NexCen Brands mulls options, gives going-concern warning

The company said it will delay filing its first quarter report and expects to amend its annual report for the 2007 fiscal year because disclosures regarding its bank credit facility were not included in the filing.

NexCen said its bank credit facility with BTMU Capital Corp. was amended in January when the company bought Great American Cookies to allow NexCen to borrow another $70 million to finance a portion of the purchase price. The amendments included an accelerated-redemption feature that required $35 million of the additional financing to be reduced to $5 million by Oct. 17, 2008.

NexCen said the accelerated-redemption feature was not disclosed in its filings.

The company, which owns the Marble Slab Creamery, MaggieMoos, Pretzel Time, Pretzelmaker, and Great American Cookies franchised brands, said it now believes "there is substantial doubt about its ability to continue as a going concern."

NexCen added that doubt may have existed when the company filed its 2007 annual report.

NexCen also said to add to its liquidity, it will explore all strategic alternatives for its business, including potential capital market transactions, the possible sale of one or more of its businesses and discussions with its lender. The company added it will immediately attempt to lower its operating expenses.

NexCen also offered revenue guidance for the first quarter, saying it expects to report revenue of $13.9 million for the quarter ended March 31.

The company said it will file its first quarter and 2007 reports as soon as possible.

Shares of Nexcen fell $1.03, or nearly 41 percent, to $1.50.