Ann: Proposed issue of securities - BIT, page-111

Warning ...... This post is personal analysis based solely upon the scenario raised by Lux above (reply button not working). It contains numerous paragraphs for reading, historical facts, some pretty charts with small writing and observations which may be offensive to anybody who was planning a quick pump and dump in coming months. The few posters who don't like analysis, history, red and green lines, facts, other people's observations or who believe that all posts on a public discussion forum should contain subliminal hints about trains leaving the station and toot toot sounds, I urge you to stop reading now. This is not compulsory reading. This post reflects only my observations of what typically happens in the weeks and months after a CR in Biotron ordinary fully paid stock and in no way diminishes the longer term prospects subsequent to events such as trial completion which may occur mid to late next year.

The above said, your comment is very true Lux and quite perceptive re expectations. History shows a very interesting story here. If we look to the previous two rights issues that Biotron has done prior to this one there is quite an interesting pattern which shows how this typically plays out. In fact the pattern for both 2017 and 2018 is so similar its uncanny.
2018 Rights Issue

If you look at the below chart you can see the significant hit the BIT SP takes on the day the CR is announced. This is because Biotron always offers new stock at a massive discount so hardly a surprise the market price drops quickly. There are a couple of days of price stabilization like we saw on Friday before rights trading commences then the slump kicks in. The SP gets a bit of a kick up towards the end of the CR as people think the pain is almost over then comes the slap in the face on the day the newly purchased stock hits people's accounts and start selling it. People could equal underwriter in this instance.

Note that the SP trends lower for about 4 months dropping approx another 40% after the the initial fall resulting from the shock of the CR announcement. After bottoming at about 1.5c over subsequent months the HIV results came in and they talked up "commercialization negotiations" so the price briefly took off for a few weeks before directors started selling, ASX asked lots of questions and it all unraveled (not shown here, different story).



2017 Rights Issue

Now look at the 2017 rights issue. A very similar pattern. Again, a massive drop in the SP on the day of the announcement which appears to be a result of the huge discount on new shares in the CR. Price plateaus for a few days after until rights trading commences then a big fall again. Picks up a bit at the end of the CR as people think its all over and hope it will rise again but in days after the new stock hits portfolios the selloff begins (same as 2018). It stays low for several months bottoming out approx another 30% below the price it averaged on the day of the CR announcement, bottoming around 1.5c. Months later the SP had a small bounce which the company could not explain (when the ASX asked) so it started drifting back down to fresh lows (1.5c) over the next year until Sept 2018 (see above) came around.

The green bars at the end of the 2018 chart are what might happen due to speculation in mid to late 2023. No doubt that's what most are here for based on the exciting stories they have heard. This chart shows where in the cycle you might expect the big pump if that what you are interested in but note that its a long, long time after the CR is done. The rest of the charts provide some insight into what impact the CRs has at announcement, rights trading and after new stock hits the market. Interestingly on both occasions the SP bottomed out at around 1.5c in the months after the CR despite vastly different SP preceding the two CRs and different offer prices. This appears to be the absolute floor price for the stock.




So far 2022 is playing out pretty much the same but we are only days into this CR so far. It will be interesting to see what happens over coming weeks but I have to agree with your comment Lux. If people are expecting a big bounce after the CR is done, history of recent Biotron CRs indicates otherwise. I have little doubt that the SP will get a big kick in mid to late 2023 which history supports but your post is about what happens between now and then which is a very different story.

In no way am I suggesting history always repeats or that this time can't be different or that magic doesn't happen, or the tooth fairy isn't real. I make no effort to predict the SP as like 120% of other people here I have no way to know exactly what will happen on any given day. We can make some assumptions about other known events in the short term which may help on the speculative front fueled by guesswork and interpretation of the latest company announcements, including the start of the long awaited covid trail (you know, the proper one), the successful completion of the capital raising, and the annual AGM propaganda where the company reminds people about the pot of gold at the end of the rainbow. Beside this we have about 7 months of interesting discussions before any known price sensitive news so consider that and the relative news flow in the years depicted above when interpreting the charts.

One final thing and I only include this for completeness. The cash currently being raised appears to be approx $3.8mil after fees and costs. Based on their typical cash burn rate (which I assume won't change much based on their quarterly despite the additional costs of the new covid trial), that's just under 11 months. Given they still have approx one month's cash left now we can estimate that by this time next year the cash will be back to almost empty without other input. I believe they have a plan for that and will be expecting that the speculative price rise in mid to late 2023 will result in many shareholders exercising their new options from this CR to raise more money just like 2018. Just be aware that cash may be very low again before this happens. Unless a "deal" occurs shortly after trial results the company will need wild speculation to occur again in order to get the options over the line else they will need to seek more funding this time next year.

Anyhow, all just my observations and opinions. Hopefully everybody gets very rich late next year and we all show patience in the 7 months between now and then. Good luck to all and happy Sunday.