Ann: Response to ASX Price and Volume Query-BRN.AX, page-8

The Company also disclosed in the announcement of 13 May 2016 that the Company had the option to place the remaining part of the Rights Issue over the next 90 days and that discussions had been started during the fund raising process with institutions and high net worth’s who have been qualified as strategic investors capable of providing further support. These discussions have continued, working with our Corporate Adviser ‐ Foster Stockbroking, and the Company hopes to confirm the placement of this shortfall in the near future.

This is an interesting response. It may imply that the company will secure well within 90 days the full CR amount via the remaining rights issue. But at what discount to these ‘strategic investors’? There are a number of possible scenarios in light of the recent SP action. One might involve creating a new SP floor above .15c if the issue to these investors is on a VWAP basis, which is possible (I think) if the discussions have been going on for several weeks and in the wake of the SP falling below 15c. These would be very favourable conditions to the ‘strategic investors’ in order to provide BRN with the additional (full CR amount) cash it needs to keep the business moving forward. It will be interesting, though, to see what the ‘strategic investors’ decide to do with their discounted BRN shares if the SP is still sitting at 18 – 19c or higher when news of the placement is announced.

In any case, that these discussions are in fact happening suggests that the company is not 100% confident that a license deal will be sufficient to cover ongoing costs and that such a deal is in fact not imminent.

All imo.