Simavita Annual Report 2018

–– On September 27, 2018 the Group received a payment of $731,315 for R&D in respect to the 2018 financial year. This incentive had been financed (total borrowings at June 30, 2018 of $678,767) and loan was repaid on receipt of the incentive, leaving a residual cash inflow of $22,444 after fees. –– As at October 2, 2018 the Group has received signed subscription agreements totalling $1,975,000. These funds are due to be received by October 5, 2018. As a result of these subscription agreements 65,833,333 new CDIs will be issued at a price of $0.03. –– On October 2, 2018 the Group received a signed Convertible Note agreement for the amount of $1,000,000 which will be subject to shareholder approval at the Annual General Meeting in December 2018. The Convertible Note agreement enables the holders, at their option, to reduce their investment of $1m by the sum of any share placement in excess of $2m that may occur up until the date of the Company’s AGM. Once approval is received, up to 1,000,000 Convertible Notes with a face value of $1 will be issued. The notes will automatically convert into CDIs on December 31, 2018. The convertible notes will entitle the holder to a coupon of 10% per annum. The ability of the Group to complete the placements described above is reliant on the ASX removing the current trading suspension of its securities. This will require that the company comply with relevant ASX listing guidelines with respect to trading suspensions including the prompt lodgement of this financial report. During the remainder of the financial year 2019 the Group plans to materially grow revenue. This will primarily occur through the partnerships and licensing of AlertPLUS™. An agreement with one of the diaper manufacturers, targeting customer contracts worth €200m ($310m) has already been signed. Additionally, the product range has been expanded to address additional market sectors of home based care and disability care. This initiative is in response to a clear global trend to assist the elderly and disabled to stay in their family home longer and to take ownership of their care. This initiative is designed to deliver more effective and cost efficient service to a rapidly growing community. Importantly the Group will also seek to appoint new distributors to address the long term care and rehabilitation markets in North America and Europe whilst focusing on government payers who support the disabled and aged. 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. 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 $4,942,295 (2017: $7,752,516) for period ended June 30, 2018 and net cash flows used in operations during the same period of $4,080,003 (2017:$6,247,185). The Group’s cash reserves as at June 30, 2018 were $1,361,484 (2017: $2,072,353). The Group’s was in a net current asset deficiency as at June 30, 2018 of $1,723,120 (2017: net current assets of $3,088,430). As highlighted in Note 29, the following events have occurred subsequent to 30 June 2018 that have a positive bearing on the assessment by Directors as to the ability of the Group to continue as a going concern: –– On September 25, 2018 the Group entered into a trading halt pending the completion of a placement of CDIs. The Group’s securities were subsequently suspended from trading on the Australian Stock Exchange (ASX) on September 27, 2018. Notes to the Consolidated Financial Statements for the year ended June 30, 2018 Simavita Limited 2018 Annual Report 22