Pure Hydrogen – Response to Query Letter.
Yushra Haniff
Adviser, Listings Compliance (Sydney)
ASX
20 Bridge Street
Sydney NSW 2000Via email : Yushra Haniff useDear Madam
We refer to letter dated 14 January 2022 concerning a query letter and response to your questions below as follows:
Pure Haul Pty Ltd
1.- Please provide a copy of the term sheet signed with Pure Haul Pty Ltd referenced at
Provided separately
2.- Please provide an outline of the due diligence PH2 performed on Pure Haul Pty Ltd to form
The director and controller of Pure Haul Pty Limited is Mr Scott Travers. Mr Travers is well known to the management of Pure Hydrogen Operations Pty Limited (although was not known to the directors of Pure Hydrogen prior to the term sheet discussions) and Pure Hydrogen Operations Pty Limited highly recommended him to the Board of Pure Hydrogen for his transport and logistic expertise.
We understand that Mr Travers currently runs an associated company that operates through eastern Australia and Northern Territory with 30 employees and 35 contractors operating 14 company prime movers as well as contractors’ prime movers. Mr Travers was the State Manager of Transport for Elgas in Queensland, as well as holding senior roles with Toll and Linfox.
Hydrogen transport is a very specialised area. Pure Haul was established as a separate company to minimise potential conflicts and protect Pure Hydrogen’s commercial data from other transport customers. Mr Travers offered to establish a clean company for the outsource of our transport and logistic hydrogen requirements which was attractive compared to other offerings.
3.- Did the registered shareholders or directors of Pure Haul Pty Ltd, or their associates, own any shares in PH2 prior to the term sheet being signed?
We are advised that a related entity acquired 345,781 shares in Pure Hydrogen at an average price of about $0.29 per share on 26/03/21.
H2X
4.- Please state the name of the person(s) or entity(ies) that received CDIs as consideration for the purchase of PH2’s interest in H2X.
Hest Pty Limited ATF Hest Investment Trust and Snowy Venture Capital Group Pty Limited ATF Snowy VC Trust Pty Limited.
5.- Noting that H2X stated that $50 million in “order requests” had been received at around 7 September 2021 and that the Warrego was to be unveiled on the Gold Coast in November 2021 (paragraph C), is PH2 able to confirm:
The media release that you refer to dated 7 September 2021, predates Pure Hydrogen’s involvement with H2X Global. Pure Hydrogen, nor anyone associated with Pure Hydrogen did not have any involvement with the preparation, editing or approval of the media release. The directors of Pure Hydrogen would not approve the media release in its current form as Pure Hydrogen would of taken the view some of matters were premature particularly the disclosure of the potential revenue as we would take a cautious and conservative approach.
5.1 the current approximate value of order requests;
There is no doubt there is significant interest in the H2X Warrego from Australia and internationally. On the main page of H2X’s website you can register your interest to reserve a H2X Warrego. The process is then to verify registrations. After H2X has demonstrated the Warrego, H2X intends to request deposits and confirm the specifications and potential delivery date. At the current time we are advised that the total expressions of interest for the Warrego through this process is in excess of $50 Million. Expressions of interests are not a revenue forecast and there is no guarantee any order placed will be fulfilled.
5.2 whether H2X has received any upfront deposits for the vehicles, and if so, the value of those upfront deposits;
No, as stated above no deposits would be requested until after H2X had revealed the H2X Warrego for demonstration purposes, and was officially unveiled by H2X as expected;
5.3 whether H2X has received any upfront deposits for the vehicles, and if so, the value of those upfront deposits;
H2X is currently working on 2 Warregos, however they are not ready to be demonstrated to potential customers yet. When Pure Hydrogen made its investment in H2X Global in October 2021, the timetable was reset for the launch to occur this year in the 2nd quarter. No upfront deposits have been received by H2X for these vehicles to our knowledge.
5.4 whether H2X is still expected to deliver vehicles to customers by Q2 2022.
Yes, we understand that deliveries to customers will start in Q2 2022.
– Please provide details on the current status of H2X’s car manufacturing facilities, including (but not limited to):
- location;
We are advised that H2X intends to have facilities in Australia, Netherlands and Malaysia. The Australian facility is an existing premises in Sale, Victoria. The Netherlands site is through a production partner at Ginaf, in Veenendaal Netherlands under contract assembly for European/Left Hand Drive Deliveries.
- whether H2X intends to lease or own the site;
We understand that H2X has leased a 1.65 ha site in Sale Victoria.
- status of construction (if incomplete, an expected completion date); and
The site is in the process of being prepared ready for occupation later this month.
- expected production rates (e.g. cars produced per week).
We understand that the production is expected to start at 20 units per month and gradually increase to about 100 per month by mid 2023. This of course will be dependent on sales.
Thanks for staying up to date with Hydrogen Central.
CAC-H2
– Please provide an update on the status of the first hydrogen plant referred to at paragraph E. In your answer, please clarify whether:
- a site has been chosen, and PH2 is currently negotiating binding terms for plant sizing and funding; or
- that PH2 has not signed any binding agreements, including the proposed site for the plant.
- if a site has been selected, please provide details.
- Pure Hydrogen has been working well with CAC-H2 with solid progress made. The first site with CAC H2 is at Caboolture, north of Brisbane. The Company has been finalising the technical aspects of the plant layout, which has taken slightly longer than expected but is progressing well. Once the detailed specifications have been agreed, the parties will be able to finalise the terms and conclude binding agreements. At this stage we do not see any reason why a deal will not be completed in line with the previous announcement.
– Please clarify whether the CannAcubed entity that was linked to (as per paragraph E.i) has any association with PH2. If so, please provide details. If not, please explain why a link to CannAcubed was provided and clarify its association with CAC-H2.
Pure Hydrogen has no link to CannAcubed, who we understand was a shareholder in CAC-H2 at the time of the announcement. We understand that CannAcubed has subsequently sold out of CAC-H2.
You can read the rest of the letter following the link below.
Pure Hydrogen, January 2022
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