Announcement PDF Elixinol Wellness Limited Appendix 4D Half-year report 1. Company details Name of entity: ABN: Reporting period: Previous period: Elixinol Wellness Limited 34 621 479 794 For the half-year ended 30 June 2025 For the half-year ended 30 June 2024 2. Results for announcement to the market The Directors present this Appendix 4D on the consolidated entity (referred to as the 'Group') consisting of Elixinol Wellness Limited (referred to as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 30 June 2025. $'000 Revenues from ordinary activities up 12.8% to 7,642 Loss from ordinary activities after tax attributable to the owners of Elixinol Wellness Limited up 12.2% to (3,093) Loss for the half-year attributable to the owners of Elixinol Wellness Limited up 12.2% to (3,093) 30 Jun 2025 Cents 30 Jun 2024 Cents (1.39) (1.39) (2.21) (2.21) Reporting period Cents Previous period Cents (1.12) 3.10 30 Jun 2025 $'000 Group 30 Jun 2024 $'000 Net assets Less: Right-of-use assets Less: Intangibles Less: Deferred tax assets Add: Lease liabilities Net tangible assets 6,965 (216) (5,950) (3,591) 220 (2,572) 7,434 (136) (2,470) 299 5,127 Total shares issued (no.)* 230,191,421 165,155,290 Basic loss per share Diluted loss per share Dividends There were no dividends paid, recommended or declared during the current financial period. Comments The loss for the Group after providing for income tax amounted to $3,093,000 (30 June 2024: $2,756,000). 3. Net tangible assets Net tangible assets per ordinary security Calculated as follows: * Total shares issued for 30 June 2024 have been restated to account for the 1:8 share consolidation that occurred during the year ended 31 December 2024. Elixinol Wellness Limited Appendix 4D Half-year report 4. Control gained over entities Not applicable. 5. Loss of control over entities Not applicable. 6. Dividends Current period There were no dividends paid, recommended or declared during the current financial period. Previous period There were no dividends paid, recommended or declared during the previous financial period. 7. Dividend reinvestment plans Not applicable. 8. Details of associates and joint venture entities Not applicable. 9. Foreign entities Details of origin of accounting standards used in compiling the report: Not applicable. 10. Audit qualification or review Details of audit/review dispute or qualification (if any): The financial statements were subject to a review by the auditors and the review report is attached as part of the Interim Report. The review report contains a paragraph that draws attention to the use of the going concern basis for the preparation of the financial statements. 11. Attachments Details of attachments (if any): The Interim Report of Elixinol Wellness Limited for the half-year ended 30 June 2025 is attached. Elixinol Wellness Limited Appendix 4D Half-year report 12. Signed Authorised for release by the Board of Directors Signed ___________________________ David Fenlon Independent Non-Executive Director and Chair Date: 29 August 2025 Elixinol Wellness Limited ABN 34 621 479 794 Interim Report - 30 June 2025 Elixinol Wellness Limited Contents 30 June 2025 Directors' report 2 Auditor's independence declaration 5 Consolidated statement of profit or loss and other comprehensive income 6 Consolidated statement of financial position 7 Consolidated statement of changes in equity 8 Consolidated statement of cash flows 9 Notes to the consolidated financial statements 10 Note 1. General information 10 Note 2. Material accounting policy information 10 Note 3. Critical accounting judgements, estimates and assumptions 11 Note 4. Operating segments 11 Note 5. Revenue 14 Note 6. Other income 15 Note 7. Cash and cash equivalents 15 Note 8. Non-current assets classified as held for sale 15 Note 9. Property, plant and equipment 16 Note 10. Right-of-use assets 17 Note 11. Intangibles 17 Note 12. Borrowings 18 Note 13. Issued capital 18 Note 14. Fair value measurement 19 Note 15. Contingent liabilities 20 Note 16. Commitments 20 Note 17. Earnings per share 20 Note 18. Share-based payments 21 Note 19. Events after the reporting period 21 Directors' declaration 22 Independent auditor's review report to the members of Elixinol Wellness Limited 23 Corporate directory 27 1 Elixinol Wellness Limited Directors' report 30 June 2025 The Directors of Elixinol Wellness Limited ('Elixinol Wellness' or the 'Company') present this report, together with the financial statements of the Company and its controlled entities ('Consolidated Entity' or 'Group') for the half-year ended 30 June 2025 ('H1 FY25'). Directors The Directors of the Company in office during the financial half-year and up to the date of this report are as follows: David Fenlon Natalie Butler Pauline Gately Independent Non-Executive Chair Executive Director and Chief Executive Officer (appointed CEO 19 June 2025) Non-Executive Director The Directors were in office for the entire period unless otherwise stated. Principal activities The principal activities of the Company during the half-year relate to its operation as a holding company for each of, Elixinol Wellness (Byron Bay) Pty Ltd, The Sustainable Nutrition Group Pty Ltd, The Sustainable Nutrition Group (Australia) Pty Ltd, and Ananda Food Pty Ltd (together 'Australia'), Elixinol LLC ('Elixinol Americas') as well as Elixinol BV and Elixinol Limited (together 'Rest of World'). The principal activities of the Group are: Australia Elixinol's Australian operations are vertically integrated, producing, manufacturing, and distributing a complementary range of products for health-conscious consumers across four verticals: human nutrition, human wellness, pet wellness, and superfood ingredients. Products are marketed under the Hemp Foods Australia, Mt Elephant, The Healthy Chef (acquired October 2024), Soul Foods, Ananda Equine, and Field Day brands, and distributed through grocery, wholesale, and e-commerce channels. The Australian Superfood Co supplies native ingredients to white-label customers and to food, beverage, and beauty manufacturers, while Australian Primary Hemp provides quality hemp ingredients to white-label and other manufacturing partners. Australia continues to be the primary driver of the Group’s revenue and operational performance. Elixinol Americas Established in 2014, Elixinol Americas specialises in marketing and distributing premium-quality, predominantly whole-plant, fullspectrum CBD products. In H1FY25, this business operated exclusively through e-commerce channels. Rest of World Established in 2018, the Rest of World segment comprises Elixinol Europe, which develops, sources, markets, and distributes hempderived CBD products, including skincare. Following a transition to a licensing model several years ago, this segment now contributes minimally to Group revenue. Operating and financial review Revenue trends and comparative performance Group revenue for H1 FY25 was $7,642,000, an increase of 12.8% on H1 FY24 revenue of $6,772,000. However, revenue was 6.7% lower than H2 FY24 ($8,184,000), consistent with the Group’s historical pattern of stronger second-half performance. The year-on-year uplift reflected stronger contributions from The Healthy Chef and Hemp Foods Australia. These gains were partly offset by softer results from Elixinol USA during its Q2 brand refresh, Mt Elephant and Ingredients business with continued retail headwinds in Australia. Statutory loss The Group reported a net loss after tax of $3,093,000 for H1 FY25 (H1 FY24: $2,756,000). The larger loss before income tax benefit (increase of $337,000) during the first six months of the year reflects higher investment in marketing and brand development expenditure, together with integration and restructuring costs incurred during Q1 FY25 relating to the Healthy Chef integration and Ananda facility rationalisation. Gross margins Group gross margin for H1 FY25 was 37.4%, compared with 35.7% in H1 FY24. The improvement was driven by introduction of the Healthy Chef portfolio and overall general increase in e-commerce. Margins stabilised in Q2 at 37.8% (Q1: 36.7%), with an improving channel and revenue mix expected to improve margins in H2. E-commerce and core brand contributions are expected to deliver ongoing margin uplift. 2 Elixinol Wellness Limited Directors' report 30 June 2025 Small deterioration in EBITDA Earnings before interest, tax and amortisation (‘EBITDA’) from continuing operations (excluding impairment, share-based payments and one-off transactions) for the period ended 30 June 2025 is detailed below. This loss increased by $132,000 during H1FY25 compared with the same period last year. While EBITDA and Adjusted EBITDA are not prescribed by Australian Accounting Standards ('AAS') and represent the Group’s statutory result under AAS, adjusted for certain items, Elixinol directors view these metrics as an indicator of the Group’s core earnings. Underlying earnings (Adjusted EBITDA) Despite revenue growth of 12.8% in H1 FY25, the Group reported a wider Adjusted EBITDA loss of $2,220,000 compared with $1,516,000 in H1 FY24. This reflected the impact of integration following recent mergers, with the enlarged business not yet fully right-sized in terms of team and cost base. Retail channels outside of e-commerce experienced margin pressures from grain purchasing and ingredient price increases, particularly chocolate for Mt Elephant, resulting in a lower gross margin. These pressures were partly offset by the Healthy Chef’s higher-margin portfolio, which delivered strong sales but also introduced increased marketing and distribution expenses. Base retail sales declined modestly due to the loss of several smaller accounts, however underlying product sales within existing distribution channels continued to grow. The Americas business was slightly lower in H1 FY25, reflecting the deliberate scaling back of marketing activity while re-adjusting brand plans in response to legislative changes. Reconciliation of Adjusted EBITDA from continuing operations to statutory loss Group 30 Jun 2025 30 Jun 2024 $'000 $'000 Loss after income tax Add back/(deduct): Income tax expense Finance costs Interest income Depreciation and amortisation EBITDA Add back/(deduct): Impairment and write-off of other assets Share-based payments One-off transactions* Adjusted EBITDA * (3,093) (2,756) 279 (4) 511 1 66 (23) 537 (2,307) (2,175) 288 (101) (100) 77 239 343 (2,220) (1,516) One-off transactions in H1 FY25 primarily comprise restructuring and integration costs associated with The Healthy Chef, the Ananda facility closure and offset by insurance proceeds from an insurable event and deferred consideration release credit Operating cash flow and balance sheet position Net operating cash outflow for H1 FY25 was $1,383,000, compared with $2,145,000 in H1 FY24. In H1 FY25 improved due to increased revenues, lower one-off costs and proceeds from an insurable event. Liquidity was supported by a $1,325,000 secured debt facility and a $150,000 equity raise completed in Q2, with a closing cash balance as at 30 June 2025 of $1,087,000. Impairment charges Impairment and other asset write off charges were $288,000 in H1 FY25, compared with $77,000 in H1 FY24. The $288,000 includes $226,000 of inventory written off, write off machinery $37,000 and impairment of intangibles of $25,000. 3 Elixinol Wellness Limited Directors' report 30 June 2025 Performance by operating segment Australian operations continued to account for the majority of Group revenue. The Healthy Chef delivered its strongest quarter since acquisition in Q2 FY25, supported by the launch of Menopause+ and a refreshed digital strategy. Hemp Foods Australia rebounded in Q2 FY25, matching Q2 FY24 revenue despite the absence of new launches, with core hemp seed, oil, and protein products remaining key growth drivers. Mt Elephant returned to growth, recording its best quarterly performance in three periods following range resets and renewed traction with grocery partners. The Australian Superfood Co experienced a softer half-year due to customer order timing and a major customer discontinued operations in the Australian market, though recovery initiatives are underway. In the United States, Elixinol USA reported a softer Q2 FY25 as marketing was deliberately scaled back ahead of a rebrand and digital strategy overhaul. While revenue declined, gross margins remained above 60%, highlighting the underlying resilience of the business. Bulk Ingredients delivered a solid Q2 FY25, benefitting from systems improvements and operational efficiencies which lifted profitability. Outlook and forward priorities The Group enters the second half of FY25 with renewed momentum across its core brands and a pipeline of innovation. The launch of The Healthy Chef protein waters and functional snacking products is expected to broaden category presence and support revenue growth. Cost reduction and portfolio optimisation initiatives are forecast to underpin further margin improvement, positioning the Group for a stronger second half. As a result of the loss incurred for the half-year ended 30 June 2025 and the liquidity at the reporting date, there is a material uncertainty as to whether the Group can continue as a going concern. The Directors consider that the Group will continue as a going concern, as explained in note 2 to the financial statements. Significant changes in the state of affairs On 19 June 2025, the Company appointed Natalie Butler as Chief Executive Officer. On the same date, Josephine Lorenz resigned as Chief Financial Officer and Adam Dimitropoulos was appointed as Chief Financial Officer. There were no other significant changes in the state of affairs of the Group during the financial half-year. Matters subsequent to the end of the financial half-year No matter or circumstance has arisen since 30 June 2025 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years. Rounding of amounts The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' report. This report is made in accordance with a resolution of Directors, pursuant to section 306(3)(a) of the Corporations Act 2001. On behalf of the Directors ___________________________ David Fenlon Independent Non-Executive Director and Chair 29 August 2025 4 Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au Parkline Place Level 25, 252 Pitt Street Sydney NSW 2000 Australia DECLARATION OF INDEPENDENCE BY ELYSIA ROTHWELL TO THE DIRECTORS OF ELIXINOL WELLNESS LIMITED As lead auditor for the review of Elixinol Wellness Limited for the half-year ended 30 June 2025, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and 2. No contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Elixinol Wellness Limited and the entities it controlled during the period. Elysia Rothwell Director BDO Audit Pty Ltd Sydney, 29 August 2025 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050 110 275 Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Elixinol Wellness Limited Consolidated statement of profit or loss and other comprehensive income For the half-year ended 30 June 2025 Note Group 30 Jun 2025 30 Jun 2024 $'000 $'000 Revenue 5 7,642 6,772 Other income Interest income calculated using the effective interest method 6 697 4 210 23 (4,787) (2,145) 101 (511) (25) (37) (226) (533) (974) (742) (726) (552) (279) (4,356) (1,751) (239) (537) (77) (558) (478) (884) (471) (343) (66) (3,093) (2,755) - (1) (3,093) (2,756) Items that may be reclassified subsequently to profit or loss Foreign currency translation (4) 40 Other comprehensive income for the half-year, net of tax (4) 40 (3,097) (2,716) Cents Cents (1.39) (1.39) (2.21) (2.21) Expenses Raw materials and consumables used and processing expenses Employee benefits expenses and Directors' fees Share-based payments Depreciation and amortisation expense Impairment of intangibles Write off of machinery Write off of inventory Professional services expenses Sales and marketing expenses Administrative expenses Distribution costs Other expenses Finance costs 11 9 Loss before income tax expense Income tax expense Loss after income tax expense for the half-year attributable to the owners of Elixinol Wellness Limited Other comprehensive income Total comprehensive income for the half-year attributable to the owners of Elixinol Wellness Limited Basic loss per share Diluted loss per share 17 17 The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 6 Elixinol Wellness Limited Consolidated statement of financial position As at 30 June 2025 Note Group 30 Jun 2025 31 Dec 2024 $'000 $'000 Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Income tax refund due Prepayments, deposits and other 7 1,087 1,251 2,891 14 510 5,753 206 5,959 1,078 1,608 3,890 14 586 7,176 7,176 791 216 5,950 3,591 73 10,621 1,161 265 6,177 3,590 80 11,273 16,580 18,449 2,153 109 2,493 182 264 450 859 6,510 2,216 22 1,114 186 337 450 661 4,986 392 38 74 2,601 3,105 543 97 94 2,703 3,437 Total liabilities 9,615 8,423 Net assets 6,965 10,026 228,486 9,367 (230,888) 228,291 9,610 (227,875) 6,965 10,026 Non-current assets classified as held for sale Total current assets 8 Non-current assets Property, plant and equipment Right-of-use assets Intangibles Deferred tax Prepayments, deposits and other Total non-current assets 9 10 11 Total assets Liabilities Current liabilities Trade and other payables Contract liabilities Borrowings Lease liabilities Employee benefits Provisions Accrued expenses Total current liabilities 12 Non-current liabilities Borrowings Lease liabilities Employee benefits Contingent consideration Total non-current liabilities 12 Equity Issued capital Reserves Accumulated losses 13 Total equity The above consolidated statement of financial position should be read in conjunction with the accompanying notes 7 Elixinol Wellness Limited Consolidated statement of changes in equity For the half-year ended 30 June 2025 Issued capital $'000 Foreign currency translation reserve $'000 Share-based payments reserve $'000 Accumulated losses $'000 Total equity $'000 222,573 9,156 886 (226,153) 6,462 Loss after income tax expense for the half-year Other comprehensive income for the half-year, net of tax - - - (2,756) (2,756) - 40 - - 40 Total comprehensive income for the half-year - 40 - (2,756) (2,716) 3,449 474 - 239 (474) - 3,449 239 - 226,496 9,196 651 (228,909) 7,434 Issued capital $'000 Foreign currency translation reserve $'000 Share-based payments reserve $'000 Accumulated losses $'000 Total equity $'000 228,291 9,223 387 (227,875) 10,026 Loss after income tax expense for the half-year Other comprehensive income for the half-year, net of tax - - - (3,093) (3,093) - (4) - - (4) Total comprehensive income for the half-year - (4) - (3,093) (3,097) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 13) Share-based payments (note 18) Vesting of share-based payments Transfer of historical expired rights 137 58 - - (101) (58) (80) 80 137 (101) - 228,486 9,219 148 (230,888) 6,965 Group Balance at 1 January 2024 Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Share-based payments (note 18) Vesting of share-based payments Balance at 30 June 2024 Group Balance at 1 January 2025 Balance at 30 June 2025 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes 8 Elixinol Wellness Limited Consolidated statement of cash flows For the half-year ended 30 June 2025 Note Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Government grants Insurance claim received Interest received Interest and other finance costs paid Income taxes paid Group 30 Jun 2025 30 Jun 2024 $'000 $'000 7,947 (9,631) 23 481 4 (207) - 6,646 (8,745) 23 (66) (3) (1,383) (2,145) Cash flows from investing activities Payment for purchase of business, net of cash acquired Payments for property, plant and equipment Payments for intangibles Proceeds from disposal of investments (13) (17) - (1,800) (45) 2,265 Net cash (used in)/from investing activities (30) 420 150 (12) 1,325 73 (95) 3,164 (395) (172) Net cash from financing activities 1,441 2,597 Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year Effects of exchange rate changes on cash and cash equivalents 28 1,078 (19) 872 708 (3) Cash and cash equivalents at the end of the financial half-year 1,087 1,577 6 Net cash used in operating activities Cash flows from financing activities Proceeds from issue of shares Share issue transaction costs Proceeds from secured loan Net proceeds from trade finance borrowings Repayment of lease liabilities 13 13 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes 9 Elixinol Wellness Limited Notes to the consolidated financial statements 30 June 2025 Note 1. General information The financial statements cover Elixinol Wellness Limited as a group consisting of Elixinol Wellness Limited ('Company' or 'parent entity') and the entities it controlled at the end of, or during, the period ('Group'). The financial statements are presented in Australian dollars, which is Elixinol Wellness Limited's functional and presentation currency. Elixinol Wellness Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office is: Registered office Principal place of business Suite 2 Level 11 385 Bourke Street Melbourne VIC 3000 Unit 233 15 Cochranes Road Moorabbin VIC 3189 A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of Directors, on 29 August 2025. The Directors have the power to amend and reissue the financial statements. Note 2. Material accounting policy information These general purpose financial statements for the interim half-year reporting period ended 30 June 2025 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 31 December 2024 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Group during the financial half-year ended 30 June 2025 and are not expected to have a significant impact for the full financial year ending 31 December 2024. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Going concern The half-year financial statements have been prepared on a going concern basis, which contemplates the continuation of normal business operations and the realisation of assets and settlement of liabilities in the normal course of business. During the half-year ended 30 June 2025, the Group incurred a net loss after tax of $3,093,000 (30 June 2024: $2,756,000) and had net current liabilities of $551,000 (31 December 2024: net current assets of $2,190,000), largely due to the borrowings of $1,325,000 which are repayable within twelve months of the reporting date. During the half-year, net cash outflows from operating activities were $1,383,000 (30 June 2024: $2,145,000). At 30 June 2025, the Group held cash reserves of $1,087,000. 10 Elixinol Wellness Limited Notes to the consolidated financial statements 30 June 2025 Note 2. Material accounting policy information (continued) The Group’s ability to continue as a going concern is dependent on: ● Achieving forecast sales growth, supported through new product and reformulation launches, roll out of select brands into retail channel, rebranding of existing lines and private label deals. ● Margin improvement through lower cost sourcing of inputs, manufacturing efficiency gains, deprioritising low margin products, reformulation of existing products to lower the cost price. The successful execution of its cost reduction initiatives across all operating expense lines including marketing and promotional ● expenses, personnel costs, consulting and professional fees and other administrative costs; and Securing additional funding through equity/debt raising, asset sales and extension of finance facilities as required: ● ● The Company has a history of successfully raising capital, including $1,100,000 institutional placement in October 2024 and $400,000 share purchase plan in November 2024. In May 2025, the Company successfully secured debt financing of $1,325,000 and an additional $150,000 through equity. ● Other existing working capital revolving debt facilities are expected to continue and include facilities provided by Scottish Pacific (debtors and trade facilities) and e-commerce facilities through Shopify and Paypal. There are reasonable grounds to expect that these facilities will continue to be available. ● The cashflow forecasts prepared by the Group for the next twelve months from the date of this report indicate the Group will have a positive cash balance. The cashflow forecasts include assumptions around future capital raising. The Directors are confident that any future capital raising would be successful. The Directors believe the Group will have access to sufficient funding to meet its obligations as and when they fall due. Accordingly, the Directors are satisfied that it is appropriate to prepare the financial report on a going concern basis. However, there is a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. Based on the Group’s forecasts, its ability to effectively manage expectations and cash flows from operations, and ability to raise future capital, the Directors believe that the Group’s existing cash reserves are adequate to pay its liabilities in the ordinary course of business for at least twelve months from the date of this report and that there is a reasonable basis to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amount and classification of liabilities that may be necessary should the Group not continue as a going concern. Note 3. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying a