Powerhouse Energy Group Plc, Bingley, U.K., a company focused on ultra-high temperature gasification waste to energy systems has announced that it has arranged for a G3-UHt gasification system (PHE-G3), complete with power generation capabilities, to be containerized, to allow it to be shipped to the U.K. for pilot testing on one of several sites under consideration.

The PHE-G3 has been undergoing testing and continued enhancement, coupled with data gathering on the operational characteristics of the unit and its balance of plant. Subject to containerization, the PHE-G3 is now ready for in-situ demonstration, according to Powerhouse Energy. The final phase of containerizing the unit will begin in 2017, with the expectation that the total system will be ready for delivery to the U.K. by the end of Q1 2017.

The U.K. sites under consideration are active waste and recycling operations with whom the company has been in discussions regarding the integration of the PHE-G3 into their facilities, it says.

Powerhouse Energy has entered into an agreement with Hill Grove Investments Pty Ltd. whereby OrePro pty ltd for a fee of $228,700 (180,000 Pounds sterling) will undertake the containerization engineering work. As it is understood that OrePro is related to Hill Grove via common ownership interests and as Hill Grove, through its convertible loan note, can convert into a shareholder holding more than 10 percent. of the share capital of the company it has been deemed a substantial shareholder and consequently the agreement is considered a Related Party Transaction under the AIM Rules.

To address any potential claims that Hill Grove or OrePro may have over the intellectual property from its work in assisting in the development of the PHE-G3 the agreement also contains provisions relating to the intellectual property.

The agreement states that on redemption of the loan note or if the containerization of the fully operational PHE-G3 system is not completed by March 31, 2017: (a) Hillgrove will, and will procure that Ore-Pro will, deliver to Powerhouse a deed of assignment of all intellectual property rights in the PHE-G3, such assignment to be for nil consideration and (b) Powerhouse will deliver to Hillgrove and/or Ore-Pro a royalty free, fee free, perpetual license to exploit the intellectual property rights in the PHE-G3 (i) Australia and New Zealand and (ii) worldwide for coal gasification projects.

The agreement also confirms that upon repayment of the convertible loan note, or conversion by Hill Grove of the loan notes into shares, all intellectual property rights in relation to the PHE-G3 will be absolutely owned by Powerhouse.

The agreement stipulates that the amounts due under the convertible loan agreement with Hill Grove, which was due for repayment on or before June 30, 2017 will now be extended by 12 months, with repayment now due on the earlier of June 30, 2018 or the date the loan becomes otherwise payable earlier in accordance with the terms of the Loan Note.

The board (all of whom are independent in this matter) consider, having consulted with WH Ireland Limited, that the terms of the agreement are fair and reasonable insofar as its shareholders are concerned.