US: Purchase collapse hits Who's Your Daddy Q2
Who's Your Daddy has revised its results for the second quarter.
The California-based energy drinks company had said in July that it expected net revenues for the three months to the end of June to come in at around US$800,000. The company said late last week, however, that net sales reached $629,471 for the period, partly due to the collapse of an intended distributor acquisition.
The purchase was cancelled following "unsatisfactory results of due diligence and the distributor is ceasing operations", Who's Your Daddy said. "The company has taken possession of unsold inventory held by that distributor worth approximately $50,000 at wholesale prices."
Operating loss for the quarter hit $1.6m, while a net loss of $3m was recorded.
For the six months to the end of June, sales hit $763,285 from $294,782 a year earlier. Operating loss rose to $2.5m from a loss of $1.5m in H1 2006. Net loss more than doubled to $4m from $1.8m.
"As we have noted in previous SEC filings, our controls and procedures are weak and need to be improved," conceded Edon Moyal, CEO of Who's Your Daddy. "With the amended Q filed, we can resume our focus on raising the capital needed to increase revenue growth.
"We are aware that the challenges over the past few months have not allowed us to communicate with our shareholders as well as we would like and we plan to correct that with a 'state of the company' press release next week."
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