Ann: Appendix 4D , page-2

The expected director statements, missing a few resignations IMHO.



Note 1: Statement of Significant Accounting Policies (continued)

(c) Going Concern

The financial report has been prepared on the basis that the consolidated entity is a going concern, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The consolidated entity has a net asset position of $6,811,532 as at 31 December 2008 and has incurred a loss of $4,808,069 for the six months ended 31 December 2008. The operations of the consolidated entity are subject to significant risk due to the product development activities of the company and the risks inherent with the commercialisation of these products.

Notwithstanding this, the directors are of the view that the going concern basis is appropriate due to the following factors:

• Cash reserves in place at the date of this report and the business plan to which the Board remain fully committed, demonstrate that the consolidated entity will be able to pay its debts as and when they fall due.

• The entity has taken steps to significantly reduce overheads. These steps have been implemented as of this report’s date.

• Ongoing sales and marketing initiatives are being undertaken in a number of countries including Australia, United Kingdom, China, India and Pakistan, the results of which should have a positive impact on the entity.

• The company is currently exploring various options to increase revenue and to raise additional funds.

If the entity is unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different to those in the financial report.

No adjustments have been made to the financial report relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that may be necessary should the consolidated entity not continue as a going concern.