More Red Ink at Troubled

From Times Staff and Wire Reports

Troubled online retailer estimated Tuesday that it lost $4.7 million for the fiscal first quarter, much larger than its $347,408 loss a year earlier.

The gloomy projection for the three months ended April 30 was included in documents notifying regulators that the Corona del Mar company was unable to file its quarterly report on time.

In its report to the Securities and Exchange Commission, attributed the delay to "a change in management along with subsequent financing." It said the report, due 45 days after the quarter's end, will be submitted within five days.

Executives could not be reached for comment.

Last month, the Internet retailer said sales for the quarter exceeded $891,000.'s founder, Robert McNulty, resigned two weeks ago as chairman and chief executive. McNulty will earn $258,000 annually--or $83,000-a-year more than his previous $175,000 salary--under a three-year consulting contract with the online retailer.

McNulty founded in November 1996 and owns 1,322,500 shares, or 31% of the company.

The company's disclosure came after the stock market closed Tuesday. stock, which trades over-the-counter, rose 6 cents to $23.44 a share in light trading.'s officers and directors, as well as McNulty, are under investigation by the SEC in connection with possible manipulation of the company's stock, company documents show. The company went public in November 1997.

The SEC suspended trading in the shares for 10 days in March because regulators were concerned about possible inaccurate company information that had been released by officials.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World