NexCen Brands, Inc., parent company of The Athlete's Foot, has completed an amendment of its 2007 10-K, including restated 2007 audited financial statements, and has filed an amended Annual Report on Form 10-K/A for the fiscal year ended December 31, 2007 with the Securities and Exchange Commission.

Amendment to 2007 10-K

The company’s corrections to its original 2007 financial statements are not material either individually or in the aggregate. Further, the company’s net loss per share for fiscal year 2007 remains unchanged. The aggregate effect of the restatement on the company’s Consolidated Statements of Operations for the year-ended December 31, 2007 is as follows:

Nexcen announced an increase in 2007 total revenues of $300,000 to $34.6 million. The company previously reported revenues of $34.3 million. The company also reported an increase in total operating expenses of $500,000 million to $32.6 million. The company previously reported total operating expenses of $32.1 million. Nexcen also reported an increase in net loss of $200,000, or 4.7%, to $4.9 million. The company previously reported a net loss of $4.6 million. Net loss per share remains unchanged at 9 cents per share.

The company said the difference of $100,000 between the increase in net loss and the change from previously reported net loss is due to rounding.

The amended 2007 10-K also details several immaterial adjustments to the company’s consolidated balance sheet and consolidated statement of cash flows, each as of Dec. 31, 2007.

The company also concluded that there was substantial doubt about its ability to continue as a going concern as of Dec. 31, 2007, although its Audited Consolidated Financial Statements included in the amended 2007 10-K have been prepared assuming that NexCen will continue as a going concern, consistent with U.S. generally accepted accounting principles.

NexCen undertook a number of steps in 2008, including completing an independent investigation, restructuring its debt facility, instituting significant changes in management, disposing of non-core assets, including its two licensing businesses, and remediating certain internal control weaknesses.

Additionally, in order to ensure proper consideration in its amended 2007 10-K of all events subsequent to Dec. 31, 2007, the company first completed the procedures necessary to substantially finalize its 2008 financial statements before finalizing the 2007 financial statements and filing the amended 2007 10-K. The substantial number of events that have transpired since the company originally filed its 2007 10-K in March 2008 contributed to the complexity of the company’s amendment and restatement process and substantially increased the amount of time needed to complete the amendment of the 2007 10-K. In addition to the restated financial statements, the amended 2007 10-K includes substantially revised disclosures about the company’s business to reflect the changes that have occurred since December 31, 2007.

Kenneth J. Hall, CEO of NexCen Brands, Inc., stated, “We are extremely pleased to have filed our amended 2007 10-K with the SEC. Importantly, the amended 2007 10-K does not contain any material adjustments to our previously reported 2007 financial results. I appreciate the dedication and the steadfast efforts of our entire team in accomplishing this critical goal. Completing this filing is a significant step toward becoming current with our financial reporting obligations. At the same time, we continue to make solid progress on our strategic plan to strengthen our organization and business.”

Strategic Plan Update

Over the course of 2008, the company completed the first phase of its two-phase strategic plan addressing financial and operational challenges that it faced in the following four ways: (1) divested the company’s non-core businesses; (2) enhanced the Company’s cash flow, including by reducing operating expenses; (3) improved corporate infrastructure and certain internal controls; and (4) executed on initiatives to grow the franchised brands.

The second phase of the company’s strategic plan is being implemented throughout 2009. Specifically, the company seeks to drive revenue growth by: (1) strengthening each of NexCen’s seven franchised brands; (2) completing the integration of the franchised brands, which were acquired in late 2006 through early 2008, into the NexCen Franchise Management operating infrastructure; (3) enhancing the profitability of NexCen franchisees; and (4) leveraging NexCen University, the company’s franchising platform, based in Norcross, Georgia.

NexCen also is continuing to strengthen its financial condition. As previously announced, on August 6, 2009 the Company repaid $5.0 million of its credit facility, reducing interest expense going forward by $0.4 million on an annualized basis. Even before the recent pay down of debt, the Company realized significant reductions in monthly cash interest expense due to decreases in the outstanding amount of debt and effective interest rates.

The average monthly cash interest expense was approximately $0.7 and $0.6 million in the first and second quarters of 2009, respectively, as compared to average monthly cash interest expense of $1.0 million in the fourth quarter of 2008. The Company’s average effective interest rate for its credit facility (excluding amortized finance costs) was 6.7% and 6.4% in the first and second quarters of 2009, respectively, as compared to an average rate of 8.6% in the fourth quarter of 2008. These changes in the effective interest rate reflect an amendment to the bank credit facility in early 2009 that reduced the fixed interest rate applicable to a portion of the debt and a decrease in the London Interbank Offered Rate (LIBOR), which affects the variable rates applicable to other portions of the debt. Cash on hand at June 30, 2009 was approximately $8 million, remaining consistent with cash on hand on December 31, 2008 and March 31, 2009, respectively.

Mr. Hall concluded, “Throughout 2008 we faced significant challenges within our business, as well as in the macro economy. Our management team has spent a substantial amount of time, energy and resources to address these issues within NexCen, and we have undertaken a number of transforming steps to improve the Company’s business strategy, corporate infrastructure and financial condition. We look forward to further improving our business and continuing to execute our business strategy for the global management and expansion of our seven franchise brands.”