The conclusion that there is improvement is questionable.
1. Quarterly Gross Profit to Net Sales at 94% versus 69% a year prior the likely result that the company is not accruing the Playboy royalty while in the legal courts.
2. Quarterly Loss from Operations down $180k from year prior, another result of not accruing the royalty expense to Playboy while in the courts.
3. Quarterly interest expenses reduced by 35%.
4. Quarterly Net Loss reduced by 41%, another result of not accruing the royalty expense to Playboy while in the courts.
5. Quarterly Selling and Administrative expenses reduced by 50%, since there are no distributors to pay since there are relatively no distributors.
6. Net Cash provided by Operating Activities up 200% (deferred revenue is a non-cash balance sheet item that means little. Cash is actually $180 as of March 31, 2014, down from prior year. $180 is all!
7. 98% reduction in debt converted to Equity (no outstanding shares available to convert)
8. 15% reduction in cash paid for interest during the period ($3,851 less, not a big deal)
9. Net loss reduced by 40%. another result of not accruing the royalty expense to Playboy while in the courts.
10. 300% reduction in accrued liabilities. ???? Current liabilities increased since December to $23.5 million.
11. 85% reduction in deferred revenue. Often means that sales are not increasing, which is a bad thing.
Debt is not under control $23.5 million in current liabilities as compared to $279k in current assets. Same POS.
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