Sales revenue % 1,318 2,332. Operating loss before tax (1,222) 255% (344) (859) Net Comprehensive Loss (1,222) 250% (349) (876)

Transcription

1 Name of Listed Issuer: Promisia Integrative Limited FINANCIAL SUMMARY Half year % Up/(Down) Half year Full year 30-Jun-18 on period 30-Jun Dec-17 Unaudited 30-Jun-17 Unaudited Audited $000 $000 $000 Sales revenue % 1,318 2,332 Operating loss before tax (1,222) 255% (344) (859) Net Comprehensive Loss (1,222) 250% (349) (876) Total Assets 1,959-33% 2,915 2,295 Basic Earnings per share (0.002) (0.001) (0.002) Diluted Earnings per share (0.002) (0.001) (0.002) Tangible Asset backing per share Report of the Directors for the six months ended 30 June 2018 The Directors of Promisia Integrative Limited are reporting on the six months to 30 June 2018 for the company and its subsidiaries. The period under review has been impacted significantly by the Medsafe Alert on published on 15 February As stated in the first quarter announcement, sales reduced to very low levels immediately following the Alert and the media coverage which followed. Although sales have continued to recover, they are approximately 50% of where they were expected to be had the Alert not been published. Discussions with Medsafe continue. Sales for the period were $467,000, a 64% reduction over the same period in the previous year. The operating net loss for the period was $1,122,000, a significant increase on the 2017 result for the same period. There were plans to launch two complimentary products to the Arthrem range in June 2018 but these plans were cancelled due to the Medsafe Alert which claimed 14 liver related adverse reactions over a 22 month period. It is important to note that this adverse reaction rate represents 1 in 14,000 and is considered to be very rare by World Health Organisation guidelines. A number of the reports are highly questionable. At the time of the Medsafe Alert, Promisia had just launched Arthrem in Australia and Artevite (Canine product) in New Zealand. Both launches were supported by significant TV advertising which could not be cancelled. Sales of both products were affected as a result of the Medsafe Alert, rendering the launches less effective than planned while still carrying high costs. Australia The pharmacy distribution agreement with Pharmabroker Sales Pty Ltd in Australia continues to develop.

2 Arthrem is now in approximately 600 pharmacies in NSW and we are in the final stages of securing access to a further 450 pharmacies nationwide. Although the Australian market is challenging, and sales are below expectations, we are gaining market recognition and developing a base of customers that are experiencing benefits from taking Arthrem. The reduction in sales in New Zealand and resulting cashflow constraints have limited our ability to spend the required amount on marketing in Australia. Canine Product The company s product Artevite, for the treatment of osteoarthritis in dogs, is on the market and has good distribution across the major pet chains. Sales are below expectation and we are currently reviewing the retail price to establish if a reduction will drive sales. The cash position of the company also limits the resources we have to invest in marketing other than with print and digital platforms. Further TV promotion is out of the question at this point. Brooklands Pet Products of New Plymouth continues to distribute Artevite on Promisia s behalf. The Future The drastic reduction in sales had a significant impact on cash flow. The company continues to explore options to fund the recovery of Arthrem sales in New Zealand. It may also include some changes to the product to ensure the future support of Medsafe. The Directors are evaluating options to recapitalise the company. They will notify shareholders when a preferred course of action has been finalised. For further information please contact: Mr Stephen Underwood, Chairman on Mr Rene de Wit, CEO on

3 Unaudited Consolidated Interim Financial Statements For the six months ended 30 June 2018

4 Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income Unaudited Unaudited Audited 6 months 6 months Year June 2018 June 2017 Dec 2017 $000 $000 $000 Revenue 467 1,318 2,332 Cost of goods sold (135) (355) (642) ,690 Other income Expenses Administration (459) (386) (923) Operating (1,002) (747) (1,379) Research (64) (146) (258) Amortisation and depreciation (12) (11) (23) (1,537) (1,290) (2,583) Loss before taxation and interest (1,195) (327) (817) Finance cost - interest paid (28) (33) (64) Finance income - interest received Net Loss for period before income tax (1,222) (344) (859) Income tax expense Net Loss for period (1,222) (344) (859) Other comprehensive income Currency translation differences - - (17) Total comprehensive loss for period (1,222) (344) (876) attributable to shareholders Basic Earnings per share (0.002) (0.001) (0.002) Diluted Earnings per share (0.002) (0.001) (0.002) The accompanying notes form part of these financial statements Page 2

5 Consolidated Interim Statement of Changes in Equity Share Foreign Share Accumulated Total Capital Currency Option Losses Reserve Reserve $000 $000 $000 $000 $000 Unaudited At 1 January , (54,391) 1,685 Total comprehensive loss for period (344) (344) Other comprehensive income (loss) - (5) - - (5) Share Issue Expired/Retired options 75 - (75) - - Share based payment At 30 June , (54,735) 1,525 Audited At 1 January , (54,391) 1,685 Total comprehensive loss for period (859) (859) Other comprehensive income (loss) - (17) - - (17) Share Issue Expired/Retired options 75 - (75) - - Share based payment At 31 December , (55,250) 1,019 Unaudited At 1 January , (55,250) 1,019 Total comprehensive loss for period (1,222) (1,222) Share Issue Expired/Retired options 68 - (68) - - Share based payment At 30 June , (56,472) 764 The accompanying notes form part of these financial statements Page 3

6 Consolidated Interim Statement of Financial Position As at 30 June 2018 Unaudited Unaudited Audited Notes 6 months 6 months Year June 2018 June 2017 Dec 2017 $000 $000 $000 EQUITY Share Capital ,059 56,042 56,041 Accumulated Losses (56,472) (54,735) (55,250) Other Equity Reserves TOTAL EQUITY 764 1,525 1,019 Represented by: CURRENT ASSETS Bank 104 1, Receivables Prepayments Inventory 1, ,383 1,718 2,702 2,088 NON-CURRENT ASSETS Investments Intangible Assets Property, plant & equipment TOTAL ASSETS 1,959 2,915 2,295 less CURRENT LIABILITIES Payables and Accruals Employee benefits Loan NON-CURRENT LIABILITIES Loan Other advances TOTAL LIABILITIES 1,196 1,390 1,276 NET ASSETS 764 1,525 1,019 The accompanying notes form part of these financial statements Page 4

7 Consolidated Interim Statement of Cash flows Operating activities Unaudited Unaudited Audited 6 months 6 months Year June 2018 June 2017 Dec 2017 $000 $000 $000 Receipts from customers 556 1,489 2,926 Payments to suppliers and employees (1,656) (2,142) (4,410) Interest (net) (28) 16 (42) Net cash flows from (used in) operating activities (1,128) (637) (1,526) Investing Activities Purchase intangible assets (7) (14) (5) Purchase property, plant & equipment (38) (4) (19) Net cash flows from (used in) investing activities (45) (18) (24) Financing activities New share capital Advance Repayment of loans (97) (60) (120) Net cash flows from financing activities Net change in cash (220) (548) (1,503) Cash at Start of Period 324 1,827 1,827 Cash at End of Period 104 1, The accompanying notes form part of these financial statements Page 5

8 Notes to The Consolidated Interim Financial Statements For six month period ended 30 June Nature of operations Promisia Integrative Limited (Company) and its subsidiaries (the Group) principal activities are focused on developing and marketing unique therapeutic natural products with proven safety and efficacy based on robust research. 2 General information and statement of compliance The company is registered under the Companies Act 1993 and is a Financial Markets Conduct 2013 reporting entity in terms of the Financial Reporting Act The group is profit orientated. Promisia Integrative Limited is a company domiciled in New Zealand. The registered office of the company is level 4, 22 Panama Street, Wellington Basis of Preparation The unaudited interim financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand, which is the New Zealand equivalent to International Financial Reporting Standards (NZ IFRS). They comply with NZ IAS 34 Interim Financial Reporting and should be read in conjunction with the 31 December 2017 annual report. The financial statements are presented in New Zealand dollars which is the group s functional and presentation currency and rounded to the nearest thousand dollars unless otherwise stated. These financial statements do not include all the information required for full financial statements and consequently should be read in conjunction with the full financial statements of the Group for the year ended 31 December The accounting policies adopted are consistent with those of the previous financial year. All new standards and amended standards issued during 2018 and applicable after 1 January 2019 have not been adopted. The impact in the initial period of application is expected to be minimal at this stage. 3. Disclosures 3.1 Operating segments The Group s reportable segments are based on the geographic location of its activities which reflect the type of activities undertaken and have been determined based on internal reporting used by management and the Board of Directors to assist strategic decision making. 3.2 Financial risk management The Group's activities are exposed to a variety of financial risks: market risk, credit risk, liquidity risk, cash flow risk and fair value interest-rate risk. The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements as at 31 December There have been no changes in the management of risk or in any risk management policies in the current period. The Group does not have any derivative financial instruments or any other financial assets or liabilities that are classified as instruments at fair value through profit and loss under NZ IFRS. The fair value of assets and liabilities approximates their carrying value. Page 6

9 Notes to The Consolidated Interim Financial Statements 3.3 Share Capital The Group s share capital includes fully paid, subscribed and treasury shares. Issued and paid capital There were 556,708,971 (31 December 2017: 508,958,971) ordinary shares on issue at balance date. During January 2018, the Group completed private placements of 47,750,000 shares to wholesale and eligible investors at an issue price of $0.02 per share and raised the sum of $955,000. The placements raised new working capital to support the launch of Arthrem into the Australian market, fund market development in New Zealand for Artevite (the canine equivalent of Arthrem) and drive further product development. The Directors and Chief Executive supported the company and participated in the placements to the value of $200,000. At 30 June 2018 issued and paid capital comprised: Unaudited Unaudited Audited 6 months 6 months Year June 2018 June 2017 Dec 2017 $000 $000 $000 Opening balance 56,041 55,799 55,799 Shares issued Expired/retired options ,059 56,041 56,041 Unpaid ordinary shares Treasury shares At 30 June 2018, 16,595,856 shares ( 30 June ,595,856) remain unallocated and are held by a nominee company Promisia Trustee Limited Related party information During the six months to 30 June 2018, director fees of $50,000 (30 June 2017: $42,916 were paid to the directors. The Brankin Family Interest Trust advanced $100,000 to the Group of which T.D Brankin is a related party to the Trust and a director of the Group - see note Contingent liabilities There were no contingent liabilities at 30 June 2018 (30 June 2017:$nil). 3.6 Capital commitments There were no capital commitments at 30 June 2018 ( 30 June 2017:$nil). Page 7

10 Notes to The Consolidated Interim Financial Statements 3.7 Unaudited Financial Statements The interim financial statements to 30 June 2018 have not been audited Events subsequent to balance date On 19 July 2018, the Group entered into a general security agreement with the Brankin Family Interest Trust who have advanced $360,000 to the Group. Of this amount, $100,000 was advanced prior to 30 June There are no repayment terms for the advance and no interest chargeable. T D Brankin is director and shareholder of the Group and a related party to the Brankin Family Interest Trust. There have been no other matters or circumstances since the end of the financial year not otherwise dealt with in these financial statements that have significantly or may significantly affect the Group s operations. Page 8