Vuance releases going concern qualification
FRANKLIN, Wis.--Vuance, a maker of RFID, identity, and access control products, has announced in a release that “for the fiscal year ended Dec. 31, 2008, the audit opinion of Fahn Kanne & Co., the company’s independent registered public accounting firm, contained a ‘going concern’ qualification.”
Does this mean Vuance is going out of business or will soon announce bankruptcy?
No, said Brett Maas, who handles investor relations for Vuance. Normally, he said, something like this would be buried in annual reports. However, due to NASDAQ requirements that it announce going concern qualifications, and because there isn’t a ready earnings report to bury this in, this announcement was made independently, which is somewhat unusual.
Or, as Maas put it, “it’s par for the course, but it’s out of the ordinary.”
According to financial reports released by the company, while Vuance earned $5.4 million in net profit in 2006, it suffered $11.3 million and $12.35 million in losses in 2007 and 2008, respectively.
At this point, according to the most recent statistics available, the public company has roughly $1 million in cash and debt of about $3.5 million.
However, Vuance feels, said Maas, “they have enough runway to get cash-flow positive ... they have receivables out there, which will be evident when they announce the next quarter,” most likely in August.