Caledonian Productions was due to stage the event at Whiteness, near Ardersier, this Saturday (1 May) to raise funds for the Highland Hospice.
The second day of the two-day festival, which had a line-up including McFly and the Sugababes, had already been cancelled due to poor ticket sales.
Veteran rockers Status Quo were scheduled to headline the Saturday night.
A statement on the festival's website reads: "The promoters have cited that due to a lack of interest generated by the second day (which was cancelled recently and was to feature McFly and the Sugababes), both the overall production costs for the entire weekend and lack of ticket sales for the Sunday unfortunately had a knock-on effect for day one, which was to feature Status Quo as the headline act.
"Sales for Status Quo were meeting expectations and continued to sell well every day in the lead up to the event, however, due to contractual tie-ups with suppliers, the overheads related to the two day event combined with a serious cash-flow situation brought on by the second days ticket sales, Caledonian Productions were left with only one option which was to cancel the entire event."
A spokesperson for one of the main acts has criticised the organisers for not planning the event properly from the start. "It is really unfortunate that the concert has been cancelled especially with Highland Hospice being a beneficiary. To have this outcome now is very sad. On reflection, it would appear that critical aspects of the event have been ill considered from the outset."
Caledonian Productions has apologised to fans and is now concentrating on making sure those who have bought tickets get their money back.
According to the statement, tickets bought on Tickmaster and Iris using credit cards will receive full refunds, while those who have purchased tickets at other outlets will be contacted directly by letter to arrange refunds over the coming weeks.
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