Caliber Learning Networks Inc., a Baltimore-based company founded five years ago by Sylvan Learning Systems Inc. and MCI WorldCom Inc., needs an "infusion of cash" to make it through the rest of the year, according to documents filed with the Securities and Exchange Commission.
Its losses increasing and revenue diminishing, the long-distance learning company requested an extension Tuesday from the SEC for filing its report for the first quarter that ended March 31.
Caliber said that "management is currently negotiating with existing creditors and potential investors a plan that would allow the company to continue its operations through 2001."
Caliber's admission that it needs more cash comes as no surprise. Its last annual report to regulators, filed in March, stated that it had cash and cash equivalents of $7.6 million as of Dec. 31 - enough to sustain operations for three months.
Since January, Caliber has secured $15 million in financing from Sylvan Ventures LLC and Fleming US Discovery Fund III, but has stated that it needs an additional $10 million to $15 million this year to continue operations. The company laid off 40 of its 223 workers in January.
Caliber officials did not return phone calls yesterday.
Caliber, with headquarters in Inner Harbor East, began as a long-distance learning company specializing in adult education. Last spring, it announced it was shifting its focus to corporate training.
Its net loss widened last year to $34 million compared with $22.2 million in 1999, while sales dropped 20 percent to $20.9 million vs. $26 million in 1999.
And Caliber's stock has sunk steadily since it went public at $14 a share in May 1998. Yesterday it closed at 45 cents a share, up 7 cents. The shares have traded under $1 since March 21 - a level that imperils its listing on the Nasdaq stock market.
Sylvan Learning's chairman and chief executive, Douglas Becker, said the challenges faced by Caliber are typical of a young growth company in this business climate. Sylvan is a major shareholder in Caliber, with an approximate 30 percent share of the company, Becker said.
"Some companies get to profitability faster than others ... with Caliber it's taking us much longer than we would have liked," he said.