OK, I am going to state the positives first, lest anybody accuse me of being negative.
I am assuming Netman is quoting passages from the report, which I am not going to read. I don't need to. Thanks Netman.
The first para. establishes what was obvious, but not stated. The Chilis installation is a pilot, with no license agreement or contract in place. Probably uWink is getting some revenue from it on a transaction basis, but there is no sale here yet. It may be probably or even likely, but no sale. What is obvious is that they have started a complex sales cycle with Brinkers for hopefully a huge deal. They must prove themselves as a corporate vendor. This gets them on a list, which then allows a Buyer to buy from them. This is square 1 for any software vendor and should have been started long ago. It is good progress, just far away from the end goal. A sales cycle like this takes from 6 mo. to 1 year.
I don't know what a QSR restaurant is, so can't really comment on that. This is more of the same, starting a corporate vendor approval process. 6 mo to 1 year away from anything meaningful.
Partnering with a group of sales executives is also good progress, but they are giving something up in the process. This kind of thing happens all of the time in this business. Key thing is.. there is no money changing hands likely, until there is a sale. Then, uWink loses a cut to these guys. I wish they had just hired a hard-nosed VP sales. That would have made more sense to me... "Partnering" is a thinly-disguised phrase for hiding total failure. Each party is thinking they are getting something (market or product) from the deal, when in reality they are splitting up the proceeds of a questionable business. It is all percentages of margin... nothing down.. no fixed fees. When I worked for a sales company in Toronto the boss was bringing in vendors all the time. I had tons of product folders on my desk with no focus or direction. I also had no training or support. Not a good way to do business. The company supposedly had inroads with the Canadian government, which was how they got these vendors interested. So the guy was with Brinkers and has some connections.. typical. uWink would have done better to hire their own sales force.
Now, the financials. This is horrible. Brutal yet again. At this point, they are pretty much out of money. They cannot continue in their present form.
Current Assets = 5.2M
Less Property & Equipment (the restaurants from which they derive their revenue) of 3.6M
Current (Liquid!) Assets = 5.2 - 3.6 = 1.6M.
Current liabilities = 1.3M
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translation: they are pooched. Out of money. Cannot continue. Pretty soon they will have to close the restaurants in order to settle their debt.
No attempt to control expenses.
At this point this stock is practically worthless. Hate to say it. Watch for it to plummet next week. Another Friday afternoon disaster...
I think at .05 - .10 this thing is a good buy.. the only chance for uWink is for someone to step in with deep pockets and save the restaurants.. before the ST debt holders come in and take the furniture..
"enough cash for 12 months?" who said that..? sheesh.. all in all a real depressing report.. sorry guys.
AI
