Finance chief Chris Marsh has since been suspended from his role and accountancy giant PwC drafted in to look through the company's books.
Just hours after the suspension, Patisserie Holdings said its board had been unaware that HM Revenue and Customs had filed a winding-up petition at the high court against the company's main trading subsidiary, Stonebeach, over an unpaid £1.14m tax bill. "We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible", the company's chairman Luke Johnson said.
In a trading update this afternoon the company said: "The Board has now reached the conclusion that there is a material shortfall between the reported financial status and the current financial status of the business".
It has five brands: Patisserie Valerie, Druckers - Vienna Patisserie, Philpotts, Baker & Spice and Flour Power City. The cafe opened in October 2015, and was the first to open in Lancashire.
It was not immediately clear whether stores would be able to remain open for the time being or what the future would hold for the company's 2,500 staff.
It was floated on the AIM stock market, for smaller companies, in 2014.
As a outcome, its shares with suspended from trading on AIM, the Alternative Investment Market while it "conducts a full investigation with its legal and professional advisors into its true financial position".
The company said it was "in communication with HMRC with the objective of addressing the petition".
"Without an immediate injection of capital, the directors are of the view that that is no scope for the business to continue trading in its current form".
Patisserie Holdings - which had a market value of almost £450m before shares were suspended this week - operates from more than 200 stores.
Mr Johnson bought into Patisserie Valerie in 2006, one of a number of business ventures by the entrepreneur, who built his reputation taking control of Pizza Express in 1993 before selling out in 1999.
In 2001 he co-founded Risk Capital Partners, which owns stakes in companies including Majestic Bingo and swimming goods firm Zoggs.