16 January 2017

Anagen Pty Ltd (Administrator Appointed)

A.C.N. 080 451 136 ("the Company")

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Appointment of Administrator

On 23 December 2016, the Board of Directors of Anagen Pty Ltd (Administrator Appointed) resolved to appoint myself, Kim Wallman, as the Voluntary Administrator of the Company.

Invitation for Expression of Interest

I write to advise that I am seeking expressions of interest for the sale of the Company's intellectual property and inventory assets.

As you may be aware, the Company is the owner of the 'BioClip' sheep wool harvesting system.

I also welcome suggestions for any other parties who may be interested in acquiring the intellectual property and inventory assets.

Please be advised that the deadline for expressions of interest is Friday, 17 February 2017.

The background information below has been extracted from the Company's prospectus prepared in 2010. A copy of the prospectus can be obtained from the Administrator's office upon request.

BioClip - a new alternative to harvesting wool

BioClip is a wool harvesting system which produces a natural break in the wool of sheep enabling harvest of the fleece from wool producing sheep and removal of unwanted fibre from self-shedding breeds. BioClip is a system of wool harvesting offering the sheep producer a realistic alternative to conventional shearing. The Company holds the rights to and interest in BioClip via its wholly owned subsidiaries Biological Wool Harvesting Co Pty Ltd and BioClip Pty Ltd.

EGF - A naturally occurring protein in mammals

BioClip's injection contains a naturally occurring protein, called epidermal growth factor (EGF) with the unique effect of causing a temporary cessation of wool growth in sheep. The EGF effect of weakening the wool occurs within a couple of days and the wool breaks between seven and fourteen days of injection. The protein breaks down into its combinate amino acids and has disappeared from the body approximately 40 hours after administration with minimal side effects. The protein is commercially manufactured by fermentation of a special bacterium into which laboratory synthesised DNA has been inserted which codes for EGF.

EGF was discovered in 1956, and identified in mice as having effects on wool follicles. Its use in sheep for wool harvesting was researched and patented by CSIRO in the 1970s and 80s. The EGF patent has expired, though the manufacturing method is unique to the supplier with which the Company has an exclusive supply agreement. The Company believes the supply to be secure, as access to the seed culture and manufacturing know-how for EGF is closely protected by the manufacturer.

The injection formulation of the EGF is subject to patent. This formulation is the basis of a new registration for the BioClip product granted in February 2010. Manufacturing scale-up trials and ongoing stability studies remain to be completed to fully commercialise this formulation.

The Break Process

Following injection and wool break, the wool fibre releases from the wool follicle commencing approximately 5 days from injection and is complete at 14 days post-injection. New wool growth commences at the same time and appears at skin level at 18-21 days post injection.

Sufficient wool re-growth has normally occurred by day 28 to prevent sunburn or hypothermia in the sheep and the wool can therefore be safely harvested. Upon removal of the net (see Fleece Retention Net heading below), the freshly harvested sheep displays a completely intact skin and returns to the paddock to resume grazing with minimal interference to their daily routine.

By contrast shorn sheep have generally been off feed and water for approximately 24 hours prior to shearing. Mechanical shearing invariably leads to some skin cuts (especially in Merinos) and shorn sheep may take a few days to return to normal feed intake.

Fleece Retention Net

The other essential component of BioClip is the fleece retention net which is applied at the same time as the injection. The nets are elasticised and are available in three sizes covering the live weight range of 20-50kg in 10kg increments. Correct net selection is an important criterion in the performance of the net in respect of retention of wool. Nets are single use only and are disposed of once the wool is removed.

The fleece retention net is essential in Merinos and their crossbreeds to protect the sheep from sunburn and hypothermia (cold shock), and to retain the wool for later harvesting.

The BioClip net continues to undergo improvement and development. Current activity is focussed on enhancing the wool retention performance of the net. Initial prototypes of the product involved wool retention/capture via coats utilising internal Velcro. These were expensive, cumbersome to use and resulted in a substantial amount of felted wool. Progress was made when a netting material was used, which evolved into elasticised netting to simplify application and to conform to a wider range of sheep sizes. The current net is commercial in its own right, however continues to undergo constant development to improve its wool holding capability and to expand the bodyweight range of sheep to those greater than 50kg.