iParty Corp. (NYSE MKT: IPT - news), a party goods retailer, today announced that it has received a letter from the NYSE MKT (the “ Exchange”) indicating that iParty is not in compliance with Section 1003(f)(v) (“ low selling price”) of the NYSE MKT Company Guide (the “ Company Guide”) due to its low selling price for a substantial period of time. Therefore, pursuant to Section 1003(f)(v) of the Company Guide, iParty’s continued listing is predicated on it effecting a reverse stock split of its common stock within a reasonable period of time, which the Exchange has determined to be no later than May 20, 2013. If iParty does not effect a reverse stock split prior to such time, it could become subject to delisting procedures.
As previously disclosed on November 7, 2012, iParty has formed a special committee of the independent members of the Board of Directors (the “ Special Committee”) and retained Raymond James & Associates, Inc. to assist the Company in exploring a broad range of financial and strategic alternatives to enhance shareholder value. Additionally, at iParty’s 2012 Annual Meeting, the stockholders approved an amendment to iParty’s Restated Certificate of Incorporation to effect a reverse stock split, pursuant to which the existing shares of iParty’s common stock would be combined into new shares of iParty common stock at an exchange ratio ranging between one-for-five and one-for-twenty, with the exchange ratio to be determined by the Board of Directors (the “ Reverse Stock Split”). With the approval of the Reverse Stock Split, the Board has the authority but not the obligation to effect the Reverse Stock Split at any time prior to the date of the 2013 Annual Meeting.
At this time, no decision has been made to engage in a financing or strategic transaction and the Special Committee has not set a definitive time table for this review process. Given the ongoing review process, the Board has made no determination to effect the Reverse Stock Split.