The financial records of L90 Inc. are under investigation by the Securities and Exchange Commission, the firm said. The investigation will delay the company’s sale to interactive entertainment network eUniverse Inc.
A subpoena has been issued to one company director requesting financial documents, the company continued.
The company has also been contacted by the Nasdaq Listing Investigations requesting specific information pursuant to a marketplace rule.
Calls to L90 officials were not returned. The SEC declined to comment on the specifics of the investigation. The online media and direct marketing company said it plans to fully comply with the investigation and information request. Its board of directors has authorized the board’s Audit Committee to begin an independent investigation and has retained outside counsel.
On Feb. 1, the company’s vice president of finance resigned effective immediately.
In January, eUniverse said it would acquire L90 in a cash deal worth up to $55 million. The resulting efficiencies were expected to help L90, which has suffered from the online ad slowdown, attain profitability, executives said at the time. The agreement was to have closed Feb. 28 but L90 now expects the deal to be delayed until at least March. Both firms are headquartered in Los Angeles.
The eUniverse network includes such Web sites as Flowgo (www.flowgo.com) Madblast (www.madblast.com) and Cupid Junction (www.cupidjunction.com). The firm also reaches more than 50-million subscribers through e-mail newsletters.
Last year, the firm acquired Novus List Marketing, a Valhalla, NY-based list management firm. In October, it sold its ad-serving and ad-tracking technology to New York-based DoubleClick. Financial terms of that deal were not released.
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