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 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

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.