US: Castle Brands granted going concern status
Castle Brands has secured 'going concern' status, as it continues its hunt for transactions to secure its future.
The US-based spirits importer and marketer said yesterday (24 July) that its financial statements for the year to the end of March contain a going concern qualification. The announcement was made to comply with American Stock Exchange rules, which require listed companies to make a public announcement disclosing the receipt of an audit opinion that contains a going concern qualification.
The qualification was made by Castle's accountants, Eisner LLP.
Earlier this year, Castle charged investment bank Miller Buckfire & Co. with evaluating various prospective transactions, "including the raising of additional equity from prospective investors, and the evaluation of the potential sale of one or more assets".
The company said at the time that it expects to grow its business through "continued expansion to new markets and within existing markets, as well as strengthening existing distributor relationships". Castle is also seeking additional brands and agency relationships, as well as looking to reduce expenses, and improve existing cash flow.
"Without sufficient additional capital or long term debt and ultimately profitable operating results, the company will not be able to continue as a going concern," Castle warned.
Earlier this month, Castle, whose portfolio includes Boru vodka, Gosling's rum and Limoncello, said that net losses for the year to the end of March climbed to US$27.6m from $16.5m a year earlier. Sales for the period, however, increased by 9% to $27.3m from $25.2m. Operating loss in the year rose to $29.5m from $18m.
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