Auditors for Lifebrandz flag 'going concern' risks

Block 3C, the Cannery (building on the right), at Clarke Quay where five outlets operated by Lifebrandz, has shut down.
Block 3C, the Cannery (building on the right), at Clarke Quay where five outlets operated by Lifebrandz, has shut down. PHOTO: ST FILE

SINGAPORE - Auditors for former entertainment group Lifebrandz have flagged concern over the its ability to continue as a going concern.

Mazars LLP noted that the Catalist-listed company had a net current liability of S$164,000 and net total liability of S$158,000 as at July 31. It also incurred a net loss of S$1.07 million and net operating cash outflows of S$987,000 for the financial year ended July 31, 2016.

"These conditions indicate the existence of a material uncertainty which may cast significant doubt on the group's and the company's abilities to continue as going concerns," said the auditors.

Mazars noted that LifeBrandz had assumed it will be able to raise S$1.5 million prior to the completion of its proposed reverse takeover of Three Crystals Hong Kong by the end of the next financial year ending July 31, 2017, which could then be used to fund the group's operating activities.

Lifebrandz is also assuming it can raise additional funds after announcing the proposed acquisition.

But Mazars noted: "If the above funds are not forthcoming, the group and the company may be unable to continue in operational existence for the foreseeable future."