----

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| R | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|--------------------------------------------------------------------------------------|

| £ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

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| Nevada                                     | 13-3750988          |
|--------------------------------------------|---------------------|
| (State or other jurisdiction of            | (I.R.S. Employer    |
| incorporation or organization)             | Identification No.) |
|  6800 Broken Sound Parkway, Suite 200 |  33487         |
| Boca Raton, Florida                        | (Zip Code)          |
| (Address of principal executive offices)   |                |
|                                       |                |

| Title of Each Class            | Name of Each Exchange on Which Registered |
|--------------------------------|-------------------------------------------|
| Common Stock, $0.001 Par Value | NASDAQ Global Market                      |

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| Large accelerated filer £                                             | Accelerated filer £    |
|----------------------------------------------------------------------------|-----------------------------|
|                                                                       |                        |
| Non-accelerated filer £ (Do not check if a smaller reporting company) | Smaller reporting company R |

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|          |                                                                                                                                                                                       | Page  |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|          |                                                                                                                                                                                       |       |
| Item 8.  | Financial Statements and Supplementary Data                                                                                         | 1          |
|          |                                                                                                                                                                                       |       |
| Item 15. | Exhibits and Financial Statement Schedules                         | 34         |

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| FriendFinder Networks Inc. and Subsidiaries                                                                                                                |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Audited Financial Statements as of December 31, 2012 and 2011 and the years ended December 31, 2012, 2011 and 2010                                         |   |
| Report of Independent Registered Public Accounting Firm                                                                                                    | 2      |
| Consolidated Balance Sheets as of December 31, 2012 and 2011                                                                                               | 3      |
| Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010                                                                 | 4      |
| Consolidated Statements of Comprehensive Loss for the years ended December 31, 2012 and 2011                                                               | 5      |
| Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ (Deficiency) for the years ended December 31, 2012, 2011 and 2010 | 6      |
| Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010                                                                 | 7      |
| Notes to Consolidated Financial Statements                                                                                                                 | 9      |

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|                                                                                                                                                                                                |   | December 31, |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|----------|
|                                                                                                                                                                                                |   | 2012         |     |   | 2011 |   |
| ASSETS                                                                                                                                                                                              |   |         |     |   |   |   |
| Current assets:                                                                                                                                                                                     |   |         |     |   |   |   |
| Cash                                                                                                                                                                                                |   | $            | 16,839   |   |   | $ | 23,364 |   |
| Restricted cash                                                                                                                                                                                     |   |         | 10,064   |   |   |   | 11,177 |   |
| Accounts receivable, less allowance for doubtful accounts of $1,284 and $1,155, respectively                                                                                                        |   |         | 12,323   |   |   |   | 8,939 |   |
| Inventories                                                                                                                                                                                         |   |         | 763      |   |   |   | 822 |   |
| Prepaid expenses                                                                                                                                                                                    |   |         | 3,436    |   |   |   | 5,645 |   |
| Deferred tax asset                                                                                                                                                                                  |   |         | 1,844    |   |   |   | 4,405 |   |
| Total current assets                                                                                                                                                                                |   |         | 45,269   |   |   |   | 54,352 |   |
| Film costs, net                                                                                                                                                                                     |   |         | 3,627    |   |   |   | 4,105 |   |
| Property and equipment, net                                                                                                                                                                         |   |         | 5,120    |   |   |   | 7,830 |   |
| Goodwill                                                                                                                                                                                            |   |         | 328,061  |   |   |   | 332,292 |   |
| Domain names                                                                                                                                                                                        |   |         | 56,614   |   |   |   | 56,093 |   |
| Trademarks                                                                                                                                                                                          |   |         | 5,643    |   |   |   | 6,613 |   |
| Other intangible assets, net                                                                                                                                                                        |   |         | 330      |   |   |   | 16,920 |   |
| Unamortized debt costs, net                                                                                                                                                                         |   |         | 6,179    |   |   |   | 11,754 |   |
| Other assets                                                                                                                                                                                        |   |         | 1,310    |   |   |   | 3,405 |   |
|                                                                                                                                                                                                |   | $            | 452,153  |   |   | $ | 493,364 |   |
| LIABILITIES                                                                                                                                                                                         |   |         |     |   |   |   |   |   |
| Current liabilities:                                                                                                                                                                                |   |         |     |   |   |   |   |   |
| Long-term debt in default, which matures on September 30, 2013 and April 30, 2014 and in 2011, current installment of long term debt, net of unamortized discount of $20,851 and $260, respectively |   |         | 500,920  |   |   |   | 8,270 |   |
| Accounts payable                                                                                                                                                                                    |   |         | 5,040    |   |   |   | 11,324 |   |
| Accrued expenses and other liabilities                                                                                                                                                              |   |         | 62,227   |   |   |   | 68,930 |   |
| Deferred revenue                                                                                                                                                                                    |   |         | 34,741   |   |   |   | 42,299 |   |
| Total current liabilities                                                                                                                                                                           |   |         | 602,928  |   |   |   | 130,823 |   |
| Deferred tax liability                                                                                                                                                                              |   |         | 25,639   |   |   |   | 28,310 |   |
| Long-term debt, net of unamortized discount of $34,170                                                                                                                                              |   |         | —  |   |   |   | 462,515 |   |
| Total liabilities                                                                                                                                                                                   |   |         | 628,567  |   |   |   | 621,648 |   |
| Commitments and contingencies (Notes Q and R)                                                                                                                                                       |   |         |     |   |   |   |   |   |
|                                                                                                                                                                                                |   |         |     |   |   |   |   |   |
| STOCKHOLDERS’ DEFICIENCY                                                                                                                                                                      |   |         |     |   |   |   |   |   |
| Preferred stock, $0.001 par value — authorized 22,500,000 shares; issued and outstanding no shares in 2012 or 2011.                                                                           |   |         |     |   |   |   |   |   |
| Common stock, $0.001 par value — authorized 125,000,000 shares in 2012 and 2011                                                                                                               |   |         |     |   |   |   |   |   |
| Common stock voting — authorized 112,500,000 shares, issued and outstanding 32,572,761 shares in 2012 and 31,219,644 in 2011.                                                                 |   |         | 32       |   |   |   | 31 |   |
| Series B common stock non-voting – authorized 12,500,000 shares, issued and outstanding no shares in 2012 or 2011.                                                                            |   |         |     |   |   |   |   |   |
| Capital in excess of par value                                                                                                                                                                      |   |         | 134,759  |   |   |   | 133,734 |   |
| Accumulated deficit                                                                                                                                                                                 |   |         | (311,205 | ) |   |   | (261,764 | ) |
| Accumulated other comprehensive loss                                                                                                                                                                |   |         | —  |   |   |   | (285 | ) |
| Total stockholders’ deficiency                                                                                                                                                                |   |         | (176,414 | ) |   |   | (128,284 | ) |
|                                                                                                                                                                                                |   | $            | 452,153  |   |   | $ | 493,364 |   |

----

|                                                                                              |   | Year Ended December 31, |    |
|---------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                              |   | 2012                    |    |   | 2011 |   |   | 2010 |   |
| Net revenue                                                                                       |   |                    |    |   |   |   |   |   |   |
| Service                                                                                           |   | $                       | 295,241 |   |   | $ | 310,512 |   |   | $ | 324,211 |   |
| Product                                                                                           |   |                    | 19,138  |   |   |   | 19,924 |   |   |   | 21,786 |   |
| Total                                                                                             |   |                    | 314,379 |   |   |   | 330,436 |   |   |   | 345,997 |   |
| Cost of revenue                                                                                   |   |                    |    |   |   |   |   |   |   |   |   |   |
| Service                                                                                           |   |                    | 94,225  |   |   |   | 92,996 |   |   |   | 97,959 |   |
| Product                                                                                           |   |                    | 14,717  |   |   |   | 15,067 |   |   |   | 12,531 |   |
| Total                                                                                             |   |                    | 108,942 |   |   |   | 108,063 |   |   |   | 110,490 |   |
| Gross profit                                                                                      |   |                    | 205,437 |   |   |   | 222,373 |   |   |   | 235,507 |   |
| Operating expenses:                                                                               |   |                    |    |   |   |   |   |   |   |   |   |   |
| Product Development                                                                               |   |                    | 15,070  |   |   |   | 16,885 |   |   |   | 12,834 |   |
| Selling and marketing                                                                             |   |                    | 31,324  |   |   |   | 30,444 |   |   |   | 37,258 |   |
| General and administrative                                                                        |   |                    | 85,927  |   |   |   | 87,347 |   |   |   | 79,855 |   |
| Amortization of acquired intangibles and software                                                 |   |                    | 13,855  |   |   |   | 15,759 |   |   |   | 24,461 |   |
| Depreciation and other amortization                                                               |   |                    | 3,160   |   |   |   | 3,998 |   |   |   | 4,704 |   |
| Impairment of other intangible assets                                                             |   |                    | 970     |   |   |   | 2,600 |   |   |   | 4,660 |   |
| Total operating expenses                                                                          |   |                    | 150,306 |   |   |   | 157,033 |   |   |   | 163,772 |   |
| Income from operations                                                                            |   |                    | 55,131  |   |   |   | 65,340 |   |   |   | 71,735 |   |
| Interest expense, net of interest income                                                          |   |                    | (89,243 | ) |   |   | (85,989 | ) |   |   | (88,508 | ) |
| Other finance expenses                                                                            |   |                    | (500    | ) |   |   | — |   |   |   | (4,562 | ) |
| Interest related to VAT liability not charged to customers                                        |   |                    | (1,660  | ) |   |   | (1,808 | ) |   |   | (2,293 | ) |
| Net loss on extinguishment and modification of debt                                               |   |                    | — |   |   |   | (7,312 | ) |   |   | (7,457 | ) |
| Foreign exchange (loss) gain, including amounts related to VAT liability not charged to customers |   |                    | (958    | ) |   |   | (498 | ) |   |   | 610 |   |
| Change in fair value of acquisition related contingent consideration                              |   |                    | 1,400   |   |   |   | (920 | ) |   |   | — |   |
| Gain on liability related to warrants                                                             |   |                    | — |   |   |   | 391 |   |   |   | 38 |   |
| Other non-operating expenses, net                                                                 |   |                    | (59     | ) |   |   | (3,530 | ) |   |   | (13,202 | ) |
| Loss from continuing operations before income tax benefit                                         |   |                    | (35,889 | ) |   |   | (34,326 | ) |   |   | (43,639 | ) |
| Income tax benefit                                                                                |   |                    | (71     | ) |   |   | (6,472 | ) |   |   | (486 | ) |
| Loss from continuing operations                                                                   |   |                    | (35,818 | ) |   |   | (27,854 | ) |   |   | (43,153 | ) |
| Loss from discontinued operations                                                                 |   |                    | (13,623 | ) |   |   | (3,289 | ) |   |   | — |   |
| Net loss                                                                                          |   | $                       | (49,441 | ) |   | $ | (31,143 | ) |   | $ | (43,153 | ) |
| Net loss per common share – basic and diluted:                                              |   |                    |    |   |   |   |   |   |   |   |   |   |
| Continuing operations                                                                             |   |                    | (1.14   | ) |   |   | (1.15 | ) |   |   | (3.14 | ) |
| Discontinued operations                                                                           |   |                    | (0.43   | ) |   |   | (0.13 | ) |   |   | — |   |
| Net loss                                                                                          |   | $                       | (1.57   | ) |   | $ | (1.28 | ) |   | $ | (3.14 | ) |
| Weighted average shares outstanding — basic and diluted                                     |   |                    | 31,560  |   |   |   | 24,249 |   |   |   | 13,735 |   |

----

|                                                                                               |   | Twelve Months EndedDecember 31, |     |
|----------------------------------------------------------------------------------------------------|--------|---------------------------------|----------|
|                                                                                               |   | 2012                            |     |   | 2011 |   |
|                                                                                               |   |                            |     |   |   |   |
| Net Loss                                                                                           |   | $                               | (49,441) |   |   | $ | (31,143) |   |
| Other comprehensive loss:                                                                          |   |                            |     |   |   |   |   |   |
| Foreign currency translation adjustment                                                            |   |                            | (51)     |   |   |   | (285) |   |
| Reclassification of foreign currency translation adjustment related to sale of JigoCity operations |   |                            | 336      |   |   |   | − |   |
| Comprehensive loss                                                                                 |   | $                               | (49,156) |   |   | $ | (31,428) |   |

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|                                                                                                                                                              |   | Redeemable Preferred Stock |   | Stockholders’ Deficiency |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|--------|--------------------------------|---------|
|                                                                                                                                                              |   | Series AConvertible        |   | Series BConvertible            |    | PreferredStock |   | Common Stock |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                              |   |                       |   |                           |    |   |   |   |   | Series AConvertible |   | Series BConvertible |   | Voting |   | Series BNon-Voting |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                              |   | Shares                     |   | Amount                         |    | Shares |   | Amount |   | Shares |   | Amount |   | Shares |   | Amount |   | Shares |   | Amount |   | Shares |   | Amount |   | CapitalinExcessof ParValue |   | Accum-ulatedDeficit |   | Accum-ulated Other Compre-hensive Loss |   | Total |   |
| Balance at January 1, 2010                                                                                                                                        |   | 1,766,703                  |   |                           | 21,000  |   | 8,444,853 |   |   | 5,000 |   | 0 |   |   |   |   |   |   | 0 |   | 6,517,746 |   |   | 6 |   | 1,839,825 |   |   | 2 |   |   | 55,818 |   |   | (187,468 | ) |   |   |   | (131,642 | ) |
| Transfer of preferred stock from temporary equity to stockholders’ deficiency                                                                               |   | (1,766,703                 | )      |                           | (21,000 | ) | (8,444,853 | ) |   | (5,000 | ) | 1,766,703 |   |   | 2 |   | 8,444,853 |   |   | 8 |   |   |   |   |   |   |   |   |   |   |   |   | 25,990 |   |   |   |   |   |   |   | 26,000 |   |
| Other                                                                                                                                                             |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (985 | ) |   |   |   |   |   |   | (985 | ) |
| Net loss                                                                                                                                                          |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (43,153 | ) |   |   |   | (43,153 | ) |
| Balance at December 31, 2010                                                                                                                                      |   | 0                          |   | $                              | 0       |   | 0 |   | $ | 0 |   | 1,766,703 |   | $ | 2 |   | 8,444,853 |   | $ | 8 |   | 6,517,746 |   | $ | 6 |   | 1,839,825 |   | $ | 2 |   | $ | 80,823 |   | $ | (230,621 | ) |   |   | $ | (149,780 | ) |
| Conversion of Series A convertible preferred stock into common stock at ratio of 1:13 to 1:00                                                                     |   |                       |   |                           |    |   |   |   |   |   |   | (1,766,703 | ) |   | (2 | ) |   |   |   |   |   | 2,000,452 |   |   | 2 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion of Series B convertible preferred stock into common stock                                                                                              |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   | (8,444,853 | ) |   | (8 | ) | 8,444,853 |   |   | 8 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exchange of Series B common stock into common stock                                                                                                               |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,839,825 |   |   | 2 |   | (1,839,825 | ) |   | (2 | ) |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of common stock purchase warrants                                                                                                                        |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,560,672 |   |   | 6 |   |   |   |   |   |   |   | (6 | ) |   |   |   |   |   |   |   |   |
| Issuance of common stock in initial public offering                                                                                                               |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,000,000 |   |   | 5 |   |   |   |   |   |   |   | 49,995 |   |   |   |   |   |   |   | 50,000 |   |
|                                                                                                                                                              |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs related to initial public offering                                                                                                                          |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (19,992 | ) |   |   |   |   |   |   | (19,992 | ) |
| Beneficial conversion feature on Non-Cash Pay Second Lien Notes recorded in connection with initial public offering net of $5.7 million of related deferred taxes |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 8,490 |   |   |   |   |   |   |   | 8,490 |   |
| Reclassification of warrant liability due to exercise of stock warrants                                                                                           |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 174,246 |   |   |   |   |   |   |   |   |   |   | 3,168 |   |   |   |   |   |   |   | 3,168 |   |
| Stock based compensation                                                                                                                                          |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,737 |   |   |   |   |   |   |   | 3,737 |   |
| Common stock issued in acquisition of PerfectMatch.com                                                                                                            |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 126,295 |   |   |   |   |   |   |   |   |   |   | 500 |   |   |   |   |   |   |   | 500 |   |
| Common stock and warrants issued in acquisition of JigoCity                                                                                                       |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,555,555 |   |   | 2 |   |   |   |   |   |   |   | 7,019 |   |   |   |   |   |   |   | 7,021 |   |
| Net Loss                                                                                                                                                          |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (31,143 | ) |   |   |   | (31,143 | ) |
| Foreign currency translation adjustment                                                                                                                           |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (285 | ) |   | (285 | ) |
| Balance at December 31, 2011                                                                                                                                      |   | 0                          |   | $                              | 0       |   | 0 |   | $ | 0 |   | 0 |   | $ | 0 |   | 0 |   | $ | 0 |   | 31,219,644 |   | $ | 31 |   | 0 |   | $ | 0 |   | $ | 133,734 |   | $ | (261,764 | ) | $ | (285 | ) | $ | (128,284 | ) |
| Exercise of warrants                                                                                                                                              |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 285,617 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of restricted and non-restrictedcommon shares pursuant to restricted stock compensation plans                                                            |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,067,500 |   |   | 1 |   |   |   |   |   |   |   | (1 | ) |   |   |   |   |   |   |   |   |   |
| Stock based compensation                                                                                                                                          |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,043 |   |   |   |   |   |   |   |   | 1,043 |   |
| Foreign currency translation adjustment                                                                                                                           |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (51 | ) |   | (51 | ) |
| Reclassification to discontinued operations in connection with sale of JigoCity                                                                                   |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 336 |   |   | 336 |   |
| Cancellation of warrants in connection with the sale of JigoCity                                                                                                  |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (17 | ) |   |   |   |   |   |   |   | (17 | ) |
| Net Loss                                                                                                                                                          |   |                       |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (49,441 | ) |   |   |   |   | (49,441 | ) |
| Balance at December 31, 2012                                                                                                                                      |   | 0                          |   | $                              | 0       |   | 0 |   | $ | 0 |   | 0 |   | $ | 0 |   | 0 |   | $ | 0 |   | 32,572,761 |   | $ | 32 |   | 0 |   | $ | 0 |   | $ | 134,759 |   | $ | (311,205 | ) | $ | 0 |   | $ | (176,414 | ) |

----

|                                                                                                |   | Year Ended December 31, |                           |
|-----------------------------------------------------------------------------------------------------|--------|-------------------------|--------------------------------|
|                                                                                                |   | 2012                    |                           |   | 2011 |   |   | 2010 |   |
| Cash flows from operating activities:                                                               |   |                    |                           |   |   |   |   |   |   |
| Net loss                                                                                            |   | $                       | (49,441)                       |   |   | $ | (31,143 | ) |   | $ | (43,153 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities:                     |   |                    |                           |   |   |   |   |   |   |   |   |   |
| Loss from discontinued operations                                                                   |   |                    | 13,623                         |   |   |   | 3,289 |   |   |   | — |   |
| Deferred income tax benefit                                                                         |   |                    | (108                           | ) |   |   | (6,508 | ) |   |   | (1,278 | ) |
| Impairment of intangibles                                                                           |   |                    | 970                            |   |   |   | 2,600 |   |   |   | 4,660 |   |
| Net loss on extinguishment and modification of debt                                                 |   |                    | —                        |   |   |   | 7,312 |   |   |   | 7,457 |   |
| Amortization of acquired intangibles and software                                                   |   |                    | 13,854                         |   |   |   | 15,759 |   |   |   | 24,461 |   |
| Depreciation and other amortization                                                                 |   |                    | 3,160                          |   |   |   | 3,998 |   |   |   | 4,704 |   |
| Amortization of film costs                                                                          |   |                    | 2,793                          |   |   |   | 3,493 |   |   |   | 3,763 |   |
| Non-cash interest, including amortization of discount                                               |   |                    | 46,961                         |   |   |   | 55,744 |   |   |   | 45,148 |   |
| Provision for doubtful accounts                                                                     |   |                    | 660                            |   |   |   | 176 |   |   |   | 839 |   |
| Change in fair value of acquisition related contingent consideration                                |   |                    | (1,400                         | ) |   |   | 920 |   |   |   | — |   |
| Gain on warrant liability                                                                           |   |                    | —                        |   |   |   | (391 | ) |   |   | (38 | ) |
| Stock based compensation expense                                                                    |   |                    | 1,043                          |   |   |   | 3,737 |   |   |   | — |   |
| Other                                                                                               |   |                    | 1,010                          |   |   |   | 612 |   |   |   | 502 |   |
| Changes in operating assets and liabilities, net of effects of acquisition:                         |   |                    |                           |   |   |   |   |   |   |   |   |   |
| Restricted cash                                                                                     |   |                    | 983                            |   |   |   | (3,661 | ) |   |   | (1,090 | )  |
| Accounts receivable                                                                                 |   |                    | (4,044                         | ) |   |   | 771 |   |   |   | 1,417 |   |
| Inventories                                                                                         |   |                    | 59                             |   |   |   | 206 |   |   |   | 311 |   |
| Prepaid expenses                                                                                    |   |                    | 112                            |   |   |   | 986 |   |   |   | 3,446 |   |
| Film costs                                                                                          |   |                    | (2,315                         | ) |   |   | (3,286 | ) |   |   | (3,549 | ) |
| Deferred debt costs                                                                                 |   |                    |  (2,312                   | ) |   |   | — |   |   |   | (4,265 | ) |
| Deferred offering costs                                                                             |   |                    | —                        |   |   |   | — |   |   |   | (4,217 | ) |
| Other assets                                                                                        |   |                    | 802                            |   |   |   | 362 |   |   |   | 1,169 |   |
| Accounts payable                                                                                    |   |                    | (3,940                         | ) |   |   | (982) |   |   |   | (3,132 | )  |
| Accrued expenses and other liabilities                                                              |   |                    | 4,809                          |   |   |   | (7,389 | ) |   |   | 3,230 |   |
| Deferred revenue                                                                                    |   |                    | (7,558                         | ) |   |   | (6,003 | ) |   |   | 2,255 |   |
| Net cash provided by continuing operations                                                          |   |                    | 19,721                         |   |   |   | 40,602 |   |   |   | 42,640 |   |
| Net cash used in discontinued operations                                                            |   |                    | (7,175                         | ) |   |   | (2,815 | ) |   |   | — |   |
| Net cash provided by operating activities                                                           |   |                    | 12,546                         |   |   |   | 37,787 |   |   |   | 42,640 |   |
| Cash flows from investing activities:                                                               |   |                    |                           |   |   |   |   |   |   |   |   |   |
| Cash received from escrow in connection with acquisition                                            |   |                    |                           |   |   |   | — |   |   |   | 2,679 |   |
| Purchases of property and equipment                                                                 |   |                    |     (2,468 | ) |   |   | (5,457 | ) |   |   | (3,530 | ) |
| Cash paid for acquisition                                                                           |   |                    | —                        |   |   |   | (2,030 | ) |   |   | — |   |
| Other                                                                                               |   |                    | (521                           | ) |   |   | (53 | ) |   |   | (399 | ) |
| Net cash used in investing activities                                                               |   |                    | (2,989                         | ) |   |   | (7,540 | ) |   |   | (1,250 | ) |
| Cash flows from financing activities:                                                               |   |                    |                           |   |   |   |   |   |   |   |   |   |
| Gross proceeds from sale of common stock in initial public offering                                 |   |                    | —                        |   |   |   | 50,000 |   |   |   | — |   |
| Payment of underwriter discount and other offering costs in connection with initial public offering |   |                    | —                        |   |   |   | (6,724 | ) |   |   | — |   |
| Issuance of New First and Second Lien Notes                                                         |   |                    | —                        |   |   |   | — |   |   |   | 89,572 |   |
| Debt issuance costs                                                                                 |   |                    | —                        |   |   |   | 296 |   |   |   | (5,834 | ) |
| Repayment of long-term debt                                                                         |   |                    | (16,082                        | ) |   |   | (41,546 | ) |   |   | (25,921 | ) |
| Redemption of long-term debt                                                                        |   |                    | —                        |   |   |   | (43,495 | ) |   |   | (86,237 | ) |
| Other                                                                                               |   |                    | —                        |   |   |   | — |   |   |   | (985 | ) |
| Net cash used in financing activities                                                               |   |                    | (16,082                        | ) |   |   | (41,469 | ) |   |   | (29,405 | ) |
| Effect of exchange rate changes on cash                                                             |   |                    | —                        |   |   |   | 1 |   |   |   | — |   |
| Net (decrease) increase in cash                                                                     |   |                    | (6,525                         | ) |   |   | (11,221 | ) |   |   | 11,985 |   |
| Cash at beginning of period                                                                         |   |                    | 23,364                         |   |   |   | 34,585 |   |   |   | 22,600 |   |
| Cash at end of period                                                                               |   | $                       | 16,839                         |   |   | $ | 23,364 |   |   | $ | 34,585 |   |

----

|                                                                                                                                                             |   | Year Ended December 31, |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                                                                             |   | 2012                    |    |   | 2011 |   |   | 2010 |   |
| Supplemental disclosures of cash flow information:                                                                                                               |   |                    |    |   |   |   |   |   |   |
| Cash paid for:                                                                                                                                                   |   |                    |    |   |   |   |   |   |   |
| Interest                                                                                                                                                         |   | $                       | 40,256  |   |   | $ | 29,498 |   |   | $ | 43,541 |   |
| Income taxes                                                                                                                                                     |   |                    | — |   |   | $ | 30 |   |   |   | — |   |
| Non-cash investing and financing activities:                                                                                                                     |   |                    | — |   |   |   | — |   |   |   | — |   |
| Recording of beneficial conversion feature on Non-Cash Pay Second Lien Notes in connection with initial public offering, net of $5,660 of related deferred taxes |   |                    | — |   |   | $ | 8,490 |   |   |   | — |   |
| Deferred offering costs written off to capital in excess of par                                                                                                  |   |                    | — |   |   | $ | 13,267 |   |   |   | — |   |
| Conversion of Series A and B convertible preferred stock and series B common stock to common stock                                                               |   |                    | — |   |   | $ | 12 |   |   |   | — |   |
| Common stock issued as partial consideration in acquisition of PerfectMatch.com                                                                                  |   |                    | — |   |   | $ | 500 |   |   |   |  — |   |
| Common stock and warrants issued and contingent consideration liability incurred as consideration for acquisition of JigoCity                                    |   |                    | — |   |   | $ | 7,500 |   |   |   | — |   |
| Exchange of New First Lien Notes for outstanding First ($126,124) and Second ($48,275) Lien Notes                                                                |   |                    | — |   |   |   | — |   |   | $ | 174,399 |   |
| Issuance of New First Lien Notes for commitment fees                                                                                                             |   |                    | — |   |   |   | — |   |   | $ | 13,146 |   |
| Exchange of New First Lien Notes and Cash Pay Second Lien Notes for Senior Secured Notes                                                                         |   |                    | — |   |   |   | — |   |   | $  | 28,053 |   |
| Exchange of Non-Cash Pay Second Lien Notes for $161,560 of Subordinated Convertible Notes plus $3,514 of accrued interest                                        |   |                    | — |   |   |   | — |   |   | $  | 165,074 |   |
| Exchange of Non-Cash Pay Second Lien Notes for $42,811 of Subordinated Term Notes plus $5,949 of accrued interest                                                |   |                    | — |   |   |   | — |   |   | $ | 45,726 |   |
| Cancellation of warrants issued in acquisition of JigoCity                                                                                                       |   | $                       | 17      |   |   |   | — |   |   |   | — |   |

----

----

----

|   | a) | Internet: |
|--------|----|-----------|

----

|   | b) | Entertainment: |
|--------|----|----------------|

----

|   | · | Level 1 – Quoted prices in active markets for identical assets or liabilities.                                                       |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Level 2 – Inputs other than quoted prices in active markets, which are directly or indirectly observable for the asset or liability. |

|   | · | Level 3 – Unobservable inputs for the asset or liability where there is little or no market data, which requires the reporting entity to develop its own assumptions. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                           |   | Year Ended December 31, |    |
|--------------------------------|--------|-------------------------|---------|
|                           |   | 2012                    |    |   | 2011 |   |   | 2010 |   |
| Common stock                   |   |                    | 31,531  |   |   |   | 21,330 |   |   |   | 6,518 |   |
| Series B common stock          |   |                    | − |   |   |   | 710 |   |   |   | 1,840 |   |
| Common stock purchase warrants |   |                    | 29      |   |   |   | 2,209 |   |   |   | 5,377 |   |
|                           |   |                    | 31,560  |   |   |   | 24,249 |   |   |   | 13,735 |   |

|                                       |   | Year Ended December 31, |    |
|--------------------------------------------|--------|-------------------------|---------|
|                                       |   | 2012                    |    |   | 2011 |   |   | 2010 |   |
| Series A Convertible Preferred Stock       |   |                    | — |   |   |   | — |   |   |   | 2,000 |   |
| Series B Convertible Preferred Stock       |   |                    | — |   |   |   | — |   |   |   | 8,445 |   |
| Warrants                                   |   |                    | 2,325   |   |   |   | 6,437 |   |   |   | 502 |   |
| Convertible Non Cash Pay Second Lien Notes |   |                    | 8,311   |   |   |   | 8,311 |   |   |   | — |   |
| Non-vested shares                          |   |                    | 936     |   |   |   | — |   |   |   | — |   |
| Employee Stock Options                     |   |                    | 1,134   |   |   |   | 590 |   |   |   | — |   |
| Total common shares issuable               |   |                    | 12,706  |   |   |   | 15,338 |   |   |   | 10,947 |   |

----

|                      |   | December 31, |   |
|---------------------------|--------|--------------|--------|
|                      |   | 2012         |   |   | 2011 |   |
| Paper and printing costs  |   | $            | 665    |   |   | $ | 723 |   |
| Editorials and pictorials |   |         | 98     |   |   |   | 99 |   |
|                      |   | $            | 763    |   |   | $ | 822 |   |

|             |   | Year Ended December 31, |   |
|------------------|--------|-------------------------|--------|
|             |   | 2012                    |   |   | 2011 |   |   | 2010 |   |
| Opening balance  |   | $                       | 4,105  |   |   | $ | 4,312 |   |   | $ | 4,526 |   |
| Content produced |   |                    | 2,315  |   |   |   | 3,286 |   |   |   | 3,549 |   |
| Amortization     |   |                    | (2,793 | ) |   |   | (3,493 | ) |   |   | (3,763 | ) |
| Ending balance   |   | $                       | 3,627  |   |   | $ | 4,105 |   |   | $ | 4,312 |   |

----

|                                           |   | December 31, |   |
|------------------------------------------------|--------|--------------|--------|
|                                           |   | 2012         |   |   | 2011 |   |
| Property and equipment:                        |   |         |   |   |   |   |
| Leasehold improvements                         |   | $            | 1,877  |   |   | $ | 1,191 |   |
| Computer hardware and software                 |   |         | 28,012 |   |   |   | 44,840 |   |
|                                           |   |         | 29,889 |   |   |   | 46,031 |   |
| Less accumulated depreciation and amortization |   |         | 24,769 |   |   |   | 38,201 |   |
|                                           |   | $            | 5,120  |   |   | $ | 7,830 |   |

| Balance as of December 31, 2010                           |   | $      | 326,540 |   |
|-----------------------------------------------------------|--------|--------|---------|--------|
| Acquisition of Perfectmatch.com                           |   |   | 1,521   |   |
| Acquisition of JigoCity                                   |   |   | 4,290   |   |
| Reduction due to foreign currency translation adjustments |   |   | (59     | )      |
| Balance as of December 31, 2011                           |   |   | 332,292 |   |
| Sale of JigoCity                                          |   |   | (4,231  | )      |
| Balance as of December 31, 2012                           |   | $      | 328,061 |   |

|                                        |   | December 31, |    |   |                    |   |
|---------------------------------------------|--------|--------------|---------|--------|-------------------------|--------|
|                                        |   | 2012         |    |   | 2011                    |   |   |   |   |
|                                        |   | GrossAmount  |    |   | AccumulatedAmortization |   |   | GrossAmount |   |   | AccumulatedAmortization |   |   | EstimatedUseful Lives(Years) |   |
| Amortizable intangible assets:              |   |         |    |   |                    |   |   |   |   |   |   |   |   |   |   |
| Customer lists and subscriber relationships |   | $            | 23,996  |   |                    | $      | 23,895 |   |   | $ | 25,482 |   |   | $ | 23,914 |   |   | 2 | – | 4 |   |
| Service contracts                           |   |         | 72,800  |   |                    |   | 72,800 |   |   |   | 73,095 |   |   |   | 59,342 |   |   | 3 | – | 5 |   |
| Studio contracts                            |   |         | 3,300   |   |                    |   | 3,300 |   |   |   | 3,300 |   |   |   | 3,300 |   |   |   | 4 |   |   |
| Other                                       |   |         | 450     |   |                    |   | 221 |   |   |   | 4,674 |   |   |   | 3,075 |   |   |   | 3 |   |   |
|                                        |   | $            | 100,546 |   |                    | $      | 100,216 |   |   | $ | 106,551 |   |   | $ | 89,631 |   |   |   |   |   |   |

----

| Common stock                                 |   | $      | 4,460,000 |   |
|----------------------------------------------|--------|--------|-----------|--------|
| Warrants                                     |   |   | 2,560,000 |   |
| Acquisition related contingent consideration |   |   | 480,000   |   |
|                                         |   | $      | 7,500,000 |   |

----

| Current assets                 |   | $      | 752   |   |
|--------------------------------|--------|--------|-------|--------|
| Identifiable intangible assets |   |   | 3,336 |   |
| Goodwill                       |   |   | 4,290 |   |
| Other non-current assets       |   |   | 551   |   |
| Total assets acquired          |   |   | 8,929 |   |
| Current liabilities            |   |   | 1,429 |   |
| Net assets acquired            |   | $      | 7,500 |   |

----

|                                                          |   | December 31, |    |
|---------------------------------------------------------------|--------|--------------|---------|
|                                                          |   | 2012         |    |   | 2011 |   |
| Accrued liability related to VAT                              |   | $            | 41,769  |   |   | $ | 41,011 |   |
| Chargeback reserve                                            |   |         | 872     |   |   |   | 785 |   |
| Compensation and benefits                                     |   |         | 3,058   |   |   |   | 1,785 |   |
| Accrued marketing                                             |   |         | 1,287   |   |   |   | 1,406 |   |
| Legal and related expenses                                    |   |         | 449     |   |   |   | 475 |   |
| Accrued interest                                              |   |         | 1,212   |   |   |   | 8,354 |   |
| Accrued commissions to third party websites                   |   |         | 5,749   |   |   |   | 4,067 |   |
| Accrued loss related to claim in arbitration (see Note Q (a)) |   |         | − |   |   |   | 2,000 |   |
| Acquisition related contingent consideration                  |   |         | − |   |   |   | 1,400 |   |
| Other                                                         |   |         | 7,831   |   |   |   | 7,647 |   |
|                                                          |   | $            | 62,227  |   |   | $ | 68,930 |   |

----

|                                                                                                                                                     |   | December 31, 2012 |     |    | December 31, 2011    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|----------|---------|----------------------|--------|
|                                                                                                                                                     |   | Principal         |     |    | Unamortized Discount |   |   | Principal |   |   | Unamortized Discount |   |
| Debt issued by FriendFinder and INI on October 27, 2010 (a)                                                                                         |   |              |     |    |                 |   |   |   |   |   |   |   |
| 14% New First Lien Notes due 2013 (b)(e)(f)                                                                                                              |   | $                 | 212,988  |    |                 | $      | 2,408 |   |   | $ | 228,375 |   |   | $ | 5,602 |   |
| 14% Cash Pay Second Lien Notes due 2013 (c)(e)(f)                                                                                                        |   |              | 9,622    |    |                 |   | 59 |   |   |   | 10,317 |   |   |   | 138 |   |
| 11.5% Non-Cash Pay Second Lien Notes, due 2014 (d)(e)(f)                                                                                            |   |              | 297,911  |    |                 |   | 18,375 |   |   |   | 265,273 |   |   |   | 28,519 |   |
| Other (g)                                                                                                                                                |   |              | 1,250    |    |                 |   | 9 |   |   |   | 1,250 |   |   |   | 171 |   |
|                                                                                                                                                     |   | $                 | 521,771  |    |                 | $      | 20,851 |   |   | $ | 505,215 |   |   | $ | 34,430 |   |
| Less: unamortized discount                                                                                                                               |   |              | (20,851  | )  |                 |   |   |   |   |   | (34,430 | ) |   |   |   |   |
| Less:  long-term debt maturing in the following twelve months and/or in default, net of unamortized discount of $20,851 and $260, respectively |   |              | (500,920 |  ) |                 |   |   |   |   |   | (8,270 | ) |   |   |   |   |
|                                                                                                                                                     |   | $                 | -        |    |                 |   |   |   |   | $ | 462,515 |   |   |   |   |   |

| (a) | On October 27, 2010, $305,000,000 principal amount of 14% Senior Secured Notes due 2013 were co-issued by FriendFinder and its wholly-owned subsidiary Interactive Network, Inc (“INI”), the parent of Various (the “New First Lien Notes”), of which (a) $200,185,000 was exchanged for $130,485,000 outstanding principal amount of First Lien Notes, $49,361,000 outstanding principal amount of Second Lien Notes and $14,551,000 outstanding principal amount of Senior Secured Notes, (b) $91,400,000 was issued for cash proceeds of $89,572,000 before payment of related fees and expenses of $5,834,000 and (c) $13,415,000 was issued to pay commitment fees to the holders of First Lien Notes and Second Lien Notes. Cash of $86,237,000 was used to redeem $36,608,000 outstanding principal amount of First Lien Notes at 102% of principal, $30,639,000 outstanding principal amount of Second Lien Notes (representing the remaining outstanding principal amounts of First Lien Notes and Second Lien Notes) and $18,258,000 outstanding principal amount of Senior Secured Notes. Cash was also used to pay $4,132,000 of accrued interest on the exchanged and redeemed notes, an $825,000 redemption premium on certain exchanged First Lien Notes and $435,000 in commitment fees to certain noteholders. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (b) | The New First Lien Notes, approximately $71.8 million principal amount of which are held by a more than 10% stockholder at December 31, 2012, were issued with an original issue discount of $6.1 million, or 2.0%.  The notes mature on September 30, 2013 and accrue interest at a rate per annum equal to 14.0%.  Interest on the notes is payable quarterly on March 31, June 30, September 30 and December 31 of each year.  Principal on the New First Lien Notes was payable quarterly to the extent of 75% of Excess Cash Flow, as defined, at 102% of principal, subject to the pro-rata sharing with the Cash Pay Second Lien Notes.  In March 2012, the Excess Cash Flow percentage and the percentage of principal repaid was increased to 85% and 110%, respectively. The New First Lien Notes are guaranteed by domestic subsidiaries of FriendFinder and INI and are collateralized by a first- priority lien on all of the Company’s assets as well as a pledge of stock of subsidiaries.  The New First Lien Notes are redeemable prior to maturity at the option of the Company, in whole but not in part, at 110% of principal, plus accrued and unpaid interest.  Note holders have the option of requiring the Company to repay the New First Lien Notes and Cash Pay Second Lien Notes in full upon a Change of Control, as defined, at 110% of principal.  The Company shall also repay the New First Lien Notes and, in certain circumstances, the Cash Pay Second Lien Notes, with proceeds received from any debt or equity financing (including a secondary offering) and asset sales of more than $25 million at 110% of principal, and with proceeds from other asset sales, insurance claims, condemnation and other extraordinary cash receipts at principal, subject to certain exceptions. On May 19, 2011, the Company redeemed $37,832,000 principal amount of New First Lien notes and $1,709,000 principal amount of Cash Pay Second Lien notes from the net proceeds of the IPO and incurred a loss on extinguishment of debt of approximately $7.3 million consisting of a redemption premium of $3.9 million and write-off of discount and deferred offering costs of $3.4 million. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | The Cash Pay Second Lien Notes, all of which were issued to entities controlled by stockholders who are also directors of the Company, were issued with an original issue discount of $276,000, or 2%, mature on September 30, 2013 and have identical terms to those of the New First Lien Notes, except as to matters regarding collateral, subordination, enforcement and voting. The Cash Pay Second Lien Notes are collateralized by a fully subordinated second lien on substantially all of the assets of the Company, pari passu with the Non-Cash Pay Second Lien Notes, and will vote with the New First Lien Notes on a dollar for dollar basis on all matters except for matters relating to collateral, liens and enforcement of rights and remedies. As to such matters, the Cash Pay Second Lien Notes will vote with the Non-Cash Pay Second Lien Notes. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | The Non-Cash Pay Second Lien Notes, of which approximately $223.0 million principal amount are held by a more than 10% stockholder at December 31, 2012, mature on April 30, 2014 and bear interest at 11.5%, payable semi-annually on June 30 and December 31, which may be paid in additional notes at the Company’s option. While the New First Lien Notes are in place, interest must be paid with additional notes. During 2011 and 2012, interest amounting to $28,063,000 and $32,638,000, respectively was paid through the issuance of additional Non-Cash Pay Second Lien Notes. The Non-Cash Pay Second Lien Notes are guaranteed by the domestic subsidiaries of FriendFinder and INI and collateralized by a second priority lien on all of the Company’s assets and a pledge of the stock of subsidiaries; however, such security interest is subordinate to the prior payment of the New First Lien Notes. The Non-Cash Pay Second Lien Notes are redeemable, at the option of the Company, in whole but not in part, at 100% of principal plus accrued and unpaid interest. Upon the payment in full of the New First Lien Notes, principal on the Non-Cash Pay Second Lien Notes is payable quarterly to the extent of 75% of Excess Cash Flow, as defined, at 102% of principal subject to pro-rata sharing with the Cash Pay Second Lien Notes. Noteholders have the option of requiring the Company to repay the Non-Cash Pay Second Lien Notes in full upon a Change of Control, as defined, at 110% of principal plus accrued and unpaid interest. If the New First Lien Notes are paid in full, the Company shall repay the Non-Cash Pay Second Lien Notes and Cash Pay Second Lien Notes on a pro-rata basis with proceeds received from any debt or equity financing (including a secondary offering), and asset sales of more than $25 million at 110% of principal plus accrued and unpaid interest and with proceeds of other asset sales, insurance claims, condemnation and other extraordinary cash receipts at principal, subject to certain exceptions. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (e) | As described above, the New First Lien Notes, the Cash Pay Second Lien Notes and the Non-Cash Pay Second Lien Notes were co-issued by FriendFinder and its wholly-owned subsidiary INI and guaranteed by their domestic subsidiaries, which are 100% owned directly or indirectly by FriendFinder.  FriendFinder and INI are holding companies and have no independent assets or operations.  The subsidiary guarantees are full and unconditional and joint and several.  Non-guarantor subsidiaries consisted of wholly-owned foreign subsidiaries of JigoCity which were acquired in September 2011 and sold in August 2012 (see Note I) |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | The New First Lien Notes, the Cash Pay Second Lien Notes and Non-Cash Pay Second Lien Notes (1) require the Company to maintain minimum specified levels of EBITDA and liquidity and financial ratios, including debt and coverage ratios, all as defined; (2) provides for certain limitations including limits on indebtedness, lease obligations, VAT payments and investments; and (3) prohibits dividends and other payments with respect to the Company’s equity securities.The New First Lien Notes, the Cash Pay Second Lien Notes and Non-Cash Pay Second Lien Notes (1) require the Company to maintain minimum specified levels of EBITDA and liquidity and financial ratios, including debt and coverage ratios, all as defined; (2) provides for certain limitations including limits on indebtedness, lease obligations, VAT payments and investments; and (3) prohibits dividends and other payments with respect to the Company’s equity securities. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| (g) | In connection with the restructuring of Subordinated Convertible Notes issued in connection with the acquisition of Various, the Company agreed to pay $3.2 million of fees to the former owners of Various of which $1 million is payable in each of 2010 through 2012 and $250,000 is payable in the first quarter of 2013.  The Company has not made the 2012 or 2013 payment.  The obligation was recorded at a present value of $2.3 million using a discount rate of 15%. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                    |   | Shares |      |    | Weighted Average Exercise Price |    |   | WeightedAverage Grant DateFair Value |   |   | Weighted AverageRemainingContractualTerms (Years) |   |
|-------------------------------------------------------------------------|--------|--------|-----------|---------|------------------------------------------------|---------|--------|-------------------------------------------|--------|--------|-------------------------------------------------------------|--------|
| Options outstanding at January 1, 2012                                  |   |   | 590,250   |    |                                           | $       | 10.00  |                                      |   | $      | 8.38                                                        |   |   |   | 6.58 |   |
| Granted                                                                 |   |   | 622,918   |    |                                           | $       | 1.39   |                                      |   | $      | 0.86                                                        |   |   |   | 9.08 |   |
| Forfeited                                                               |   |   | (79,250   | )  |                                           | $       | 7.43   |                                      |   | $      | 6.13                                                        |   |   |   | — |   |
| Options outstanding at December 31, 2012                                |   |   | 1,133,918 |    |                                           | $       | 5.47   |                                      |   | $      | 4.43                                                        |   |   |   | 7.41 |   |
| Options exercisable at December 31, 2012                                |   |   | 422,300   |    |                                           |    | 10.00  |                                      |   |   | —                                                     |   |   |   | 5.54 |   |
| Options exercisable and expected to be exercisable at December 31, 2012 |   |   | 947,056   |    |                                           | $  | 5.89   |                                      |   |   | —                                                     |   |   |   | 7.24 |   |

----

|              |   | Year Ended December 31, |      |
|-------------------|--------|-------------------------|-----------|
|              |   | 2012                    |      |   | 2011 |   |   | 2010 |   |
| Current:          |   |                    |      |   |   |   |   |   |   |
| Federal           |   | $                       | —   |   |   | $ | — |   |   | $ | 162 |   |
| State             |   |                    | 37        |   |   |   | 36 |   |   |   | 630 |   |
| Foreign           |   |                    | —   |   |   |   | — |   |   |   | — |   |
|              |   | $                       |   37 |   |   | $ | 36 |   |   | $ | 792 |   |
| Deferred:         |   |                    |      |   |   |   |   |   |   |   |   |   |
| Federal           |   | $                       | (95       | ) |   | $ | (5,695 | ) |   | $ | (1,118 | ) |
| State             |   |                    | (13       | ) |   |   | (813 | ) |   |   | (160 | ) |
| Foreign           |   |                    | —   |   |   |   | — |   |   |   | — |   |
|              |   |                    | (108      | ) |   |   | (6,508 | ) |   |   | (1,278 | ) |
| Total tax benefit |   | $                       | (71       | ) |   | $ | (6,472 | ) |   | $ | (486 | ) |

|                                                                                                                                                                |   | Year Ended December 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                                                                                |   | 2012                    |    |   | 2011 |   |   | 2010 |   |
| Tax benefit at federal statutory rate (35%)                                                                                                                         |   | $                       | 12,561  |   |   | $ | 12,014 |   |   | $ | 15,274 |   |
| State taxes, net of federal effect                                                                                                                                  |   |                    | 1,758   |   |   |   | 1,739 |   |   |   | 1,552 |   |
| Net operating loss for which no tax benefit is recognized                                                                                                           |   |                    | (14,549 | ) |   |   | (12,344 | ) |   |   | (16,679 | ) |
| Reduction of valuation allowance from recognition of deferred tax liability charged to additional paid in capital related to beneficial conversion feature on notes |   |                    | — |   |   |   | 5,660 |   |   |   | — |   |
| Change in fair value of acquisition related contingent consideration                                                                                                |   |                    | 560     |   |   |   | (368 | ) |   |   | — |   |
| Gain on warrant liability                                                                                                                                           |   |                    | — |   |   |   | 137 |   |   |   | 14 |   |
| Non-deductible stock compensation expense                                                                                                                           |   |                    | (162    | ) |   |   | (884 | ) |   |   | — |   |
| Other                                                                                                                                                               |   |                    | (97     | ) |   |   | 518 |   |   |   | 326 |   |
| Tax benefit                                                                                                                                                         |   | $                       | 71      |   |   | $ | 6,472 |   |   | $ | 486 |   |

----

|                                                    |   | December 31, |    |
|---------------------------------------------------------|--------|--------------|---------|
|                                                    |   | 2012         |    |   | 2011 |   |
| Deferred tax assets:                                    |   |         |    |   |   |   |
| Net operating loss carryforwards                        |   | $            | 42,634  |   |   | $ | 38,828 |   |
| Allowance for doubtful accounts                         |   |         | 466     |   |   |   | 462 |   |
| Accrued liability related to VAT                        |   |         | 11,794  |   |   |   | 11,749 |   |
| Non-qualified stock compensation                        |   |         | 731     |   |   |   | 484 |   |
| Other                                                   |   |         | 443     |   |   |   | 590 |   |
| Gross deferred tax assets                               |   |         | 56,068  |   |   |   | 52,113 |   |
| Less valuation allowance                                |   |         | (48,506 | ) |   |   | (36,017 | ) |
| Net deferred tax assets                                 |   |         | 7,562   |   |   |   | 16,096 |   |
| Deferred tax liabilities:                               |   |         |    |   |   |   |   |   |
| Trademarks and domain names not subject to amortization |   |         | (22,366 | ) |   |   | (22,754 | ) |
| Intangible assets subject to amortization               |   |         | (40     | ) |   |   | (5,710 | ) |
| Long-term debt                                          |   |         | (6,423  | ) |   |   | (9,465 | ) |
| Property and equipment, including software              |   |         | (1,099  | ) |   |   | (921 | ) |
| Other                                                   |   |         | (1,429  | ) |   |   | (1,151 | ) |
|                                                    |   |         | (31,357 | ) |   |   | (40,001 | ) |
| Net deferred tax liabilities                            |   | $            | (23,795 | ) |   | $ | (23,905 | ) |

|                                       |   | December 31, |    |
|--------------------------------------------|--------|--------------|---------|
|                                       |   | 2012         |    |   | 2011 |   |
| Deferred tax asset — current         |   | $       | 1,844   |   |   | $ | 4,405 |   |
| Deferred tax liability — non-current |   |         | (25,639 | ) |   |   | (28,310 | ) |
| Net deferred tax liability                 |   | $       | (23,795 | ) |   | $ | (23,905 | ) |

----

|                                                                                       |   | Year Ended December 31, |    |
|--------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                       |   | 2012                    |    |   | 2011 |   |   | 2010 |   |
| Assets:                                                                                    |   |                    |    |   |   |   |   |   |   |
| Internet                                                                                   |   | $                       | 436,906 |   |   | $ | 475,578 |   |   | $ | 506,297 |   |
| Entertainment                                                                              |   |                    | 11,492  |   |   |   | 16,887 |   |   |   | 22,399 |   |
| Unallocated corporate                                                                      |   |                    | 3,755   |   |   |   | 899 |   |   |   | 4,121 |   |
| Total                                                                                      |   | $                       | 452,153 |   |   | $ | 493,364 |   |   | $ | 532,817 |   |
| Net revenue from external customers:                                                       |   |                    |    |   |   |   |   |   |   |   |   |   |
| Internet                                                                                   |   | $                       | 292,882 |   |   | $ | 308,321 |   |   | $ | 321,605 |   |
| Entertainment                                                                              |   |                    | 21,497  |   |   |   | 22,115 |   |   |   | 24,392 |   |
| Total                                                                                      |   | $                       | 314,379 |   |   | $ | 330,436 |   |   | $ | 345,997 |   |
| Income from operations:                                                                    |   |                    |    |   |   |   |   |   |   |   |   |   |
| Internet                                                                                   |   | $                       | 63,021  |   |   | $ | 77,274 |   |   | $ | 76,142 |   |
| Entertainment                                                                              |   |                    | (1,063  | ) |   |   | (2,314 | )  |   |   | 1,140 |   |
| Total segment income from operations                                                       |   |                    | 61,958  |   |   |   | 74,960 |   |   |   | 77,282 |   |
| Unallocated corporate                                                                      |   |                    | (6,827  | ) |   |   | (9,620 | ) |   |   | (5,547 | ) |
| Total                                                                                      |   | $                       | 55,131  |   |   | $ | 65,340 |   |   | $ | 71,735 |   |
| AA Amortization of acquired intangibles and software (included in income from operations): |   |                    |    |   |   |   |   |   |   |   |   |   |
| Internet                                                                                   |   | $                       | 13,855  |   |   | $ | 15,759 |   |   | $ | 24,461 |   |
| Entertainment                                                                              |   |                    | — |   |   |   | — |   |   |   | — |   |
| Unallocated corporate                                                                      |   |                    | — |   |   |   | — |   |   |   | — |   |
| Total                                                                                      |   | $                       | 13,855  |   |   | $ | 15,759 |   |   | $ | 24,461 |   |

| Depreciation and other amortization (included in income from operations): |   |   |    |   |   |   |    |   |   |
|---------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Internet                                                                  |   | $      | 2,695   |   |   | $      | 3,715   |   |   | $ | 4,527 |   |
| Entertainment                                                             |   |   | 465     |   |   |   | 283     |   |   |   | 177 |   |
| Unallocated corporate                                                     |   |   | − |   |   |   | — |   |   |   | — |   |
| Total                                                                     |   | $      | 3,160   |   |   | $      | 3,998   |   |   | $ | 4,704 |   |
| Impairment of intangible assets (included in income from operations):     |   |   |    |   |   |   |    |   |   |   |   |   |
| Internet                                                                  |   | $      | — |   |   | $      | — |   |   | $ | — |   |
| Entertainment                                                             |   |   | 970     |   |   |   | 2,600   |   |   |   | 4,660 |   |
| Total                                                                     |   | $      | 970     |   |   | $      | 2,600   |   |   | $ | 4,660 |   |

----

|                       |   | Year Ended December 31, |    |
|----------------------------|--------|-------------------------|---------|
|                       |   | 2012                    |    |   | 2011 |   |   | 2010 |   |
| Internet:                  |   |                    |    |   |   |   |   |   |   |
| Subscription based service |   | $                       | 201,761 |   |   | $ | 226,762 |   |   | $ | 245,174 |   |
| Pay by usage service       |   |                    | 90,766  |   |   |   | 81,554 |   |   |   | 76,321 |   |
| Advertising and other      |   |                    | 355     |   |   |   | 5 |   |   |   | 110 |   |
|                       |   |                    | 292,882 |   |   |   | 308,321 |   |   |   | 321,605 |   |
| Entertainment:             |   |                    |    |   |   |   |   |   |   |   |   |   |
| Magazine                   |   |                    | 8,003   |   |   |   | 9,536 |   |   |   | 10,894 |   |
| Video entertainment        |   |                    | 11,135  |   |   |   | 10,388 |   |   |   | 10,892 |   |
| Licensing                  |   |                    | 2,359   |   |   |   | 2,191 |   |   |   | 2,606 |   |
|                       |   |                    | 21,497  |   |   |   | 22,115 |   |   |   | 24,392 |   |
| Total revenues             |   | $                       | 314,379 |   |   | $ | 330,436 |   |   | $ | 345,997 |   |

|          |   | Year Ended December 31, |    |
|---------------|--------|-------------------------|---------|
|          |   | 2012                    |    |   | 2011 |   |   | 2010 |   |
| Net revenue:  |   |                    |    |   |   |   |   |   |   |
| United States |   | $                       | 177,573 |   |   | $ | 180,870 |   |   | $ | 184,996 |   |
| Europe        |   |                    | 75,751  |   |   |   | 93,099 |   |   |   | 109,058 |   |
| Canada        |   |                    | 18,393  |   |   |   | 18,733 |   |   |   | 17,895 |   |
| Other         |   |                    | 42,662  |   |   |   | 37,734 |   |   |   | 34,048 |   |
| Total         |   | $                       | 314,379 |   |   | $ | 330,436 |   |   | $ | 345,997 |   |

| Year       |   |   | OperatingLeases |   |
|------------|--------|--------|-----------------|--------|
| 2013       |   |   | $               | 2,401  |   |
| 2014       |   |   |            | 2,179  |   |
| 2015       |   |   |            | 1,879  |   |
| 2016       |   |   |            | 707    |   |
| 2017       |   |   |            | 707    |   |
| Thereafter |   |   |            | 236    |   |
| Total      |   |   | $               | 8,109  |   |

----

| (a) | On December 23, 2005, Robert Guccione (“Guccione”) filed an action against the Company and some of its officers, among other defendants, in New York State Court for breach of contract, fraud, unjust enrichment, promissory estoppel, failure to pay severance and conspiracy to defraud. The amount of damages requested in the complaint against the Company is approximately $9.0 million and against the officers is in excess of $10.0 million. Guccione filed an amended complaint on June 5, 2007 to include additional claims relating to ownership of certain United Kingdom, Jersey and Guernsey trademarks and added as a party Penthouse Publications Limited, an entity with no current affiliation with the Company, as party plaintiff. Guccione filed a second amended complaint on December 14, 2007 adding General Media International, Inc. (an entity with no current affiliation with the Company) as party plaintiff and a new claim for inducement to breach of contract. On October 20, 2010, Guccione passed away. In 2011, Guccione’s estate was substituted as the plaintiff.  In September, 2012 the parties executed a settlement agreement providing for both monetary and non-monetary relief,.  In or about December 2012, the surrogate court approved the settlement agreement and the Company paid an immaterial amount to the Plaintiffs.  A stipulation of dismissal was filed by the Plaintiffs in favor of the Company on or about December 27, 2012.  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | On November 28, 2006, Antor Media Corporation (“Antor”) filed a complaint against the Company, its subsidiary, General Media Communications, Inc. (“GMCI”), and several non-affiliated media/entertainment defendants in the U.S. District Court for the Eastern District of Texas, Texarkana Division, for infringement of a Patent titled “Method  and Apparatus for Transmitting Information Recorded on Information Storage Means from a Central Server to Subscribers via a High Data Rate Digital Telecommunications Network.” In 2009, the USPTO issued a Final Office Action rejecting all of the plaintiff’s claims and plaintiff appealed. In 2010, the USPTO Board of Patent Appeals entered an order affirming the rejection of Antor’s claims. In May 2011, Antor filed its notice of appeal of the USPTO Board of Patent Appeals Order.  In July 2012, the Federal Circuit affirmed the USPTO's rejection of all claims of Antor's patent-in-suit as being invalid over the prior art references cited during reexamination. The Federal Circuit issued its mandate affirming the decision of the USPTO on or about September 17, 2012. On or about December 19, 2012, the final judgment of dismissal was entered, concluding this matter in its entirety.   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Effective July 1, 2008, Various registered in the European Union and on July 29, 2008, began separately charging VAT to its customers.  For periods prior thereto, Various recorded a liability for VAT and related interest and penalties in connection with revenue from internet services derived from its customers in the various European Union countries.  Various reduced its VAT liability for periods prior to July 1, 2008 in the countries where the liability was either paid in full or payments were made pursuant to settlement and payment plans or where determinations were made that payments were not due.  Various continues to negotiate settlements of the liabilities or challenge the liability related to VAT for periods prior to July 1, 2008.  |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | On November 11, 2011, a putative shareholder class action was filed in the U.S. District Court for the Southern District of Florida by Greenfield Children's Partnership, on behalf of investors who purchased the Company’s common stock pursuant to its initial public offering, against the Company, Ladenburg Thalmann & Co., Inc. and Imperial Capital LLC, the underwriters in the initial public offering, and the Company’s directors and certain of the Company’s executive officers. The complaint alleges, among other things, that the initial public offering documents contained certain false and misleading statements and seeks an unspecified amount of compensatory damages. In March 2012, the plaintiffs filed an amended complaint alleging all of the same causes of action and adding additional factual allegations and in response to the Amended Complaint the Company filed its Motion to Dismiss.  The Company believes it has meritorious defenses to all claims and is vigorously defending the lawsuit.  On or about November 15, 2012, the court granted the Motion to Dismiss and gave plaintiffs fifteen days to amend portions of their Amended Complaint.  On or about November 30, 2012, plaintiffs filed their Motion for Reconsideration or for Leave. The Company awaits the court’s decision on this matter. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (e) | On December 28, 2007, Broadstream Capital Partners, Inc. (“Broadstream”) filed a lawsuit against the Company in the State Superior Court of California, County of Los Angeles, Central District, and the Company subsequently removed the case to the Federal District Court for the Central District of California. The complaint alleged breach of contract, breach of covenant of good faith and fair dealing, breach of fiduciary duty and constructive fraud arising out of a document titled “Non-Disclosure Agreement.” The complaint sought damages in excess of $20 million, plus interest, costs and punitive damages. Broadstream later asserted up to $557 million in damages plus punitive damages. On July 20, 2009, the Company entered into an agreement with Broadstream under which, without admitting liability, the Company agreed to pay Broadstream $3.0 million. Such payments were timely made. The agreement provided that upon the earlier of twelve months after the Company had securities registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, or eighteen months after the effective date of the agreement, but not later than twelve months following such earlier date, Broadstream must choose either to (i) refile its complaint in Federal District Court provided that it first repay the Company the $3.0 million or (ii) demand arbitration. If Broadstream elected arbitration, the parties agreed that there would be an arbitration award to Broadstream of at least $10 million but not more than $47 million. Giving consideration to the limitation of the arbitration award in relation to damages sought in litigation, management had not concluded that it was probable that Broadstream would demand arbitration. Accordingly, no loss had been provided for as a result of entering into the agreement. In December 2010, Broadstream elected arbitration. Accordingly, at December 31, 2010, the Company recognized a loss in connection with the matter of $13.0 million which is included in other non-operating expense, net in the accompanying 2010 consolidated statement of operations. In July 2011, the Company entered into a settlement agreement with Broadstream pursuant to which the arbitration and related litigation and all claims asserted therein were dismissed and the Company paid Broadstream $15 million. As a result of the settlement, the Company recognized an additional loss of $5 million which is included in other non-operating expense, net in the accompanying 2011 consolidated statement of operations. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| FRIENDFINDER NETWORKS INC.YEARS ENDED DECEMBER 31, 2012, 2011, AND 2010VALUATION AND QUALIFYING ACCOUNTS(IN THOUSANDS)  |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                         |   | Balance at Beginning of Period |   |   | Additions Charged to Costs and Expenses |   |   | Additions Charged to Other Accounts |   |   | Deductions |   |   | Balance at End of Period |   |
| Description                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year Ended December 31, 2010:                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for doubtful accounts                                                                                              |   | $  | 2,152 |   |   | $  | 839 |   |   | $  | — |   |   | $  | 755 | (a) |   | $  | 2,236 |   |
| Deferred tax asset valuation allowance                                                                                       |   |   | 11,948 |   |   |   | 16,679 |   |   |   | — |   |   |   | — |   |   |   | 28,627 |   |
| Year Ended December 31, 2011:                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for doubtful accounts                                                                                              |   |   | 2,236 |   |   |   | 176 |   |   |   | — |   |   |   | 1,257 | (a) |   |   | 1,155 |   |
| Deferred tax asset valuation allowance                                                                                       |   |   | 28,627 |   |   |   | 12,697 |   |   |   | 353 | (c) |   |   | 5,660 | (b) |   |   | 36,017 |   |
| Year Ended December 31, 2012:                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for doubtful accounts                                                                                              |   |   | 1,155 |   |   |   | 660 |   |   |   | — |   |   |   | 531 | (a) |   |   | 1,284 |   |
| Deferred tax asset valuation allowance                                                                                       |   |   | 36,017 |   |   |   | 13,195 |   |   |   | — |   |   |   | 706 | (d) |   |   | 48,506 |   |

----

| (a) | Accounts receivable amounts considered uncollectible and removed from accounts receivable by reducing the allowance for doubtful accounts. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Reduction of the valuation allowance and corresponding credit to income tax benefit from recognition of deferred tax liability charged to additional paid in capital related to benefical conversion feature on notes. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c) | Valuation allowance recorded at date of acquisition of JigoCity related to its net deferred tax assets at such date.                                                                                                   |
| (d) | Reduction in the valuation allowance resulting from the disposition of JigoCity                                                                                                                                        |

| ExhibitNumber |               | Description                                                                                                                                                                                                          |
|---------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  2.1     |     | Agreement and Plan of Merger, dated as of September 7, 2011, by and among FriendFinder Networks Inc., JGC Holdings Limited, BDM Global Ventures Limited, Global Investment Ventures LLC and Anthony R. Bobulinski(1) |
|  3.1     |     | Amended and Restated Articles of Incorporation of FriendFinder Networks Inc., which became effective on January 25, 2010(2)                                                                                          |
|  3.2     |     | Amended and Restated Bylaws of FriendFinder Networks Inc.(5)                                                                                                                                                         |
|  4.1     |     | Specimen of Common Stock Certificate(3)                                                                                                                                                                              |
|  4.13    |     | Registration Rights Agreement dated December 6, 2007 (Warrants)(3)                                                                                                                                                   |
|  4.14    |     | Amendment to Registration Rights Agreement (Warrants) dated October 8, 2009(3)                                                                                                                                       |
|  4.20    |     | Intercreditor and Subordination Agreement, dated as of October 27, 2010, by and among INI and the Company as Co-Issuers, the Guarantors party thereto, and U.S. Bank, N.A. as Trustee.(3)                            |
|  4.21    |     | Second Lien Intercreditor Agreement, dated as of October 27, 2010, by and among INI and the Company as Co-Issuers, the Guarantors party thereto, and U.S. Bank, N.A. as Trustee.(3)                                  |
|  4.35    |     | Form of 14% Senior Secured Note, Series A, Due 2013 (filed with Exhibit 4.66)                                                                                                                                        |
|  4.36    |     | Form of 14% Senior Secured Note, Series B, Due 2013 (filed with Exhibit 4.66)                                                                                                                                        |
|  4.37    |     | Form of Cash Pay Secured Note, Series A, Due 2013 (filed with Exhibit 4.68)                                                                                                                                          |
|  4.38    |     | Form of Cash Pay Secured Note, Series B, Due 2013 (filed with Exhibit 4.68)                                                                                                                                          |

----

| ExhibitNumber |               | Description                                                                                                                                                                                                                                                |
|---------------|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  4.39    |     | Agreement re: Limitation on Ability to Acquire Common Stock by and between FriendFinder Networks Inc. and Beach Point Capital Management LP dated October 8, 2009(3)                                                                                       |
|  4.40    |     | Form of Amendment to Warrants executed in connection with Agreement re: Limitation on Ability to Acquire Common Stock(3)                                                                                                                                   |
|  4.65    |     | Binding Term Sheet by and among FriendFinder Networks Inc., Interactive Network, Inc., Andrew B. Conru Trust Agreement, Mapstead Trust, created on April 16, 2002, Andrew B Conru, Lars Mapstead, Daniel Staton and Marc H. Bell, dated October 8, 2009(3) |
|  4.66    |     | Indenture, dated as of October 27, 2010, by and among INI and the Company as Co-Issuers, the Guarantors party thereto, and U.S. Bank, N.A. as Trustee relating to the 14% Senior Secured Notes due 2013(3)                                                 |
|  4.67    |     | Indenture, dated as of October 27, 2010, by and among INI and the Company as Co-Issuers, the Guarantors party thereto, and U.S. Bank, N.A. as Trustee relating to the 11.5% Convertible Non-Cash Pay Secured Notes due 2014(3)                             |
|  4.68    |     | Indenture, dated as of October 27, 2010, by and among INI and the Company as Co-Issuers, the Guarantors party thereto, and U.S. Bank, N.A. as Trustee relating to the 14% Cash Pay Secured Notes due 2013(3)                                               |
|  4.69    |     | Security and Pledge Agreement(3)                                                                                                                                                                                                                           |
|  4.70    |     | Second Lien Cash Pay Security and Pledge Agreement(3)                                                                                                                                                                                                      |
|  4.71    |     | Form of Non-Cash Pay Secured Note, Series A, Due 2014 (filed with Exhibit 4.67)                                                                                                                                                                            |
|  4.72    |     | Form of Non-Cash Pay Secured Note, Series B, Due 2014 (filed with Exhibit 4.67)                                                                                                                                                                            |
|  4.73    |               | Supplemental Indenture, dated as of March 27, 2012, by and among INI and the Company as Co-Issuers, the Guarantors party thereto, and U.S. Bank, N.A. as Trustee relating to the 14% Senior Secured Notes due 2013(5)                                      |
|  4.74    |               | Supplemental Indenture, dated as of March 27, 2012, by and among INI and the Company as Co-Issuers, the Guarantors party thereto, and U.S. Bank, N.A. as Trustee relating to the 14% Cash Pay Secured Notes due 2013(5)                                    |
| 4.75          |               | Waiver Agreement, dated May 11, 2012, by and among INI and the Company as Co-Issuers, the Guarantors party thereto, and U.S. Bank, National Association as Trustee relating to the 11.5% Convertible Non-Cash Pay Notes due 2014(6).                       |
| 4.76          |               | Waiver Agreement, dated August 1, 2012, by and among INI and the Company as Co-Issuers, the Guarantors party thereto, and U.S. Bank, National Association as Trustee relating to the 11.5% Convertible Non-Cash Pay Notes due 2014(7).                     |
| 10.1     |     | Form of Indemnification Agreement between FriendFinder Networks Inc. and its Directors and Officers(3)                                                                                                                                                     |
| 10.2     |     | Amended and Restated Management Agreement, dated as of November 1, 2010, by and between the Company and Bell & Staton, Inc.(3)                                                                                                                         |
| 10.3     |     | Form of Employment Agreement by and between FriendFinder Networks Inc. and Daniel C. Staton, effective upon closing of the Initial Public Offering(3)                                                                                                      |
| 10.4     |     | Form of Employment Agreement by and between FriendFinder Networks Inc. and Marc H. Bell, effective upon closing of the Initial Public Offering(3)                                                                                                          |
| 10.14         |     | Independent Contractor Agreement dated September 21, 2007, by and between Hinok Media Inc. and Various, Inc.(3)                                                                                                                                            |
| 10.15         |     | Amendment to Independent Contractor Agreement dated May 12, 2008, by and between Hinok Media Inc. and Various, Inc.(3)                                                                                                                                     |
| 10.16         |     | Amendment No. 2 to Independent Contractor Agreement, Assignment and Limited Waiver dated October 8, 2009, by and between Hinok Media Inc., YouMu, Inc. and Various Inc.(3)                                                                                 |
| 10.17         |     | Amendment to Letter Agreement Dated October 8, 2009 by and among the Company, Andrew B. Conru Trust Agreement, Mapstead Trust and Messrs. Conru, Mapstead, Bell and Staton(3)                                                                              |
| 10.18         |     | Letter Agreement relating to confirmation of certain consent and exchange fees, by and between the Company and Andrew B. Conru Trust Agreement dated October 27, 2010(3)                                                                                   |
| 10.19         |     | Letter Agreement relating to confirmation of certain consent and exchange fees, by and between the Company and Mapstead Trust dated October 27, 2010(3)                                                                                                    |
| 10.21         |     | Employee Proprietary Information Agreement dated September 21, 2007, by and between Andrew B. Conru and Various, Inc.(3)                                                                                                                                   |
| 10.22         |     | Independent Contractor Agreement dated September 21, 2007, by and between Legendary Technology Inc. and Various, Inc.(3)                                                                                                                                   |
| 10.23         |     | Amendment No. 1 to Independent Contractor Agreement dated October 8, 2009, by and between Legendary Technology Inc. and Various, Inc.(3)                                                                                                                   |
| 10.24         |     | Employee Proprietary Information Agreement dated September 21, 2007, by and between Lars Mapstead and Various, Inc.(3)                                                                                                                                     |
| 10.28         |     | Second Amended and Restated Employment Offer Letter, Dated April 1, 2010, by and between the Company and Ezra Shashoua (3)                                                                                                                                 |
| 10.29         |     | Form of Employment Agreement, dated as of March 14, 2011, by and between FriendFinder Networks Inc. and Anthony Previte(3)                                                                                                                                 |
| 10.30         |     | Employment Agreement, effective as of January 1, 2011, by and between the Company and Robert Brackett(3)                                                                                                                                                   |

----

| ExhibitNumber |   | Description                                                                                                                                                                                                                                                             |
|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.33         |   | Employee Proprietary Information Agreement dated November 9, 2007, by and between Various, Inc. and Robert Brackett(3)                                                                                                                                                  |
| 10.35         |   | Fourth Amendment to Lease, Dated November 1, 2010, by and between 6800 Broken Sound LLC and FriendFinder Networks Inc.(3)                                                                                                                                               |
| 10.36         |   | Lease dated May 6, 2008 by and between 20 Broad Company LLC and Penthouse Media Group Inc.(3)                                                                                                                                                                           |
| 10.37         |   | Lease dated April 24, 2009 by and between NBP Partners I, LLC and Streamray Studios, Inc.(3)                                                                                                                                                                            |
| 10.43         |   | Lease dated May 9, 2008, between Batton Associates, LLC, Lessor and Various, Inc., Lessee(3)                                                                                                                                                                            |
| 10.44         |   | Commercial Lease Agreement dated December 14, 2009 by and between Escondido Partners II, LLC and Steamray Inc.(3)                                                                                                                                                       |
| 10.45         |   | Amended and Restated FriendFinder Networks Inc. 2008 Stock Option Plan(3)                                                                                                                                                                                               |
| 10.46         |   | Form of FriendFinder Networks Inc. Stock Option Agreement for Employees(3)                                                                                                                                                                                              |
| 10.47         |   | Form of FriendFinder Networks Inc. Stock Option Agreement Non-ISO(3)                                                                                                                                                                                                    |
| 10.48         |   | Form of FriendFinder Networks Inc. Stock Option Agreement for Directors(3)                                                                                                                                                                                              |
| 10.49         |   | Form of FriendFinder Networks Inc. Stock Option Agreement for Consultants(3)                                                                                                                                                                                            |
| 10.50         |   | Form of FriendFinder Networks Inc. Stock Option Agreement for Board Consultants(3)                                                                                                                                                                                      |
| 10.51         |   | FriendFinder Networks Inc. 2009 Restricted Stock Plan(3)                                                                                                                                                                                                                |
| 10.52         |   | Form of FriendFinder Networks Inc. 2009 Restricted Stock Plan Restricted Stock Grant Agreement(3)                                                                                                                                                                       |
| 10.53         |   | Agreement, dated as of December 17, 2009, by and between Daniel C. Staton and FriendFinder Networks Inc.(3)                                                                                                                                                             |
| 10.54         |   | Agreement, dated as of December 17, 2009, by and between Marc H. Bell and FriendFinder Networks Inc.(3)                                                                                                                                                                 |
| 10.55         |   | Agreement, dated as of December 17, 2009, by and between Andrew B. Conru Trust Agreement and FriendFinder Networks Inc.(3)                                                                                                                                              |
| 10.56         |   | Agreement, dated as of December 17, 2009, by and between Mapstead Trust, created on April 16, 2002 and FriendFinder Networks Inc.(3)                                                                                                                                    |
| 10.57         |   | Equity Put Agreement, dated as of September 7, 2011, by and among FriendFinder Networks Inc., the Shareholders and Anthony R. Bobulinski, in his capacity as the Shareholders' representative.(1)                                                                       |
| 10.58         |   | Registration Rights Agreement, dated as of September 7, 2011, by and among FriendFinder Networks Inc., Global Investment Ventures LLC and Anthony R. Bobulinski(1)                                                                                                      |
| 10.59         |   | Employment Agreement, dated as of November 18, 2011, between FriendFinder Networks Inc., Various, Inc. and Ezra Shashoua.(4)                                                                                                                                            |
| 10.60         |   | FriendFinder Networks Inc. 2012 Stock Incentive Plan. (8)                                                                                                                                                                                                               |
| 10.61         |   | Employment Agreement, dated as of April 24, 2012, between FriendFinder Networks Inc. and Marc H. Bell. (9)                                                                                                                                                              |
| 10.62         |   | Employment Agreement, dated as of April 24, 2012, between FriendFinder Networks Inc. and Daniel C. Staton. (9)                                                                                                                                                          |
| 10.63         |   | Employment Agreement, dated as of April 24, 2012, between FriendFinder Networks Inc., Various, Inc. and Anthony Previte. (9)                                                                                                                                            |
| 10.64         |   | Amended and Restated Employment Agreement, dated as of May 15, 2012, between FriendFinder Networks Inc., Various, Inc. and Ezra Shashoua. (10)                                                                                                                          |
| 10.65         |   | Consulting Agreement, dated as of October 5, 2012, between FriendFinder Networks Inc. and Marc H. Bell. (11)                                                                                                                                                            |
| 10.66         |   | Consulting Agreement, dated as of October 5, 2012, between FriendFinder Networks Inc. and Daniel C. Staton. (11)                                                                                                                                                        |
| 10.67         |   | Agreement in Connection With Continuation of Certain Equity Awards, dated as of October 5, 2012, between FriendFinder Networks Inc. and Marc H. Bell. (11)                                                                                                              |
| 10.68         |   | Agreement in Connection With Continuation of Certain Equity Awards, dated as of October 5, 2012, between FriendFinder Networks Inc. and Daniel C. Staton. (11)                                                                                                          |
| 10.69         |   | Form of Forbearance Agreement, dated November 5, 2012, entered into between FriendFinder Networks Inc. and Interactive Network, Inc., as Co-Issuers, the Guarantors party thereto, and certain holders of the 14% Senior Secured Notes due 2013. (12)                   |
| 10.70         |   | Form of Forbearance Agreement, dated November 5, 2012, entered into between FriendFinder Networks Inc. and Interactive Network, Inc., as Co-Issuers, the Guarantors party thereto, and the holders of the Cash Pay Secured Notes due 2013. (12)                         |
| 10.71         |   | Form of First Amendment to Forbearance Agreement, dated February 4, 2013, entered into between FriendFinder Networks Inc. and Interactive Network, Inc., as Co-Issuers, the Guarantors party thereto and certain holders of the 14% Senior Secured Notes due 2013. (13) |
| 10.72         |   | Form of First Amendment to Forbearance Agreement, dated February 4, 2013, entered into between FriendFinder Networks Inc. and Interactive Network, Inc., as Co-Issuers, the Guarantors party thereto, and the holders of the Cash Pay Secured Notes due 2013. (13)      |
| 10.73         |   | First Amendment to Employment Offer Letter Agreement, dated March 29, 2013, among Friendfinder Networks Inc., Various, Inc. and Robert Brackett *                                                                                                                       |
| 21.1          |   | List of Subsidiaries *                                                                                                                                                                                                                                                  |
| 23.1          |   | Consent of EisnerAmper LLP **                                                                                                                                                                                                                                           |

----

| ExhibitNumber |   | Description                                                                                             |
|---------------|--------|---------------------------------------------------------------------------------------------------------|
| 31.1          |   | Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**  |
| 31.2          |   | Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**  |
| 32.1          |   | Certifications of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*** |
| 32.2          |   | Certifications of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*** |
| 101.INS       |   | XBRL Instance Document#****                                                                             |
| 101.SCH       |   | XBRL Taxonomy Extension Schema Document#****                                                            |
| 101.CAL       |   | XBRL Taxonomy Extension Calculation Linkbase Document#****                                              |
| 101.DEF       |   | XBRL Taxonomy Extension Definition Linkbase Document#****                                               |
| 101.LAB       |   | XBRL Taxonomy Extension Label Linkbase Document#****                                                    |
| 101.PRE       |   | XBRL Taxonomy Extension Presentation Linkbase Dcocument#****                                            |

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| #      | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *      | Previously filed with the Form 10-K for the year ended December 31, 2012 filed with the SEC on April 1, 2013.                                                                                                                                                                                                                                                         |
| **     | Filed herewith.                                                                                                                                                                                                                                                                                                                                                       |
| ***    | Furnished herewith.                                                                                                                                                                                                                                                                                                                                                   |
| ****   | Previously furnished with the Form 10-K for the year ended December 31, 2012 filed with the SEC on April 1, 2013.                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| (1)    | Incorporated by reference to Exhibits 2.1, 10.1 and 10.2 filed with the Form 8-K on September 12, 2011.                                                                                                                                                                                                                                                               |
| (2)    | Incorporated by reference to Exhibit 3.4 filed with the Form S-1(File No. 333-156414) or any of the amendments filed thereto.                                                                                                                                                                                                                                         |
| (3)    | Incorporated by reference to the exhibit with the corresponding number filed with the Form S-1 (File No. 333-156414) or any of the amendments filed thereto.                                                                                                                                                                                                          |
| (4)    | Incorporated by reference to Exhibit 10.1 filed with the Form 8-K on November 22, 2011.                                                                                                                                                                                                                                                                               |
| (5)    | Incorporated by reference to the exhibit with the corresponding number filed with the Form 10-K for the year ended December 31, 2012.                                                                                                                                                                                                                                 |
| (6)    | Incorporated by reference to the exhibit with the corresponding number filed with the Form 10-Q for the quarterly period ended March 31, 2012.                                                                                                                                                                                                                        |
| (7)    | Incorporated by reference to the exhibit with the corresponding number filed with the Form 10-Q for the quarterly period ended June 30, 2012.                                                                                                                                                                                                                         |
| (8)    | Incorporated by reference to the Exhibit 10.1filed with the Form S-8 on August 31, 2012 .                                                                                                                                                                                                                                                                             |
| (9)    | Incorporated by reference to Exhibits 10.1, 10.2 and 10.3 filed with the Form 8-K on April 26, 2012.                                                                                                                                                                                                                                                                  |
| (10)   | Incorporated by reference to Exhibit 10.1 filed with the Form 8-K on May 18, 2012.                                                                                                                                                                                                                                                                                    |
| (11)   | Incorporated by reference to Exhibits 10.1, 10.2, 10.3 and 10.4 filed with Form 8-K on October 5, 2012.                                                                                                                                                                                                                                                               |
| (12)   | Incorporated by reference to Exhibits 10.1and 10.2 filed with the Form 8-K on November 8, 2012.                                                                                                                                                                                                                                                                       |
| (13)   | Incorporated by reference to Exhibits 10.1 and 10.2 filed with the Form 8-K on February 8, 2013.                                                                                                                                                                                                                                                                      |

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| August 7, 2013 | FRIENDFINDER NETWORKS INC.                      |
|----------------|-------------------------------------------------|
|           |                                            |
|           | /s/ Anthony Previte                             |
|           | Anthony Previte                                 |
|           | Chief Executive Officer, President and Director |
|           | (Duly Authorized Officer)                       |