Powerhouse Technology Centre Project Update

Powerhouse Energy (AIM:PHE), a company pioneering integrated technology that converts non-recyclable waste into low carbon energy, provides the following update on its project for the development of its Technology Centre (the "Centre").

Summary

• All General building work has now been completed
• Both the PHE and Engsolve teams will be moving into the Centre this month
• The Centre will now become the Company's business headquarters and Registered office
• The Company has been made aware that Mitchell Dryers (Kingmoor) Limited, one of the Company's suppliers, has ceased trading

PHE advises that it is making excellent progress in the development of the Centre in Bridgend South, Wales. All general building work has now been completed and the teams will be moving into the centre this month. Powerhouse also announces that the Centre will become the Company's new registered headquarters. The Company's registered office will therefore be changing to Unit 3/3A, Garth Drive, Brackla Industrial Estate, Bridgend, CF31 2AQ.

The Company has also been made aware that its equipment supplier Mitchell Dryers (Kingmoor) Ltd ("MDKL") has ceased trading and on 6 October 2023 is commencing liquidation, which PHE understands is likely to progress as a creditors' voluntary winding up. MDKL had, prior to its cessation of trading, under contract with PHE, been manufacturing the Thermal Combustion Chamber ("TCC") for the Feedstock Testing Unit ("FTU") being built at the Powerhouse Technology Centre, as well as being committed to sourcing the ancillary equipment and completing the installation.

Whilst we are concerned for MDKL and its workforce, the Company has been working to source an alternative TCC. The Company has spoken with a number of potential suppliers, all of whom are capable of delivering a TCC to the Company's requirements, as are all of the ancillary equipment vendors. It is unclear if the change of supplier will have any impact on the schedule for installation and commissioning of the FTU at the Centre. PHE is in direct contact with MDKL's liquidator.

In parallel to PHE sourcing an alternative TCC, the preparation of the ancillary processes, safety systems, and civil works that must be completed for the FTU to be installed, will be undertaken by the Company's wholly owned subsidiary Engsolve Ltd and is expected to start immediately. This work will now precede installation of the TCC and this adjustment to the order of steps will help with supporting the schedule should an alternative TCC need to be sourced.

In the meantime, the Company has lodged a claim for the first payment of £193,000 which was made to MDKL. In addition, PHE has also added a claim for liquidated damages and registered interest in the purchase of the already completed equipment. The Company is in possession of the alloy that was bought by its wholly owned subsidiary Plastics to Hydrogen Number 1 Ltd, for the first commercial scale of the TCC. This had previously been stored at MDKL in Carlisle but was moved earlier this year.

Tony Gardner-Hillman, Non-Executive Chairman of PHE, commented:

"This news is something we take in our stride, and we do not currently anticipate that it should delay the opening of the Centre. PHE has yet to decide whether its best course of action is to take possession of the equipment in the MDKL facility or to go to another supplier afresh. Relative complexities of negotiations, costs and timings will be key factors. MDKL is not the only UK supplier able to provide the TCC and we have rekindled contacts with others we were speaking to prior to engaging with MDKL."

Paul Emmitt, acting CEO of Powerhouse Energy plc, said:

"We are making positive progress at the Centre and look forward to our teams moving in shortly. Whilst frustrating, we do not believe that the TCC and FTU setback is a major concern to PHE and should not delay the scheduled opening of the Technology Centre. We have alternative plans in place which we are optimistic will result in a successful outcome."