xbootie,
In response to your request re the financials, specifically the P&L:
1.) The title is wrong. The period covered is not for the six months ended June 30, it is for the three months. I wish they would pay a little more attention to detail, or at least have me review their filings prior to posting them as I offered to do free of charge to avoid embarrassments like this.
2.) Revenues are up $10K, although the swings are wild, with royalties having dropped $159K while franchise/license sales rose $190K. I don't understand which revenue source is better or the reasons for these fluctuations, but maybe someone could call them and ask what they mean.
3.) Gross margins remained relatively constant at 80% in Q2 vs. 78% in Q1, which is encouraging, as they are very high and seem relatively constant and hopefully predictable as revenues rise.
4.) Operating expenses fell markedly in Q2 driven by the absence in Q2 of web and development costs, and generally lower expenses in many categories. It indicates good expense control by management, although I have to wonder how salaries can only be $30K for the quarter. That seems awfully low to me, and I wonder if they have properly accrued everything they need to be accruing.
5.) Operating income rose from $3K, or 1% in Q1 to $112K, or 37% in Q2, a very substantial increase both absolutely and percentage-wise. If that can be maintained as revenues increase, we will be in very good shape, as an operating margin at the 37% level is outstanding.
That's about it. If the results are valid as reported (meaning that I'm not sure the expenses aren't underaccrued), then this quarter has shown significant progress over Q1.
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