MaxWorldwide Delays Q2 Filing

NEW YORK — MaxWorldwide, formerly L90, said Friday that it has delayed filing its second quarter earnings report due to misclassifications of certain research and development expenses.

The New York-based online and offline media and marketing agency said it is examining the treatment of these expenses with PricewaterhouseCoopers, its new independent auditor that replaced Arthur Andersen in July. The move will likely call for a restatement of the company’s operating results for prior periods, which will require a re-audit of prior results. The company said it doesn’t expect the misclassifcations to affect the net income reported for prior periods.

MaxWorldwide said it believes the misclassifacations are unrelated to past barter-related transactions that in May lead the company to restate operating results for the quarter ended Sept. 30, 2000, the year ended Dec. 31, 2000, and the quarters ended March 31, June 30 and Sept. 30, 2001.

As a result of the delayed filing, MaxWorldwide could face a delisting from the Nasdaq stock market. Earlier this year, the Nasdaq issued a delisting notice because the company failed to file its 2001 annual report in on time [IQ Daily Briefing, April 22].

MaxWorldwide stock (MAXW) was trading on Friday at 39 cents, down 11 cents or 22 percent. Its 52-week high is $2.07 and its 52-week low is 47 cents.