Ann: Appendix 4E, page-33

The expenses look high but there is something going on that I will discuss later.

If you look at note 6 which is a rec of the cashflow. It adds back the non cash items to give you a cash view of the p&l. Here you see the company has improved by 500k.

This is all attributable to revenue which shows that whatever income comes in will fall to the bottom line.

I do have a bone to pick with why they did not accrue the royalty and I await a response.

Now for the increase in benefits. Something odd is occurring here. I mentioned this last half.

Back in 2015 accounts the share based payment reserve note stated 2.223m to be expensed by Nov 2017
Come 2016 accounts 923k was expensed and the note said 1.299m was to be expensed by Nov 2017. All good so far.
2017 3.5m expensed so an extra 2.2m in share expense wages have been put through. Where did this come from?

Roll back to the 4D this year 1.5m was expensed and 1.291m left to expense an all the note 4 items had already been action-ed, so again where did this 1.5m come from.

Now I assume that no balance was mentioned all milestones have been written off rather than carry a balance to Nov 2017 as they are not likely to be met therefore cannot carry the balance. Funny the first time no balance has been mentioned, obviously trying to hide the fact.

So could they have allocated 2m worth of share options to staff without telling shareholders? Yes my belief is they have allocated a shit load of shares to staff as incentive to achieve the year end goal. This from my understanding does not need to be approved by shareholders, yet they do not mention it in the notes.

I know these have not been audited, but the disclosure is crap house. Would never get through with a big 4.

Now for those exploding about expenses. If I am correct and there are no carry forward of balances the 3m of that expense line was never spent as no shares will be issued just an accounting standard issue because the reserve has the income that does not get written back to offset the expense.

Also on a side note
400k units made me laugh

They quoted that product 3 would be more that product 2. They got that right product 2 was 176k balance was product 3.