Francesca’s sees ‘substantial doubt’ about ability to continue as going concern

Francesca’s noted its audited financial statements included a statement that there is a “substantial doubt” about its ability to continue as a going concern and that a continuation of negative financial trends could result in its inability to continue as a going concern. The company explained, “As a result of the impact of the COVID-19 pandemic on our operations, our management has determined that there is a substantial doubt about our ability to continue as a going concern over the next twelve months and our independent auditors have included a ‘going concern’ explanatory paragraph in their report on our financial statements as of and for the year ended February 1, 2020. We have obtained a waiver of any event of default associated with our independent auditor’s report indicating a substantial doubt about our ability to continue as a going concern in connection with our year-end audit under…Additionally, if our projected operating results fail to improve we could violate additional debt covenants, our liquidity could be further adversely impacted and we may need to seek additional sources of funding…Our liquidity has been adversely impacted by our negative operating results and the COVID-19 pandemic and there is no assurance that we will have sufficient liquidity to continue operations.” Francesca’s shares closed Monday down 20c to $3.78.