Castle Brands Receives an Audit Opinion Containing a Going Concern Qualification

2008-07-23 23:39:06 -

- Castle Brands Inc. (AMEX: ROX), an emerging international spirits company, announced today that its financial statements for the fiscal year ended March 31, 2008 contain a going concern qualification. This announcement is made in compliance with Section 610(B) of the American Stock Exchange Company Guide, which requires listed companies to make a public announcement disclosing the receipt of an audit opinion that contains a going concern qualification.

As noted in the Company's Report on Form 10-K filed as of June 30, 2008, and as required under applicable American Stock Exchange rules, the Company notes that its audit report on its financial statements for the fiscal year ended March 31, 2008, contain a going concern qualification from its Independent Registered Public Accounting Firm, Eisner LLP. Further information regarding the going concern qualification can be found in the Company's Report on Form 10-K filed with the Securities and Exchange Commission as of June 30, 2008.

In May 2008, the Company engaged Miller Buckfire & Co., LLC, a nationally recognized investment banking firm, as its exclusive financial advisor in connection with the evaluation of various prospective transactions, including the raising of additional equity from prospective investors, and the evaluation of the potential sale of one or more assets. In addition, the Company continues to implement a plan supporting the continued growth of existing brands that will be supported by a variety of sales and marketing initiatives that it expects will generate cash flows from operations. As part of this plan, the Company expects to grow its business through continued expansion to new markets and within existing markets, as well as strengthening existing distributor relationships. Castle Brands is also seeking additional brands and agency relationships to leverage the existing distribution platform, as well as a systematic approach to expense reduction, improvements in routes to market and production cost containment to improve existing cash flow. There can be no assurance that the Company can successfully implement its business plan or raise sufficient capital on acceptable terms. 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.

More about Castle Brands Inc.

Castle Brands is an emerging developer and international marketer of premium branded spirits within four growing categories of the spirits industry: vodka, rum, whiskey and liqueurs. Castle Brands' portfolio includes Boru(R) Vodka, Gosling's Rum(R), Sea Wynde(R) Rum, Knappogue Castle Whiskey(R), Clontarf(R) Irish Whiskey, Jefferson's(TM) and Jefferson's Reserve(R) Bourbon, Sam Houston(R) Bourbon, Tierras Tequila, Celtic Crossing(R) Liqueur, Pallini(R) Limoncello(TM), Raspicello(TM) and Peachcello(TM) and Brady's(R) Irish Cream. www.castlebrandsinc.com

Forward Looking Statements

This press release includes statements of our expectations, intentions, plans and beliefs that constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, related to the discussion of our business strategies and our expectations concerning future operations, margins, profitability, liquidity and capital resources and to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. We have used words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "thinks," "estimates," "seeks," "expects," "predicts," "could," "projects," "potential" and other similar terms and phrases, including references to assumptions, in this press release to identify forward looking statements. These forward looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties, risks and factors relating to our operations and business environments, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by these forward looking statements. More information about these and other factors are described under the caption "Risk Factors" in Castle Brands' Annual Report on Form 10-K for the year ended March 31, 2008 filed with the Securities and Exchange Commission.

When considering these forward looking statements, you should keep in mind the cautionary statements in this press release and the documents incorporated by reference. New risks and uncertainties arise from time to time, and we cannot predict those events or how they may affect us. We assume no obligation to update any forward looking statements after the date of this press release as a result of new information, future events or developments, except as required by the federal securities laws.

ROX-G

For Investor Relations:
ICR Inc.
Kathleen Heaney, 203-803-3585
ir@castlebrandsinc.com