Simply Inc. (SIMPQ)

[SpencerTracy]

cjf:

Last Q: their gross profit was $322K, and their net loss was $1.1M. Based on this, they needed $1.4M in gross profit to break even! If $1.4M gross profit is what they need to break even, then $12M in sales @ 12% gross margin (which is 2.3 times the last Q's 5.2%) will achieve that! What is wrong with my math?

This Q just can't be as bad as the last Q; therefore, we should expect improvements in sales and gross profits. If they did $9M in sales (no sales in US) and 11% in gross margin in this Q (reasonable #s), sure it is improvement but it is still a Q with about 400K loss! Will this be good enough for you?

What the company needs is a different business model (don't know how a new CEO will make money using the current model with US market closed for the phone sales to them due to the patent issue)!

Further, launching the new software doesn't mean anything; the software needs to generate sales! Their target customers are large retailers. Do you think large customers will buy software products from the company that has NO software expertise or sales?

Your thoughts?