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Aug. 11, 2022, 5:36 p.m. EDT

Pet Food Maker Better Choice Raises Doubts About Its Financial Future

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Pet food maker Better Choice Co. says there is doubt about its long-term ability to continue as a going concern in light of losses and financial covenants requiring it to maintain a certain level of liquidity.

Companies issue such warnings when concerns arise about their ability to remain in business a year out. The owner of the Halo brand, sold at retailers, said Thursday that as of June 30 it was in compliance with debt covenants.

But it said it "does not currently expect to be able to generate sufficient cash to maintain sufficient liquidity to meet the covenant in certain periods prior to maturity, giving the lender the right to call the debt."

Liabilities total $18.6 million. Quarterly net sales rose to $16.5 million from $11 million. It lost $4.4 million.

Inflation has been a problem, it said.

Write to Becky Yerak at becky.yerak@wsj.com

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