Tuesday, Dec 23, 2008    Text size: 

The company, which operates the Adult FriendFinder network as well as about two dozen more networking sites, also announced that it is now the parent of Penthouse Media Group Inc., which purchased FriendFinder last year.

The revelations came way of a regulatory filing with the Securities and Exchange Commission on Tuesday.

FriendFinder plans to use the proceeds of its IPO primarily to pay off debt, according to the filing.

Further, the company said it has shifted gears to consolidate its brands to add value.

“We believe that the brand recognition that we have developed has significantly contributed to the success of our business,” the company said. “We also believe that maintaining and enhancing the FriendFinder, AdultFriendFinder and Penthouse brands is critical to expanding our base of users, advertisers and affiliates.”

FriendFinder’s filing offered several gems of information, including that the company depends on affiliates greatly to send traffic.

“As of Sept. 30, we had more than 110,000 participants in our marketing affiliate program from which we derive a substantial portion of our new members and approximately 44 percent of our revenue,” the company said. “For the nine months ended Sept. 30, we made payments to marketing affiliates of over $46.4 million.”

The company also said that it failed to inform investors that Penthouse Media Group would change its corporate name, which it said it did in July.

“We … failed to obtain the consent of the noteholders prior to taking certain corporate actions such as seeking their consent prior to changing our name from Penthouse Media Group Inc. to FriendFinder Networks Inc.,” the company said.

Last December, Penthouse acquired FriendFinder for about $401 million in a cash-and-stock deal.

Later, Penthouse Group said it planned to raise $250 million in its own IPO and file with the SEC in the second quarter. But that proposal never came to fruition.

In Tuesday's regulatory filing, it also was revealed that both FriendFinder CEO Marc Bell and FriendFinder President Daniel Staton have signed five-year contracts with the company. Bell and Staton will earn $1 million each year plus, with bonuses equal to their annual earnings. Both packages also have stock options.

FriendFinder executive "Legendary" Lars Mapstead and founder Andrew Conru have both inked independent contractor contracts, as well. Each will be compensated $231,000 annually.

In the filing, FriendFinder revealed its net income between Jan. 1 and Dec. 6, 2007 — $48.6 million, down 20.5 percent from the full year in 2006.

Bell did not return XBIZ phone calls for comment by post time.

Restructured Company Going Public

Below is a list of subsidiaries of FriendFinder Networks Inc.

Big Island Technology Group Inc.

Confirm ID Inc.

Danni Ashe Inc.

Fastcupid Inc.

FriendFinder California Inc.

FriendFinder GmbH

FriendFinder Processing (India) Private Ltd.

FriendFinder Processing, Ltd.

FriendFinder United Kingdom Ltd.

FRNK Technology Group

General Media Art Holding Inc.

General Media CommunicationsInc.

General Media EntertainmentInc.

General Media UK Ltd.

Global Alphabet Inc.

GMCI Internet Operations Inc.

GMI Online Ventures Ltd.

Interactive Network Inc.

Medley.com Inc.

Penthouse Clubs International Establishment

Penthouse Digital Media Productions Inc.

Penthouse Financial Services N.V.

Penthouse Images Acquisitions Ltd.

PMGI Holdings Inc.

PPM Technology Group Inc.

Pure Entertainment Telecommunications Inc.

Sharkfish Inc.

Snapshot Productions LLC

Streamray (England and Wales)

Streamray Inc. (Nevada)

Streamray Inc. (St. Kitts)

Traffic Cat Inc.

Transbloom Inc.

Various Inc.

Video Bliss Inc.

West Coast Facilities Inc.

Source: FriendFinder Networks Inc.