Simavita Online Annual Report 2017

and cost efficient service to a rapidly growing community. During the financial year 2018 the Group plans tomaterially grow revenue and also appoint additional distributors to address the long termcare and rehabilitationmarkets in North America and Europe. The Group has indicated its strong intention to raise additional capital to fund ongoing operations together with its initiatives to drive revenue with newproduct in newmarket segments particularly associatedwith AlertPLUS™ for massmarkets in the Aged, Disabled and Infantsmarkets in North America and Europe. There is uncertainty about the Group’s ability tomaterially grow revenue in a timelymanner and to raise capital on terms that meet timing and pricing requirements. The viability of the Group and its ability to continue as a going concern andmeet its debts and commitments as they fall due are dependent upon: –– The continued support of shareholders in the provision of ongoing working capital, –– Completion of a licensing agreement with at least one of the international manufacturing firms currently reviewing Simavita’s AlertPLUS™ platform technology, –– Successfully raising additional working capital either by way of licensing transaction or through the issue of new shares. Either or both of these events must occur prior to November 30, 2017; –– Materially and rapidly addressing new market opportunities and to grow revenue; and –– Continuing cost containment strategies. Due to the uncertainty surrounding the abovematters, there is material uncertainty that may cast significant doubt upon the Group’s ability to continue as a going concern and, therefore, that it may be unable to realize its assets and liabilities in the normal course of business. However, the Directors believe that the Groupwill be successful in the abovematters and, accordingly, have prepared the financial report on a going concern basis. The Group’s auditor included an emphasis of matter paragraph in the June 30, 2017 Audit Report relating to the Group’s ability to continue as a going concern. Currently, there are no significant seasonality factors that influence the Group’s business. (b) Basis of consolidation These consolidated financial statements include the accounts of the Group and the entities it controlled, being Simavita Holdings Limited, Simavita (Aust.) Pty. Ltd., Simavita US, Inc. and Fred Bergman Healthcare Pty. Ltd. A Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Intracompany balances and transactions, including any unrealized income and expenses arising from any intracompany transactions, are eliminated in preparing the consolidated financial statements. The functional and presentation currency of the Group and its subsidiaries is the Australian dollar. 1. Nature and continuance of operations Simavita Limited (the “Group”) was incorporated under the laws of the Yukon Territory on May 28, 1968 and continued under the laws of the Province of British Columbia, Canada on December 3, 2013. Our first products focus on major unmet needs for the assessment and management of incontinence. The annual global economic burden is billions of dollars for incontinence diapers alone and is increasing rapidly. Simavita’s patented technologies provide sensors for all segments of the diaper market from the assessment of incontinence needs for the aged and disabled through to extremely low cost alert sensors for everyday use, particularly focused upon the infant market. Simavita operates in Australia, Europe and North America where there is a significant and growing demand for products that deliver real clinical and cost benefits to the health care industry. AssessPLUS™ is a low cost and easy to use assessment platform. Its focus is on ensuring that the aged and disabled, who live in the community, will be provided with the right diaper at the right time. A 48 to 72 hour assessment programwill drive reduced costs by up to 25% as well as improved health outcomes, including reduced accidents associated with falls and improved skin integrity. 2. Summary of significant accounting policies (a) Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and interpretations issued by the Australian Accounting Standards Board. The Group is a for-profit entity for the purpose of preparing the financial statements. The financial statements comprise the consolidated financial statements of the consolidated entity. Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards (IFRS). Going concern The Group has incurred total loss before tax of $7,752,516 (2016: $11,457,221) for period ended June 30, 2017 and net cash flows used in operations during the same period of $6,247,185 (2016: $11,538,002). The Group’s cash reserves as at June 30, 2017 were $2,072,353 (2016: $6,172,770). In December 2016, the Group received a payment of $1,659,600 under the Australian Commonwealth Government’s research and development tax incentive scheme and the Directors expect the Groupwill receive a payment of $961,558 in respect to the 2017 financial year during the next 6months. During the financial year the product range was expanded to address additional market sectors of home based care and disability care. This initiative was in response to a clear global trend to enable the elderly and disabled to stay at their family home longer and to take ownership of their care. This initiative was designed to deliver more effective Notes to the Consolidated Financial Statements for the year ended June 30, 2017 21