NASDAQ Threatens FriendFinder with Delisting

NEW YORK—In an 8-K SEC filing issued yesterday by Penthouse parent FriendFinder Networks Inc., the company stated that it has received a notice of non-compliance from NASDAQ that could lead to its delisting.

“On January 10, 2012, the Company received a notice of non-compliance from Nasdaq stating that the minimum bid price of its common stock had fallen below $1.00 per share for the last 30 consecutive business days,” stated the company. “Nasdaq Rule 5450(a)(1) requires a $1.00 minimum bid for continued listing of an issuer's common stock.

“In accordance with Rule 5810(c)(3)(A), the Company has until July 9, 2012, one hundred and eighty (180) calendar days from January 10, 2012, to regain compliance,” the announcement continued. “The Company can regain compliance with the minimum bid price rule if the bid price of its common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days during the 180 calendar day period.”

If the company is able to regain compliance, the threat of delisting will be lifted. However, if it does not, become compliant by July 9, 2012, “the Nasdaq staff will provide the Company written notification that its securities are subject to delisting, unless the Company otherwise qualifies for an extension of time.”

FriendFinder is the second adult company listed on NASDAQ to find itself in such a precarious position in 2011-2. Barcelona-based Private Media Group was recently notified by NASDAQ that it has begun the process of permanently delisting the company, which is traded under PRVT.

FriendFinder, which is traded under FFN, was first notified of its non-compliance status on January 6, which informed the company that “for the last 30 consecutive business days, the market value of the Company's publicly held shares was less than the $15 million minimum required for continued listing on Nasdaq pursuant to Rule 5450(b)(3)…. If, at any time prior to July 5, 2012, the market value of the Company's publicly held shares is $15 million or more for a minimum of 10 business days, the Nasdaq staff will provide written notification that the Company has achieved compliance and this matter will be closed.”

The 8-K also states, “The Company intends to monitor the market value of its publicly held securities and the trading price of its publicly held securities and consider available options if its common stock does not trade at a level likely to result in the Company regaining compliance with the minimum market value of publicly held shares requirement by July 5, 2012 and the minimum bid price requirement by July 9, 2012.”

FriendFinder Networks' anticipated initial public offering took place in May of this year, when it sold 5,000,000 shares of common stock at a per share value of $10 per share for gross proceeds to FFN of $50,000,000. Within a week of the IPO, shares had fallen by a third to a half of their original value and have not regained their ground since.

AVN also has learned that there have been several layoffs recently at Penthouse, and has contacted the company to see if they are related to its current issues with NASDAQ.