MaxWorldwide Inc., formerly known as L90, had its stock delisted from Nasdaq yesterday for failing to file its quarterly report on time.
Nasdaq previously had threatened to delist MaxWorldwide's stock because the New York online media rep and direct marketing list firm did not file its annual report on time, but granted it a reprieve in that case.
MaxWorldwide said in a statement that it wants to ensure previous filings are accurate before it files its quarterly report. It retained PricewaterhouseCoopers LLP to replace Arthur Andersen LLP as its independent auditors.
“In working with PricewaterhouseCoopers, we discovered misclassifications of certain research and development expenses reported in our prior financial statements,” chief financial officer William H. Mitchell said in a statement. “We are reviewing the treatment of these expenses and will likely have our operating results for certain prior periods re-audited.”
However, in an earlier statement when it announced it would delay filing its quarterly report, MaxWorldwide said the misclassifications will not affect net income reported for those periods. It also said the misclassifications are unrelated to questionable booking of barter transactions that led the company, then known as L90, to restate its earnings in May.
The delisting comes as MaxWorldwide works to put recent troubles behind it and emerge as an online media rep and list brokerage titan.
In July, it bought DoubleClick's North American media business for 4.8 million shares and $5 million in cash and moved its headquarters from Los Angeles to New York. Soon after, MaxWorldwide indicated it is in the market for a list company.
The company in February revealed that the Securities and Exchange Commission and Nasdaq were investigating some questionably booked revenue relating to barter transactions with embattled real estate portal Homestore.com. In March, it announced the resignations of its president/CEO and its chief financial officer and began installing new management.
L90's troubles led to the termination of a planned merger with online direct marketing firm eUniverse Inc.