Maui Land & Pineapple Co.'s debt has raised uncertainty over the company's ability to continue in business.

In a filing with the US Securities and Exchange Commission, the company's auditors Deloitte & Touche cited dwindling cash reserves, continuing losses and several lawsuits as reasons for the company's serious financial troubles.

"These circumstances raise substantial doubt about the company's ability to continue as a going concern," Deloitte & Touche said.

The audit was performed as an update to the company's previous filing as it is preparing to register a secondary equity offering that will enable shareholders to buy additional stock. The company hopes to raise US$25m.

In addition to its pineapple and real estate holdings, the company is 51% owner of Bay Holdings, developer of The Residences at Kapalua Bay.

The audit said that in September, Maui Land took a $209m impairment charge on its Bay Holdings investment and that it had written down its value to zero. Cancellations and defaults on sales contracts for the luxury time share and residence complex managed as a Ritz-Carlton property were much higher than anticipated.

In August, last year the firm reported a net loss for the first six months of the year, hurt by a downturn in visitors at its resorts business and losses in its agricultural segment.

The Kahului-based company reported a net loss of US$67.4m, compared to a net loss of $142,000 for the first six months of 2008. Revenues were also down for the period to 30 June, dropping to $28.9m, compared to $42.9m during the same period a year ago.