cashflow - time is running out, page-3

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24/10/2005 Appendix 4C Page 5
Notes
The Company recognises that its current cash balance is unlikely to be sufficient to fund operations for
another two quarters without being supplemented by additional capital. The results reported in this Appendix
4C were in line with Company expectations.
Further commentary on this matter can be found in the Chairman’s report, the Chief Executive Officer’s
report, the Directors’ report and Note 1 to the financial statements in the Company’s 2008 Annual Report.
As discussed in the Annual Report, the Company is taking several concurrent approaches to achieve its
funding objectives.
In the current economic climate the Board believes the most likely path to success is through the targeting of
organisations and individuals that have both the necessary capital resources and a strategic interest in the
Company’s potential outcomes. A number of these negotiations are currently active. Based on discussions
to date the Company believes there is a reasonable likelihood that one or more of these activities will deliver
a successful outcome.
The Company also has $20m of convertible note debt that becomes due and payable on 1 September 2009.
If the amount of capital raised is insufficient to pay the note holders who choose not to convert to stock, the
Company would also need to negotiate an extension to the convertible note term. The largest noteholder
has indicated its support for such an extension and the Company intends to have a proposal to the market
on this matter towards the end of the June quarter. If accepted, this proposal along with a capital raise
should allow the Company continue to operate as normal for at least the next 12 months.
The current situation is not unfamiliar territory to the Company and it has previously succeeded in raising
capital in pressure circumstances.
The Directors are confident the Company will be able to raise the required funds but would stress,
particularly in light of the current economic climate, that a successful capital raise is not assured.
With all these factors in mind the Directors believe the Company to be a going concern and therefore in
compliance with listing rule 12.2.