Proposed waiver of Rule 9 and Notice of GM

RNS Number : 1517R

Powerhouse Energy Group PLC

26 June 2020

 

PowerHouse Energy Group Plc

("PowerHouse" or the "Company")

Proposed issue of 1,437,440,277 new Ordinary Shares in connection with the proposed acquisition of Waste2Tricity Limited

Proposed Waiver of obligations under Rule 9 of the Takeover Code

Notice of General Meeting

Further to the announcement by PowerHouse Energy Group plc (AIM: PHE) on 23 December 2019, PowerHouse has entered into a conditional agreement for the acquisition of the entire issued share capital of Waste2Tricity Limited, the consideration for which shall be satisfied through the issue by the Company of 1,437,440,277 ordinary shares in Powerhouse (the "Acquisition"). On 26 June 2020 the Company posted to shareholders a notice of the general meeting of the Company to be held at 10 a.m. on 14 July 2020 at the private residence of the Chairman along with a circular (the "Circular") and the form of proxy in connection with the Acquisition and the approval of a proposed waiver of obligations under Rule 9 of the Takeover Code. The terms used in this announcement have the meaning given to them in the Circular unless otherwise defined in the body of this announcement.

Extracts from the letter from the Chairman contained in the Circular are set out below, which includes the background to and reasons for the Acquisition. A copy of the Circular will be available for download from the Company's website shortly, www.powerhouseenergy.net .

For more information, contact:

PowerHouse Energy Group plc	Tel: [phone]
David Ryan, Chief Executive Officer
WH Ireland Limited (Nominated Adviser)	Tel: [phone]
James Joyce / Lydia Zychowska
Turner Pope Investments (TPI) Ltd (Joint Broker)	Tel: [phone]
Andrew Thacker / Zoe Alexander
Ikon Associates (Media enquiries)	Tel: [phone]
Adrian Shaw	Mob: [phone]

About PowerHouse Energy Group plc

PowerHouse has developed a proprietary process technology - DMG® - which can utilise waste plastic, end-of-life-tyres, and other waste streams to efficiently and economically convert them into syngas from which valuable products such as chemical precursors, hydrogen, electricity and other industrial products may be derived. The PowerHouse technology is one of the world's first proven, modular, hydrogen from waste (HfW) process.

The PowerHouse DMG® process can generate up to 2 tonnes of road-fuel quality H2, and more than 58MW/h of exportable electricity per day.

The PowerHouse process produces low levels of safe residues and requires a small operating footprint, making it suitable for deployment at enterprise and community level.

PowerHouse is quoted on the London Stock Exchange's AIM Market under the ticker: PHE, and is incorporated in the United Kingdom.

For more information see www.powerhouseenergy.net

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of this document and Form of Proxy . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26 June 2020
Latest time and date for receipt of Forms of Proxy. . . . . . . . . . . . . . . . . . . . . .  . . . .	10 a.m. on 10 July 2020
General Meeting  . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10  a.m. on 14 July 2020
Admission of Acquisition Shares . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .	15 July 2020

Notes:

1.  Each of the times and dates above are indicative only and are subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified by the Company to the Shareholders by announcement through a regulatory information service.

2.  All of the above times refer to London time unless otherwise stated.

3.  Admission of the Acquisition Shares on AIM is conditional on, inter alia, the passing of the Allotment Resolution at the General Meeting.

KEY STATISTICS

Number of Existing Ordinary Shares in issue as at the date of this document	2,072,360,416
Number of Acquisition Shares to be issued pursuant to the Acquisition	1,437,440,277
Enlarged Share Capital immediately following Admission	3,509,800,693
Fully diluted enlarged share capital immediately following Admission (taking into account the options and warrants in issue)	3,593,600,693
Acquisition Shares as a percentage of the Enlarged Share Capital	40.96%

DEFINITIONS

The following definitions apply throughout this document (including Notice of General Meeting and the Form of Proxy) unless the context requires otherwise:

Acquisition	the proposed acquisition by PowerHouse of the entire issued share capital of W2T, in accordance with the terms and conditions of the Acquisition Agreement
Acquisition Agreement	the conditional agreement entered into between PowerHouse and the Principal Sellers in relation to the Acquisition dated on or around the publication of this Circular, further details of which are set out in the letter from the Chairman incorporated into this document
Acquisition Shares	the 1,437,440,277 new Ordinary Shares proposed to be issued to the Sellers pursuant to the Acquisition
Admission	the admission of the Acquisition Shares to trading on AIM becoming effective in accordance with the AIM Rules
AIM	AIM, a market of that name operated by the LSE
AIM Rules	the AIM Rules for Companies published by the LSE, as amended from time to time
Allotment Resolution	resolution 1 as set out in the Notice, to be voted on by the Shareholders at the General Meeting to authorise the Board to allot the Acquisition Shares on a non-pre-emptive basis
Board or Directors	the directors of the Company whose names are set out on page 12 in the letter from the Chairman incorporated into this document
Broker	Turner Pope Investments (TPI) Ltd, a company incorporated and registered in England and Wales with company number 09506196 whose registered office is situated at 8 Frederick's Place, London, EC2R 8AB
Business Day	any day on which banks are usually open in England and Wales for the transaction of sterling business, other than a Saturday, Sunday or public holiday
certificated or in certificated form	a share or other security not held in uncertificated form (that is, not in CREST)
Code, City Code or Takeover Code	the City Code on Takeovers and Mergers
Company or PowerHouse	PowerHouse Energy Group Plc, a company incorporated in England and Wales with registration number 03934451 whose registered office is situated at 15 Victoria Mews, Mill Field Road, Cottingley Business Park, Bingley, England, BD16 1PY
Completion	completion of the sale and purchase of the entire issued share capital of W2T in accordance with the Acquisition Agreement
Concert Party	certain Sellers being Aquavista Limited, Marianna Beck, Jane Bennett, Tony Bennett, Bruce Drew, Linda Farnes, John Hall, Peter Jones OBE, Keith Riley, Piangkwan Thummukgool, Paul Warwick, Ben White, Howard White, Josh White, Serena White-Reyes, Diane Yeo, Timothy Yeo and Anna-Mariya Yordanova and as further described in paragraph 9 of Part I and paragraph 1 of Part II
Conditions	the conditions to Completion as contained within the Acquisition Agreement, being Admission and the passing of the Resolutions
Circular	this document
CREST Regulations	the Uncertificated Securities Regulations 2001 (SI 2001/3755)
DMG Technology	PowerHouse's proprietary distributed modular generation technology that enables the recovery of energy from unrecyclable plastic, end-of-life tyres and other waste streams through small scale pyrolosis and gasification into an energy rich clean syngas (synthetic gas similar to town gas) from which electrical power and hydrogen can be produced
Enlarged Share Capital	the issued share capital of the Company at the date of Admission (assuming that no further warrants and/or options will be exercised between 25 July 2020 (being the latest practicable date prior to publication of the Circular) and Admission) as enlarged by the issue and allotment of the Acquisition Shares
Existing Ordinary Shares	the 2,072,360,416 Ordinary Shares in issue at the date of this document
Financial Conduct Authority	the Financial Conduct Authority in its capacity as the competent authority for the purposes of Part IV of FSMA
Form of Proxy	the enclosed form of proxy for use by Shareholders in connection with the General Meeting
FSMA	the Financial Services and Markets Act 2000 (as amended)
General Meeting	the general meeting of PowerHouse to be held at 10 a.m. on 14 July 2020 (or any reconvened meeting following any adjournment of the general meeting) at the Chairman's private residence, notice of which is set out at the end of this document
Independent Directors	the Board, excluding Mr David Ryan who holds shares in W2T, being Dr William Cameron Davies, Mr Nigel Brent Fitzpatrick, Mr James John Pryn Greenstreet and Mr Myles Kitcher
Independent Shareholders	shareholders who are independent of a person who would otherwise be required to make a Rule 9 Offer and any person acting in concert with him or her (as defined by the Code) which, for the purposes of the Panel Waiver, excludes all members of the Concert Party and any other shareholders of W2T who hold shares in the Company
Lock-In Deed	the deed between the Company and each of the Locked-In Sellers, further details of which are set out in paragraph 11 of the letter from the Chairman incorporated into this document
Locked-In Sellers	each of John Hall, Peter Jones OBE, Keith Riley, Piangkwan Thummukgool, Howard White, Josh White, Ben White, Serena White-Reyes, Timothy Yeo, Diane Yeo, Paul Heagren, Steve Medlicott and David Ryan
LSE or London Stock Exchange	London Stock Exchange plc
Notice or Notice of General Meeting	the notice of the General Meeting set out at the end of this document
Ordinary Shares	ordinary shares of £0.005 each in the capital of PowerHouse
Panel	the Panel on Takeovers and Mergers
Peel	Peel L&P Environmental Limited, a company incorporated in England and Wales with company number 04480419 whose registered office is situated at Peel Dome Intu Trafford Centre, Trafford City, Manchester, M17 8PL, England
Peel Collaboration Agreement	the agreement between PowerHouse, W2T, W2T Protos and Peel dated 9 August 2019 relating to the deployment of the Company's DMG Technology in the UK in respect of the Protos Project and a further 10 projects (as varied by the Peel Supplemental Collaboration Agreement)
Peel Supplemental Agreement	the agreement between PowerHouse, W2T, W2T Protos and Peel dated 10 February 2020 that varied the Peel Collaboration Agreement to seek to accelerate the development of the Protos Project
Peel UK Exclusivity Option Agreement	the agreement between PowerHouse and Peel dated 6 March 2020 pursuant to which Peel has been granted an exclusive option to commercialise the DMG Technology in the UK
Principal Sellers	John Hall and Howard White
Protos Project	the proposed application of the DMG Technology at the Protos Site
Protos Site	part of a 54 hectare site known as 'Protos' near Ellesmere Port, Cheshire, England
Registrar	Neville Registrars Limited, a company incorporated in England and Wales with registration number 04770411 whose registered office is situated at Neville House, Steelpark Road, Halesowen, B62 8HD
Relationship Agreement	the agreement in agreed form between PowerHouse and the White Family, further details of which are set out in paragraph 10 of the letter from the Chairman incorporated into this document
Resolutions	the resolutions to be proposed at the General Meeting as set out in the Notice of General Meeting
Rule 9 Offer	a general offer under Rule 9 of the Code
Sellers	the sellers of the ordinary shares of £0.01 each in W2T, being Aquavista Limited, Marianna Beck, Jane Bennett, Tony Bennett, Ron Bezalel, Izhaki Omer Chalamis, Chris Vanezis, Moshe Cohen, Dima Alfalasi, Bruce Drew, Linda Farnes, Alon Gad, Steven Giles, Sheila Gimson, Tristan Haley, John Hall, Neville Harris, Paul Heagren, Ram Itzhaki, Peter Jones OBE, Agnieszka Makarewicz, Steve Medlicott, Stefan Iucovici, Mollyndave PTY Ltd - Mollyndave Family A/C, N.O.M. Itzhaki Consulting Limited, Nick Penn, Martin Peters, Conrad Griffiths QC, Keith Riley, Herardo Rippa, David Ryan, Ian Smith, Maria Suttle, Kate Templeman, Piangkwan Thummukgool, Joseph Tytunovich, Shlomit Tytunovich, Nony Verioti, Paul Warwick, Ben White, Howard White, Josh White, Serena White-Reyes, Diane Yeo, Timothy Yeo and Anna-Mariya Yordanova
Shareholders	the holders of Ordinary Shares
uncertificated or in uncertificated form	recorded on the register of members of PowerHouse as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
UK or United Kingdom	the United Kingdom of Great Britain and Northern Ireland
Waiver	the waiver granted by the Panel (conditional on the approval of the Waiver Resolution by the Independent Shareholders) of the obligation of the Concert Party to make a Rule 9 offer under the Takeover Code as a consequence of the allotment and issue to it (or members of it) of the Acquisition Shares
Waiver Resolution	the ordinary resolution of the Independent Shareholders to approve the Waiver, to be proposed on a poll at the General Meeting and set out as Resolution 2 in the Notice
Waste2Tricity or W2T	Waste2Tricity Limited, a company incorporated in England and Wales with company number 06708968 whose registered office is situated at Finsgate, 5-7 Cranwood Street, London, EC1V 9EE
WH Ireland	WH Ireland Limited, a company incorporated in England and Wales with company number 02002044 whose registered office is situated at 24 Martin Lane, London, EC4R 0DR, England
W2T International	Waste2Tricity International Limited, a company incorporated in England and Wales with company number 07979088 whose registered office address is situated at Finsgate, 5-7 Cranwood Street, London EC1V 9EE
White Family	Howard White, Josh White, Ben White and Serena White-Reyes
W2T Protos	Waste2Tricity (Protos) Limited, a company incorporated in England and Wales with company number 08361548 whose registered office address is situated at Finsgate, 5-7 Cranwood Street, London, EC1V 9EE
W2T Thai	Waste2Tricity International (Thailand) Ltd, a company incorporated and registered in Thailand with the Juristic Person Registration Number 0105555173929
£, pounds sterling, penny or pence	UK pound sterling, the lawful currency of the United Kingdom

PART I

LETTER FROM THE CHAIRMAN

PowerHouse Energy Group Plc

(a public limited company incorporated in England and Wales with registered number 03934451) 

Directors:	Registered Office:
Dr William Cameron Davies (Non-Executive Chairman) Mr David John Ryan (Chief Executive Officer) Mr Nigel Brent Fitzpatrick (Non-Executive Director) Mr James John Pryn Greenstreet (Non-Executive Director) Mr Myles Kitcher (Non-Executive Director)	15 Victoria Mews Mill Field Road Cottingley Business Park Bingley England BD16 1PY

26 June 2020

To holders of Ordinary Shares

Dear Shareholder,

Proposed issue of 1,437,440,277 new Ordinary Shares in connection with the proposed acquisition of Waste2Tricity

Approval of Waiver of obligations under Rule 9 of the Takeover Code

Notice of General Meeting

1.  INTRODUCTION

On 23 December 2019, the Board announced that PowerHouse had entered into heads of terms with W2T to acquire the entire issued share capital of W2T (Heads), a structured solutions provider to the energy-from-waste sector. The Board provided updates on the proposed Acquisition and related arrangements on 11 February 2020 and 9 March 2020. On 25 June the Company and the Principal Sellers entered into the Acquisition Agreement. The consideration for the Acquisition, in accordance with the Acquisition Agreement, is the issue of 1,437,440,277 Acquisition Shares to the Sellers in proportion (as nearly as may be practicable) to their current respective W2T holdings, which shall be issued and allotted conditional only on the passing of the Allotment and Waiver Resolutions and Admission and is expected to represent, in aggregate, 40.96% of PowerHouse's Enlarged Share Capital and 40% of PowerHouse's fully diluted enlarged share capital, taking into account the options and warrants in issue. Certain of the Sellers are acting in concert (as defined by the Takeover Code) and therefore comprise the Concert Party as described further in paragraph 9 of Part I and paragraph 1 of Part II of this Circular.

The Acquisition Shares will rank pari passu in all respects with the Ordinary Shares in issue including the right to receive all dividends and other distributions made or paid following Admission.

The issue of the Acquisition Shares is conditional upon, inter alia, the Shareholders passing the Allotment Resolution and the passing of the Waiver Resolution by the Independent Shareholders at the General Meeting which will grant authority to the Board to allot the Acquisition Shares on a non-pre-emptive basis.

Under Rule 9 of the Code, the issue of the Acquisition Shares to the Concert Party and the resultant increase in the Concert Party's percentage holding of Ordinary Shares would normally result in the Concert Party being obliged to make a Rule 9 Offer. The Panel has agreed to waive this obligation subject to the passing, on a poll, of the Waiver Resolution by the Independent Shareholders of PowerHouse at the General Meeting. Your attention is drawn to the section on the Code contained in paragraph 8 of the letter from the Chairman of PowerHouse.

A General Meeting is therefore being convened at 10 a.m. on 14 July 2020 (or any reconvened meeting following any adjournment of the general meeting) at the Chairman's private residence for the purposes of considering the Resolutions.

Due to ongoing circumstances surrounding COVID-19 Shareholders wishing to participate are requested not to attend the meeting in person and instead vote in advance by completing and returning the hard copy Form of Proxy (or, alternatively, appointing a proxy or proxies electronically by registering the proxy with the Registrar at www.sharegateway.co.uk and completing the authentication requirements as set out on the Form of Proxy) or if you hold your shares in the Company in uncertificated form (that is, in CREST) you may vote using the CREST Proxy Voting service in accordance with the procedures set out in the CREST Manual. Please refer to paragraph 13 of this Part 1 of this Circular and the Notice of General Meeting set out at the end of this Circular, for further information in respect of the General Meeting.

The formal Notice of General Meeting is set out at the end of this document.

Prior to the Acquisition, PowerHouse, W2T and Peel have been collaborating to develop the Protos Project as a 'first-of-a-kind' application of the DMG Technology at the Protos Site, together with 10 additional potential projects. The terms of this collaboration have, as it has developed over time, been recorded in a number of agreements culminating in the Peel Collaboration Agreement, the Peel Supplemental Agreement and, most recently, the Peel UK Exclusivity Option Agreement (all together, Peel Agreements) with the Acquisition being a condition to full implementation of the Peel Agreements pursuant to which Peel has, on exercise of its option (exercisable from Completion) (Option), agreed to pay the sum of £500,000 to PowerHouse for the exclusive right to use the DMG Technology in the United Kingdom (Exclusivity Sum) and, as a consequence, will further lead the development and the further funding strategy for all developments contemplated within the Peel Agreements.

The purpose of this letter is to explain why the Independent Directors recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as they intend to do in respect of the Ordinary Shares held by them.

2.  BACKGROUND

PowerHouse is the designer, creator, licensor and vendor of a modular energy recovery system using renewable or waste feedstock and owner of the DMG Technology. The DMG Technology is a proprietary design that converts calorific waste streams into a valuable intermediate product, a synthetic gas, a product that can be used for power generation and as a source of hydrogen for fuel cell vehicles.

W2T was established in September 2008 by Howard White to identify technologies capable of generating low cost hydrogen. W2T has two wholly owned UK subsidiaries, W2T International and W2T Protos, both of which are dormant.

W2T and PowerHouse's former director, Keith Allaun, had regular contact about technology development during Keith's tenure at PowerHouse which was demonstrated by an agreement that was entered into by PowerHouse for territorial use of technology in Thailand in 2014. Following this, PowerHouse and W2T continued to keep regular contact regarding the potential of trialling the technology using non-recyclable plastics as a feed to generate a stream of hydrogen.

These exploratory project discussions led in January 2017 to a memorandum of understanding (MOU) to harness PowerHouse and W2T's strengths to develop, build and operate a number waste to energy plants in the UK, utilising PowerHouse's technology but focussing on hydrogen as a product, on a 50:50 partnership. Under this development partnership, W2T arranged initially for the use of an interim testing site from Peel, with whom they had a long standing project co-operation agreement with and, subsequently a permanent research and development site lease with Thornton Energy Park. 

The partnership set the objectives of technology development by PowerHouse, following W2T's key market application of distributed hydrogen using waste plastic as an operational feedstock. This hydrogen focussed product vision was developed from 2017 by the Company using W2T team members including David Ryan, who at that time had been seconded from W2T. The output from this programme became the DMG Technology.

W2T fostered a closer relationship for PowerHouse with Peel, whereby Peel considered exploiting the DMG Technology and its applications in the UK, with Peel initially offering a site to the Company for it to develop in another area of Ellesmere Port in Cheshire, England. However, the Company faced commercial challenges leading a development on this site and W2T therefore proposed that they lead an alternative development. W2T and Peel continued discussions and, as a result, in April 2019, Peel offered W2T a 124-year lease on part of the Protos Site, which presented a far better route to commerciality.

On signature, PowerHouse initiated the site-specific design engineering work whilst Peel and W2T developed the documentation to enable planning applications to be made.

In August 2019, the MOU between the Company and W2T was formalised into the Peel Collaboration Agreement under which PowerHouse agreed to grant W2T and Peel exclusivity in respect of the development of the DMG Technology in the UK in respect of at least eleven 'waste plastic-to-hydrogen' facilities, with the Protos Site identified as the first site.

Under the Peel Collaboration Agreement, PowerHouse was engaged to provide engineering services and the license covering DMG Technology for each project under development. PowerHouse enhanced its engineering designs such that the Protos Project facility capacity increased to 35 tonnes of waste plastic per day, targeting production of 3.8MWe of electricity on site, exporting 3.4MWe to local customers and up to two tonnes of hydrogen per day.  Planning submissions were finalised by Peel, W2T and W2T Protos in September 2019.

Throughout the negotiations in the second half of 2019, Peel indicated their intent to engage in a potential UK wide roll out of the DMG Technology, aligned to a wider 'Plastic Parks' strategic development, where waste plastics are recycled and regenerated.

Under the Peel Collaboration Agreement, Peel further committed to supporting W2T with ongoing engagement with third party funders, with the intention of securing funding for the project pipeline (the Protos Project and the envisaged further ten projects) from sector market investors. The Board believes that Peel will develop its  'Plastic Parks' concept in such a way that the DMG Technology would be a key component of each facility and a cornerstone of each 'Plastic Park' bringing together potential counterparties for waste, power and hydrogen and easing the contractual and funding roadmap for DMG Technology applications.

Peel's investigations with the funding community for these DMG Technology applications revealed that, for the strategy to be attractive to funders, Peel would need to act as sole developer, with exclusive rights to use the DMG Technology in the UK, supported by PowerHouse as technology provider. However, the W2T project rights of development acted as a contractual impediment to this strategy, and with other commercial options ruled out, it was proposed that, to follow the Peel led roll-out of the DMG Technology at the Protos Project and the further ten projects envisaged under the Peel Collaboration Agreement, PowerHouse would acquire W2T thus allowing rights of development to be returned to PowerHouse.

The PowerHouse board considered that given the research and definition activities undertaken by Peel to date, they were in a prime position as a developer and that any delay in adopting Peel's offer to develop the DMG Technology application at the Protos Project would have a deleterious effect on the capacity of PowerHouse to deliver a project on any other site. The development of this first site was critical to PowerHouse's plan to take the DMG Technology to the next stage of its commercial development and the Board was of the opinion that Peel would not be in a position to progress the Protos Project to its conclusion without Completion taking place. Hence, in December 2019 the Board initiated its due diligence on W2T.

As a result of the proposal by the Company to acquire W2T, subject to the execution by Peel, W2T and W2T Protos of the Peel Supplemental Agreement, PowerHouse and W2T entered into the heads of terms for the Protos site as announced on 23 December 2019. On 9 March 2020 Peel entered into the Peel UK Exclusivity Option Agreement which is conditional upon and requires the completion of the proposed PowerHouse acquisition of Waste2Tricity.

In February 2020, PowerHouse announced the entry into the Peel Supplemental Agreement with Peel, W2T and W2T Protos under which it was agreed that Peel will take lead responsibility for the development and funding strategy of the first five of the earlier announced eleven projects. This Peel Supplemental Agreement contains commercial arrangements regarding the monetisation of the DMG Technology at the Protos Site and subsequent sites which includes the payment by Peel of a £500,000 annual licence fee per project to PowerHouse starting when each project is commissioned (PHE Licence Fee), and the immediate commitment to pay PowerHouse £100,000 in historic costs. At the same time, fallback agreements were made to cover PowerHouse sharing revenues with W2T should the Acquisition not proceed. Notwithstanding commercial fallback positions taken, the Board remains of the opinion that that neither Peel nor the funders would progress the Protos Project to completion without the Acquisition proceeding.

On 3 March 2020, the Cheshire West and Chester planning committee approved the planning application made by Peel and W2T for the DMG Technology to be utilised on the Protos Site. This success arose from the successful partnership of the three companies and the Board is happy to confirm that all principal team members from W2T will be incorporated into the PowerHouse team at completion of the acquisition, focussed either on the Protos Project services delivery activities or international development, and monthly operational costs will be reduced significantly. 

The Board consider that, should the Acquisition be completed, the key outcome would be that all project licence fees, and project technology incomes would revert to PowerHouse, together with the rights to assign project development for projects twelve and beyond. Hence PowerHouse would then be in a position to grant exclusivity for the DMG Technology in the UK. 

The Board considers that the engagement of Peel as an experienced player in the sustainable waste and energy sector, together with the size, infrastructure credentials, national reach, and expertise in industrial real estate of the wider Peel group will bring additional credibility to the DMG Technology offering. Peel is, in the Board's view, a natural fit for PowerHouse, given Peel's land bank, industrial real estate and infrastructure credentials.

On 9 March 2020, the Company announced the entry into the Peel UK Exclusivity Option Agreement with Peel for all UK DMG Technology development projects, under which it is envisaged that the DMG Technology applications projects would be both owned by Peel and third parties. Peel has agreed that they will pay a fee of £500,000 for this exclusivity on award, in addition to the project-by-project annual licences. As a result of this further commitment to the future of PowerHouse, the Board considered it appropriate to offer Peel the opportunity to nominate a non-executive director to the Board and following this invitation, on 18 March 2020, Myles Kitcher, managing director of Peel, was appointed to the Board.

The Board firmly believes that the strategic rationale for the Acquisition is underpinned by the success of the combined PowerHouse and W2T team to date, in identifying and resolving the key technology application, the importance of the delivery of the Protos Project and the other four early projects. Post-Completion, the longer-term collaboration with Peel provides a significant commercial advantage compared to other delivery strategies or partnering with alternative collaboration parties.

3.  INFORMATION ON WASTE2TRICITY

PowerHouse granted W2T and Peel exclusive development rights to the DMG Technology in the UK in respect of the 11 'waste plastic-to-hydrogen' facilities and separately afforded W2T the right to exclusive development of the DMG Technology in Japan and Korea, subject to identifying suitable target projects and securing initial contracts. PowerHouse has separately granted W2T Thai exclusive development rights to the DMG Technology in Thailand. W2T International recently sold 31% of the issued share capital in W2T Thai pursuant to a share purchase agreement dated 17 April 2020 (Thai SPA) which, as a result, means that W2T International is no longer the majority shareholder of W2T Thai, and has also agreed (by way of granting an option) to divest the remaining shares held by it in W2T Thai within six months of the date of the Thai SPA.

For the period 1 May 2018 to 30 April 2019, W2T generated an operating loss of £282,412 and a loss after exceptional items of £459,937. The unaudited accounts as at 30 April 2020, show that the net liabilities of Waste2Tricity totalled £722,550.

W2T's Board has recommended the Acquisition to the Sellers who have accepted, conditional upon Admission.

4.  ISSUE OF THE ACQUISITION SHARES IN POWERHOUSE

On or around the date of this Circular, the Company and the Principal Sellers shall enter into the Acquisition Agreement, the terms of which require that the Principal Sellers transfer their respective number of shares held in the capital of W2T to the Company on Completion. Arrangements are also in place to facilitate the transfer of all of the remaining shares in the capital of W2T from the Sellers (other than the Principal Sellers) to the Company at Completion.

The consideration for the purchase of the share capital of W2T held by the Principal Sellers under the Acquisition Agreement and the arrangements with the Sellers (other than the Principal Sellers) is the issue of the Acquisition Shares to each of the Sellers in respect of their proportional shareholding in W2T such that the Sellers, following Completion, will own 46.42% (which includes, for the avoidance of doubt, any PHE shares owned by the Sellers prior to the issue of the Acquisition Shares) of the Enlarged Share Capital of the Company. The Acquisition Shares shall rank pari passu in all respects with the Existing Ordinary Shares, including the right (subject always to the rights attaching to the Acquisition Shares) to receive all dividends declared, made or paid after Completion (save that they shall not rank for any dividend or other distribution declared made, or paid by reference to a record date before Completion).

The Acquisition shall complete automatically and is conditional on the satisfaction of the Conditions. If the Conditions are not satisfied or waived on or before the date falling 2 months after the date of the Acquisition Agreement (Longstop Date), the Acquisition Agreement will cease to have effect immediately at 6.00pm on the Longstop Date.

In the Acquisition Agreement, the Principal Sellers have agreed to give certain undertakings to assist the Company pre-Completion with settling certain debts owed by W2T and, following Completion, the Principal Sellers have agreed to give certain undertakings related to events post-Completion covering customary restrictive covenants and also in relation to the termination or winding up of all of W2T's existing operational and corporate arrangements. 

The Principal Sellers have also agreed under the Acquisition Agreement to give limited warranties to the Company subject to customary contractual limitations.

The Acquisition Shares will be issued at the mid-market closing price of 3.71 pence on 25 June 2020, the latest practicable date prior to the publication of this document, the Acquisition Shares represent a total value of £53,329,034.28.

Conditional only on the passing of all the Resolutions at the General Meeting, PowerHouse will allot the Acquisition Shares and apply to the London Stock Exchange for Admission.

5.  INFORMATION ON CURRENT TRADING

The Company's financial performance was set out in the Company's unaudited interim results announcement released on 27^th September 2019. As at 30 June 2019 the assets totalled £481,191.00 with total current liabilities in the sum of £296,812.00 and the Company's loss before tax was £865,408 for the 6 months ended 30 June 2019.

Since the interim results for June 2019 announced in September 2019, the Company has been engaged primarily in the continued development of the intended first commercial use of the DMG Technology at the Protos Site. This has involved the necessary technical preparatory work carried out in advance of formal contracts, and with Peel, tendering and selecting contracting partners for the engineering definition.

The Company's results for the full year 2019 are currently being audited but are expected to be in line with the trading position reported in the interim results to June 2019. The 2019 results will reflect the full cost of the Directors for the 2019 financial year though it should be noted that the Directors did not take their remuneration in pay during 2019 and will only be compensated for this during 2020.

During 2020, the Company's work on the pre-contract stage for the Protos Site, whilst not significant in value, has been invoiced and represents the Company's first recognition of revenue. The Company is now engaged with the client and contracting partners in reviewing contractual structures suitable for the build phase and their key terms. The Company is expected to act as a sub-contractor in this phase providing engineering expertise for the technology build and commissioning.

Financial performance in 2020, is represented by similar operating costs to 2019, though aided by the recognition of some engineering fees as detailed above. Cash has continued to be managed during this period by the avoidance of unnecessary spend and in utilising share settlement deals with contractors where appropriate.

6.  POWERHOUSE/W2T STRATEGY FOLLOWING COMPLETION

The Directors promote the Acquisition as they consider that the post-Acquisition enlarged company will be better understood by its customers and investors, with rights to markets and developments in-house, and will be able to present a clear message to international markets about its innovative technology designed to address a major world challenge; that of efficiently eliminating plastic waste. The substantial global potential for the application of PowerHouse's DMG Technology will drive the Board's strategy to exploit this opportunity as quickly and effectively as possible.

The fundamental tenet of the market engagement strategy, given the vast size of the addressable market, will be to negotiate similar exclusivity arrangements to the UK, with carefully selected experienced well-financed development partners on a country-by-country basis to enable rollout of its DMG Technology in each region. This strategy will enable international delivery of DMG Technology projects in a speedy yet manageable manner, whilst also mitigating operational and financial risk to PowerHouse, thus creating a company operation and management system to optimise profit and deliver sustainable growth.

To deliver this strategy, the existing pipeline of two dozen screened DMG Technology plant opportunities in the UK will be handed over to Peel under the Peel Collaboration Agreement and a future UK exclusivity agreement, freeing company operational resource and removing all of associated UK business development costs. The international business development activities of W2T will now be integrated into those of PowerHouse and will focus on developing territory-by-territory partnership agreements with regional partners, contractors and operators to roll out the DMG Technology in each territory. PowerHouse will continue these international business development activities of seeking industrial partner relationships, including the current W2T led Japanese and Asian customer liaison which will be taken in-house and become technically led.

Following Completion, the Board's immediate focus will be on delivering the first commercial application of DMG Technology on the contracted Protos Site. To support the Protos Project development and other future projects, PowerHouse intends to seek to expand its operational teams in a phased manner, aligned to projects progress, with teams set up to maintain and develop the delivery and supply chain relationships designed to enable it to deliver and provide licensing support to multiple projects simultaneously. PowerHouse intends to invest in operational personnel, management systems and equipment to deliver these services as required.

The Board will use reasonable endeavours to ensure that the transfer of the remaining shares held by W2T International in W2T Thai will be completed after Completion and that the opportunities in Thailand are fully explored with the new W2T Thai owners. The Board will also commence steps to wind up W2T's two wholly owned, dormant subsidiaries (W2T Protos and W2T International) and W2T as an entity as soon as reasonably practical after Completion. 

PowerHouse will continue with the DMG Technology development. PowerHouse will be the IP owner and licensor, providing technical services and our partners will undertake the project development, project funding and ownership. The Board consider that the global outlook for the expanded Company is extremely positive, with sales and marketing effort brought in house and more focused to deliver the international ambitions of the Company and the roll out of the application of the DMG Technology worldwide.

7.  PROPOSED BOARD AND MANAGEMENT

On Completion, it is proposed that Timothy Yeo, current chairman of W2T, will join the Board of the Company as a non-executive director. Mr Yeo has wide experience in government, serving in the Environment and Health Departments, and subsequently as Shadow Secretary of State for Trade and Industry in the Shadow Cabinet. He is currently the chairman of the New Nuclear Watch Institute, Honorary Ambassador of Foreign Investment Promotion for South Korea and since 2007 has been a non-executive director of Getlink SE, operator of the Channel Tunnel whose market capitalisation on the Paris Bourse exceeds £6 billion.

Upon his proposed appointment as a non-executive director, Tim will enter into a new letter of appointment with PowerHouse.

Furthermore, it is proposed that John Hall and Howard White will join PowerHouse at Completion as consultants. The Principal Sellers and some of the other W2T directors who are also shareholders of W2T will agree to certain restrictive covenants not allowing them to promote similar distributed modular generation technologies to the DMG Technology for a period of 24 months following Completion.

8.  CITY CODE ON TAKEOVERS AND MERGERS

The Code applies to the Company and as such the Shareholders are subject to and entitled to the protections afforded by the Code, as described in this paragraph (paragraph 8) and Part I of this Circular. For the purposes of the Code, the members of the Concert Party are regarded as acting in concert, as defined by the Code, with regard to their respective holdings of shares in the issued share capital of the Company.

The issue of the Acquisition Shares gives rise to certain considerations under the Takeover Code. Brief details of the Panel, the Takeover Code and the protections they afford are set out below.

The Takeover Code is issued and administered by the Panel. The Takeover Code applies to all takeover and merger transactions, however effected, where the offeree company is, among other things, a listed or unlisted public company resident in the United Kingdom, the Channel Islands or the Isle of Man (and to certain categories of private limited companies). The Company is a public company whose Ordinary Shares are admitted to trading on AIM, and its Shareholders are therefore entitled to the protections afforded by the Takeover Code.

Under Rule 9 of the Takeover Code, where any person acquires, whether by a series of transactions over a period of time or by one specific transaction, an interest (as defined in the Takeover Code) in shares which (taken together with shares in which he is already interested and in which persons acting in concert with him are interested) carry 30 per cent, or more of the voting rights of a company that is subject to the Takeover Code, that person is normally required by the Panel to make a Rule 9 Offer to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights in that company to acquire the balance of their interests in the company.

Similarly, Rule 9 of the Takeover Code also provides, among other things, that where any person, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of that company which is subject to the Takeover Code but does not hold shares carrying more than 50 per cent. of the voting rights of that company and such person or any person acting in concert with him acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which he is interested, then such person or persons acting in concert with him will normally be required by the Panel to make a Rule 9 Offer to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights of that company to acquire the balance of their interests in the company.

An offer under Rule 9 of the Takeover Code must be in cash (or with a cash alternative) and at the highest price paid within the preceding 12 months for any interest in shares in the company by the person required to make the offer or any person acting in concert with him.

Shareholders should be aware that Rule 9 of the Takeover Code further provides, inter alia, that where any person who, together with persons acting in concert with him, holds interests in shares carrying more than 50 per cent. of the voting rights of a company, acquires an interest in shares which carry additional voting rights, then they will not normally be required to make a Rule 9 Offer to the other shareholders to acquire their shares. 

For the purposes of the Takeover Code, persons acting in concert include persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate, to obtain or consolidate control of a company or frustrate the successful outcome of an offer for a company subject to the Takeover Code. For the purposes of the Takeover Code, ''control'' means a holding, or aggregate holdings, of shares in the capital of a company carrying 30 per cent. or more of the voting rights attributable to the share capital of a company which are currently exercisable at a general meeting, irrespective of whether the holding or aggregate holdings give de facto control. Under the Takeover Code, shareholders in a private company who sell their shares in that company in consideration for the issue of new shares in a company to which the Takeover Code applies are also presumed to be acting in concert in respect of that company unless the contrary is established.

9.  CONCERT PARTY AND TAKEOVER CODE

9.1  Background to Concert Party

Upon Admission, the Concert Party will hold a maximum 39.90% of the voting rights of the Company which, without the Waiver, would result in the Concert Party being required to make a Rule 9 Offer for the Company. The Panel has agreed, subject to the Waiver Resolution being passed on a poll by the Independent Shareholders at the General Meeting, to waive the requirement under Rule 9 of the Code for the Concert Party to make a Rule 9 Offer for the Ordinary Shares of the Company, that would otherwise arise upon the issuance to the Concert Party of the Acquisition Shares. Some members of the Concert Party currently hold shares in the Company and will not be able to vote on the Resolutions put forward in this Circular as they are not viewed as independent.

The Independent Directors believe that it is in the best interests of the Company that the Waiver Resolution be passed so as to allow the Company to acquire Waste2Tricity. Further details in relation to the Waiver are set out in this paragraph 9.

The Notice of General Meeting, at which the resolutions to approve the issue of the Acquisition Shares, conditional on Admission, and the approval of the Waiver Resolution will be proposed, is set out at the end of this document.  Should, at the General Meeting, the approval of the Shareholders not be obtained in respect of the Allotment Resolution and/or the Independent Shareholders fail to approve the Waiver Resolution, the Acquisition will not proceed.

The persons set out in the table below are presumed to be acting in concert with each other. Their interests in the enlarged Company immediately following Admission are also set out in the table below. Further information is set out at paragraph 1 of Part II of this document.

9.2  Information on the Concert Party

For the purposes of the Takeover Code, the members of the Concert Party are regarded by the Panel as acting in concert with regard to their holdings of shares in the issued share capital of the Company.

The members of the Concert Party and their respective interests in the existing share capital of W2T and the Company and also the Enlarged Share Capital of the Company are:

Name	Holdings  in W2T	Holdings % in W2T	Current holdings in PHE	Current % holdings in PHE	Acquisition shares	Total % in PHE Enlarged Share Capital
Aquavista Limited	16,000	1.23%	-	-	17,642,161	0.50%
Beck, Marianna	11,290	0.87%	-	-	12,448,750	0.35%
Bennett, Tony	1,222	0.09%	3,762,306	0.18%	1,347,420	0.15%
Bennett, Jane	1,222	0.09%	23,715,616	1.14%	1,347,420	0.71%
Drew, Bruce	3,500	0.27%	-	-	3,859,223	0.11%
Farnes, Linda	5,000	0.38%	-	-	5,513,175	0.16%
Hall, John	103,431	7.93%	-	-	114,046,647	3.25%
Jones OBE, Peter	47,500	3.64%	-	-	52,375,166	1.49%
Riley, Keith	11,000	0.84%	-	-	12,128,986	0.35%
Thummukgool, Piangkwan	82,024	6.29%	-	-	90,442,538	2.58%
Warwick, Paul	11,560	0.89%	48,818,890	2.36%	12,746,461	1.75%
White, Ben	172,987	13.27%	32,756,786	1.58%	190,741,532	6.37%
White, Howard	131,001	10.05%	16,172,010	0.78%	144,446,296	4.58%
White, Josh	309,019	23.70%	-	-	340,735,185	9.71%
White-Reyes, Serena	172,986	13.27%	-	-	190,740,429	5.43%
Yeo, Diane	56,879	4.36%	-	-	62,716,780	1.79%
Yeo, Timothy	8,303	0.64%	-	-	9,155,179	0.26%
Yordanova, Anna-Mariya	11,560	0.89%	-	-	12,746,461	0.36%
Total	1,156,484	88.71%	125,225,608	6.04%	1,275,179,809	39.90%

Other than as disclosed in this document, there are no further relationships (personal, financial and commercial) arrangements and understandings between the Concert Party members. For further information on the Concert Party see paragraph 1 of Part II.

9.3 Waiver of Rule 9 obligation

Under Note 1 on the Notes on the Dispensations from Rule 9 of the Takeover Code, the Panel will normally waive the requirement for a Rule 9 Offer to be made in accordance with Rule 9 if, inter alia, those shareholders of the company who are independent of the persons who would otherwise be required to make a Rule 9 Offer (being the shareholders of the Company other than any member of the Concert Party, any of the other shareholders in W2T or any person acting in concert with any such persons) pass an ordinary resolution on a poll at a General Meeting approving such a Waiver.

The Company has applied to the Panel for the Waiver in order to permit the Acquisition to proceed without triggering an obligation on the part of the Concert Party to make a Rule 9 Offer to the Shareholders. Subject to the approval of the Independent Shareholders of the Waiver Resolution, to be taken on a poll at the General Meeting, the Panel has agreed to waive the obligation of the Concert Party to make a Rule 9 Offer. To be passed, the Waiver Resolution will require a simple majority of the votes cast on a poll by the Independent Shareholders participating and voting at the General Meeting.

Shareholders should be aware that under Rule 9 of the Takeover Code, any person who acquires an interest (as such term is defined in the Takeover Code) in shares which, taken together with the shares in which he and persons acting in concert with him are interested, carry 30% or more of the voting rights in a company which is subject to the Takeover Code, is normally required to make a Rule 9 Offer to all of the remaining shareholders to acquire their shares. Similarly, when any person, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30% of the voting rights but does not hold shares carrying more than 50% of the voting rights of such a company, a Rule 9 Offer will normally be required if any further interests in shares are acquired by any such person. These limits apply to the entire Concert Party as well as the total beneficial holdings of individual members. Such an offer would have to be made in cash at a price not less than the highest price paid by him, or by any member of the group of persons acting in concert with him, for any interest in shares in the Company during the 12 months prior to the announcement of the offer.

Notwithstanding the Waiver, the individual members of the Concert Party will not be able to increase their percentage shareholding through or between a Rule 9 threshold without the consent of the Panel. In the event that the Waiver is approved at the General Meeting, neither the Concert Party nor any of its connected persons or other persons acting in concert with it will be restricted from making an offer for the Company.

Shareholders should be aware that Rule 9 of the Takeover Code further provides, inter alia, that where any person who, together with persons acting in concert with him, holds interests in shares carrying more than 50 per cent. of the voting rights of a company, acquires an interest in shares which carry additional voting rights, then they will not normally be required to make a Rule 9 Offer to the other shareholders to acquire their shares.

9.4 Dealings by the Concert Party

9.4 (a) Dealings in the past 12 months

Certain persons within the Concert Party have made the following dealings in the 12 months preceding the date of this Circular.

Shares acquired

Jane Bennett

Date	Number of Shares	Price
14 January 2020	457,142	0.79

Ben White

Date	Number of Shares	Price
24 January 2020	1,000,000	0.80
24 January 2020	1,000,000	0.80
24 January 2020	1,000,000	0.79
24 January 2020	1,000,000	0.79
24 January 2020	1,000,000	0.78
10 January 2020	545,248	0.60
19 December 2019	8,928,572	0.51
16 December 2019	1,078,774	0.33
16 December 2019	2,985,764	0.31
16 December 2019	1,985,489	0.31
16 December 2019	2,000,000	0.31
16 December 2019	2,000,000	0.30
16 December 2019	2,000,000	0.30
16 December 2019	2,000,000	0.30
16 December 2019	1,085,679	0.30
16 December 2019	1,056,876	0.29
16 December 2019	1,089,670	0.28
09 December 2019	30,000	0.32

Shares disposed

Ben White

Date	Number of Shares	Price
08 June 2020	-  1,000,000	3.91
08 June 2020	-  500,000	4.01
08 June 2020	-  1,000,000	3.90
08 June 2020	-  100,000	4.01
08 June 2020	-  500,000	4.01
08 June 2020	-  1,000,000	3.93
08 June 2020	-  1,000,000	3.96
08 June 2020	-  1,400,000	4.03
05 June 2020	-  1,000,000	3.60
05 June 2020	-  500,000	3.51
05 June 2020	-  500,000	3.50
04 June 2020	-  500,000	3.32
03 June 2020	-  2,000,000	2.62
03 June 2020	-  1,000,000	2.65
02 June 2020	-  1,000,000	2.80
02 June 2020	-  1,000,000	2.71
02 June 2020	-  1,000,000	2.84
02 June 2020	-  2,000,000	2.81
02 June 2020	-  2,000,000	2.70
02 June 2020	-  1,000,000	2.76
02 June 2020	-  1,000,000	2.85
02 June 2020	-  2,000,000	2.62
02 June 2020	-  1,000,000	2.85
02 June 2020	-  1,000,000	3.05
02 June 2020	-  2,000,000	2.69
02 June 2020	-  957,142	2.83
01 June 2020	-  786,072	3.68
01 June 2020	-  1,000,000	3.87
01 June 2020	-  2,500,000	3.96
13 December 2019	-  580,658	0.27
12 December 2019	-  500,000	0.26
12 December 2019	-  980,000	0.27
12 December 2019	-  1,010,000	0.27
12 December 2019	-  200,000	0.27
11 December 2019	-  500,000	0.27
11 December 2019	-  94,504	0.27
11 December 2019	-  198,576	0.28
11 December 2019	-  1,018,976	0.29
11 December 2019	-  990,950	0.29
11 December 2019	-  80,000	0.29
11 December 2019	-  1,008,767	0.29
11 December 2019	-  105,679	0.29
11 December 2019	-  35,000	0.29
11 December 2019	-  360,888	0.29
11 December 2019	-  150,000	0.29
11 December 2019	-  250,000	0.28
11 December 2019	-  94,344	0.29
11 December 2019	-  43,565	0.29
11 December 2019	-  430,565	0.29
11 December 2019	-  90,600	0.29
11 December 2019	-  33,000	0.29
11 December 2019	-  222,221	0.29
11 December 2019	-  120,000	0.29
10 December 2019	-  30,800	0.29
10 December 2019	-  55,000	0.29
10 December 2019	-  124,580	0.28
10 December 2019	-  50,000	0.29
10 December 2019	-  996,000	0.28
10 December 2019	-  1,025,879	0.30
09 December 2019	-  1,001,856	0.31
09 December 2019	-  500,000	0.30
09 December 2019	-  1,058,707	0.31
09 December 2019	-  1,096,457	0.32
06 December 2019	-  1,254,877	0.32
06 December 2019	-  1,158,707	0.32
05 December 2019	-  1,058,447	0.32
05 December 2019	-  1,008,467	0.33
04 December 2019	-  1,050,008	0.33
04 December 2019	-  1,100,000	0.34
10 October 2019	-  1,897,647	0.38
20 September 2019	-  1,985,764	0.40
19 September 2019	-  1,654,273	0.39
18 September 2019	-  1,728,062	0.39
18 September 2019	-  1,258,497	0.39
17 September 2019	-  1,899,999	0.40
12 September 2019	-  1,258,797	0.39
06 September 2019	-  999,999	0.38
05 September 2019	-  1,005,000	0.39
14 August 2019	-  1,500,000	0.44
12 August 2019	-  2,506,897	0.48
12 August 2019	-  1,000,000	0.49
20 June 2019	-  1,015,828	0.40
18 June 2019	-  1,245,804	0.41
17 June 2019	-  1,258,096	0.42

9.4 (b) Disqualifying Transactions

The Panel will not normally waive an obligation under Rule 9 of the Takeover Code if any member of the Concert Party, or any person acting in concert with it, has acquired any interest in shares in the Company in the 12 months preceding the date of this Circular but subsequent to negotiations, discussions or the reaching of understandings or agreements with the Directors of the Company in relation to the proposed issue of new shares. In addition, the Waiver will be invalidated if any acquisition of any interest in shares in the Company are made in the period between the date of this Circular and the General Meeting.

The Panel has considered the transactions below, which took place in the time period referred to above, and in the circumstances concluded that these do not prejudice the grant of the Waiver:

Name	Date	Number of shares purchased	Price
Jane Bennett	14 January 2020	457,142	0.79
Ben White	24 January 2020	1,000,000	0.80
Ben White	24 January 2020	1,000,000	0.80
Ben White	24 January 2020	1,000,000	0.79
Ben White	24 January 2020	1,000,000	0.79
Ben White	24 January 2020	1,000,000	0.78
Ben White	10 January 2020	545,248	0.60
Ben White	19 December 2019	8,928,572	0.51
Ben White	16 December 2019	1,078,774	0.33
Ben White	16 December 2019	2,985,764	0.31
Ben White	16 December 2019	1,985,489	0.31
Ben White	16 December 2019	2,000,000	0.31
Ben White	16 December 2019	2,000,000	0.30
Ben White	16 December 2019	2,000,000	0.30
Ben White	16 December 2019	2,000,000	0.30
Ben White	16 December 2019	1,085,679	0.30
Ben White	16 December 2019	1,056,876	0.29
Ben White	16 December 2019	1,089,670	0.28
Ben White	09 December 2019	30,000	0.32

9.5 Intentions of the Concert Party

The Concert Party has confirmed that there is no agreement, arrangement or understanding for the transfer of their Acquisition Shares to any third party.

The Concert Party has no intention of making any changes in relation to:

· the future business of the Company;

· the continued employment of the Company's (and its subsidiaries) employees and management, including any material change in the conditions of employment or in the balance of the skills and functions of the employees and management;

· the strategic plans of the Company;

· the location of the Company's places of business;

· any research and development activities of the business;

· the redeployment of any fixed assets of the Company;

· employer contributions into the Company's pension scheme and the admission of new members; or

· the maintenance of the existing trading facilities for the Company's shares on AIM.

The Company has no employees other than the Directors and does not operate a pension scheme.

The Concert Party does not intend to change its own current business strategy, or any other matter referred to in the paragraph above as a result of the Acquisition.

10. RELATIONSHIP AGREEMENT

The Company and each member of the White Family entered into the Relationship Agreement (which is conditional on Admission) to manage the relationship between them to ensure that the Company will at all times be capable of carrying out its business independently of the White Family.

Further details of the Relationship Agreement are set out in the Appendix to this document.

11. LOCK-IN DEED

The Company and each of the Locked-In Sellers have entered into a Lock-In Deed (which is conditional on Admission) containing certain restrictions on each of the Locked-In Sellers regarding the disposal of their Acquisition Shares following Admission including a restriction on disposals of any interest over any Acquisition Shares held by them for 12 months following Admission and, at the end that 12 month period, orderly market restrictions for a further 12 months. These restrictions will not prevent the Locked-In Sellers from, among other things, accepting a general offer (in accordance with the Takeover Code) made to the Shareholders of the Company to acquire all the Company's issued Ordinary Shares or to the execution and delivery of an irrevocable undertaking to accept such general offer.

12. GENERAL MEETING

For the reasons set out above, Completion is conditional upon, inter alia, the approval by the Shareholders of the Resolutions at the General Meeting. Set out at the end of this document is a notice convening the General Meeting which is to be held at the Chairman's private residence at 10 a.m. on 14 July 2020, for the purpose of considering, and if thought fit, passing the Resolutions set out in the Notice of General Meeting, and further described below.

As Shareholders will be aware, the UK government's announcement on 23 March 2020 of new restrictive measures in connection with COVID-19 will restrict the ability of Shareholders to attend the General Meeting in person.

Unless the measures change prior to the General Meeting, the Company anticipates that it will run the General Meeting as a closed meeting. In order to comply with relevant legal requirements, and to ensure the General Meeting is quorate, the General Meeting will be convened with one Shareholder, being the Chairman of the General Meeting, and two proxy shareholders each appointed by a Shareholder, at the Chairman's private residence at 10 a.m. on 14 July 2020. This will be facilitated by the Company.

As such Shareholders will not be permitted to attend the General Meeting in person and, instead, are advised to submit a Form of Proxy (either by completing and returning the hard copy Form of Proxy or, alternatively, appointing a proxy or proxies electronically by registering the proxy with the Registrar at www.sharegateway.co.uk and completing the authentication requirements as set out on the Form of Proxy) in advance of the General Meeting. In order to ensure that each Shareholder's vote counts, the Board recommends that Shareholders appoint the Chairman of the General Meeting as their proxy for the General Meeting to vote on their behalf. If you hold your shares in the Company in uncertificated form (that is, in CREST) you may vote using the CREST Proxy Voting service in accordance with the CREST Manual (please also refer to the accompanying notes to the Notice of the General Meeting set out at the end of this document).

Should a Shareholder have any questions that they would have raised at the General Meeting in connection with the business of that meeting, the Board asks that Shareholders send any questions by email to [e-mail].

The Board will endeavour to provide answers to all appropriate questions and to publish such answers on the Company's website as soon as practicable following the General Meeting. Shareholder engagement is important to the Company even in these exceptional times.

At the current time it is anticipated that Shareholders attempting to attend the General Meeting in person will be refused entry. 

The Board will continue to assess the situation in the UK, and in particular any new or existing measures that the UK government takes and will duly notify Shareholders if appropriate and what further action, if any, Shareholders are permitted to take in respect of the General Meeting via a regulatory news service.

Resolution 1

Resolution 1 is an ordinary resolution to provide the Directors with authority to allot shares in the Company, and grant rights to subscribe for or to convert any security into shares of the Company (such shares, and rights to subscribe for or to convert any security into shares of the Company) up to an aggregate nominal amount of £7,187,201.39, in connection with the Acquisition.

Resolution 2

Resolution 2 is an ordinary resolution and is subject to the approval of the Independent Shareholders (being the Shareholders other than the members of the Concert Party and any other shareholders of W2T who hold shares in the Company) on a poll and each Independent Shareholder will be entitled to vote for each ordinary share held.

The authority granted by the Allotment Resolution is required to provide the Board with authority to allot the Acquisition Shares and the Directors will not use the authority granted by the Allotment Resolution for any other reason. The passing of the Waiver Resolution by the Independent Shareholders is a condition of the Panel granting the Waiver.

For the avoidance of doubt the share authority in place from last year's AGM also remains in place.

13. ACTIONS TO BE TAKEN

Please check that you have received with this document a Form of Proxy for use in respect of the General Meeting.

In light of the restrictive measures introduced by the UK government in connection with COVID-19,  the Board strongly advises and recommends that all Shareholder's complete, sign and return a Form of Proxy in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received, by post to the Registrar at Neville House, Steelpark Road, Halesowen, B62 8HD by no later than 10 a.m. on 10 July 2020 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting).

In order to ensure that each Shareholder's vote counts, the Board recommends that Shareholders appoint the Chairman of the General Meeting as their proxy for the General Meeting to vote on their behalf.

Please note that in light of the restrictive measures introduced by the UK government in connection with COVID-19, the Board recommends that all Shareholders vote in advance by completing and returning the Form of Proxy, as per above, or voting by way of CREST Proxy Voting, as per below.

As an alternative to completing and returning the printed hard copy Form of Proxy, you can also appoint a proxy or proxies electronically by registering the proxy with the Registrar  at  www.sharegateway.co.uk  and completing the authentication requirements as set out on the Form of Proxy. For an electronic proxy appointment to be valid, the appointment must be received by the Registrar by no later than 10 a.m. on 10 July 2020.

If you hold your Ordinary Shares in uncertificated form (that is, in CREST) you may vote using the CREST Proxy Voting service in accordance with the procedures set out in the CREST Manual (please also refer to the accompanying notes to the Notice of the General Meeting set out at the end of this document). Proxies submitted via CREST must be received by the Company's agent (the Registrar (ID: 7RA11)) by no later than 10 a.m. on 10 July 2020 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting). The completion and return of the Form of Proxy would not normally prevent you from attending and voting in person at the General Meeting, or any adjournment thereof, but due to COVID-19 we are instructing Shareholders not to attend this meeting in person and instead to raise any questions in relation to the business to be considered at the General Meeting by following the procedure as set out on pages 29 to 31 of this document.

Appointing a proxy in accordance with the instructions set out above will enable your vote to be counted at the General Meeting in the event of your absence. As noted previously, the Board recommends that you appoint the chairman of the forthcoming General Meeting as your proxy. In accordance with the UK Government's advice in relation to COVID-19, it is not anticipated that you will be permitted to attend the General Meeting in person.

14. APPLICATION FOR ADMISSION OF THE ACQUISITION SHARES

Application will be made to the London Stock Exchange for the Acquisition Shares to be admitted to trading on AIM and it is expected that trading in the Acquisition Shares will commence on AIM at 8.00 a.m. on or around 15 July 2020. Admission of the Acquisition Shares is subject to, inter alia, approval of the Allotment Resolution and the Waiver Resolution at the General Meeting.

15. RECOMMENDATIONS AND UNDERTAKINGS

Shareholders should be aware that if the Allotment Resolution and the Waiver Resolution are not passed at the General Meeting, the Acquisition will not proceed, and the engagement with Peel, which is conditional on Completion, will therefore be terminated. This would in turn have a significant impact on PowerHouse's ability to develop the Protos Project, if at all.

The Independent Directors, having been so advised by WH Ireland, consider the Acquisition and the grant of the Waiver to be fair and reasonable and in the best interests of the Company as a whole. Accordingly, the Independent Directors recommend that the Independent Shareholders vote in favour of the Resolutions at the General Meeting.

The Independent Directors have undertaken to vote in favour of the Resolutions in respect of their holdings of Ordinary Shares, in aggregate, 2,303,459 Ordinary Shares, representing approximately 0.11% of the Company's issued share capital.

Yours faithfully

Dr William Cameron Davies

Non-Executive Chairman

 

END

 

 

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