from the auditors report

Significant Uncertainty Regarding Going Concern

The financial statements have been prepared on the going concern basis, which indicates continuity of business activities and the realisation of assets and settlement of liabilities in the normal course of business. As at 30 June 2012 the group had net current liabilities of ($3,520,296). The group made a net loss of ($6,308,215) and incurred net cash outflows from operating activities of ($655,087), net cash outflows from investing activities of ($2,402,653) and cash inflows from financing activities of $3,202,178 for the year ended 30 June 2012.

As disclosed in Note 1(a) to the financial report, the ability of the group to continue as a going concern is dependent on the receipt of a research and development tax incentive from the Australian Taxation Office, the recovery of other debtors which have been fully impaired during the year, and the raising of sufficient capital over the coming 12 months to achieve projected cash flows.

These conditions, along with other matters as set forth in Note 1(a), indicate the existence of a material uncertainty which casts significant doubt on the group's ability to continue as a going concern. Therefore the group may be unable to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.