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Webvan Group, one of the boldest bets of the Internet Economy, may be nearing the end of the road. In its annual report filed Monday with the Securities and Exchange Commission, the ailing online grocer reported that its auditor, Deloitte & Touche, issued a warning about the company’s ability to stay in business. Webvan “has suffered recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern,” the annual report said. In accounting terms, a “going concern” warning means there are serious questions about a company’s ability to stay in business through the end of the year. In the report, Webvan also disclosed that it has been sued by Amazon.com, one of its largest shareholders, over the alleged breach of an advertising contract between the two companies. Webvan is also at risk of being delisted from the Nasdaq soon. On Jan. 12, the Nasdaq notified Webvan that unless its shares rose above $1 within 90 days, it would face delisting. “We will likely file for an appeal hearing before Nasdaq,” said Bud Grebey, Webvan’s VP of corporate affairs. Webvan’s struggle to survive is a stark reversal of fortunes for a Net retailer that raised $1.2 billion — more than any other Internet retailer save Amazon. In the past few months, Webvan has been trying to save cash by scaling back its original ambitions to operate in 26 cities within three years. It has indefinitely postponed the launch of service in Maryland and New Jersey and pulled the plug on its Dallas facility. Webvan’s more modest goal now is to prove it can make money in one of its facilities, something it desperately needs if it has any hope of raising the additional funds to stay alive. According to Webvan’s filing, its auditors raised questions about the company’s ability to obtain that financing. Related Articles from The Industry Standard: Webvan, Check Aisle 5 for a Lawsuit Wanna Buy a Warehouse? The Blackened Blue Chips of E-Commerce Copyright � 2001 The Industry Standard

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