NexCen Brands Inc. may have misrepresented to investors its financial position including its failure to disclose an accelerated-redemption feature for financing used in an acquisition.

This is a securities class action lawsuit against NexCen Brands Inc. and certain of its officers and directors.

NexCen operates as a brand management and franchising company in the United States and internationally. NexCen owns, licenses, franchises, and markets a portfolio of brands, including Bill Blass, Waverly, The Athlete's Foot, Shoebox New York, Great American Cookies, MaggieMoo's, Marble Slab Creamery, Pretzel Time, and Pretzelmaker.

The class action complaint alleges that, during the Class Period, NexCen issued a series of materially false and misleading statements that misrepresented and failed to disclose:

(i) that NexCen was able to finance a portion of the Great American Cookies acquisition by agreeing to an accelerated-redemption feature, which would force NexCen to pay back half of its borrowing by a certain date;

(ii) that NexCen was unable to comply with this accelerated-redemption feature, which would reduce the amount of cash available to NexCen;

(iii) that NexCen had no reasonable basis for its earnings guidance for fiscal 2008; and

(iv) as a result of the foregoing, NexCen's ability to continue as a going concern was in serious doubt.

Then, on May 19, 2008, NexCen announced that it "expects to amend the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007." NexCen also stated that its prior financial guidance for 2008 "is no longer applicable." Moreover, NexCen revealed 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 company's lender."

Upon this news, shares of NexCen Brands' stock fell $1.95 per share, or 77%, to close at $0.58 per share, on heavy trading volume.