Simavita Annual Report 2019

Simavita Limited 24 The group also elected to adopt the following amendments early: –– AASB 2018-1 Amendments to Australian Accounting Standards - Annual Improvements 2015-2017 Cycle Most of the other amendments listed above did not have any impact on the amounts recognised in prior periods and are  not expected to significantly affect the current or future periods. Going concern The Group has incurred losses before tax of $3,934,216 (2018: $4,942,295) for period ended June 30, 2019 and net cash flows used in operations during the same period of $3,506,527 (2018: $4,080,003). The Group’s cash reserves as at June 30, 2019 were $689,462 (2018: $1,361,484). The Group’s was in a net current asset deficiency as at June  30, 2019 of $2,319,190 (2018: net current assets deficiency of $1,723,120). The following events occurred in the recent months and have had a positive bearing on the assessment by Directors as to the ability of the Group to continue as a going concern: A Convertible Note agreement for $3,140,000 was approved by the shareholders at the Special General Meeting on June 24, 2019 and is payable in 3 tranches. Payment of  $500,000 for Tranche 1 of these notes was received in April 2019. Tranche 2 payment of $1,640,000 was received in June and July 2019. The final Tranche 3 payment of $1,000,000 is due on November 1, 2019 pending management obtaining CE Mark registration together with confirmation of agreements with sufficient magnitude to evidence the market support for Smartz™. During the financial year 2020, the Group will continue to focus on commercialising Smartz™ to grow revenue by obtaining CE Mark registration and securing relevant agreements. The commercialisation of Smartz™ will primarily occur through the licensing of Smartz™ technology to diaper manufacturers, distributors and retailers. In addition, the Group will also continue to focus on government payers who support the disabled and aged. The Group has indicated to the market its strong intention to complete a reorganisation. Details of this reorganisation will be announced in coming months. Fundamental to the reorganisation of the Group will be to raise sufficient capital by January 31, 2020 to fund major revenue opportunities particularly associated with Smartz™ for global Aged, Disabled and Infant markets. 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. Simavita’s patented technologies provide sensors for all segments of the USD 64 billion diaper market from extremely low cost alert sensors for everyday use, particularly focused upon the adult and infant markets to the assessment of incontinence needs for the aged and disabled. The alert technology, Smartz™, is addressing the demand for change in the global diaper 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). Historical cost convention The financial statements have been prepared on a historical cost bases, except for the following: –– certain financial assets and liabilities (including derivative instruments) - measured at fair value New and amended standards adopted by the group The group has applied the following standards and amendments for the first time for their annual reporting period commencing July 1, 2018. –– AASB 9 Financial Instruments –– AASB 15 Revenue from Contracts with Customers –– AASB 2016-5 Amendments to Australian Accounting Standards -Classification and Measurement of Share-based Payment Transactions –– AASB 2017-1 Amendments to Australian Accounting Standards - Transfers to Investment Property, Annual Improvements 2014-2016 Cycle and Other Amendments –– Interpretation 22 Foreign Currency Transactions and Advance Consideration Notes to the Consolidated Financial Statements for the year ended June 30, 2019