Indiepub Entertainment Inc (OTC:IPUB)

We will track the Zoo Entertainment story. We have been searching for a video game developer for some time now. The company reported a strong 2010 first quarter in May:

• Revenues increased 23.4 percent to $17.1 million from $13.9 million
• Gross margins expanded to 21.1 percent from 17.3 percent
• Net income increased to $290,000 compared to a net loss of $1.4 million
• EBITDA was $1.2 million up from $64,000, reflecting strong revenue growth and
  operating leverage
• Adjusted EBITDA, excluding non-cash stock-based compensation of $246,000, was
  $1.4 million compared with $86,000
• SG&A expenses, excluding non-cash stock-based compensation, decreased to 12.8
  percent of revenues as compared to 16.1 percent of revenues
• EPS was $0.10 vs a loss.  
  

Investors need to be mindful of the seasonal nature of the video game industry, which can often lead to lumpy quarterly financial results. We do not believe ZOOG shares have much appeal at current levels, but will  monitor for EPS break outs as we enter the seasonally stronger second half of the year.