Parlux said in a statement that the warning from Nasdaq concerned a delay in the filing of its 10-Q from for the period ending June 30 this year. According to Nasdaq regulations all companies listed on the exchange must file required financial reports on time or risk delisting.
At the end of June the company blamed the late filing of its quarterly results on a high rise in the level of administration work that required to produce its annual report on time.
Evidently the company's administration team had not been able to keep up with rapid expansion over the course of the last year, when sales more than doubled from $47.44m in 2005, to reach $111.77.
The Nasdaq warning follows Parlux delaying the filing of it quarterly report a second time last week, when the company also warned that there would be a big dip in its net sales due primarily to weak sales at department sales and other associated outlets.
News of the company's slowing performance follows an earlier announcement that company executives wanted to privatize the business.
In mid-June Parlux CEO Ilia Lekach made an unsolicited offer to buy back the company shares at $29 in a bid to fend of the threat of short-term investors.
The announcement came after what Lekach termed 'disruptions' from short sellers, which he claims had damaged the company's investment potential. A month later Lekach withdrew his share buyout offer on the back of pressure from shareholders, causing share prices to plummet still further.
Shareholders have become so disillusioned with the situation they have filed a class action suit against the company on the basis that it has violated federal securities laws.
With shares now trading at $5.50, many industry experts believe that the only viable choice is for the company to sell off its brands one-by-one.
Parlux, is the license holder to big fragrance names such as Perry Ellis XOXO, Ocean Pacific and tennis star Andy Roddick, and really hit the big-time by licensing deal to produce fragrances and asscessories using the name and image of media figure and heiress Paris Hilton.
The Paris Hilton brand is undoubtedly a more asset to the company, but for the time being it is likely the smaller brands that will be sold off first.Indeed, yesterday Parlux indicated that it was in discussions to sell its Perry Ellis brand to New Jersey company Victory for an estimated $140m. The company said that this move would enable it to concentrate on its celebrity-branded perfumes.