A $41.4 million charge to settle class-action and derivative lawsuits pushed MP3.com, Inc.'s most recent quarterly net loss to $46.1 million.
Reporting to the Securities and Exchange Commission on April 27, San Diego-based MP3.com contrasted the $46.1 million net loss for the quarter ended March 31 to the $18.1 million net loss in the first quarter of 2000.
The University City-based Internet music service reported a net loss of $35.6 million in the fourth quarter of 2000.
An MP3.com press release put the company's pro forma net loss for the first quarter of 2001 at $2.2 million.
The pro forma calculation excludes several charges taken during the quarter. Largest among these is a $41.4 million charge to settle class-action and derivative lawsuits filed between Sept. 19 and Nov. 15 of last year.
With its March 20 settlement , which still needs approval in superior and federal courts , MP3.com paid $35 million into an escrow account, recorded a $5.4 million charge for issuing 2.5 million shares of common stock, and paid legal bills related to the cases. MP3.com officials said in their SEC filing that the company would try to recover the money from its insurance company.
The $2.2 million pro forma net loss for the first quarter of 2001 compares with an $8.4 million pro forma net loss for first quarter of 2000.
Revenues for the first quarter of 2001 were $21.8 million , up from the same period last year, when revenues were $17.5 million.
The company reported $20 million in advertising revenue in the first quarter of 2001, compared to $14.6 million in the first quarter of 2000. Non-advertising revenue was $1.7 million and $2.9 million, respectively.
Legal tussles have been a common theme of MP3.com's growth as an online music provider.
The company's SEC filing also relates an unusual legal story that is still unfolding. New York City jurors in early April told a judge they made a mathematical error in deciding how much MP3.com must pay the record label Tee Vee Tunes, Inc.
Like several other labels, New York City-based Tee Vee Tunes has alleged MP3.com infringed its copyrights. The court agreed, and a New York jury was asked to come up with a settlement. Jurors, however, said they calculated incorrectly and the record label could get more money, according to newspaper reports.
No matter how the case turns out, MP3.com's April 27 SEC filing predicts an immediate appeal by one side or the other.
At issue was music played over the MP3.com Web site.