On June 21, 2012 the Registrant determined to exit its retail business and focus solely on growing its OEM business. The results for the quarter ended June 30, 2012 included a Net Loss of approximately $3.3 million and $6.4 million, respectively, for the three months and nine months ended June 30, 2012, including a Loss from discontinued operations, net of tax, of approximately $2.7 million and $4.7 million, respectively, for the corresponding periods.
I agree, they should exit this business, but mgmt should have thought this out before entering it. The costs of exiting are far too high for a small time entry into the retail segment.
This mgmt is just too inexperienced to be directing any company. Here's another $50,000 down the drain -
Waterproof Case License
In September 2011, the Company entered into a Letter of Intent with a Florida corporation (“FloridaCo”) that has invented a patent pending waterproof electronics case. Under the Letter of Intent, the Company will be granted the exclusive worldwide license to manufacture, develop, distribute, and otherwise use the waterproof case, subject to maintaining certain minimum monthly sales levels, in exchange for making certain royalty payments to FloridaCo. In addition, the Company agreed to make four quarterly payments of advance royalties to FloridaCo, in the amount of $25,000 each, commencing December 1, 2011. In July 2012, upon mutual agreement, the Company withdrew its Letter of Intent with FloridaCo. As of the date of such termination, the Company had paid FloridaCo $50,000 of advance royalties, which are non-refundable and interest free. The Company included these royalty payments in its “selling expenses” in the accompanying consolidated statements of operations during the three and nine-month period ended June 30, 2012.