i'll do some of your dd for you. from the Q1 10QSB:
"(b) DVD's and Video Games Library.
As of December 2005 the Company has purchased over $2,000,000.00 of inventory and makes available 40,000 DVD and video game titles. The Company acquires DVD's and video games from distributors through a direct purchase agreement. Such purchases are recorded at the historical cost. The Company depreciates its DVD's and video games library on a straight-line basis over a twelve month period. The Company currently has not assigned a salvage value since it is our intention to not sell the library. In the event that the Company does sell a portion of the library as result of slow moving title rentals, the Company will re-evaluate its policy of depreciation in relation to the salvage value."
From the Q2 10QSB:
"(b) DVD's and Video Games Library.
As of June 30, 2006, the Company has invested over $3,300,000.00 in our DVD and video game library resulting in approximately 50,000 DVD and video game titles available for rental. We acquire DVD's and video games from distributors through a direct purchase agreement. Such purchases are recorded at the historical cost. We depreciate our DVD's and video games library on a straight-line basis over a twelve- month period. We currently have not assigned a salvage value since it is our intention to not sell our library. In the event that we do sell a portion of our library as result of slow moving title rentals, we will re-evaluate our policy of depreciation in relation to the salvage value."
Thus, the company has added $1.3mil in inventory over the past 6 months. That's a lot of DVDs, and that's how the company is prepared to meet much bigger subscriber demands.
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