into consideration when making payment . Any application monies received for more than your final allocation of Shares (only where the amount is $1.00 or greater) will be refunded. No interest will be paid on any application monies received or refunded.

3.8

Offset Arrangements

The Company has agreed to offset debts owed to each of the Directors, Mr David Breeze, Mr Anthony Huston and Mr Charles Maling in the amount of $30,000 each, and they will each take up their maximum entitlement under the SPP Offer with no cash payment being made.

3.9 Not underwritten

The Offer under this Prospectus is not underwritten.

3.10 ASX listing

Application for Official Quotation of the Shares offered pursuant to this Prospectus will be made in accordance with the timetable set out in Section 2.1. If ASX does not grant Official Quotation of the Shares offered pursuant to this Prospectus before the expiration of 3 months after the date of issue of the Prospectus, (or such period as varied by the ASIC), the Company will not issue any Shares and will repay all application monies for the Shares within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant Official Quotation to the Shares offered pursuant to this Prospectus is not to be taken in any way as an indication of the merits of the Company or the Shares now offered.

3.11 Issue

Shares issued pursuant to the Offer will be issued in accordance with the ASX Listing Rules and timetable set out at the commencement of this Prospectus.

Where the number of Shares issued is less than the number applied for, or where no issue is made surplus application monies will be refunded without any interest to the Applicant as soon as practicable after the closing date of the Offer.

Pending the issue of the Shares or payment of refunds pursuant to this Prospectus, all application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

Holding statements for Shares issued under the Offer will be mailed in accordance with the timetable set out at the commencement of this Prospectus.

3.12

Overseas shareholders

This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus.

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The Shares are not being offered to the public within New Zealand other than to existing Shareholders of the Company with registered addresses in New Zealand to whom the offer of these securities is being made in reliance on the provisions of the Financial Markets Conduct Act 2013 (New Zealand) and the Financial Markets Conduct (Incidental Offers) Exemption Notice 2016 (New Zealand).

This Prospectus has been prepared in compliance with Australian law and has not been registered, filed with or approved by any New Zealand regulatory authority. This document is not a product disclosure statement under New Zealand law and is not required to, and may not, contain all the information that a product disclosure statement under New Zealand law is required to contain.

Shareholders resident in Australia or New Zealand holding Shares on behalf of persons who are resident overseas are responsible for ensuring that applying for Shares under the Offer does not breach regulations in the relevant overseas jurisdiction. Return of a duly completed SPP Application Form will be taken by the Company to constitute a representation that there has been no breach of those regulations.

3.13 Commissions payable

The Company reserves the right to pay a commission of 6% (exclusive of goods and services tax) of amounts subscribed through any licensed securities dealers or Australian financial services licensee in respect of any valid applications lodged and accepted by the Company and bearing the stamp of the licensed securities dealer or Australian financial services licensee. Payments will be subject to the receipt of a proper tax invoice from the licensed securities dealer or Australian financial services licensee.

3.14 Enquiries

Any questions concerning the Offer should be directed to David Breeze, Company Secretary, on +61 (08) 9328 8366.

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4. PURPOSE AND EFFECT OF THE OFFER

4.1 Purpose of the Offer

The primary purpose of the SPP Offer is to raise up to $600,000, with the ability to accept oversubscriptions of an additional $200,000 (before costs).

The funds raised from the SPP Offer are planned to be used in accordance with the table set out below:

Proceeds of the SPP Offer	Full Subscription ($)	%
Advent	$195,000	32.5%
Cortical and MDS	$175,000	29.2%
Administration and corporate costs	$65,000	10.8%
Expenses of the Offer1	$38,000	6.3%
General working capital	$127,000	21.2%
Total	$600,000	100%

Notes:

1. Refer to Section 7.8 of this Prospectus for further details relating to the estimated expenses of the SPP Offer.

The oversubscriptions if accepted will be allocated to administration and corporate costs and working capital in equal proportions. The above table is a statement of current intentions as of the date of this Prospectus. As with any budget, intervening events and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

On completion of the SPP Offer, the Board believes the Company will have sufficient working capital to achieve the above objectives.

4.2 Effect of the Offer

The principal effect of the Offer, assuming the maximum number of Shares offered under this Prospectus are issued and no Options are exercised prior to the Record Date, will be to:

• (a) increase the cash reserves by $672,000 (including oversubscriptions, and after deducting the estimated expenses of the Offer and the maximum director debt offsets as described in section 3.6) immediately after completion of the Offer; and

• (b) increase the number of Shares on issue from 2,990,277,658 as at the date of this Prospectus to 3,418,677,727 Shares following completion of the Offer. The oversubscriptions of $200,000 may increase this by 142,800,023 shares.

4.3 Effect on capital structure

The effect of the Offer on the capital structure of the Company is set out below.

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Shares

	Number
Shares currently on issue	2,990,277,658
Shares offered pursuant to the SPP (assuming full subscription)	428,400,069
Total Shares on issue on completion of the Offer	3,418,677,727*

*This total will increase by 142,800,023 in the event of the Company accepting oversubscriptions.

Options

	Number
Unquoted exercisable at $0.02 expiring 31/3/2020	9,795,000
Unquoted exercisable at $0.02 expiring 30/11/2020	2,000,000
Unquoted exercisable at $0.02 expiring 30/11/2021	2,000,000
Unquoted exercisable at $0.02 expiring 30/11/2022	4,000,000
Unquoted exercisable at $0.002 expiring 20/06/2024	30,000,000
Unquoted exercisable at $0.002 expiring 09/08/2024	20,000,000
Total Options on issue after completion of the Offer	67,795,000

4.4 Pro-forma statement of financial position

The audited statement of financial position as at 30 June 2019 and the pro-forma statement of financial position as at 30 June 2019 shown below have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position.

The pro-forma statement of financial position has been prepared assuming the maximum number of Shares offered under this Prospectus are issued together with the oversubscriptions, no existing Options are exercised prior to the Record Date, the maximum director debt offsets, and including the expenses of the SPP Offer.

The pro-forma statement of financial position has been prepared to provide investors with information on the assets and liabilities of the Company and proforma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

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STATEMENT OF FINANCIAL POSITION
	Audited	Pro-forma
	30 June 2019 $	30 June 2019 $
Current Assets
Cash and cash equivalents	437,316	1,109,316
Trade and other receivables	20,969	20,969
Financial assets	190,342	190,342
Other current assets	33,869	33,869
Total Current Assets	682,496	1,354,496
Non-Current Assets
Financial assets	2,507,543	2,507,543
Investments in associates	436,541	436,541
Total Non-Current Assets	2,944,084	2,944,084
Total Assets	3,626,580	4,298,580
Current Liabilities
Trade and other payables	1,424,235	1,334,235
Financial liabilities	200,086	200,086
Total Current Liabilities	1,624,321	1,534,321
Net Assets	2,002,259	2,764,259
Equity
Issued capital	45,574,507	46,336,507
Reserves	508,436	508,436
Accumulated losses	(43,920,864)	(43,920,864)
Non-controlling interest	(159,820)	(159,820)
Total Equity	2,002,259	2,764,259

Note :

1. The proforma balance sheet set out above includes the full oversubscription of $200,000.

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5. RIGHTS ATTACHING TO SHARES

5.1 Shares

The following is a summary of the more significant rights attaching to Shares to be issued pursuant to this Prospectus. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Full details of the rights attaching to Shares are set out in the Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours.

(a) General meetings

Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company. Shareholders may requisition meetings in accordance with section 249D of the Corporations Act and the Constitution.

(b) Voting rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:

• (i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;

• (ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and

• (iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares shall have such number of votes as bears the same proportion to the total of such Shares registered in the Shareholder’s name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited).

(c)

Dividend rights

Subject to the rights of any preference Shareholders and to the rights of the holders of any shares created or raised under any special arrangement as to dividend, the Directors may from time to time declare a dividend to be paid to the Shareholders entitled to the dividend which shall be payable on all Shares according to the proportion that the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) in respect of such Shares.

The Directors may from time to time pay to the Shareholders any interim dividends as they may determine. No dividend shall carry interest as against the Company. The Directors may set aside out of the profits of the Company any amounts that they may determine as reserves, to be

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applied at the discretion of the Directors, for any purpose for which the profits of the Company may be properly applied.

Subject to the ASX Listing Rules and the Corporations Act, the Company may, by resolution of the Directors, implement a dividend reinvestment plan on such terms and conditions as the Directors think fit and which provides for any dividend which the Directors may declare from time to time payable on Shares which are participating Shares in the dividend reinvestment plan, less any amount which the Company shall either pursuant to the Constitution or any law be entitled or obliged to retain, be applied by the Company to the payment of the subscription price of Shares.

(d) Winding-up

If the Company is wound up, the liquidator may, with the authority of a special resolution of the Company, divide among the shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.

The liquidator may, with the authority of a special resolution of the Company, vest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no Shareholder is compelled to accept any Shares or other securities in respect of which there is any liability.

(e)

Shareholder liability

As the Shares under the Prospectus are fully paid shares, they are not subject to any calls for money by the Directors and will therefore not become liable for forfeiture.

(f)

Transfer of Shares

Generally, Shares are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in breach of the Corporations Act or the ASX Listing Rules.

(g)

Variation of rights

Pursuant to section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to Shares.

If at any time the share capital is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not the Company is being wound up, may be varied or abrogated with the consent in writing of the holders of three-quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

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(h) Alteration of Constitution

The Constitution can only be amended by a special resolution passed by at least three quarters of Shareholders present and voting at the general meeting. In addition, at least 28 days written notice specifying the intention to propose the resolution as a special resolution must be given.

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6. RISK FACTORS

6.1 Introduction

The Shares offered under this Prospectus are considered highly speculative. An investment in the Company is not risk free and the Directors strongly recommend potential investors to consider the risk factors described below, together with information contained elsewhere in this Prospectus and to consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

There are specific risks which relate directly to the Company’s business. In addition, there are other general risks, many of which are largely beyond the control of the Company and the Directors. The risks identified in this section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Shares.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

6.2 Company specific

(a) Going Concern Risk and additional funds

The Company’s Annual Financial Report includes a note to the financial statements on the financial condition of the Company and the existence of items of material uncertainty about the Company’s ability to continue as a going concern. The report notes that:

• (i) The consolidated entity has reported a net loss after tax for the year ended 30 June 2019 of $3,013,043 (2018: loss of $1,506,758) and has a net cash outflow from operating activities of $487,427 (2018: outflow of $466,968). Revenue increased by 17.8% to $278,227 as the company continued to accrue interest on its secured loans to its investee companies.

The net loss from ordinary activities after tax is after recognising (i) a fair value gain of $280,372 (2018: $Nil) (ii) $Nil impairment charge with respect to Advent (2018: charge of $1,003,001) and; (iii) $332,102 consulting and legal costs (2018: $311,680) (iv) loan provisions of $2,889,033 (2018: $77,155) .

Included in trade creditors and payables is current director fee accruals of $812,783 (2018: $765,027). The directors have reviewed their expenditure and commitments for the consolidated entity and have implemented methods of costs reduction. The directors as a part of their cash monitoring, have voluntarily suspended cash payments for their directors’ fees to conserve cash resources. Subsequent to year end Grandbridge Limited has confirmed that the $200,086 loans provided to the consolidated entity at 30 June 2019 will not be called upon for repayment if the BPH directors are of the opinion that such an action would compromise BPH’s financial solvency.

The directors have prepared cash flow forecasts, including potential capital raisings, which indicate that the consolidated entity should have sufficient cash flows for a period of at least 12 months from the date of this report. Based on the cash flow

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forecasts including directors voluntarily suspending cash payments for their director fees the directors are satisfied that, the going concern basis of preparation is appropriate. The financial report has therefore been prepared on a going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

Should BPH not be successful in raising additional funds through the issue of new equity, should the need arise there is a material uncertainty that may cast significant doubt as to whether or not the consolidated entity will be able to continue as a going concern and therefore, whether it will realise its assets and discharge its liabilities as and when they fall due and in the normal course of business and at the amounts stated in the financial report. The financial statements do not include any adjustments relative to the recoverability and classification of recorded asset amounts or, to the amounts and classification of liabilities that might be necessary should the entity not continue as a going concern.

(b) Loans and Company Specific Investments

The Annual Financial Report further indicates a material uncertainty in relation to the consolidated entity’s ability to recover its loans to Cortical Dynamics Limited ( Cortical ) and its investment in and loans to Advent.

• (i) Loan to Cortical of $1,026,670: Subsequent to year end the Company has provided a letter confirming these amounts will not be called upon for repayment for at least 12 months from signing the financial report or until such time the Cortical is financially independent. The borrower has provided the Company with an option to convert the loans into ordinary shares in the at the lower of $0.10 per share and the most recent share placement price achieved by the borrower in the 6 months prior to conversion, being $0.10 per share. $532,500 of these loans have an annual interest rate of 8% and the remainder are noninterest bearing. This loan was fully provided for at 30 June 2019. It is anticipated that Cortical shareholders will be asked for approval to convert part of the Cortical loans to equity at its upcoming 2019 annual general meeting.

• (ii) Loan to Cortical of $2,290,538: These loans are secured by a charge over all of the assets and undertakings of each entity and interest bearing. Subject to the conditions of the agreements the Company has the right to conversion to satisfy the debt on or before the termination date.

The Company has two convertible loan agreements with Cortical. One loan is for a maximum amount of $500,000 at an interest rate of 8.16% per annum and is to be used for short term working capital requirements. Subject to Cortical being admitted to the Official List of ASX ( Official List ) of the ASX BPH has a right of conversion to satisfy the debt on or before the termination date, being 19 July 2021. As at reporting date the loan had been drawn down by an amount of $699,978, including capitalised interest (2018: $639,751). Interest charged on the loan

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for the period was $60,227 (2018: $55,340). This loan was fully provided for at 30 June 2019.

On 28 February 2012 BPH entered into a second convertible loan agreement with Cortical. The facility is for an amount of $1,000,000 at an interest rate of 9.4% per annum. The loan will be used for short term working capital requirements and funding further development of the BAR monitor. BPH has a right of conversion to satisfy the debt on or before the termination date, being 28 July 2021. As at reporting date the loan had been drawn down by an amount of $1,590,560, including capitalised interest (2018: $1,450,707). Interest charged on the loan for the period was $140,272 (2018: $183,559). This loan was fully provided for at 30 June 2019. It is anticipated that Cortical shareholders will be asked for approval to convert part of the Cortical loans to equity at its upcoming 2019 annual general meeting.

(iii)

Loan to Advent of $162,564 and investment in Advent of $2,006,000: As of 1 January 2017, a judgement was made that, despite a shareholding of 27%, the Company no longer exercised significant influence over Advent as required by the accounting standards and therefore it has ceased to be treated as an associate of BPH Energy Limited from that date. As a consequence of a legal settlement reached in August 2019 the Company has resumed significant influence over Advent. The investment was accounted for as fair value through profit and loss at 30 June 2019.

In MEC Resources Limited’s ( MEC ) June 2019 Annual Financial Report it was stated that in order to maintain an interest in the exploration tenements, the group is committed to meet the conditions under which the tenements were granted. These are the subject of applications for variation that remains outstanding as at the time of reporting. Capital expenditure forecasted for at the reporting date but not recognised as liabilities within a period of one year was $12,750,000, and greater than one year and less than 5 years was $5,475,000.

Advent is continually seeking and reviewing potential sources of both equity and debt funding. Advent is now embarking on a fresh marketing campaign to attract new investors and/or joint venture partners. Management has confidence that a suitable outcome will be achieved however there is no certainty at this stage that this will result in further funding being made available. Asset Energy Pty Ltd has invested over $25 million in the PEP11 title in recent history and, along with its JV partner Bounty Oil and Gas NL, is committed to continuing to explore for and ultimately exploit any petroleum accumulations which may be identified in this title area. If Advent is unable to source further funding for each of PEP11, RL1 and EP 386 each of these permits are at risk.

The above conditions indicate a material uncertainty that may affect the ability of Advent to realise the carrying value of the exploration assets in the ordinary course of business and may affect the ability of the Company to realise the carrying value of its loan receivable and its investment in Advent in the ordinary course of business.

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The funds raised under the Offer are considered sufficient to meet the current proposed objectives of the Company. Additional funding may be required in the event future costs exceed the Company’s estimates and to effectively implement its business and operations plans in the future, to take advantage of opportunities for acquisitions, joint ventures or other business opportunities, and to meet any unanticipated liabilities or expenses which the Company may incur.

The Company may seek to raise further funds through equity or debt financing, joint ventures or other means. There can be no assurance that additional finance will be available when needed or, if available, the terms of the financing might not be favourable to the Company and might involve substantial dilution to Shareholders.

(c) ASX Re-compliance

Shareholders should note that any future investment by the Company in medical cannabis will be reviewed by ASX and the Company may be required to re-comply with chapters 1 and 2 of the ASX Listing Rules and there may be necessary escrow implications for the Shares offered under this entitlement issue.

6.3 Industry Specific

(a) Development and commercialisation of technologies

Securing rights to Technologies, and in particular patents, is an integral part of securing potential product value in the outcomes of biotechnology research and development. Competition in retaining and sustaining protection of Technologies and the complex nature of Technologies can lead to expensive and lengthy patents disputes for which there can be no guaranteed outcome.

The granting of a patent does not guarantee that the rights of others are not infringed or that competitors will not develop competing Technologies that circumvents such patents. The Company’s success depends, in part, on its ability to obtain patents, maintain trade secret protection and operate without infringing the proprietary rights of third parties. Because the patent position of biotechnology companies can be highly uncertain and frequently involve complex legal and scientific evaluation, neither the breadth of claims allowed in biotechnology patents nor their enforceability can be predicted. There can be no assurance that any patents the Company or Universities may own or control or licence now and in the future will afford the Company commercially significant protection of the Technologies, or that any of the projects that may arise from the Technologies will have commercial applications.

Although the Company is not aware of any third party interests in relation to the Technologies rights of the Technologies, and has taken steps to protect and confirm its interest in these rights, there is always a risk of third parties claiming involvement in technological and medical discoveries, and if any disputes arise, they could adversely affect the Company.

Although the Company will implement all reasonable endeavours to protect its Technologies, there can be no assurance that these measures have been, or will be sufficient.

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(b) Research and development

The Company can make no representation that any of its research into or development of the technologies will be successful, that the development milestones will be achieved, or that the technologies will be developed into products that are commercially exploitable.

There are many risks inherent in the development of biotechnology products, particularly where the products are in the early stages of development. Projects can be delayed or fail to demonstrate any benefit, or research may cease to be viable for a range of scientific and commercial reasons

(c)

Oil & gas industry risks

Significant investment: the Company has a 22.6% interest in Advent Energy Ltd ( Advent ). Risks associated with this significant investment include:

• (i) Illiquid investment : as Advent is an unlisted entity, there is a risk that there will not be a ready market for the Company to sell its Advent Energy shares.

• (ii) No controlling interest : the Company’s current interest in Advent means the Company does not have a controlling interest and accordingly the Company does not have the capacity to determine the outcome of decisions about Advent’s financial and operating policies.

• (iii) Oil and gas exploration: the business of oil and gas exploration, project development and production, by its nature, contains elements of significant risk with no guarantee of success. A failure to discover an economic reserve, or to successfully produce from such a reserve, will adversely affect Advent’s performance and have a resulting effect on the value of the Company’s investment in Advent Energy.

• (iv) Oil and gas price volatility : fluctuations in oil and gas prices and, in particular, a material decline in the price of oil or gas, may have a material adverse effect on Advent’s business and therefore the value of the Company’s investment in Advent Energy.

• (v) Exploration and production licences: As noted above, if Advent is unable to source further funding for each of PEP11, RL1 and EP 386 each of these permits are at risk. These licences place a range of past, current and future obligations on Advent. In some cases, there could be adverse consequences for breach of these obligations, ranging from penalties to, in extreme cases, suspension or termination of the relevant licence or related contract. These may then affect the Company’s investment in Advent.

• (vi) Expansion targets and operational delays: There can be no assurance that Advent will be able to complete any development of its properties on time or to budget, or that the current personnel, systems, procedures and controls will be adequate to support Advent’s operations. Any failure of

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management to identify problems at an early stage could have an adverse impact on Advent’s financial performance.

• (vii) Resources, reserves and production: The figures for oil & gas reserves and resources presented in this Prospectus where given are estimates and no assurance can be given that the anticipated figures will be achieved or that the indicated level of recovery will be realised. Market fluctuations in the price of oil & gas may render oil & gas reserves and resources uneconomical. Moreover, short-term operating factors relating to oil & gas reserves and resources, such as the need for orderly development of an oil & gas reservoir may cause an oil & gas operation to be unprofitable in any particular accounting period.

• (viii) Limited operating history: Advent may not have assets producing positive cash flow and its ultimate success may depend on its ability to generate cash flow from active oil & gas operations in the future and its ability to access equity markets for its development requirements. Advent has not made profits to date and there is no assurance that it will do so in the future. A portion of Advent’s activities will be directed to the search for and the development of new oil & gas deposits. Significant capital investment will be required to achieve commercial production from Advent’s existing projects and from successful exploration efforts. There is no assurance that Advent will be able to raise the required funds to continue these activities.

(ix) Additional financing: As noted above, Advent is required to fund its share of approved exploration expenditure on certain of the properties on which it has exploration rights, failing which Advent’s exploration rights in the relevant property may be either reduced or forfeited. Advent may acquire exploration rights in other exploration properties which may require acquisition payments to be made and exploration expenditures to be incurred. The only sources of funding currently available to Advent are through the issue of additional equity capital, project finance or borrowing. There is no assurance that Advent will be successful in raising sufficient funds to commence drilling or production operations or to meet its obligations with respect to the exploration properties in which it has or may acquire exploration rights. The Directors currently believe that Advent’s working capital will not be sufficient to fund operations. Advent will therefore have to seek additional financing for operations at a later date.

(x) Regulatory approvals: Advent’s operations and the exploration agreements which it has entered into require approvals, licences and permits from various regulatory authorities, governmental and otherwise (including project specific governmental decrees). Such approvals, licences and permits are subject to change in various circumstances and further project specific governmental decrees and/or legislative enactments may be required. There can be no guarantee that Advent will be able to obtain or maintain all necessary approvals, licences and permits that may be required and/or that all project specific governmental decrees and/or required legislative enactments

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will be forthcoming to explore for oil & gas and develop the properties on which it has exploration rights, commence construction or operation of production facilities or to maintain continued operations that economically justify the costs involved.

• (xi) Environmental factors: Advent’s operations are subject to environmental regulation (including regular environmental impact assessments and the requirement to obtain and maintain certain permits) in all the jurisdictions in which it operates. Such regulation covers a wide variety of matters, including, without limitation, prevention of waste, pollution and protection of the environment, labour regulations and health and safety. Advent may also be subject under such regulations to clean-up costs and liability for toxic or hazardous substances which may exist on or under any of its properties or which may be produced as a result of its operations. Environmental legislation and permitting requirements are likely to evolve in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their directors and employees.

• (xii) Competition: The oil & gas exploration and production business is competitive in all of its phases. Advent competes with numerous other companies and individuals, including competitors with greater financial, technical and other resources than itself, in the search for and acquisition of exploration and development rights on attractive oil & gas properties. Advent’s ability to acquire exploration and development rights on properties in the future will depend not only on its ability to develop the properties on which it currently has exploration and development rights, but also on its ability to select and acquire exploration and development rights on suitable properties for exploration and development. There is no assurance that Advent will continue to be able to compete successfully with its competitors in acquiring exploration and development rights on such properties.

• (xiii) Currency risk: Currency fluctuations may affect the cash flow that Advent hopes to realise from its operations, as oil & gas is sold and traded on the world markets in United States dollars. Advent’s costs are incurred primarily in Australian dollars and United States dollars.

• (xiv) Uninsured risks: Advent Energy, as a participant in exploration and mining programmes, may become subject to liability for hazards that cannot be insured against or against which it may elect not to be so insured because of high premium costs. Advent may incur a liability to third parties (in excess of any insurance cover) arising from pollution or other damage or injury.

• (xv) Market perception : Market perception of small oil & gas exploration companies may change and this could impact on the value of the Company’s holdings and impact on Advent’s ability to raise further equity capital.

• (xvi) Unitisation: In the case of any cross-border discovery or cross permit discovery involving another permit holder, the Company

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will be required to share production in accordance with the requirements of the relevant regulatory authorities of Western Australia, and/or the Northern Territory, and/or South Australia, and/or New South Wales, or of any relevant unitisation agreements agreed to between the parties, as the case may be.

(d) Nature of BPH’s further existing investments

As noted above, the Company’s existing investments include an equity investment in Advent and further 20% interest in MDS with a carrying value of $0.44 million and a 4.4% interest in Cortical with a carrying value of $0.5 million.

The Company can make no representations that any of these projects will be successful, that the Company’s development milestones will be achieved or that it will develop products that are commercially exploitable. Further, the Company’s success depends, in part, on its ability to obtain patents, maintain trade secret protection and operate without infringing the proprietary rights of third parties. Because the patent positions of biotechnology companies can be highly uncertain and frequently involve complex legal and scientific evaluation, neither the breadth of claims allowed in medical device patents, nor their enforceability, can be predicted. There can be no assurance that any patents the Company may own or control or license now and, in the future, will afford the Company commercially significant protection of its intellectual property or its projects or have commercial application. While the Company is not aware of any third party interests in its intellectual property rights and has taken steps to protect and confirm its interest in these rights, there is always a risk of third parties claiming involvement in technological and medical discoveries and if any such disputes arise, they could adversely affect the Company.

(e) Regulatory risk

The introduction of new legislation or amendments to existing legislation by governments, developments in existing common law, or the respective interpretation of the legal requirements in any of the legal jurisdictions which govern the Company’s operations or contractual obligations, could impact adversely on the assets, operations and, ultimately, the Company’s financial performance and its Shares. In addition, there is a commercial risk that legal action may be taken against the Company in relation to commercial matters.

(f) Potential acquisitions

As part of its business strategy, the Company may make acquisitions of or significant investments in complementary companies, products or technologies. Any such future transactions would be accompanied by the risks commonly encountered in making acquisitions of companies, products and technologies.

6.4 General risks

(a) General economic conditions

Economic conditions, both domestic and global, may affect the performance of the Company. Factors such as fluctuations in currencies, commodity prices, inflation, interest rates, supply and demand and

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industrial disruption may have an impact on operating costs and share market prices. The Company's future possible revenues and Share price can be affected by these factors, all of which are beyond the control of the Company or its Directors.

(b) Equity market conditions

Securities listed on the stock market can experience extreme price and volume fluctuations that are often unrelated to the operating performances of such companies. The market price of Shares may fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general.

General factors that may affect the market price of Shares include economic conditions in both Australia and internationally (particularly Australian, US and Chinese economic conditions), investor sentiment, local and international share market conditions, changes in interest rates and the rate of inflation, variations in commodity prices, the global security situation and the possibility of terrorist disturbances, changes to government regulation, policy or legislation, changes which may occur to the taxation of companies as a result of changes in Australian and foreign taxation laws, changes to the system of dividend imputation in Australia, and changes in exchange rates.

(c)

Change in government policy and legislation

Any material adverse changes in relevant government policies or legislation of Australia may affect the viability and profitability of the Company, and consequent returns to investors. The activities of the Company are subject to various federal, state and local laws governing prospecting, development, production, taxes, labour standards and occupational health and safety, and other matters.

(d) Reliance on key management and personnel

The Company is dependent on its management, the loss of whose services could materially and adversely affect the Company and impede the achievements of its research and development objectives. Because of the specialised nature of the Company’s business, its ability to commercialise its products and maintain its research programme will depend in part upon its ability to attract and retain suitably qualified management, scientists and research people over time. There can be no assurance that the Company will be able to attract or retain sufficiently qualified personnel on a timely basis, retain its key scientific and management personnel, or maintain its relationship with key scientific organisations.

(e)

Market conditions

The market price of the Company’s Shares can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in biomedical development stocks in particular.

Accordingly, investors should recognise that the price of the Shares may fall as well as rise. In particular, the trading price of Shares at any given time may be higher or lower than the price paid under the Offer. Neither the Company nor the Directors warrant the future performance of the Company or any return on the Company’s Shares.

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(f) Insurance

The Company will have insurance in place considered appropriate for the Company’s needs. The Company will not be insured against all possible losses, either because of the unavailability of cover or because the Directors believe the premiums are excessive relative to the benefits that would accrue. The Directors believe that the insurance the Company has in place is appropriate. The Directors will continue to review the insurance cover in place to ensure that it is adequate.

(g) Unforeseen expenditure risk

Expenditure may need to be incurred that has not been taken into account in the preparation of this Prospectus. Although the Company is not aware of any such additional expenditure requirements, if such expenditure is subsequently incurred, this may adversely affect the expenditure proposals of the Company.

6.5 Speculative investment

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares offered under this Prospectus

Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

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7. ADDITIONAL INFORMATION

7.1 Litigation

(a) Statutory Demand

The company received a statutory demand from Deborah Ambrosini, a former Director of the company for an amount of $117,481. The Company disputes this position. The company has advised Mrs Ambrosini that the conditions precedent for payment has not occurred and that any Directors fees are not due and owing.

(b) Statutory Demand

The company received a statutory demand from Goh Hock, a former Director of the company for an amount of $145,832. The Company disputes this position. The company has advised Hock Goh that the conditions precedent for payment has not occurred and that any Directors fees are not due and owing.

The Plaintiffs in these actions have now consented to have these statutory demands set aside.

7.2 Continuous Disclosure Obligations

The Company is a “disclosing entity” (as defined in section 111AC of the Corporations Act) for the purposes of section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company’s Shares.

This Prospectus is a “transaction specific prospectus”. In general terms a “transaction specific prospectus” is only required to contain information in relation to the effect of the issue of securities on a company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest.

Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the 3 months before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.

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The Company, as a disclosing entity under the Corporations Act states that:

• (a) it is subject to regular reporting and disclosure obligations;

• (b) copies of documents lodged with the ASIC in relation to the Company (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of the ASIC; and

• (c) it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:

• (i) the annual financial report most recently lodged by the Company with the ASIC;

• (ii) any half-year financial report lodged by the Company with the ASIC after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with the ASIC; and

• (iii) any continuous disclosure documents given by the Company to ASX in accordance with the ASX Listing Rules as referred to in section 674(1) of the Corporations Act after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with the ASIC.

Copies of all documents lodged with the ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.

Details of documents lodged by the Company with ASX since the date of lodgement of the Company’s latest annual financial report and before the lodgement of this Prospectus with the ASIC are set out in the table below.

Date	Description of Announcement
01/11/2019	Appendix 4C – quarterly
01/11/2019	Annual Report to Shareholders
31/10/2019	Notice of Annual General Meeting / Proxy Form
25/10/2019	Security Purchase Plan
23/10/2019	Corporate Governance Statement
01/10/2019	Reconciliation of Appendix 4E
01/10/2019	Appendix 4G – Corporate Governance
01/10/2019	Annual Financial Report

7.3 Market price of shares

The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX.

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The highest, lowest and last market sale prices of the Shares on ASX during the three months immediately preceding the date of lodgement of this Prospectus with the ASIC and the respective dates of those sales were:

	($)	Date
Highest	$0.002	26 – 28 August 2019, 1 October 2019
Lowest	$0.001	6 August 2019 - 21 August 2019 (inclusive), 23 August 2019, 6 September 2019, 19 September 2019 – 20 September 2019
Last	0.002	5 November 2019

7.4 Substantial holders

Based on publicly available information as at the date of this Prospectus, those persons which (together with their associates) have a relevant interest in 5% or more of the Shares on issue are set out below:

Shareholder	Shares	%
David Breeze, Trandcorp Limited, Grandbridge Limited, Grandbridge Securities Pty Ltd	310,677,944	10.39%
Hongmen Capital Holdings Pty Ltd	161,992,266	5.42%

7.5 Effect on control of the Company

The SPP Offer will not have an effect on control of the Company as the number of Shares that may be issued represents approximately 16.71% of the issued capital of the Company and each Shareholder may only apply for a maximum of $30,000 of Shares (assuming full oversubscription).

7.6 Interests of Directors

Other than as set out below or elsewhere in this Prospectus, no Director or proposed Director holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

• (a) the formation or promotion of the Company;

• (b) any property acquired or proposed to be acquired by the Company in connection with:

• (i) its formation or promotion; or

• (ii) the Offer; or

• (c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to a Director or proposed Director:

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• (d) as an inducement to become, or to qualify as, a Director; or

• (e) for services provided in connection with:

• (i) the formation or promotion of the Company; or

• (ii) the Offer.

Steinepreis Paganin has acted as the solicitors to the Company in relation to the Offer and associated due diligence process. The Company estimates it will pay Steinepreis Paganin $7,500 (excluding GST and disbursements) for these services.

Security Holdings

Directors are not required under the Company’s Constitution to hold any Shares to be eligible to act as a director. The relevant interest of each of the Directors in the securities of the Company as at the date of this Prospectus is set out in the table below:

Director	Shares	Unlisted Options	Maximum number of Shares under the SPP Offer
David Breeze(1)	310,677,944	Nil	21,420,004
Charles Maling	44,536	2,000,000	21,420,004
Anthony Huston	20,000,000	2,000,000	21,420,004

Notes:

1. Includes 142,402,064 Shares held indirectly by Trandcorp Pty Ltd, 140,000,000 Shares held indirectly by Grandbridge Securities Pty Ltd, and 27,112,800 Shares held indirectly by Grandbridge Limited, all entities controlled by Mr David Breeze.

The Directors intend to participate in the SPP Offer in an amount of $30,000 each and the payment for the Shares will be offset against the same amount owing to each Director. This is subject to the allocation policy set out in this Prospectus.

Remuneration

The remuneration of an executive Director is decided by the Board, without the affected executive Director participating in that decision-making process. The total maximum remuneration of non-executive Directors is determined by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive Directors’ remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each non-executive Director.

A Director may be paid fees or other amounts (i.e. non-cash performance incentives such as Options, subject to any necessary Shareholder approval) as the other Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. In addition, Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors.

The following table shows the annual remuneration paid to both executive and non-executive Directors inclusive of superannuation for the past two financial years and the proposed remuneration for the financial year ended 30 June 2020.

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Director	2018	2019	2020 (proposed)
David Breeze	$148,000	$148,000	$148,000
C Maling	$18,354	$25,000	$25,000
A Huston1	$25,717	$57,000	$25,000

Note :

1. Mr Huston’s 2019 remuneration includes 20,000,000 Shares. The Shares have been valued at the Share price at the time of issue of $0.001 per share.

7.7 Consents

Each of the parties referred to in this Section:

• (a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this Section; and

• (b) to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section.

Steinepreis Paganin has given its written consent to being named as the solicitors to the Company in this Prospectus. Steinepreis Paganin has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

7.8 Expenses of the Offer

The total expenses of the Offer are estimated to be approximately $38,000 (excluding GST) and are expected to be applied towards the items set out in the table below:

	$
ASIC fees	3,206
ASX fees	4,512
Legal fees	7,500
Share registry	2,782
Printing, distribution and other expenses	20,000
Total	38,000

7.9 Electronic Prospectus

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the SPP Application Form. If you have not, please contact the Company and the Company will send you, for free, either a hard copy or a further electronic copy of this Prospectus or both. Alternatively, you may obtain a copy of this Prospectus from the website of the Company at www.bphenergy.com.au.

The Company reserves the right not to accept an SPP Application Form from a person if it has reason to believe that when that person was given access to the electronic SPP Application Form, it was not provided together with the electronic

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Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

7.10 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will apply to participate in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Electronic sub-registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with statements (similar to a bank account statement) that set out the number of securities issued to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship. Electronic sub-registers also mean ownership of securities can be transferred without having to rely upon paper documentation. Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

7.11 Privacy statement

If you complete an SPP Application Form, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder. The information may also be used from time to time and disclosed to persons inspecting the register, including bidders for your securities in the context of takeovers, regulatory bodies including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the share registry. You can access, correct and update the personal information that we hold about you. If you wish to do so, please contact the share registry at the relevant contact number set out in this Prospectus. Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for securities, the Company may not be able to accept or process your application.

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8. DIRECTORS’ AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with the ASIC.

==> picture [114 x 47] intentionally omitted <==

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Director For and on behalf of BPH ENERGY LIMITED

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9. GLOSSARY

• $ means an Australian dollar.

Applicant means an investor that applies for Listed Options under the Offer using an SPP Application Form pursuant to this Prospectus.

ASIC means Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it as the context requires.

ASX Listing Rules means the official listing rules of ASX.

ASX Settlement Operating Rules means the settlement rules of the securities clearing house which operates CHESS.

Board means the board of Directors as constituted from time to time.

Class Order means ASIC Class Order CO 09/547.

Closing Date means the closing date of the Offer as set out in the indicative timetable in the Section 2.1 (subject to the Company reserving the right to extend the Closing Date or close the Offer early).

Company means BPH Energy Limited (ACN 003 043 570).

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company at the date of this Prospectus.

Eligible Shareholders means Shareholders:

• (a) who were registered holders of Shares on the Record Date; and

(b) whose registered address was in Australia or New Zealand.

Offer means the SPP Offer.

Official Quotation means official quotation by ASX in accordance with the ASX Listing Rules.

Opening Date means the opening date of the Offer as set out in the indicative timetable in the Section 2.1 .

Option means an option to acquire a Share.

Prospectus means this prospectus.

Shares means the Shares offer pursuant to the SPP Offer.

Section means a section of this Prospectus.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of Shares.

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SPP Application Form means the application form attached to or accompanying this Prospectus relating to the Offer.

SPP Offer means the offer of Shares referred to in Section 3.1.

WST means Western Standard Time as observed in Perth, Western Australia.

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