Ann: BPH Cover letter Notice of Meeting to shareholders, page-2

MEMBER NOTICE TO BE INCLUDED IN NOTICE OF MEETING​

6 February 2017

Dear fellow BPH Shareholders,

As very concerned fellow shareholders of BPH Energy Ltd (“BPH”), we strongly recommend you vote to support all resolutions to remove the existing directors of BPH and replace them with the better qualified independent nominee directors.

BPH originally listed on the ASX as Biopharmica Ltd and was principally a biotechnology company. It then diversified in 2010 by also investing in an unlisted oil and gas company, Advent Energy Ltd.
BPH holds investments in unlisted biotechnology subsidiaries including Molecular Discovery Systems Ltd (“MDS”) and Cortical Dynamics Ltd (“Cortical”). We believe the existing directors do not have the necessary skills to monitor and make decisions in relation to these biotechnology investments.

In contrast, the three individuals we have nominated for appointment to the BPH Board have the requisite knowledge, skill and experience in relation to all industries in which BPH currently holds investments, being biotechnology and petroleum.

BPH’s share price has retreated from $0.210 in November 2010 down to only $0.004 in January 2017. This decline is graphically represented on the ASX platform:
http://www.asx.com.au/prices/charti...ator=Bar&volumeMovingAverage=&timeframe=Daily

This decline in share price shows a steady diminution of shareholder value and cannot be allowed to continue. Your support in replacing the current BPH Board members with the recommended independent, better qualified nominee directors is critical to protecting and growing your investment in BPH.

We also have major concerns surrounding the present governance of BPH.

BPH (ASX:BPH) recently announced a 1:1 rights issue.

BPH released its offer document to ASX on 11 January 2017. The “ex-date” was only two days later, significantly limiting the possibility for trading in shares by investors motivated to take up the rights issue.
In addition, BPH’s share price was approximately $0.004 at the time of the offer. As of 25 January 2017, it had not been greater than $0.005 for approximately two months. BPH’s rights issue is at a price of $0.005 per share, and the offer is non-renounceable: the price at which the rights issue may be exercised combined with the recent share price means existing shareholders may not exercise their rights and are unable to trade their rights to take up the offer.

BPH’s announcement of 23 December 2016 made no mention of the rights issue being underwritten.
However, the 11 January 2017 offer document states that the rights issue is partially underwritten by Grandbridge Securities Pty Ltd and Mr Thomas Fontaine (an associate of Mr Breeze). Grandbridge Securities Pty Ltd’s ultimate holding company is Grandbridge Limited in which Mr Breeze holds 32% interest (directly and indirectly though entities associated with him)

If, as expected, the BPH rights issue is not taken up in full, the effect of the rights issue will be to dilute existing shareholders and increase the holdings of the underwriters.

The BPH rights issue offer document also provided unsanctioned and potentially misleading statements about Advent Energy Ltd (Advent Energy).

We strongly recommend you support the removal of BPH Energy’s current directors Mr David Breeze, Mr Thomas Fontaine, Mr Gregory Gilbert and Mr Bruce Whan.

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Putting Shareholders first!
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We have consulted with three new independent, appropriately qualified and specifically experienced professionals who have consented to acting as new directors for BPH. Our nominated directors are Dr Peter King, Mr Barry Nicholson and Mr Lun-Man (Adrian) Cheung.

We have selected these directors as they have the specific skills, knowledge and experience to enable the Board to make good decisions in relation to BPH’s current investments, including its investments in MDS, which owns Hls5 gene intellectual property, Cortical, which owns exciting medical device technology, and the oil and gas asset base of Advent Energy.

Dr Peter King is a former CEO of BPH (then Biopharmica Ltd) and has an in-depth knowledge of the Company. Dr King holds a PhD in biochemistry and is currently the Manager of Technical Operations at the Centre for Microscopy, Characterisation and Analysis at the University of Western Australia. He is a founding director of Jplus Consulting Ltd and was previously a technical director of Applied Photophysics Ltd.

Dr King has knowledge and experience in the area of biotechnology, which will assist the Board to manage BPH’s biotechnology investments.

Mr Barry Nicholson is a petro-physicist and professional petroleum engineer who has held leadership positions covering conventional and unconventional petroleum fields in Australia and internationally. Mr Nicholson received his B.Sc. in Physics from Leeds University and his Masters in Petroleum Reservoir Engineering from Heriot-Watt University in Edinburgh. His skillset includes reservoir simulation and field development and he has had a 25 year career with large global oilfield services organisation, Schlumberger.

Mr Nicholson’s experience in the petroleum industry and reservoir engineering will assist the Board to manage BPH’s investment in Advent Energy.

Mr Lun-Man (Adrian) Cheung is a specialist in the commercialisation of medical devices across general surgery, urology, gynaecology and the robotics markets throughout the booming Asian market. He obtained his qualifications from the Chinese University of Hong Kong. He also co-founded Medical Distributor Alliance Ltd that has for the last 20 years helped medical device companies to distribute their products into China and Hong Kong.

Mr Cheung’s experience in the medical devices industry and knowledge around regulatory approval and market entry will assist the Board to manage BPH’s biotechnology investments.

We strongly recommend you support the appointment of Dr Peter King, Mr Lun-Man (Adrian) Cheung, and Mr Barry Nicholson.