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1 Brain Resource Ltd (ASX: BRC, OTC:BRRZY) 22 October 2015 MyBrainSolutions Growth and Quarterly Cash Update 1) Growth in MyBrainSolutions for Employer Boeing now live We are pleased to report that MyBrainSolutions commenced being offered to around 90,000 Boeing employees from earlier this week, this significant milestone following on from the successfully completion of the pilot offer. Already, there have been several thousand registrations and assessment completions, which bodes well for the overall uptake. Momentum in overall client growth has also continued to build, with 5 employers added during the current quarter and bringing our current total contracts to This compares to a total of 8 employers added for entire previous financial year. Contracts added: Sharecare which contracted with MyBrainSolutions to provide key aspects of its consumer digital brain health online platform. Sharecare, Inc. is a health and wellness engagement platform and nearly 40 million people have shared more than 5 billion data points about their health status and habits with it. Sharecare was founded by Jeff Arnold (WebMD) and Dr. Mehmet Oz in partnership with Harpo Productions (Oprah Winfrey), Sony Pictures Television and Discovery Communications. Humana, a leading health and wellbeing company focused on making it easy for people to achieve their best health with clinical excellence through coordinated care which serves millions of people across the US. Nike through our Aetna relationship. Citrix, a multinational software company through our Mercer relationship. Teletech, a global outsourcing business, a direct sale as opposed to through one of our distributors. Note that the above includes the 4 contracts we flagged in our Annual Report as being in progress at the end of August Our growth focus is based on leveraging our strong relationships with the major providers (includes Mercer, Aetna, Kaiser that in combination insure >50 million US lives) to onsell MyBrainSolutions. 1 2 accounts dating back several years were incorrectly classified and now been excluded from this total. ABN investor@brainresource.com URL: 1

2 2) MyBrainSolutions for Addiction is rapidly approaching 100 contracted clinics We are pleased to report that during September 2015 we signed our 92nd Addiction clinic user of MyBrainSolutions for Addiction, and momentum continues to grow. This builds on the 72 contracted clinics using MyBrainSolutions for Addiction at the end of the 30 June 2015 financial year 2. This scale is establishing our credibility in the market and supporting our sales focus on the large providers. Revenue growth is also tied to the value we can demonstrate and also the integration of our solution within clinic workflows. To that end the following progress is expected to have an impact. a) We now have enough data to show proof points for value at a recent conference Dr Evian Gordon (CEO) presented several significant findings including: The MyBrainSolutions Assessment is an efficient way to predict relapse risk based on predictors in the scientific literature (including those with low Feeling and Self Regulation scores, lower baseline Positivity and Resilience prior to treatment) Playing MyBrainSolutions Games for around 3.5 hours has a statistically significant impact on these Assessment scores and reduces clinical symptoms. b) We have recently released a new Clinical Dashboard, a new application that we have built to aid addiction clinic users in their use of the MyBrainSolutions site. Importantly it streamlines the new client onboarding process, the management and dissemination of patient logins, reporting and payments. The overall impact being to reduce the time and effort required by our clients and internal support staff to establish a new account and to manage their needs. 3) Award for MyBrainSolutions Dr Evian Gordon on behalf of MyBrainSolutions has been chosen as the first ever recipient of IDA s Innovation Award. Brain Resource s industry leading innovation to help people train for peak brain health and fitness, reduce stress simply and objectively, provide rapid assessment of brain strengths & weaknesses and to enable landmark tests to predict treatment in Depression and ADHD is leading the way and to be modeled. This provides further signs of our growing adoption and recognition in the US. See invisibledisabilities.org/seminarsandevents/2015brainideassymposiumitsallinyourhead / for further detail. 2 1 contract was terminated prior to being commissioned and has now been excluded from this total. 2

3 4) September 2015 Quarterly cash Please see the attached quarterly cash update which shows a closing cash balance of $3.2 million. Cash consumption has been higher than expected, including due to the many new client start up requirements such as Boeing, and the impact of the AUD/USD depreciation. Given the lag between these costs and the associated revenues, we will require an improvement in our operational performance and a capital raising in the near term to supplement cash resources. We will also be curtailing spend on any new initiatives until this occurs and accelerating the cost rationalisation program flagged in our Annual Report to better align our resources. We do however remain optimistic that our early wins in these markets will extrapolate to more substantial revenue growth in the near future, for example winning one of the large addiction groups that could materially transform our current position. About Brain Resource: Brain Resource is the leading provider of online scalable products that ASSESS, TRAIN and MONITOR the brain. The MyBrainSolutions products target large markets, including 18,000 US employers and 14,000 US addiction clinics. Current clients include 40 brand name corporations and 92 addiction clinics. BRC is also developing Depression and ADHD treatment prediction tests and has the world s largest standardised brain database that underpins all development and products. 3

4 Appendix 4C Quarterly report for entities Rule 4.7B Appendix 4C Quarterly report for entities admitted on the basis of commitments Introduced 31/3/2000. Amended 30/9/2001 Name of entity ABN Quarter ended ( current quarter ) September 2015 Consolidated statement of cash flows Cash flows related to operating activities Current quarter Year to date 1.1 Receipts from customers Payments to Suppliers and Employees (1,476) (1,476) 1.3 Dividends received 1.4 Interest and other items of a similar nature received Interest and other costs of finance paid 1.6 Income taxes paid R&D offset received Other (provide details if material) Net operating cash flows (552) (552) 30/9/2001 Appendix 4C Page 1

5 Appendix 4C Quarterly report for entities Current quarter Year to date 1.8 Net operating cash flows (carried forward) (552) (552) Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) financial assets (c) intellectual property (d) physical noncurrent assets (e) other noncurrent assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical noncurrent assets (e) other noncurrent assets (752) (17) (752) (17) 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material) Net investing cash flows (769) (769) 1.14 Total operating and investing cash flows (1,321) (1,321) Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings (41) (41) 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other Share Issue Expenses Net financing cash flows (41) (41) Net increase (decrease) in cash held (1,362) (1,362) 1.21 Cash at beginning of quarter/year to date 4,335 4, Exchange rate adjustments to item Cash at end of quarter 3,238 3,238 Appendix 4C Page 2 30/9/2001

6 Appendix 4C Quarterly report for entities Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter $A' Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item Explanation necessary for an understanding of the transactions Salaries of Executive Directors. Noncash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows N/A 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest N/A Financing facilities available Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2). Amount available Amount used 3.1 Loan facilities Nil Nil 3.2 Credit standby arrangements Nil Nil 30/9/2001 Appendix 4C Page 3

7 Appendix 4C Quarterly report for entities Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current quarter Previous quarter 4.1 Cash on hand and at bank Deposits at call Bank overdraft 4.4 Other Term Deposit 2,781 3,611 Total: cash at end of quarter (item 1.23) 3,238 4,335 Acquisitions and disposals of business entities Acquisitions (Item 1.9(a)) Disposals (Item 1.10(a)) 5.1 Name of entity N/A N/A 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX. 2 This statement does /does not* (delete one) give a true and fair view of the matters disclosed. Sign here: Dan Segal Date: 22 October 2015 (Director/Company Secretary) Print name: Dan Segal Appendix 4C Page 4 30/9/2001

8 Appendix 4C Quarterly report for entities Notes 1. The quarterly report provides a basis for informing the market how the entity s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below. 6.2 reconciliation of cash flows arising from operating activities to operating profit or loss 9.2 itemised disclosure relating to acquisitions 9.4 itemised disclosure relating to disposals 12.1(a) policy for classification of cash items 12.3 disclosure of restrictions on use of cash 13.1 comparative information 3. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. 30/9/2001 Appendix 4C Page 5