Following the appointment of a new CFO in March, NexCen Brands, the owner of The Athlete's Foot franchise brand, said it found “there is substantial doubt about its ability to continue as a going concern.” Effectively, NexCen is worried about its ability to both pay off a portion of its bank credit facility while also having the cash necessary to continue operating.
As a result of the revelations, the company reported that it is actively exploring all strategic alternatives to enhance its liquidity, including potential capital market transactions, the possible sale of one or more of its businesses, and discussions with the companys lender. In addition, the company will take immediate steps to reduce operating expenses.
The company expects to report revenues of $13.9 million in the first quarter of 2008 compared with $3.9 million in Q1 2007. The growth is driven by the host of acquisitions it has completed in the last year. It also said the pipeline of letters of intent for new franchise stores grew during the first quarter from 151 to 410 stores.
