Troubled NetWolves runs for bankruptcy

The telecom expects a cash crunch in 2008.

By Madhusmita Bora, Times Staff Writer
Published May 23, 2007

Shares of NetWolves Corp. took another sharp plunge Tuesday after the Tampa company filed for Chapter 11 bankruptcy protection.

The announcement came a week after the long-struggling telecommunications and Internet managed services provider told federal regulators that it may run out of cash next year.

The company attributed its financial instability to litigation costs and dipping stock price.

NetWolves didn't return calls yesterday, but newly appointed chief executive Scott Foote said in a release that the company expects "to create a business plan that will provide a workable financial scenario and operational clarity for our customers".

The immediate goal is to provide outstanding and reliable services to its consumers, Foote said.

Founded in 1998, NetWolves twice earned a spot among Deloitte & Touche USA's 500 fastest-growing technology companies in North America. But the company has struggled more recently.

Last year, Nasdaq told the company that it failed to comply with the minimum bid price requirement for continued listing.

In March, the company reported a second-quarter net loss of $1.3-million, or 4 cents a share, on revenue of $4.3-million, compared with a net loss of $1.2-million, or 4 cents a share, on revenue of $5.6-million for the same period last year.

Yesterday's announcement didn't sit well with Wall Street. Its shares closed at 6 cents, down 50 percent.

Madhusmita Bora can be reached at mbora@sptimes.com or (813) 225-3112.