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Lifebrandz's auditors flag risks to its "operational existence"
AUDITORS for former nightlife entertainment behemoth Lifebrandz has flagged concern over the group's ability to continue as a going concern.
Mazars LLP noted that the group had a net current liability of S$164,000, and net total liability of S$158,000 as at July 31, 2016. It also incurred a net loss of S$1.07 million and net operating cashflows of S$987,000 for the financial year ending then.
"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," it said.
It noted that the group has taken certain steps to raise funds, including a reverse takeover of a industrial-grade garnet mining company in Inner Mongolia. According to the agreement, Lifebrandz and the target firm Three Crystals Hong Kong Limited will raise up to S$5 million through convertible bonds or new share placements.
The management is also of the view that it will be able to raise additional funds in view of the proposed deal.
Said Mazars: "If the above funds are not forthcoming, the group and the company may be unable to continue in operational existence for the foreseeable future."