Interim Financial Statements June 2019

Report of the Directors for the six months ended 30 June 2019 The Directors of Promisia Integrative Limited are reporting on the six months to 30 June 2019 for the company and its subsidiaries. Sales for the six months were $91,000 compared with sales of $468,000 in the same period in 2018. The significantly lower sales reflects the damage to the Arthrem brand following the two Medsafe Alerts in 2018. The operating loss for the period was $1,728,000 compared with a loss of $1,195,000 for the same period in 2018. The operating loss includes significant provisions of $1,096,000 for the impairment of both raw materials and stock. The impairment has been included due to the very low level of sales and the high probability that this material will not be required in the foreseeable future. The company intends to find buyers for raw material and extract stock but has taken a prudent approach in view of the fundamental uncertainty of the outcome of the prosecution of the company by the Ministry of Health. As reported previously, the company has ceased all marketing activities in New Zealand and Australia to conserve funds. Sales continue to be achieved in New Zealand to consumers obtaining joint support from Arthrem. In Australia, sales of Arthrem to pharmacies have been very limited over the last six months and wholesale distribution arrangements have ceased. A hearing date for the charges laid against the company by the Ministry of Health has not been finalised, despite three brief appearances in the District Court. The parties have agreed to set a hearing date at the next court appearance set down for 13 September 2019. A five day trial is expected to occur in early 2020 and the company intends to defend all charges rigorously. Corporate expenses have been reduced significantly with all marketing staff leaving the company, the office lease transferred to another party, and all operating costs minimised. The Brankin Trust has been making progressive payments to the company to pay up its entitlement to 250 million new shares as approved at a meeting of shareholders held on 4 December 2018 and as advised to the market on 23 January 2019. When these are fully paid then an allotment of fully paid shares will be made to the Brankin Trust. On behalf of shareholders the directors thank the Brankin Trust for its ongoing support of the company. These are testing times for the company but your directors, with the support of the Brankin Trust, are working to achieve an acceptable outcome for shareholders. On behalf of the Board Stephen Underwood Chairman 29 August 2019 End CA:00340060 For:PIL Type:HALFYR Time:2019-08-29 14:46:32