Value Microcaps Motherboard

[SkepticalOptimist]

Bobwins, YPNT, true to my name, I have to be skeptical about something, so here it is:

YPNT amortizes sales and marketing costs over a 12-month period. Therefore, in the past 2 quarters, the company has spent $3.2M and $3.1M in cash on sales and marketing; however, because of YPNT's amortization policy, they have only recognized $2.1M and $2.5M of sales and marketing costs. This inflates the EPS by approx 2.3 cents in FY2Q06 and 1.4 cents FY3Q06. If YPNT expensed sales and marketing as incurred, then the last 2 quarterly EPS's are -.0055 and $.0126, which does not paint as favorable of a picture.

This accounting "quirk" will not stop until the quarterly amortization matches the quarterly cash spend, which should occur in approximately FY1Q07. At that point in time, the EPS will be a little more reliable IMHO.

I am following this somewhat closely and am hoping to buy in sometime around that time period. On a positive note, they are beginning to attract higher quality customers (lower churn) and will either be able to continue this phenomenal growth and grow gross margin or reach maximimum size and significantly cut back on sales & marketing spend.