Further items that current and potential BPH investors need to be aware of:
1) According to the BPH annual report (Ref 1), BPH’s main asset (including loans) is in Cortical Dynamics:
· From Note 10 (page 35)
Secured loans to Cortical Dynamics = $2,129,971
Investment in Cortical Dynamics = $148,949
Total in Cortical Dynamics =$2,278,920*
* This value is actually bigger as a provision of $494,170 has been raised in the accounts to reduce the loan value
· Unsecured loan to Advent Energy = $162,564
Investment in Advent Energy = $2,006,000
Total in Advent Energy = $2,168,564
2) ASX Listing Rule 4.8 (Ref 2) says that’ “if securities in a listed entity, or loans or advances to it, are a listed entities main asset, the listed entity must give the ASX the latest accounts of the unlisted entity, together with any auditor’s report or statement when the listed entity gives ASX documents required under Rule 4.7 (annual report)”.
3) ASX Listing Rule 4.8.1 (Ref 2) says that if a listed entity must give ASX the accounts of an unlisted entity under this rule, it must give a security holder, on request, the accounts of the unlisted entity, together with any auditor’s statement or report”. This means that because Cortical Dynamics is BPH’s main asset (as per the above), on request any BPH Energy shareholder is entitled to be provided with a copy of Cortical Dynamics’s accounts.
4) Given that Cortical Dynamics is such a big part of BPH’s investments, this is a great opportunity for all shareholders to understand how BPH’s main asset is actually performing. As at 13/12/18 the 2018 Cortical Dynamics annual report was not provided on the Cortical Dynamics website (Ref 3). The 2017 – 2012 Annual reports were provided.
5) BPH Energy recently provided Cortical Dynamics with a further loan as per the recent Appendix 4C (Ref 4), further increasing BPH’s financial exposure to the success of Cortical Dynamics.
6) I have recently become aware that Cortical Dynamics is working with Enable funding attempting to raise funds via the crowd sourced funding company “Enable Funding” (Ref 5). Cortical Dynamics is one of the investment opportunities listed as “Coming Soon” on this website.
7) According to the Corporations Act (S738H(1)(e)(i)) (Ref 6), Cortical Dynamics is not able to raise funds in this manner as it is a related party to BPH Energy and Grandbridge. This relationship is stated in both the BPH Energy Annual report (Note 22(g) – page 50) (Ref 1) and Grandbridge Annual Report (Note 21(a)(iii) – page 45) (Ref 7).
I can only hope that BPH was not relying on the attempted raising via Enable Funding for the “Pre-IPO capital raising of up to $2 million at 10 cents per share” (ref 8).
Ref 1 – BPH Annual report
https://www.asx.com.au/asxpdf/20181001/pdf/43yvbn8sz8rt2k.pdf
Ref 2 – Listing Rule 4 (includes 4.8 and 4.8.1)
https://www.asx.com.au/documents/rules/Chapter04.pdf
Ref 3 – Cortical Dynamics website
https://www.corticaldynamics.com/investors/annual-reports
Ref 4 – Recent loan to Cortical Dynamics https://www.asx.com.au/asxpdf/20181101/pdf/43zx882xgckt6g.pdf
Ref 5 – Enable Funding website
https://www.enablefunding.com/opportunities/
Ref 6 – Corporations Act S738H(1)(e)(i)
http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s738h.html
Ref 7 – Grandbridge Annual Report
https://www.asx.com.au/asxpdf/20181001/pdf/43yvbyggx7rslh.pdf
Ref 8 – Next small cap article
