PIL – Unaudited Financial Statements

Name of Listed Issuer:Promisia Integrative Limited

UNAUDITED FINANCIAL SUMMARY
For the year ended 31 December 2017

Full year% Up/(Down) Half yearFull year
31-Dec-17on year 30-Jun-1731-Dec-16
Unaudited31-Dec-16UnauditedAudited
$000 $000$000
Sales revenue2,332 -12%1,318 2,665


Operating loss before tax(859) 87%(344) (459)
Net Loss876 -295%(349) (450)
Total Assets2,295 -28%2,915 3,192
Basic Earnings per share(0.002) (0.001) (0.001)
Diluted Earnings per share(0.002) (0.001) (0.001)
Tangible Asset backing per share0.004 0.0060.006




REPORT OF THE CHAIRMAN
On behalf of the directors I have pleasure in presenting the Unaudited Interim Financial
Statements for Promisia Integrative Limited and its subsidiaries (the Group) for the year
ended 31 December 2017.

Promisia Integrative Group Results

The financial result for the year was a loss of $876,000. This was a major disappointment to
the board and for shareholders after the promising outcome in 2016.

The directors had budgeted for a breakeven result for the year but this was not to be due to
several factors:
• The arrival in the market of several competitors had an impact on sales which were
down 14% on 2016
• A change of contracted sales force that proved to be less effective than expected.
• The delay in the launch of Artevite, the canine product, resulted in the expensing of
significant prelaunch costs of $153,000, including preparation of television
advertisement, but very low revenue
• The delay in entering the Australian market also incurred pre-launch costs of
$87,000 without any offsetting revenue

New Zealand

The Arthrem sales of $2,293,000 in New Zealand was a good outcome considering the
change in marketing representatives and the advent of competition from two large
competitors.

The contracted sales force engaged in late 2016 did not perform as expected and the
arrangement was terminated in December 2017. The success of Arthrem in 2016 generated
interest from well-established producers of dietary supplements and the release of well
supported competing products was not expected. Arthrem remained the bestselling
product in its product category and was generally the largest selling product in pharmacies
each month by dollar value throughout 2017.

The new Chief Executive introduced a new sales and marketing strategy late in the year,
including the use of a telemarketer who called every pharmacy in the country and
generated significant sales. The directors considered that it was now appropriate for the
company to employ its own dedicated sales team. It is important that the company
strengthens its relationships with its pharmacy customers and a direct connection will
provide better opportunities to respond to the market.

Australia

The launch of Arthrem in Australia took considerably longer than expected. Registration as
a Listed Complementary Medicine by the Therapeutic Goods Administration was achieved in
April. By year end a distribution agreement had been concluded with Pharmabroker Sales
Pty Ltd to represent Arthrem to pharmacies in the state of New South Wales. This state was
chosen as the launch point for Arthrem in Australia because of the high number of
independent pharmacies in the state. Supporting agreements with warehousing and
distribution parties also needed negotiation and completion. This process proved to be
considerably more difficult and time consuming than expected.

Pharmabroker commenced marketing activities in November but the cost of television
advertising was prohibitive prior to Christmas. Promotion of Arthrem did not commence
until late January and therefore no revenue was received from Australia in 2017 to offset
the not inconsiderable costs and time expending during the year on this exercise. Arthrem
is now available from over 600 pharmacies in NSW.

Artevite

Finalisation of the formulation of Artevite also took considerably longer than anticipated
and it was only the efforts of our in-house team that resulted in the formulation being
finalised in a stable form late in the year. Brooklands Pet Products Ltd of New Plymouth was
appointed in August as the wholesaler and distributor for Artevite. Brooklands began the
process of filling the retail pipeline in November. Pre-Christmas advertising was not possible
at an economical cost and therefore promotion of Artevite did not commence until late
January 2018. Pre-launch costs of $153,000, including the cost of preparing a television
advertisement, were incurred during the year without any offsetting revenue.

New Chief Executive

On 9 October 2017 the company welcome Mr Rene de Wit as the new Chief Executive of the
company. Rene has an extensive commercial background and has already added
considerable value to the management team.

In the period between the departure of the former CEO and the appointment of Rene de
Wit the company was fortunate to have the services of Tom Brankin, a director of the
company and one of its largest shareholders, in the role of Acting CEO. Tom made a
significant commitment to the company and pushed through the launch of both Arthrem in
Australia and Artevite in New Zealand. The only cost to the company for Mr Brankin’s time
was his out of pocket travel and related expenses. On behalf of his fellow directors and
shareholders I wish to acknowledge and thank Tom for his input over several months as
Acting CEO.

Events since Balance Date

Share Placement

In January 2018 the company completed a placement of 47.75 million shares at a price of 2
cents per share to raise $955,000 of additional capital. The directors wish to thank those
participating in the placement for their confidence in the company.

Medsafe Alert

On 15 February 2018 Medsafe issued an Alert advising that there was a risk of harm to the
liver from taking Arthrem. This Alert generated a high level of media coverage which did
not provide any context about the very low level of adverse reaction relative to the number
of bottles of Arthrem sold in the same period. The company has noted that Arthrem is one
of a number of soft gel capsule products containing Artemisia annua extract and grape seed
oil and that it was unreasonable to single out Arthrem when competing products are alleged
by their manufacturers to be the same as Arthrem.

A total of 14 adverse reactions in the form of liver toxicity have been reported to Medsafe in
the period from February 2016 until December 2017, a period of 23 months. During that
same period well in excess of 200,000 bottles of Arthrem were sold. The reported adverse
reaction rate is approximately 1 in 14,000 or 0.007%. The World Health Organisation
describes an adverse reaction at a rate of 1 in 10,000 as being very rare.

Arthrem is sold in a 150 mg capsule and the recommended dose is one capsule to be taken
twice daily, morning and night. Competing products are sold in a single 300mg capsule to
be taken once a day.

It is important to acknowledge that many thousands take Arthrem every day and experience
only beneficial outcomes. The company takes adverse reactions seriously but notes that the
rate of adverse reaction is extremely low.

Arthrem is one of the very few dietary supplements that has been subject to a placebo
controlled double blind clinical trial (results published in the December 2015 issue of Clinical
Rheumatology) and a follow up safety study (results published in the October 2016 issue of
the New Zealand Medical Journal).

In response to the Medsafe Alert the company has undertaken the following:
• Responded to both Medsafe and the Centre of Adverse Reactions Monitoring
(CARM)
• Provided additional information to the Australian Therapeutic Goods Authority
• Worked closely with its pharmacy retailers in both New Zealand and Australia to
provide assurance about the safety of Arthrem
• Revised product labelling and point of sale material
The company has requested more details of the adverse reaction reports to determine if
there is a batch or other specific issue that has been responsible for a recent increase in the
number of reported incidents.

A significant majority of pharmacies contacted by the company have been supportive and
continue to stock and sell Arthrem.

Priorities for 2018

There will undoubtedly be an impact on sales as a result of the Medsafe Alert and budgets
have been revised accordingly. The priorities for 2017 will be:
• Restoring pharmacy and consumer confidence in Arthrem
• Creation of an in-house sales and marketing team. A Marketing Manager has joined
the company based in the Wellington office. A sales representative to service
pharmacies in the lower North Island has been appointed. An appointment is being
negotiated for an Auckland based representative.
• Building Arthrem as a credible brand in Australia where the product is sold as a
Listed Complementary Medicine with considerably greater freedom to describe its
benefits
• Build the Artevite brand as a credible and effective product providing joint support
to dogs
• Two new products have been finalised but the launch of those products will be cash
flow dependant and may be deferred until late in 2018 or sometime in 2019.
The company is well funded and has amended its budgets to reflect recent events. The
directors are confident that the setback of the last few weeks can be overcome and thank
you for your continued support.

Stephen Underwood
Chairman

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Promisia Integrative Limited

Unaudited Interim Financial Statements

For the Year ended 31 December 2017

Page 2
Promisia Integrative Limited
Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income
For the period ended 31 December 2017

UnauditedUnauditedAudited
Year6 monthsYear
Dec 2017June 2017Dec 2016
$000$000$000

Revenue2,332 1,318 2,665
Cost of goods sold(642) (355) (773)
1,690 963 1,892
Other income76 - -
Expenses
Administration (923) (386) (661)
Operating (1,379) (747) (1,432)
Research (258) (146) (191)
Amortisation and depreciation(23) (11) (23)
(2,583) (1,290) (2,307)
Loss before taxation and interest(817) (327) (415)


Finance cost - interest paid(64) (33) (55)
Finance income - interest received 22 16 11
Net Loss for period before income tax (859) (344) (459)
Income tax expense - - -

Net Loss for period (859) (344) (459)
Other comprehensive income
Currency translation differences (17) (5) 9
Total comprehensive loss for period(876) (349) (450)
attributable to shareholders
Basic Earnings per share (0.002) (0.001) (0.001)
Diluted Earnings per share(0.002) (0.001) (0.001)














The accompanying notes form part of these financial statements

Page 3
Promisia Integrative Limited
Consolidated Interim Statement of Changes in Equity
For the year ended 31 December 2017
ShareForeignShareAccumulatedTotal
CapitalCurrencyOptionLosses
ReserveReserve
$000$000$000$000$000
Unaudited
At 1 January 201755,799 194 83 (54,391) 1,685
Total comprehensive loss for period- - - (859) (859)
Other comprehensive income (loss)- (17) - - (17)
Share Issue 167 - - - 167
Expired/Retired options75 - (75) - -
Share based payment- - 43 - 43
At 31 December 201756,041 177 51 (55,250) 1,019
Unaudited
At 1 January 201755,799 194 83 (54,391) 1,685
Total comprehensive loss for period- - - (344) (344)
Other comprehensive income (loss)- (5) - - (5)
Share Issue 167 - - - 167
Expired/Retired options75 - (75) - -
Share based payment- - 21 - 21
At 30 June 201756,041 189 29 (54,735) 1,524

Audited
At 1 January 201654,225 185 57 (53,932) 535
Total comprehensive loss for period- - - (459) (459)
Other comprehensive income (loss)- 9 - - 9
Share Issue 1,557 - - - 1,557
Expired/Retired options17 - (17) - -
Share based payment- - 43 - 43
At 31 December 201655,799 194 83 (54,391) 1,685
















The accompanying notes form part of these financial statements

Page 4
Promisia Integrative Limited
Consolidated Interim Balance Sheet
As at 31 December 2017

UnauditedUnauditedAudited
NotesYear6 monthsYear
Dec 2017June 2017Dec 2016
$000$000$000
EQUITY
Share Capital3.356,041 56,04155,799
Accumulated Losses(55,250) (54,735) (54,391)
Other Equity Reserves228 218277

TOTAL EQUITY1,019 1,524 1,685
Represented by:
CURRENT ASSETS
Bank324 1,2791,827
Receivables244 333263
Prepayments137 19984
Inventory1,383 891811
2,088 2,702 2,985
NON-CURRENT ASSETS
Investments75 7575
Intangible Assets125 111127
Property, plant & equipment7 27 5
207 213207
TOTAL ASSETS2,295 2,915 3,192
less
CURRENT LIABILITIES
Payables and Accruals316 412 468
Employee benefits41 - -
Loan480 120 120
837 532 588
NON-CURRENT LIABILITIES
Loan439 859 919

TOTAL LIABILITIES1,276 1,3911,507
NET ASSETS 1,019 1,524 1,685

















The accompanying notes form part of these financial statements

Page 5
Promisia Integrative Limited
Consolidated Interim Statement of Cash flows
For the period ended 31 December 2017
UnauditedUnauditedAudited
Year6 monthsYear
Dec 2017June 2017Dec 2016
$000$000$000
Operating activities
Receipts from customers 2,926 1,489 2,471
GST (net) (52) - 56
Payments to suppliers and employees(4,358) (2,142) (3,147)
Interest (net)(42) 16 (44)
Net cash flows from (used in) operating activities(1,526) (637) (664)

Investing Activities
Purchase intangible assets(19) (14) (35)
Purchase property, plant & equipment (5) (4) (5)
Net cash flows from (used in) investing activities(24) (18) (40)
Financing activities
New share capital 167 167 1,510
Repayment of loans(120) (60) -
Net cash flows from financing activities47 107 1,510

Net change in cash (1,503) (548) 806
Cash at Start of Period1,827 1,827 1,021
Cash at End of Period324 1,279 1,827















The accompanying notes form part of these financial statements

Page 6
Promisia Integrative Limited
Notes to The Consolidated Interim Financial Statements
For the year ended 31 December 2017
_________________________________________________________________________

1. 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 2013. 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 6011.
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 2017.

The accounting policies adopted are consistent with those of the previous financial year. All new
standards and amended standards issued during 2017 and applicable after 1 January 2017
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 2017. 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 7
Promisia Integrative Limited
Notes to The Consolidated Interim Financial Statements
For the year ended 31 December 2017
_________________________________________________________________________________

3.3 Share Capital
The Group’s share capital includes fully paid, subscribed and treasury shares.
Issued and paid capital
There were 508,958,971 (31 December 2016: 498,510,841) ordinary shares on issue at
balance date.

During the year, 10,448,130 ordinary shares were issued to staff as part of a staff bonus
scheme. Bonuses were paid to staff net of tax based on achieving agreed sales targets as set
by the board on an annual basis for the financial year ending 31 December 2016. The bonuses
were used entirely as payment for the unpaid shares.


At 31 December 2017 issued and paid capital comprised:

UnauditedUnauditedAudited
Year6 monthsYear
Dec 2017June 2017Dec 2016
$000$000$000
Opening balance55,799 55,799 54,225
Shares issued167 167 1,557
Expired/retired options75 75 17
56,041 56,041 55,799

Unpaid ordinary shares – Treasury shares
At 31 December 2016, 27,043,986 of unpaid shares have been issued by the company as part
of a Staff Unpaid Share Scheme for eligible staff being employees or contractors to purchase.
During the period to 30 June 2017 staff were allocated total shares of 10,448,130 and paid
$167,170 for these shares from their share of the company’s bonus scheme.
At 31 December 2017, 16,595,856 shares remain unallocated and are held by a nominee
company Promisia Trustee Limited
3.4. Related party information
During the year to 31 December 2017, director fees of $92, 917, (31 December 2016: $73,744)
were paid to the directors.
In October 2017, a new chief executive, Rene de Wit was appointed.
As noted in paragraph 3.3, staff are entitled to participate in the Staff Unpaid Share Scheme.

3.5. Contingent liabilities
There were no contingent liabilities at 31 December 2017 (31 December 2016:$nil).

3.6 Capital commitments
There were no capital commitments at 31 December 2017 (December 2016:$nil).

Page 8
Promisia Integrative Limited
Notes to The Consolidated Interim Financial Statements
For the year ended 31 December 2017
_________________________________________________________________________________

3.7 Purchase commitments
The Artemisia leaf purchase commitment at 31 December 2017 amounts to $210,800
(2016:$93,000). Advertising commitment at 31 December 2017 amounts to $210,000
(2016:$nil).

3.8 Unaudited Financial Statements
The interim financial statements to 31 December 2017 have not been audited.

3.9. Events subsequent to 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.
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.