Going concernThe Interim Financial Report has been prepared on...

Going concern

The Interim Financial Report has been prepared on the going concern basis that contemplates the continuity ofnormal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course ofbusiness. For the half-year ended 31 December 2018 the Group recorded an operating cash outflow of$1,858,468 (half-year ended 31 December 2017: outflow of $2,646,690 and at 31 December 2018 had a networking capital deficit of $517,780 (30 June 2018: deficit of $1,817,667).

The Group’s cash flow forecast is dependent on forecasted revenues under existing contracts, conversion ofinventory and balance of unpaid convertible note and placement funds being received. Convertible note fundingis due and payable by 30 June 2019 for the amount of $1,351,000 plus accrued interest (with $19,000 redeemedduring December 2018) in either cash or conversion to equity as directed by the note holders. Additional workingcapital may be required to meet manufacturing and cashflow requirements and as such the Group may seekaccess to additional working capital in the next 12 months.

The Directors are confident that the Group will convert inventory to cash, receive outstanding committed fundsand access funds via increased sales revenue in the coming quarters. Additional funds may be required throughthe issue of new equity or securing of additional loan funding by way of manufacturing finance facility, shouldthe need arise. However, should neither eventuate, there exists a material uncertainty that may cast significantdoubt on the Group’s ability to continue as a going concern and therefore, the Group may be unable to realiseits assets and discharge its liabilities in the normal course of business.