Investor Update November 2014

PatentsFollowing approval for the bhsl ‘Chicken Rearing Process‘ in Europe, in the past week the United States has accepted further arguments by our attorney and have agreed to grant.

Mexico has been granted and Vietnam has indicated that it intends to grant.

In September the bhsl ‘Mushroom Rearing Process‘ was patent granted in the USA. China has also agreed to the patentability and we expect them to grant in the next two to four months. Lastly in October, the European Examiner gave notification to grant at a face to face meeting in Munich with Jack O’Connor and Rory Litton.

Rory is our patent attorney out of Cruickshanks and deserves great credit for how he has handled our entire patent family with all the Examiners globally over the past 5 years. Thank you Rory, but please do not stop now!

Toploader Sales

We completed successful installations at St. Mary’s School, Dorset, and the University of Hertfordshire. An installation at Oldham City Council is in progress.

The company has won a contract in Uruguay worth 65k euro, and have been specified for a contract in Scotland.

We are pursuing the international opportunities on the basis that the customers can produce a further pipeline of work and will manage their own installations with only minimum involvement by bhsl.

CHP Product

The design and costing of the company’s first combined heat and power (CHP) product is complete and we are now selling it into the UK.

This solution uses all the manure on a site to produce both heat and electricity for poultry houses. Renewable Energy CHP within the UK attracts additional incentives over just heating.

EPIC 2014

bhsl were Platinum Sponsors at this year’s Egg and Poultry Industry Conference (EPIC).

The theme for this year was “Sustainable Intensification – A Question of Balance”, a topic very close to our heart.

Click for the full story.

Application Development

The first customer portal has been rolled out and provides interactive reports of plant output, financial savings and energy centre performance.

An internal portal has been completed which allows the sales team to model the energy demand of farms anywhere in the world and produce proposals.

Congratulations!

Nigel and Patrick Joice of Uphouse Farm win prestigious ‘British Farming Renewables Innovator of the Year Award’

Nigel was kind enough to acknowledge the role of bhsl:

“We are incredibly excited about this and we owe a lot to the company behind our efforts bhsl. Without them we would not be doing what we are doing today and we are very excited about the future.”

Congratulations to Nigel and Patrick – this is another major award for Uphouse Farm who are great advocates for bhsl.

Click to view on BFA site

Message of Welcome

Welcome to the third edition of our investor update.

In October the company became the first in the Europe Union to have its technology approved under the new rules using manure as fuel in combustion on a Poultry Farm.

The State of Maryland officially awarded bhsl a grant of $970,000 to install the technology on a poultry farm in Rhodesdale, Maryland.

The sales pipeline for the UK Poultry is now very strong. We are selling our services through long term energy services contracts with the finance being organised by bhsl. We expect a rapid deployment of this model once UK customers have seen the benefits on their demonstration sites.

The company is in early stage discussions with two global corporations in relation to a strategic investment and we intend to add other institutions to this list over the coming weeks. We have engaged Opus Corporate Finance LLP (London) as our advisors to run this process.

Finally, I look forward to seeing you at the AGM which is on the 18th November in Bewleys Airport Hotel, Dublin at 2pm.

I hope you enjoy the newsletter and as always thank you for your continued support of the business.

Yours sincerely,

Declan O’Connor

Regulatory Update

On July 15th new rules to enable poultry farmers to use their manure as a fuel became law across Europe.

Nigel Joice of Uphouse Farm and Declan O’Connor met the Defra farming minister George Eustice to explain how the bhsl process works. The meeting was followed by Farmers Weekly journalist Philip Clarke.

Click to view Farmers Weekly article

On October 8th, the application to use manure as a fuel at Uphouse Farm was fully approved by the Animal and Plant Health Agency (APHA) and the farm became the first in Europe to be licensed under the new rules.

Commercial Update

USA – State of Maryland Project

bhsl signed a contract with the Department of Agriculture for the State of Maryland USA, to build a demonstration poultry manure to energy plant in Rhodesdale, Maryland, USA. The State has awarded $970,000 to bhsl to support the project. We will be demonstrating the benefits of abundant dry heat during the heating season and providing cooling during the warmer months by using our combustion heat to drive an absorption chiller.

Click for The Democrat Star Article

This is an exciting new development, which will help farmers reduce their demand for electric power from the grid and of course reduce pollution due to manure spreading. The project will have high visibility in the USA, which has the largest poultry growing industry in the world.  Governor Martin O’Malley remarked “By working to reach our sustainability goals, we’ll grow our renewable energy portfolio and reduce the amount of run-off going into our precious Bay. This program is a win-win for our State.”

Energy Services Focus

The company has made a strategic decision to offer our solution in the form of an energy services contract over 15-20 year term rather than selling plant. The advantages of this approach include removing capital investment as a barrier and creating long term revenues for bhsl.

Our corporate finance advisers in London have helped us develop a funding model for heating and CHP energy service solutions and we are now in the process of testing the market. We have commenced due diligence with a number of funders including those backed by the Green Investment Bank.  We have also appointed a reputable London Law firm to assist us with contractual structures.

UK Integrators

Our efforts have been focused on funding one demonstration site with each of the large UK integrators. All large integrators are considering renewable energy and are evaluating a number of options. We are currently engaged at different stages with the top four players in the UK.

UK Independent Farmers

We have extended our energy services offer to select independent farmers and are in negotiations with a number of them right now. We have signed Heads of Terms with one farmer and are advancing a number of others where we expect to close at least one energy services contract and one outright purchase in the fourth quarter.

Mitie

Mitie, the UK facilities and waste management company is in exclusive discussions to become our operation, maintenance and life-cycle replacement partner for the UK. Mitie services many types of facilities from industrial plants to hospitals, schools and large office buildings. We are working closely with the renewable and waste management division who have over 700 engineers deployed servicing waste to energy facilities.

Design for Volume

bhsl has engaged Kellog Brown & Root (KBR), one of the world’s leading engineering firms serving the energy sector, to complete a design review of our technology. The objectives are to simplify design for volume manufacturing, reduce plant cost and maintenance, improve efficiency and develop a modular manufacturing strategy. Phase one will be complete at the end of November and we plan to expedite phase two aiming for a completed design by end of Quarter 1 2015.

HEADQUARTERS

bhsl,
Kantoher Business Park,
Killeedy, Ballagh,
Co. Limerick,
Ireland.
Tel: +353 (0) 69 85926
Fax: +353 (0) 69 85927
Email: info@bhsl.com

UK

bhsl,
2nd Floor
Berkeley Square House,
Berkeley Square
London
W1J 6BD
UK.
LoCall: 0844 544 7727

USA

bhsl,
1910 Towne Centre Boulevard,
Suite 250,
Annapolis,
Maryland 21401,
USA.